2024 Q1 Form 10-K Financial Statement

#000196504024000010 Filed on March 13, 2024

View on sec.gov

Income Statement

Concept 2024 Q1 2023 Q4 2023
Revenue $662.1M $775.4M $3.109B
YoY Change -13.36% -74.96% 0.42%
Cost Of Revenue $554.2M $655.7M $2.589B
YoY Change -12.89% -73.21% 5.77%
Gross Profit $107.9M $119.7M $520.4M
YoY Change -15.7% -81.55% -19.78%
Gross Profit Margin 16.3% 15.44% 16.74%
Selling, General & Admin $120.1M $98.90M $336.6M
YoY Change 53.97% -64.65% 20.3%
% of Gross Profit 111.31% 82.62% 64.68%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $23.50M $23.90M $96.40M
YoY Change 3.07% -74.22% 3.99%
% of Gross Profit 21.78% 19.97% 18.52%
Operating Expenses $120.1M $122.8M $336.6M
YoY Change 19.15% -67.03% -9.64%
Operating Profit -$37.40M -$3.100M $63.10M
YoY Change -237.5% -101.12% -77.15%
Interest Expense -$39.60M -$32.60M $69.80M
YoY Change 620.0% 3522.22% -7855.56%
% of Operating Profit 110.62%
Other Income/Expense, Net $1.300M $2.300M $6.900M
YoY Change 116.67% 15.0% 245.0%
Pretax Income -$75.70M -$41.00M $1.100M
YoY Change -458.77% -117.3% -99.54%
Income Tax $4.100M -$5.000M $4.500M
% Of Pretax Income 409.09%
Net Earnings -$101.0M -$36.00M -$3.400M
YoY Change -680.46% -118.66% -101.76%
Net Earnings / Revenue -15.25% -4.64% -0.11%
Basic Earnings Per Share -$1.13 -$0.04
Diluted Earnings Per Share -$1.13 -$0.41 -$0.04
COMMON SHARES
Basic Shares Outstanding 89.40M shares 88.80M shares
Diluted Shares Outstanding 89.20M shares 88.80M shares

Balance Sheet

Concept 2024 Q1 2023 Q4 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $92.80M $108.6M $108.6M
YoY Change -22.8% -3.04% -3.04%
Cash & Equivalents $92.80M $108.6M $108.6M
Short-Term Investments
Other Short-Term Assets $166.2M $35.10M $92.40M
YoY Change 31.9% -68.86% -18.01%
Inventory
Prepaid Expenses $35.30M
Receivables $941.0M $1.052B $1.052B
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.200B $1.253B $1.253B
YoY Change -3.44% 0.5% 0.5%
LONG-TERM ASSETS
Property, Plant & Equipment $167.4M $220.9M $220.9M
YoY Change -7.21% 33.96% 33.96%
Goodwill $1.728B $2.029B
YoY Change 0.45% 1.6%
Intangibles $707.9M $771.2M
YoY Change -6.33%
Long-Term Investments
YoY Change
Other Assets $89.00M $79.50M $82.70M
YoY Change 43.55% 46.41% 49.01%
Total Long-Term Assets $3.040B $3.104B $3.104B
YoY Change -0.79% 2.07% 2.07%
TOTAL ASSETS
Total Short-Term Assets $1.200B $1.253B $1.253B
Total Long-Term Assets $3.040B $3.104B $3.104B
Total Assets $4.240B $4.357B $4.357B
YoY Change -1.56% 1.62% 1.62%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $131.3M $132.8M $132.8M
YoY Change 27.97% 62.94% 62.94%
Accrued Expenses $328.7M $356.1M $375.6M
YoY Change 11.42% 10.35% 17.78%
Deferred Revenue $236.9M $241.4M
YoY Change -11.09%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $55.00M $26.10M $26.10M
YoY Change
Total Short-Term Liabilities $818.3M $775.9M $775.9M
YoY Change 24.82% 11.0% 11.0%
LONG-TERM LIABILITIES
Long-Term Debt $1.559B $1.566B $1.566B
YoY Change
Other Long-Term Liabilities $28.90M $61.30M $127.8M
YoY Change -55.95% 182.49% 106.8%
Total Long-Term Liabilities $1.588B $1.627B $1.694B
YoY Change 2321.19% 7398.62% 2640.61%
TOTAL LIABILITIES
Total Short-Term Liabilities $818.3M $775.9M $775.9M
Total Long-Term Liabilities $1.588B $1.627B $1.694B
Total Liabilities $2.648B $2.618B $2.618B
YoY Change 193.67% 176.99% 176.99%
SHAREHOLDERS EQUITY
Retained Earnings -$169.5M -$49.10M
YoY Change
Common Stock $100.0K $100.0K
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $1.592B $1.739B $1.739B
YoY Change
Total Liabilities & Shareholders Equity $4.240B $4.357B $4.357B
YoY Change -1.56% 1.62% 1.62%

Cashflow Statement

Concept 2024 Q1 2023 Q4 2023
OPERATING ACTIVITIES
Net Income -$101.0M -$36.00M -$3.400M
YoY Change -680.46% -118.66% -101.76%
Depreciation, Depletion And Amortization $23.50M $23.90M $96.40M
YoY Change 3.07% -74.22% 3.99%
Cash From Operating Activities -$25.60M $12.40M $167.4M
YoY Change -852.94% -85.83% 91.31%
INVESTING ACTIVITIES
Capital Expenditures $9.300M $9.400M $40.30M
YoY Change -42.59% -82.72% -25.92%
Acquisitions
YoY Change
Other Investing Activities $100.0K $400.0K $8.500M
YoY Change 0.0% 2025.0%
Cash From Investing Activities -$9.200M -$9.000M -$31.80M
YoY Change -43.21% -83.33% -41.11%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $7.700M $15.40M
YoY Change
Cash From Financing Activities $21.30M -4.600M -$139.0M
YoY Change 7.04% -47.13% 1497.7%
NET CHANGE
Cash From Operating Activities -$25.60M 12.40M $167.4M
Cash From Investing Activities -$9.200M -9.000M -$31.80M
Cash From Financing Activities $21.30M -4.600M -$139.0M
Net Change In Cash -$15.80M -1.200M -$3.400M
YoY Change -322.54% -104.84% -113.71%
FREE CASH FLOW
Cash From Operating Activities -$25.60M $12.40M $167.4M
Capital Expenditures $9.300M $9.400M $40.30M
Free Cash Flow -$34.90M $3.000M $127.1M
YoY Change 172.66% -90.94% 283.99%

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CY2022 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Including Exchange Rate Effect
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17400000 usd
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14300000 usd
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112000000.0 usd
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94600000 usd
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CY2023Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2022Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2021Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2023 us-gaap Nature Of Operations
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BUSINESS<div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Description of Business</span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Fortrea Holdings Inc. ("Fortrea" or the “Company”), a Delaware corporation incorporated on January 31, 2023, is a leading global contract research organization (“CRO”) providing biopharmaceutical product and medical device development services, patient access solutions and other enabling services to pharmaceutical, biotechnology and medical device customers. The Company offers customers highly flexible delivery models that include Full Service, Functional Service Provider, and Hybrid Service structures. The Company has a rich history of providing clinical development services for over 30 years across more than 20 therapeutic areas, first as Covance and later as Labcorp Drug Development. On June 30, 2023, the Company completed a spin-off (the “Spin” or the “Separation”) from Laboratory Corporation of America Holdings (“Labcorp” or “Former Parent”). The Company leverages its global scale, clinical data insights, technology innovation, industry network and decades of experience as a standalone company and as a business unit prior to the Spin to deliver tailored solutions to its customers. With what the Company believes is a distinctive market offering, Fortrea meets growing global demand for clinical development services.</span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company manages its business in two reportable segments - Clinical Services and Enabling Services. The Clinical Services segment provides services across the clinical pharmacology and clinical development spectrum. The Enabling Services segment provides patient access and clinical trial technology solutions to customers that streamline complex randomization and optimize the trial drug supply process, while minimizing operational costs and supporting timely and accurate patient dosing. For further financial information about these segments, see </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Note 20, Business Segment Information</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> to the consolidated and combined financial statements.</span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company has established access to key markets worldwide through a strategic footprint of primary office locations in five countries (the United States, the United Kingdom, China, India and Singapore) with field operations in other jurisdictions worldwide.</span></div><div style="text-align:center"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:1pt;font-weight:400;line-height:120%"> </span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Agreements with Labcorp</span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On June 30, 2023, the Company completed the Spin from Labcorp. The Company has entered into several agreements with Labcorp that govern the relationship of the parties following the Separation, including the Separation and Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, and the Transition Services Agreement, which are described in the Company’s Registration Statement on Form 10, as amended (“Form 10”), as filed with the Securities and Exchange Commission (the “SEC”). Under the terms of the Transition Services Agreement, the Company and Labcorp agreed to provide each other certain transitional services. The services and assets to be provided to Fortrea by Labcorp support the Company’s enterprise functions, most notably IT applications, network and security support and hosting as well as finance, human resources, marketing and other administrative support.</span></div>
CY2023 us-gaap Number Of Operating Segments
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2 segment
CY2023 us-gaap Number Of Reportable Segments
NumberOfReportableSegments
2 segment
CY2023 ftre Number Of Countries With Primary Office Locations
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CY2023 us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Reclassification</span></div>Certain previously reported amounts have been reclassified to conform to the current year presentation.
CY2022 us-gaap Interest Expense
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200000 usd
CY2021 us-gaap Interest Expense
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CY2023 us-gaap Use Of Estimates
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<div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Use of Estimates</span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The preparation of financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Significant estimates include revenue estimates, deferred tax assets, fair value of goodwill, amortization lives for acquired intangible assets, and the fair values of assets acquired and liabilities assumed in business combinations. Actual results could differ from those estimates.</span></div>
CY2023 us-gaap Concentration Risk Credit Risk
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<div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Concentration of Credit Risk</span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and unbilled services.</span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company maintains cash and cash equivalents with various major financial institutions. These financial institutions are generally highly rated and geographically dispersed. The Company evaluates the relative credit standing of these financial institutions and has not sustained credit losses from instruments held at financial institutions.</span></div><div style="margin-bottom:9pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Substantially all of the Company’s accounts receivable and unbilled services are with companies in the pharmaceutical, biotechnology and medical device industries. As of December 31, 2023, two pharmaceutical companies accounted for approximately 16.0% and 10.7% of the Company’s combined gross accounts receivable and unbilled services. For the year ended December 31, 2022, one pharmaceutical company accounted for approximately 10.5% of the Company's combined gross accounts receivable and unbilled services. Additionally, for the year ended December 31, 2023, one customer accounted for approximately 10.6% of revenue, and for the years ended December 31, 2022 and 2021, no customer accounted for more than 10% of revenues. Concentrations of credit risk are mitigated due to the number of the Company’s customers, as well as their dispersion across many different geographic regions. Additionally, the Company applies assumptions and judgments, including historical collection experience and reasonable and supportable forecasts, for assessing collectability and determining allowances for doubtful accounts.</span></div>
CY2023 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
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CY2023Q4 ftre Accounts Receivable And Contract With Customer Asset After Allowance For Credit Loss Current
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CY2023 us-gaap Contract With Customer Liability Revenue Recognized
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CY2022 us-gaap Allowance For Doubtful Accounts Receivable Write Offs
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CY2023 us-gaap Provision For Doubtful Accounts
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CY2023 us-gaap Allowance For Doubtful Accounts Receivable Write Offs
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32300000 usd
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4762800000 usd
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0.31
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CY2022 us-gaap Contract With Customer Performance Obligation Satisfied In Previous Period
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CY2021 us-gaap Contract With Customer Performance Obligation Satisfied In Previous Period
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CY2023Q2 ftre Accounts Receivable Purchase Program Maximum Facility Amount
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CY2023 us-gaap Accounts Receivable Sale
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CY2023 ftre Restructuring Impairment Charges
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CY2022 ftre Restructuring Impairment Charges
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CY2021 us-gaap Restructuring And Related Cost Incurred Cost
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CY2021 ftre Restructuring Impairment Charges
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CY2023 us-gaap Other Restructuring Costs
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CY2022 us-gaap Other Restructuring Costs
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CY2021 us-gaap Other Restructuring Costs
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CY2023 ftre Restructuring Impairment Charges
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CY2022 ftre Restructuring Impairment Charges
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CY2021 ftre Restructuring Impairment Charges
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2800000 usd
CY2023 ftre Restructuring Charges Transferred From Parent
RestructuringChargesTransferredFromParent
200000 usd
CY2022 ftre Restructuring Charges Transferred From Parent
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700000 usd
CY2021 ftre Restructuring Charges Transferred From Parent
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1800000 usd
CY2023 us-gaap Restructuring And Related Cost Incurred Cost
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24300000 usd
CY2022 us-gaap Restructuring And Related Cost Incurred Cost
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30500000 usd
CY2021 us-gaap Restructuring And Related Cost Incurred Cost
RestructuringAndRelatedCostIncurredCost
20700000 usd
CY2020Q4 us-gaap Restructuring Reserve
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CY2021 us-gaap Restructuring Charges
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16800000 usd
CY2021 us-gaap Restructuring Reserve Accrual Adjustment1
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CY2021Q4 us-gaap Restructuring Reserve
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CY2022 us-gaap Restructuring Reserve Accrual Adjustment1
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CY2022 us-gaap Payments For Restructuring
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CY2022Q4 us-gaap Restructuring Reserve
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CY2023 us-gaap Restructuring Charges
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24300000 usd
CY2023 us-gaap Restructuring Reserve Accrual Adjustment1
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CY2023 us-gaap Payments For Restructuring
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CY2023Q4 us-gaap Restructuring Reserve
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CY2023Q4 us-gaap Restructuring Reserve Noncurrent
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CY2023Q4 us-gaap Restructuring Reserve
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4700000 usd
CY2023Q4 ftre Restructuring Reserve Expected Payout Period
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CY2023 ftre Effective Income Tax Rate Reconciliation Withholding Tax Percent
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CY2023Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Three
DefinedBenefitPlanExpectedFutureBenefitPaymentsYearThree
1300000 usd
CY2023Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Four
DefinedBenefitPlanExpectedFutureBenefitPaymentsYearFour
1800000 usd
CY2023Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Five
DefinedBenefitPlanExpectedFutureBenefitPaymentsYearFive
1700000 usd
CY2023Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Five Fiscal Years Thereafter
DefinedBenefitPlanExpectedFutureBenefitPaymentsFiveFiscalYearsThereafter
10200000 usd
CY2023 us-gaap Related Party Transaction Amounts Of Transaction
RelatedPartyTransactionAmountsOfTransaction
194000000.0 usd
CY2022 us-gaap Related Party Transaction Amounts Of Transaction
RelatedPartyTransactionAmountsOfTransaction
382000000.0 usd
CY2021 us-gaap Related Party Transaction Amounts Of Transaction
RelatedPartyTransactionAmountsOfTransaction
304300000 usd
CY2023 us-gaap Interest Paid Net
InterestPaidNet
45100000 usd
CY2022 us-gaap Interest Paid Net
InterestPaidNet
400000 usd
CY2021 us-gaap Interest Paid Net
InterestPaidNet
200000 usd
CY2023 us-gaap Income Taxes Paid Net
IncomeTaxesPaidNet
18000000.0 usd
CY2022 us-gaap Income Taxes Paid Net
IncomeTaxesPaidNet
27000000.0 usd
CY2021 us-gaap Income Taxes Paid Net
IncomeTaxesPaidNet
16100000 usd
CY2023 ftre Noncash Investing And Financing Activities Change In Accrued Property Plant And Equipment
NoncashInvestingAndFinancingActivitiesChangeInAccruedPropertyPlantAndEquipment
-1300000 usd
CY2022 ftre Noncash Investing And Financing Activities Change In Accrued Property Plant And Equipment
NoncashInvestingAndFinancingActivitiesChangeInAccruedPropertyPlantAndEquipment
1800000 usd
CY2021 ftre Noncash Investing And Financing Activities Change In Accrued Property Plant And Equipment
NoncashInvestingAndFinancingActivitiesChangeInAccruedPropertyPlantAndEquipment
-1900000 usd
CY2023 ftre Transfer To From Parent Change In Right Of Use Lease Asset
TransferToFromParentChangeInRightOfUseLeaseAsset
13900000 usd
CY2022 ftre Transfer To From Parent Change In Right Of Use Lease Asset
TransferToFromParentChangeInRightOfUseLeaseAsset
0 usd
CY2021 ftre Transfer To From Parent Change In Right Of Use Lease Asset
TransferToFromParentChangeInRightOfUseLeaseAsset
0 usd
CY2023 ftre Transfer To From Parent Change In Property Plant And Equipment Net
TransferToFromParentChangeInPropertyPlantAndEquipmentNet
-27700000 usd
CY2022 ftre Transfer To From Parent Change In Property Plant And Equipment Net
TransferToFromParentChangeInPropertyPlantAndEquipmentNet
0 usd
CY2021 ftre Transfer To From Parent Change In Property Plant And Equipment Net
TransferToFromParentChangeInPropertyPlantAndEquipmentNet
0 usd
CY2023 us-gaap Number Of Operating Segments
NumberOfOperatingSegments
2 segment
CY2023 us-gaap Number Of Reportable Segments
NumberOfReportableSegments
2 segment
CY2023 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
3109000000 usd
CY2022 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
3096100000 usd
CY2021 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
3057500000 usd
CY2023 us-gaap Operating Income Loss
OperatingIncomeLoss
63100000 usd
CY2022 us-gaap Operating Income Loss
OperatingIncomeLoss
235900000 usd
CY2021 us-gaap Operating Income Loss
OperatingIncomeLoss
114300000 usd

Files In Submission

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0001965040-24-000010.txt Edgar Link pending
0001965040-24-000010-xbrl.zip Edgar Link pending
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