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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, 2022

ICON plc
(Registrant's name)


333-08704
(Commission file number)


South County Business Park, Leopardstown, Dublin 18, D18 X5R3, Ireland
(Address of principal executive offices)


Brendan Brennan, CFO
South County Business Park, Leopardstown, Dublin 18, D18 X5R3, 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be deemed a part of each such registration statement from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished by ICON plc under the Securities Act of 1933 or the Securities Exchange Act of 1934.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”, the "Group", 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 healthcare intelligence partner of choice by delivering industry leading solutions and best in class performance in clinical development.

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, 2022 we had approximately 40,500 employees, in 119 locations in 53 countries. During the six months ended June 30, 2022, we derived approximately 48.6%, 45.7% and 5.7% of our revenue in the United States, Europe and Rest of World respectively.

We began operations in 1990 and have expanded our business 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, D18 X5R3, Republic of Ireland. The contact telephone number of this office is +353-1-291-2000.

Recent developments

Senior Secured Credit Facilities repayment

On June 30, 2022, the Company repaid $100.0 million of the senior secured term loan facility and made a quarterly interest payment of $39.4 million. This repayment resulted in an accelerated charge associated with previously capitalized fees of $0.9 million.

On March 31, 2022, the Company repaid $300.0 million of the senior secured term loan facility and made a quarterly interest payment of $35.1 million. This repayment resulted in an additional charge associated with previously capitalized fees of $3.2 million.

Foreign exchange translation

The Company prepares its financial statements in United States dollar while the local results of a certain number of our subsidiaries are prepared in currencies other than United States dollars, including, amongst others, the pound sterling and the euro. In addition, the Company's contracts with clients are sometimes denominated in currencies other than the United States dollar. Finally, the Company is exposed to a wider variety of currencies in the expenses line due to most expenses being incurred in the local currencies of where our global operations are based. Accordingly, changes in exchange rates between the United States dollar and those other currencies can impact the Company’s financial results.

Ukraine situation

On February 24, 2022 Russia invaded Ukraine, creating significant instability and unrest in the region. The Company's operations in these affected regions have been significantly curtailed as a result of these events. The Company’s revenue in the affected regions are approximately 1-2% of the Company’s consolidated revenues for the six months ended June 30, 2022. The financial impact of the conflict is not material to the Company during the six months ended June 30, 2022.

During these concerning times, the Company's key focus is on the safety of our employees and their families, patients, investigators and on the mitigation of adverse impacts on ongoing clinical trials. The Company has worked to ensure the safety of employees and their families based in the Ukraine through the implementation of a number of employee assistance programs. These programs aim to provide affected employees and their families with transportation, accommodation in neighboring countries, financial assistance, communications and other support services as needed.








2



PRA Health Sciences, Inc. - Merger Completion

On July 1, 2021, ICON completed the Acquisition of PRA Health Services, Inc. ("PRA") by means of a merger whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA, the parent of the PRA Health Sciences Group ("the Acquisition" and "the Merger"). The combined Group retained the name ICON and brought together approximately 38,000 employees (as at the Merger date) across the globe, creating one of the world’s most advanced healthcare intelligence and clinical research organizations.

The combined Company leverages 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 has 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. 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 total value of the Merger consideration is $12.0 billion and has resulted in the recognition of goodwill of $8.1 billion, intangible assets of $4.9 billion and an associated deferred tax liability of $1.1 billion. The accounting for the Merger was finalized as of June 30, 2022.

The financial information presented in this Form 6-K reflect the results of the combined Company for the six months ended June 30, 2022. The financial information presented for the six months ended June 30, 2021 are as previously reported and do not reflect the pre-Merger results of PRA, other than where clearly stated and required by GAAP.

3


     ICON plc
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2022 AND DECEMBER 31, 2021
(Unaudited)(Audited)
June 30,
2022
December 31, 2021
ASSETS(in thousands)
Current Assets:
Cash and cash equivalents$614,918 $752,213 
Available for sale investments1,712 1,712 
Accounts receivable, net of allowance for credit losses1,357,268 1,342,770 
Unbilled revenue709,477 623,121 
Other receivables63,838 56,760 
Prepayments and other current assets130,977 114,323 
Income taxes receivable52,132 50,299 
Total current assets2,930,322 2,941,198 
Non-current Assets:
Property, plant and equipment, net313,110 336,444 
Goodwill8,970,283 9,037,931 
Intangible assets4,508,453 4,710,843 
Operating right-of-use assets160,417 198,123 
Other receivables53,236 70,557 
Income taxes receivable18,838 18,637 
Deferred tax asset54,051 48,392 
Equity method investments731 2,373 
Investments in equity- long term 26,891 22,592 
Total Assets$17,036,332 $17,387,090 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable$77,648 $90,764 
Unearned revenue1,191,778 1,323,961 
Other liabilities1,118,975 949,629 
Income taxes payable38,223 59,433 
Current bank credit lines and loan facilities55,150 55,150 
Total current liabilities2,481,774 2,478,937 
Non-current Liabilities:
Non-current bank credit lines and loan facilities4,990,500 5,381,162 
Lease liabilities147,300 159,483 
Non-current other liabilities38,223 42,596 
Non-current income taxes payable216,942 172,109 
Deferred tax liability1,015,580 1,085,976 
Commitments and contingencies  
Total Liabilities8,890,319 9,320,263 
Shareholders' Equity:
Ordinary shares, par value 6 euro cents per share; 100,000,000 shares authorized,
81,526,607 shares issued and outstanding at June 30, 2022 and
81,554,683 shares issued and outstanding at December 31, 2021
6,637 6,640 
Additional paid-in capital6,787,365 6,733,910 
Other undenominated capital1,162 1,134 
Accumulated other comprehensive loss(192,935)(90,937)
Retained earnings1,543,784 1,416,080 
       Total Shareholders' Equity8,146,013 8,066,827 
Total Liabilities and Shareholders' Equity$17,036,332 $17,387,090 

The accompanying notes are an integral part of these condensed consolidated financial statements.
4


ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021
(UNAUDITED)
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands except share and per share data)
Revenue$1,935,193 $871,155 $3,836,957 $1,729,353 
Costs and expenses: 
Direct costs (excluding depreciation and amortization)1,392,062 631,123 2,770,529 1,257,367 
Selling, general and administrative expense189,953 89,867 385,214 175,901 
Depreciation and amortization144,019 17,276 285,424 34,681 
Transaction and integration-related expenses8,884 20,017 20,969 32,518 
Restructuring22,486  26,693  
Total costs and expenses1,757,404 758,283 3,488,829 1,500,467 
Income from operations177,789 112,872 348,128 228,886 
Interest income166 186 293 443 
Interest expense(47,111)(24,551)(91,536)(27,278)
Income before provision for income taxes130,844 88,507 256,885 202,051 
Provision for income taxes(14,254)(14,133)(27,540)(30,281)
Income before share of earnings from equity method investments116,590 74,374 229,345 171,770 
Share of losses in equity method investments(856)(509)(1,641)(783)
Net income attributable to the Group$115,734 $73,865 $227,704 $170,987 
Net income per Ordinary Share attributable to the Group (note 14): 
Basic$1.42 $1.40 $2.80 $3.23 
Diluted$1.41 $1.38 $2.76 $3.21 
Weighted average number of Ordinary Shares outstanding (note 14):  
Basic81,398,071 52,909,368 81,430,507 52,860,414 
Diluted82,312,946 53,381,501 82,462,842 53,294,435 

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

5



ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021
(UNAUDITED)

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)(in thousands)
Comprehensive income:
Net income attributable to the group$115,734 $73,865 $227,704 $170,987 
Currency translation adjustment(65,628)10,242 (101,623)(8,909)
Currency impact of long term funding (net of tax)(552)163 (375)(239)
Amortization of interest rate hedge 57  113 
Write off of loss on interest rate hedge 778  778 
Total comprehensive income attributable to the group$49,554 $85,105 $125,706 $162,730 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6


ICON plc
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
 
Group
SharesAmountAdditional
Paid-in
Capital
Other
Undenominated
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
(dollars in thousands, except share data)
Balance at December 31, 202181,554,683 $6,640 $6,733,910 $1,134 $(90,937)$1,416,080 $8,066,827 
Net income— — — — — 111,970 111,970 
Exercise of share options84,090 6 7,491 — — — 7,497 
Issue of restricted share units / performance share units74,769 4 — — — — 4 
Non-cash stock compensation expense— — 18,840 — — — 18,840 
Share issuance costs— — (3)— — — (3)
Share repurchase program(420,530)(28)— 28 — (99,983)(99,983)
Share repurchase costs— — — — — (17)(17)
Other comprehensive loss, net of tax— — — — (35,818)— (35,818)
Balance at March 31, 202281,293,012 6,622 6,760,238 1,162 (126,755)1,428,050 8,069,317 
Net income— — — — — 115,734 115,734 
Exercise of share options75,671 4 7,649 — — — 7,653 
Issue of restricted share units / performance share units 157,924 11 — — — — 11 
Non-cash stock compensation expense— — 19,478 — — — 19,478 
Other comprehensive loss, net of tax— — — — (66,180)— (66,180)
Balance at June 30, 202281,526,607 $6,637 $6,787,365 $1,162 $(192,935)$1,543,784 $8,146,013 


7


Group
SharesAmountAdditional
Paid-in
Capital
Other
Undenominated
Capital
Accumulated
Other
Comprehensive
Loss
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 
Net income— — — — — 97,122 97,122 
Exercise of share options— — — — — — — 
Issue of restricted share units / performance share units70,097 5 — — — — 5 
Non-cash stock compensation expense— — 6,310 — — — 6,310 
Share issuance costs— — (5)— — — (5)
Other comprehensive loss, net of tax— — — — (19,497)— (19,497)
Balance at March, 31 202152,858,190 4,585 623,409 1,134 (54,974)1,360,017 1,934,171 
Net income— — — — — 73,865 73,865 
Exercise of share options4,020 — 170 — — — 170 
Issue of restricted share units / performance share units95,853 7 — — — — 7 
Non-cash stock compensation expense— — 8,495 — — — 8,495 
Share issuance costs— — (5)— — — (5)
Other comprehensive income net of tax— — — — 11,240 — 11,240 
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
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021 (UNAUDITED)

Six Months Ended
June 30, 2022June 30, 2021
(in thousands)
Cash flows from operating activities:
Net income$227,704 $170,987 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense285,424 34,681 
Impairment of long lived assets20,749  
Reduction in carrying value of operating right-of-use assets23,570 14,037 
Loss on equity method investments1,641 783 
Charge on interest rate hedge 891 
Amortization of financing costs and debt discount9,188 1,592 
Stock compensation expense38,186 14,874 
Loss on extinguishment of debt 14,434 
Deferred taxes(75,265)3,313 
Unrealized foreign exchange gain(37,421)2,586 
Other non-cash items9,159 (3,909)
Changes in operating assets and liabilities:
Accounts receivable(41,032)36,650 
Unbilled revenue(33,187)12,690 
Unearned revenue(176,904)14,534 
Other net assets157,154 (77,789)
Net cash provided by operating activities408,966 240,354 
Cash flows from investing activities:  
Purchase of property, plant and equipment(47,840)(21,653)
Purchase of equity method investment (2,450)
Purchase of investments in equity - long term(799)(1,771)
Net cash used in investing activities(48,639)(25,874)
Cash flows from financing activities:  
Proceeds from exercise of equity compensation15,140 182 
Share issue costs(3)(10)
Repurchase of ordinary shares(99,983) 
Share repurchase costs(17) 
Drawdown of bank credit lines and loan facilities25,000  
Repayment of bank credit lines and loan facilities(425,000) 
Net cash used in financing activities(484,863)172 
Effect of exchange rate movements on cash(12,759)539 
Net (decrease)/ increase in cash and cash equivalents(137,295)215,191 
Cash and cash equivalents at beginning of period752,213 840,305 
Cash and cash equivalents at end of period614,918 1,055,496 

The accompanying notes are an integral part of these condensed consolidated financial statements.
9


ICON plc
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 2022
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, 2021 (see note 2 - Significant accounting policies). Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal period ending December 31, 2022.

Certain prior period amounts in the consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. Most notably, the Company has presented transaction and integration-related expenses as a separate line in the Condensed Consolidated Statement of Operations and reclassified certain costs incurred in the six months ended June 30, 2021 within this line. These costs consist of transaction related expenses incurred as part of the Merger. These costs amounted to $32.5 million for the six months ended June 30, 2021 and were previously presented in the selling, general and administrative expenses but have been reclassified to transaction and integration-related expenses to conform to the current period’s presentation.

2. Significant accounting policies
Revenue recognition
The Company earns revenues by providing a number of different services to its customers. These services, which are integral elements of the clinical development process, include clinical trials management, consulting, contract staffing, data services and laboratory services. Contracts range in duration from a number of months to several years.

ASC 606 requires application of five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies the performance obligation(s).

Clinical trial service revenue
A clinical trial service is a single performance obligation satisfied over time. The full-service obligation in respect of a clinical trial (including those services performed by investigators and other parties) is considered a single performance obligation. Promises offered to the customer are not distinct within the context of the contract. We have concluded that ICON is the contract principal in respect of both direct services and in the use of third parties (principally investigator services) that support the clinical research project. The transaction price is determined by reference to the contract or change order value (total service revenue and pass-through/ reimbursable expenses) adjusted to reflect a realizable contract value. Revenue is recognized as the single performance obligation is satisfied. The progress towards completion for clinical service contracts is measured based on an input measure being total project costs incurred (inclusive of third party costs) at each reporting period as a percentage of forecasted total project costs.

Contracting services revenue
The Company has availed of the practical expedient which results in recognition of revenue on a right to invoice basis. Application of the practical expedient reflects the right to consideration from the customer in an amount that corresponds directly with the value to the customer of the performance completion to date. This reflects hours performed by contract staff.

Consulting services revenue
We have concluded that our consulting services contracts represent a single performance obligation satisfied over time. The transaction price is determined by reference to contract or change order value. Revenue is recognized as the performance obligation is satisfied. The progress towards completion for consulting contracts is measured based on total project inputs (time) at each reporting period as a percentage of forecasted total project inputs.


10


Laboratory services revenue
Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the products or services are transferred to the customer. Revenue for laboratory services is measured as the amount of consideration we expect to receive in exchange for transferring products or services. Where contracts with customers contain multiple performance obligations, the transaction price is allocated to each performance obligation based on the estimated relative selling price of the promised good or service. Service revenue is recognized over time as the services are delivered to the customer based on the extent of progress towards completion of the performance obligation. The determination of the methodology to measure progress requires judgment and is based on the nature of services provided. This requires an assessment of the transfer of value to the customer. The right to invoice measure of progress is generally related to rate per unit contracts, as the extent of progress towards completion is measured based on discrete service or time-based increments, such as samples tested or labor hours incurred. Revenue is recorded in the amount invoiced since that amount corresponds to the value of the Company's performance and the transfer of value to the customer.

Data services revenue
The Company provides data reports and analytics to customers based on agreed-upon specifications, including the timing of delivery, which is typically either weekly, monthly, or quarterly. If a customer requests more than one type of data report or series of data reports within a contract, each distinct type of data report is a separate performance obligation. The contracts provide for the Company to be compensated for the value of each deliverable. The transaction price is determined using list prices, discount agreements, if any, and negotiations with the customers, and generally includes any out-of-pocket expenses. Typically, the Company bills in advance of services being provided with the amount being recorded as unearned revenue.

When multiple performance obligations exist, the transaction price is allocated to performance obligations on a relative standalone selling price basis. In cases where the Company contracts to provide a series of data reports, or in some cases data, the Company recognizes revenue over time using the “units delivered” output method as the data or reports are delivered. Expense reimbursements are recorded to revenue as the expenses are incurred as they relate directly to the services performed.

Commissions
Incremental costs of obtaining a contract are recognized as an asset on the Condensed Consolidated Balance Sheet in respect of those contracts that exceed one year. Where commission costs relate to contracts that are less than one year, the practical expedient is applied as the amortization period of the asset which would arise on deferral would be one year or less.
Business Combinations
The cost of a business combination is measured as the aggregate of the fair values at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued in exchange for control. Where a business combination agreement provides for an adjustment to the cost of the acquisition which is contingent upon future events, the amount of the estimated adjustment is recognized at the acquisition date at the fair value of the contingent consideration. Any changes to this estimate outside the measurement period will depend on the classification of the contingent consideration. If the contingent consideration is classified as equity it shall not be re-measured and the settlement shall be accounted for within equity. If the contingent consideration is classified as a liability any adjustments will be accounted for through the Consolidated Statement of Operations or Other Comprehensive Income depending on whether the liability is considered a financial instrument.

The assets, liabilities and contingent liabilities of businesses acquired are measured at their fair values at the date of acquisition. In the case of a business combination which is completed in stages, the fair values of the identifiable assets, liabilities and contingent liabilities are determined at the date of each exchange transaction. When the initial accounting for a business combination is determined provisionally, any subsequent adjustments to the provisional values allocated to the identifiable assets, liabilities and contingent liabilities are made within twelve months of the acquisition date and presented as adjustments to goodwill in the reporting period in which the adjustments are determined.

The Company allocates a share of net income to the noncontrolling interest holders based on percentage ownership.
Intangible Assets
Intangible assets are amortized on a straight line basis over their estimated useful life.
The carrying values of intangible assets are reviewed for recoverability to determine if the facts and circumstances suggest that a potential impairment may have occurred. If this review indicates that carrying values will not be recoverable the Company will record an impairment charge to reduce carrying values to estimated fair value.
11


3. Revenue

Revenue disaggregated by customer profile is as follows:
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)(in thousands)
Clients 1-5525,938 356,450 1,065,641 750,644 
Clients 6-10260,689 116,237 553,350 239,130 
Clients 11-25368,675 158,577 726,985 296,432 
Other779,891 239,891 1,490,981 443,147 
Total$1,935,193 $871,155 $3,836,957 $1,729,353 

Revenue from individual customers greater than 10% of consolidated revenue in the respective periods was as follows:

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Customer:
Customer A*12.7 %*15.9 %
Customer B*11.2 %*11.2 %
*Less than 10%


















12



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, 2022December 31, 2021
(in thousands)
Contract assets:
Billed services (accounts receivable)$1,372,345 $1,349,851 
Unbilled services (unbilled revenue)709,477 623,121 
Accounts receivable and unbilled revenue, gross2,081,822 1,972,972 
Allowance for credit losses(15,077)(7,081)
Accounts receivable and unbilled revenue, net$2,066,745 $1,965,891 
    
Unbilled services and unearned revenue or payments on account (contract assets and liabilities) were as follows:
(in thousands, except percentages)June 30, 2022December 31, 2021$ Change% Change
Unbilled services (unbilled revenue)$709,477 $623,121 $86,356 13.9 %
Unearned revenue (payments on account)(1,191,778)(1,323,961)132,183 (10.0)%
Net balance$(482,301)$(700,840)$218,539 (31.2)%

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, 2022 increased by $86.4 million compared to December 31, 2021. Unearned revenue decreased by $132.2 million over the same period resulting in an increase of $218.5 million in the net balance of unbilled services and unearned revenue or payments on account between December 31, 2021 and June 30, 2022. 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.

As of June 30, 2022 approximately $13.9 billion (June 30, 2021: $6.6 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 49% of the unsatisfied performance obligation over the next 12 months, with the remainder recognized thereafter over the duration of the customer contracts.

13


5. Goodwill
Six Months EndedYear Ended
June 30, 2022December 31, 2021
(in thousands)
Opening balance$9,037,931 $936,257 
Current period acquisitions (Note 7) 8,120,006 
Prior period acquisitions (Note 7)(35,692) 
Foreign exchange movement(31,956)(18,332)
Closing balance$8,970,283 $9,037,931 
There are no accumulated impairment charges as of June 30, 2022 and December 31, 2021.


6. Intangible assets

Intangible assets, net consisted of the following:
Six Months EndedYear Ended
June 30, 2022December 31, 2021
Cost(in thousands)
Customer relationships$4,076,062 $4,056,642 
Order backlog536,685 528,022 
Trade names & brands204,604 204,685 
Patient database170,274 170,525 
Technology assets120,840 121,507 
Total cost5,108,465 5,081,381 
Accumulated amortization(600,012)(370,538)
 Net book value$4,508,453 $4,710,843 

The identifiable intangible assets are amortized over their estimated useful lives.
















14



7. Business combinations 

PRA Health Sciences, Inc. - Merger Completion

On July 1, 2021 (the "Merger Date"), the Company completed the Acquisition of PRA by means of a merger whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA, the parent of the PRA Health Sciences Group. The combined Group has retained the name ICON and brought together approximately 38,000 (as at the Merger date) employees across the globe, creating one of the world’s most advanced healthcare intelligence and clinical research organizations. The Merger was accounted for as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations.

The combined Company leverages 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 has 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.

In the six months ended June 30, 2022, the Company incurred $21.0 million of Merger-related expenses which were accounted for separately from the business combination and expensed as incurred within the “Transaction and integration related expenses” line item of the condensed consolidated statements of operations. These costs consisted primarily of integration costs including severance arrangements, retention agreements and advisory fees.

The Merger Date fair value of the consideration transferred consisted of the following:

 (in thousands)
Fair value of cash consideration$5,308,646 
Fair value of ordinary shares issued to acquiree stockholders5,658,126 
Fair value of replacement share-based awards issued to acquiree employees209,399 
Repayment of term loan obligations and accrued interest *865,800 
$12,041,971 
* This represents the portion of PRA debt paid by ICON. PRA also paid $401.6 million from available cash to settle debt obligations that existed at the Merger Date.
























15


The following table summarizes the allocation of the consideration transferred based on the Merger Date fair values of assets acquired and liabilities assumed, with the excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill:

July 1
2021
(in thousands)
Cash and cash equivalents$259,971 
Accounts receivable and unbilled revenue934,308 
Other current assets125,156 
Fixed assets156,851 
Operating lease right-of-use assets180,601 
Goodwill *8,084,314 
Intangible assets4,919,000 
Deferred tax assets25,190 
Other assets33,928 
Accounts payable(50,259)
Accrued expenses and other current liabilities(380,048)
Current portion of operating lease liabilities(36,506)
Unearned revenue(739,278)
Non-current portion of operating lease liabilities(147,204)
Non-current deferred tax liabilities(1,119,762)
Other non-current liabilities(204,291)
Net assets acquired$12,041,971 
* The goodwill in connection with the Merger is primarily attributable to the assembled workforce of PRA and the expected synergies of the Merger. None of the goodwill recognized is expected to be deductible for income tax purposes.

The following table summarizes the fair value of identified intangible assets and their respective useful lives as of the Merger Date (in thousands, except for estimated useful lives):
Estimated Fair ValueEstimated Useful Life
Customer relationship3,938,000 23 years
Order backlog500,000 3 years
Trade names202,000 3 years
Patient database168,000 7 years
Technology111,000 5 years
4,919,000 

16


At June 30, 2022, the Company completed its review of the July 1, 2021 acquisition balance sheet of PRA and completed final valuation reports associated with certain assets acquired and liabilities assumed. In the period since the Merger Date, the Company recognized certain measurement period adjustments as shown in the table below:
Measurement period adjustments
(in thousands)
Cash and cash equivalents$ 
Accounts receivable and unbilled revenue 
Other current assets14,465 
Fixed assets(6,137)
Operating lease right-of-use assets(11,744)
Goodwill70,436 
Intangible assets *44,000 
Deferred tax assets(147,039)
Other assets(1,166)
Accounts payable 
Accrued expenses and other current liabilities(37,496)
Current portion of operating lease liabilities1,865 
Unearned revenue **19,623 
Non-current portion of operating lease liabilities10,454 
Non-current deferred tax liabilities193,837 
Other non-current liabilities(151,098)
* In the six months ended June 30, 2022, the Company incurred $2.2 million amortization which related to the year ended December 31, 2021 due to the timing of when the measurement period adjustment was identified.
** The unearned revenue measurement period adjustment also includes $16.0 million as a result of the early adoption of ASU 2021-08 'Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers' in Quarter 4 2021.

Pro forma financial information
The following pro forma financial information was derived from the historical financial statements of the Company and PRA and presents the combined results of operations as if the Merger had occurred on January 1, 2021. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the results that would have actually occurred had the Merger been completed on January 1, 2021. In addition, the pro forma financial information presented for the comparative period does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may result from the Merger, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of PRA.
Six Months EndedSix Months Ended
June 30, 2022June 30, 2021
(in thousands, except per share data)
Revenue$3,836,957 $3,710,527 
Net income (loss)$227,704 $(183,780)

The pro forma financial information presented above for the six months ended June 30, 2021 reflect certain pro forma adjustments to the financial performance of the Company had the Merger date been completed on January 1, 2021. The pro forma adjustments primarily relate to the amortization of acquired intangible assets, interest expense, amortization of deferred financing costs related to the new financing arrangements, transaction costs, share-based compensation expense related to the acceleration of share-based compensation awards and replacement share-based awards, and financing fees. The pro forma adjustments were tax effected using the tax rate relevant in the appropriate jurisdiction.

The results presented above for the six months ended June 30, 2022 are as reported in the Condensed Consolidated Statement of Operations.


17


8. 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. 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% remaining voting share capital from August 1, 2025.

The following table represents our equity method investments at June 30, 2022:
Ownership PercentageCarrying ValueCarrying Value
June 30, 2022June 30, 2022December 31, 2021
(in thousands)
Oncacare Limited49 %$731 $2,373 

The Company has recorded a loss of $0.9 million representing its pro rata share of the losses in Oncacare for the three months ended June 30, 2022. The Company recorded a loss of $1.6 million for the six months ended June 30, 2022.

During the year ended December 31, 2021, the Company provided a loan of $10 million to Oncacare in order to fund the continued development of the business operations. The loan accrues annual interest at 1.6% and the loan is repayable on June 30, 2025. Oncacare continues to perform in line with expectations.


9. Fair value measurements

The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, unbilled services, contract assets, accounts payable, and unearned revenue approximate fair value due to the short maturities of these instruments.

Recurring Fair Value Measurements
The Company classifies its interests in investments in equity-long term having considered the nature of its investment, the extent of influence over operating and financial decisions and the availability of readily determinable fair values. The Company determined that the interests in funds at June 30, 2022 and December 31, 2021 meet the definition of equity securities without readily determinable fair values. The Company concluded that the interests held at June 30, 2022 and December 31, 2021 qualify for the Net Asset Value (NAV) practical expedient in ASC 820 'Fair value measurements and disclosures'. There was an increase in fair value of $3.5 million (December 31, 2021: $3.2 million) recognized in net income during the year bringing the carrying value of the subscriptions to $26.9 million at June 30, 2022 (December 31, 2021: $22.6 million).

Non-recurring Fair Value Measurements
Certain assets and liabilities are carried on the accompanying Condensed Consolidated Balance Sheet at cost and are not re-measured to fair value on a recurring basis. These assets include finite-lived intangible assets that are tested for impairment when a triggering event occurs and goodwill that is tested for impairment annually or when a triggering event occurs. As of June 30, 2022, assets carried on the balance sheet at cost and not re-measured to fair value on a recurring basis totaled approximately $13,478.7 million and are identified as Level 3 assets. These assets are comprised of goodwill of $8,970.3 million and identifiable intangible assets, net of $4,508.5 million. Refer to "Note 12 - Bank credit lines and loan facilities" for additional information regarding the fair value of long-term debt balances.
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10. Restructuring

In the six months ended June 30, 2022, a restructuring charge of $26.7 million was recorded in the Condensed Consolidated Statement of Operations under a restructuring plan adopted following a review of operations. The restructuring plan reflected resource rationalization across the business to improve employee utilization and an office consolidation program to optimize the Company's office footprint.

 Six Months Ended
June 30, 2022June 30, 2021
 (in thousands)
Restructuring charges$26,693 $ 
Net charge$26,693 $ 

At June 30, 2022, a total liability of $6.7 million was recorded on the Consolidated Balance Sheet relating to restructuring activities. The total liability included $5.1 million of facilities related liabilities of which $2.2 million is included within other liabilities and $2.9 million is included within non-current other liabilities. The remaining provision of $1.6 million relates to workforce reduction and is included within other liabilities.     

Six Months EndedYear ended
June 30, 2022December 31, 2021
(in thousands)
Opening provision$10,311 $4,676 
Additional provisions2,551 11,272 
Utilization(6,151)(5,637)
Ending provision$6,711 $10,311 













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11. Operating leases
Lease costs recorded under operating leases for the six months ended June 30, 2022 and June 30, 2021 were as follows:

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)(in thousands)
Operating lease costs$13,548 $7,549 $28,812 $15,338 
Income from sub-leases(303)(220)(630)(431)
Net operating lease costs$13,245 $7,329 $28,182 $14,907 

Of the total cost of $28.2 million incurred in the six months ended June 30, 2022 (June 30, 2021: $14.9 million), $27.1 million (June 30, 2021: $13.8 million) is recorded within selling, general and administration costs and $1.1 million (June 30, 2021: $1.1 million) is recorded within direct costs.

During the six months ended June 30, 2022 and June 30, 2021, 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, 2022, excluding early termination options, now reasonably certain to be exercised of $Nil (June 30, 2021: $Nil), totaled $29.0 million (June 30, 2021: $1.0 million). Right-of-use assets obtained during the six months ended June 30, 2022, excluding early termination options, now reasonably certain to be exercised of $Nil (June 30, 2021: $4.2 million), totaled $35.8 million (June 30, 2021: $3.8 million).

The weighted average remaining lease term and weighted-average discount rate at June 30, 2022 were 6.82 years and 2.65%, respectively.

Future minimum lease payments under non-cancelable leases as of June 30, 2022 were as follows:
Minimum rental payments
(in thousands)June 30, 2022
Year 1$49,554 
Year 242,029 
Year 328,422 
Year 420,226 
Year 516,870 
Thereafter53,190 
Total future minimum lease payments210,291 
Lease imputed interest(15,993)
Total$194,298 

Operating lease liabilities are presented as current and non-current. Operating lease liabilities of $47.0 million have been included in other liabilities as at June 30, 2022 (June 30, 2021: $22.8 million).


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12. Bank credit lines and loan facilities

The Company had the following debt outstanding as of June 30, 2022 and December 31, 2021:

Principal amount
Interest rate as ofInterest rate as ofJune 30,December 31,
(in thousands)June 30, 2022December 31, 202120222021Maturity Date
Credit Facilities:
Senior Secured Term Loan4.563 %2.750 %$4,601,213 $5,001,213 July 2028
Senior Secured Notes
2.875 %2.875 %500,000 500,000 July 2026
Total debt5,101,213 5,501,213 
Less current portion of long-term debt(55,150)(55,150)
Total long-term debt5,046,063 5,446,063 
Less debt issuance costs and debt discount
(55,563)(64,901)
Total long-term debt, net$4,990,500 $5,381,162 

The Company paid a $27.6 million debt discount in connection with the Senior Secured Credit Facility and Senior Secured Notes on July 1, 2021.

As of June 30, 2022, the contractual maturities of the Company's debt obligations were as follows:

Current maturities of long-term debt:(in thousands)
2022 (remaining)$27,575 
202355,150 
202455,150 
202555,150 
2026 and thereafter4,908,188 
Total$5,101,213 

The Company's primary financing arrangements are its senior secured credit facilities (the "Senior Secured Credit Facilities"), which consists of a senior secured term loan and a revolving credit facility, and the senior secured notes (the "Senior Secured Notes").

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").

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 is 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. On November 10, 2021, the Company achieved a net leverage ratio of less than 4 times and the margin applicable to the senior secured term loan was reduced by 0.25%. The senior secured term loan facility is subject to a LIBOR floor of 0.50%.

The interest rate margin applicable to borrowings under the revolving loan facility will be, at the option of the borrower, either (i) the applicable base rate plus an applicable margin of 1.00%, 0.60% or 0.25% based on ICON’s current corporate family rating assigned by S&P of BB- (or lower), BB or BB+ (or higher), respectively, or (ii) LIBOR (or an alternative reference rate) plus an applicable margin of 2.00%, 1.60% or 1.25% based on ICON’s current corporate family rating assigned by S&P of BB- (or lower), BB or BB+ (or higher), respectively. In addition, lenders under the revolving loan facility are entitled to commitment fees as a percentage of the applicable margin at the time of drawing and utilization fees dependent on the proportion of the facility drawn. On April 11, 2022, $25 million of the senior secured revolving loan facility was drawn down at an interest rate of 1.75%, representing one month LIBOR plus a margin of 1.25%. This was repaid in full on May 9, 2022. Currently, $300.0 million remains available for borrowing under the senior secured revolving loan facility.
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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 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. Our long-term debt arrangements contain customary restrictive covenants and, as of June 30, 2022, we were in compliance with our restrictive covenants in all material respects.

On June 30, 2022 the Company repaid $100.0 million of the senior secured term loan facility and made a quarterly interest payment of $39.4 million. This repayments resulted in an additional charge associated with previously capitalized fees of $0.9 million.

On March 31, 2022 the Company repaid $300.0 million of the senior secured term loan facility and made a quarterly interest payment of $35.1 million. This repayment resulted in an additional charge associated with previously capitalized fees of $3.2 million.

On December 29, 2021, the Company repaid $500.0 million of the senior secured term loan facility and made a quarterly interest payment of $40.8 million. These repayments resulted in an additional charge associated with previously capitalized fees of $5.6 million. The Company is permitted to make prepayments on the senior secured term loan without penalty.

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.

Fair Value of Debt
The estimated fair value of the Company’s debt was $4,901.1 million at June 30, 2022. The fair values of the Senior Secured Credit Facilities and Senior Secured Notes were determined based on Level 2 inputs, which are based on rates at which the debt is traded among financial institutions.


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13. Income taxes
Income taxes recognized during the six months ended June 30, 2022 and June 30, 2021, comprise:

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)(in thousands)
Provision for income taxes (excluding restructuring)$20,092 $14,133 $34,207 $30,281 
Tax impact of restructuring(5,838)