What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-13 compared with 2023-02-14 · 90 added, 104 removed, 848 unchanged (19% of the section changed)

91 unchanged sentences

298,400 253,404

Prepaid expenses and other current assets 52,293 43,176

Prepaid expenses and other current assets (includes $ 0.3 million with related parties at December 31, 2023)

49,979 52,293

Total current assets 593,828 333,962

8 unchanged sentences

Current liabilities:

Accounts payable (includes $ 0.3 million with related parties at December 31, 2022 and 2021, respectively)

Accounts payable (includes $ 3.1 million and $ 0.3 million with related parties at December 31, 2023 and 2022, respectively)

$ 31,869 $ 33,069

3 unchanged sentences

Short-term debt — 50,000

Other current liabilities (includes $ 12.5 million with related parties at December 31, 2022, respectively)

Other current liabilities (includes $ 12.5 million with related parties at December 31, 2022)

40,441 47,547

15 unchanged sentences

Additional paid-in capital 802,681 770,794

(Accumulated deficit) Retained earnings ( 359,827 ) 234,984

Accumulated deficit ( 221,645 ) ( 359,827 )

Accumulated other comprehensive loss ( 10,072 ) ( 12,392 )

19 unchanged sentences

Income from operations 336,825 278,697 198,615

Other income, net:

Miscellaneous income, net 7,068 3,342 1,183

Interest (expense) income, net ( 2,905 ) ( 105 ) 307

Total other income, net 4,163 3,237 1,490

Other (expense) income, net:

Miscellaneous (expense) income, net ( 655 ) 7,068 3,342

Interest expense, net ( 488 ) ( 2,905 ) ( 105 )

Total other (expense) income, net ( 1,143 ) 4,163 3,237

Income before income taxes 335,682 282,860 201,852

15 unchanged sentences

Net income $ 282,810 $ 245,368 $ 181,848

Other comprehensive (loss) income

Other comprehensive income (loss)

Foreign currency translation adjustments, net of taxes 2,320 ( 7,546 ) ( 4,715 )

22 unchanged sentences

Repurchases of common stock ( 57 ) ( 14,243 ) ( 833,549 ) ( 847,849 )

Retirement of treasury stock 5,427 ( 5,427 ) —

BALANCE — December 31, 2022 $ 309 $ ( 12,497 ) $ 770,794 $ ( 359,827 ) $ ( 12,392 ) $ 386,387

4 unchanged sentences

Repurchases of common stock ( 8 ) ( 144,453 ) ( 144,461 )

Retirement of treasury stock 5,427 ( 5,427 ) —

Re-issuance of treasury stock 175 ( 175 ) —

BALANCE — December 31, 2023 $ 308 $ ( 12,322 ) $ 802,681 $ ( 221,645 ) $ ( 10,072 ) $ 558,950

13 unchanged sentences

Noncash lease expense 19,646 18,015 16,288

Deferred income tax (benefit) provision ( 23,014 ) ( 37,112 ) 527

Amortization and adjustment of deferred credit ( 620 ) ( 668 ) ( 706 )

Deferred income tax benefit ( 25,117 ) ( 23,014 ) ( 37,112 )

Other 2,705 ( 2,127 ) 8

19 unchanged sentences

EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 1,081 ( 6,572 ) ( 3,972 )

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 433,039 ) 183,538 145,846

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 217,184 ( 433,039 ) 183,538

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period 28,265 461,304 277,766

21 unchanged sentences

For the year ended December 31, 2021, the Company repurchased 377,783 shares for $ 62.1 million.

For the year ended December 31, 2020, the Company repurchased 1,183,095 shares for $ 98.3 million.

As of June 30, 2022, the Company completed all authorized share repurchases under this repurchase program.

1 unchanged sentence

For the year ended December 31, 2023, the Company repurchased 781,068 shares for $ 144.0 million under the new repurchase program.

For the year ended December 31, 2022, the Company repurchased 228,247 shares for $ 47.2 million under the new repurchase program.

As of December 31, 2023, we have remaining authorization of $ 308.8 million under the new repurchase program.

Repurchases under the share repurchase programs are executed in the open market or negotiated transactions under trading plans established pursuant to Rule 10b5-1.

The Company constructively retired the repurchased shares associated with these approved share repurchase programs, except for a small portion which were retained as Treasury Shares on the consolidated statements of shareholders' equity.

The Company constructively retires the repurchased shares associated with these approved share repurchase programs, except for a small portion which were retained as Treasury Shares on the consolidated statements of shareholders' equity.

Retired share repurchase amounts paid in excess of par value are reflected within Accumulated deficit/Retained earnings in the Company’s consolidated balance sheets.

19 unchanged sentences

Separately, net realized gains and losses on foreign currency transactions are included in Miscellaneous income, net, on the consolidated statements of operations.

Foreign currency transactions resulted in a net gain of $ 3.9 million, $ 2.8 million, and $ 0.5 million during the years ended December 31, 2022, 2021, and 2020, respectively.

Foreign currency transactions resulted in a net (loss)/gain of $( 1.9 ) million, $ 3.9 million, and $ 2.8 million during the years ended December 31, 2023, 2022, and 2021, respectively.

Revenue Recognition

62 unchanged sentences

Total advertising expenses of $ 1.5 million, $ 1.3 million and $ 1.2 million were incurred during the years ended December 31, 2023, 2022 and 2021, respectively.

The Company’s consolidated US federal income tax return is comprised of its US subsidiaries, one of its foreign branches located in Korea and certain foreign subsidiaries.

The Company’s consolidated US federal income tax return is comprised of its US subsidiaries, its foreign branches and certain foreign subsidiaries.

The Company provides for income taxes on all transactions that have been recognized in the consolidated financial statements in accordance with accounting guidance governing income tax accounting.

19 unchanged sentences

Equity Awards

In connection with the Company's initial public offering (IPO), the Board approved the formation of the 2016 Incentive Award Plan (the “2016 Plan”), which replaced our 2014 Equity Incentive Plan (the “2014 Plan”).

In connection with the Company's initial public offering (IPO), the Board approved the formation of the 2016 Incentive Award Plan (the “2016 Plan”).

The 2016 Plan provides for long-term equity incentive compensation for key employees, officers and non-employee directors.

4 unchanged sentences

All outstanding Awards under the 2016 Plan are equity classified awards.

The Company created the 2014 Plan, providing for the future issuance of vested shares, stock options, RSAs and RSUs in Medpace Holdings, Inc.’s common stock (the “2014 Plan Awards”).

The 2014 Plan Awards were subject to either equity or liability-classification pursuant to the terms of the participant’s award agreement and the 2014 Plan based on accounting guidance which governs such transactions.

All outstanding Awards under the 2014 Plan are equity classified awards in the periods presented.

There were no outstanding awards under the 2014 Plan as of December 31, 2022.

Stock-based compensation expense for both the 2016 Plan and 2014 Plan is calculated using the fair value method on the grant date.

Stock-based compensation expense for the 2016 Plan is calculated using the fair value method on the grant date.

The Company expenses stock-based compensation over the term of the award based on the vesting described in the award agreement.

31 unchanged sentences

The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses, and advanced billings approximate their carrying amounts due to their short term maturities.

The Company does not have any recurring fair value measurements as of December 31, 2022.

There were no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2022, 2021 and 2020.

The Company does not have any material recurring fair value measurements as of December 31, 2023 and 2022.

There were no material transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2023, 2022 and 2021.

Cash and Cash Equivalents, including Restricted Cash

56 unchanged sentences

Fair value of long-lived assets is determined based on a combination of discounted cash flows and market multiples.

There was no indication of impairment related to long-lived assets based on the fourth quarter 2023 assessment.

Advanced Billings

Advanced billings represents cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized.

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” intended to provide financial statement users with more decision-useful information about expected credit losses and other commitments to extend credit held by the reporting entity.

The standard replaces the incurred loss impairment methodology with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The guidance is effective for fiscal years

beginning after December 15, 2019 with early adoption permitted.

The Company adopted this standard in the first quarter of 2020 and it had no material impact to the consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, "Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance" which requires entities to provide disclosures on material government assistance transactions for annual reporting periods.

The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity's financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies.

The guidance is effective for annual periods beginning after December 15, 2021, with early adoption permitted.

The Company adopted this standard on a prospective basis in the fourth quarter of 2022.

The Company receives global government incentives with domestic and foreign governments.

Government Assistance

The Company receives government incentives from domestic and foreign governments.

The incentives come in various arrangements, but consist primarily in the form of tax credits, economic development grants and property tax abatement credits.

1 unchanged sentence

These tax credits are recorded on a jurisdiction-by-jurisdiction basis upon the first instance of the credit being monetized.

Upon achieving a history of monetization in a jurisdiction, income is typically estimated as the activities or contractual requirements defined in the credit agreements occur.

Depending on the jurisdiction rules, credits can be monetized immediately or up to 3 years after the credits have been submitted to the relevant taxing agencies.

Upon achieving a history of monetization in a jurisdiction, income is typically estimated as the activities or contractual requirements defined in the applicable agreements occur.

Depending on the jurisdiction laws and regulations, credits can be monetized immediately or up to 3 years after the credits have been submitted to the relevant taxing agencies.

The Company receives grants from certain jurisdictions for economic development projects, based on job growth, employee retention and capital investment commitments.

2 unchanged sentences

These credits are monetized through reductions to the real estate tax liability at the time payments are due and recognized as real estate taxes are incurred.

Government incentives are recorded in accordance with their purpose, net of fees incurred to monetize the benefit, as a reduction of expense within Selling, general and administrative in the consolidated statements of operations.

The Company recognized government assistance income, net of $ 15.4 million during the year ended December 31, 2022.

Government incentives are recorded in accordance with their purpose, net of fees incurred to monetize the benefit, as a reduction of expense within Direct service costs, excluding depreciation and amortization and Selling, general and administrative in the consolidated statements of operations.

The Company recognized government assistance income, net of $ 15.5 million and $ 15.4 million during the years ended December 31, 2023 and 2022, respectively.

Government assistance receivables are recorded in the consolidated balance sheets based on the expected timing of monetizing the benefit.

Government assistance receivables recorded on the December 31, 2023 consolidated balance sheets are expected to be recovered through 2027.

The Company recorded receivables related to government assistance programs as of December 31, 2022 of $ 11.3 million in Prepaid expenses and other current assets and $ 7.1 million in Other assets.

The Company recorded receivables related to government assistance programs at December 31, 2023 of $ 9.5 million in Prepaid expenses and other current assets and $ 12.2 million in Other assets, respectively.

The Company recorded receivables related to government assistance programs at December 31, 2022 of $ 11.3 million in Prepaid expenses and other current assets and $ 7.1 million in Other assets, respectively.

Recently Adopted Accounting Standards

In November 2021, the FASB issued ASU 2021-10, "Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance" which requires entities to provide disclosures on material government assistance transactions for annual reporting periods.

The guidance is effective for annual periods beginning after December 15, 2021, with early adoption permitted.

The Company adopted this standard on a prospective basis in the fourth quarter of 2022.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" which requires entities to enhance disclosures around segment reporting.

The guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" which requires entities to enhance disclosures around income taxes.

The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.

CONTRACT ASSETS AND CONTRACT LIABILITIES

48 unchanged sentences

Total intangible assets, net $ 35,809 $ 38,008

As of December 31, 2022, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):

As of December 31, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years is as follows (in thousands):

ACCRUED EXPENSES

6 unchanged sentences

Debt consisted of the following at December 31 (in thousands):

Revolving credit facility $ 50,000 $ —

Credit facility $ — $ 50,000

Short-term debt $ — $ 50,000

Principal payments on debt are due as follows (in thousands):

Total $ 50,000

The estimated fair value of the Company’s debt based on Level 2 inputs using the market approach, which is primarily based on rates at which the debt is traded among financial institutions, approximates the carrying value as of December 31, 2022.

On September 30, 2019 (the “Closing Date”), the Company obtained an unsecured credit facility in an aggregate principal amount up to $ 50.0 million (as amended from time to time, the “Credit Facility”) through its wholly owned subsidiaries, Medpace, Inc., as borrower (the “Borrower”), and Medpace IntermediateCo, Inc., as guarantor (the “Guarantor”).

On the Closing Date, the Borrower and lender entered into a Loan Agreement (as it may be amended from time to time, the “Loan Agreement”) providing for the Credit Facility, and the Guarantor executed a Guaranty Agreement providing for its guarantee of the payment and performance of the obligations under the Loan Agreement.

On December 27, 2021, the Company entered into Amendment No.

3 to the Credit Facility, which extends the expiration date of the revolving credit note to March 31, 2023 and adds provisions for alternative rates of interest as a result of global reference rate initiatives and removes the ability to obtain advances in any currency other than U.S.

After the LIBOR cessation date of December 31, 2021, the Credit Facility bears interest at a rate of the sum of The Secured Overnight Financing Rate (SOFR) and the benchmark replacement adjustment plus 100 basis points ( 1.00 %).

On March 15, 2022, the Company entered into Amendment No.

4 to the Loan Agreement, which increased the aggregate principal amount that may be borrowed under the facility’s line of credit to up to $ 250.0 million.

As of December 31, 2022, the Credit Facility interest rate was 5.3 %.

On March 31, 2023, the Company entered into Amendment No.

5 to the Loan Agreement, which changed the aggregate principal amount that may be borrowed under the facility's line of credit to up to $ 150.0 million, adjusted the interest rate and fee charged on the credit facility and extended the expiration date of resolving credit note to March 29, 2024.

The Credit Facility bears interest at a rate of the sum of The Secured Overnight Financing Rate (SOFR) plus 125 basis points ( 1.25 %) or the highest of the Prime Rate, the sum of the Overnight Bank Funding Rate plus 50 basis points ( 0.50 %) and the sum of Daily Simple SOFR plus 100 basis points ( 1.00 %).

The Loan Agreement contains other customary loan terms, representations and warranties, and affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions.

The Loan Agreement contains certain events of default, including, among others, non-payment of principal or interest and breach of the covenants.

As of December 31, 2022 and 2021, respectively, there were $ 0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

As of December 31, 2023, there were less than $ 0.1 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

The Company enters into leases for real estate and equipment.

Real estate leases are for our corporate office space and laboratories around the world.

Real estate leases have remaining lease terms of less than one year to 18 years.

Real estate leases have remaining lease terms of less than 1 year to 17 years.

Many of the Company’s leases include options to extend the leases on a month to month basis or for set periods for up to 20 years.

Many leases also include options to terminate the leases within one year or per other contractual terms.

Many leases also include options to terminate the leases within 1 year or per other contractual terms.

The components of lease expense were as follows (in thousands):

11 unchanged sentences

Supplemental balance sheet information related to the leases was as follows at December 31 (in thousands):

Operating lease right-of-use assets - related parties $ 83,065 $ 86,356

Operating lease right-of-use assets - non-related parties 61,736 52,712

Operating lease right-of-use assets $ 144,801 $ 139,068

Other current liabilities - related parties 5,730 5,409

Other current liabilities - non-related parties 16,635 13,863

Other current liabilities $ 22,365 $ 19,272

Operating lease liabilities - related parties 90,568 93,393

Operating lease liabilities - non-related parties 51,554 45,474

Operating lease liabilities 142,122 138,867

18 unchanged sentences

Total $ 96,298 $ 68,189 $ 164,487

As of December 31, 2023, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $ 2.7 million.

SHAREHOLDERS’ EQUITY

1 unchanged sentence

2016 Incentive Award Plan

On August 11, 2016 in connection with the Company's IPO, the Board approved the formation of the 2016 Incentive Award Plan (the “2016 Plan”), which replaced our 2014 Equity Incentive Plan (the “2014 Plan”).

On August 11, 2016 in connection with the Company's IPO, the Board approved the 2016 Incentive Award Plan (the “2016 Plan”).

The 2016 Plan provides for long-term equity incentive compensation for key employees, officers and non-employee directors.

4 unchanged sentences

Option prices are generally expected to be set at the market price of the Company’s common stock at the date of grant and option terms are not expected to exceed ten years .

The Company granted 47,238 awards to employees under the 2016 Incentive Award Plan during the year ended December 31, 2023, consisting of 45,988 RSU and 1,250 stock option awards having four year vesting schedules.

The Company granted an additional 848 RSU that vest in four approximately equal installments on March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024, and 11,187 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the year ended December 31, 2023.

These stock option awards will vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date.

The Company granted 405,550 awards to employees under the 2016 Incentive Award Plan during the year ended December 31, 2022, consisting of 164,478 RSU and 113,838 stock option awards having four year vesting schedules and 127,234 stock option awards having two year vesting schedules.

The Company granted an additional 1,117 RSU that vest in four approximately equal installments on March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023, and 11,418 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the year ended December 31, 2022.

These stock option awards will vest on the earlier of (a) the day immediately preceding the date of the

first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date.

The Company granted 374,235 awards to employees under the 2016 Incentive Award Plan during the year ended December 31, 2021, consisting of 74,725 RSU and 205,086 stock option awards vesting after four years and six months, 27,854 RSU and 9,000 stock option awards vesting after four years , and 57,570 stock option awards vesting after two years .

The Company granted an additional 10,932 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the year ended December 31, 2021.

These awards will vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date.

The Company granted 405,237 awards to employees under the 2016 Incentive Award Plan during the year ended December 31, 2020, consisting of 20,724 RSA and 177,808 RSU vesting after four years , 4,800 stock option awards and 2,500 RSU vesting after three years and 199,405 fully-vested stock option awards.

The Company granted 374,235 awards to employees under the 2016 Incentive Award Plan during the year ended December 31, 2021, consisting of 74,725 RSU and 205,086 stock option awards vesting after 4 years and six months, 27,854 RSU and 9,000 stock option awards vesting after four years , and 57,570 stock option awards vesting after two years .

The Company granted an additional 10,932 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the year ended December 31, 2021.

3 unchanged sentences

The Company satisfies stock option exercises and vested stock awards with treasury shares or newly issued shares.

Shares available for future stock compensation grants under the 2016 Plan totaled 2.3 million and 2.6 million at December 31, 2022 and 2021, respectively.

2014 Equity Incentive Plan

The 2014 Plan for employees and directors provided the issuance of vested shares, stock options, RSAs and RSUs in Medpace Holdings, Inc.’s common stock.

The awards were granted to key employees as additional compensation for services rendered and as a means of retention over the vesting period, typically three to four years .

RSAs awarded under the 2014 Plan were subject to automatic forfeiture upon departure until vested and entitle the shareholder to all rights of common stock ownership except that they may not be sold, transferred, pledged or otherwise disposed of during the restriction period, except as noted in the following paragraph.

The 2014 Plan allowed for the issuance of non-qualified stock options to employees, officers, and directors under this plan.

Under the 2014 Plan, options could be granted with an exercise price equal to or greater than the fair value of common stock at the grant date as determined by the Board of Directors.

The stock options, if unexercised, expired seven years from the date of grant.

The awards under the 2014 Plan were equity classified instruments for all periods presented.

There were no outstanding awards under the 2014 Plan as of December 31, 2022.

Shares available for future stock compensation grants under the 2016 Plan totaled 2.3 million at December 31, 2023 and 2022, respectively.

Equity Awards

17 unchanged sentences

The expected dividend yield is assumed to be zero based on recent and anticipated dividend activity.

Subsequent to the Company’s IPO in August 2016, the fair value of common stock is based upon the market price of the Company’s common stock on the date of grant as listed on the NASDAQ.

Due to the absence of an active market for the Company’s common stock prior to the IPO, the Company determined the fair value of restricted shares by obtaining an independent valuation of the fair value of the Company’s equity, applying a discount for lack of marketability, and then calculating the implied share price.

The fair value of the Company was estimated primarily using an income approach which is based on assumptions and estimates made by management and, secondarily, using other market-related factors in current industry trends as well as observed transaction values.

In determining the estimated future cash flows used in the income approach, the Company developed and applied certain estimates and judgments, including current and projected future levels of income based on management’s plans, business trends, prospects and market and economic conditions, including market-participant considerations.

Significant assumptions utilized in the income approach were based on company specific information and projections, which were not observable in the market and are thus considered Level 3 measurements by authoritative guidance.

The discount for lack of marketability (the “Marketability Discount”) was applied to reflect what a market participant would consider in relation to the post-vesting restrictions imposed regarding the inability to sell, transfer, or pledge the shares during the restriction period.

The Marketability Discount was estimated by using the BSM Model to calculate the cost of a theoretical put option to hedge the fluctuation in value of the investment between the valuation date and an anticipated liquidity date.

The fair value of restricted shares is based upon the market price of the Company’s common stock on the date of grant as listed on the NASDAQ.

The following table summarizes the grant date fair values of stock options and restricted shares issued during the period as well as the allocation of stock-based compensation expense to Total direct costs, and Selling, general and administrative reported in the consolidated statements of operations:

28 unchanged sentences

Outstanding and unvested - end of period 390,998 523,377 602,187

Cumulative vested shares - end of period 2,229,916 2,032,916 1,913,916

The following table summarizes information about stock options expected to vest, stock options exercisable, and unvested restricted share awards expected to vest at December 31, 2023:

71 unchanged sentences

$ 52,872 15.8 % $ 37,492 13.3 % $ 20,004 9.9 %

Prior to the passage of the Tax Cuts and Jobs Act of 2017 ("TCJA"), the Company asserted that all of the undistributed foreign earnings of its foreign subsidiaries were considered indefinitely reinvested and accordingly, no deferred taxes were provided.

Beginning in 2018, the TCJA provides a 100 % deduction for dividends received from 10 -percent owned foreign corporations by U.S.

corporate shareholders, subject to a one-year holding period.

Although dividend income is now exempt from U.S.

federal tax in the hands of the U.S.

corporate shareholders, companies must still apply the guidance of ASC 740-30-25-18 to account for the tax consequences of outside basis differences and other tax impacts of their investments in non-U.S.

subsidiaries.

As of December 31, 2023, the Company’s accounting position is that unremitted foreign earnings are indefinitely reinvested.

19 unchanged sentences

The ultimate realization of this tax benefit is dependent upon the generation of sufficient operating income in the respective tax jurisdictions.

Approximately 57 % of the foreign net operating loss carryforwards can be utilized over an indefinite period whereas the remainder will expire in 2026 if not utilized.

The foreign net operating loss carryforwards will expire in 2027 and 2028 if not utilized.

Annual activity related to the Company’s valuation allowance is as follows (in thousands):

16 unchanged sentences

Interest and penalties associated with uncertain tax positions are recognized as components of Income tax provision in the consolidated statements of operations.

There was no material change to tax-related interest and penalties during the years ended December 31, 2022, 2021 and 2020.

There was no material change to tax-related interest and penalties during the years

ended December 31, 2023, 2022 and 2021.

As of December 31, 2023 and 2022, respectively, the Company has a liability for interest and penalties of $ 5.2 million and $ 3.8 million that is associated with related tax liabilities of $ 16.2 million and $ 12.7 million for uncertain tax positions.

10 unchanged sentences

The commitments expire at various times through 2029.

MISCELLANEOUS INCOME, NET

Miscellaneous income, net consisted of the following (in thousands):

MISCELLANEOUS (EXPENSE) INCOME, NET

Miscellaneous (expense) income, net consisted of the following (in thousands):

Year Ended December 31,

2023 2022 2021

Net gain on foreign-currency transactions $ 3,859 $ 2,779 $ 514

Net (loss) gain on foreign-currency transactions $ ( 1,929 ) $ 3,859 $ 2,779

Other income 1,274 3,209 563

Miscellaneous income, net $ 7,068 $ 3,342 $ 1,183

Miscellaneous (expense) income, net $ ( 655 ) $ 7,068 $ 3,342

RELATED PARTY TRANSACTIONS

1 unchanged sentence

The Company periodically extends short term loans or advances to employees, typically upon commencement of employment.

Total receivables as a result of these employee advances of $ 0.3 million and $ 0.2 million existed at December 31, 2022 and 2021, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the consolidated balance sheets, respectively, depending on the contractual repayment date.

Total receivables as a result of these employee advances of $ 0.3 million existed at December 31, 2023 and 2022, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the consolidated balance sheets, respectively, depending on the contractual repayment date.

Service Agreements

5 unchanged sentences

As of December 31, 2023 and 2022, the Company had, from LIB, Advanced billings of $ 7.6 million and $ 7.4 million in the consolidated balance sheets, respectively.

In addition, the Company had Accounts receivable and unbilled, net from LIB of

$ 5.5 million and $ 0.5 million in the consolidated balance sheets at December 31, 2022 and 2021, respectively.

In addition, the Company had Accounts receivable and unbilled, net from LIB of $ 0.5 million and $ 5.5 million in the consolidated balance sheets at December 31, 2023 and 2022, respectively.

The Company had Other current liabilities with LIB of $ 12.5 million in the consolidated balance sheets at December 31, 2022.

5 unchanged sentences

As of December 31, 2023 and 2022 the Company had Accounts receivable and unbilled, net from CinRx of $ 1.9 million and $ 2.2 million in the consolidated balance sheets, respectively.

The Company had Prepaid expenses and other current assets with CinRX of $ 0.2 million in the consolidated balance sheets at December 31, 2023.

Certain affiliates of CinRx included in previous reported quarters are no longer disclosed due to changes in the affiliate relationship.

4 unchanged sentences

Leased Real Estate

Headquarters Lease

The Company has entered into operating leases for its corporate headquarters and a storage space facility with an entity that is wholly owned by the Company’s chief executive officer.

Campus Headquarters Leases

The Company entered into an operating lease for the occupancy of office space in a building in Cincinnati, Ohio with an entity that is wholly owned by the chief executive officer of the Company.

The Company has evaluated its relationship with the related party and concluded that the related party is not a variable interest entity because the Company has no direct ownership interest or relationship other than the leases.

The lease for headquarters was for an initial term of twelve years through November 2022 with a renewal option for one 10 -year term at prevailing market rates.

The Company entered into short-term extensions through January 2023.

In the third quarter of fiscal year 2021, the Company accounted for the renewal option, as it became reasonably certain it would be exercised per the agreement, by extending the lease term through November 2032.

The lease was renewed in the first quarter of fiscal year 2023 for a term of ten years through December 2032 with a renewal option for one 10-year term at prevailing market rates.

The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the properties.

Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index.

The Company has determined that the lease is an operating lease.

Operating lease cost recognized for the years ended December 31, 2023, 2022 and 2021 was $ 2.6 million, $ 2.3 million and 2.1 million, respectively, and was allocated between Total direct costs, and Selling, general and administrative in the consolidated statements of operations.

9 unchanged sentences

The Company has determined that the lease is an operating lease.

Operating lease cost recognized for the years ended December 31, 2022, 2021 and 2020 was $ 5.7 million, $ 5.7 million and $ 3.6 million, respectively.

Operating lease cost recognized for the years ended December 31, 2023, 2022 and 2021 was $ 5.7 million, respectively.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the consolidated statements of operations.

4 unchanged sentences

The Company assumed occupancy in 2012 and the leases expire in 2027 with the Company having one 10 -year option to extend the lease term.

The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property.

The Company pays rent, taxes, insurance, and maintenance expenses that arise

from the use of the property.

Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index.

6 unchanged sentences

Travel Services

The Company incurs expenses for travel services for company executives provided by private aviation charter companies which in 2020 was a company owned by the chief executive officer and the executive vice president of operations of the Company and commencing in 2021 is a company controlled by the chief executive officer of the Company (each a “private aviation charter”).

The Company incurs expenses for travel services for company executives provided by private aviation charter companies which is a company controlled by the chief executive officer of the Company (each a “private aviation charter”).

The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party aircraft management and jet charter company (the “Aircraft Management Company”).

16 unchanged sentences

Total Europe 26,962 21,072

Asia-Pacific 14,472 6,223

Other 1,305 1,337

9 unchanged sentences

Cardiology 193,690 174,634 119,692

Central Nervous System 157,939 121,548 88,393

AVAI 163,312 118,031 110,976

Central Nervous System 160,057 157,939 121,548

Total revenue $ 1,885,842 $ 1,459,996 $ 1,142,377

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data