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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 under
the Securities Exchange Act of 1934


For
the month ended July, 2021

ICON plc
(Registrant's name)


333-08704
(Commission file number)


South County Business Park, Leopardstown, Dublin 18, Ireland
(Address of principal executive offices)


Brendan Brennan, CFO
South County Business Park, Leopardstown, Dublin 18, Ireland
Brendan.Brennan@iconplc.com
+353-1-291-2000
(Name, telephone number, email and/or facsimile number and address of Company contact person)


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F___X___
Form 40-F______
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes______
No___X___
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes______
No___X___
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule12g3-2(b) under the Securities Exchange Act of 1934.
Yes______
No___X___
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82 N/A



ICON plc
    This report on Form 6-K is hereby incorporated by reference in the registration statement on Form F-3 (Registration No. 333-133371) of ICON plc and in the prospectus contained therein, registration statement on Form F-4 (Registration No. 333-254891) of ICON plc and in the prospectus contained therein, registration statement on Form S-8 (Registration No. 333-152802) of ICON plc, registration statement on Form S-8 (Registration No. 333-190068) of ICON plc, registration statement on Form S-8 (Registration No. 333-231527) of ICON plc, registration statement on Form S-8 (Registration No. 333-254891) of ICON plc, and registration statement on Form S-8 (Registration No. 333-257578) of ICON plc and this report on Form 6-K shall be deemed a part of each such registration statement from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished by ICON plc under the Securities Act of 1933 or the Securities Exchange Act of 1934.

1


GENERAL

    As used herein, “ICON”, the “Company” and “we” refer to ICON plc and its consolidated subsidiaries, unless the context requires otherwise.

Business

    ICON public limited company (“ICON”) is a clinical research organization (“CRO”), providing outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. We specialize in the strategic development, management and analysis of programs that support all stages of the clinical development process - from compound selection to Phase I-IV clinical studies. Our vision is to be the global CRO partner of choice in drug development by delivering best in class information, solutions and performance in clinical and outcomes research.

    We believe that we are one of a select group of CROs with the expertise and capability to conduct clinical trials in most major therapeutic areas on a global basis and have the operational flexibility to provide development services on a stand-alone basis or as part of an integrated “full service” solution. At June 30, 2021 we had approximately 16,480 employees, in 89 locations in 45 countries. During the six months ended June 30, 2021, we derived approximately 38.5%, 52.7% and 8.8% of our revenue in the United States, Europe and Rest of World respectively.

    We began operations in 1990 and have expanded our business predominately through organic growth, together with a number of strategic acquisitions to enhance our capabilities and expertise in certain areas of the clinical development process. We are incorporated in Ireland and our principal executive office is located at: South County Business Park, Leopardstown, Dublin 18, Republic of Ireland. The contact telephone number of this office is +353-1-291-2000.

Recent developments

PRA Health Sciences Inc - Merger Completion

On July 1, 2021, ICON plc announced the completion of its merger (the "Merger") with PRA Health Sciences, Inc. ("PRA"). The combined company will retain the name ICON and will bring together 38,000 employees across 47 countries, creating the world’s most advanced healthcare intelligence and clinical research organization.

The combined company will leverage its enhanced operations to transform clinical trials and accelerate biopharma customers’ commercial success through the development of much needed medicines and medical devices. The new ICON will have a renewed focus on leveraging data, applying technology and accessing diverse patient populations to speed up drug development.

Upon completion of the Merger, pursuant to the terms of the merger agreement, PRA became a wholly owned subsidiary of ICON plc. Under the terms of the Merger, PRA shareholders received per share $80 in cash and 0.4125 shares of ICON stock. The trading of PRA common stock on NASDAQ was suspended prior to market open on July 1, 2021.

The condensed financial statements below do not reflect the results of the combined company at June 30, 2021.

Senior Secured Credit Facilities

In conjunction with the completion of the Merger agreement, on July 1, 2021, ICON entered into a credit agreement providing for a senior secured term loan facility of $5,515 million and a senior secured revolving loan facility in an initial aggregate principal amount of $300 million (the "Senior Secured Credit Facilities"). The proceeds of the senior secured term loan facility were used to repay in full (i) PRA’s existing credit facilities and (ii) the Company's private placement notes outstanding and fund, in part, the transaction. The senior secured term loan facility will mature in July 2028 and the revolving loan facility will mature in July 2026.

Borrowings under the senior secured term loan facility amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount, with the remaining balance due at final maturity. The interest rate margin applicable to borrowings under the senior secured term loan facility will be, at the option of the applicable borrower (as defined in the credit agreement), either (1) the base rate (as described in the credit agreement) plus an applicable margin of 1.50% or (2) LIBOR plus an applicable margin of 2.50%, in each case, with a step down of 0.25% if the first lien net leverage ratio is equal to or less than 4.00 to 1.00. The senior secured term loan facility is subject to a LIBOR floor of 0.50%.

The Borrowers’ (as defined in the credit agreement) obligations under the Senior Secured Credit Facilities are guaranteed by ICON and the subsidiary guarantors. The Senior Secured Credit Facilities are secured by a lien on substantially all of ICON’s, the Borrowers’ and each of the subsidiary guarantor’s assets (subject to certain exceptions), and the Senior Secured Credit Facilities will have a first-priority lien on such assets, which will rank pari passu with the lien securing the Senior Secured Notes (see below), subject to other permitted liens.

2




Senior Secured Notes

In addition to the Senior Secured Credit Facilities, on July 1, 2021, a subsidiary of the Company issued $500 million in aggregate principal amount of 2.875% senior secured notes due 2026 (the “Senior Secured Notes”) in a private offering (the “Offering”). The Senior Secured Notes will mature on July 15, 2026. The proceeds from the Offering and borrowings made under the Senior Secured Credit Facilities, together with cash on hand, were used to (i) fund the cash consideration payable by ICON for the Merger, (ii) repay existing indebtedness of ICON and PRA and (iii) pay fees and expenses related to the Merger, the Offering and the Senior Secured Credit Facilities. The Senior Secured Notes are guaranteed on a senior secured basis by ICON and its direct and indirect subsidiaries.

Repayment of the 2020 Senior Notes

On December 8, 2020, the Company issued new senior notes, (the "2020 Senior Notes") for aggregate gross proceeds of $350.0 million in the private placement market. The 2020 Senior Notes were issued in two tranches; Series A Notes of $275.0 million at a fixed interest rate of 2.32% and Series B Notes of $75.0 million at a fixed interest rate of 2.43%. The effective interest rate was adjusted by the impact of an interest rate cash flow hedge which was entered into in advance of the rate fixing date. This cash flow hedge was deemed to be fully effective in accordance with ASC 815 'Derivatives and Hedging'. The realized loss related to this derivative was recorded within other comprehensive income and amortized over the life of the 2020 Senior Notes. The effective rate on the 2020 Senior Notes is fixed at 2.41%.

In connection with the Merger with PRA, the Company was required to repay the 2020 Senior Notes prior to entering into the Senior Secured Credit Facilities and the Senior Secured Notes. In June 2021, ICON committed to entering into the Senior Secured Credit Facilities and the Senior Secured Notes and therefore committed to replacing the 2020 Senior Notes. The 2020 Senior Notes have been repaid and long term financing consisting of the Senior Secured Credit Facilities and the Senior Secured Notes have been drawn. As the 2020 Senior Notes have been replaced by long term financing we continue to present the 2020 Senior Notes as non-current at June 30, 2021. The 2020 Senior Notes were repaid on July 1, 2021 inclusive of early repayment charges. The total repayment on July 1, 2021 was $364.3 million.

Board Appointments

As a result of the Merger, Mr. Colin Shannon and Dr. Linda Grais, who both served on the PRA Board, will join ICON’s Board of Directors.

Mr. Shannon previously served as PRA's President and Chief Executive Officer and was a director of the Company since 2010. He was also the Chairman of the Board of Directors at PRA. Mr. Shannon joined PRA in 2007, serving first as President and Chief Operating Officer. Prior to joining PRA, he was Executive Vice President, Global Clinical Operations at Pharmaceutical Product Development, Inc. (now known as PPD, Inc., or PPD). During his 12 year tenure with PPD, he held various leadership roles, including Chief Operating Officer for its European division and Chief Financial and Administration Officer for Europe and the Pacific Rim.

Dr. Grais was previously a member of the PRA board since October 2015. Dr. Grais served as a member of the board of directors of Ocera Therapeutics, Inc., a biopharmaceutical company, from January 2008 through December 2017 and as President and Chief Executive Officer of Ocera Therapeutics, Inc. from June 2012 to December 2017. Prior to her employment by Ocera Therapeutics, Dr. Grais served as a managing member at InterWest Partners, a venture capital firm from May 2005 until February 2011. She sits on the audit committees of Corvus Pharmaceuticals, Inc., Zosano Pharma Corporation and Arca Biopharma, Inc. and on the compensation committee of Arca Biopharma, Inc.

Assessment of COVID-19 impact on the business

    In the period since December 31, 2020, the Company has continued to experience a return to positive growth in revenue and net income as a result of the ongoing recovery from the global COVID-19 pandemic. At this point in time, there still remains some degree of uncertainty relating to the long-term effect of COVID-19 on our business and when it will be possible for business activity to return to normal operating levels. Although the impact of the global COVID-19 pandemic is reducing, we continue to experience restrictions on our ability to ensure laboratory samples are collected and analyzed on time, our ability to monitor our clinical trials, the ability of patients or service providers to travel, and our ability to travel, as a result of the outbreak.

ICON has continued to successfully mobilize its vaccine resources to address the COVID-19 global threat, including its ability to conduct home-based trials to minimize infection. In addition, the Company is currently providing clinical monitoring and safety oversight on more than 100 COVID-19 trials for both the private and government sectors.

3


Revenue for the three months ended June 30, 2021 increased by $250.9 million, or 40.5%, to $871.2 million, compared to $620.2 million for the three months ended June 30, 2020. Revenue increased by 37.5% in both constant currency and constant dollar organic terms. The increase in revenues in the three months ended June 30, 2021 is due to the continued recovery from the impact the COVID-19 global pandemic had on operations and the additional clinical trials commenced in direct response to COVID-19 over the last twelve months.

Share repurchase program

    On January 8, 2019, the Company commenced a share buyback program of up to 1.0 million ordinary shares which was completed during the year ended December 31, 2019 for total consideration of $141.6 million. On October 22, 2019, the Company commenced a further share buyback program. At December 31, 2019, 35,100 ordinary shares were redeemed for a total consideration of $5.3 million. During the year ended December 31, 2020, 1,235,218 ordinary shares were redeemed by the Company under this buyback program for a total consideration of $175.0 million. During the six months ended June 30, 2021, no ordinary shares were redeemed by the Company under this buyback program.

    All ordinary shares that were redeemed under the buyback program were canceled in accordance with the Constitution of the Company and the nominal value of these shares transferred to other undenominated capital as required by Irish Company law.

New accounting pronouncements

Recently adopted accounting standards

In December 2019, the FASB issued ASU 2019-12 'Simplifying the Accounting for Income Taxes (Topic 740)'. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company will adopt the amendments in this ASU on a prospective basis, except where the required method of adoption is retrospective or modified retrospective. ASU 2019-12 is effective for the Company for fiscal years commencing on or after December 15, 2020. The adoption of this ASU did not have a significant impact on the financial statements.

In January 2020, the FASB issued ASU 2020-01, 'Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)'. ASU 2020-01 states any equity security transitioning from the alternative method of accounting under Topic 321 to the equity method, or vice versa, due to an observable transaction will be remeasured immediately before the transition. In addition, the ASU clarifies the accounting for certain non-derivative forward contracts or purchased call options to acquire equity securities stating such instruments will be measured using the fair value principles of Topic 321 before settlement or exercise. The ASU is effective for fiscal years beginning after December 15, 2020, and will be applied on a prospective basis. The adoption of this ASU did not have a significant impact on the financial statements.

In August 2020, the FASB issues ASU 2020-06 ‘Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity’ which removes the separation models in ASC 470 ‘Debt’ for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. The ASU also removes from ASC 815 ‘Derivatives and Hedge Accounting’ certain conditions for equity classification for contracts on an entity’s own equity. The adoption of this ASU did not have a significant impact on the financial statements.




4


     ICON plc
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2021 AND DECEMBER 31, 2020
(Unaudited)(Audited)
June 30,
2021
December 31, 2020
ASSETS(in thousands)
Current Assets:
Cash and cash equivalents$1,055,496 $840,305 
Available for sale investments1,729 1,729 
Accounts receivable, net of allowance for credit losses677,247 715,271 
Unbilled revenue415,390 428,684 
Other receivables32,289 35,394 
Prepayments and other current assets71,200 53,477 
Income taxes receivable32,037 28,118 
Total current assets2,285,388 2,102,978 
Other Assets:
Property, plant and equipment, net166,244 174,343 
Goodwill933,387 936,257 
Operating right-of-use assets69,238 84,561 
Other non-current assets22,445 20,773 
Non-current income taxes receivable12,373 17,230 
Non-current deferred tax asset12,282 12,705 
Equity method investments3,751 4,534 
Investments in equity-long term22,286 15,765 
Intangible assets57,070 66,460 
Total Assets$3,584,464 $3,435,606 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable$37,818 $51,113 
Unearned revenue675,234 660,883 
Other liabilities382,593 399,769 
Income taxes payable9,396 12,178 
Total current liabilities1,105,041 1,123,943 
Other Liabilities:
Non-current bank credit lines and loan facilities350,000 348,477 
Non-current operating lease liabilities47,334 60,801 
Non-current other liabilities26,541 26,366 
Non-current government grants795 838 
Non-current income taxes payable13,262 14,539 
Non-current deferred tax liability13,548 10,406 
Commitments and contingencies  
Total Liabilities1,556,521 1,585,370 
Shareholders' Equity:
Ordinary shares, par value 6 euro cents per share; 100,000,000 shares authorized,
52,958,063 shares issued and outstanding at June 30, 2021 and
52,788,093 shares issued and outstanding at December 31, 2020
4,592 4,580 
Additional paid-in capital632,069 617,104 
Other undenominated capital1,134 1,134 
Accumulated other comprehensive income(43,734)(35,477)
Retained earnings1,433,882 1,262,895 
       Total Shareholders' Equity2,027,943 1,850,236 
Total Liabilities and Shareholders' Equity$3,584,464 $3,435,606 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND JUNE 30, 2020
(UNAUDITED)
Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
(in thousands except share and per share data)
Revenue$871,155 $620,228 $1,729,353 $1,335,330 
Costs and expenses: 
Direct costs (excluding depreciation and amortization)631,123 445,833 1,257,367 951,126 
Selling, general and administrative expense109,884 83,499 208,419 170,695 
Depreciation and amortization17,276 15,858 34,681 32,180 
Restructuring 18,089  18,089 
Total costs and expenses758,283 563,279 1,500,467 1,172,090 
Income from operations112,872 56,949 228,886 163,240 
Interest income186 441 443 2,250 
Interest expense(24,551)(3,220)(27,278)(6,401)
Income before provision for income taxes88,507 54,170 202,051 159,089 
Provision for income taxes(14,133)(6,410)(30,281)(19,000)
Income before share of earnings from equity method investments74,374 47,760 171,770 140,089 
Share of equity method investments(509) (783) 
Net income73,865 47,760 170,987 140,089 
Net income attributable to noncontrolling interest   (633)
Net income attributable to the Group$73,865 $47,760 $170,987 $139,456 
Net income per Ordinary Share attributable to the Group (note 11): 
Basic$1.40 $0.91 $3.23 $2.55 
Diluted$1.38 $0.90 $3.21 $2.51 
Weighted average number of Ordinary Shares outstanding:  
Basic52,909,368 52,570,104 52,860,414 52,959,229 
Diluted53,381,501 53,028,567 53,294,435 53,691,138 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND JUNE 30, 2020 (UNAUDITED)
Six Months Ended
June 30, 2021June 30, 2020
(in thousands)
Cash flows from operating activities:
Net income $170,987 $140,089 
Adjustments to reconcile net income to net cash provided by operating activities:  
(Gain)/loss on disposal of property, plant and equipment(5)95 
 Depreciation expense25,940 22,643 
 Impairment of right-of-use assets 5,411 
 Reduction in carrying value of operating right-of-use assets14,037 14,337 
 Amortization of intangibles8,741 9,537 
 Amortization of government grants(24)(22)
 Interest on non-current operating lease liability 870 1,006 
 Realized gain on sale of short term investments (232)
 Gain on re-measurement of financial assets(4,750) 
 Loss on equity method investments783  
 Stock compensation expense14,874 13,186 
 Amortization of interest rate hedge891 (482)
 Amortization of financing costs1,592 258 
 Loss on extinguishment of debt14,434  
 Deferred taxes3,313 (2,613)
Changes in assets and liabilities:  
 Decrease in accounts receivable36,650 58,170 
 Decrease in unbilled revenue12,690 12,226 
 Decrease in other receivables2,406 2,689 
 Decrease in prepayments and other current assets5,748 2,937 
 (Increase)/decrease in other non-current assets(1,748)486 
 Increase in unearned revenue14,534 25,056 
 Decrease in other current liabilities(50,981)(33,507)
 Decrease in operating lease liabilities(14,951)(15,416)
 Increase in other non-current liabilities1,151 2,355 
 Decrease in income taxes payable(3,583)(5,931)
 (Decrease)/increase in accounts payable(13,245)8,370 
Net cash provided by operating activities240,354 260,648 
Cash flows from investing activities:  
 Purchase of property, plant and equipment(21,653)(21,161)
 Purchase of subsidiary undertakings (47,367)
 Purchase of equity method investments(2,450) 
 Cash acquired with subsidiary undertaking 10,170 
 Sale of available for sale investments 47,902 
 Purchase of investments in equity - long term(1,771)(1,273)
Net cash used in investing activities(25,874)(11,729)
Cash flows from financing activities:  
 Proceeds from exercise of equity compensation182 1,461 
 Share issue costs(10)(6)
 Repurchase of ordinary shares (175,000)
 Share repurchase costs (140)
Net cash provided by (used in) financing activities172 (173,685)
Effect of exchange rate movements on cash539 (3,443)
Net increase in cash and cash equivalents215,191 71,791 
Cash and cash equivalents at beginning of period840,305 520,309 
Cash and cash equivalents at end of period$1,055,496 $592,100 

The accompanying notes are an integral part of these condensed consolidated financial statements.
7


ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(UNAUDITED)
 
Group
SharesAmountAdditional
Paid-in
Capital
Other
Undenominated
Capital
Accumulated
Other
Comprehensive
Income
Retained
Earnings
Total
(dollars in thousands, except share data)
Balance at December 31, 202052,788,093 $4,580 $617,104 $1,134 $(35,477)$1,262,895 $1,850,236 
Comprehensive income:
Net income — — — — — 170,987 170,987 
Currency translation adjustment
— — — — (8,909)— (8,909)
Currency impact of long term funding (net of tax)
— — — — (239)— (239)
Amortization of interest rate hedge
— — — — 113 — 113 
Write off of loss on interest rate hedge— — — — 778 — 778 
Total comprehensive income— — — — (8,257)170,987 162,730 
Exercise of share options4,020 — 170 — — — 170 
Issue of restricted share units165,950 12 — — — — 12 
Non-cash stock compensation expense— — 14,805 — — — 14,805 
Share issuance costs— — (10)— — — (10)
Balance at June 30, 202152,958,063 $4,592 $632,069 $1,134 $(43,734)$1,433,882 $2,027,943 

The accompanying notes are an integral part of these condensed consolidated financial statements.

8


ICON plc
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 2021
1. Basis of presentation

    These condensed consolidated financial statements which have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) have not been audited. The condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary to present a fair statement of the operating results and financial position for the periods presented. The preparation of the condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures in the condensed consolidated financial statements. Actual results could differ from those estimates.

    The condensed consolidated financial statements should be read in conjunction with the accounting policies and notes to the consolidated financial statements included in ICON’s Form 20-F for the year ended December 31, 2020 (see note 2 - Significant accounting policies for impact of adoption of any new accounting standards). Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal period ending December 31, 2021.
2. Significant accounting policies

Redeemable noncontrolling interests and equity

On May 23, 2019, ICON acquired a majority ownership interest in MeDiNova. Included in the purchase agreement were put and call option arrangements with the noncontrolling interest holders that required (put option) or enabled (call option) ICON to purchase the remaining minority ownership at a future date. The option was accounted for as temporary equity, which was presented separately as redeemable noncontrolling interest on the Condensed Consolidated Balance Sheet. This classification reflects the assessment that the instruments were contingently redeemable in accordance with ASC 480-10-S99 'Distinguishing Liabilities from Equity'.

Redeemable noncontrolling interests are accreted to their redemption value over the period from the date of issuance to the first date on which the option is exercisable. The change in the option's redemption value is recorded against retained earnings. In a computation of earnings per share, the accretion of redeemable noncontrolling interests to their redemption value is a reduction of net income attributable to the Group. Basic and diluted net income per ordinary share attributable to the Group includes the adjustment to reflect the accretion of the noncontrolling interest to its redemption value.

On March 9, 2020 ICON exercised its option to call the outstanding shares in the noncontrolling interest to take 100% ownership of MeDiNova. On exercise of the call option, the noncontrolling interest is extinguished and a liability was recorded for the amount payable to the former noncontrolling interest holders. This liability was settled on July 17, 2020 for $43.9 million.

Financial assets - credit losses

    On January 1, 2020, the Group adopted ASU 2016-13 'Measurement of Credit Losses on Financial Instruments (ASC 326)', which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life. The update provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The amendment replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates.

    The Group adopted ASC 326 using the modified retrospective measurement method for all in scope financial assets. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The impact of transitioning to the new standard at January 1, 2020 was immaterial and no adjustment was recorded to retained earnings for the cumulative effect of adopting ASC 326.

    On transition to ASC 326, the Group has revised the methodology to calculate the allowance for credit losses. The Group's estimate of expected credit losses considers historical credit loss information that is adjusted, where necessary, for current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The Group's receivables and unbilled services are predominantly due from large and mid-tier pharmaceutical and biotechnology companies that share similar risk characteristics. The Group monitors their portfolio of receivables and unbilled services for any deterioration in current or expected credit quality (for example, expected delinquency level), and adjusts the allowance for credit losses as required.

9


    Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in the Condensed Consolidated Statement of Operations. Losses are charged against the allowance when management believes the uncollectibility of a previously provisioned amount is confirmed.

Leases

    The new leasing standard (ASC 842 'Leases') was effective and adopted by ICON from January 1, 2019. ASC 842 'Leases' supersedes the requirements in ASC 840 'Leases' and requires that lessees recognize rights and obligations from virtually all leases (other than leases that meet the definition of a short-term lease) on their balance sheets as right-of-use assets with corresponding lease liabilities. The ASU also provides additional guidance on how to classify leases and how to determine the lease term for accounting purposes.

    ICON adopted the new standard under the cumulative effect adjustment approach. Under this transition method, the new standard is applied from January 1, 2019 without restatement of comparative period amounts. Operating lease liabilities and right-of-use assets of $106.5 million were recorded on the Condensed Consolidated Balance Sheet as at January 1, 2019.

    There was no impact of adopting ASC 842 on opening retained earnings at January 1, 2019.
3. Revenue

    Revenue disaggregated by customer profile is as follows:
Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
(in thousands)(in thousands)
Top client$110,356 $74,932 $274,650 $156,199 
Clients 2-5246,094 179,018 475,994 381,996 
Clients 6-10116,237 86,449 239,130 160,800 
Clients 11-25158,577 101,417 296,432 231,501 
Other239,891 178,412 443,147 404,834 
Total$871,155 $620,228 $1,729,353 $1,335,330 

4. Accounts receivable, unbilled revenue (contract assets) and unearned revenue or payments on account (contract liabilities)

    Accounts receivables and unbilled revenue are as follows:
June 30, 2021December 31, 2020
(in thousands)
Contract assets:
Billed services (accounts receivable)$684,355 $722,420 
Unbilled services (unbilled revenue)415,390 428,684 
Accounts receivable and unbilled revenue1,099,745 1,151,104 
Allowance for credit losses(7,108)(7,149)
Accounts receivable and unbilled revenue, net$1,092,637 $1,143,955 
10


    
Unbilled services and unearned revenue or payments on account (contract assets and liabilities) were as follows:
(in thousands, except percentages)June 30, 2021December 31, 2020$ Change% Change
Unbilled services (unbilled revenue)$415,390 $428,684 $(13,294)(3.1)%
Unearned revenue (payments on account)(675,234)(660,883)(14,351)2.2 %
Net balance$(259,844)$(232,199)$(27,645)11.9 %

    Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. We record assets for amounts related to performance obligations that are satisfied but not yet billed and/or collected. These assets are recorded as unbilled services and therefore contract assets rather than accounts receivables when receipt of the consideration is conditional on something other than the passage of time. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations or billed in advance of the revenue being earned.

    Unbilled services/revenue balances arise where invoicing or billing is based on the timing of agreed milestones related to service contracts for clinical research. Contractual billing arrangements in respect of certain reimbursable expenses (principally investigators) require billing by the investigator to the Company prior to billing by the Company to the customer. As there is no contractual right to set-off between unbilled services (contract assets) and unearned revenue (contract liabilities), each are separately presented gross on the Condensed Consolidated Balance Sheet.

    Unbilled services as at June 30, 2021 decreased by $13.3 million compared to December 31, 2020. Unearned revenue increased by $14.4 million over the same period resulting in a decrease of $27.6 million in the net balance of unbilled services and unearned revenue or payments on account between December 31, 2020 and June 30, 2021. These fluctuations are primarily due to timing of payments and invoicing related to the Group's clinical trial management contracts. Billings and payments are established by contractual provisions including predetermined payment schedules which may or may not correspond to the timing of the transfer of control of the Company's services under the contract. Unbilled services arise from long-term contracts when a cost-based input method of revenue recognition is applied and revenue recognized exceeds the amount billed to the customer.

    The credit loss expense and allowance for credit losses recognized on the Group's receivables and unbilled services were de minimis for the three and six months ended June 30, 2021 and June 30, 2020.

    As of June 30, 2021 approximately $6.6 billion (June 30, 2020: $5.7 billion) of revenue is expected to be recognized in the future in respect of unsatisfied performance obligations. The Company expects to recognize revenue on approximately 43% of the unsatisfied performance obligation over the next 12 months, with the remainder recognized thereafter over the duration of the customer contracts.

5. Goodwill
Six Months EndedYear Ended
June 30, 2021December 31, 2020
(in thousands)
Opening balance$936,257 $883,170 
Current period acquisitions (Note 6) 27,191 
Prior period acquisitions 123 
Foreign exchange movement(2,870)25,773 
Closing balance$933,387 $936,257 
11




6. Business combinations 

PRA Health Sciences Inc - Merger Completion

On July 1, 2021, ICON plc announced the completion of its Merger with PRA Health Sciences Inc ("PRA"). The combined company will retain the name ICON and will bring together approximately 38,000 employees across 47 countries, creating the world’s most advanced healthcare intelligence and clinical research organization.

The combined company will leverage its enhanced operations to transform clinical trials and accelerate biopharma customers’ commercial success through the development of much needed medicines and medical devices. The new ICON will have a renewed focus on leveraging data, applying technology and accessing diverse patient populations to speed up drug development.

Upon completion of the Merger, pursuant to the terms of the merger agreement, PRA became a wholly owned subsidiary of ICON plc. Under the terms of the Merger, PRA shareholders received per share $80 in cash and 0.4125 shares of ICON stock. The trading of PRA common stock on NASDAQ was suspended prior to market open on July 1, 2021.

The consideration for the Merger is estimated at approximately $12.5 billion. The opening balance sheet remains under preparation but we expect to record additional intangible assets of approximately $5.5 billion from the acquisition. The purchase accounting associated with the PRA Merger remains ongoing and we await formal valuations reports to support the assets acquired and the liabilities assumed. We expect to conclude the purchase accounting exercise within the next 12 months.


Acquisitions – MedPass Group ("MedPass")

On January 22, 2020 a subsidiary of the Company, ICON Investments Limited acquired 100% of the equity share capital of the MedPass Group. MedPass is the leading European medical device CRO, regulatory and reimbursement consultancy, that specializes in medical device development and market access. The acquisition of MedPass further enhances ICON’s Medical Device and Diagnostic Research services, through the addition of new regulatory and clinical capabilities in Europe. The integration of MedPass’s services brings noted expertise in complex class 3 medical devices, interventional cardiology and structural heart devices. Accounting for the acquisition of MedPass was finalized in the period ended December 31, 2020.
12



    The acquisition of MedPass has been accounted for as a business combination in accordance with ASC 805 'Business Combinations'. The Company has made an assessment of the fair value of assets acquired and liabilities assumed as at that date. The following table summarizes the Company’s fair values of the assets acquired and liabilities assumed:
January 22,
2020
(in thousands)
Cash & cash equivalents$10,170 
Property, plant and equipment45 
Operating right of use assets539 
Goodwill *27,191 
Customer relationships 11,725 
Order backlog 2,883 
Accounts receivable3,033 
Prepayments and other current assets 158 
Accounts payable(368)
Unearned revenue(989)
Other liabilities(2,202)
Current lease liabilities(219)
Non-current lease liabilities(320)
Non-current deferred tax liability(4,090)
Net assets acquired$47,556 
Cash outflows$46,992 
Working capital adjustment paid564 
Contingent consideration ** 
Total consideration$47,556 
* Goodwill represents the acquisition of an established workforce that specializes in medical device development and market access. None of the goodwill recognized is expected to be deductible for income tax purposes.
** The fair value of the contingent consideration was estimated at the date of acquisition as $Nil. Depending on performance of MedPass for the 12 month period ended December 31, 2020, the total consideration could have increased by a maximum of $6.7 million in contingent consideration. In January 2021, the contingent consideration was finalized and a value of $Nil was payable.









13



Acquisitions – CRN Holdings LLC (trading as Symphony Clinical Research ("Symphony"))

    On September 24, 2019 a subsidiary of the Company, ICON Clinical Research LLC, acquired a 100% interest in Symphony. Symphony is a leading provider of at-home trial services and site support services. The acquisition of Symphony further enhances our site & patient services offering. Accounting for the acquisition of Symphony was finalized in the period ended September 30, 2020. The total consideration was $37.8 million and resulted in the recognition of $22.9 million in Goodwill.

The total consideration included $2.5 million in contingent consideration, which was dependent on Symphony meeting certain revenue targets. The fair value of the contingent consideration was estimated at the date of acquisition. On June 12, 2020 the contingent consideration was settled at its revised fair value in the amount of $0.5 million. The change in fair value has been recorded in the selling, general and administrative expense line of the Condensed Consolidated Statement of Operations in the year ended December 31, 2020.

Acquisitions – MeDiNova

    On May 23, 2019 a subsidiary of the Company, ICON Clinical Research (U.K.) Limited acquired a 60% majority shareholding in MeDiNova, a site network with research sites in key markets in Europe and Africa. On March 9, 2020 ICON exercised its option to call the outstanding shares in the noncontrolling interest to take 100% ownership of MeDiNova. The acquisition further enhances ICON's patient recruitment capabilities in EMEA and complements ICON's existing site network in the US, PMG Research. Accounting for the acquisition of MeDiNova was finalized in the period ended June 30, 2020. The total consideration was $86.2 million and resulted in the recognition of $81.8 million in Goodwill.

The total consideration included $32.6 million to reflect the fair value of the redeemable noncontrolling interest. The fair value of the redeemable noncontrolling interest was estimated by applying an income based approach. The valuation approach used was based on the future earnings of the company times an appropriate earnings multiple. Effective from March 9, 2020, the noncontrolling interest was derecognized and a liability was recognized, representing the assessment of the redemption value of the noncontrolling interest. This liability was settled on July 17, 2020 for $43.9 million.

Acquisitions – MolecularMD Corp ("MMD")

    On January 25, 2019 a subsidiary of the Company, ICON Laboratory Services, Inc. acquired 100% of the share capital of MMD. MMD is a molecular diagnostic specialty laboratory that enables the development and commercialization of precision medicines in oncology. Accounting for the acquisition of MMD was finalized in the year ended December 31, 2019. The total consideration was $42.2 million and resulted in the recognition of $22.4 million in Goodwill.


7. Equity method investments

The Company has invested $4.9 million to obtain a 49% interest in the voting share capital of Oncacare Limited ("Oncacare"). The Company’s investment in Oncacare is accounted for under the equity method due to the Company's ability to exercise significant influence over Oncacare that is considered to be greater than minor. The Company records its pro rata share of the earnings/losses of this investment in 'Share of equity method investments' in the Condensed Consolidated Statement of Operations.

The majority investor has the right to sell the 51% majority voting share capital exclusively to the Company in a two and half year period commencing from January 1, 2023 and ICON also has the right to acquire the 51% majority voting share capital from August 1, 2025.

The following table represents our equity method investments at June 30, 2021:
Ownership PercentageCarrying ValueCarrying Value
June 30, 2021June 30, 2021December 31, 2020
(in thousands)
Oncacare Limited49 %$3,751 $4,534 

The Company has invested $4.9 million in Oncacare, which includes $2.5 million that was paid on June 30, 2021.

The Company has recorded a loss of $0.5 million representing its pro rata share of the losses in Oncacare for the three month period ended June 30, 2021. The Company recorded a loss of $0.8 million for the six months ended June 30, 2021.

14


8. Restructuring

Restructuring charges 

    No restructuring charge was recognized during the six months ended June 30, 2021 (June 30, 2020: $18.1 million).

Prior Period Restructuring charges 

A restructuring charge of $18.1 million was recognized in the year ended December 31, 2020 under a restructuring plan adopted following a review of operations. The restructuring plan reflected resource rationalization across the business to improve resource utilization, resulting in a charge of $11.4 million and office consolidation resulting in a charge for onerous lease obligations of $6.7 million, including the recognition of an impairment of right of use assets of $5.4 million and provision for other related costs of $1.3 million. No additional charge was recorded during the three and six months ended June 30, 2021.

Workforce reductionsOnerous LeaseTotal
(in thousands)
Initial restructuring charge recorded$11,391 $6,698 $18,089 
Utilization(6,987)(1,309)(8,296)
Foreign exchange movement 325 325 
Provision at December 31, 20204,404 5,714 10,118 
Utilization(2,299)(1,345)(3,644)
Foreign exchange movement 4 4 
Provision at June 30, 2021$2,105 $4,373 $6,478 

Future minimum lease payments (including related costs), associated with the 2020 restructuring plan, under the non-cancelable onerous leases as at June 30, 2021 were as follows:

Minimum rental payments
(in thousands)
June 30, 2021
2021$1,210 
20221,872 
20231,015 
2024142 
2025141 
Thereafter401 
Total future minimum lease payments (including related costs)4,781 
Lease imputed interest(408)
Total$4,373 


    A restructuring charge of $12.5 million was recognized during the year ended December 31, 2018 under a restructuring plan adopted following a review of operations. The restructuring plan reflected resource rationalization across the business to improve resource utilization, resulting in a charge of $9.7 million and office consolidation resulting in the recognition of an onerous lease obligation of $2.8 million. No additional charge was recorded during the six months ended June 30, 2021.
15


Workforce reductionsOnerous LeaseTotal
(in thousands)
Initial restructuring charge recorded$9,684 $2,806 $12,490 
Utilization(5,399)(672)(6,071)
Provision at December 31, 2018$4,285 $2,134 $6,419 
Utilization(3,554)(1,228)(4,782)
Provision at December 31, 2019$731 $906 $1,637 
Utilization(731)(276)(1,007)
Provision at December 31, 2020$ $630 $630 
Utilization (97)(97)
Provision at June 30, 2021$ $533 $533 
    
    At June 30, 2021, $4.4 million is included within other liabilities and $2.6 million within non-current other liabilities.

9. Operating leases
    Lease costs recorded under operating leases for the three and six months ended June 30, 2021 and June 30, 2020 were as follows:

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
(in thousands)(in thousands)
Operating lease costs$7,549 $7,768 $15,338 $15,857 
Income from sub-leases(220)(246)(431)(514)
Net operating lease costs$7,329 $7,522 $14,907 $15,343 

    Of the total cost of $14.9 million incurred in the six months ended June 30, 2021 (June 30, 2020: $15.3 million), $13.8 million (June 30, 2020: $14.0 million) is recorded within selling, general and administration costs and $1.1 million (June 30, 2020: $1.3 million) is recorded within direct costs.

    During the three and six months ended June 30, 2021 and June 30, 2020, costs incurred by the Group related to variable lease payments was de minimis.

    Right-of-use assets obtained during the three months ended June 30, 2021 excluding early termination options, now reasonably certain to be exercised of $Nil (June 30, 2020: $1.6 million), totaled $1.0 million (June 30, 2020: $0.2 million). Right-of-use assets obtained during the six months ended June 30, 2021, excluding early termination options now reasonably certain to be exercised of $4.2 million (June 30, 2020: $1.6 million), totaled $3.8 million (June 30, 2020: $4.5 million). In the three and six months ended June 30, 2020, office consolidations resulted in the recognition of an onerous lease obligation. The right-of-use assets related to these offices have been impaired to the extent they are considered onerous and a loss $5.4 million was recorded (see note 8 - Restructuring). No impairment losses were recognized in the three and six months ended June 30, 2021.

The weighted average remaining lease term and weighted-average discount rate at June 30, 2021 were 3.93 years and 2.52%, respectively.

16


    Future minimum lease payments under non-cancelable leases as of June 30, 2021 were as follows:
Minimum rental payments
(in thousands)
June 30, 2021
Due within 1 year$24,293 
Due between 1 and 5 years43,579 
Thereafter6,377 
Total future minimum lease payments 74,249 
Lease imputed interest(4,107)
Total$70,142 

    Operating lease liabilities are presented as current and non-current. Operating lease liabilities of $22.8 million have been included in other liabilities as at June 30, 2021 (June 30, 2020: $23.1 million).

10. Income taxes
    Income taxes recognized during the six months ended June 30, 2021 and June 30, 2020, comprise:

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
(in thousands)(in thousands)
Provision for income taxes (excluding restructuring)$14,133 $8,671 $30,281 $21,261 
Tax impact of restructuring (2,261) (2,261)
Provision for income taxes $14,133 $6,410 $30,281 $19,000 

    As at June 30, 2021 the Company maintains a $17.4 million liability (December 31, 2020: $19.6 million) for unrecognized tax benefit, which is comprised of $17.1 million (December 31, 2020: $19.1 million) related to items generating unrecognized tax benefits and $0.3 million (December 31, 2020: $0.5 million) for interest and penalties related to such items. The Company recognizes interest accrued on unrecognized tax benefits as an additional income tax expense.

    The Company has analyzed the filing positions in all of the significant federal, state and foreign jurisdictions where it is required to file income tax returns, as well as open tax years in these jurisdictions. The only periods subject to audit by the major tax jurisdictions where the Company does business are the 2016 through 2020 tax years. During such audits, local tax authorities may challenge the positions taken by us in our tax returns.
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11. Net income per ordinary share

Basic net income per ordinary share attributable to the Group has been computed by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted net income per ordinary share is computed by adjusting the weighted average number of ordinary shares outstanding during the period for all potentially dilutive ordinary shares outstanding during the period and adjusting net income for any changes in income or loss that would result from the conversion of such potential ordinary shares.

There is no difference in net income used for basic and diluted net income per ordinary share.

Basic and diluted net income per ordinary share attributable to the Group includes the adjustment to reflect the accretion of the noncontrolling interest in MeDiNova to its redemption value.

The reconciliation of the number of shares used in the computation of basic and diluted net income per ordinary share is as follows:
Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Weighted average number of ordinary shares outstanding for basic net income per ordinary share52,909,368 52,570,104 52,860,414 52,959,229 
Effect of dilutive share options outstanding472,133 458,463 434,021 731,909 
Weighted average number of ordinary shares outstanding for diluted net income per ordinary share53,381,501 53,028,567 53,294,435 53,691,138 
    
The reconciliation of net income attributable to the Group and net income attributable to the Group (including NCI redemption amount) as used to calculate net income per ordinary share attributable to the Group is as follows:

Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
(in thousands)(in thousands)
Net income attributable to the Group$73,865 $47,760 $170,987 $139,456 
Noncontrolling interest adjustment to redemption amount   (4,522)
Net income attributable to the Group (including NCI redemption adjustment)$73,865 $47,760 $170,987 $134,934 
Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Net income per Ordinary Share attributable to the Group (including NCI redemption adjustment):
Basic$1.40 $0.91 $3.23 $2.55 
Diluted$1.38 $0.90 $3.21 $2.51 

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12. Share-based awards

Share Options

    On July 21, 2008, the Company adopted the Employee Share Option Plan 2008 (the “2008 Employee Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may grant options to any employee, or any Director holding a salaried office or employment with the Company or a Subsidiary for the purchase of ordinary shares. On the same date, the Company also adopted the Consultants Share Option Plan 2008 (the “2008 Consultants Plan”), pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may grant options to any consultant, adviser or non-executive Director retained by the Company or any Subsidiary for the purchase of ordinary shares. 

    On February 14, 2017, both the 2008 Employee Plan and the 2008 Consultants Plan (together the “2008 Option Plans”) were amended and restated in order to increase the number of options that can be issued under the 2008 Consultants Plan from 0.4 million to 1.0 million and to extend the date for options to be granted under the 2008 Option Plans.

    An aggregate of 6.0 million ordinary shares have been reserved under the 2008 Employee Plan, as reduced by any shares issued or to be issued pursuant to options granted under the 2008 Consultants Plan, under which a limit of 1.0 million shares applies. Further, the maximum number of ordinary shares with respect to which options may be granted under the 2008 Employee Option Plan, during any calendar year to any employee shall be 0.4 million ordinary shares. There is no individual limit under the 2008 Consultants Plan. No options may be granted under the 2008 Option Plans after February 14, 2027. 

    Each option granted under the 2008 Option Plans will be an employee stock option, or NSO, as described in Section 422 or 423 of the Internal Revenue Code. Each grant of an option under the 2008 Options Plans will be evidenced by a Stock Option Agreement between the optionee and the Company. The exercise price will be specified in each Stock Option Agreement, however option prices will not be less than 100% of the fair market value of an ordinary share on the date the option is granted. 

    On January 17, 2003, the Company adopted the Share Option Plan 2003 (the “2003 Share Option Plan”) pursuant to which the Compensation and Organization Committee of the Board could grant options to officers and other employees of the Company or its subsidiaries for the purchase of ordinary shares. An aggregate of 6.0 million ordinary shares were reserved under the 2003 Share Option Plan; and, in no event could the number of ordinary shares issued pursuant to options awarded under this plan exceed 10% of the outstanding shares, as defined in the 2003 Share Option Plan, at the time of the grant, unless the Board expressly determined otherwise. Further, the maximum number of ordinary shares with respect to which options could be granted under the 2003 Share Option Plan during any calendar year to any employee was 0.4 million ordinary shares. The 2003 Share Option Plan expired on January 17, 2013. No new options may be granted under this plan. 

    Share option awards are granted with an exercise price equal to the market price of the Company’s shares at date of grant. Prior to 2018, share options typically vest over a period of five years from date of grant and expire eight years from date of grant. Share options granted to non-executive directors during 2018 vest over 12 months and expire eight years from the date of grant. The maximum contractual term of options outstanding at June 30, 2021 is eight years.

    The following table summarizes option activity for the six months ended June 30, 2021:
 Options
Outstanding
Number of Shares 
Weighted
Average
Exercise
Price
Weighted
Average Grant Date
Fair Value
Weighted
Average
Remaining
Contractual
Life
Outstanding at December 31, 2020553,746 $108.53 $31.63 4.86
Granted100,299 $177.76 $49.15 
Exercised(4,020)$42.24 $14.07 
Canceled/expired $ $ 
Outstanding at June 30, 2021650,025 $119.62 $34.44 4.90
Exercisable at June 30, 2021336,942 $92.71 $27.42 3.63

    The Company has outstanding options with fair values ranging from $12.24 to $64.07 per option or a weighted average fair value of $25.97 per option. The Company issues ordinary shares for all options exercised. The total amount of fully vested share options which remained outstanding at June 30, 2021 was 336,942. Fully vested share options at June 30, 2021 have an average remaining contractual term of 3.63 years, an average exercise price of $92.71 and a total intrinsic value of $38.4 million. The total intrinsic value of options exercised during the six months ended June 30, 2021 was $0.7 million (June 30, 2020: $4.3 million).

The following table summarizes the movement in non-vested share options for the six months ended June 30, 2021: 
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Options
Outstanding
Number of Shares
Weighted Average
Exercise Price
Weighted Average
Grant Date Fair Value
Non-vested outstanding at December 31, 2020328,901 $125.89 $36.24 
Granted100,299 $177.76 $49.15 
Vested(116,117)$109.53 $31.84 
Forfeited $ $ 
Non-vested outstanding at June 30, 2021313,083 $148.58 $42.00 

Fair value of Stock Options Assumptions

    The weighted average fair value of options granted during the six months ended June 30, 2021 and June 30, 2020 was calculated using the Black-Scholes option pricing model. The weighted average grant date fair values and assumptions used were as follows:
Six Months Ended
June 30, 2021June 30, 2020
Weighted average grant date fair value$49.15 $42.43 
Assumptions:  
Expected volatility30 %30 %
Dividend yield % %
Risk-free interest rate0.78 %0.57 %
Expected life5 years5 years

    Expected volatility is based on the historical volatility of our common stock over a period equal to the expected term of the options; the expected life represents the weighted average period of time that options granted are expected to be outstanding given consideration to vesting schedules and our historical experience of past vesting and termination patterns. The risk-free rate is based on the U.S. government zero-coupon bonds yield curve in effect at time of the grant for periods corresponding with the expected life of the option.

Restricted Share Units and Performance Share Units 

    On April 23, 2013, the Company adopted the 2013 Employees Restricted Share Unit and Performance Share Unit Plan (the “2013 RSU Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may select any employee, or any Director holding a salaried office or employment with the Company, or a Subsidiary to receive an award under the plan. On May 11, 2015, the 2013 RSU Plan was amended and restated in order to increase the number of shares that can be issued under the RSU Plan by 2.5 million shares. Accordingly, an aggregate of 4.1 million ordinary shares have been reserved for issuance under the 2013 RSU Plan. The shares are awarded at par value and vest over a service period. Awards under the 2013 RSU Plan may be settled in cash or shares at the option of the Company.

    On April 30 2019, the Company approved the 2019 Consultants and Directors Restricted Share Unit Plan (the “2019 Consultants RSU Plan”), which was effective as of May 16, 2019, pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may select any consultant, adviser or non-executive Director retained by the Company, or a Subsidiary to receive an award under the plan. 250,000 ordinary shares have been reserved for issuance under the 2019 Consultants RSU Plan. The awards are at par value and vest over a service period. Awards granted to non-executive directors during 2019, 2020 and 2021 vest over twelve months.









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    The Company has awarded RSUs and PSUs to certain key individuals of the Group. The following table summarizes RSU and PSU activity for the six months ended June 30, 2021:
  
PSU
Outstanding
Number of
Shares
 
PSU
Weighted
Average Grant Date
Fair Value
PSU
Weighted
Average
Remaining
Contractual
Life
 
RSU
Outstanding
Number of
Shares
 
RSU
Weighted
Average Grant Date
Fair Value
RSU
Weighted
Average
Remaining
Contractual
Life
Outstanding at December 31, 2020159,641 $137.64 1.14341,424 $145.77 1.41
Granted55,444 $177.77  144,274 $207.29 
Shares vested(44,132)$115.61  (122,331)$131.37 
Forfeited(3,159)$115.61  (9,818)$146.64 
Outstanding at June 30, 2021167,794 $