Document_and_Entity_Informatio
Document and Entity Information (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Aug. 05, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'TELETECH HOLDINGS INC | ' |
Entity Central Index Key | '0001013880 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Public Float | $495,904,505 | ' |
Entity Common Stock, Shares Outstanding | ' | 49,187,278 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $97,778 | $158,017 |
Accounts receivable, net | 251,436 | 236,099 |
Prepaids and other current assets | 59,515 | 52,332 |
Deferred tax assets, net | 11,731 | 11,905 |
Income tax receivable | 10,821 | 11,198 |
Total current assets | 431,281 | 469,551 |
Long-term assets | ' | ' |
Property, plant and equipment, net | 141,381 | 126,719 |
Goodwill | 110,781 | 102,743 |
Contract acquisition costs, net | 1,043 | 1,642 |
Deferred tax assets, net | 33,740 | 42,791 |
Other intangible assets, net | 54,190 | 54,812 |
Other long-term assets | 44,221 | 44,084 |
Total long-term assets | 385,356 | 372,791 |
Total assets | 816,637 | 842,342 |
Current liabilities | ' | ' |
Accounts payable | 28,675 | 32,031 |
Accrued employee compensation and benefits | 69,216 | 80,130 |
Other accrued expenses | 28,441 | 31,659 |
Income taxes payable | 2,851 | 6,066 |
Deferred tax liabilities, net | 35 | 590 |
Deferred revenue | 23,046 | 28,799 |
Other current liabilities | 9,641 | 11,512 |
Total current liabilities | 161,905 | 190,787 |
Long-term liabilities | ' | ' |
Line of credit | 100,000 | 100,000 |
Deferred tax liabilities, net | 3,342 | 2,281 |
Deferred rent | 8,726 | 9,635 |
Other long-term liabilities | 50,882 | 63,648 |
Total long-term liabilities | 162,950 | 175,564 |
Total liabilities | 324,855 | 366,351 |
Commitments and contingencies (Note 10) | ' | ' |
Mandatorily redeemable noncontrolling interest | 3,274 | 2,509 |
Stockholders' equity | ' | ' |
Preferred stock - $0.01 par value: 10,000,000 shares authorized; zero shares outstanding as of March 31, 2014 and December 31, 2013 | 0 | 0 |
Common stock - $0.01 par value; 150,000,000 shares authorized; 49,714,740 and 50,352,881 shares outstanding as of March 31, 2014 and December 31, 2013, respectively | 492 | 503 |
Additional paid-in capital | 352,920 | 356,381 |
Treasury stock at cost: 32,513,513 and 31,699,372 shares as of March 31, 2014 and December 31, 2013, respectively | -508,627 | -477,399 |
Accumulated other comprehensive income | -6,357 | -20,586 |
Retained earnings | 641,852 | 606,502 |
Noncontrolling interest | 8,228 | 8,081 |
Total stockholders' equity | 488,508 | 473,482 |
Total liabilities and stockholders' equity | $816,637 | $842,342 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Stockholders' equity | ' | ' |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 49,186,028 | 50,352,881 |
Treasury stock, shares | 32,866,225 | 31,699,372 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Revenue | $295,490 | $289,692 | $597,711 | $578,075 |
Operating expenses | ' | ' | ' | ' |
Cost of services (exclusive of depreciation and amortization presented separately below) | 212,315 | 208,809 | 426,102 | 417,041 |
Selling, general and administrative | 47,802 | 46,168 | 98,169 | 91,915 |
Depreciation and amortization | 14,089 | 11,263 | 27,259 | 21,818 |
Restructuring charges, net | 617 | 2,572 | 1,157 | 3,423 |
Impairment losses | 0 | 1,205 | 0 | 1,205 |
Total operating expenses | 274,823 | 270,017 | 552,687 | 535,402 |
Income from operations | 20,667 | 19,675 | 45,024 | 42,673 |
Other income (expense) | ' | ' | ' | ' |
Interest income | 492 | 575 | 1,003 | 1,244 |
Interest expense | -1,861 | -1,903 | -3,551 | -3,768 |
Loss on deconsolidation of subsidiary | 0 | -3,655 | 0 | -3,655 |
Other income (expense), net | 4,249 | 1,884 | 5,250 | 1,076 |
Total other income (expense) | 2,880 | -3,099 | 2,702 | -5,103 |
Income before income taxes | 23,547 | 16,576 | 47,726 | 37,570 |
Benefit from (provision for) income taxes | -5,417 | -3,854 | -8,293 | -6,245 |
Net income | 18,130 | 12,722 | 39,433 | 31,325 |
Net income attributable to noncontrolling interest | -1,268 | -407 | -2,353 | -1,049 |
Net income attributable to TeleTech stockholders | 16,862 | 12,315 | 37,080 | 30,276 |
Other comprehensive income (loss) | ' | ' | ' | ' |
Foreign currency translation adjustments | -7,010 | -19,617 | -5,287 | -16,483 |
Derivative valuation, gross | 17,780 | -23,801 | 13,863 | -20,411 |
Derivative valuation, tax effect | -6,775 | 9,418 | -5,393 | 8,208 |
Other, net of tax | 280 | 137 | 556 | 299 |
Total other comprehensive income | 4,275 | -33,863 | 3,739 | -28,387 |
Total comprehensive (loss) income | 22,405 | -21,141 | 43,172 | 2,938 |
Comprehensive income attributable to noncontrolling interest | -1,167 | -277 | -2,159 | -829 |
Comprehensive income attributable to TeleTech stockholders | $21,238 | ($21,418) | $41,013 | $2,109 |
Weighted average shares outstanding | ' | ' | ' | ' |
Basic | 49,351 | 51,861 | 49,696 | 52,104 |
Diluted | 50,111 | 52,628 | 50,536 | 52,912 |
Net income per share attributable to TeleTech stockholders | ' | ' | ' | ' |
Basic | $0.34 | $0.24 | $0.75 | $0.58 |
Diluted | $0.34 | $0.23 | $0.73 | $0.57 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders' Equity (USD $) | Total | Stockholders' Equity of the Company Preferred Stock [Member] | Stockholders' Equity of the Company Common Stock [Member] | Stockholders' Equity of the Company Treasury Stock [Member] | Stockholders' Equity of the Company Additional Paid-in Capital [Member] | Stockholders' Equity of the Company Accumulated Other Comprehensive Income (Loss) [Member] | Stockholders' Equity of the Company Retained Earnings [Member] | Noncontrolling Interest [Member] |
In Thousands, except Share data | ||||||||
Beginning balance,value at Dec. 31, 2013 | $473,482 | $0 | $503 | ($477,399) | $356,381 | ($20,586) | $606,502 | $8,081 |
Preferred stock beginning balance, share at Dec. 31, 2013 | 0 | 0 | ' | ' | ' | ' | ' | ' |
Common stock beginning balance, share at Dec. 31, 2013 | 50,352,881 | ' | 50,353 | ' | ' | ' | ' | ' |
Net income | 39,433 | ' | ' | ' | ' | ' | 37,080 | ' |
Net income excluding mandatorily redeemable noncontrolling interest | 39,154 | ' | ' | ' | ' | ' | ' | 2,074 |
Dividends distributed to noncontrolling interest | -2,025 | ' | ' | ' | ' | ' | ' | -2,025 |
Adjustments to redemption value of mandatorily redeemable noncontrolling interest | -1,730 | ' | ' | ' | ' | ' | -1,730 | ' |
Foreign currency translation adjustments | -5,287 | ' | ' | ' | ' | 5,202 | ' | 85 |
Derivatives valuation, net of tax | 8,471 | ' | ' | ' | ' | 8,471 | ' | ' |
Vesting of restricted stock units, value | -4,698 | ' | 4 | 5,092 | -9,794 | ' | ' | ' |
Exercise of stock options, value | 314 | ' | 1 | 713 | -400 | ' | ' | ' |
Excess tax benefit from equity-based awards | 923 | ' | ' | ' | 923 | ' | ' | ' |
Equity-based compensation expense | 5,823 | ' | ' | ' | 5,810 | ' | ' | 13 |
Purchases of common stock, value | -37,049 | ' | -16 | -37,033 | ' | ' | ' | ' |
Other | 556 | ' | ' | ' | ' | 556 | ' | ' |
Ending balance,value at Jun. 30, 2014 | 488,508 | 0 | 492 | -508,627 | 352,920 | -6,357 | 641,852 | 8,228 |
Preferred stock ending balance, share at Jun. 30, 2014 | 0 | 0 | ' | ' | ' | ' | ' | ' |
Common stock ending balance, share at Jun. 30, 2014 | 49,186,028 | ' | 49,186 | ' | ' | ' | ' | ' |
Beginning balance,value at Mar. 31, 2014 | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 18,130 | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | -7,010 | ' | ' | ' | ' | ' | ' | ' |
Vesting of restricted stock units, share | ' | ' | 339 | ' | ' | ' | ' | ' |
Exercise of stock options, share | ' | ' | 47 | ' | ' | ' | ' | ' |
Purchases of common stock, share | ' | ' | -1,553 | ' | ' | ' | ' | ' |
Ending balance,value at Jun. 30, 2014 | $488,508 | $0 | $492 | ' | ' | ' | ' | ' |
Preferred stock ending balance, share at Jun. 30, 2014 | 0 | 0 | ' | ' | ' | ' | ' | ' |
Common stock ending balance, share at Jun. 30, 2014 | 49,186,028 | ' | 49,186 | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net income | $39,433 | $31,325 |
Adjustment to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 27,259 | 21,818 |
Amortization of contract acquisition costs | 657 | 506 |
Amortization of debt issuance costs | 349 | 319 |
Imputed interest expense and fair value adjustments to contingent consideration | -3,710 | 670 |
Provision for doubtful accounts | 219 | 478 |
Gain on disposal of assets | 0 | -106 |
Impairment losses | 0 | 1,205 |
Deferred income taxes | 5,035 | 2,697 |
Excess tax benefit from equity-based awards | -1,050 | -1,046 |
Equity-based compensation expense | 5,881 | 6,577 |
Gain on foreign currency derivatives | -2,955 | -2,768 |
Loss on deconsolidation of subsidiary, net of cash of zero and $897, respectively | 0 | 2,758 |
Changes in assets and liabilities, net of acquisitions: | ' | ' |
Accounts receivable | -9,238 | -2,804 |
Prepaids and other assets | -631 | 1,044 |
Accounts payable and accrued expenses | -22,965 | -14,151 |
Deferred revenue and other liabilities | -6,654 | -8,311 |
Net cash provided by operating activities | 31,630 | 40,211 |
Cash flows from investing activities | ' | ' |
Proceeds from sale of property, plant and equipment | 135 | 0 |
Purchases of property, plant and equipment, net of acquisitions | -34,483 | -13,660 |
Acquisitions, net of cash acquired of $812 and zero, respectively | -8,732 | -1,652 |
Net cash used in investing activities | -43,080 | -15,312 |
Cash flows from financing activities | ' | ' |
Proceeds from line of credit | 1,001,500 | 681,550 |
Payments on line of credit | -1,001,500 | -679,550 |
Proceeds from other debt | 0 | 3,709 |
Payments on other debt | -3,127 | -2,661 |
Payments of contingent consideration related to acqusitions | -8,547 | 0 |
Dividends distributed to noncontrolling interest | -3,713 | -2,385 |
Proceeds from exercise of stock options | 313 | 856 |
Excess tax benefit from equity-based awards | 1,050 | 1,046 |
Purchase of treasury stock | -37,049 | -31,001 |
Payments of debt issuance costs | 0 | 1,732 |
Net cash used in financing activities | -51,073 | -30,168 |
Effect of exchange rate changes on cash and cash equivalents | 2,284 | -8,593 |
(Decrease) increase in cash and cash equivalents | -60,239 | -13,862 |
Cash and cash equivalents, beginning of period | 158,017 | 164,485 |
Cash and cash equivalents, end of period | 97,778 | 150,623 |
Supplemental disclosures | ' | ' |
Cash paid for interest | 2,670 | 2,226 |
Cash paid for income taxes | 7,486 | 8,913 |
Non-cash investing and financing activities | ' | ' |
Acquisition of equipment through increase in accounts payable | 1,420 | 0 |
Landlord incentives credited to deferred rent | $0 | $511 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from investing activities | ' | ' |
Acquisitions, net of cash acquired of $857 and zero, respectively | $857 | $0 |
Loss on deconsolidation of subsidiary, net of cash of zero and $897, respectively | $0 | $897 |
OVERVIEW_AND_BASIS_OF_PRESENTA
OVERVIEW AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2014 | |
OVERVIEW AND BASIS OF PRESENTATION [Abstract] | ' |
OVERVIEW AND BASIS OF PRESENTATION | ' |
(1) OVERVIEW AND BASIS OF PRESENTATION | |
Summary of Business | |
TeleTech Holdings, Inc. (“TeleTech” or “the Company”) is a leading provider of customer strategy, analytics-driven and technology-enabled customer engagement management solutions with 40,000 employees delivering services across 25 countries from 53 delivery centers on five continents. | |
We have deep industry expertise and serve more than 250 customer-focused industry leaders in the Global 1000. Our business is structured and reported in four segments: Customer Management Services (“CMS”), Customer Growth Services (“CGS”), Customer Technology Services (“CTS”), and Customer Strategy Services (“CSS”). | |
Basis of Presentation | |
The Consolidated Financial Statements are comprised of the accounts of TeleTech, its wholly owned subsidiaries, its 55% equity owned subsidiary Percepta, LLC, its 80% interest in iKnowtion, LLC, and its 80% interest in Peppers & Rogers Group through the third quarter of 2013 when the final 20% interest was repurchased (see Note 2). All intercompany balances and transactions have been eliminated in consolidation. | |
The unaudited Consolidated Financial Statements do not include all of the disclosures required by accounting principles generally accepted in the U.S. (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company and the consolidated results of operations and comprehensive income (loss) and the consolidated cash flows of the Company. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | |
These unaudited Consolidated Financial Statements should be read in conjunction with the Company's audited Consolidated Financial Statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. | |
Use of Estimates | |
The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates including those related to derivatives and hedging activities, income taxes including valuation allowances for deferred tax assets, self-insurance reserves, litigation reserves, restructuring reserves, allowance for doubtful accounts, and valuation of goodwill, long-lived and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. | |
Recently Issued Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements and Property, Plant, and Equipment – Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU 2014-08 provides new guidance related to the definition of a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This new guidance is effective for annual periods beginning on or after December 15, 2014 and interim periods within those years. Beginning in 2015, the Company will apply the new guidance, as applicable, to future disposals of components or classifications as held for sale. | |
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 provides new guidance related to how an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, ASU 2014-09 specifies new accounting for costs associated with obtaining or fulfilling contracts with customers and expands the required disclosures related to revenue and cash flows from contracts with customers. This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption, with early application not permitted. The Company is currently determining its implementation approach and assessing the impact on the consolidated financial statements. | |
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, and early adoption is permitted. Beginning in 2016, the Company will apply the new guidance as applicable. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended | |||
Jun. 30, 2014 | ||||
ACQUISITIONS [ABSTRACT] | ' | |||
ACQUISITIONS | ' | |||
(2) ACQUISITIONS | ||||
Sofica | ||||
In the first quarter of 2014, the Company acquired a 100% interest in Sofica Group, a Bulgarian joint stock company (“Sofica”). Sofica provides customer lifecycle management and other business process services across multiple channels in multiple sites in over 18 languages. | ||||
The estimated purchase price of $13.8 million, included $9.4 million in cash consideration (including a working capital adjustment) and $3.4 million in earn-out payments, payable in 2015 and 2016, contingent on Sofica achieving specified earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets, as defined by the stock purchase agreement. Additionally, the estimated purchase price includes a $1.0 million hold-back payment for contingencies as defined in the stock purchase agreement which will be paid in the second quarter of 2016 as required. | ||||
The fair value of the contingent payments was measured based on significant inputs not observable in the market (Level 3 inputs). Key assumptions include a discount rate of 22% and expected future value of payments of $4.0 million. The $4.0 million of expected future payments was calculated using a bell curve probability weighted EBITDA assessment with the highest probability associated with Sofica achieving the targeted EBITDA for each earn-out year. As of the acquisition date, the fair value of the contingent consideration was approximately $3.4 million. As of June 30, 2014, the fair value of the contingent consideration was $3.5 million, of which $2.0 million and $1.5 million were included in Other accrued expenses and Other long-term liabilities in the accompanying Consolidated Balance Sheets, respectively. | ||||
The following summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands). The estimates of fair value of identifiable assets acquired and liabilities assumed are preliminary, pending completion of a valuation, thus are subject to revisions that may result in adjustments to the values presented below: | ||||
Preliminary Estimate of Acquisition Date Fair Value | ||||
Cash | $ | 857 | ||
Accounts receivable | 3,175 | |||
Other assets | 378 | |||
Property, plant and equipment | 653 | |||
Customer relationships | 3,531 | |||
Goodwill | 7,208 | |||
15,802 | ||||
Accounts payable | 296 | |||
Accrued employee compensation and benefits | 697 | |||
Accrued expenses | 664 | |||
Deferred tax liability and other | 368 | |||
2,025 | ||||
Total purchase price | $ | 13,777 | ||
The Sofica customer relationships have an estimated useful life of five years. The goodwill recognized from the Sofica acquisition was attributable primarily to the acquired workforce of Sofica, expected synergies, and other factors. The tax basis of the acquired intangibles and goodwill are not deductible for income tax purposes. The acquired goodwill and the operating results of Sofica are reported within the CMS segment from the date of acquisition. | ||||
WebMetro | ||||
In the third quarter of 2013, the Company acquired 100% of WebMetro, a California corporation (“WebMetro”), a digital marketing agency. | ||||
The total purchase price was $17.8 million, including $15.3 million in cash consideration (inclusive of a working capital adjustment) and $2.5 million in earn-out payments, payable in 2014 and 2015, contingent on WebMetro achieving specified EBITDA targets, as defined by the stock purchase agreement. The first contingent payment was made in the second quarter of 2014. | ||||
Financial Information | ||||
The acquired businesses purchased in 2013 and 2014 noted above contributed revenues of $7.9 million and $12.8 million and income from operations of $0.6 million and $0.9 million, inclusive of $0.7 million and $1.3 million of acquired intangible amortization, to the Company for the three and six months ended June 30, 2014. | ||||
Peppers & Rogers Group | ||||
In the third quarter of 2013, the Company acquired the remaining 20% interest in Peppers & Rogers Group (“PRG”) for $425 thousand. The buy-out accelerated TeleTech's rights pursuant to the sale and purchase agreement to acquire the remaining portion of the business in 2015. | ||||
rogenSi | ||||
Subsequent to June 30, 2014, the Company entered into an agreement (the “rogenSi Agreement”) to acquire substantially all operating assets of rogenSi Worldwide PTY, Ltd., a global sales and leadership performance training and applied leadership consulting company (the “rogenSi Acquisition”). The total purchase price is $35.7 million, subject to standard working capital adjustments, and consists of $18.0 million in cash at closing and $17.7 million in three earn-out payments, contingent on the acquired companies and TeleTech's CSS business segment achieving certain agreed EBITDA targets, as defined in the rogenSi Agreement. The earn-out payments are payable in early 2015, 2016 and 2017, based on post closing performance in 2014, 2015 and 2016, respectively. We expect the rogenSi Acquisition to close on or before August 31, 2014, subject to customary closing deliverables, representations, warranties and indemnifications. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
SEGMENT INFORMATION [ABSTRACT] | ' | |||||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||||
(3) SEGMENT INFORMATION | ||||||||||||||||
The Company reports the following four segments: | ||||||||||||||||
the CMS segment includes the customer experience delivery solutions which integrate innovative technology with highly-trained customer experience professionals to optimize the customer experience across all channels and all stages of the customer lifecycle from an onshore, offshore or work-from-home environment; | ||||||||||||||||
the CGS segment provides technology-enabled sales and marketing solutions that support revenue generation across the customer lifecycle, including sales advisory, search engine optimization, digital demand generation, lead qualification, and acquisition sales, growth and retention services; | ||||||||||||||||
the CTS segment includes operational and design consulting, systems integration, and cloud and on-premise managed services, the requirements needed to design, deliver and maintain best-in-class multichannel customer engagement platforms; and | ||||||||||||||||
the CSS segment provides professional services in customer experience strategy, customer intelligence analytics, system and operational process optimization, and culture development and knowledge management. | ||||||||||||||||
The Company allocates to each segment its portion of corporate operating expenses. All intercompany transactions between the reported segments for the periods presented have been eliminated. | ||||||||||||||||
The following tables present certain financial data by segment (in thousands): | ||||||||||||||||
Three Months Ended June 30, 2014 | ||||||||||||||||
Gross Revenue | Intersegment Sales | Net Revenue | Depreciation & Amortization | Income (Loss) from Operations | ||||||||||||
Customer Management Services | $ | 218,683 | $ | - | $ | 218,683 | $ | 10,169 | $ | 16,493 | ||||||
Customer Growth Services | 28,875 | - | 28,875 | 1,468 | 1,831 | |||||||||||
Customer Technology Services | 35,753 | -16 | 35,737 | 2,008 | 1,616 | |||||||||||
Customer Strategy Services | 12,195 | - | 12,195 | 444 | 727 | |||||||||||
Total | $ | 295,506 | $ | -16 | $ | 295,490 | $ | 14,089 | $ | 20,667 | ||||||
Three Months Ended June 30, 2013 | ||||||||||||||||
Gross Revenue | Intersegment Sales | Net Revenue | Depreciation & Amortization | Income (Loss) from Operations | ||||||||||||
Customer Management Services | $ | 220,965 | $ | -324 | $ | 220,641 | $ | 8,532 | $ | 16,465 | ||||||
Customer Growth Services | 22,399 | - | 22,399 | 777 | -620 | |||||||||||
Customer Technology Services | 36,717 | -73 | 36,644 | 1,489 | 5,819 | |||||||||||
Customer Strategy Services | 10,256 | -248 | 10,008 | 465 | -1,989 | |||||||||||
Total | $ | 290,337 | $ | -645 | $ | 289,692 | $ | 11,263 | $ | 19,675 | ||||||
Six Months Ended June 30, 2014 | ||||||||||||||||
Gross Revenue | Intersegment Sales | Net Revenue | Depreciation & Amortization | Income (Loss) from Operations | ||||||||||||
Customer Management Services | $ | 446,607 | $ | - | $ | 446,607 | $ | 19,634 | $ | 37,316 | ||||||
Customer Growth Services | 57,780 | - | 57,780 | 3,024 | 3,601 | |||||||||||
Customer Technology Services | 68,532 | -19 | 68,513 | 3,723 | 1,927 | |||||||||||
Customer Strategy Services | 24,811 | - | 24,811 | 878 | 2,180 | |||||||||||
Total | $ | 597,730 | $ | -19 | $ | 597,711 | $ | 27,259 | $ | 45,024 | ||||||
Six Months Ended June 30, 2013 | ||||||||||||||||
Gross Revenue | Intersegment Sales | Net Revenue | Depreciation & Amortization | Income (Loss) from Operations | ||||||||||||
Customer Management Services | $ | 443,854 | $ | -631 | $ | 443,223 | $ | 16,394 | $ | 37,196 | ||||||
Customer Growth Services | 45,255 | - | 45,255 | 1,474 | 656 | |||||||||||
Customer Technology Services | 70,363 | -157 | 70,206 | 3,005 | 8,717 | |||||||||||
Customer Strategy Services | 20,186 | -795 | 19,391 | 945 | -3,896 | |||||||||||
Total | $ | 579,658 | $ | -1,583 | $ | 578,075 | $ | 21,818 | $ | 42,673 | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Capital Expenditures | ||||||||||||||||
Customer Management Services | $ | 14,587 | $ | 8,110 | $ | 24,499 | $ | 10,396 | ||||||||
Customer Growth Services | 1,289 | 435 | 1,669 | 751 | ||||||||||||
Customer Technology Services | 3,407 | 960 | 8,038 | 2,288 | ||||||||||||
Customer Strategy Services | 105 | 50 | 277 | 225 | ||||||||||||
Total | $ | 19,388 | $ | 9,555 | $ | 34,483 | $ | 13,660 | ||||||||
30-Jun-14 | 31-Dec-13 | |||||||||||||||
Total Assets | ||||||||||||||||
Customer Management Services | $ | 531,926 | $ | 554,015 | ||||||||||||
Customer Growth Services | 84,058 | 86,416 | ||||||||||||||
Customer Technology Services | 153,552 | 157,040 | ||||||||||||||
Customer Strategy Services | 47,101 | 44,871 | ||||||||||||||
Total | $ | 816,637 | $ | 842,342 | ||||||||||||
30-Jun-14 | 31-Dec-13 | |||||||||||||||
Goodwill | ||||||||||||||||
Customer Management Services | $ | 27,240 | $ | 19,819 | ||||||||||||
Customer Growth Services | 30,395 | 30,128 | ||||||||||||||
Customer Technology Services | 42,709 | 42,709 | ||||||||||||||
Customer Strategy Services | 10,437 | 10,087 | ||||||||||||||
Total | $ | 110,781 | $ | 102,743 | ||||||||||||
The following table presents revenue based upon the geographic location where the services are provided (in thousands): | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenue | ||||||||||||||||
United States | $ | 137,596 | $ | 132,341 | $ | 284,065 | $ | 264,088 | ||||||||
Philippines | 85,541 | 88,049 | 172,207 | 174,158 | ||||||||||||
Latin America | 43,258 | 44,303 | 85,304 | 89,331 | ||||||||||||
Europe / Middle East / Africa | 22,267 | 16,638 | 41,484 | 33,621 | ||||||||||||
Asia Pacific | 5,358 | 4,359 | 11,758 | 8,585 | ||||||||||||
Canada | 1,470 | 4,002 | 2,893 | 8,292 | ||||||||||||
Total | $ | 295,490 | $ | 289,692 | $ | 597,711 | $ | 578,075 | ||||||||
SIGNIFICANT_CLIENTS_AND_OTHER_
SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS | 6 Months Ended |
Jun. 30, 2014 | |
SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS [Abstract] | ' |
SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS | ' |
(4) SIGNIFICANT CLIENTS and other concentrations | |
The Company had one client that contributed in excess of 10% of total revenue for the six months ended June 30, 2014. This client contributed 12.0% and 11.8% of total revenue for the three months ended June 30, 2014 and 2013. This client contributed 11.8% and 11.8% for the six months ended June 30, 2014 and 2013. This client had an outstanding receivable balance of $28.6 million and $32.5 million as of June 30, 2014 and 2013. | |
The loss of one or more of its significant clients could have a material adverse effect on the Company's business, operating results, or financial condition. The Company does not require collateral from its clients. To limit the Company's credit risk, management performs periodic credit evaluations of its clients and maintains allowances for uncollectible accounts and may require pre-payment for services. Although the Company is impacted by economic conditions in various industry segments, management does not believe significant credit risk existed as of June 30, 2014. |
GOODWILL
GOODWILL | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
GOODWILL [ABSTRACT] | ' | |||||||||||||||
GOODWILL | ' | |||||||||||||||
(5) GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||||||||||
Goodwill consisted of the following (in thousands): | ||||||||||||||||
31-Dec-13 | Acquisitions/ Adjustments | Impairments | Effect of Foreign Currency | 30-Jun-14 | ||||||||||||
Customer Management Services | $ | 19,819 | $ | 7,208 | $ | - | $ | 213 | $ | 27,240 | ||||||
Customer Growth Services | 30,128 | 267 | - | - | 30,395 | |||||||||||
Customer Technology Services | 42,709 | - | - | - | 42,709 | |||||||||||
Customer Strategy Services | 10,087 | 350 | - | - | 10,437 | |||||||||||
Total | $ | 102,743 | $ | 7,825 | $ | - | $ | 213 | $ | 110,781 | ||||||
The Company performs a goodwill impairment assessment on at least an annual basis. The Company conducts its annual goodwill impairment assessment during the fourth quarter, or more frequently, if indicators of impairment exist. | ||||||||||||||||
The Company has identified a triggering event based on the continued decline during the second quarter of 2014 in operating results of the TSG reporting unit within the CTS segment. At June 30, 2014, the Company completed an interim quantitative assessment of this reporting unit's fair value using an income based approach. Key assumptions used in the fair value calculation include, but are not limited to, a perpetuity growth rate of 3.0% based on the current inflation rate combined with the GDP growth rate for the reporting unit's geographical region and a discount rate of 19.1%, which is equal to the reporting unit's equity risk premium adjusted for its size and company specific risk factors. Estimated future cash flows under the income approach are based on the Company's internal business plan and adjusted as appropriate for the Company's view of market participant assumptions. The current business plan assumes the occurrence of certain events in the future, such as realignment of operations and reduction of general and administrative costs. Significant differences in some or all of these assumptions may impact the calculated fair value of this reporting unit resulting in impairment to goodwill in a future period. The goodwill attributable to this reporting unit is $23.0 million. As of June 30, 2014, the fair value of this reporting unit exceeds its carrying value by 8%. The Company will continue to review the calculated fair value of this reporting unit until the fair value is substantially in excess of its carrying value. |
DERIVATIVES
DERIVATIVES | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
DERIVATIVES [ABSTRACT] | ' | ||||||||||||||
DERIVATIVES | ' | ||||||||||||||
(6) DERIVATIVES | |||||||||||||||
Cash Flow Hedges | |||||||||||||||
The Company enters into foreign exchange and interest rate related derivatives. Foreign exchange derivatives entered into consist of forward and option contracts to reduce the Company's exposure to foreign currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. Interest rate derivatives consist of interest rate swaps to reduce the Company's exposure to interest rate fluctuations associated with its variable rate debt. Upon proper qualification, these contracts are designated as cash flow hedges. It is the Company's policy to only enter into derivative contracts with investment grade counterparty financial institutions, and correspondingly, the fair value of derivative assets consider, among other factors, the creditworthiness of these counterparties. Conversely, the fair value of derivative liabilities reflects the Company's creditworthiness. As of June 30, 2014, the Company has not experienced, nor does it anticipate, any issues related to derivative counterparty defaults. The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the three and six months ended June 30, 2014 and 2013 (in thousands and net of tax): | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Aggregate unrealized net gain/(loss) at beginning of period | $ | -10,886 | $ | 11,739 | $ | -8,352 | $ | 9,559 | |||||||
Add: Net gain/(loss) from change in fair value of cash flow hedges | 9,946 | -12,801 | 6,297 | -8,702 | |||||||||||
Less: Net (gain)/loss reclassified to earnings from effective hedges | 1,059 | -1,582 | 2,174 | -3,501 | |||||||||||
Aggregate unrealized net gain/(loss) at end of period | $ | 119 | $ | -2,644 | $ | 119 | $ | -2,644 | |||||||
The Company's foreign exchange cash flow hedging instruments as of June 30, 2014 and December 31, 2013 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts unless noted otherwise. | |||||||||||||||
As of June 30, 2014 | Local Currency Notional Amount | U.S. Dollar Notional Amount | % Maturing in the Next 12 Months | Contracts Maturing Through | |||||||||||
Canadian Dollar | 4,500 | $ | 4,382 | 100 | % | Jun-15 | |||||||||
Philippine Peso | 17,776,000 | 411,135 | (1) | 40 | % | Mar-19 | |||||||||
Mexican Peso | 2,395,000 | 170,462 | 29.1 | % | Mar-19 | ||||||||||
$ | 585,979 | ||||||||||||||
As of December 31, 2013 | Local Currency Notional Amount | U.S. Dollar Notional Amount | |||||||||||||
Canadian Dollar | 7,500 | $ | 7,336 | ||||||||||||
Philippine Peso | 17,355,000 | 404,638 | (1) | ||||||||||||
Mexican Peso | 2,305,500 | 166,132 | |||||||||||||
British Pound Sterling | 1,200 | 1,853 | (2) | ||||||||||||
New Zealand Dollar | 150 | 117 | |||||||||||||
$ | 580,076 | ||||||||||||||
(1) Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2014 and December 31, 2013. | |||||||||||||||
(2) Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on December 31, 2013. | |||||||||||||||
The Company's interest rate swap arrangements as of June 30, 2014 and December 31, 2013 were as follows: | |||||||||||||||
Notional Amount | Variable Rate Received | Fixed Rate Paid | Contract Commencement Date | Contract Maturity Date | |||||||||||
As of June 30, 2014 | $ | 25 million | 1 - month LIBOR | 2.55 | % | Apr-12 | Apr-16 | ||||||||
and December 31, 2013 | 15 million | 1 - month LIBOR | 3.14 | % | May-12 | May-17 | |||||||||
$ | 40 million | ||||||||||||||
Fair Value Hedges | |||||||||||||||
The Company enters into foreign exchange forward contracts to economically hedge against foreign currency exchange gains and losses on certain receivables and payables of the Company's foreign operations. Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings in Other income (expense), net. As of June 30, 2014 and December 31, 2013 the total notional amounts of the Company's forward contracts used as fair value hedges were $244.3 million and $204.5 million, respectively. | |||||||||||||||
Derivative Valuation and Settlements | |||||||||||||||
The Company's derivatives as of June 30, 2014 and December 31, 2013 were as follows (in thousands): | |||||||||||||||
30-Jun-14 | |||||||||||||||
Designated as Hedging Instruments | Not Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Interest Rate | Foreign Exchange | Leases | |||||||||||
Derivative classification: | Cash Flow | Cash Flow | Fair Value | Embedded Derivative | |||||||||||
Fair value and location of derivative in the | |||||||||||||||
Consolidated Balance Sheet: | |||||||||||||||
Prepaids and other current assets | $ | 2,853 | $ | - | $ | 2,472 | $ | - | |||||||
Other long-term assets | 8,915 | - | - | - | |||||||||||
Other current liabilities | -4,870 | -1,044 | -321 | - | |||||||||||
Other long-term liabilities | -4,780 | -847 | - | - | |||||||||||
Total fair value of derivatives, net | $ | 2,118 | $ | -1,891 | $ | 2,151 | $ | - | |||||||
31-Dec-13 | |||||||||||||||
Designated as Hedging Instruments | Not Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Interest Rate | Foreign Exchange | Leases | |||||||||||
Derivative classification: | Cash Flow | Cash Flow | Fair Value | Embedded Derivative | |||||||||||
Fair value and location of derivative in | |||||||||||||||
the Consolidated Balance Sheet: | |||||||||||||||
Prepaids and other current assets | $ | 3,379 | $ | - | $ | 97 | $ | - | |||||||
Other long-term assets | 1,439 | - | - | - | |||||||||||
Other current liabilities | -4,595 | -1,028 | -815 | -116 | |||||||||||
Other long-term liabilities | -11,708 | -1,124 | - | - | |||||||||||
Total fair value of derivatives, net | $ | -11,485 | $ | -2,152 | $ | -718 | $ | -116 | |||||||
The effects of derivative instruments on the Consolidated Statements of Comprehensive Income for the three months ended June 30, 2014 and 2013 were as follows (in thousands): | |||||||||||||||
Three Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Designated as Hedging Instruments | Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Interest Rate | Foreign Exchange | Interest Rate | |||||||||||
Derivative classification: | Cash Flow | Cash Flow | Cash Flow | Cash Flow | |||||||||||
Amount of gain or (loss) recognized in other comprehensive | |||||||||||||||
income (loss) - effective portion, net of tax | $ | 10,049 | $ | -103 | $ | -12,956 | $ | 155 | |||||||
Amount and location of net gain or (loss) reclassified | |||||||||||||||
from accumulated OCI to income - effective portion: | |||||||||||||||
Revenue | $ | -1,472 | $ | - | $ | 2,850 | $ | - | |||||||
Interest Expense | - | -265 | - | -257 | |||||||||||
Three Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Leases | Foreign Exchange | Leases | |||||||||||
Derivative classification: | Option and Forward Contracts | Fair Value | Embedded Derivative | Option and Forward Contracts | Fair Value | Embedded Derivative | |||||||||
Amount and location of net gain or (loss) | |||||||||||||||
recognized in the Consolidated Statement | |||||||||||||||
of Comprehensive Income: | |||||||||||||||
Costs of services | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 44 | |||
Other income (expense), net | $ | - | $ | -2,825 | $ | - | $ | - | $ | -2,685 | $ | - | |||
The effects of derivative instruments on the Consolidated Statements of Comprehensive Income for the six months ended June 30, 2014 and 2013 were as follows (in thousands): | |||||||||||||||
Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Designated as Hedging Instruments | Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Interest Rate | Foreign Exchange | Interest Rate | |||||||||||
Derivative classification: | Cash Flow | Cash Flow | Cash Flow | Cash Flow | |||||||||||
Amount of gain or (loss) recognized in other comprehensive | |||||||||||||||
income (loss) - effective portion, net of tax | $ | 6,457 | $ | -160 | $ | -8,744 | $ | 42 | |||||||
Amount and location of net gain or (loss) reclassified | |||||||||||||||
from accumulated OCI to income - effective portion: | |||||||||||||||
Revenue | $ | -3,043 | $ | - | $ | 6,310 | $ | - | |||||||
Interest Expense | - | -523 | - | -514 | |||||||||||
Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Leases | Foreign Exchange | Leases | |||||||||||
Derivative classification: | Option and Forward Contracts | Fair Value | Embedded Derivative | Option and Forward Contracts | Fair Value | Embedded Derivative | |||||||||
Amount and location of net gain or (loss) | |||||||||||||||
recognized in the Consolidated Statement | |||||||||||||||
of Comprehensive Income: | |||||||||||||||
Costs of services | $ | - | $ | - | $ | 116 | $ | - | $ | - | $ | 113 | |||
Other income (expense), net | $ | - | $ | -2,206 | $ | - | $ | - | $ | -1,247 | $ | - | |||
FAIR_VALUE
FAIR VALUE | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
FAIR VALUE [Abstract] | ' | ||||||||||||||
FAIR VALUE | ' | ||||||||||||||
(7) FAIR VALUE | |||||||||||||||
The authoritative guidance for fair value measurements establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires that the Company 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, similar assets and liabilities in markets that are not active or can be corroborated by observable market data. | |||||||||||||||
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. | |||||||||||||||
The following presents information as of June 30, 2014 and December 31, 2013 for the Company's assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value. | |||||||||||||||
Accounts Receivable and Payable - The amounts recorded in the accompanying balance sheets approximate fair value because of their short-term nature. | |||||||||||||||
Debt - The Company's debt consists primarily of the Company's Credit Agreement, which permits floating-rate borrowings based upon the current Prime Rate or LIBOR plus a credit spread as determined by the Company's leverage ratio calculation (as defined in the Credit Agreement). As of June 30, 2014 and December 31, 2013, the Company had $100.0 million and $100.0 million, respectively, of borrowings outstanding under the Credit Agreement. During the three and six months ended June 30, 2014 outstanding borrowings accrued interest at an average rate of 1.2% and 1.2% per annum, respectively, excluding unused commitment fees. The amounts recorded in the accompanying balance sheets approximate fair value due to the variable nature of the debt. | |||||||||||||||
Derivatives - Net derivative assets (liabilities) are measured at fair value on a recurring basis. The portfolio is valued using models based on market observable inputs, including both forward and spot foreign exchange rates, interest rates, implied volatility, and counterparty credit risk, including the ability of each party to execute its obligations under the contract. As of June 30, 2014, credit risk did not materially change the fair value of the Company's derivative contracts. | |||||||||||||||
The following is a summary of the Company's fair value measurements for its net derivative assets (liabilities) as of June 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||
As of June 30, 2014 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | At Fair Value | ||||||||||||
Cash flow hedges | $ | - | $ | 2,118 | $ | - | $ | 2,118 | |||||||
Interest rate swaps | - | -1,891 | - | -1,891 | |||||||||||
Embedded derivatives | - | - | - | - | |||||||||||
Fair value hedges | - | 2,151 | - | 2,151 | |||||||||||
Total net derivative asset (liability) | $ | - | $ | 2,378 | $ | - | $ | 2,378 | |||||||
As of December 31, 2013 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | At Fair Value | ||||||||||||
Cash flow hedges | $ | - | $ | -11,485 | $ | - | $ | -11,485 | |||||||
Interest rate swaps | - | -2,152 | - | -2,152 | |||||||||||
Fair value hedges | - | -718 | - | -718 | |||||||||||
Embedded derivatives | - | -116 | - | -116 | |||||||||||
Total net derivative asset (liability) | $ | - | $ | -14,471 | $ | - | $ | -14,471 | |||||||
The following is a summary of the Company's fair value measurements as of June 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||
As of June 30, 2014 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | |||||||||||||||
Money market investments | $ | - | $ | 241 | $ | - | |||||||||
Derivative instruments, net | - | 2,378 | - | ||||||||||||
Total assets | $ | - | $ | 2,619 | $ | - | |||||||||
Liabilities | |||||||||||||||
Deferred compensation plan liability | $ | - | $ | -8,070 | $ | - | |||||||||
Derivative instruments, net | - | - | - | ||||||||||||
Contingent consideration | - | - | -12,481 | ||||||||||||
Total liabilities | $ | - | $ | -8,070 | $ | -12,481 | |||||||||
As of December 31, 2013 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | |||||||||||||||
Money market investments | $ | - | $ | 240 | $ | - | |||||||||
Derivative instruments, net | - | - | - | ||||||||||||
Total assets | $ | - | $ | 240 | $ | - | |||||||||
Liabilities | |||||||||||||||
Deferred compensation plan liability | $ | - | $ | -6,829 | $ | - | |||||||||
Derivative instruments, net | - | -14,471 | - | ||||||||||||
Contingent consideration | - | - | -21,748 | ||||||||||||
Total liabilities | $ | - | $ | -21,300 | $ | -21,748 | |||||||||
Money Market Investments — The Company invests in various well-diversified money market funds which are managed by financial institutions. These money market funds are not publicly traded, but have historically been highly liquid. The value of the money market funds are determined by the banks based upon the funds' net asset values (“NAV”). As of June 30, 2014, the money market funds permit daily investments and redemptions at a $1.00 NAV. | |||||||||||||||
Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan structured as a Rabbi trust for certain eligible employees. Participants in the deferred compensation plan select from a menu of phantom investment options for their deferral dollars offered by the Company each year, which are based upon changes in value of complementary, defined market investments. The deferred compensation liability represents the combined values of market investments against which participant accounts are tracked. | |||||||||||||||
Contingent Consideration — The Company recorded contingent consideration related to the acquisitions of iKnowtion, Guidon, TSG, WebMetro and Sofica. These contingent payables were recognized at fair value using a discounted cash flow approach and a discount rate of 21.0%, 21.0%, 4.6%, 5.3% or 22.0%, respectively. The discount rates vary dependant on the specific risks of each acquisition including the country of operation, the nature of services and complexity of the acquired business, and other similar factors. These measurements were based on significant inputs not observable in the market. The Company will record interest expense each period using the effective interest method until the future value of these contingent payables reaches their expected future value of $13.4 million. Interest expense related to all recorded contingent payables is included in Interest expense in the Consolidated Statements of Comprehensive Income (Loss). | |||||||||||||||
During the second quarter of 2014, the Company recorded a fair value adjustment of the contingent consideration associated with the TSG reporting unit within the CTS segment based on revised estimates noting achievement of the targeted 2014 EBITDA is remote. Based on this conclusion a $4.0 million reduction in the payable was recorded as of June 30, 2014 and included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss). | |||||||||||||||
A rollforward of the activity in the Company's fair value of the contingent consideration is as follows (in thousands): | |||||||||||||||
31-Dec-13 | Acquisitions | Payments | Imputed Interest / Adjustments | 30-Jun-14 | |||||||||||
iKnowtion | $ | 3,470 | $ | - | $ | -1,400 | $ | 123 | $ | 2,193 | |||||
Guidon | 2,637 | - | -1,426 | 39 | 1,250 | ||||||||||
TSG | 12,933 | - | -5,292 | -3,840 | 3,801 | ||||||||||
WebMetro | 2,708 | - | -1,026 | 15 | 1,697 | ||||||||||
Sofica | - | 3,435 | - | 105 | 3,540 | ||||||||||
Total | $ | 21,748 | $ | 3,435 | $ | -9,144 | $ | -3,558 | $ | 12,481 | |||||
INCOME_TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2014 | |
INCOME TAXES [ABSTRACT] | ' |
INCOME TAXES | ' |
(8) INCOME TAXES | |
The Company accounts for income taxes in accordance with the accounting literature for income taxes, which requires recognition of deferred tax assets and liabilities for the expected future income tax consequences of transactions that have been included in the Consolidated Financial Statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. Quarterly, the Company assesses the likelihood that its net deferred tax assets will be recovered. Based on the weight of all available evidence, both positive and negative, the Company records a valuation allowance against deferred tax assets when it is more-likely-than-not that a future tax benefit will not be realized. | |
During the first quarter of 2014, a benefit of $1.2 million was recorded due to the closing of statutes of limitations in Canada. | |
As of June 30, 2014, the Company had $45.5 million of gross deferred tax assets (after an $8.1 million valuation allowance) and net deferred tax assets (after deferred tax liabilities) of $42.1 million related to the U.S. and international tax jurisdictions whose recoverability is dependent upon future profitability. | |
The effective tax rate for the three and six months ended June 30, 2014 was 23.0% and 17.4%, respectively. The effective tax rate for the three and six months ended June 30, 2013 was 23.3% and 16.6%, respectively. | |
The Company's U.S. income tax returns filed for the tax years ending December 31, 2010 to present remain open tax years. The IRS has concluded its audit in the United Sates for tax years 2009, 2011 and 2012 resulting in no changes to the Company's financial statements or tax liabilities as previously reported. The Company has been notified of the intent to audit, or is currently under audit, of income taxes in Canada for tax years 2009 and 2010 and The Netherlands for tax years 2010 and 2011. On August 1, 2014 we received and are in the process of reviewing a draft report from the taxing authorities in The Netherlands for the tax years under examination. Although the outcome of examinations by taxing authorities are always uncertain, it is the opinion of management that the resolution of these audits will not have a material effect on the Company's Consolidated Financial Statements. |
RESTRUCTURING_CHARGES_AND_IMPA
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract] | ' | |||||||||||||
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES | ' | |||||||||||||
(9) RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES | ||||||||||||||
Restructuring Charges | ||||||||||||||
During the three and six months ended June 30, 2014 and 2013, the Company undertook restructuring activities primarily associated with reductions in the Company's capacity and workforce in several of its segments to better align the capacity and workforce with current business needs. | ||||||||||||||
A summary of the expenses recorded in Restructuring, net in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2014 and 2013, respectively, is as follows (in thousands): | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Reduction in force | ||||||||||||||
Customer Management Services | $ | 535 | $ | 2,292 | $ | 1,046 | $ | 2,986 | ||||||
Customer Growth Services | 8 | - | 37 | - | ||||||||||
Customer Technology Services | 74 | - | 74 | - | ||||||||||
Customer Strategy Services | - | 32 | - | 189 | ||||||||||
Total | $ | 617 | $ | 2,324 | $ | 1,157 | $ | 3,175 | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Facility exit charges | ||||||||||||||
Customer Management Services | $ | - | $ | 248 | $ | - | $ | 248 | ||||||
Customer Growth Services | - | - | - | - | ||||||||||
Customer Technology Services | - | - | - | - | ||||||||||
Customer Strategy Services | - | - | - | - | ||||||||||
Total | $ | - | $ | 248 | $ | - | $ | 248 | ||||||
A rollforward of the activity in the Company's restructuring accruals is as follows (in thousands): | ||||||||||||||
Closure of Delivery Centers | Reduction in Force | Total | ||||||||||||
Balance as of December 31, 2013 | $ | - | $ | 1,353 | $ | 1,353 | ||||||||
Expense | - | 1,197 | 1,197 | |||||||||||
Payments | - | -1,439 | -1,439 | |||||||||||
Change in estimates | - | -40 | -40 | |||||||||||
Balance as of June 30, 2014 | $ | - | $ | 1,071 | $ | 1,071 | ||||||||
The remaining restructuring accruals are expected to be paid or extinguished during 2014 and are all classified as current liabilities within Other accrued expenses in the Consolidated Balance Sheets. | ||||||||||||||
Impairment Losses | ||||||||||||||
During each of the periods presented, the Company evaluated the recoverability of its leasehold improvement assets at certain delivery centers. An asset is considered to be impaired when the anticipated undiscounted future cash flows of its asset group are estimated to be less than the asset group's carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. To determine fair value, the Company used Level 3 inputs in its discounted cash flows analysis. Assumptions included the amount and timing of estimated future cash flows and assumed discount rates. During the three and six months ended June 30, 2014, the Company recognized no losses related to leasehold improvement assets. During the three and six months ended June 30, 2013, the Company recognized $0.1 million of losses related to leasehold improvement assets in the Customer Management Services segment. | ||||||||||||||
During the second quarter of 2013, the Company recorded an impairment charge of $1.1 million related to the PRG trade name intangible asset within the Customer Strategy Services segment. This expense was included in the Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2014 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
(10) COMMITMENTS AND CONTINGENCIES | |
Credit Facility | |
In the second quarter of 2013, the Company entered into a $700.0 million, five-year, multi-currency revolving credit facility (the “Credit Agreement”) with a syndicate of lenders which includes an accordion feature that permits the Company to request an increase in total commitments up to $1.0 billion, under certain conditions. Wells Fargo Securities, LLC, KeyBank National Association, Bank of America Merrill Lynch, BBVA Compass and HSBC Bank USA, National Association served as Joint Lead Arrangers. The Credit Agreement amends and restates in its entirety the Company's prior credit facility entered into during 2010 and amended in 2012. | |
The Credit Agreement provides for a secured revolving credit facility that matures on June 3, 2018 with an initial maximum aggregate commitment of $700.0 million. At the Company's discretion, direct borrowing options under the Credit Agreement include (i) Eurodollar loans with one, two, three, and six month terms, and/or (ii) overnight base rate loans. The Credit Agreement also provides for a sub-limit for loans or letters of credit in both U.S. dollars and certain foreign currencies, with direct foreign subsidiary borrowing capabilities up to 50% of the total commitment amount. The Company may increase the maximum aggregate commitment under the Credit Agreement to $1.0 billion if certain conditions are satisfied, including that the Company is not in default under the Credit Agreement at the time of the increase and that the Company obtains the commitment of the lenders participating in the increase. | |
The Company primarily utilizes its Credit Agreement to fund working capital, general operations, stock repurchases and other strategic activities, such as the acquisitions described in Note 2. As of June 30, 2014 and December 31, 2013, the Company had borrowings of $100.0 million and $100.0 million, respectively, under its Credit Agreement, and its average daily utilization was $280.5 million and $230.9 million for the six months ended June 30, 2014 and 2013, respectively. After consideration for issued letters of credit under the Credit Agreement, totaling $3.5 million, the Company's remaining borrowing capacity was $596.5 million as of June 30, 2014. As of June 30, 2014, the Company was in compliance with all covenants and conditions under its Credit Agreement. | |
From time-to-time, the Company has unsecured, uncommitted lines of credit to support working capital for a few foreign subsidiaries. As of June 30, 2014 and 2013, no foreign loans were outstanding. | |
Letters of Credit | |
As of June 30, 2014, outstanding letters of credit under the Credit Agreement totaled $3.5 million and primarily guaranteed workers' compensation and other insurance related obligations. As of June 30, 2014, letters of credit and contract performance guarantees issued outside of the Credit Agreement totaled $1.0 million. | |
Legal Proceedings | |
From time to time, the Company has been involved in legal actions, both as plaintiff and defendant, which arise in the ordinary course of business. The Company accrues for exposures associated with such legal actions to the extent that losses are deemed both probable and estimable. To the extent specific reserves have not been made for certain legal proceedings, their ultimate outcome, and consequently, an estimate of possible loss, if any, cannot reasonably be determined at this time. | |
Based on currently available information and advice received from counsel, the Company believes that the disposition or ultimate resolution of its legal proceedings, except as otherwise specifically reserved for in its financial statements, will not have a material adverse effect on the Company's financial position, cash flows or results of operations. | |
In the fourth quarter of 2012, a class action complaint was filed in the State of California against a TeleTech subsidiary and Google Inc. (“Google”), as co-defendants. Pursuant to its contractual commitments, the Company has agreed to indemnify Google for costs and expenses related to the complaint. The Company settled the matter for an immaterial amount during the first quarter of 2014. |
NONCONTROLLING_INTEREST
NONCONTROLLING INTEREST | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
NONCONTROLLING INTEREST [Abstract] | ' | ||||||
NONCONTROLLING INTEREST | ' | ||||||
(11) NONCONTROLLING INTEREST | |||||||
The following table reconciles equity attributable to noncontrolling interest (in thousands): | |||||||
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Noncontrolling interest, January 1 | $ | 8,081 | $ | 12,978 | |||
Net income attributable to noncontrolling interest | 2,074 | 890 | |||||
Dividends distributed to noncontrolling interest | -2,025 | -2,113 | |||||
Deconsolidation of a subsidiary | - | -121 | |||||
Foreign currency translation adjustments | 85 | -220 | |||||
Equity-based compensation expense | 13 | 16 | |||||
Noncontrolling interest, June 30 | $ | 8,228 | $ | 11,430 | |||
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [ABSTRACT] | ' | |||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ' | |||||||||||||
(13) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||
The following table presents changes in the accumulated balance for each component of other comprehensive income (loss), including current period other comprehensive income (loss) and reclassifications out of accumulated other comprehensive income (loss) (in thousands): | ||||||||||||||
Foreign Currency Translation Adjustment | Derivative Valuation, Net of Tax | Other, Net of Tax | Totals | |||||||||||
Accumulated other comprehensive income | ||||||||||||||
(loss) at December 31, 2013 | $ | -10,581 | $ | -8,352 | $ | -1,653 | $ | -20,586 | ||||||
Other comprehensive (loss) income before | ||||||||||||||
reclassifications | 5,202 | 6,297 | 33 | 11,532 | ||||||||||
Amounts reclassified from accumulated other | ||||||||||||||
comprehensive income (loss) | - | 2,174 | 523 | 2,697 | ||||||||||
Net current period other comprehensive income | 5,202 | 8,471 | 556 | 14,229 | ||||||||||
Accumulated other comprehensive income | ||||||||||||||
(loss) at June 30, 2014 | $ | -5,379 | $ | 119 | $ | -1,097 | $ | -6,357 | ||||||
Accumulated other comprehensive income | ||||||||||||||
(loss) at December 31, 2012 | $ | 15,673 | $ | 9,559 | $ | -2,251 | $ | 22,981 | ||||||
Other comprehensive income (loss) before reclassifications | -16,263 | -8,702 | 7 | -24,958 | ||||||||||
Amounts reclassified from accumulated other | ||||||||||||||
comprehensive income (loss) | - | -3,501 | 292 | -3,209 | ||||||||||
Net current period other comprehensive income (loss) | -16,263 | -12,203 | 299 | -28,167 | ||||||||||
Accumulated other comprehensive income | ||||||||||||||
(loss) at June 30, 2013 | $ | -590 | $ | -2,644 | $ | -1,952 | $ | -5,186 | ||||||
For the Three Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | Statement of Comprehensive Income Classification | ||||||||||||
Derivative valuation | ||||||||||||||
Gain (loss) on foreign currency forward | ||||||||||||||
exchange contracts | $ | -1,472 | $ | 2,850 | Revenue | |||||||||
Loss on interest rate swaps | -265 | -257 | Interest expense | |||||||||||
Tax effect | 678 | -1,011 | Provision for income taxes | |||||||||||
$ | -1,059 | $ | 1,582 | Net income (loss) | ||||||||||
Other | ||||||||||||||
Actuarial loss on defined benefit plan | $ | -280 | $ | -154 | Cost of services | |||||||||
Tax effect | 18 | 9 | Provision for income taxes | |||||||||||
$ | -262 | $ | -145 | Net (loss) | ||||||||||
For the Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | Statement of Comprehensive Income (Loss) Classification | ||||||||||||
Derivative valuation | ||||||||||||||
Gain (loss) on foreign currency forward | ||||||||||||||
exchange contracts | $ | -3,043 | $ | 6,310 | Revenue | |||||||||
Loss on interest rate swaps | -523 | -514 | Interest expense | |||||||||||
Tax effect | 1,392 | -2,295 | Provision for income taxes | |||||||||||
$ | -2,174 | $ | 3,501 | Net income (loss) | ||||||||||
Other | ||||||||||||||
Actuarial loss on defined benefit plan | $ | -556 | $ | -311 | Cost of services | |||||||||
Tax effect | 33 | 19 | Provision for income taxes | |||||||||||
$ | -523 | $ | -292 | Net (loss) | ||||||||||
NET_INCOME_PER_SHARE
NET INCOME PER SHARE | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
NET INCOME PER SHARE [Abstract] | ' | ||||||||||
NET INCOME PER SHARE | ' | ||||||||||
(14) NET INCOME PER SHARE | |||||||||||
The following table sets forth the computation of basic and diluted shares for the periods indicated (in thousands): | |||||||||||
Three months ended June 30, | Six Months Ended June 30, | ||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||
Shares used in basic earnings per share calculation | 49,351 | 51,861 | 49,696 | 52,104 | |||||||
Effect of dilutive securities: | |||||||||||
Stock options | 425 | 411 | 419 | 403 | |||||||
Restricted stock units | 335 | 356 | 421 | 405 | |||||||
Performance-based restricted stock units | - | - | - | - | |||||||
Total effects of dilutive securities | 760 | 767 | 840 | 808 | |||||||
Shares used in dilutive earnings per share calculation | 50,111 | 52,628 | 50,536 | 52,912 | |||||||
For the three months ended June 30, 2014 and 2013, options to purchase 0.1 million and 0.1 million shares of common stock, respectively, were outstanding, but not included in the computation of diluted net income per share because the exercise price exceeded the value of the shares and the effect would have been anti–dilutive. For the six months ended June 30, 2014 and 2013, options to purchase 0.1 million and 0.1 million shares of common stock, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive. For the three months ended June 30, 2014 and 2013, restricted stock units (“RSUs”) of 0.1 million and 0.2 million, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive. For the six months ended June 30, 2014 and 2013, RSUs of 0.1 million and 0.5 million, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive. |
EQUITYBASED_COMPENSATION_PLANS
EQUITY-BASED COMPENSATION PLANS | 6 Months Ended |
Jun. 30, 2014 | |
EQUITY-BASED COMPENSATION PLANS [Abstract] | ' |
EQUITY-BASED COMPENSATION PLANS | ' |
(15) EQUITY-BASED COMPENSATION PLANS | |
All equity–based awards to employees are recognized in the Consolidated Statements of Comprehensive Income (Loss) at the fair value of the award on the grant date. During the three and six months ended June 30, 2014 and 2013, the Company recognized total compensation expense of $2.7 million and $5.9 million and $3.4 million and $6.6 million, respectively. Of the total compensation expense, $0.5 million and $1.1 million was recognized in Cost of services and $2.2 million and $4.8 million was recognized in Selling, general and administrative during the three and six months ended June 30, 2014. During the three and six months ended June 30, 2013, the Company recognized compensation expense of $0.6 million and $1.0 million in Cost of Services and $2.8 million and $5.6 million, in Selling, general and administrative, respectively. | |
Stock Options | |
As of June 30, 2014, there was approximately $0.1 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to unvested option arrangements granted under the Company's equity plans. The Company recognizes compensation expense straight–line over the vesting term of the option grant. The Company recognized compensation expense related to stock options of approximately $0.1 million and $0.1 million for the three months ended June 30, 2014 and 2013, respectively. The Company recognized compensation expense related to stock options of approximately $0.2 million and $0.2 million for the six months ended June 30, 2014 and 2013, respectively. | |
Restricted Stock Unit Grants | |
During the six months ended June 30, 2014 and 2013, the Company granted 210,176 and 693,055 RSUs, respectively, to new and existing employees, which vest in equal installments over four or five years. The Company recognized compensation expense related to RSUs of $2.6 million and $5.7 million for the three and six months ended June 30, 2014, respectively. The Company recognized compensation expense related to RSUs of $3.2 million and $6.3 million for the three and six months ended June 30, 2013, respectively. As of June 30, 2014, there was approximately $23.3 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to RSUs granted under the Company's equity plans. | |
As of June 30, 2014 and 2013, the Company had performance-based RSUs outstanding that vest based on the Company achieving specified revenue and operating income performance targets. The Company determined that it was not probable these performance targets would be met; therefore no expense was recognized for the three and six months ended June 30, 2014 or 2013. |
DECONSOLIDATION_OF_SUBSIDIARY
DECONSOLIDATION OF SUBSIDIARY | 6 Months Ended |
Jun. 30, 2014 | |
DECONSOLIDATION OF SUBSIDIARY [ABSTRACT] | ' |
DECONSOLIDATION OF SUBSIDIARY | ' |
(16) DECONSOLIDATION OF SUBSIDIARY | |
During the second quarter of 2013, the Company concluded that it no longer had controlling influence over Peppers & Rogers Gulf WLL (“PRG Kuwait”), a once consolidated subsidiary in the CSS segment, because the Company was no longer confident that it could exercise its beneficial ownership rights. Upon deconsolidation of PRG Kuwait, the Company wrote off all PRG Kuwait assets and liabilities resulting in a loss of $3.7 million which was recorded during the second quarter of 2013. Effective April 2014, the Company entered into a stock and membership interest purchase agreement with PRG Kuwait's other shareholders to sell its 48% interest in the company for $175 thousand. It is anticipated the stipulations of the agreement will be finalized and the cash received before December 31, 2014. |
OVERVIEW_AND_BASIS_OF_PRESENTA1
OVERVIEW AND BASIS OF PRESENTATION (POLICIES) | 6 Months Ended |
Jun. 30, 2014 | |
OVERVIEW AND BASIS OF PRESENTATION [Abstract] | ' |
Overview | ' |
Summary of Business | |
TeleTech Holdings, Inc. (“TeleTech” or “the Company”) is a leading provider of customer strategy, analytics-driven and technology-enabled customer engagement management solutions with 40,000 employees delivering services across 25 countries from 53 delivery centers on five continents. | |
We have deep industry expertise and serve more than 250 customer-focused industry leaders in the Global 1000. Our business is structured and reported in four segments: Customer Management Services (“CMS”), Customer Growth Services (“CGS”), Customer Technology Services (“CTS”), and Customer Strategy Services (“CSS”). | |
Basis Of Presentation | ' |
Basis of Presentation | |
The Consolidated Financial Statements are comprised of the accounts of TeleTech, its wholly owned subsidiaries, its 55% equity owned subsidiary Percepta, LLC, its 80% interest in iKnowtion, LLC, and its 80% interest in Peppers & Rogers Group through the third quarter of 2013 when the final 20% interest was repurchased (see Note 2). All intercompany balances and transactions have been eliminated in consolidation. | |
The unaudited Consolidated Financial Statements do not include all of the disclosures required by accounting principles generally accepted in the U.S. (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company and the consolidated results of operations and comprehensive income (loss) and the consolidated cash flows of the Company. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | |
These unaudited Consolidated Financial Statements should be read in conjunction with the Company's audited Consolidated Financial Statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates including those related to derivatives and hedging activities, income taxes including valuation allowances for deferred tax assets, self-insurance reserves, litigation reserves, restructuring reserves, allowance for doubtful accounts, and valuation of goodwill, long-lived and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. | |
Recently Issued Accounting Pronouncements | ' |
Recently Issued Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements and Property, Plant, and Equipment – Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU 2014-08 provides new guidance related to the definition of a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This new guidance is effective for annual periods beginning on or after December 15, 2014 and interim periods within those years. Beginning in 2015, the Company will apply the new guidance, as applicable, to future disposals of components or classifications as held for sale. | |
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 provides new guidance related to how an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, ASU 2014-09 specifies new accounting for costs associated with obtaining or fulfilling contracts with customers and expands the required disclosures related to revenue and cash flows from contracts with customers. This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption, with early application not permitted. The Company is currently determining its implementation approach and assessing the impact on the consolidated financial statements. | |
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, and early adoption is permitted. Beginning in 2016, the Company will apply the new guidance as applicable. |
ACQUISITIONS_TABLES
ACQUISITIONS (TABLES) | 6 Months Ended | |||
Jun. 30, 2014 | ||||
Business Acquisition [Line Items] | ' | |||
Schedule of Assets Acquired and Liabilities Assumed | ' | |||
Preliminary Estimate of Acquisition Date Fair Value | ||||
Cash | $ | 857 | ||
Accounts receivable | 3,175 | |||
Other assets | 378 | |||
Property, plant and equipment | 653 | |||
Customer relationships | 3,531 | |||
Goodwill | 7,208 | |||
15,802 | ||||
Accounts payable | 296 | |||
Accrued employee compensation and benefits | 697 | |||
Accrued expenses | 664 | |||
Deferred tax liability and other | 368 | |||
2,025 | ||||
Total purchase price | $ | 13,777 | ||
SEGMENT_INFORMATION_TABLES
SEGMENT INFORMATION (TABLES) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
SEGMENT INFORMATION [ABSTRACT] | ' | |||||||||||||||
Schedule of Segment Selected Financial Data | ' | |||||||||||||||
Three Months Ended June 30, 2014 | ||||||||||||||||
Gross Revenue | Intersegment Sales | Net Revenue | Depreciation & Amortization | Income (Loss) from Operations | ||||||||||||
Customer Management Services | $ | 218,683 | $ | - | $ | 218,683 | $ | 10,169 | $ | 16,493 | ||||||
Customer Growth Services | 28,875 | - | 28,875 | 1,468 | 1,831 | |||||||||||
Customer Technology Services | 35,753 | -16 | 35,737 | 2,008 | 1,616 | |||||||||||
Customer Strategy Services | 12,195 | - | 12,195 | 444 | 727 | |||||||||||
Total | $ | 295,506 | $ | -16 | $ | 295,490 | $ | 14,089 | $ | 20,667 | ||||||
Three Months Ended June 30, 2013 | ||||||||||||||||
Gross Revenue | Intersegment Sales | Net Revenue | Depreciation & Amortization | Income (Loss) from Operations | ||||||||||||
Customer Management Services | $ | 220,965 | $ | -324 | $ | 220,641 | $ | 8,532 | $ | 16,465 | ||||||
Customer Growth Services | 22,399 | - | 22,399 | 777 | -620 | |||||||||||
Customer Technology Services | 36,717 | -73 | 36,644 | 1,489 | 5,819 | |||||||||||
Customer Strategy Services | 10,256 | -248 | 10,008 | 465 | -1,989 | |||||||||||
Total | $ | 290,337 | $ | -645 | $ | 289,692 | $ | 11,263 | $ | 19,675 | ||||||
Six Months Ended June 30, 2014 | ||||||||||||||||
Gross Revenue | Intersegment Sales | Net Revenue | Depreciation & Amortization | Income (Loss) from Operations | ||||||||||||
Customer Management Services | $ | 446,607 | $ | - | $ | 446,607 | $ | 19,634 | $ | 37,316 | ||||||
Customer Growth Services | 57,780 | - | 57,780 | 3,024 | 3,601 | |||||||||||
Customer Technology Services | 68,532 | -19 | 68,513 | 3,723 | 1,927 | |||||||||||
Customer Strategy Services | 24,811 | - | 24,811 | 878 | 2,180 | |||||||||||
Total | $ | 597,730 | $ | -19 | $ | 597,711 | $ | 27,259 | $ | 45,024 | ||||||
Six Months Ended June 30, 2013 | ||||||||||||||||
Gross Revenue | Intersegment Sales | Net Revenue | Depreciation & Amortization | Income (Loss) from Operations | ||||||||||||
Customer Management Services | $ | 443,854 | $ | -631 | $ | 443,223 | $ | 16,394 | $ | 37,196 | ||||||
Customer Growth Services | 45,255 | - | 45,255 | 1,474 | 656 | |||||||||||
Customer Technology Services | 70,363 | -157 | 70,206 | 3,005 | 8,717 | |||||||||||
Customer Strategy Services | 20,186 | -795 | 19,391 | 945 | -3,896 | |||||||||||
Total | $ | 579,658 | $ | -1,583 | $ | 578,075 | $ | 21,818 | $ | 42,673 | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Capital Expenditures | ||||||||||||||||
Customer Management Services | $ | 14,587 | $ | 8,110 | $ | 24,499 | $ | 10,396 | ||||||||
Customer Growth Services | 1,289 | 435 | 1,669 | 751 | ||||||||||||
Customer Technology Services | 3,407 | 960 | 8,038 | 2,288 | ||||||||||||
Customer Strategy Services | 105 | 50 | 277 | 225 | ||||||||||||
Total | $ | 19,388 | $ | 9,555 | $ | 34,483 | $ | 13,660 | ||||||||
30-Jun-14 | 31-Dec-13 | |||||||||||||||
Total Assets | ||||||||||||||||
Customer Management Services | $ | 531,926 | $ | 554,015 | ||||||||||||
Customer Growth Services | 84,058 | 86,416 | ||||||||||||||
Customer Technology Services | 153,552 | 157,040 | ||||||||||||||
Customer Strategy Services | 47,101 | 44,871 | ||||||||||||||
Total | $ | 816,637 | $ | 842,342 | ||||||||||||
30-Jun-14 | 31-Dec-13 | |||||||||||||||
Goodwill | ||||||||||||||||
Customer Management Services | $ | 27,240 | $ | 19,819 | ||||||||||||
Customer Growth Services | 30,395 | 30,128 | ||||||||||||||
Customer Technology Services | 42,709 | 42,709 | ||||||||||||||
Customer Strategy Services | 10,437 | 10,087 | ||||||||||||||
Total | $ | 110,781 | $ | 102,743 | ||||||||||||
Schedule of Revenue by Geographic Area | ' | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenue | ||||||||||||||||
United States | $ | 137,596 | $ | 132,341 | $ | 284,065 | $ | 264,088 | ||||||||
Philippines | 85,541 | 88,049 | 172,207 | 174,158 | ||||||||||||
Latin America | 43,258 | 44,303 | 85,304 | 89,331 | ||||||||||||
Europe / Middle East / Africa | 22,267 | 16,638 | 41,484 | 33,621 | ||||||||||||
Asia Pacific | 5,358 | 4,359 | 11,758 | 8,585 | ||||||||||||
Canada | 1,470 | 4,002 | 2,893 | 8,292 | ||||||||||||
Total | $ | 295,490 | $ | 289,692 | $ | 597,711 | $ | 578,075 | ||||||||
GOODWILL_TABLES
GOODWILL (TABLES) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
GOODWILL [ABSTRACT] | ' | |||||||||||||||
Schedule of Goodwill Rollforward | ' | |||||||||||||||
31-Dec-13 | Acquisitions/ Adjustments | Impairments | Effect of Foreign Currency | 30-Jun-14 | ||||||||||||
Customer Management Services | $ | 19,819 | $ | 7,208 | $ | - | $ | 213 | $ | 27,240 | ||||||
Customer Growth Services | 30,128 | 267 | - | - | 30,395 | |||||||||||
Customer Technology Services | 42,709 | - | - | - | 42,709 | |||||||||||
Customer Strategy Services | 10,087 | 350 | - | - | 10,437 | |||||||||||
Total | $ | 102,743 | $ | 7,825 | $ | - | $ | 213 | $ | 110,781 | ||||||
DERIVATIVES_TABLES
DERIVATIVES (TABLES) | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
DERIVATIVES [ABSTRACT] | ' | ||||||||||||||
Schedule of Cash Flow Hedges OCI Rollforward | ' | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Aggregate unrealized net gain/(loss) at beginning of period | $ | -10,886 | $ | 11,739 | $ | -8,352 | $ | 9,559 | |||||||
Add: Net gain/(loss) from change in fair value of cash flow hedges | 9,946 | -12,801 | 6,297 | -8,702 | |||||||||||
Less: Net (gain)/loss reclassified to earnings from effective hedges | 1,059 | -1,582 | 2,174 | -3,501 | |||||||||||
Aggregate unrealized net gain/(loss) at end of period | $ | 119 | $ | -2,644 | $ | 119 | $ | -2,644 | |||||||
Schedule of Notional Amounts of Outstanding Cash Flow Hedges | ' | ||||||||||||||
As of June 30, 2014 | Local Currency Notional Amount | U.S. Dollar Notional Amount | % Maturing in the Next 12 Months | Contracts Maturing Through | |||||||||||
Canadian Dollar | 4,500 | $ | 4,382 | 100 | % | Jun-15 | |||||||||
Philippine Peso | 17,776,000 | 411,135 | (1) | 40 | % | Mar-19 | |||||||||
Mexican Peso | 2,395,000 | 170,462 | 29.1 | % | Mar-19 | ||||||||||
$ | 585,979 | ||||||||||||||
As of December 31, 2013 | Local Currency Notional Amount | U.S. Dollar Notional Amount | |||||||||||||
Canadian Dollar | 7,500 | $ | 7,336 | ||||||||||||
Philippine Peso | 17,355,000 | 404,638 | (1) | ||||||||||||
Mexican Peso | 2,305,500 | 166,132 | |||||||||||||
British Pound Sterling | 1,200 | 1,853 | (2) | ||||||||||||
New Zealand Dollar | 150 | 117 | |||||||||||||
$ | 580,076 | ||||||||||||||
(1) Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2014 and December 31, 2013. | |||||||||||||||
(2) Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on December 31, 2013. | |||||||||||||||
Schedule of Interest Rate Swaps | ' | ||||||||||||||
Notional Amount | Variable Rate Received | Fixed Rate Paid | Contract Commencement Date | Contract Maturity Date | |||||||||||
As of June 30, 2014 | $ | 25 million | 1 - month LIBOR | 2.55 | % | Apr-12 | Apr-16 | ||||||||
and December 31, 2013 | 15 million | 1 - month LIBOR | 3.14 | % | May-12 | May-17 | |||||||||
$ | 40 million | ||||||||||||||
Schedule of Derivatives Instruments on Balance Sheet | ' | ||||||||||||||
30-Jun-14 | |||||||||||||||
Designated as Hedging Instruments | Not Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Interest Rate | Foreign Exchange | Leases | |||||||||||
Derivative classification: | Cash Flow | Cash Flow | Fair Value | Embedded Derivative | |||||||||||
Fair value and location of derivative in the | |||||||||||||||
Consolidated Balance Sheet: | |||||||||||||||
Prepaids and other current assets | $ | 2,853 | $ | - | $ | 2,472 | $ | - | |||||||
Other long-term assets | 8,915 | - | - | - | |||||||||||
Other current liabilities | -4,870 | -1,044 | -321 | - | |||||||||||
Other long-term liabilities | -4,780 | -847 | - | - | |||||||||||
Total fair value of derivatives, net | $ | 2,118 | $ | -1,891 | $ | 2,151 | $ | - | |||||||
31-Dec-13 | |||||||||||||||
Designated as Hedging Instruments | Not Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Interest Rate | Foreign Exchange | Leases | |||||||||||
Derivative classification: | Cash Flow | Cash Flow | Fair Value | Embedded Derivative | |||||||||||
Fair value and location of derivative in | |||||||||||||||
the Consolidated Balance Sheet: | |||||||||||||||
Prepaids and other current assets | $ | 3,379 | $ | - | $ | 97 | $ | - | |||||||
Other long-term assets | 1,439 | - | - | - | |||||||||||
Other current liabilities | -4,595 | -1,028 | -815 | -116 | |||||||||||
Other long-term liabilities | -11,708 | -1,124 | - | - | |||||||||||
Total fair value of derivatives, net | $ | -11,485 | $ | -2,152 | $ | -718 | $ | -116 | |||||||
Schedule of Derivative Impact on Statement of Comprehensive Income | ' | ||||||||||||||
Three Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Designated as Hedging Instruments | Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Interest Rate | Foreign Exchange | Interest Rate | |||||||||||
Derivative classification: | Cash Flow | Cash Flow | Cash Flow | Cash Flow | |||||||||||
Amount of gain or (loss) recognized in other comprehensive | |||||||||||||||
income (loss) - effective portion, net of tax | $ | 10,049 | $ | -103 | $ | -12,956 | $ | 155 | |||||||
Amount and location of net gain or (loss) reclassified | |||||||||||||||
from accumulated OCI to income - effective portion: | |||||||||||||||
Revenue | $ | -1,472 | $ | - | $ | 2,850 | $ | - | |||||||
Interest Expense | - | -265 | - | -257 | |||||||||||
Three Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Leases | Foreign Exchange | Leases | |||||||||||
Derivative classification: | Option and Forward Contracts | Fair Value | Embedded Derivative | Option and Forward Contracts | Fair Value | Embedded Derivative | |||||||||
Amount and location of net gain or (loss) | |||||||||||||||
recognized in the Consolidated Statement | |||||||||||||||
of Comprehensive Income: | |||||||||||||||
Costs of services | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 44 | |||
Other income (expense), net | $ | - | $ | -2,825 | $ | - | $ | - | $ | -2,685 | $ | - | |||
Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Designated as Hedging Instruments | Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Interest Rate | Foreign Exchange | Interest Rate | |||||||||||
Derivative classification: | Cash Flow | Cash Flow | Cash Flow | Cash Flow | |||||||||||
Amount of gain or (loss) recognized in other comprehensive | |||||||||||||||
income (loss) - effective portion, net of tax | $ | 6,457 | $ | -160 | $ | -8,744 | $ | 42 | |||||||
Amount and location of net gain or (loss) reclassified | |||||||||||||||
from accumulated OCI to income - effective portion: | |||||||||||||||
Revenue | $ | -3,043 | $ | - | $ | 6,310 | $ | - | |||||||
Interest Expense | - | -523 | - | -514 | |||||||||||
Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | ||||||||||||||
Derivative contracts: | Foreign Exchange | Leases | Foreign Exchange | Leases | |||||||||||
Derivative classification: | Option and Forward Contracts | Fair Value | Embedded Derivative | Option and Forward Contracts | Fair Value | Embedded Derivative | |||||||||
Amount and location of net gain or (loss) | |||||||||||||||
recognized in the Consolidated Statement | |||||||||||||||
of Comprehensive Income: | |||||||||||||||
Costs of services | $ | - | $ | - | $ | 116 | $ | - | $ | - | $ | 113 | |||
Other income (expense), net | $ | - | $ | -2,206 | $ | - | $ | - | $ | -1,247 | $ | - | |||
FAIR_VALUE_TABLES
FAIR VALUE (TABLES) | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
FAIR VALUE [Abstract] | ' | ||||||||||||||
Schedule of Fair Value Derivative Assets and Liabilities | ' | ||||||||||||||
As of June 30, 2014 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | At Fair Value | ||||||||||||
Cash flow hedges | $ | - | $ | 2,118 | $ | - | $ | 2,118 | |||||||
Interest rate swaps | - | -1,891 | - | -1,891 | |||||||||||
Embedded derivatives | - | - | - | - | |||||||||||
Fair value hedges | - | 2,151 | - | 2,151 | |||||||||||
Total net derivative asset (liability) | $ | - | $ | 2,378 | $ | - | $ | 2,378 | |||||||
As of December 31, 2013 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | At Fair Value | ||||||||||||
Cash flow hedges | $ | - | $ | -11,485 | $ | - | $ | -11,485 | |||||||
Interest rate swaps | - | -2,152 | - | -2,152 | |||||||||||
Fair value hedges | - | -718 | - | -718 | |||||||||||
Embedded derivatives | - | -116 | - | -116 | |||||||||||
Total net derivative asset (liability) | $ | - | $ | -14,471 | $ | - | $ | -14,471 | |||||||
Schedule of Fair Value Assets and Liabilities | ' | ||||||||||||||
As of June 30, 2014 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | |||||||||||||||
Money market investments | $ | - | $ | 241 | $ | - | |||||||||
Derivative instruments, net | - | 2,378 | - | ||||||||||||
Total assets | $ | - | $ | 2,619 | $ | - | |||||||||
Liabilities | |||||||||||||||
Deferred compensation plan liability | $ | - | $ | -8,070 | $ | - | |||||||||
Derivative instruments, net | - | - | - | ||||||||||||
Contingent consideration | - | - | -12,481 | ||||||||||||
Total liabilities | $ | - | $ | -8,070 | $ | -12,481 | |||||||||
As of December 31, 2013 | |||||||||||||||
Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | |||||||||||||||
Money market investments | $ | - | $ | 240 | $ | - | |||||||||
Derivative instruments, net | - | - | - | ||||||||||||
Total assets | $ | - | $ | 240 | $ | - | |||||||||
Liabilities | |||||||||||||||
Deferred compensation plan liability | $ | - | $ | -6,829 | $ | - | |||||||||
Derivative instruments, net | - | -14,471 | - | ||||||||||||
Contingent consideration | - | - | -21,748 | ||||||||||||
Total liabilities | $ | - | $ | -21,300 | $ | -21,748 | |||||||||
Schedule of Business Acquistions by Acquisition Contingent Consideration | ' | ||||||||||||||
31-Dec-13 | Acquisitions | Payments | Imputed Interest / Adjustments | 30-Jun-14 | |||||||||||
iKnowtion | $ | 3,470 | $ | - | $ | -1,400 | $ | 123 | $ | 2,193 | |||||
Guidon | 2,637 | - | -1,426 | 39 | 1,250 | ||||||||||
TSG | 12,933 | - | -5,292 | -3,840 | 3,801 | ||||||||||
WebMetro | 2,708 | - | -1,026 | 15 | 1,697 | ||||||||||
Sofica | - | 3,435 | - | 105 | 3,540 | ||||||||||
Total | $ | 21,748 | $ | 3,435 | $ | -9,144 | $ | -3,558 | $ | 12,481 | |||||
RESTRUCTURING_CHARGES_AND_IMPA1
RESTRUCTURING CHARGES AND IMPAIRMENT (TABLES) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract] | ' | |||||||||||||
Schedule of Restructuring Liabilities | ' | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Reduction in force | ||||||||||||||
Customer Management Services | $ | 535 | $ | 2,292 | $ | 1,046 | $ | 2,986 | ||||||
Customer Growth Services | 8 | - | 37 | - | ||||||||||
Customer Technology Services | 74 | - | 74 | - | ||||||||||
Customer Strategy Services | - | 32 | - | 189 | ||||||||||
Total | $ | 617 | $ | 2,324 | $ | 1,157 | $ | 3,175 | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Facility exit charges | ||||||||||||||
Customer Management Services | $ | - | $ | 248 | $ | - | $ | 248 | ||||||
Customer Growth Services | - | - | - | - | ||||||||||
Customer Technology Services | - | - | - | - | ||||||||||
Customer Strategy Services | - | - | - | - | ||||||||||
Total | $ | - | $ | 248 | $ | - | $ | 248 | ||||||
Schedule of Restructuring Liability Rollforward | ' | |||||||||||||
Closure of Delivery Centers | Reduction in Force | Total | ||||||||||||
Balance as of December 31, 2013 | $ | - | $ | 1,353 | $ | 1,353 | ||||||||
Expense | - | 1,197 | 1,197 | |||||||||||
Payments | - | -1,439 | -1,439 | |||||||||||
Change in estimates | - | -40 | -40 | |||||||||||
Balance as of June 30, 2014 | $ | - | $ | 1,071 | $ | 1,071 | ||||||||
NONCONTROLLING_INTEREST_TABLES
NONCONTROLLING INTEREST (TABLES) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
NONCONTROLLING INTEREST [Abstract] | ' | ||||||
Noncontrolling Interest Rollforward | ' | ||||||
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Noncontrolling interest, January 1 | $ | 8,081 | $ | 12,978 | |||
Net income attributable to noncontrolling interest | 2,074 | 890 | |||||
Dividends distributed to noncontrolling interest | -2,025 | -2,113 | |||||
Deconsolidation of a subsidiary | - | -121 | |||||
Foreign currency translation adjustments | 85 | -220 | |||||
Equity-based compensation expense | 13 | 16 | |||||
Noncontrolling interest, June 30 | $ | 8,228 | $ | 11,430 | |||
MANDATORILY_REDEEMABLE_NONCONT
MANDATORILY REDEEMABLE NONCONTROLLING INTEREST (TABLES) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Mandatorily Redeemable Noncontrolling Interest [Abstract] | ' | ||||||
Mandatorily Redeemable Noncontrolling Interest Rollforward | ' | ||||||
(12) MANDATORILY REDEEMABLE NONCONTROLLING INTEREST | |||||||
The Company holds an 80% interest in iKnowtion. In the event iKnowtion meets certain EBITDA targets for calendar year 2015, the purchase and sale agreement requires TeleTech to purchase the remaining 20% interest in iKnowtion in 2016 for an amount equal to a multiple of iKnowtion's 2015 EBITDA as defined in the purchase and sale agreement. These terms represent a contingent redemption feature which the Company determined is probable of being achieved. | |||||||
The Company has recorded the mandatorily redeemable noncontrolling interest at the redemption value based on the corresponding EBITDA multiples as prescribed in the purchase and sale agreement at the end of each reporting period. At the end of each reporting period the changes in the redemption value are recorded in retained earnings. Since the EBITDA multiples as defined in the purchase and sale agreement are below the current market multiple, the Company has determined that there is no preferential treatment to the noncontrolling interest shareholders resulting in no impact to earnings per share. | |||||||
A rollforward of the mandatorily redeemable noncontrolling interest is included in the table below (in thousands). | |||||||
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Mandatorily redeemable noncontrolling interest, January 1 | $ | 2,509 | $ | 1,067 | |||
Net income attributable to mandatorily redeemable | |||||||
noncontrolling interest | 279 | 159 | |||||
Working capital distributed to mandatorily redeemable | |||||||
noncontrolling interest | -1,244 | -272 | |||||
Change in redemption value | 1,730 | 1,065 | |||||
Mandatorily redeemable noncontrolling interest, June 30 | $ | 3,274 | $ | 2,019 | |||
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Mandatorily redeemable noncontrolling interest, January 1 | $ | 2,509 | $ | 1,067 | |||
Net income attributable to mandatorily redeemable | |||||||
noncontrolling interest | 279 | 159 | |||||
Working capital distributed to mandatorily redeemable | |||||||
noncontrolling interest | -1,244 | -272 | |||||
Change in redemption value | 1,730 | 1,065 | |||||
Mandatorily redeemable noncontrolling interest, June 30 | $ | 3,274 | $ | 2,019 | |||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (TABLES) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [ABSTRACT] | ' | |||||||||||||
Other Comprehensive Income Attributable to TeleTech Shareholders Table | ' | |||||||||||||
Foreign Currency Translation Adjustment | Derivative Valuation, Net of Tax | Other, Net of Tax | Totals | |||||||||||
Accumulated other comprehensive income | ||||||||||||||
(loss) at December 31, 2013 | $ | -10,581 | $ | -8,352 | $ | -1,653 | $ | -20,586 | ||||||
Other comprehensive (loss) income before | ||||||||||||||
reclassifications | 5,202 | 6,297 | 33 | 11,532 | ||||||||||
Amounts reclassified from accumulated other | ||||||||||||||
comprehensive income (loss) | - | 2,174 | 523 | 2,697 | ||||||||||
Net current period other comprehensive income | 5,202 | 8,471 | 556 | 14,229 | ||||||||||
Accumulated other comprehensive income | ||||||||||||||
(loss) at June 30, 2014 | $ | -5,379 | $ | 119 | $ | -1,097 | $ | -6,357 | ||||||
Accumulated other comprehensive income | ||||||||||||||
(loss) at December 31, 2012 | $ | 15,673 | $ | 9,559 | $ | -2,251 | $ | 22,981 | ||||||
Other comprehensive income (loss) before reclassifications | -16,263 | -8,702 | 7 | -24,958 | ||||||||||
Amounts reclassified from accumulated other | ||||||||||||||
comprehensive income (loss) | - | -3,501 | 292 | -3,209 | ||||||||||
Net current period other comprehensive income (loss) | -16,263 | -12,203 | 299 | -28,167 | ||||||||||
Accumulated other comprehensive income | ||||||||||||||
(loss) at June 30, 2013 | $ | -590 | $ | -2,644 | $ | -1,952 | $ | -5,186 | ||||||
Income Statement Location of Adjustments Reclassified from Accumulated Other Comprehensive Income to Income | ' | |||||||||||||
For the Three Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | Statement of Comprehensive Income Classification | ||||||||||||
Derivative valuation | ||||||||||||||
Gain (loss) on foreign currency forward | ||||||||||||||
exchange contracts | $ | -1,472 | $ | 2,850 | Revenue | |||||||||
Loss on interest rate swaps | -265 | -257 | Interest expense | |||||||||||
Tax effect | 678 | -1,011 | Provision for income taxes | |||||||||||
$ | -1,059 | $ | 1,582 | Net income (loss) | ||||||||||
Other | ||||||||||||||
Actuarial loss on defined benefit plan | $ | -280 | $ | -154 | Cost of services | |||||||||
Tax effect | 18 | 9 | Provision for income taxes | |||||||||||
$ | -262 | $ | -145 | Net (loss) | ||||||||||
For the Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | Statement of Comprehensive Income (Loss) Classification | ||||||||||||
Derivative valuation | ||||||||||||||
Gain (loss) on foreign currency forward | ||||||||||||||
exchange contracts | $ | -3,043 | $ | 6,310 | Revenue | |||||||||
Loss on interest rate swaps | -523 | -514 | Interest expense | |||||||||||
Tax effect | 1,392 | -2,295 | Provision for income taxes | |||||||||||
$ | -2,174 | $ | 3,501 | Net income (loss) | ||||||||||
Other | ||||||||||||||
Actuarial loss on defined benefit plan | $ | -556 | $ | -311 | Cost of services | |||||||||
Tax effect | 33 | 19 | Provision for income taxes | |||||||||||
$ | -523 | $ | -292 | Net (loss) | ||||||||||
NET_INCOME_PER_SHARE_TABLES
NET INCOME PER SHARE (TABLES) | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
NET INCOME PER SHARE [Abstract] | ' | ||||||||||
Schedule of Diluted Shares Calculation | ' | ||||||||||
Three months ended June 30, | Six Months Ended June 30, | ||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||
Shares used in basic earnings per share calculation | 49,351 | 51,861 | 49,696 | 52,104 | |||||||
Effect of dilutive securities: | |||||||||||
Stock options | 425 | 411 | 419 | 403 | |||||||
Restricted stock units | 335 | 356 | 421 | 405 | |||||||
Performance-based restricted stock units | - | - | - | - | |||||||
Total effects of dilutive securities | 760 | 767 | 840 | 808 | |||||||
Shares used in dilutive earnings per share calculation | 50,111 | 52,628 | 50,536 | 52,912 | |||||||
ACQUISITIONS_ASSETS_ACQUIRED_T
ACQUISITIONS (ASSETS ACQUIRED TABLE) (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jan. 28, 2014 | Aug. 09, 2013 |
In Thousands, unless otherwise specified | Sofica [Member] | Sofica [Member] | WebMetro [Member] | ||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Cash | ' | ' | $857 | ' | ' |
Accounts receivable | ' | ' | 3,175 | ' | ' |
Property, plant and equipment | ' | ' | 653 | ' | ' |
Other assets | ' | ' | 378 | ' | ' |
Customer relationships | ' | ' | 3,531 | ' | ' |
Goodwill | 110,781 | 102,743 | 7,208 | ' | ' |
Total assets acquired | ' | ' | 15,802 | ' | ' |
Accounts payable | ' | ' | 296 | ' | ' |
Accrued employee compensation and benefits | 69,216 | 80,130 | 697 | ' | ' |
Accrued expenses | ' | ' | 664 | ' | ' |
Other | ' | ' | 368 | ' | ' |
Total liabilities assumed | ' | ' | 2,025 | ' | ' |
Total purcahse price | ' | ' | $13,777 | $13,800 | $17,800 |
ACQUISITIONS_NARRATIVE_DETAILS
ACQUISITIONS (NARRATIVE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Aug. 09, 2013 | Jun. 30, 2014 | Jan. 28, 2014 | Sep. 30, 2014 | |
WebMetro [Member] | Sofica [Member] | Sofica [Member] | rogenSi [Member] | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Percentage of Voting Interests Acquired | ' | ' | ' | 100.00% | ' | 100.00% | ' |
Description of Acquired Entity | ' | ' | ' | ' | ' | ' | 'rogenSi Worldwide PTY, Ltd., a global sales and leadership performance training and applied leadership consulting company (the “rogenSi Acquisition”). |
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net | ' | ' | ' | $17,800,000 | $13,777,000 | $13,800,000 | $35,700,000 |
Cost of Acquired Entity, Up Front Cash Consideration | ' | ' | ' | 15,300,000 | ' | 9,400,000 | 18,000,000 |
Future Value of Liabilities Incurred From Business Acquisitions | 13,400,000 | 13,400,000 | ' | ' | ' | 4,000,000 | 17,700,000 |
Valuation Technique on Contingent Consideration | ' | 'The Company recorded contingent consideration related to the acquisitions of iKnowtion, Guidon, TSG, WebMetro and Sofica. These contingent payables were recognized at fair value using a discounted cash flow approach and a discount rate of 21.0%, 21.0%, 4.6%, 5.3% or 22.0%, respectively. The discount rates vary dependant on the specific risks of each acquisition including the country of operation, the nature of services and complexity of the acquired business, and other similar factors. These measurements were based on significant inputs not observable in the market. | ' | ' | ' | ' | 'The total purchase price is $35.7 million, subject to standard working capital adjustments, and consists of $18.0 million in cash at closing and $17.7 million in three earn-out payments, contingent on the acquired companies and TeleTech’s CSS business segment achieving certain agreed EBITDA targets, as defined in the rogenSi Agreement. The earn-out payments are payable in early 2015, 2016 and 2017, based on post closing performance in 2014, 2015 and 2016, respectively. We expect the rogenSi Acquisition to close on or before August 31, 2014, subject to customary closing deliverables, representations, warranties and indemnifications. |
Contingent Consideration, at fair value | 12,481,000 | 12,481,000 | 21,748,000 | 2,500,000 | ' | 3,500,000 | ' |
Contingent Consideration, at Fair Value, Current Portion | ' | ' | ' | ' | ' | 2,000,000 | ' |
Contingent Consideration, at Fair Value, Noncurrent Portion | ' | ' | ' | ' | ' | 1,500,000 | ' |
Revenue of Acquirees since Acquisition Date, Actual | 7,900,000 | 12,800,000 | ' | ' | ' | ' | ' |
Income (loss) from operations of Acquirees since Acquisition Date, Actual | 600,000 | 900,000 | ' | ' | ' | ' | ' |
Business Combination Pro Forma Information Amortization Expense of Acquirees Since Acquisition | $700,000 | $1,300,000 | ' | ' | ' | ' | ' |
SEGMENT_INFORMATION_SEGMENT_FI
SEGMENT INFORMATION (SEGMENT FINANCIALS) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Gross Revenue | $295,506 | $290,337 | $597,730 | $579,658 | ' |
Intersegment Sales | -16 | -645 | -19 | -1,583 | ' |
Net Revenue | 295,490 | 289,692 | 597,711 | 578,075 | ' |
Depreciation and amortization | 14,089 | 11,263 | 27,259 | 21,818 | ' |
Income (Loss) from Operations | 20,667 | 19,675 | 45,024 | 42,673 | ' |
Capital Expenditures | 19,388 | 9,555 | 34,483 | 13,660 | ' |
Total Assets | 816,637 | ' | 816,637 | ' | 842,342 |
Goodwill | 110,781 | ' | 110,781 | ' | 102,743 |
Customer Management Services [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Gross Revenue | 218,683 | 220,965 | 446,607 | 443,854 | ' |
Intersegment Sales | 0 | -324 | 0 | -631 | ' |
Net Revenue | 218,683 | 220,641 | 446,607 | 443,223 | ' |
Depreciation and amortization | 10,169 | 8,532 | 19,634 | 16,394 | ' |
Income (Loss) from Operations | 16,493 | 16,465 | 37,316 | 37,196 | ' |
Capital Expenditures | 14,587 | 8,110 | 24,499 | 10,396 | ' |
Total Assets | 531,926 | ' | 531,926 | ' | 554,015 |
Goodwill | 27,240 | ' | 27,240 | ' | 19,819 |
Customer Growth Services [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Gross Revenue | 28,875 | 22,399 | 57,780 | 45,255 | ' |
Intersegment Sales | 0 | 0 | 0 | 0 | ' |
Net Revenue | 28,875 | 22,399 | 57,780 | 45,255 | ' |
Depreciation and amortization | 1,468 | 777 | 3,024 | 1,474 | ' |
Income (Loss) from Operations | 1,831 | -620 | 3,601 | 656 | ' |
Capital Expenditures | 1,289 | 435 | 1,669 | 751 | ' |
Total Assets | 84,058 | ' | 84,058 | ' | 86,416 |
Goodwill | 30,395 | ' | 30,395 | ' | 30,128 |
Customer Technology Services [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Gross Revenue | 35,753 | 36,717 | 68,532 | 70,363 | ' |
Intersegment Sales | -16 | -73 | -19 | -157 | ' |
Net Revenue | 35,737 | 36,644 | 68,513 | 70,206 | ' |
Depreciation and amortization | 2,008 | 1,489 | 3,723 | 3,005 | ' |
Income (Loss) from Operations | 1,616 | 5,819 | 1,927 | 8,717 | ' |
Capital Expenditures | 3,407 | 960 | 8,038 | 2,288 | ' |
Total Assets | 153,552 | ' | 153,552 | ' | 157,040 |
Goodwill | 42,709 | ' | 42,709 | ' | 42,709 |
Customer Strategy Services [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Gross Revenue | 12,195 | 10,256 | 24,811 | 20,186 | ' |
Intersegment Sales | 0 | -248 | 0 | -795 | ' |
Net Revenue | 12,195 | 10,008 | 24,811 | 19,391 | ' |
Depreciation and amortization | 444 | 465 | 878 | 945 | ' |
Income (Loss) from Operations | 727 | -1,989 | 2,180 | -3,896 | ' |
Capital Expenditures | 105 | 50 | 277 | 225 | ' |
Total Assets | 47,101 | ' | 47,101 | ' | 44,871 |
Goodwill | $10,437 | ' | $10,437 | ' | $10,087 |
SEGMENT_INFORMATION_REVENUE_GE
SEGMENT INFORMATION (REVENUE GEOGRAPHY) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Revenue | $295,490 | $289,692 | $597,711 | $578,075 |
United States [Member] | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Revenue | 137,596 | 132,341 | 284,065 | 264,088 |
Philippines [Member] | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Revenue | 85,541 | 88,049 | 172,207 | 174,158 |
Latin America [Member] | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Revenue | 43,258 | 44,303 | 85,304 | 89,331 |
Europe Middle East Africa [Member] | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Revenue | 22,267 | 16,638 | 41,484 | 33,621 |
Canada [Member] | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Revenue | 1,470 | 4,002 | 2,893 | 8,292 |
Asia Pacific[ Member] | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' |
Revenue | $5,358 | $4,359 | $11,758 | $8,585 |
SIGNIFICANT_CLIENTSNARRATIVE_D
SIGNIFICANT CLIENTS(NARRATIVE) (DETAILS) (Client A [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Client A [Member] | ' | ' | ' | ' |
Entity Wide Revenue Major Customer [Line Items] | ' | ' | ' | ' |
Revenue from major customer as a percentage of total revenue | 12.00% | 11.80% | 11.80% | 11.80% |
Accounts receivable amount from major customer | $28.60 | $32.50 | $28.60 | $32.50 |
GOODWILL_GOODWILL_ROLLFORWARD_
GOODWILL (GOODWILL ROLLFORWARD) (DETAILS) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Goodwill [Line Items] | ' |
Beginning balance, goodwill | $102,743 |
Acquisitions | 7,825 |
Impairments | 0 |
Effect of Foreign Currency | 213 |
Ending balance, goodwill | 110,781 |
Customer Management Services [Member] | ' |
Goodwill [Line Items] | ' |
Beginning balance, goodwill | 19,819 |
Acquisitions | 7,208 |
Impairments | 0 |
Effect of Foreign Currency | 213 |
Ending balance, goodwill | 27,240 |
Customer Growth Services [Member] | ' |
Goodwill [Line Items] | ' |
Beginning balance, goodwill | 30,128 |
Acquisitions | 267 |
Impairments | 0 |
Effect of Foreign Currency | 0 |
Ending balance, goodwill | 30,395 |
Customer Technology Services [Member] | ' |
Goodwill [Line Items] | ' |
Beginning balance, goodwill | 42,709 |
Acquisitions | 0 |
Impairments | 0 |
Effect of Foreign Currency | 0 |
Ending balance, goodwill | 42,709 |
Customer Strategy Services [Member] | ' |
Goodwill [Line Items] | ' |
Beginning balance, goodwill | 10,087 |
Acquisitions | 350 |
Impairments | 0 |
Effect of Foreign Currency | 0 |
Ending balance, goodwill | $10,437 |
GOODWILL_NARRATIVE_DETAILS
GOODWILL (NARRATIVE) (DETAILS) | 6 Months Ended |
Jun. 30, 2014 | |
GOODWILL [ABSTRACT] | ' |
Method used to calculate fair value of reporting unit that has goodwill at risk | 'The Company performs a goodwill impairment assessment on at least an annual basis. The Company conducts its annual goodwill impairment assessment during the fourth quarter, or more frequently, if indicators of impairment exist. The Company has identified a triggering event based on the continued decline during the second quarter of 2014 in operating results of the TSG reporting unit within the CTS segment. At June 30, 2014, the Company completed an interim quantitative assessment of this reporting unit’s fair value using an income based approach. Key assumptions used in the fair value calculation include, but are not limited to, a perpetuity growth rate of 3.0% based on the current inflation rate combined with the GDP growth rate for the reporting unit’s geographical region and a discount rate of 19.1%, which is equal to the reporting unit’s equity risk premium adjusted for its size and company specific risk factors. Estimated future cash flows under the income approach are based on the Company’s internal business plan and adjusted as appropriate for the Company’s view of market participant assumptions. The current business plan assumes the occurrence of certain events in the future, such as realignment of operations and reduction of general and administrative costs. Significant differences in some or all of these assumptions may impact the calculated fair value of this reporting unit resulting in impairment to goodwill in a future period. The goodwill attributable to this reporting unit is $23.0 million. As of June 30, 2014, the fair value of this reporting unit exceeds its carrying value by 8%. The Company will continue to review the calculated fair value of this reporting unit until the fair value is substantially in excess of its carrying value. |
DERIVATIVES_OCI_ROLLFORWARD_DE
DERIVATIVES (OCI ROLLFORWARD) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
DERIVATIVES [ABSTRACT] | ' | ' | ' | ' |
Aggregate unrealized net gain/(loss) at beginning of year | ($10,886) | $11,739 | ($8,352) | $9,559 |
Add: Net gain/(loss) from change in fair value of cash flow hedges | 9,946 | -12,801 | 6,297 | -8,702 |
Less: Net (gain)/loss reclassified to earnings from effective hedges | $1,059 | ($1,582) | $2,174 | ($3,501) |
DERIVATIVES_NOTIONAL_TABLE_DET
DERIVATIVES (NOTIONAL TABLE) (DETAILS) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | USD ($) | USD ($) | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards | Forwards |
USD ($) | USD ($) | CAD | CAD | CAD | CAD | PHP | PHP | PHP | PHP | MXN | MXN | MXN | MXN | GBP | GBP | NZD | NZD | |||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | GBP (£) | USD ($) | ||||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notional Amount | $244,300 | $204,500 | $585,979 | $580,076 | $4,382 | 4,500 | $7,336 | 7,500 | $411,135 | 17,776,000 | $404,638 | 17,355,000 | $170,462 | 2,395,000 | $166,132 | 2,305,500 | $1,853 | £ 1,200 | $117 | 150 |
% Maturing in the Next 12 Months | ' | ' | ' | ' | 100.00% | 100.00% | ' | ' | 40.00% | 40.00% | ' | ' | 29.10% | 29.10% | ' | ' | ' | ' | ' | ' |
Contracts Maturing Through | ' | ' | ' | ' | '1 year 0 months 0 days | '1 year 0 months 0 days | ' | ' | '4 years 9 months 1 day | '4 years 9 months 1 day | ' | ' | '4 years 9 months 1 day | '4 years 9 months 1 day | ' | ' | ' | ' | ' | ' |
DERIVATIVES_INTEREST_RATE_SWAP
DERIVATIVES (INTEREST RATE SWAPS) (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | Interest Rate Swap One [Member] | Interest Rate Swap Two [Member] | Total Interest Rate Swaps [Member] | ||
Derivative [Line Items] | ' | ' | ' | ' | ' |
Notional Amount | $244,300 | $204,500 | $25,000 | $15,000 | $40,000 |
Variable Rate Received | ' | ' | '1 - month LIBOR | '1 - month LIBOR | ' |
Fixed Rate Paid | ' | ' | 2.55% | 3.14% | ' |
Contract Commencement Date | ' | ' | 1-Apr-12 | 1-May-12 | ' |
Contract Maturity Date | ' | ' | 1-Apr-16 | 1-May-17 | ' |
DERIVATIVES_BALANCE_SHEET_CLAS
DERIVATIVES (BALANCE SHEET CLASSIFICATION) (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | $2,118 | ($11,485) |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Prepaids And Other Current Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 2,853 | 3,379 |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Other assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 8,915 | 1,439 |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Other Current Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | -4,870 | -4,595 |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Other Long-Term Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | -4,780 | -11,708 |
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | -1,891 | -2,152 |
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Prepaids And Other Current Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 0 | 0 |
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Other assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 0 | 0 |
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Other Current Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | -1,044 | -1,028 |
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Other Long-Term Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | -847 | -1,124 |
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 2,151 | -718 |
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Prepaids And Other Current Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 2,472 | 97 |
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Other assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 0 | 0 |
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Other Current Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | -321 | -815 |
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Other Long-Term Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 0 | 0 |
Not Designated as Hedging Instruments [Member] | Leases Derivative Contract [Member] | Embedded Derivative [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 0 | -116 |
Not Designated as Hedging Instruments [Member] | Leases Derivative Contract [Member] | Embedded Derivative [Member] | Prepaids And Other Current Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 0 | 0 |
Not Designated as Hedging Instruments [Member] | Leases Derivative Contract [Member] | Embedded Derivative [Member] | Other assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 0 | 0 |
Not Designated as Hedging Instruments [Member] | Leases Derivative Contract [Member] | Embedded Derivative [Member] | Other Current Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | 0 | -116 |
Not Designated as Hedging Instruments [Member] | Leases Derivative Contract [Member] | Embedded Derivative [Member] | Other Long-Term Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total net derivative asset (liability) | $0 | $0 |
DERIVATIVES_INCOME_STATEMENT_C
DERIVATIVES (INCOME STATEMENT CLASSIFICATION) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Interest expense | $1,861 | $1,903 | $3,551 | $3,768 |
Other income (expense), net | 4,249 | 1,884 | 5,250 | 1,076 |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of gain or (loss) recognized in other comprehensive income (loss) - effective portion, net of tax: | 10,049 | -12,956 | 6,457 | -8,744 |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Amount and Location of Net Gain or Loss Reclassified From Accumulated Other Comprehensive Income to Income [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Revenues | -1,472 | 2,850 | -3,043 | 6,310 |
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of gain or (loss) recognized in other comprehensive income (loss) - effective portion, net of tax: | -103 | 155 | -160 | 42 |
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Amount and Location of Net Gain or Loss Reclassified From Accumulated Other Comprehensive Income to Income [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Revenues | ' | ' | ' | -514 |
Interest expense | -265 | -257 | -523 | ' |
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Amount and Location of Net Gain or Loss Recognized in Income Nondesignated Hedging Instruments [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Other income (expense), net | -2,825 | -2,685 | -2,206 | -1,247 |
Not Designated as Hedging Instruments [Member] | Leases Derivative Contract [Member] | Embedded Derivative [Member] | Amount and Location of Net Gain or Loss Recognized in Income Nondesignated Hedging Instruments [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Cost of services | ' | $44 | $116 | $113 |
DERIVATIVES_NARRATIVE_DETAILS
DERIVATIVES (NARRATIVE) (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
DERIVATIVES [ABSTRACT] | ' | ' |
Notional Amount | $244.30 | $204.50 |
FAIR_VALUE_DERIVATIVES_TABLE_D
FAIR VALUE (DERIVATIVES TABLE) (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Cash flow hedges | $0 | $0 |
Interest rate swaps | 0 | 0 |
Fair value hedges | 0 | 0 |
Embedded derivatives | 0 | 0 |
Total net derivative asset (liability) | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Cash flow hedges | 2,118 | -11,485 |
Interest rate swaps | -1,891 | -2,152 |
Fair value hedges | 2,151 | -718 |
Embedded derivatives | 0 | -116 |
Total net derivative asset (liability) | 2,378 | -14,471 |
Significant Unobservable Inputs (Level 3) [Member] | ' | ' |
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Cash flow hedges | 0 | 0 |
Interest rate swaps | 0 | 0 |
Fair value hedges | 0 | 0 |
Embedded derivatives | 0 | 0 |
Total net derivative asset (liability) | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | ' | ' |
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Cash flow hedges | 2,118 | -11,485 |
Interest rate swaps | -1,891 | -2,152 |
Fair value hedges | 2,151 | -718 |
Embedded derivatives | 0 | -116 |
Total net derivative asset (liability) | $2,378 | ($14,471) |
FAIR_VALUE_FAIR_VALUE_ASSETS_A
FAIR VALUE (FAIR VALUE ASSETS AND LIABILITIES) (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Liabilities [Abstract] | ' | ' |
Contingent consideration | ($12,481) | ($21,748) |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Money market investments | 0 | 0 |
Derivative assets, net | 0 | 0 |
Total assets | 0 | 0 |
Liabilities [Abstract] | ' | ' |
Deferred compensation plan liability | 0 | 0 |
Derivative instruments, net | 0 | ' |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Money market investments | 241 | 240 |
Derivative assets, net | 2,378 | 0 |
Total assets | 2,619 | 240 |
Liabilities [Abstract] | ' | ' |
Deferred compensation plan liability | -8,070 | 6,829 |
Derivative instruments, net | 0 | 14,471 |
Contingent consideration | 0 | 0 |
Total liabilities | 8,070 | -21,300 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Money market investments | 0 | 0 |
Derivative assets, net | 0 | 0 |
Total assets | 0 | 0 |
Liabilities [Abstract] | ' | ' |
Deferred compensation plan liability | 0 | 0 |
Derivative instruments, net | 0 | ' |
Contingent consideration | -12,481 | 21,748 |
Total liabilities | $12,481 | ($21,748) |
FAIR_VALUE_PURCHASE_PRICE_PAYA
FAIR VALUE (PURCHASE PRICE PAYABLE TABLE) (DETAILS) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Business acquisitions, Contingent Consideration [Line Items] | ' | ' |
Beginning balance, purchase price payable | $12,481 | $21,748 |
Acquisitions | 3,435 | ' |
Payments | -9,144 | ' |
Imputed Interest/ Adjustments | -3,558 | ' |
Ending balance, purchase price payable | 12,481 | 21,748 |
Iknowtion [Member] | ' | ' |
Business acquisitions, Contingent Consideration [Line Items] | ' | ' |
Beginning balance, purchase price payable | 2,193 | 3,470 |
Acquisitions | 0 | ' |
Payments | -1,400 | ' |
Imputed Interest/ Adjustments | 123 | ' |
Ending balance, purchase price payable | 2,193 | 3,470 |
Guidon [Member] | ' | ' |
Business acquisitions, Contingent Consideration [Line Items] | ' | ' |
Beginning balance, purchase price payable | 1,250 | 2,637 |
Acquisitions | 0 | ' |
Payments | -1,426 | ' |
Imputed Interest/ Adjustments | 39 | ' |
Ending balance, purchase price payable | 1,250 | 2,637 |
Technology Solutions Group [Member] | ' | ' |
Business acquisitions, Contingent Consideration [Line Items] | ' | ' |
Beginning balance, purchase price payable | 3,801 | 12,933 |
Acquisitions | 0 | ' |
Payments | -5,292 | ' |
Imputed Interest/ Adjustments | -3,840 | ' |
Ending balance, purchase price payable | 3,801 | 12,933 |
WebMetro [Member] | ' | ' |
Business acquisitions, Contingent Consideration [Line Items] | ' | ' |
Beginning balance, purchase price payable | 1,697 | 2,708 |
Acquisitions | 0 | ' |
Payments | -1,026 | ' |
Imputed Interest/ Adjustments | 15 | ' |
Ending balance, purchase price payable | 1,697 | 2,708 |
Sofica [Member] | ' | ' |
Business acquisitions, Contingent Consideration [Line Items] | ' | ' |
Beginning balance, purchase price payable | 3,540 | 0 |
Acquisitions | 3,435 | ' |
Payments | 0 | ' |
Imputed Interest/ Adjustments | 105 | ' |
Ending balance, purchase price payable | $3,540 | $0 |
FAIR_VALUE_NARRATIVE_DETAILS
FAIR VALUE (NARRATIVE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
FAIR VALUE [Abstract] | ' | ' | ' |
Business Acquisition Future Value Of Liabilities Incurred | $13,400,000 | $13,400,000 | ' |
Future Value of Liabilities Incurred From Business Acquisitions | 13,400,000 | 13,400,000 | ' |
Valuation Technique on Contingent Consideration | ' | 'The Company recorded contingent consideration related to the acquisitions of iKnowtion, Guidon, TSG, WebMetro and Sofica. These contingent payables were recognized at fair value using a discounted cash flow approach and a discount rate of 21.0%, 21.0%, 4.6%, 5.3% or 22.0%, respectively. The discount rates vary dependant on the specific risks of each acquisition including the country of operation, the nature of services and complexity of the acquired business, and other similar factors. These measurements were based on significant inputs not observable in the market. | ' |
Contingent Consideration, at fair value | 12,481,000 | 12,481,000 | 21,748,000 |
Fair value measurement gain or loss | $4,000,000 | ' | ' |
INCOME_TAXES_NARRATIVE_DETAILS
INCOME TAXES (NARRATIVE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
INCOME TAXES [ABSTRACT] | ' | ' | ' | ' |
Total deferred tax assets, net of valuation allowance | $45.50 | ' | $45.50 | ' |
Valuation allowance on deferred tax assets | 8.1 | ' | 8.1 | ' |
Deferred tax assets, net of valuation allowance and deferred tax liabilities | 42.1 | ' | 42.1 | ' |
Effective income tax rate | 23.00% | 23.30% | 17.40% | 16.60% |
Canada [Member] | ' | ' | ' | ' |
Significant Change in Unrecognized Tax Benefits Is Reasonably Possible [LineItems] | ' | ' | ' | ' |
Tax Adjustments, Settlements, and Unusual Provisions | $1.20 | ' | ' | ' |
Income Tax Examination [Line Items] | ' | ' | ' | ' |
Income Tax Years under Audit | '2009 and 2010 | ' | ' | ' |
Netherlands [Member] | ' | ' | ' | ' |
Income Tax Examination [Line Items] | ' | ' | ' | ' |
Income Tax Years under Audit | '2010 and 2011 | ' | ' | ' |
RESTRUCTURING_CHARGES_AND_IMPA2
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES (LIABILITY CLASSIFICATION TABLE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reduction in force | $617 | $2,324 | $1,157 | $3,175 |
Facility exit charges | 0 | 248 | 0 | 248 |
Restructuring charges, net | 617 | 2,572 | 1,157 | 3,423 |
Customer Management Services [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reduction in force | 535 | 2,292 | 1,046 | 2,986 |
Facility exit charges | 0 | 248 | 0 | 248 |
Customer Growth Services [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reduction in force | 8 | 0 | 37 | 0 |
Facility exit charges | 0 | 0 | 0 | 0 |
Customer Technology Services [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reduction in force | 74 | 0 | 74 | 0 |
Facility exit charges | 0 | 0 | 0 | 0 |
Customer Strategy Services [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reduction in force | 0 | 32 | 0 | 189 |
Facility exit charges | $0 | $0 | $0 | $0 |
RESTRUCTURING_CHARGES_AND_IMPA3
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES (LIABLITY ROLLFORWARD TABLE) (DETAILS) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Restructuring Cost and Reserve [Line Items] | ' |
Beginning balance, restructuring reserve | $1,353 |
Expense | 1,197 |
Payments | -1,439 |
Reversals | -40 |
Ending balance, restructuring reserve | 1,071 |
Closure of Delivery Centers [Member] | ' |
Restructuring Cost and Reserve [Line Items] | ' |
Beginning balance, restructuring reserve | 0 |
Expense | 0 |
Payments | 0 |
Reversals | 0 |
Ending balance, restructuring reserve | 0 |
Reduction in Force [Member] | ' |
Restructuring Cost and Reserve [Line Items] | ' |
Beginning balance, restructuring reserve | 1,353 |
Expense | 1,197 |
Payments | -1,439 |
Reversals | -40 |
Ending balance, restructuring reserve | $1,071 |
RESTRUCTURING_CHARGES_AND_IMPA4
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES (NARRATIVE) (DETAILS) (USD $) | 6 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | |
Customer Management Services [Member] | Customer Strategy Services [Member] | |||
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract] | ' | ' | ' | ' |
Description of assets subject to impairment | 'During each of the periods presented, the Company evaluated the recoverability of its leasehold improvement assets at certain delivery centers. An asset is considered to be impaired when the anticipated undiscounted future cash flows of its asset group are estimated to be less than the asset group’s carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. To determine fair value, the Company used Level 3 inputs in its discounted cash flows analysis. Assumptions included the amount and timing of estimated future cash flows and assumed discount rates. During the three and six months ended June 30, 2014, the Company recognized no losses related to leasehold improvement assets. During the three and six months ended June 30, 2013, the Company recognized $0.1 million of losses related to leasehold improvement assets in the Customer Management Services segment. | ' | ' | ' |
Asset Impairment [Line Items] | ' | ' | ' | ' |
Impairment of intangible assets | ' | ' | $100,000 | $1,100,000 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring Reserve | 1,071,000 | 1,353,000 | ' | ' |
Payments | ($1,439,000) | ' | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (NARRATIVE) (DETAILS) (USD $) | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 03, 2013 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ' | ' | ' |
Initial Borrowing Capacity | ' | ' | ' | $700,000,000 |
Maximum Borrowing Capacity | ' | ' | ' | 1,000,000,000 |
Borrowings outstanding on credit facility | 100,000,000 | ' | 100,000,000 | ' |
Average daily utilization under credit facility | 280,500,000 | 230,900,000 | ' | ' |
Letters of credit issued under credit facility | 3,500,000 | ' | ' | ' |
Remaining borrowing capacity under credit facility | $596,500,000 | ' | ' | ' |
NONCONTROLLING_INTERES_NONCONT
NONCONTROLLING INTERES (NONCONTROLLING INTEREST ROLLFORWARD TABLE) (DETAILS) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Stockholders' Equity Attributable to Noncontrolling Interest | ' | ' |
Noncontrolling interest, January 1 | $8,081 | $12,978 |
Net income attributable to noncontrolling interest | 2,074 | 890 |
Dividends distributed to noncontrolling interest | -2,025 | -2,113 |
Deconsolidation of subsidiary | ' | -121 |
Foreign currency translation adjustments | 85 | -220 |
Equity based compensation expense | 13 | 16 |
Noncontrolling interest, March 31 | $8,228 | $11,430 |
MANDATORILY_REDEEMABLE_NONCONT1
MANDATORILY REDEEMABLE NONCONTROLLING INTEREST (ROLLFORWARD TABLE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Mandatorily redeemable noncontrolling interest [Line Items] | ' | ' | ' | ' |
Mandatorily redeemable noncontrolling interest, January 1 | ' | ' | $2,509 | ' |
Net income attributable to mandatorily redeemable noncontrolling interest | 18,130 | 12,722 | 39,433 | 31,325 |
Working capital distributed to mandatorily redeemable noncontrolling interest | -1,244 | -272 | -1,244 | -272 |
Change in redemption value | ' | ' | -1,730 | ' |
Mandatorily redeemable noncontrolling interest, March 31 | 3,274 | ' | 3,274 | ' |
Iknowtion [Member] | ' | ' | ' | ' |
Mandatorily redeemable noncontrolling interest [Line Items] | ' | ' | ' | ' |
Mandatorily redeemable noncontrolling interest, January 1 | ' | ' | 2,509 | 1,067 |
Net income attributable to mandatorily redeemable noncontrolling interest | ' | ' | 279 | 159 |
Change in redemption value | ' | ' | 1,730 | 1,065 |
Mandatorily redeemable noncontrolling interest, March 31 | $3,274 | $2,019 | $3,274 | $2,019 |
MANDATORILY_REDEEMABLE_NONCONT2
MANDATORILY REDEEMABLE NONCONTROLLING INTEREST (NARRATIVE) (DETAILS) | 6 Months Ended |
Jun. 30, 2014 | |
Mandatorily Redeemable Noncontrolling Interest [Abstract] | ' |
Valuation Technique on Contingent Consideration | 'The Company recorded contingent consideration related to the acquisitions of iKnowtion, Guidon, TSG, WebMetro and Sofica. These contingent payables were recognized at fair value using a discounted cash flow approach and a discount rate of 21.0%, 21.0%, 4.6%, 5.3% or 22.0%, respectively. The discount rates vary dependant on the specific risks of each acquisition including the country of operation, the nature of services and complexity of the acquired business, and other similar factors. These measurements were based on significant inputs not observable in the market. |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (ROLLFORWARD TABLE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Foreign Currency Translation Adjustment [Abstract] | ' | ' | ' | ' |
Accumulated other comprehensive income (loss) - Foreign currency translation adjustment, beginning balance | ' | ' | ($10,581) | $15,673 |
Other comprehensive income before reclassifications - foreign currency translation adjustment | ' | ' | 5,202 | -16,263 |
Amounts reclassified from accumulated other comprehensive income - foreign currency translation adjustment | ' | ' | 0 | 0 |
Accumulated other comprehensive income (loss) - Foreign currency translation adjustment, ending balance | -5,379 | -590 | -5,379 | -590 |
Derivative Valuation, Net of Tax [Abstract] | ' | ' | ' | ' |
Aggregate unrealized net gain/(loss) at beginning of year | -10,886 | 11,739 | -8,352 | 9,559 |
Other comprehensive income before reclassifications - derivative valuation, net of tax | 9,946 | -12,801 | 6,297 | -8,702 |
Amounts reclassified from accumulated other comprehensive income - derivative valuation, net of tax | -1,059 | 1,582 | -2,174 | 3,501 |
Net current period other comprehensive income - derivative valuation, net of tax | ' | ' | 8,471 | -12,203 |
Other, Net of Tax [Abstract] | ' | ' | ' | ' |
Accumulated other comprehensive income (loss) - Other, net of tax | ' | ' | -1,653 | -2,251 |
Other comprehensive income before reclassifications - other, net of tax | ' | ' | 33 | 7 |
Amounts reclassified from accumulated other comprehensive income - other, net of tax | ' | ' | 523 | 292 |
Accumulated other comprehensive income (loss) - Other, net of tax at end of period | -1,097 | -1,952 | -1,097 | -1,952 |
Totals | ' | ' | ' | ' |
Accumulated other comprehensive income (loss), beginning balance | ' | ' | -20,586 | 22,981 |
Other comprehensive income before reclassifications - Totals | ' | ' | 11,532 | -24,958 |
Amounts reclassified from accumulated other comprehensive income - Totals | ' | ' | 2,697 | -3,209 |
Other comprehensive income (loss), net of tax | ' | ' | 14,229 | -28,167 |
Accumulated other comprehensive income (loss), ending balance | ($6,357) | ($5,186) | ($6,357) | ($5,186) |
ACCUMULATED_OTHER_COMPREHENSIV3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (INCOME STATEMENT CLASSIFICATION TABLE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Presentation of Income Statement Reclassifications [Line Items] | ' | ' | ' | ' |
Other Comprehensive Income Loss Reclassified to Income | ' | ' | $2,697 | ($3,209) |
Net Income (Loss) [Member] | Derivative Valuation [Member] | ' | ' | ' | ' |
Presentation of Income Statement Reclassifications [Line Items] | ' | ' | ' | ' |
Other Comprehensive Income Loss Reclassified to Income | -1,059 | 1,582 | -2,174 | 3,501 |
Net Income (Loss) [Member] | Other Accumulated Other Comprehensive Income Loss [Member] | ' | ' | ' | ' |
Presentation of Income Statement Reclassifications [Line Items] | ' | ' | ' | ' |
Other Comprehensive Income Loss Reclassified to Income | -262 | -145 | -523 | -292 |
Gain Loss on Foreign Currency Forward Contracts [Member] | Revenue [Member] | Derivative Valuation [Member] | ' | ' | ' | ' |
Presentation of Income Statement Reclassifications [Line Items] | ' | ' | ' | ' |
Other Comprehensive Income Loss Reclassified to Income | -1,472 | 2,850 | -3,043 | 6,310 |
Loss on Interest Rate Swaps [Member] | Interest Expenses [Member] | Derivative Valuation [Member] | ' | ' | ' | ' |
Presentation of Income Statement Reclassifications [Line Items] | ' | ' | ' | ' |
Other Comprehensive Income Loss Reclassified to Income | -265 | -257 | -523 | -514 |
Tax Effect [Member] | Provision for Income Taxes [Member] | Derivative Valuation [Member] | ' | ' | ' | ' |
Presentation of Income Statement Reclassifications [Line Items] | ' | ' | ' | ' |
Other Comprehensive Income Loss Reclassified to Income | 678 | -1,011 | 1,392 | -2,295 |
Tax Effect [Member] | Provision for Income Taxes [Member] | Other Accumulated Other Comprehensive Income Loss [Member] | ' | ' | ' | ' |
Presentation of Income Statement Reclassifications [Line Items] | ' | ' | ' | ' |
Other Comprehensive Income Loss Reclassified to Income | 18 | 9 | 33 | 19 |
Actuarial Loss on Defined Benefit Plan [Member] | Cost of Services [Member] | Other Accumulated Other Comprehensive Income Loss [Member] | ' | ' | ' | ' |
Presentation of Income Statement Reclassifications [Line Items] | ' | ' | ' | ' |
Other Comprehensive Income Loss Reclassified to Income | ($280) | ($154) | ($556) | ($311) |
NET_INCOME_PER_SHARE_DILUTED_S
NET INCOME PER SHARE (DILUTED SHARES TABLE) (DETAILS) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ' | ' | ' | ' |
Shares used in basic earnings per share calculation | 49,351 | 51,861 | 49,696 | 52,104 |
Effect of dilutive securities: | ' | ' | ' | ' |
Stock options | 425 | 411 | 419 | 403 |
Restricted stock units | 335 | 356 | 421 | 405 |
Performance-based restricted stock units | 0 | 0 | 0 | 0 |
Total effects of dilutive securities | 760 | 767 | 840 | 808 |
Shares used in dilutive earnings per share calculation | 50,111 | 52,628 | 50,536 | 52,912 |
NET_INCOME_PER_SHARE_NARRATIVE
NET INCOME PER SHARE (NARRATIVE) (DETAILS) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Stock Options [Member] | ' | ' | ' | ' |
Anti-dilutive options to purchase common stock [Line Items] | ' | ' | ' | ' |
Anti-dilutive securities | 0.1 | 0.1 | 0.1 | 0.1 |
Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' |
Anti-dilutive options to purchase common stock [Line Items] | ' | ' | ' | ' |
Anti-dilutive securities | 0.1 | 0.2 | 0.1 | 0.5 |
EQUITYBASED_COMPENSATION_PLANS1
EQUITY-BASED COMPENSATION PLANS (NARRATIVE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Equity-based compensation expense | $2,700,000 | $3,400,000 | $5,881,000 | $6,577,000 |
Stock Options [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Equity-based compensation expense | 100,000 | 100,000 | 200,000 | 200,000 |
Unrecognized Compensation Expense | 100,000 | ' | 100,000 | ' |
Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Equity-based compensation expense | 2,600,000 | 3,200,000 | 5,700,000 | 6,300,000 |
Unrecognized Compensation Expense | 23,300,000 | ' | 23,300,000 | ' |
Non-option Equity Awards Granted | ' | ' | 210,176 | 693,055 |
Cost of Services [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Equity-based compensation expense | 500,000 | 600,000 | 1,100,000 | 1,000,000 |
Selling General And Administrative Expenses [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Equity-based compensation expense | $2,200,000 | $2,800,000 | $4,800,000 | $5,600,000 |
DECONSOLIDATION_OF_SUBSIDIARY_
DECONSOLIDATION OF SUBSIDIARY (NARRATIVE) (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
DECONSOLIDATION OF SUBSIDIARY [ABSTRACT] | ' | ' | ' | ' |
Description of Loss of Control in Noncontrolling Interest | ' | ' | 'During the second quarter of 2013, the Company concluded that it no longer had controlling influence over Peppers & Rogers Gulf WLL (“PRG Kuwait”), a once consolidated subsidiary in the CSS segment, because the Company was no longer confident that it could exercise its beneficial ownership rights. Upon deconsolidation of PRG Kuwait, the Company wrote off all PRG Kuwait assets and liabilities resulting in a loss of $3.7 million which was recorded during the second quarter of 2013. Effective April 2014, the Company entered into a stock and membership interest purchase agreement with PRG Kuwait’s other shareholders to sell its 48% interest in the company for $175 thousand. It is anticipated the stipulations of the agreement will be finalized and the cash received before December 31, 2014. | ' |
Loss on deconsolidation of subsidiary | $0 | ($3,655) | $0 | ($3,655) |