Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TTEC HOLDINGS, INC. | ||
Entity Central Index Key | 1,013,880 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
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 | $ 562,964,438 | ||
Entity Common Stock, Shares Outstanding | 45,876,511 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 74,437 | $ 55,264 |
Accounts receivable, net | 385,751 | 300,808 |
Prepaids and other current assets | 63,668 | 59,905 |
Income tax receivable | 11,099 | 7,035 |
Total assets held for sale | 7,835 | 10,715 |
Total current assets | 542,790 | 433,727 |
Long-term assets | ||
Property, plant and equipment, net | 163,297 | 151,037 |
Goodwill | 206,694 | 129,648 |
Deferred tax assets, net | 12,012 | 53,585 |
Other intangible assets, net | 92,086 | 30,787 |
Other long-term assets | 61,857 | 47,520 |
Total long-term assets | 535,946 | 412,577 |
Total assets | 1,078,736 | 846,304 |
Current liabilities | ||
Accounts payable | 46,029 | 38,197 |
Accrued employee compensation and benefits | 83,997 | 66,133 |
Other accrued expenses | 18,993 | 14,830 |
Income taxes payable | 7,497 | 7,040 |
Deferred revenue | 21,628 | 23,318 |
Other current liabilities | 22,312 | 29,154 |
Total liabilities held for sale | 1,322 | 1,357 |
Total current liabilities | 201,778 | 180,029 |
Long-term liabilities | ||
Line of credit | 344,000 | 217,300 |
Deferred tax liabilities, net | 11,285 | 160 |
Non-current Income Taxes Payable | 47,871 | |
Deferred rent | 15,714 | 15,256 |
Other long-term liabilities | 95,243 | 71,664 |
Total long-term liabilities | 514,113 | 304,380 |
Total liabilities | 715,891 | 484,409 |
Stockholders' equity | ||
Common stock - $0.01 par value; 150,000,000 shares authorized; 45,861,959 and 46,113,693 shares outstanding as of December 31, 2017 and December 31, 2016, respectively | 459 | 462 |
Additional paid-in capital | 351,725 | 348,739 |
Treasury stock at cost: 36,190,294 and 35,938,560 shares as of December 31, 2017 and December 31, 2016, respectively | (615,677) | (603,262) |
Accumulated other comprehensive income (loss) | (102,304) | (126,964) |
Retained earnings | 721,664 | 735,939 |
Noncontrolling interest | 6,978 | 6,981 |
Total stockholders' equity | 362,845 | 361,895 |
Total liabilities and stockholders' equity | $ 1,078,736 | $ 846,304 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
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 | 45,861,959 | 46,113,693 |
Treasury stock, shares | 36,190,294 | 35,938,560 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income | |||
Revenue | $ 1,477,365 | $ 1,275,258 | $ 1,286,755 |
Operating expenses | |||
Cost of services (exclusive of depreciation and amortization presented separately below) | 1,110,068 | 941,592 | 928,247 |
Selling, general and administrative | 182,314 | 175,797 | 194,606 |
Depreciation and amortization | 64,507 | 68,675 | 63,808 |
Restructuring charges, net | 14,665 | 4,392 | 1,814 |
Impairment losses | 5,322 | 32,050 | 8,100 |
Total operating expenses | 1,376,876 | 1,222,506 | 1,196,575 |
Income from operations | 100,489 | 52,752 | 90,180 |
Other income (expense) | |||
Interest income | 2,841 | 1,234 | 1,090 |
Interest expense | (13,734) | (7,943) | (7,538) |
Other income (expense), net | 1,869 | 9,555 | 2,157 |
Loss on assets held-for-sale | (2,578) | ||
Non-cash loss on assets held-for-sale | 0 | (5,300) | 0 |
Total other income (expense) | (11,602) | (2,454) | (4,291) |
Income before income taxes | 88,887 | 50,298 | 85,889 |
Benefit from (provision for) income taxes | (78,075) | (12,863) | (20,004) |
Net income | 10,812 | 37,435 | 65,885 |
Net income attributable to noncontrolling interest | (3,556) | (3,757) | (4,219) |
Net income (loss) attributable to TeleTech stockholders | 7,256 | 33,678 | 61,666 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | 8,285 | (21,055) | (38,200) |
Derivative valuation, gross | 27,931 | (7,838) | (15,768) |
Derivative valuation, tax effect | (11,284) | 2,330 | 7,228 |
Other, net of tax | 105 | 721 | (2,707) |
Total other comprehensive income (loss) | 25,037 | (25,842) | (49,447) |
Total comprehensive income (loss) | 35,849 | 11,593 | 16,438 |
Less: Comprehensive income attributable to noncontrolling interest | (3,933) | (3,514) | (3,026) |
Comprehensive income attributable to TeleTech stockholders | $ 31,916 | $ 8,079 | $ 13,412 |
Weighted average shares outstanding | |||
Basic | 45,826 | 47,423 | 48,370 |
Diluted | 46,382 | 47,736 | 49,011 |
Net income per share attributable to TeleTech stockholders | |||
Basic | $ 0.16 | $ 0.71 | $ 1.27 |
Diluted | $ 0.16 | $ 0.71 | $ 1.26 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | 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] | Accumulated Other Comprehensive Income (Loss) | Stockholders' Equity of the Company Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Common stock beginning balance, share at Dec. 31, 2014 | 48,453,000 | ||||||
Beginning balance, value at Dec. 31, 2014 | $ 485 | $ (527,595) | $ 356,792 | $ (52,274) | $ 677,859 | $ 7,983 | $ 463,250 |
Net income | 61,666 | 3,382 | 65,885 | ||||
Net income excluding mandatorily redeemable noncontrolling interest | 65,048 | ||||||
Dividends to shareholders | (17,423) | (17,423) | |||||
Dividends distributed to noncontrolling interest | (3,960) | (3,960) | |||||
Adjustments to redemption value of mandatorily redeemable noncontrolling interest | (1,113) | (1,113) | |||||
Foreign currency translation adjustments | (37,844) | (356) | (38,200) | ||||
Derivatives valuation, net of tax | (8,540) | (8,540) | |||||
Vesting of restricted stock units, share | 372,000 | ||||||
Vesting of restricted stock units, value | $ 4 | 5,768 | (10,016) | (4,244) | |||
Exercise of stock options, share | 342,000 | ||||||
Exercise of stock options, value | $ 3 | 5,307 | (9,737) | (4,427) | |||
Excess tax benefit from equity-based awards | (823) | (823) | |||||
Equity-based compensation expense | 11,035 | 152 | 11,187 | ||||
Purchases of common stock, share | (686,000) | ||||||
Purchases of common stock, value | $ (7) | (17,224) | (17,231) | ||||
Other, net of tax | (2,707) | (2,707) | |||||
Common stock ending balance, share at Dec. 31, 2015 | 48,481,000 | ||||||
Ending balance, value at Dec. 31, 2015 | $ 485 | (533,744) | 347,251 | (101,365) | 720,989 | 7,201 | 440,817 |
Net income | 33,678 | 3,757 | 37,435 | ||||
Net income excluding mandatorily redeemable noncontrolling interest | 37,435 | ||||||
Dividends to shareholders | (18,262) | (18,262) | |||||
Dividends distributed to noncontrolling interest | (3,825) | (3,825) | |||||
Adjustments to redemption value of mandatorily redeemable noncontrolling interest | (466) | (466) | |||||
Foreign currency translation adjustments | (20,812) | (243) | (21,055) | ||||
Derivatives valuation, net of tax | (5,508) | (5,508) | |||||
Vesting of restricted stock units, share | 297,000 | ||||||
Vesting of restricted stock units, value | $ 3 | 4,681 | (8,614) | (3,930) | |||
Exercise of stock options, share | 29,000 | ||||||
Exercise of stock options, value | 458 | (82) | 376 | ||||
Excess tax benefit from equity-based awards | 557 | 557 | |||||
Equity-based compensation expense | 9,627 | 81 | 9,708 | ||||
Purchases of common stock, share | (2,693,000) | ||||||
Purchases of common stock, value | $ (26) | (74,657) | (74,683) | ||||
Other, net of tax | 721 | 10 | $ 731 | ||||
Preferred stock ending balance, share at Dec. 31, 2016 | 0 | ||||||
Common stock ending balance, share at Dec. 31, 2016 | 46,114,000 | 46,113,693 | |||||
Ending balance, value at Dec. 31, 2016 | $ 462 | (603,262) | 348,739 | (126,964) | 735,939 | 6,981 | $ 361,895 |
Net income | 7,256 | 3,556 | 10,812 | ||||
Dividends to shareholders | (21,531) | (21,531) | |||||
Dividends distributed to noncontrolling interest | (3,645) | (3,645) | |||||
Foreign currency translation adjustments | 7,908 | 377 | 8,285 | ||||
Derivatives valuation, net of tax | 16,647 | 16,647 | |||||
Vesting of restricted stock units, share | 298,000 | ||||||
Vesting of restricted stock units, value | $ 3 | 4,913 | (10,313) | $ (5,397) | |||
Exercise of stock options, share | 60,000 | 60,000 | |||||
Exercise of stock options, value | 994 | 1,156 | $ 2,150 | ||||
Equity-based compensation expense | 12,143 | (291) | 11,852 | ||||
Purchases of common stock, share | (610,000) | ||||||
Purchases of common stock, value | $ (6) | (18,322) | (18,328) | ||||
Other, net of tax | 105 | $ 105 | |||||
Preferred stock ending balance, share at Dec. 31, 2017 | 0 | ||||||
Common stock ending balance, share at Dec. 31, 2017 | 45,862,000 | 45,861,959 | |||||
Ending balance, value at Dec. 31, 2017 | $ 459 | $ (615,677) | $ 351,725 | $ (102,304) | $ 721,664 | $ 6,978 | $ 362,845 |
Consolidated Statement of Stoc6
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated statement of stockholders' equity [Abstract] | |||
Common Stock, Dividends, Per Share, Declared | $ 0.47 | $ 0.385 | $ 0.36 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net income | $ 10,812 | $ 37,435 | $ 65,885 |
Adjustment to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 64,507 | 68,675 | 63,808 |
Amortization of contract acquisition costs | 1,678 | 659 | 900 |
Amortization of debt issuance costs | 745 | 753 | 712 |
Imputed interest expense and fair value adjustments to contingent consideration | 51 | (4,523) | 716 |
Provision for doubtful accounts | 458 | 1,164 | 1,465 |
(Gain) loss on disposal of assets | 3,694 | (44) | (166) |
Gain on sale of business | (908) | 0 | 0 |
Impairment losses | 5,322 | 32,050 | 8,100 |
Non-cash loss on assets held-for-sale | 0 | 5,300 | 0 |
Deferred income taxes | 16,777 | (1,583) | 9,317 |
Excess tax benefit from equity-based awards | (2,192) | (601) | (662) |
Equity-based compensation expense | 11,852 | 9,773 | 11,304 |
(Gain) loss on foreign currency derivatives | (681) | 1,710 | (1,469) |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | (59,284) | (7,858) | (19,867) |
Prepaids and other assets | (19,266) | (92) | (5,379) |
Accounts payable and accrued expenses | 18,968 | (19,141) | 16,189 |
Deferred revenue and other liabilities | 60,619 | (11,847) | (12,855) |
Net cash provided by operating activities | 113,152 | 111,830 | 137,998 |
Cash flows from investing activities | |||
Proceeds from sale of long-live assets | 39 | 114 | 202 |
Purchases of property, plant and equipment | (51,958) | (50,832) | (66,595) |
Proceeds from sale of business | 636 | 0 | 0 |
Investments in non-marketable equity investments | (1,384) | (3,179) | (9,000) |
Acquisitions, net of cash acquired of zero and zero, respectively | (116,320) | (46,460) | (1,776) |
Net cash used in investing activities | (168,987) | (100,357) | (77,169) |
Cash flows from financing activities | |||
Proceeds from line of credit | 2,293,587 | 2,093,500 | 2,262,350 |
Payments on line of credit | (2,166,887) | (1,976,200) | (2,262,350) |
Payments on other debt | (6,041) | (3,222) | (3,222) |
Payments of contingent consideration and hold back payments to acquisitions | (1,409) | (9,467) | (11,883) |
Dividends paid to shareholders | (21,531) | (18,262) | (17,423) |
Payments to noncontrolling interest | (3,645) | (4,317) | (4,593) |
Purchase of mandatorily redeemable noncontrolling interest | 0 | (4,105) | 0 |
Proceeds from exercise of stock options | 2,150 | 371 | 825 |
Tax payments related to issuance of restricted stock units | (5,397) | (3,933) | (4,248) |
Excess tax benefit from equity-based awards | 0 | 601 | 662 |
Payments of debt issuance costs | (918) | (1,888) | (35) |
Purchase of treasury stock | (18,328) | (74,683) | (17,231) |
Net cash provided by financing activities | 71,581 | (1,605) | (57,148) |
Effect of exchange rate changes on cash and cash equivalents | 3,427 | (14,908) | (20,693) |
Increase (decrease) in cash and cash equivalents | 19,173 | (5,040) | (17,012) |
Cash and cash equivalents, beginning of period | 55,264 | 60,304 | 77,316 |
Cash and cash equivalents, end of period | 74,437 | 55,264 | 60,304 |
Supplemental disclosures | |||
Cash paid for interest | 11,727 | 6,976 | 6,052 |
Cash paid for income taxes | 18,813 | 19,741 | 15,178 |
Non-cash investing and financing activities | |||
Acquisition of long lived assets through capital leases | 9,836 | 584 | 10,492 |
Acquisition of equipment through increase in accounts payable, net | 97 | (681) | 386 |
Contract acquisition costs credited to accounts receivable | $ 0 | $ 206 | $ 1,055 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from investing activities | |||
Acquisitions, net of cash acquired of $5,997, $2,655, and zero, respectively | $ 5,997 | $ 2,655 | $ 0 |
OVERVIEW AND BASIS OF PRESENTAT
OVERVIEW AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2017 | |
OVERVIEW AND BASIS OF PRESENTATION [Abstract] | |
OVERVIEW AND BASIS OF PRESENTATION | (1) OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview TTEC Holdings, Inc. (“TTEC”, “the Company”) (formerly known as TeleTech Holdings, Inc. until the name was changed in January 2018) is a global customer experience company that designs, builds and operates omnichannel customer experiences on behalf of the world's most innovative brands. The Company helps large global companies increase revenue and reduce costs by delivering personalized customer experiences across every interactional channel and phase of the customer lifecycle as an end-to-end provider of customer engagement services, technologies, insights and innovations. TTEC’s 56,000 employees serve clients in the automotive, communication, financial services, government, healthcare, logistics, media and entertainment, retail, technology, transportation and travel industries via operations in the U.S., Australia, Belgium, Brazil, Bulgaria, Canada, China, Costa Rica, Germany, Hong Kong, India, Ireland, Lebanon, Macedonia, Mexico, New Zealand, the Philippines, Poland, Singapore, South Africa, Thailand, Turkey, the United Arab Emirates, and the United Kingdom. Basis of Presentation The Consolidated Financial Statements are comprised of the accounts of TTEC, its wholly owned subsidiaries, its 55% equity owned subsidiary Percepta, LLC, its 100% interest in iKnowtion, LLC effective January 2016, and its 100% interest in Motif, Inc. (see Note 2 and 16). All intercompany balances and transactions have been eliminated in consolidation. During the three months ended March 31, 2016, the Company recorded an additional tax expense of $1.1 million that should have been recorded in prior periods related to operations by an entity outside its country of incorporation. The total amount of $1.1 million should have been recorded as additional expense in the amount of $180 thousand in 2011, $123 thousand in 2012, $137 thousand in 2013, $358 thousand in 2014 and $301 thousand in 2015. During the three months ended June 30, 2015, the Company recorded an additional expense of $1.75 million as an additional estimated tax liability that should have been recorded in prior periods related to ongoing discussions with relevant government authorities related to site compliance with tax advantaged status. The total amount of $1.75 million should have been recorded as additional tax expense in the amount of $466 thousand in 2012, $406 thousand in 2013, $645 thousand in 2014 and $234 thousand in the first quarter of 2015. During the three months ended June 30, 2015, the Company recorded an additional $3.2 million loss related to foreign currency translation within Other comprehensive income (loss) that should have been recorded in 2014 and the three months ended March 31, 2015 to correct for an error in translating the financial results of Sofica Group AD, which the Company acquired on February 28, 2014. Of the $3.2 million recorded, approximately $1.7 million and $1.5 million should have been recorded in the year ended December 31, 2014, and the three months ended March 31, 2015, respectively. The Company also recorded an additional $2.7 million loss to Other, net of tax within Other comprehensive income (loss) in the three months ended March 31, 2015 related to the annual actuarial analysis for the Company’s Philippines pension liability that should have been recorded in the fourth quarter of 2014. During the three months ended December 31, 2015, the Company recorded an additional $2.9 million impairment to correct for an error in the goodwill impairment annual assessment and quarterly assessment for the WebMetro reporting unit. The Company should have recorded a $2.3 million impairment in the three months ended December 31, 2014 and an additional $0.6 million impairment in the three months ended September 30, 2015. The Company has evaluated the aggregate impact of these adjustments and concluded that these adjustments were not material to the previously issued or current period Consolidated Financial Statements. Use of Estimates The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the U.S. (“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 the valuation allowance for deferred tax assets, self-insurance reserves, litigation reserves, restructuring reserves, allowance for doubtful accounts, contingent consideration, 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. Concentration of Credit Risk The Company is exposed to credit risk in the normal course of business, primarily related to accounts receivable and derivative instruments. Historically, the losses related to credit risk have been immaterial. The Company regularly monitors its credit risk to mitigate the possibility of current and future exposures resulting in a loss. The Company evaluates the creditworthiness of its clients prior to entering into an agreement to provide services and as necessary through the life of the client relationship. The Company does not believe it is exposed to more than a nominal amount of credit risk in its derivative hedging activities, as the Company diversifies its activities across six well-capitalized, investment-grade financial institutions. Fair Value of Financial Instruments Fair values of cash equivalents, accounts receivable and payable and debt approximate the carrying amounts because of their short-term nature. Cash and Cash Equivalents The Company considers all cash and highly liquid short-term investments with an original maturity of 90 days or less to be cash equivalents. The Company manages a centralized global treasury function in the United States with a focus on concentrating and safeguarding its global cash and cash equivalents. While the majority of the Company’s cash is held outside the U.S., the Company prefers to hold U.S. Dollars in addition to the local currencies of the foreign subsidiaries. The Company believes that it has effectively mitigated and managed its risk relating to its global cash through its cash management practices, banking partners, and utilization of diversified, high quality investments. However, the Company can provide no assurances that it will not sustain losses. Accounts Receivable An allowance for doubtful accounts is determined based on the aging of the Company’s accounts receivable, historical experience, client financial condition, and management judgment. The Company writes off accounts receivable against the allowance when the Company determines a balance is uncollectible. Derivatives The Company enters into foreign exchange forward and option contracts to reduce its exposure to foreign currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. The Company also enters into interest rate derivatives which 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. The Company formally documents at the inception of the hedge all relationships between hedging instruments and hedged items as well as its risk management objective and strategy for undertaking various hedging activities. All derivative financial instruments are reported at fair value and recorded in Prepaids and other current assets, Other assets, Other current liabilities, and Other liabilities in the accompanying Consolidated Balance Sheets as applicable for each period end. Changes in fair value of derivative instruments designated as cash flow hedges are recorded in Accumulated other comprehensive income (loss), a component of Stockholders’ Equity, to the extent they are deemed effective. Ineffectiveness is measured based on the change in fair value of the forward contracts and the fair value of the hypothetical derivatives with terms that match the critical terms of the risk being hedged. Based on the criteria established by current accounting standards, the Company’s cash flow hedge contracts are deemed to be highly effective. Any realized gains or losses resulting from the foreign currency cash flow hedges are recognized together with the hedged transaction within Revenue. Any realized gains or losses from the interest rate swaps are recognized in Interest expense. Gains and losses from the settlements of the Company’s net investment hedges remain in Accumulated other comprehensive income (loss) until partial or complete liquidation of the applicable net investment. The Company also enters into fair value derivative contracts that hedge against foreign currency exchange gains and losses primarily associated with short-term payables and receivables. Changes in the fair value of derivative instruments designated as fair value hedges affect the carrying value of the asset or liability hedged, with changes in both the derivative instrument and the hedged asset or liability being recognized in Other income (expense), net in the accompanying Consolidated Statements of Comprehensive Income (Loss). Property, Plant and Equipment Property, plant and equipment are stated at historical cost less accumulated depreciation and amortization. Maintenance, repairs and minor renewals are expensed as incurred. Depreciation and amortization are computed on the straight-line method based on the following estimated useful lives: Building 30 years Computer equipment and software 3 to 7 years Telephone equipment 4 to 7 years Furniture and fixtures 5 years Leasehold improvements Lesser of economic useful life (typically 10 years) or original lease term Other 3 to 7 years The Company evaluates the carrying value of property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. An asset is considered to be impaired when the forecasted undiscounted cash flows of an asset group are estimated to be less than its carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. Fair value estimates are based on assumptions concerning the amount and timing of forecasted future cash flows. Software Development Costs The Company capitalizes costs incurred to acquire or develop software for internal use. Capitalized software development costs are amortized using the straight-line method over the estimated useful life equal to the lesser of the license term or 4 or 7 years depending on the software type. The amortization expense is recorded in Depreciation and amortization in the accompanying Consolidated Statements of Comprehensive Income (Loss). Goodwill The Company evaluates goodwill for possible impairment at least annually on December 1, and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses a two step process to assess the realizability of goodwill. The first step, Step 0, is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. For example, the Company analyzes changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there would be a significant decline to the fair value of a particular reporting unit. A qualitative assessment also includes analyzing the excess fair value of a reporting unit over its carrying value from impairment assessments performed in previous years. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates that a significant decline to fair value of a reporting unit is more likely than not, or if a reporting unit’s fair value has historically been closer to its carrying value, the Company will proceed to Step 1 testing where the Company calculates the fair value of a reporting unit. If Step 1 indicates that the carrying value of a reporting unit is in excess of its fair value, the Company will record an impairment equal to the amount by which a reporting unit’s carrying value exceeds its fair value. Other Intangible Assets The Company has other intangible assets that include customer relationships (definite-lived) and trade names (indefinite-lived and definite-lived) and non-compete agreements (definite-lived). Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from three to 12 years. The Company evaluates the carrying value of its definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. A definite-lived intangible asset is considered to be impaired when the forecasted undiscounted cash flows of its asset group are estimated to be less than its carrying value. The Company evaluates indefinite-lived intangible assets for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Similar to goodwill, the Company may first use a qualitative analysis to assess the realizability of its indefinite-lived intangible assets. The qualitative analysis will include a review of changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there would be a significant decline to the fair value of an indefinite-lived intangible asset. If a quantitative analysis is completed, an indefinite-lived intangible asset (i.e. trade name) is evaluated for possible impairment by comparing the fair value of the asset with its carrying value. Fair value is estimated as the discounted value of future revenues arising from a trade name using a royalty rate that a market participant would pay for use of that trade name. An impairment charge is recorded if the trade name’s carrying value exceeds its estimated fair value. Self Insurance Liabilities The Company self-insures for certain levels of workers’ compensation, employee health, property, errors and omissions, cyber risks, and general liability insurance. The Company records estimated liabilities for these insurance lines based upon analyses of historical claims experience. The most significant assumption the Company makes in estimating these liabilities is that future claims experience will emerge in a similar pattern with historical claims experience. The liabilities related to workers’ compensation and employee health insurance are included in Accrued employee compensation and benefits in the accompanying Consolidated Balance Sheets. The liability for other general liability insurance is included in Other accrued expenses in the accompanying Consolidated Balance Sheets. Restructuring Liabilities The Company routinely assesses the profitability and utilization of its customer engagement centers and existing markets. In some cases, the Company has chosen to close under-performing customer engagement centers and complete reductions in workforce to enhance future profitability. Severance payments that occur from reductions in workforce are in accordance with the Company’s postemployment plans and/or statutory requirements that are communicated to all employees upon hire date; therefore, severance liabilities are recognized when they are determined to be probable and reasonably estimable. Other liabilities for costs associated with an exit or disposal activity are recognized when the liability is incurred, rather than upon commitment to a plan. Income Taxes Accounting for income taxes 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 or tax returns. 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 enacted tax rates in effect for the year in which the differences are expected to reverse. Gross deferred tax assets may then be reduced by a valuation allowance for amounts that do not satisfy the realization criteria established by current accounting standards. The Company accounts for uncertain tax positions using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. The Company evaluates these uncertain tax positions on a quarterly basis. This evaluation is based on the consideration of several factors including changes in facts or circumstances, changes in applicable tax law, and settlement of issues under audit. The Company recognizes interest and penalties related to uncertain tax positions as a part of the Provision for income taxes in the accompanying Consolidated Statements of Comprehensive Income (Loss). The Company provided for U.S. income tax expense on the earnings of foreign subsidiaries under the 2017 Tax Act. This lead to a reassessment of the determination as to whether the US subsidiaries’ foreign earnings are considered permanently reinvested outside the U.S. No amount was booked related to withholding taxes on the changes in indefinite reinvestment assertion on the potential repatriation of foreign earnings as it is the Company’s determination that there would be no material additional amount of tax if the related foreign cash was repatriated to the United States. The Company has not completed its analysis in regard to the full tax impact related to a change in indefinite reinvestment reassertion as the computation is complex and impacted by the provisional calculations outlined above. No additional income taxes have been provided for any remaining outside basis difference inherent in our foreign subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations. Determination of any unrecognized deferred tax liability related to the outside basis difference in investments in foreign subsidiaries is not practicable due to the inherent complexity of the multi-national tax environment in which we operate. Tax Reform The United States recently enacted comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the "2017 Tax Act") that, among other things, reduces the U.S. federal corporate income tax rate from 35% to 21% and implements a territorial tax system, but imposes an alternative “base erosion and anti-abuse tax” (“BEAT”), and an incremental tax on global intangible low taxed foreign income (“GILTI”) effective January 1, 2018. In addition, the law imposes a one-time mandatory repatriation tax on accumulated foreign earnings on domestic corporations effective for the 2017 tax year. In response, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act and allows the registrant to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. We have recognized the provisional impacts related to the one-time transition tax and revaluation of deferred tax balances and included these estimates in our consolidated financial statements for the year ended December 31, 2017. The ultimate impact may materially differ from these provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the Tax Act. Equity-Based Compensation Expense Equity-based compensation expense for all share-based payment awards granted is determined based on the grant-date fair value net of an estimated forfeiture rate on a straight-line basis over the requisite service period of the award, which is typically the vesting term of the share-based payment award. The Company estimates the forfeiture rate annually based on its historical experience of forfeited awards. Foreign Currency Translation The assets and liabilities of the Company’s foreign subsidiaries, whose functional currency is not the U.S. Dollar, are translated at the exchange rates in effect on the last day of the period and income and expenses are translated using the monthly average exchange rates in effect for the period in which the items occur. Foreign currency translation gains and losses are recorded in Accumulated other comprehensive income (loss) within Stockholders’ Equity. Foreign currency transaction gains and losses are included in Other income (expense), net in the accompanying Consolidated Statements of Comprehensive Income (Loss). Revenue Recognition The Company recognizes revenue when evidence of an arrangement exists, the delivery of service has occurred, the fee is fixed or determinable and collection is reasonably assured. The BPO inbound and outbound service fees are based on either a per minute, per hour, per FTE, per transaction or per call basis. Certain client programs provide for adjustments to monthly billings based upon whether the Company achieves, exceeds or fails certain performance criteria. Adjustments to monthly billings consist of contractual bonuses/penalties, holdbacks and other performance based contingencies. Revenue recognition is limited to the amount that is not contingent upon delivery of future services or meeting other specified performance conditions. Revenue also consists of services for agent training, program launch, professional consulting, fully-hosted or managed technology and learning innovation services. These service offerings may contain multiple element arrangements whereby the Company determines if those service offerings represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value and delivery or performance of the undelivered item is considered probable and substantially within our control. If those deliverables are determined to be separate units of accounting, revenue is recognized as services are provided. If those deliverables are not determined to be separate units of accounting, revenue for the delivered services are bundled into one unit of accounting and recognized over the life of the arrangement or at the time all services and deliverables have been delivered and satisfied. The Company allocates revenue to each of the deliverables based on a selling price hierarchy of vendor specific objective evidence (“VSOE”), third-party evidence, and then estimated selling price. VSOE is based on the price charged when the deliverable is sold separately. Third-party evidence is based on largely interchangeable competitor services in standalone sales to similarly situated customers. Estimated selling price is based on the Company’s best estimate of what the selling prices of deliverables would be if they were sold regularly on a standalone basis. Estimated selling price is established considering multiple factors including, but not limited to, pricing practices in different geographies, service offerings, and customer classifications. Once the Company allocates revenue to each deliverable, the Company recognizes revenue when all revenue recognition criteria are met. Deferred Revenue and Costs The Company records amounts billed and received, but not earned, as deferred revenue. These amounts are recorded in Deferred revenue or as a component of Other long-term liabilities in the accompanying Consolidated Balance Sheets based on the period over which the Company expects to render services. We defer revenue for initial training that occurs upon commencement of a new contract if that training is billed separately because the training is not considered to provide standalone value from other services. Accordingly, the corresponding training costs, consisting primarily of labor and related expenses, are also deferred. In these circumstances, both the training revenue and costs are amortized straight-line over the life of the contract as a component of Revenue and Cost of services, respectively. In situations where these initial training costs are not billed separately, but rather included in the hourly service rates paid by the client over the life of the contract, no deferral is necessary as the revenue is being recognized over the life of the contract and the associated training costs are expensed as incurred. Rent Expense The Company has negotiated certain rent holidays, landlord/tenant incentives and escalations in the base price of rent payments over the initial term of its operating leases. The initial term could include the “build-out” period of leases, where no rent payments are typically due. The Company recognizes rent holidays and rent escalations on a straight-line basis to rent expense over the lease term. The landlord/tenant incentives are recorded as an increase to deferred rent liabilities and amortized on a straight line basis to rent expense over the initial lease term. Asset Retirement Obligations Asset retirement obligations relate to legal obligations associated with the retirement of long-lived assets resulting from the acquisition, construction, development and/or normal use of the underlying assets. The Company records all asset retirement obligations at estimated fair value. The Company’s asset retirement obligations primarily relate to clauses in its customer engagement center operating leases which require the Company to return the leased premises to its original condition. The associated asset retirement obligations are capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset. The liability, reported within Other long-term liabilities, is accreted through charges to operating expenses. If the asset retirement obligation is settled for an amount other than the carrying amount of the liability, the Company recognizes a gain or loss on settlement. Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“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. While ASU-2014-09 was originally effective for fiscal years and interim periods within those years beginning after December 15, 2016, in August 2015, the FASB issued ASU 2015-14, “Deferral of Effective Date”, deferring the effective date by one year, to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Earlier adoption was permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. ASU 2014-09 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. In June 2017, FASB issued ASU 2017-10, “Service Concession Arrangements”, which will be adopted along with the ASU 2014-09 guidance. The Company assigned a project manager and team, selected an external consulting company to assist through the project, completed the project assessment phase, and has finalized its implementation approach. The Company has evaluated the adoption impact of the updated accounting guidance on our consolidated financial statements and continues to evaluate the impact on disclosures and internal controls. The new guidance will impact: (i) revenue associated with certain taxes, which will be recognized on a net basis versus the current gross treatment; (ii) the timing of revenue recognition associated with upfront fees on certain contracts; and (iii) the timing of recognition related to certain elements of variable consideration. The Company adopted this updated accounting guidance beginning January 1, 2018 using the modified retrospective method under which it will recognize a cumulative-effect adjustment in the range of $9 million to $12 million. In February 2016, the FASB issued ASU 2016-02, “ Leases ”, which amends the existing accounting standards for lease accounting, including requiring lessees, to recognize most leases on their balance sheets related to the rights and obligations created by those leases and making targeted changes to lessor accounting. The ASU also requires new disclosures regarding the amounts, timing, and uncertainty of cash flows arising from leases. The ASU is effective for interim and annual periods beginning on or after December 15, 2018 and early adoption is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently assessing the impact on the consolidated financial statements and related disclosures, evaluating software solutions and other tracking methods, and finalizing the implementation approach. In March 2016, the FASB issued ASU 2016-09, “ Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting ”, which amends the existing accounting standards related to stock-based compensation. The ASU simplifies several aspects of accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is effective for interim and annual periods beginning on or after December 15, 2016. Beginning with the first quarter of 2017, the Company has adopted the new guidance as applicable and this adoption did not have a material impact on its financial position, results of operation or related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows ”. ASU 2016-15 is intended to reduce diversity in practice regarding how certain cash transactions are presented and classified in the Consolidated Statement of Cash Flows by providing guidance on eight specific cash flow issues. The ASU is effective for interim and annual periods beginning on or after December 15, 2017 and early adoption is permitted. The Company is currently assessing the impact on the consolidated statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other: Simplifying the Accounting for Goodwill Impairment ”. ASU 2017-04 removes the need to complete Step 2 of any goodwill impairment test that has failed Step 1. The goodwill impairment will now be calculated as the amount by which a reporting unit’s carrying value exceeds its fair value. The ASU is effective for interim and annual periods beginning on or after December 15, 2019 and early adoption is permitted. The Company early adopted this standard as of January 1, 2017. In August 2017, the FASB issued ASU 2017-12, “ Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. ASU 2017-12 amends and simplif |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2017 | |
ACQUISITIONS [ABSTRACT] | |
ACQUISITIONS | (2) ACQUISITIONS AND DIVESTITURES Motif On November 8, 2017, the Company agreed to acquire all of the outstanding shares in Motif, Inc., a California corporation (“Motif”). Motif is a digital trust and safety services company serving eCommerce marketplaces, online retailers, travel agencies and financial services companies. Motif provides omni-channel community moderation services via voice, email and chat from delivery centers in India and the Philippines via approximately 2,700 employees. Motif will be integrated into the Customer Management Services (“CMS”) segment. The acquisition will be implemented through two separate transactions. In November 2017, the Company completed the acquisition of 70% of all outstanding shares in Motif from private equity and certain individual investors for $46.8 million, subject to customary representations and warranties, and working capital adjustments. The Company also agreed to purchase the remaining 30% interest in Motif from Motif’s founders (“founders’ shares”) no later than May 2020 (“30% buyout period”). The Company agreed to pay for the founders’ shares at a purchase price based on Motif’s fiscal year 2020’s adjusted normalized EBITDA, $5.0 million in cash, and 30% of the excess cash present in the business at the time of the buyout; or if the buyout occurs prior to May 2020, the trailing twelve months EBITDA, calculated from the most recently completed full monthly period ending prior to the date of the buyout triggering event, $5.0 million in cash, and 30% of the excess cash in the business at that point. In connection with this mandatory buyout, the Company has recorded a $27.8 million liability as of December 31, 2017 which is included in Other long-term liabilities in the Consolidated Balance Sheet. As a part of the transition, the Motif founders agreed to continue to stay as executives in the acquired business, at least through the 30% buyout period, as part of the Company’s CMS segment, and not to compete with the Company with respect to the acquired business. The following summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. (in thousands): Preliminary Estimate of Acquisition Date Fair Value Cash $ 5,997 Accounts receivable, net 5,187 Prepaid expenses 1,248 Other current assets 670 Property, plant and equipment 2,182 Income tax receivable 1,691 Customer relationships 37,200 Goodwill 39,272 $ 93,447 Accounts payable $ 2,914 Accrued employee compensation and benefits 5,249 Accrued expenses 104 Deferred tax liability 11,402 Other 340 $ 20,009 Total purchase price $ 73,438 The estimates of fair value of identifiable assets acquired and liabilities assumed are preliminary, pending finalization of a valuation, thus are subject to revisions that may result in adjustments to the values presented above. The Motif customer relationships have been estimated based on the initial valuation and are amortized over an estimated useful life of 11 years. The goodwill recognized from the Motif acquisition is estimated to be attributable, but not limited to, the acquired workforce and expected synergies with CMS. None of the tax basis of the acquired intangibles and goodwill will be deductible for income tax purposes. The acquired goodwill and intangibles, and operating results of Motif are reported within the CMS segment from the date of acquisition. Connextions On April 3, 2017, the Company acquired all of the outstanding shares of Connextions, Inc., a health care customer service provider company, from OptumHealth Holdings, LLC. Connextions is being integrated into the health care vertical of the CMS segment of the Company. Connextions employed approximately 2,000 at several centers in the U.S. The total cash paid at acquisition was $80 million. The purchase price is subject to customary representations and warranties, indemnities, and net working capital adjustment. In connection with the acquisition, the Company and OptumHealth (directly and through affiliates) also entered into long-term technology and customer services agreements, and into transition services agreements to facilitate the transfer of the business. The Company was required to pay an additional $1.8 million for the working capital adjustment, which was paid during the third quarter of 2017. Additionally, fair value adjustments related to the transition services agreements reduced the purchase price by $4.1 million resulting in a net purchase price of $77.7 million. The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands): Acquisition Date Fair Value Cash $ — Accounts receivable, net 15,959 Prepaid expenses 241 Other current assets 51 Property, plant and equipment 7,594 Customer relationships 35,000 Goodwill 35,272 $ 94,117 Accounts payable $ 1 Accrued employee compensation and benefits 346 Accrued expenses 386 Deferred tax liabilities 15,273 Deferred revenue 399 $ 16,405 Total purchase price $ 77,712 In the fourth quarter of 2017, the Company finalized its valuation of Connextions for the acquisition date assets acquired and liabilities assumed and determined that no material adjustments to any of the balances were required. The Connextions customer relationships will be amortized over a useful life of 12 years. The goodwill recognized from the Connextions acquisition is attributable, but not limited to, the acquired work force and expected synergies with CMS. None of the tax basis of the acquired intangibles and goodwill will be deductible for income tax purposes. The acquired goodwill and the operating results of Connextions are reported within the CMS segment from the date of acquisition. Atelka On November 9, 2016, the Company acquired all of the outstanding shares of Atelka Enterprise Inc. (“Atelka”), a Canadian customer contact center management and business process outsourcing services company that serves Canadian telecommunications, logistics, and entertainment clients. This acquisition was an addition to the CMS segment. Atelka employs approximately 2,800 in Quebec, Ontario, New Brunswick and Prince Edward Island. The total purchase price was $48.4 million ($65.0 million CAD), including certain working capital adjustments, and consisted of $47.5 million in cash at closing and a $1.4 million hold-back for contingencies as defined in the sale and purchase agreement, which will be released to the seller in 12 and 24 months, post acquisition, if not used. During the fourth quarter of 2017, $0.6 million ($0.8 million CAD) of the hold-back was released to the seller. The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. (in thousands): Acquisition Date Fair Value Cash $ 2,655 Accounts receivable, net 18,449 Other assets 615 Property, plant and equipment 3,161 Deferred tax assets, net 638 Customer relationships 10,500 Goodwill 20,275 56,293 Accounts payable 1,199 Accrued employee compensation and benefits 2,418 Accrued expenses 2,597 Other 1,678 7,892 Total purchase price $ 48,401 In the third quarter of 2017, the Company finalized its valuation of Atelka for the acquisition date assets and liabilities assumed and determined that no material adjustments to any of the balances were required. The Atelka customer relationships will be amortized over a useful life of 12 years. The goodwill recognized from the Atelka acquisition is attributable, but not limited to, the acquired work force and expected synergies with CMS. None of the tax basis of the acquired intangibles and goodwill will be deductible for income tax purposes. The acquired goodwill and the operating results of Atelka are reported within the CMS segment from the date of acquisition. Financial Impact of Acquired Businesses The acquired businesses purchased in 2017 and 2016 noted above contributed revenues of $172.3 million and $10.0 million, and a net loss of $(0.7) million and $(0.3) million, inclusive of $3.5 million and $0.1 million of acquired intangible amortization, to the Company for the years ended December 31, 2017 and 2016, respectively. The unaudited proforma financial results for the twelve months ended 2017 and 2016 combines the consolidated results of the Company, Motif, Connextions and Atelka assuming the Motif and Connextions acquisitions had been completed on January 1, 2016 and the Atelka acquisition on January 1, 2015. The reported revenue and net income of $1,275.3 million and $37.4 million would have been $1,489.1 million and $31.1 million for the twelve months ended December 31, 2016, respectively, on an unaudited proforma basis. For 2017, the reported revenue and net income of $1,477.4 million and $7.3 million would have been $1,541.6 million and $11.5 million for the year ended December 31, 2017, respectively, on an unaudited proforma basis. The unaudited pro forma consolidated results are not to be considered indicative of the results if these acquisitions occurred in the periods mentioned above, or indicative of future operations or results. Additionally, the pro forma consolidated results do not reflect any anticipated synergies expected as a result of the acquisition. Assets and Liabilities Held for Sale During the third quarter of 2016, the Company determined that one business unit from the Customer Growth Services (“CGS”) segment and one business unit from the Customer Strategy Services (“CSS”) segment would be divested from the Company’s operations. These business units met the criteria to be classified as held for sale. The Company had engaged a broker for both business units and was working with potential buyers for both business units. The Company took into consideration the discounted cash flow models, management input based on early discussions with brokers and potential buyers, and third-party evidence from similar transactions to complete the fair value analysis as there had not been a selling price determined at this point for either unit. For the two business units in CGS and CSS losses of $2.6 million and $2.7 million, respectively, were recorded as of December 31, 2016 in Loss on assets held for sale in the Consolidated Statements of Comprehensive Income (Loss). No adjustments were made for this business unit as this continues to be reflective of the fair value at December 31, 2017. For the business unit in CGS, based on further discussion and initial offers, management determined that the estimated selling price assumed should be revised and an additional $3.2 million loss was recorded in June 30, 2017 and included in Loss on assets held for sale in the Consolidated Statements of Comprehensive Income (Loss). Effective December 22, 2017, the business unit was sold to The Search Agency (“TSA”) for an up-front payment of $245 thousand and future contingent earnout on the one year anniversary of the closing date. During the fourth quarter of 2017, a net $0.6 million gain was recorded in Loss on assets held for sale in the Consolidated Statements of Comprehensive Income (Loss). The following table presents information related to the major components of assets and liabilities that were classified as held for sale in the Consolidated Balance Sheet as of December 31, 2017. As of December 31, 2017 Cash $ — Accounts receivable, net 6,151 Allowance for doubtful accounts — Other assets 303 Property, plant and equipment 49 Deferred tax assets, net — Customer relationships 999 Goodwill 3,033 Other intangible assets — Allowance for reduction of assets held for sale (2,700) Total assets $ 7,835 Accounts payable $ 413 Accrued employee compensation and benefits 833 Accrued expenses 54 Other 22 Total liabilities $ 1,322 Investments CaféX In the first quarter of 2015, the Company invested $9.0 million in CafeX Communications, Inc. (“CaféX”) through the purchase of a portion of the Series B Preferred Stock of CaféX. CaféX is a provider of omni-channel web-based real time communication (WebRTC) solutions that enhance mobile applications and websites with in-app video communication and screen share technology to increase customer satisfaction and enterprise efficiency. TTEC anticipates deploying the CaféX technology as part of the TTEC customer experience offerings within the CMS business segment and as part of its Humanify platform. At December 31, 2015, the Company owned 17.2% of the total equity of CaféX. During the fourth quarter of 2016, the Company invested an additional $4.3 million to purchase a portion of the Series C Preferred Stock; $3.2 million was paid in the fourth quarter of 2016 and $1.1 million was paid in the first quarter of 2017. At December 31, 2017, the Company owns 17.2% of the total equity of CaféX. The investment is accounted for under the cost method of accounting. The Company evaluates its investments for possible other-than-temporary impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company tested the investment in CaféX for impairment and concluded that the investment was not impaired at December 31, 2017 or December 31, 2016. During the first quarter of 2018, the Company provided to CaféX $2.1 million in the form of a bridge loan which accrues interest at a rate of 12% until maturity or conversion, which will be no later than June 30, 2020. Based on certain events, the loan could convert into Series D preferred stock. Divestitures Technology Solutions Group (“TSG”) Effective June 30, 2017, the Company sold the Technology Solutions Group to SKC Communication Products, LLC (“SKC”) for an upfront payment of $250 thousand and future contingent royalty payments over the next 3 years. TSG had been included in the CTS segment. During the second quarter of 2017, a $30 thousand gain, which included the write-off of $0.7 million of goodwill, was recorded and included in the Consolidated Statements of Comprehensive Income (Loss). During the third quarter of 2017, a $141 thousand gain was recorded as a result of TSG delivering to SKC working capital in excess of the target set forth in the stock purchase agreement, and the gain was included in the Consolidated Statements of Comprehensive Income (Loss). During the fourth quarter of 2017, TTEC received $259 thousand related to quarterly royalty payments which was included in Other Income (expense) in the Consolidated Statements of Comprehensive Income (Loss). TeleTech Spain Holdings SL In the third quarter of 2017, the Company dissolved TeleTech Spain Holdings SL, a fully owned foreign subsidiary domiciled in Spain. Upon complete liquidation, $3.2 million attributable to the accumulated translation adjustment component of equity has been removed from Accumulated other comprehensive income (loss) and recognized as part of the gain on liquidation. The $3.2 million gain was included in Other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2017. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
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 system design consulting, customer experience technology product, implementation and integration consulting services, and management of clients’ cloud and on-premise solutions; and · the CSS segment provides professional services in customer experience strategy and operations, insights, 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): Year Ended December 31, 2017 Depreciation Gross Intersegment Net & Income from Revenue Sales Revenue Amortization Operations Customer Management Services $ 1,141,779 $ (19) $ 1,141,760 $ 52,193 $ 78,206 Customer Growth Services 128,698 — 128,698 2,959 7,803 Customer Technology Services 138,918 (337) 138,581 7,092 12,047 Customer Strategy Services 68,326 — 68,326 2,263 2,433 Total $ 1,477,721 $ (356) $ 1,477,365 $ 64,507 $ 100,489 Year Ended December 31, 2016 Depreciation Gross Intersegment Net & Income from Revenue Sales Revenue Amortization Operations Customer Management Services $ 924,654 $ (329) $ 924,325 $ 48,770 $ 50,541 Customer Growth Services 141,005 — 141,005 5,905 6,969 Customer Technology Services 141,865 (611) 141,254 10,645 933 Customer Strategy Services 68,674 — 68,674 3,355 (5,691) Total $ 1,276,198 $ (940) $ 1,275,258 $ 68,675 $ 52,752 Year Ended December 31, 2015 Depreciation Gross Intersegment Net & Income from Revenue Sales Revenue Amortization Operations Customer Management Services $ 913,272 $ — $ 913,272 $ 44,633 $ 58,018 Customer Growth Services 129,021 — 129,021 6,065 3,077 Customer Technology Services 157,838 (232) 157,606 9,775 13,339 Customer Strategy Services 86,856 — 86,856 3,335 15,746 Total $ 1,286,987 $ (232) $ 1,286,755 $ 63,808 $ 90,180 For the Year Ended December 31, 2017 2016 2015 Capital Expenditures Customer Management Services $ 48,069 $ 40,321 $ 56,570 Customer Growth Services 871 4,185 4,681 Customer Technology Services 2,308 5,217 4,216 Customer Strategy Services 710 1,109 1,128 Total $ 51,958 $ 50,832 $ 66,595 December 31, 2017 2016 2015 Total Assets Customer Management Services $ 869,594 $ 585,679 $ 525,470 Customer Growth Services 41,036 71,540 75,291 Customer Technology Services 100,351 115,537 146,480 Customer Strategy Services 67,755 73,548 96,086 Total $ 1,078,736 $ 846,304 $ 843,327 December 31, 2017 2016 2015 Goodwill Customer Management Services $ 119,497 $ 42,589 $ 23,218 Customer Growth Services 24,439 24,439 24,439 Customer Technology Services 40,839 41,500 41,500 Customer Strategy Services 21,919 21,120 25,026 Total $ 206,694 $ 129,648 $ 114,183 The following tables present certain financial data based upon the geographic location where the services are provided (in thousands): As of and for the Year Ended December 31, 2017 2016 2015 Revenue United States $ 820,597 $ 693,023 $ 679,959 Philippines 353,122 351,853 343,013 Latin America 130,082 122,347 147,267 Europe / Middle East / Africa 62,597 65,866 78,182 Asia Pacific / India 36,715 28,219 32,554 Canada 74,252 13,950 5,780 Total $ 1,477,365 $ 1,275,258 $ 1,286,755 Property, plant and equipment, gross United States $ 490,110 $ 441,222 $ 415,918 Philippines 137,683 133,214 140,712 Latin America 51,451 50,605 49,464 Europe / Middle East / Africa 10,231 8,805 14,567 Asia Pacific / India 24,592 23,484 23,181 Canada 15,912 19,988 16,239 Total $ 729,979 $ 677,318 $ 660,081 Other long-term assets United States $ 46,029 $ 36,442 $ 34,007 Philippines 7,753 8,194 5,220 Latin America 1,475 1,161 1,161 Europe / Middle East / Africa 1,950 1,099 811 Asia Pacific / India 4,326 110 165 Canada 324 514 1,122 Total $ 61,857 $ 47,520 $ 42,486 |
ACCOUNTS RECEIVABLE AND SIGNIFI
ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS [Abstract] | |
ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS | (4) ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS Accounts receivable, net in the accompanying Consolidated Balance Sheets consists of the following (in thousands): December 31, 2017 2016 Accounts receivable $ 386,672 $ 301,470 Less: Allowance for doubtful accounts (921) (662) Accounts receivable, net $ 385,751 $ 300,808 Activity in the Company’s Allowance for doubtful accounts consists of the following (in thousands): December 31, 2017 2016 2015 Balance, beginning of year $ 662 $ 2,176 $ 3,425 Provision for doubtful accounts 458 1,164 1,465 Uncollectible receivables written-off (180) (2,670) (2,035) Effect of foreign currency and other (19) (8) (679) Balance, end of year $ 921 $ 662 $ 2,176 Significant Clients The Company had no clients that contributed in excess of 10% of total revenue for the year ended December 31, 2017. The Company had one client that contributed 10% of total revenue in the years ended December 31, 2016 and 2015. This client operates in the communications industry and is included in the CMS segment. The revenue from this client as a percentage of total revenue was as follows: Year Ended December 31, 2017 2016 2015 Telecommunications client 9 % 10 % 10 % Accounts receivable from this client was as follows (in thousands): Year Ended December 31, 2017 2016 2015 Telecommunications client $ 26,920 $ 28,080 $ 23,953 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 with its clients, management performs periodic credit evaluations, maintains allowances for uncollectible accounts and may require pre-payment for services from certain clients. Based on currently available information, management does not believe significant credit risk exists as of December 31, 2017. |
PROPERTY PLANT AND EQUIPMENT
PROPERTY PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY PLANT AND EQUIPMENT [ABSTRACT] | |
PROPERTY, PLANT AND EQUIPMENT | (5) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in thousands): December 31, 2017 2016 Land and buildings $ 38,858 $ 38,868 Computer equipment and software 390,899 364,854 Telephone equipment 46,521 42,858 Furniture and fixtures 76,856 68,248 Leasehold improvements 176,467 162,232 Motor vehicles 158 143 Construction-in-progress and other 220 115 Property, plant and equipment, gross 729,979 677,318 Less: Accumulated depreciation and amortization (566,682) (526,281) Property, plant and equipment, net $ 163,297 $ 151,037 Depreciation and amortization expense for property, plant and equipment was $57.0 million, $59.1 million and $54.0 million for the years ended December 31, 2017, 2016 and 2015, respectively. Included in the computer equipment and software is internally developed software of $8.5 million net and $10.1 million net as of December 31, 2017 and 2016, respectively. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL [ABSTRACT] | |
GOODWILL. | (6) GOODWILL Goodwill consisted of the following (in thousands): Effect of December 31, Acquisitions / Foreign December 31, 2016 Adjustments Impairments Currency 2017 Customer Management Services $ 42,589 $ 73,934 $ — $ 2,974 $ 119,497 Customer Growth Services 24,439 — — — 24,439 Customer Technology Services 41,500 (661) — — 40,839 Customer Strategy Services 21,120 — — 799 21,919 Total $ 129,648 $ 73,273 $ — $ 3,773 $ 206,694 Effect of December 31, Acquisitions / Foreign December 31, 2015 Adjustments Impairments Currency 2016 Customer Management Services $ 23,218 $ 21,030 $ (1,363) $ (296) $ 42,589 Customer Growth Services 24,439 — — — 24,439 Customer Technology Services 41,500 — — — 41,500 Customer Strategy Services 25,026 (3,033) — (873) 21,120 Total $ 114,183 $ 17,997 $ (1,363) $ (1,169) $ 129,648 Impairment The Company has six reporting units with goodwill and performs a goodwill impairment test on at least an annual basis. The Company conducts its annual goodwill impairment test during the fourth quarter, or more frequently, if indicators of impairment exist. For the annual goodwill impairment analysis, the Company elected to perform a Step 1 evaluation for all of its reporting units, which includes comparing a reporting unit’s estimated fair value to its carrying value. The determination of fair value requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term growth rates for the businesses, the useful lives over which the cash flows will occur and determination of appropriate discount rates (based in part on the Company’s weighted average cost of capital). Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. As of December 1, 2017, the date of the annual impairment testing, the Company concluded that for all six of the reporting units the fair values were in excess of their respective carrying values and the goodwill for those reporting units was not impaired. During the Company’s annual impairment testing as of December 1, 2017, the Company identified triggering events that could lead to impairment of goodwill for the CSS reporting unit, including lower revenues and profits than had been anticipated over the past two years. The carrying value of CSS was $43.4 million at December 1, 2017, including approximately $22.0 million of goodwill. Based on the Company’s assessment, the estimated fair value of the CSS reporting unit exceeded its carrying value by approximately 44.0%, but based on additional sensitivity analysis, the amount of cushion could fall to 10% if the performance of the business does not improve as expected. The estimate of fair value was based on generally accepted valuation techniques and information available at the date of the assessment, which incorporated management’s assumptions about expected revenues and future cash flows and available market information for comparable companies. The process of evaluating the fair value of the reporting units is highly subjective and requires significant judgment and estimates as the reporting units operate in a number of markets and geographical regions. We used a market approach and an income approach to determine our best estimates of fair value which incorporated the following significant assumptions: · Revenue projections, including revenue growth during the forecast periods ranging from (3.2)% to 7.8%; · EBITDA margin projections held relatively flat over the forecast periods ranging from 10% to 21.4%; · Estimated income tax rates of 14.6% to 34.3%; · Estimated capital expenditures ranging from $0.8 million to $40.4 million; and · Discount rates ranging from 10% to 16% based on various inputs, including the risks associated with the specific reporting units, the country of operations as well as their revenue growth and EBITDA margin assumptions. CMS - Humanify reporting unit As of December 1, 2016, the calculated fair value for the Humanify reporting unit was below the carrying value which necessitated an impairment analysis. The Company tested all of the assets of the reporting unit for impairment. Definite-lived long-lived assets consisted of internally developed software and purchased IP. Based on a decision to change the strategy of this business unit in December 2016 which will not use these assets on a go forward basis, the Company has determined that there is no value associated with these assets and recorded a $10.8 million impairment in the three months ended December 31, 2016, which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). For the goodwill impairment analysis, the Company calculated the fair value of the Humanify reporting unit and compared that to the updated carrying value and determined that the fair value was not in excess of its carrying value. Key assumptions used in the fair value calculation for goodwill impairment testing include, but are not limited to, revenue growth of approximately $300 thousand to $1 million per year through 2027, a perpetual growth rate of 3%, a discount rate of 16.75%, and negative EBITDA through 2020 growing to a 15.6% EBITDA for the terminal year. Estimated future cash flows under the income approach were based on the Company’s internal business plan adjusted as appropriate for the Company’s view of market participant assumptions. The fair value of the Humanify reporting unit was determined to be zero. Upon completing this assessment, the Company determined that the implied fair value of goodwill was below the carrying value and the entire goodwill balance of $1.4 million was impaired and expensed in the three months ended December 31, 2016 which is included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CSS reporting unit During the quarter ended September 30, 2016, the Company identified negative indicators such as lower financial performance and the reversal of contingent consideration for the CSS reporting unit and thus the Company updated its quantitative assessment for the CSS reporting unit fair value using an income based approach. The determination of fair value requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term growth rates for the businesses, the useful lives over which the cash flows will occur and determination of appropriate discount rates (based in part on the Company’s weighted average cost of capital). Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. At September 30, 2016, the fair value for the CSS reporting unit exceeded the carrying value and thus no impairment was required. The Company also determined that effective September 30, 2016 the assets of one of the business units within the CSS reporting unit will be held for sale (see discussion in Note 2). Therefore the CSS reporting unit was separated into the component that will be held for sale and the components that will be held for use and two separate fair value analyses were completed. At September 30, 2016 the fair value for the CSS held for use component exceeded the carrying value and thus no impairment was required. The fair value for the CSS held for sale component also exceeded the carrying value and thus no impairment was required. |
OTHER INTANGIBLE ASSETS
OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
OTHER INTANGIBLE ASSETS [Abstract] | |
Intangible Assets Disclosure [Text Block] | (7) OTHER INTANGIBLE ASSETS Other intangible assets which are included in Other long-term assets in the accompanying Consolidated Balance Sheets consisted of the following (in thousands): Acquisitions Effect of December 31, and Foreign December 31, 2016 Amortization Impairments Adjustments Currency 2017 Customer relationships, gross $ 50,454 $ — $ — $ 72,492 $ 1,829 $ 124,775 Customer relationships - accumulated amortization (25,943) (7,213) — (210) (194) (33,560) Other intangible assets, gross 4,589 — — 151 44 4,784 Other intangible assets - accumulated amortization (3,978) (254) — 1 318 (3,913) Trade name - indefinite life 5,665 — (5,322) — (343) — Other intangible assets, net $ 30,787 $ (7,467) $ (5,322) $ 72,434 $ 1,654 $ 92,086 Acquisitions Effect of December 31, and Foreign December 31, 2015 Amortization Impairments Adjustments Currency 2016 Customer relationships, gross $ 62,257 $ — $ (17,150) $ 6,588 $ (1,241) $ 50,454 Customer relationships - accumulated amortization (30,180) (7,246) 6,120 5,097 266 (25,943) Other intangible assets, gross 13,750 — (5,566) (3,701) 106 4,589 Other intangible assets - accumulated amortization (8,755) (2,285) 3,956 2,929 177 (3,978) Trade name - indefinite life 14,143 — (8,682) — 204 5,665 Other intangible assets, net $ 51,215 $ (9,531) $ (21,322) $ 10,913 $ (488) $ 30,787 The acquisitions and adjustments recorded during 2017 relate to the purchase of Connextions and Motif (see Note 2 for further information) and the impairment of intangible assets during the fourth quarter of 2017 (see below). The acquisitions and adjustments recorded during 2016 relate to the purchase of Atelka (see Note 2 for further information) and the impairment of several intangible assets during the third and fourth quarters of 2016 (see below). CTS - eLoyalty During the fourth quarter of 2017 in connection with the rebranding of the consolidated company, management has determined that it will no longer be using the name of eLoyalty and will be transitioning to TTEC Digital. Based on this change in branding strategy, an evaluation of the indefinite-lived trade name was completed and it was determined that the fair value of the asset was zero. The Company recorded an impairment expense of $3.3 million in the three months ended December 31, 2017 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CSS - PRG During the fourth quarter of 2017 in connection with the rebranding of the consolidated company and the full integration of the CSS segment, management has determined that it will no longer be using the name of PRG and will be transitioning all CSS entities to TTEC Consulting. Based on this change in branding strategy, an evaluation of the indefinite-lived trade name was completed and it was determined that the fair value of the asset was zero. The Company recorded impairment expense of $2.0 million in the three months ended December 31, 2017 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CTS - Avaya In connection with reduced profitability for the Avaya component of the CTS segment an interim impairment analysis was completed during the third quarter of 2016. The Company modified the sales focus of the Avaya component away from premise product and services towards cloud solutions. The indefinite-lived intangible asset evaluated for impairment consisted of the TSG trade name. The Company calculated the fair value of the trade name using a relief from royalty method based on forecasted revenues sold under the trade name using significant inputs not observable in the market (Level 3 inputs). The valuation assumptions included an estimated royalty rate of 0.5%, a discount rate specific to the trade name of 19.0%, which was equal to the reporting unit’s equity risk premium adjusted for its size and company specific risk factors. and a perpetuity growth rate of 3.0%. Based on the calculated fair value of $0.4 million, the Company recorded impairment expense of $0.7 million in the three months ended September 30, 2016 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). Additional triggering events occurred related to continued lower than expected financial performance and the bankruptcy filing for Avaya. In connection with this event, the forecasted revenue and operating income for the future years has decreased and thus an impairment analysis was completed during the fourth quarter of 2016 for both the indefinite-lived TSG trade name and the TSG customer relationship asset. The Company completed an asset group recoverability analysis using significant inputs not observable in the market (Level 3 inputs). These included a declining revenue stream from 2017 through 2019 and a negative EBITDA for the next 4 years. The estimated fair value was a negative $0.9 million. Based on this recoverability analysis, an impairment of $9.2 million of customer relationships, $0.4 million of trade name and $0.4 million of non-compete intangible assets was recorded. In addition $1.3 million of fixed assets were also impaired. The total $11.3 million of expense was recorded in the three months ended December 31, 2016 and was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CSS - rogenSi In connection with reduced profitability of the rogenSi component of the CSS segment, an interim impairment analysis was completed during the third quarter of 2016. The indefinite-lived intangible asset evaluated for impairment consisted of the trade name. The Company calculated the fair value of the trade name using a relief from royalty method based on forecasted revenues sold under the trade name using significant inputs not observable in the market (Level 3 inputs). The valuation assumptions included an estimated royalty rate of 2.0%, a discount rate specific to the trade name of 18.2%, which was equal to the reporting unit’s equity risk premium adjusted for its size and company specific risk factors, and a perpetuity growth rate of 3.0%. Based on the calculated fair value of $3.1 million, the Company recorded impairment expense of $1.2 million in the three months ended September 30, 2016 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss) During the fourth quarter of 2016 in connection with the full integration of the CSS segment, management has determined that it will no longer be using the name rogenSi and will be transitioning all CSS entities to TTEC Consulting. Based on this change in branding strategy, an evaluation of the indefinite-lived trade name was completed and it was determined that the fair value of the asset was zero. The Company recorded impairment expense of $3.0 million in the three months ended December 31, 2016 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CSS – component held-for-sale The Company calculated the fair value of the trade name using a relief from royalty method based on forecasted revenues sold under the trade name using significant inputs not observable in the market (Level 3 inputs). The valuation assumptions included an estimated royalty rate of 3.75%, a discount rate specific to the trade name of 19.2% and a perpetuity growth rate of 3.0%. Based on the calculated fair value of $2.0 million, the Company recorded impairment expense of $3.3 million in the three months ended September 30, 2016 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). Customer relationships are being amortized over the remaining weighted average useful life of 8.8 years and other intangible assets are being amortized over the remaining weighted average useful life of 3.8 years. Amortization expense related to intangible assets was $7.5 million, $9.5 million and $9.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. Expected future amortization of other intangible assets as of December 31, 2017 is as follows (in thousands): 2018 $ 10,903 2019 10,682 2020 9,381 2021 8,850 2022 8,160 Thereafter 44,110 Total $ 92,086 |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2017 | |
DERIVATIVES [ABSTRACT] | |
DERIVATIVES | (8) 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 December 31, 2017, the Company had 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 years ended December 31, 2017, 2016 and 2015 (in thousands and net of tax): Year Ended December 31, 2017 2016 2015 Aggregate unrealized net gain/(loss) at beginning of period $ (32,393) $ (26,885) $ (18,345) Add: Net gain/(loss) from change in fair value of cash flow hedges 31,053 11,242 (16,349) Less: Net (gain)/loss reclassified to earnings from effective hedges (14,406) (16,750) 7,809 Aggregate unrealized net gain/(loss) at end of period $ (15,746) $ (32,393) $ (26,885) The Company’s foreign exchange cash flow hedging instruments as of December 31, 2017 and 2016 are summarized as follows (in thousands). All hedging instruments are forward contracts. Local Currency U.S. Dollar % Maturing Contracts Notional Notional in the next Maturing As of December 31, 2017 Amount Amount 12 months Through Philippine Peso 10,685,000 219,917 (1) 62.3 % August 2021 Mexican Peso 1,609,000 93,589 41.0 % May 2021 $ 313,506 Local Currency U.S. Dollar Notional Notional As of December 31, 2016 Amount Amount Philippine Peso 14,315,000 301,134 (1) Mexican Peso 2,089,000 129,375 $ 430,509 (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 December 31, 2017 and December 31, 2016. The Company’s interest rate swap arrangement expired as of May 31, 2017 and no additional swaps have been entered into. As of December 31, 2016, the outstanding interest rate swap was as follows: Contract Contract Notional Variable Rate Fixed Rate Commencement Maturity December 31, 2016 Amount Received Paid Date Date Swap $ 15 million 1 - month LIBOR 3.14 % May 2012 May 2017 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 December 31, 2017 and 2016, the total notional amount of the Company’s forward contracts used as fair value hedges was $176.2 million and $227.8 million, respectively. Derivative Valuation and Settlements The Company’s derivatives as of December 31, 2017 and 2016 were as follows (in thousands): December 31, 2017 Designated Not Designated as Hedging as Hedging Designation: Instruments Instruments Foreign Interest Foreign Derivative contract type: Exchange Rate Exchange Derivative classification: Cash Flow Cash Flow Fair Value Fair value and location of derivative in the Consolidated Balance Sheet: Prepaids and other current assets $ 220 $ — $ 1,603 Other long-term assets 393 — — Other current liabilities (15,603) — (133) Other long-term liabilities (11,266) — — Total fair value of derivatives, net $ (26,256) $ — $ 1,470 December 31, 2016 Designated Not Designated as Hedging as Hedging Designation: Instruments Instruments Foreign Interest Foreign Derivative contract type: Exchange Rate Exchange Derivative classification: Cash Flow Cash Flow Fair Value Fair value and location of derivative in the Consolidated Balance Sheet: Prepaids and other current assets $ 1,178 $ — $ 1,606 Other long-term assets — — — Other current liabilities (23,503) (147) (866) Other long-term liabilities (31,714) — — Total fair value of derivatives, net $ (54,039) $ (147) $ 740 The effect of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017 and 2016 were as follows (in thousands): Year Ended December 31, 2017 2016 Designated as Hedging Designated as Hedging Designation: Instruments Instruments Foreign Interest Foreign Interest Derivative contract type: Exchange Rate Exchange 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 $ (14,336) $ (70) $ (16,438) $ (312) Amount and location of net gain or (loss) reclassified from Accumulated OCI to income - effective portion: Revenue $ (22,792) $ — $ (28,025) $ — Interest expense — (115) — (534) Year Ended December 31, 2017 2016 Designation: Not Designated as Hedging Instruments Not Designated as Hedging Instruments Derivative contract type: Foreign Exchange Foreign Exchange Forward Forward Derivative classification: Contracts Fair Value Contracts Fair Value Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income (Loss): Cost of services $ — $ — $ — $ — Other income (expense), net — 1,350 — (5,826) |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE [Abstract] | |
FAIR VALUE | (9) 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 December 31, 2017 and 2016 of 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. Investments – The Company measures investments, including cost and equity method investments, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include market observable inputs and discounted cash flow projections. An impairment charge is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary. As of December 31, 2017, the investment in CaféX Communications, Inc., which consists of the Company’s first quarter 2015 $9.0 million investment, the fourth quarter 2016 $3.2 million investment, and the first and second quarters of 2017 $1.3 million investment, is recorded at $13.5 million. 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 December 31, 2017 and 2016, the Company had $344.0 million and $217.3 million, respectively, of borrowings outstanding under the Credit Agreement. During 2017 and 2016, borrowings accrued interest at an average rate of 2.2% and 1.5% 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 based on level 2 inputs. 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 December 31, 2017, 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 December 31, 2017 and 2016 (in thousands): As of December 31, 2017 Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) At Fair Value Cash flow hedges $ — $ (26,256) $ — $ (26,256) Interest rate swaps — — — — Fair value hedges — 1,470 — 1,470 Total net derivative asset (liability) $ — $ (24,786) $ — $ (24,786) As of December 31, 2016 Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) At Fair Value Cash flow hedges $ — $ (54,039) $ — $ (54,039) Interest rate swaps — (147) — (147) Fair value hedges — 740 — 740 Total net derivative asset (liability) $ — $ (53,446) $ — $ (53,446) The following is a summary of the Company’s fair value measurements as of December 31, 2017 and 2016 (in thousands): As of December 31, 2017 Fair Value Measurements Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Derivative instruments, net $ — $ — $ — Total assets $ — $ — $ — Liabilities Deferred compensation plan liability $ — $ (13,219) $ — Derivative instruments, net — (24,786) — Contingent consideration — — (399) Total liabilities $ — $ (38,005) $ (399) As of December 31, 2016 Fair Value Measurements Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Derivative instruments, net $ — $ — $ — Total assets $ — $ — $ — Liabilities Deferred compensation plan liability $ — $ (10,841) $ — Derivative instruments, net — (53,446) — Contingent consideration — — (1,808) Total liabilities $ — $ (64,287) $ (1,808) 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, Sofica, rogenSi, and Atelka. These contingent payables were recognized at fair value using a discounted cash flow approach and a discount rate of 21.0%, 5.0%, 4.6%, or 0%, respectively. The discount rates vary dependent on the specific risks of each acquisition including the country of operation, the nature of services and complexity of the acquired business, and other factors. These measurements were based on significant inputs not observable in the market. The Company recorded interest expense each period using the effective interest method until the future value of these contingent payables reached their expected future value. Interest expense related to all recorded contingent payables is included in Interest expense in the Consolidated Statements of Comprehensive Income (Loss). The Company recorded contingent consideration related to a revenue servicing agreement with Welltok in the fourth quarter of 2016, in which a maximum of $1.25 million will be paid over eight quarters based on the dollar value of revenue earned by the Company. The contingent payable was recognized at fair value of $1.25 million as of December 31, 2016. During the second quarter of 2015, the Company recorded a fair value adjustment of the contingent consideration associated with the Sofica reporting unit within the CMS segment based on revised estimates reflecting Sofica earnings will be lower than anticipated for 2015. Accordingly a $0.5 million decrease in the payable was recorded as of June 30, 2015 and was included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss). During the third and fourth quarters of 2015, and the third quarter of 2016, the Company recorded fair value adjustments of the contingent consideration associated with the rogenSi reporting unit within the CSS segment based on revised estimates reflecting that rogenSi earnings would be higher and then lower than anticipated for 2015 and 2016. Accordingly a $0.8 million increase, a $0.3 million decrease, and a $4.3 million decrease to the payable was recorded as of September 30, 2015, December 31, 2015, and September 30, 2016, respectively, and were included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss). As of September 30, 2016, the fair value of the remaining contingent consideration was reduced to zero given the remote possibility of any additional payments. As of December 31, 2016, the payment was finalized at a value of zero and thus no additional expense was required. A rollforward of the activity in the Company’s fair value of the contingent consideration is as follows (in thousands): Imputed December 31, Interest / December 31, 2016 Acquisitions Payments Adjustments 2017 Welltok 1,250 — (851) — 399 Atelka 558 — (582) 24 — Total $ 1,808 $ — $ (1,433) $ 24 $ 399 Imputed December 31, Interest / December 31, 2015 Acquisitions Payments Adjustments 2016 iKnowtion $ 500 $ — $ (500) $ — $ — Sofica 3,153 — (3,146) (7) — rogenSi 9,797 — (5,793) (4,004) — Welltok — 1,250 — — 1,250 Atelka — 558 — — 558 Total $ 13,450 $ 1,808 $ (9,439) $ (4,011) $ 1,808 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES [ABSTRACT] | |
INCOME TAXES | (10) INCOME TAXES The sources of pre-tax operating income are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Domestic $ 10,909 $ (6,216) $ 25,402 Foreign 77,978 56,514 60,487 Total $ 88,887 $ 50,298 $ 85,889 The United States recently enacted comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the "2017 Tax Act") that, among other things, reduces the U.S. federal corporate income tax rate from 35% to 21% and implements a territorial tax system, but imposes an alternative “base erosion and anti-abuse tax” (“BEAT”), and an incremental tax on global intangible low taxed foreign income (“GILTI”) effective January 1, 2018. In addition, the law imposes a one-time mandatory repatriation tax on accumulated foreign earnings on domestic corporations effective for the 2017 tax year. In response, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act and allows the registrant to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The Company has not completed its final analysis of the full impact of the 2017 Act on its tax provisions. However, the Company has recognized the provisional impacts related to the one-time transition tax and revaluation of deferred tax balances and included these estimates in our consolidated financial statements for the year ended December 31, 2017. The significant components of this expense include (i) the remeasurement of net deferred tax assets at the lower enacted U.S. federal corporate tax rate, which resulted in a net $1.1 million increase in income tax expense; and (ii) the deemed repatriation tax on unremitted non-U.S. earnings and profits that were previously tax deferred and other tax impacts of the 2017 Tax Act, which resulted in a $62.4 million increase in income tax expense, net of deductions and credits. No amount was booked related to withholding taxes on the changes in indefinite reinvestment assertion on the potential repatriation of foreign earnings as it is the Company’s determination that there would be no material additional amount of tax if the related foreign cash was repatriated to the United States. The Company has not completed its analysis in regard to the full tax impact related to a change in indefinite reinvestment reassertion as the computation is complex and impacted by the provisional calculations outlined above. No additional income taxes have been provided for any remaining outside basis difference inherent in our foreign subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations. Determination of any unrecognized deferred tax liability related to the outside basis difference in investments in foreign subsidiaries is not practicable due to the inherent complexity of the multi-national tax environment in which we operate. The ultimate impact of the 2017 Tax Act may materially differ from the provisional amounts recorded, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the Tax Act. In addition, foreign and state governments may enact tax laws in response to the Tax Act that could result in further changes to global taxation and materially affect our financial position and results of operations. Our selection of an accounting policy with respect to the new GILTI rules will depend in part on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI, and if so, what the impact is expected to be. We have not yet computed a reasonable estimate of the effect of this provision, and therefore, we have not made a policy decision regarding whether to record deferred taxes related to GILTI nor have we made any adjustments related to GILTI tax in our year-end financial statements. We expect to complete our analysis of the impacts of the 2017 Tax Act within the measurement period in accordance with SAB 118. The components of the Company’s Provision for (benefit from) income taxes are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current provision for (benefit from) Federal $ 48,556 $ (373) $ 4,094 State 99 372 1,829 Foreign 12,643 14,447 4,764 Total current provision for (benefit from) 61,298 14,446 10,687 Deferred provision for (benefit from) Federal 14,441 (2,390) (1,895) State 707 103 1,085 Foreign 1,629 704 10,127 Total deferred provision for (benefit from) 16,777 (1,583) 9,317 Total provision for (benefit from) income taxes $ 78,075 $ 12,863 $ 20,004 The following reconciles the Company’s effective tax rate to the federal statutory rate (in thousands): Year Ended December 31, 2017 2016 2015 Income tax per U.S. federal statutory rate (35%) $ 31,110 $ 17,605 $ 30,062 State income taxes, net of federal deduction 460 (158) 1,603 Change in valuation allowances (924) (129) 3,923 Foreign income taxes at different rates than the U.S. (14,417) (10,206) (14,490) Foreign withholding taxes 323 590 958 Losses in international markets without tax benefits 1,098 2,474 1,999 Nondeductible compensation under Section 162(m) 647 104 512 Liabilities for uncertain tax positions 1,607 (133) 1,756 Permanent difference related to foreign exchange gains 142 388 162 (Income) losses of foreign branch operations (824) (635) (517) Non-taxable earnings of noncontrolling interest (1,030) (1,128) (1,349) Foreign dividend less foreign tax credits (4,798) (4,646) (4,425) Increase in deferred tax liability - branch losses in UK — — (2,530) Decrease (increase) to deferred tax asset - change in tax rate 1,101 443 (526) State income tax credits 207 100 (1,477) Foreign earnings taxed currently in U.S. 3,143 3,673 2,839 Taxes related to prior year filings (865) 2,554 344 Taxes related to US tax reform 61,569 — — Other (474) 1,967 1,160 Income tax per effective tax rate $ 78,075 $ 12,863 $ 20,004 The Company’s deferred income tax assets and liabilities are summarized as follows (in thousands): Year Ended December 31, 2017 2016 Deferred tax assets, gross Accrued workers compensation, deferred compensation and employee benefits $ 8,597 $ 11,212 Allowance for doubtful accounts, insurance and other accruals 2,197 3,348 Amortization of deferred rent liabilities 2,352 3,362 Net operating losses 17,887 20,253 Equity compensation 1,481 2,489 Customer acquisition and deferred revenue accruals 7,026 11,739 Federal and state tax credits, net 50 7,439 Depreciation and amortization — 4,671 Unrealized losses on derivatives 3,137 13,815 Contract acquisition costs — 1,044 Other 1,557 2,331 Total deferred tax assets, gross 44,284 81,703 Valuation allowances (9,526) (9,949) Total deferred tax assets, net 34,758 71,754 Deferred tax liabilities Depreciation and amortization (12,850) — Contract acquisition costs (5,331) — Intangible assets (15,405) (17,971) Other (446) (357) Total deferred tax liabilities (34,032) (18,328) Net deferred tax assets $ 726 $ 53,426 Quarterly, the Company assesses the likelihood by jurisdiction 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. As of December 31, 2017 the Company had approximately $4.2 million of net deferred tax assets in the U.S. and $3.5 million of net deferred tax liabilities related to certain international locations whose recoverability is dependent upon their future profitability. As of December 31, 2017 the deferred tax valuation allowance was $9.5 million and related primarily to tax losses in foreign jurisdictions which do not meet the “more-likely-than-not” standard under current accounting guidance. When there is a change in judgment concerning the recovery of deferred tax assets in future periods, a valuation allowance is recorded into earnings during the quarter in which the change in judgment occurred. In 2017, the Company made adjustments to its deferred tax assets and corresponding valuation allowances. The net change to the valuation allowance consisted of the following: a $0.1 million increase in certain state credits and NOLs that are now expected to be utilized prior to expiration, a $2.1 million increase in valuation allowance in the United Kingdom, Ireland, Canada, Luxembourg and Australia for deferred tax assets that do not meet the “more-likely-than-not” standard, and a $2.5 million release of valuation allowance in Argentina, New Zealand, Belgium, Turkey, United States and various other jurisdictions related to the utilization or write-off of deferred tax assets. Activity in the Company’s valuation allowance accounts consists of the following (in thousands): Year Ended December 31, 2017 2016 2015 Beginning balance $ 9,949 $ 10,139 $ 10,721 Additions of deferred income tax expense 2,044 1,914 4,300 Reductions of deferred income tax expense (2,467) (2,104) (4,882) Ending balance $ 9,526 $ 9,949 $ 10,139 As of December 31, 2017, after consideration of all tax loss and tax credit carry back opportunities, the Company had tax affected tax loss carry forwards worldwide expiring as follows (in thousands): 2018 $ 98 2019 205 2020 319 2021 160 After 2021 9,687 No expiration 5,282 Total $ 15,751 The Company has been granted “Tax Holidays” as an incentive to attract foreign investment by the governments of the Philippines and Costa Rica. Generally, a Tax Holiday is an agreement between the Company and a foreign government under which the Company receives certain tax benefits in that country, such as exemption from taxation on profits derived from export-related activities. In the Philippines, the Company has been granted multiple agreements with an initial period of four years and additional periods for varying years, expiring at various times between 2017 and 2019. The aggregate benefit to income tax expense for the years ended December 31, 2017, 2016 and 2015 was approximately $11.9 million, $12.4 million and $12.2 million, respectively, which had a favorable impact on diluted net income per share of $0.26, $0.27 and $0.25, respectively. Accounting for Uncertainty in Income Taxes In accordance with ASC 740, the Company has recorded a reserve for uncertain tax positions. The total amount of interest and penalties recognized in the accompanying Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss) as of December 31, 2017, 2016 and 2015 was approximately $1.8 million, $693 thousand and $709 thousand, respectively. The Company had a reserve for uncertain tax benefits, on a net basis, of $3.3 million and $3.5 million for the years ended December 31, 2017 and 2016, respectively. The liability for uncertain tax positions was increased by $0.9 million during 2016 for new uncertain tax positions. The tabular reconciliation of the reserve for uncertain tax benefits on a gross basis without interest for the three years ended December 31, 2017 is presented below (in thousands): Balance as of December 31, 2014 $ 1,661 Additions for current year tax positions 1,048 Reductions in prior year tax positions — Balance as of December 31, 2015 2,709 Additions for current year tax positions 826 Reductions in prior year tax positions (1,153) Balance as of December 31, 2016 2,382 Additions for current year tax positions 916 Reductions in prior year tax positions — Balance as of December 31, 2017 $ 3,298 At December 31, 2017, the amount of uncertain tax benefits that, if recognized, would reduce tax expense was $5.1 million. Within the next 12 months, it is expected that the amount of unrecognized tax benefits will be reduced by $3.9 million as a result of the expiration of various statutes of limitation or the confirmation of tax positions by tax authorities. In accordance with ASC 740, the Company recorded a liability of $0.9 million related to an uncertain tax position. The Company recorded a liability during the second quarter of 2015 of $1.75 million and during the first quarter of 2016 of $1.1 million, inclusive of penalties and interest, for an uncertain tax position. See Note 1 for further information on these items. During the second quarter of 2016, $0.3 million of liability was released due to the closing of a statute of limitations. During the third quarter of 2016, $0.8 million of liability was released due to the favorable outcome of communications with a revenue authority related to site compliance for locations with tax advantaged status. During the third quarter of 2016, $0.5 million of liability was released due to the closing of a statute of limitations. The Company and its domestic and foreign subsidiaries (including Percepta LLC and its domestic and foreign subsidiaries) file income tax returns as required in the U.S. federal jurisdiction and various state and foreign jurisdictions. The following table presents the major tax jurisdictions and tax years that are open as of December 31, 2017 and subject to examination by the respective tax authorities: Tax Jurisdiction Tax Year Ended United States 2014 to present Australia 2013 to present Brazil 2012 to present Canada 2009 to present Mexico 2012 to present Philippines 2015 to present The Company’s U.S. income tax returns filed for the tax years ending December 31, 2014 to present, remain open tax years. The Company has been notified of the intent to audit, or is currently under audit of, income taxes for Canada for tax years 2009 and 2010, the Philippines for tax year 2015, Ireland for tax year 2016 and the state of Minnesota in the United States for tax years 2014 through 2016. 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. The Company successfully closed their audit in the second quarter of 2017 in Hong Kong for the tax year 2014 with no material changes. The Company also recorded a benefit in the amount of $0.8 million in the financial statements during the fourth quarter related to the favorable resolution of tax audits. |
RESTRUCTURING CHARGES, INTEGRAT
RESTRUCTURING CHARGES, INTEGRATION CHARGES AND IMPAIRMENT LOSSES | 12 Months Ended |
Dec. 31, 2017 | |
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract] | |
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES | (11) RESTRUCTURING CHARGES, INTEGRATION CHARGES AND IMPAIRMENT LOSSES Restructuring Charges During the years ended December 31, 2017, 2016 and 2015, the Company continued restructuring activities primarily associated with reductions in the Company’s capacity, workforce and related management in all of its segments to better align the capacity and workforce with current business needs. During 2017, several restructuring activities were completed related to the purchase of Connextions (see Note 2) including the closure of two delivery centers that came with the acquisition. During 2017, a net $0.4 million severance accrual was recorded in relation to these closures. In conjunction with closing these two delivery centers, a $0.6 million termination fee and a $1.4 million net lease liability and applicable expenses were recorded as of December 31, 2017. These net charges were included in the Consolidated Statements of Comprehensive Income (Loss) during the year ended December 31, 2017. A summary of the expenses recorded for restructuring and included in Restructuring and integration charges, net in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015, respectively, is as follows (in thousands): Year Ended December 31, 2017 2016 2015 Reduction in force Customer Management Services $ 1,012 $ 2,837 $ 1,482 Customer Growth Services — 147 22 Customer Technology Services 94 324 13 Customer Strategy Services 55 92 297 Total $ 1,161 $ 3,400 $ 1,814 Year Ended December 31, 2017 2016 2015 Facility exit and other charges Customer Management Services $ 2,050 $ 959 $ — Customer Growth Services — — — Customer Technology Services 84 33 — Customer Strategy Services 85 — — Total $ 2,219 $ 992 $ — A rollforward of the activity in the Company’s restructuring accruals for the years ended December 31, 2017 and 2016, respectively, is as follows (in thousands): Reduction Facility Exit and in Force Other Charges Total Balance as of December 31, 2015 $ 806 $ — $ 806 Expense 3,728 992 4,720 Payments (2,646) (894) (3,540) Changes due to foreign currency (92) — (92) Changes in estimates (328) — (328) Balance as of December 31, 2016 1,468 98 1,566 Expense 1,316 2,219 3,535 Payments (1,892) (908) (2,800) Changes due to foreign currency (43) — (43) Changes in estimates (155) — (155) Balance as of December 31, 2017 $ 694 $ 1,409 $ 2,103 The remaining restructuring accruals are expected to be paid or extinguished during 2018 and are all classified as current liabilities within Other accrued expenses in the Consolidated Balance Sheets. Integration Charges During the third and fourth quarters of 2017, as a result of the Connextions acquisition, certain integration activities were completed and $5.6 million and $3.9 million of additional expenses were incurred and paid, respectively. These integration activities included the hiring, training and licensing of a group of employees at new delivery centers as one of the acquired centers was closed during the third quarter of 2017 and one of the acquired centers was closed during the fourth quarter of 2017. In connection with these center closures, leasehold improvements of $3.5 million were written off as a related integration expense. The Company has also incurred significant expenses related to the integration of the IT systems and has paid duplicative software costs and facilities expenses for several areas during the transition period. Impairment Losses During each of the periods presented, the Company evaluated the annual recoverability of its leasehold improvement assets at certain customer engagement 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 2017, 2016 and 2015, the Company recognized impairment losses related to leasehold improvement assets of zero, zero, and $0.4 million, respectively, in its Customer Management Services segment. |
INDEBTEDNESS
INDEBTEDNESS | 12 Months Ended |
Dec. 31, 2017 | |
INDEBTEDNESS [ABSTRACT] | |
INDEBTEDNESS | (12) INDEBTEDNESS Credit Facility On February 11, 2016, the Company entered into a First Amendment to our June 3, 2013 Amended and Restated Credit Agreement and Amended and Restated Security Agreement (collectively the “Credit Agreement”) for a senior secured revolving credit facility (the “Credit Facility”) with a syndicate of lenders led by Wells Fargo Bank, National Association. The Credit Agreement provides for a secured revolving credit facility that matures on February 11, 2021 with an initial maximum aggregate commitment of $900.0 million, and an accordion feature of up to $1.2 billion in the aggregate, if certain conditions are satisfied. On October 30, 2017, the Company entered into a Third Amendment to the Credit Agreement and exercised the Credit Facility’s accordion feature to increase the total commitment under the Credit Facility to $1.2 billion. All other material terms of the Credit Agreement remained unchanged. Base rate loans bear interest at a rate equal to the greatest of (i) Wells Fargo’s prime rate, (ii) one half of 1% in excess of the federal funds effective rate, and (iii) 1.25% in excess of the one month London Interbank Offered Rate (“LIBOR”); plus in each case a margin of 0% to 0.75% based on the Company’s net leverage ratio. Eurodollar loans bear interest at LIBOR plus a margin of 1.0% to 1.75% based on the Company’s net leverage ratio. Alternate currency loans bear interest at rates applicable to their respective currencies. Letter of credit fees are one eighth of 1% of the stated amount of the letter of credit on the date of issuance, renewal or amendment, plus an annual fee equal to the borrowing margin for Eurodollar loans. The Credit Facility commitment fees are payable to the lenders in an amount equal to the unused portion of the Credit Facility at a rate of 0.125% to 0.250% based on the Company’s net leverage ratio. The Company is obligated to maintain a maximum net leverage ratio of 3.25 to 1.00, and a minimum interest coverage ratio of 2.50 to 1.00. The Company primarily utilizes its Credit Agreement to fund working capital, general operations, stock repurchases, dividends, and other strategic activities, such as the acquisitions described in Note 2. As of December 31, 2017, and 2016, the Company had borrowings of $344.0 million and $217.3 million, respectively, under its Credit Agreement, and its average daily utilization was $494.7 million and $375.3 million for the years ended December 31, 2017 and 2016, respectively. Based on the current level of availability based on the covenant calculations, the Company’s remaining borrowing capacity was approximately $350 million as of December 31, 2017. As of December 31, 2017, the Company was in compliance with all covenants and conditions under its Credit Agreement. |
DEFERRED REVENUE AND COSTS
DEFERRED REVENUE AND COSTS | 12 Months Ended |
Dec. 31, 2017 | |
DEFERRED REVENUE AND COSTS [ABSTRACT] | |
DEFERRED REVENUE AND COSTS | (13) DEFERRED REVENUE AND COSTS Deferred revenue in the accompanying Consolidated Balance Sheets consist of the following (in thousands): December 31, 2017 2016 Deferred Revenue - Current $ 21,628 $ 23,318 Deferred Revenue - Long-term 9,632 8,851 Total Deferred Revenue $ 31,260 $ 32,169 Deferred costs in the accompanying Consolidated Balance Sheets consist of the following (in thousands): December 31, 2017 2016 Deferred Costs - Current $ 13,649 $ 14,755 Deferred Costs - Long-term 9,654 8,124 Total Deferred Costs $ 23,303 $ 22,879 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (14) COMMITMENTS AND CONTINGENCIES Letters of Credit As of December 31, 2017, outstanding letters of credit under the Credit Agreement totaled $4.5 million and primarily guaranteed workers’ compensation and other insurance related obligations. As of December 31, 2017, letters of credit and contract performance guarantees issued outside of the Credit Agreement totaled $0.7 million. Guarantees Indebtedness under the Credit Agreement is guaranteed by certain of the Company’s present and future domestic subsidiaries. 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 reasonably 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 any current 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. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2017 | |
LEASES [ABSTRACT] | |
LEASES | (15) LEASES The Company has various operating leases primarily for customer engagement centers, equipment, and office space, which generally contain renewal options. Rent expense under operating leases was approximately $46.3 million, $39.5 million and $37.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. In 2008, the Company sub-leased one of its customer engagement centers to a third party for the remaining term of the original lease. The sub-lease began on January 1, 2009 and rental income is recognized on a straight-line basis over the term of the sub-lease through 2021. Future minimum sub-lease rental receipts are shown in the table below. The future minimum rental payments and receipts required under non-cancelable operating leases as of December 31, 2017 are as follows (in thousands): Operating Sub-Lease Leases Income 2018 $ 44,177 $ (2,470) 2019 34,528 (2,470) 2020 26,471 (2,470) 2021 20,854 (206) 2022 17,215 — Thereafter 30,984 — Total $ 174,229 $ (7,616) The Company records operating lease expense on a straight-line basis over the life of the lease as described in Note 1. The deferred lease liability as of December 31, 2017 and 2016 was $15.7 million and $15.3 million, respectively. Asset Retirement Obligations The Company records asset retirement obligations (“ARO”) for several of its customer engagement center leases. Capitalized costs related to ARO’s are included in Other long-term assets in the accompanying Consolidated Balance Sheets while the ARO liability is included in Other long-term liabilities in the accompanying Consolidated Balance Sheets. Following is a summary of the amounts recorded (in thousands): Balance at Balance at December 31, Additions and December 31, 2016 Modifications Accretion Settlements 2017 ARO liability total $ 1,861 $ 317 $ 7 $ (247) $ 1,938 Balance at Balance at December 31, Additions and December 31, 2015 Modifications Accretion Settlements 2016 ARO liability total $ 1,641 $ 333 $ 15 $ (128) $ 1,861 Increases to ARO result from a new lease agreement or modifications on an ARO from a preexisting lease agreement. Modifications to ARO liabilities and accumulated accretion occur when lease agreements are amended or when assumptions change, such as the rate of inflation. Modifications are accounted for prospectively as changes in estimates. Settlements occur when leased premises are vacated and the actual cost of restoration is paid. Differences between the actual costs of restoration and the balance recorded as ARO liabilities are recognized as gains or losses in the accompanying Consolidated Statements of Comprehensive Income (Loss). |
MANDATORILY REDEEMABLE NONCONTR
MANDATORILY REDEEMABLE NONCONTROLLING INTEREST | 12 Months Ended |
Dec. 31, 2017 | |
Mandatorily Redeemable Noncontrolling Interest [Abstract] | |
Mandatorily Redeemable Noncontrolling Interest | (16) MANDATORILY REDEEMABLE NONCONTROLLING INTEREST The Company held an 80% interest in iKnowtion until January 1, 2016 when the additional 20% was purchased. In the event iKnowtion met certain EBITDA targets for calendar year 2015, the purchase and sale agreement required TTEC 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 represented a contingent redemption feature which the Company determined was probable of being achieved. Based on final EBITDA for 2015, the payment for the remaining 20% was completed in April 2016 for the value shown in the table below in accordance with the purchase and sale agreement. 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 as follows (in thousands): Year Ended December 31, 2017 2016 Mandatorily redeemable noncontrolling interest, January 1 $ — $ 4,131 Net income attributable to mandatorily redeemable noncontrolling interest — — Working capital distributed to mandatorily redeemable noncontrolling interest — (492) Change in redemption value — 466 Purchase of mandatorily redeemable noncontrolling interest — (4,105) Mandatorily redeemable noncontrolling interest, December 31 $ — $ — |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Net income per share attributable to TeleTech stockholders | |
NET INCOME PER SHARE | (18) NET INCOME PER SHARE The following table sets forth the computation of basic and diluted shares for the periods indicated (in thousands): Year Ended December 31, 2017 2016 2015 Shares used in basic earnings per share calculation 45,826 47,423 48,370 Effect of dilutive securities: Stock options 10 10 275 Restricted stock units 536 286 338 Performance-based restricted stock units 10 17 28 Total effects of dilutive securities 556 313 641 Shares used in dilutive earnings per share calculation 46,382 47,736 49,011 For the years ended December 31, 2017, 2016 and 2015, zero, 0.1 million and 0.1 million, respectively, of options to purchase shares of common stock 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 years ended December 31, 2017, 2016 and 2015, restricted stock units of 0.0 million, 0.1 million, and 0.4 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 years ended December 31, 2017, 2016 and 2015, there were no performance-based restricted stock units outstanding but not included in the computation of diluted net income per share. |
EMPLOYEE COMPENSATION PLANS
EMPLOYEE COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE COMPENSATION PLANS [Abstract] | |
EMPLOYEE COMPENSATION PLANS | (19) EMPLOYEE COMPENSATION PLANS Employee Benefit Plan The Company currently has a 401(k) profit-sharing plan that allows participation by U.S. employees who have completed six months of service, as defined, and are 21 years of age or older. Participants may defer up to 75% of their gross pay, up to a maximum limit determined by U.S. federal law. Participants are also eligible for a matching contribution. The Company may from time to time, at its discretion, make a “matching contribution” based on the amount and rate of the elective deferrals. The Company determines how much, if any, it will contribute for each dollar of elective deferrals. Participants vest in matching contributions over a three-year period. Company matching contributions to the 401(k) plan(s) totaled $5.7 million, $5.1 million and $4.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. Equity Compensation Plans In February 1999, the Company adopted the TeleTech Holdings, Inc. 1999 Stock Option and Incentive Plan (the “1999 Plan”). An aggregate of 14.0 million shares of common stock were reserved for issuance under the 1999 Plan, which permitted the award of incentive stock options, non-qualified stock options, stock appreciation rights, shares of restricted common stock and restricted stock units (“RSUs”). The 1999 Plan also provided for annual equity-based compensation grants to members of the Company’s Board of Directors. Options granted to employees generally vested over four to five years and had a contractual life of ten years. Options issued to Directors vested immediately and had a contractual life of ten years. In May 2009, the Company adopted a policy to issue RSUs to Directors, which generally vest over one year. In May 2010, the Company adopted the 2010 Equity Incentive Plan (the “2010 Plan”). Upon adoption of the 2010 Plan, all authorized and unissued equity in the 1999 Plan were cancelled. An aggregate of 4.0 million shares of common stock has been reserved for issuance under the 2010 Plan, which permits the award of incentive stock options, non-qualified stock options, stock appreciation rights, shares of restricted common stock and RSUs. As of December 31, 2017, a total of 4.0 million shares were authorized and 1.1 million shares were available for issuance under the 2010 Plan. For the years ended December 31, 2017, 2016, and 2015, the Company recorded total equity-based compensation expense under all equity-based arrangements (stock options and RSUs) of $11.9 million, $9.8 million and $11.3 million, respectively. For 2017, 2016 and 2015, of the total compensation expense, $4.1 million, $3.1 million and $2.9 million was recognized in Cost of services and $7.8 million, $6.7 million and $8.4 million, was recognized in Selling, general and administrative in the Consolidated Statements of Comprehensive Income (Loss), respectively. For the years ended December 31, 2017, 2016, and 2015, the Company recognized a tax benefit under all equity-based arrangements (stock options and RSUs) of $6.8 million, $5.0 million and $6.7 million, respectively. Restricted Stock Units 2017, 2016 and 2015 RSU Awards: The Company granted RSUs in 2017, 2016 and 2015 to new and existing employees that vest over four or five years. The Company also granted RSUs in 2017, 2016 and 2015 to members of the Board of Directors that vest over one year. During 2015, the Company granted performance-based RSUs to an executive the amount of which is determinable based on a reporting segment of the Company achieving incremental operating income for each year from 2015-2017. During 2015 and 2016, based on operating income performance for reporting segment of the Company, approximately $0.4 million and $0.1 million of RSUs were earned. These RSUs were granted in March 2016 and March 2017, respectively, and will vest 12 months from the grant date. During 2017, the Company cancelled the 2017 performance grant. Summary of RSUs: Settlement of the RSUs shall be made in shares of the Company’s common stock by delivery of one share of common stock for each RSU then being settled. The Company calculates the fair value for RSUs based on the closing price of the Company’s stock on the date of grant and records compensation expense over the vesting period using a straight-line method. The Company factors an estimated forfeiture rate in calculating compensation expense on RSUs and adjusts for actual forfeitures upon the vesting of each tranche of RSUs. The Company also factors in the present value of the estimated dividend payments that will have accrued as these RSUs are vesting. The weighted average grant-date fair value of RSUs, including performance-based RSUs, granted during the years ended December 31, 2017, 2016, and 2015 was $29.56, $26.60, and $26.52, respectively. The total intrinsic value and fair value of RSUs vested during the years ended December 31, 2017, 2016, and 2015 was $10.6 million, $10.8 million, and $13.0 million, respectively. A summary of the status of the Company’s non-vested RSUs and performance-based RSUs and activity for the year ended December 31, 2017 is as follows: Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2016 1,167,621 $ 25.29 Granted 731,817 $ 29.56 Vested (439,601) $ 24.25 Cancellations/expirations (169,410) $ 26.77 Unvested as of December 31, 2017 1,290,427 $ 27.87 All RSUs vested during the year ended December 31, 2017 were issued out of treasury stock. As of December 31, 2017, there was approximately $23.7 million of total unrecognized compensation expense and approximately $51.9 million in total intrinsic value related to non-vested RSU grants. The unrecognized compensation expense will be recognized over the remaining weighted-average vesting period of 1.5 years using the straight-line method. Stock Options During the year ended December 31, 2011, the Company granted 150,000 stock options to a key employee. The stock option award is made up of four separate tranches. Each tranche will vest based on certain stock price targets (market conditions). The grant date fair values of each tranche were calculated using a Monte Carlo simulation model in addition to a time-based binomial lattice model. The following table provides the assumptions used in the time-based binomial lattice model for each tranche granted: Year Ended December 31, 2011 Risk-free interest rate 2.1 % Expected life in years - 2.7 Expected volatility 54.4 % Dividend yield — % Weighted-average volatility 54.4 % The Company estimated the expected term based on historical averages of option exercises and expirations. The calculation of expected volatility is based on the historical volatility of the Company’s common stock over the expected term. The risk-free interest rate is based on the yield on the grant measurement date of a traded zero-coupon U.S. Treasury bond, as reported by the U.S. Federal Reserve, with a term equal to the expected term of the stock option granted. The Company factored an estimated forfeiture rate and adjusted for actual forfeitures upon the vesting of each tranche of options. A summary of stock option activity for the year ended December 31, 2017 is as follows: Weighted Weighted Average Aggregate Average Remaining Intrinsic Exercise Contract Value Shares Price Term in Years (000’s) Outstanding as of December 31, 2016 191,666 $ 22.83 Exercises (60,000) $ 35.81 $ 194 Post-vest cancellations/expirations (16,666) $ 17.31 Outstanding as of December 31, 2017 115,000 $ 16.86 Vested and exercisable as of December 31, 2017 15,000 $ 13.87 $ 396 There were no stock options granted during 2017, 2016 or 2015. The total intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 was $194 thousand, $400 thousand and $13.9 million, respectively. The total fair value of stock options vested during the years ended December 31, 2017, 2016 and 2015 was zero, respectively. Cash received from option exercises under the Plans for the years ended December 31, 2017, 2016 and 2015 was $2.1 million, $0.4 million and $0.8 million, respectively. The recognized tax benefit from option exercises for the years ended December 31, 2017, 2016 and 2015 was $0.0 million, $0.2 million and $1.0 million, respectively. Shares issued for options exercised during the year ended December 31, 2017 were issued out of treasury stock. |
STOCK REPURCHASE PROGRAM
STOCK REPURCHASE PROGRAM | 12 Months Ended |
Dec. 31, 2017 | |
STOCK REPURCHASE PROGRAM [ABSTRACT] | |
STOCK REPURCHASE PROGRAM | (20) STOCK REPURCHASE PROGRAM Stock Repurchase Program The Company has a stock repurchase program, which was initially authorized by the Company’s Board of Directors in November 2001. As of December 31, 2017, the cumulative authorized repurchase allowance was $762.3 million. During the year ended December 31, 2017, the Company purchased 0.6 million shares for $18.3 million. Since inception of the program, the Company has purchased 46.1 million shares for $735.8 million. As of December 31, 2017, the remaining allowance under the program was approximately $26.6 million. For the period from January 1, 2018 through February 28, 2018, the Company did not purchase any additional shares. The stock repurchase program does not have an expiration date. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS [ABSTRACT] | |
RELATED PARTY TRANSACTIONS | (21) RELATED PARTY TRANSACTIONS The Company entered into an agreement under which Avion, LLC (“Avion”) and Airmax LLC (“Airmax”) provide certain aviation flight services as requested by the Company. Such services include the use of an aircraft and flight crew. Kenneth D. Tuchman, Chairman and Chief Executive Officer of the Company, has a 100% beneficial ownership interest in Avion and Airmax. During 2017, 2016 and 2015, the Company expensed $1.1 million, $1.0 million and $1.7 million, respectively, to Avion and Airmax for services provided to the Company. There was $375 thousand in payments due and outstanding to Avion and Airmax as of December 31, 2017. During 2014, the Company entered into a vendor contract with Convercent Inc. to provide learning management and web and telephony based global helpline solutions. This contract was renewed, after an arms-length market pricing review, in the fourth quarter of 2016. The majority owner of Convercent is a company which is owned and controlled by Kenneth D. Tuchman, Chairman and Chief Executive Officer of the Company. During 2017 and 2016, the Company expensed $70 thousand and $100 thousand, respectively, to Convercent and is expecting to spend another $60 thousand with Convercent during 2018. During 2015, the Company entered into a vendor contract with Netlink to help the Company develop a key stroke monitoring solution. Shrikant Mehta, one of the Board of Directors, has an ownership interest in Netlink. During 2015, the Company paid $98 thousand to Netlink for these services. The Company did not use Netlink services in 2016 or 2017 and has no plans to make additional payment to Netlink at this time. During 2015, the Company entered into a contract to purchase software from CaféX, which is a company that TTEC holds a 17.2% equity investment in. During 2017, 2016 and 2015, the Company purchased $0.1 million, $0.4 million and $0.25 million, respectively, of software from CaféX. See Note 2 for further information regarding this investment. During 2017, in connection with the Motif acquisition, the Company is now a party to a real estate lease for a building that is owned by one of the Motif Founders. The lease expires in 2020 and has future payments of approximately $142 thousand. |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
OTHER FINANCIAL INFORMATION [ABSTRACT] | |
OTHER FINANCIAL INFORMATION | (22) OTHER FINANCIAL INFORMATION Self-insurance liabilities of the Company which are included in Accrued employee compensation and benefits and Other accrued expenses in the accompanying Consolidated Balance Sheets were as follows (in thousands): December 31, 2017 2016 Workers compensation $ 5,312 $ 1,523 Employee health and dental insurance 1,631 4,908 Total self-insurance liabilities $ 6,943 $ 6,431 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) [ABSTRACT] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | (23) QUARTERLY FINANCIAL DATA (UNAUDITED) The following tables present certain quarterly financial data for the year ended December 31, 2017 (in thousands except per share amounts). First Second Third Fourth Quarter Quarter Quarter Quarter Revenue $ 338,277 $ 353,429 $ 359,036 $ 426,623 Cost of services 253,898 268,004 275,548 312,618 Selling, general and administrative 43,220 43,985 45,167 49,942 Depreciation and amortization 14,500 16,258 16,515 17,234 Restructuring and integration charges, net 169 3,593 6,006 4,897 Impairment losses — — — 5,322 Income from operations 26,490 21,589 15,800 36,610 Other income (expense) (932) (4,198) 1,846 (8,318) (Provision for) benefit from income taxes (5,391) (1,597) (2,071) (69,016) Non-controlling interest (922) (1,100) (806) (728) Net income (loss) attributable to TTEC stockholders $ 19,245 $ 14,694 $ 14,769 $ (41,452) Weighted average shares outstanding Basic 45,950 45,662 45,838 45,856 Diluted 46,315 46,150 46,367 46,461 Net income per share attributable to TTEC stockholders Basic $ 0.42 $ 0.32 $ 0.32 $ (0.90) Diluted $ 0.42 $ 0.32 $ 0.32 $ (0.89) Included in Other income (expense) in the second quarter is a $3.2 million expense related to additional estimated loss on one of the units being reported as Assets Held for Sale. In the fourth quarter, we sold this unit and a net $0.6 million gain was recorded. Included in Other income (expense) in the third quarter, was a $3.2 million gain related to dissolution of a foreign entity and a release of its cumulative translation adjustment. Included in Other income (expense) in the fourth quarter is a $5.25 million expense related to finalization of the transition services agreement for the Connextions acquisition, and a $1.2 million interest charge related to the future purchase for the remaining 30% of the Motif acquisition. Included in the Provision for Income Taxes is $62.4 million of expense in the fourth quarter related to the US 2017 Tax Act, $0.4 million of expense in the fourth quarter, $1.3 million of expense in the third quarter and $1.3 million of benefit in the second quarter related to the disposition of assets, $1.9 million of benefit in the fourth quarter related to impairments, a $1.9 million benefit in the fourth quarter, a $2.4 million benefit in the third quarter and a $1.5 million benefit in the second quarter related to restructuring charges. Also included is $0.6 million of expense in the fourth quarter related to changes in valuation allowances. Additionally, $0.3 million of benefit was recorded in the fourth quarter, $0.2 million of expense was recorded in the third quarter, $0.7 million of benefit recorded in the second quarter, and $0.3 million of expense was recorded in the first quarter related to return to provision adjustments. Also included in the fourth quarter was $2.1 million of benefit related to transition service agreement. Finally, a $0.2 million benefit was recorded in the fourth quarter, a $1.0 million benefit was recorded in the third quarter, a $0.7 million benefit was recorded in the second quarter and a $0.3 million benefit was recorded in the first quarter related to stock options. The following tables present certain quarterly financial data for the year ended December 31, 2016 (in thousands except per share amounts). First Second Third Fourth Quarter Quarter Quarter Quarter Revenue $ 312,410 $ 305,105 $ 312,796 $ 344,947 Cost of services 231,340 226,768 233,541 249,943 Selling, general and administrative 45,500 44,774 40,628 44,895 Depreciation and amortization 17,729 17,221 16,811 16,914 Restructuring and integration charges, net 88 114 3,688 502 Impairment losses — — 5,602 26,448 Income from operations 17,753 16,228 12,526 6,245 Other income (expense) (1,320) (734) (690) 290 Provision for income taxes (4,528) (2,952) 813 (6,196) Non-controlling interest (680) (926) (1,198) (953) Net income attributable to TTEC stockholders $ 11,225 $ 11,616 $ 11,451 $ (614) Weighted average shares outstanding Basic 48,368 47,873 47,081 46,386 Diluted 48,746 48,221 47,315 46,677 Net income per share attributable to TTEC stockholders Basic $ 0.23 $ 0.24 $ 0.24 $ (0.01) Diluted $ 0.23 $ 0.24 $ 0.24 $ (0.01) Included in Other income (expense) in the third quarter is $4.3 million benefit related to fair value adjustments to the contingent consideration related to revised estimates of the performance against the targets for one of the Company’s acquisitions. Included in Other income (expense) in the third quarter is a $5.3 million expense related to the determination that two business units would be divested and are being reported as Assets Held for Sale. Included in the Provision for Income Taxes is a $1.3 million benefit in the third quarter and a $0.2 million benefit in the fourth quarter related to restructuring charges. Also included are a $0.1 million of benefit in the first quarter, $1.0 million of expense in the second quarter, and $0.4 million of benefit in the fourth quarter related to changes in valuation allowances. Also included are $0.7 million of expense recorded in the second quarter, $0.6 million of expense recorded in the third quarter and $0.4 million of expense recorded in the fourth quarter related to return to provision adjustments. Additionally, in the fourth quarter there was $1.1 million of expense related to a transfer pricing adjustment for a prior period. Also included are a $0.5 million expense in the fourth quarter related to tax rate changes. Finally, there was a $1.5 million benefit in the third quarter and a $8.3 million benefit in the fourth quarter related to impairments and assets held for sale. |
OVERVIEW AND BASIS OF PRESENT31
OVERVIEW AND BASIS OF PRESENTATION (POLICIES) | 12 Months Ended |
Dec. 31, 2017 | |
OVERVIEW AND BASIS OF PRESENTATION [Abstract] | |
Overview | Overview TTEC Holdings, Inc. (“TTEC”, “the Company”) (formerly known as TeleTech Holdings, Inc. until the name was changed in January 2018) is a global customer experience company that designs, builds and operates omnichannel customer experiences on behalf of the world's most innovative brands. The Company helps large global companies increase revenue and reduce costs by delivering personalized customer experiences across every interactional channel and phase of the customer lifecycle as an end-to-end provider of customer engagement services, technologies, insights and innovations. TTEC’s 56,000 employees serve clients in the automotive, communication, financial services, government, healthcare, logistics, media and entertainment, retail, technology, transportation and travel industries via operations in the U.S., Australia, Belgium, Brazil, Bulgaria, Canada, China, Costa Rica, Germany, Hong Kong, India, Ireland, Lebanon, Macedonia, Mexico, New Zealand, the Philippines, Poland, Singapore, South Africa, Thailand, Turkey, the United Arab Emirates, and the United Kingdom. |
Basis Of Presentation | Basis of Presentation The Consolidated Financial Statements are comprised of the accounts of TTEC, its wholly owned subsidiaries, its 55% equity owned subsidiary Percepta, LLC, its 100% interest in iKnowtion, LLC effective January 2016, and its 100% interest in Motif, Inc. (see Note 2 and 16). All intercompany balances and transactions have been eliminated in consolidation. During the three months ended March 31, 2016, the Company recorded an additional tax expense of $1.1 million that should have been recorded in prior periods related to operations by an entity outside its country of incorporation. The total amount of $1.1 million should have been recorded as additional expense in the amount of $180 thousand in 2011, $123 thousand in 2012, $137 thousand in 2013, $358 thousand in 2014 and $301 thousand in 2015. During the three months ended June 30, 2015, the Company recorded an additional expense of $1.75 million as an additional estimated tax liability that should have been recorded in prior periods related to ongoing discussions with relevant government authorities related to site compliance with tax advantaged status. The total amount of $1.75 million should have been recorded as additional tax expense in the amount of $466 thousand in 2012, $406 thousand in 2013, $645 thousand in 2014 and $234 thousand in the first quarter of 2015. During the three months ended June 30, 2015, the Company recorded an additional $3.2 million loss related to foreign currency translation within Other comprehensive income (loss) that should have been recorded in 2014 and the three months ended March 31, 2015 to correct for an error in translating the financial results of Sofica Group AD, which the Company acquired on February 28, 2014. Of the $3.2 million recorded, approximately $1.7 million and $1.5 million should have been recorded in the year ended December 31, 2014, and the three months ended March 31, 2015, respectively. The Company also recorded an additional $2.7 million loss to Other, net of tax within Other comprehensive income (loss) in the three months ended March 31, 2015 related to the annual actuarial analysis for the Company’s Philippines pension liability that should have been recorded in the fourth quarter of 2014. During the three months ended December 31, 2015, the Company recorded an additional $2.9 million impairment to correct for an error in the goodwill impairment annual assessment and quarterly assessment for the WebMetro reporting unit. The Company should have recorded a $2.3 million impairment in the three months ended December 31, 2014 and an additional $0.6 million impairment in the three months ended September 30, 2015. The Company has evaluated the aggregate impact of these adjustments and concluded that these adjustments were not material to the previously issued or current period Consolidated Financial Statements. |
Use of Estimates | Use of Estimates The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the U.S. (“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 the valuation allowance for deferred tax assets, self-insurance reserves, litigation reserves, restructuring reserves, allowance for doubtful accounts, contingent consideration, 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. |
Concentration of Credit Risk | Concentration of Credit Risk The Company is exposed to credit risk in the normal course of business, primarily related to accounts receivable and derivative instruments. Historically, the losses related to credit risk have been immaterial. The Company regularly monitors its credit risk to mitigate the possibility of current and future exposures resulting in a loss. The Company evaluates the creditworthiness of its clients prior to entering into an agreement to provide services and as necessary through the life of the client relationship. The Company does not believe it is exposed to more than a nominal amount of credit risk in its derivative hedging activities, as the Company diversifies its activities across six well-capitalized, investment-grade financial institutions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair values of cash equivalents, accounts receivable and payable and debt approximate the carrying amounts because of their short-term nature. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all cash and highly liquid short-term investments with an original maturity of 90 days or less to be cash equivalents. The Company manages a centralized global treasury function in the United States with a focus on concentrating and safeguarding its global cash and cash equivalents. While the majority of the Company’s cash is held outside the U.S., the Company prefers to hold U.S. Dollars in addition to the local currencies of the foreign subsidiaries. The Company believes that it has effectively mitigated and managed its risk relating to its global cash through its cash management practices, banking partners, and utilization of diversified, high quality investments. However, the Company can provide no assurances that it will not sustain losses. |
Accounts Receivable | Accounts Receivable An allowance for doubtful accounts is determined based on the aging of the Company’s accounts receivable, historical experience, client financial condition, and management judgment. The Company writes off accounts receivable against the allowance when the Company determines a balance is uncollectible. |
Derivatives. | Derivatives The Company enters into foreign exchange forward and option contracts to reduce its exposure to foreign currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. The Company also enters into interest rate derivatives which 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. The Company formally documents at the inception of the hedge all relationships between hedging instruments and hedged items as well as its risk management objective and strategy for undertaking various hedging activities. All derivative financial instruments are reported at fair value and recorded in Prepaids and other current assets, Other assets, Other current liabilities, and Other liabilities in the accompanying Consolidated Balance Sheets as applicable for each period end. Changes in fair value of derivative instruments designated as cash flow hedges are recorded in Accumulated other comprehensive income (loss), a component of Stockholders’ Equity, to the extent they are deemed effective. Ineffectiveness is measured based on the change in fair value of the forward contracts and the fair value of the hypothetical derivatives with terms that match the critical terms of the risk being hedged. Based on the criteria established by current accounting standards, the Company’s cash flow hedge contracts are deemed to be highly effective. Any realized gains or losses resulting from the foreign currency cash flow hedges are recognized together with the hedged transaction within Revenue. Any realized gains or losses from the interest rate swaps are recognized in Interest expense. Gains and losses from the settlements of the Company’s net investment hedges remain in Accumulated other comprehensive income (loss) until partial or complete liquidation of the applicable net investment. The Company also enters into fair value derivative contracts that hedge against foreign currency exchange gains and losses primarily associated with short-term payables and receivables. Changes in the fair value of derivative instruments designated as fair value hedges affect the carrying value of the asset or liability hedged, with changes in both the derivative instrument and the hedged asset or liability being recognized in Other income (expense), net in the accompanying Consolidated Statements of Comprehensive Income (Loss). |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant and Equipment Property, plant and equipment are stated at historical cost less accumulated depreciation and amortization. Maintenance, repairs and minor renewals are expensed as incurred. Depreciation and amortization are computed on the straight-line method based on the following estimated useful lives: Building 30 years Computer equipment and software 3 to 7 years Telephone equipment 4 to 7 years Furniture and fixtures 5 years Leasehold improvements Lesser of economic useful life (typically 10 years) or original lease term Other 3 to 7 years The Company evaluates the carrying value of property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. An asset is considered to be impaired when the forecasted undiscounted cash flows of an asset group are estimated to be less than its carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. Fair value estimates are based on assumptions concerning the amount and timing of forecasted future cash flows. |
Software Development Costs | Software Development Costs The Company capitalizes costs incurred to acquire or develop software for internal use. Capitalized software development costs are amortized using the straight-line method over the estimated useful life equal to the lesser of the license term or 4 or 7 years depending on the software type. The amortization expense is recorded in Depreciation and amortization in the accompanying Consolidated Statements of Comprehensive Income (Loss). |
Goodwill Policy | Goodwill The Company evaluates goodwill for possible impairment at least annually on December 1, and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses a two step process to assess the realizability of goodwill. The first step, Step 0, is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. For example, the Company analyzes changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there would be a significant decline to the fair value of a particular reporting unit. A qualitative assessment also includes analyzing the excess fair value of a reporting unit over its carrying value from impairment assessments performed in previous years. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates that a significant decline to fair value of a reporting unit is more likely than not, or if a reporting unit’s fair value has historically been closer to its carrying value, the Company will proceed to Step 1 testing where the Company calculates the fair value of a reporting unit. If Step 1 indicates that the carrying value of a reporting unit is in excess of its fair value, the Company will record an impairment equal to the amount by which a reporting unit’s carrying value exceeds its fair value. |
Other Intangible Assets | Other Intangible Assets The Company has other intangible assets that include customer relationships (definite-lived) and trade names (indefinite-lived and definite-lived) and non-compete agreements (definite-lived). Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from three to 12 years. The Company evaluates the carrying value of its definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. A definite-lived intangible asset is considered to be impaired when the forecasted undiscounted cash flows of its asset group are estimated to be less than its carrying value. The Company evaluates indefinite-lived intangible assets for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Similar to goodwill, the Company may first use a qualitative analysis to assess the realizability of its indefinite-lived intangible assets. The qualitative analysis will include a review of changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there would be a significant decline to the fair value of an indefinite-lived intangible asset. If a quantitative analysis is completed, an indefinite-lived intangible asset (i.e. trade name) is evaluated for possible impairment by comparing the fair value of the asset with its carrying value. Fair value is estimated as the discounted value of future revenues arising from a trade name using a royalty rate that a market participant would pay for use of that trade name. An impairment charge is recorded if the trade name’s carrying value exceeds its estimated fair value. |
Self Insurance Liabilities [Policy Text Block] | Self Insurance Liabilities The Company self-insures for certain levels of workers’ compensation, employee health, property, errors and omissions, cyber risks, and general liability insurance. The Company records estimated liabilities for these insurance lines based upon analyses of historical claims experience. The most significant assumption the Company makes in estimating these liabilities is that future claims experience will emerge in a similar pattern with historical claims experience. The liabilities related to workers’ compensation and employee health insurance are included in Accrued employee compensation and benefits in the accompanying Consolidated Balance Sheets. The liability for other general liability insurance is included in Other accrued expenses in the accompanying Consolidated Balance Sheets. |
Restructuring Liabilities | Restructuring Liabilities The Company routinely assesses the profitability and utilization of its customer engagement centers and existing markets. In some cases, the Company has chosen to close under-performing customer engagement centers and complete reductions in workforce to enhance future profitability. Severance payments that occur from reductions in workforce are in accordance with the Company’s postemployment plans and/or statutory requirements that are communicated to all employees upon hire date; therefore, severance liabilities are recognized when they are determined to be probable and reasonably estimable. Other liabilities for costs associated with an exit or disposal activity are recognized when the liability is incurred, rather than upon commitment to a plan. |
Income Taxes. | Income Taxes Accounting for income taxes 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 or tax returns. 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 enacted tax rates in effect for the year in which the differences are expected to reverse. Gross deferred tax assets may then be reduced by a valuation allowance for amounts that do not satisfy the realization criteria established by current accounting standards. The Company accounts for uncertain tax positions using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. The Company evaluates these uncertain tax positions on a quarterly basis. This evaluation is based on the consideration of several factors including changes in facts or circumstances, changes in applicable tax law, and settlement of issues under audit. The Company recognizes interest and penalties related to uncertain tax positions as a part of the Provision for income taxes in the accompanying Consolidated Statements of Comprehensive Income (Loss). The Company provided for U.S. income tax expense on the earnings of foreign subsidiaries under the 2017 Tax Act. This lead to a reassessment of the determination as to whether the US subsidiaries’ foreign earnings are considered permanently reinvested outside the U.S. |
Tax Reform | Tax Reform The United States recently enacted comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the "2017 Tax Act") that, among other things, reduces the U.S. federal corporate income tax rate from 35% to 21% and implements a territorial tax system, but imposes an alternative “base erosion and anti-abuse tax” (“BEAT”), and an incremental tax on global intangible low taxed foreign income (“GILTI”) effective January 1, 2018. In addition, the law imposes a one-time mandatory repatriation tax on accumulated foreign earnings on domestic corporations effective for the 2017 tax year. In response, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act and allows the registrant to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. We have recognized the provisional impacts related to the one-time transition tax and revaluation of deferred tax balances and included these estimates in our consolidated financial statements for the year ended December 31, 2017. The ultimate impact may materially differ from these provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the Tax Act. |
Equity-Based Compensation Expense | Tax Reform The United States recently enacted comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the "2017 Tax Act") that, among other things, reduces the U.S. federal corporate income tax rate from 35% to 21% and implements a territorial tax system, but imposes an alternative “base erosion and anti-abuse tax” (“BEAT”), and an incremental tax on global intangible low taxed foreign income (“GILTI”) effective January 1, 2018. In addition, the law imposes a one-time mandatory repatriation tax on accumulated foreign earnings on domestic corporations effective for the 2017 tax year. In response, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act and allows the registrant to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. We have recognized the provisional impacts related to the one-time transition tax and revaluation of deferred tax balances and included these estimates in our consolidated financial statements for the year ended December 31, 2017. The ultimate impact may materially differ from these provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the Tax Act. Equity-Based Compensation Expense Equity-based compensation expense for all share-based payment awards granted is determined based on the grant-date fair value net of an estimated forfeiture rate on a straight-line basis over the requisite service period of the award, which is typically the vesting term of the share-based payment award. The Company estimates the forfeiture rate annually based on its historical experience of forfeited awards. |
Foreign Currency Translation | Foreign Currency Translation The assets and liabilities of the Company’s foreign subsidiaries, whose functional currency is not the U.S. Dollar, are translated at the exchange rates in effect on the last day of the period and income and expenses are translated using the monthly average exchange rates in effect for the period in which the items occur. Foreign currency translation gains and losses are recorded in Accumulated other comprehensive income (loss) within Stockholders’ Equity. Foreign currency transaction gains and losses are included in Other income (expense), net in the accompanying Consolidated Statements of Comprehensive Income (Loss). |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when evidence of an arrangement exists, the delivery of service has occurred, the fee is fixed or determinable and collection is reasonably assured. The BPO inbound and outbound service fees are based on either a per minute, per hour, per FTE, per transaction or per call basis. Certain client programs provide for adjustments to monthly billings based upon whether the Company achieves, exceeds or fails certain performance criteria. Adjustments to monthly billings consist of contractual bonuses/penalties, holdbacks and other performance based contingencies. Revenue recognition is limited to the amount that is not contingent upon delivery of future services or meeting other specified performance conditions. Revenue also consists of services for agent training, program launch, professional consulting, fully-hosted or managed technology and learning innovation services. These service offerings may contain multiple element arrangements whereby the Company determines if those service offerings represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value and delivery or performance of the undelivered item is considered probable and substantially within our control. If those deliverables are determined to be separate units of accounting, revenue is recognized as services are provided. If those deliverables are not determined to be separate units of accounting, revenue for the delivered services are bundled into one unit of accounting and recognized over the life of the arrangement or at the time all services and deliverables have been delivered and satisfied. The Company allocates revenue to each of the deliverables based on a selling price hierarchy of vendor specific objective evidence (“VSOE”), third-party evidence, and then estimated selling price. VSOE is based on the price charged when the deliverable is sold separately. Third-party evidence is based on largely interchangeable competitor services in standalone sales to similarly situated customers. Estimated selling price is based on the Company’s best estimate of what the selling prices of deliverables would be if they were sold regularly on a standalone basis. Estimated selling price is established considering multiple factors including, but not limited to, pricing practices in different geographies, service offerings, and customer classifications. Once the Company allocates revenue to each deliverable, the Company recognizes revenue when all revenue recognition criteria are met. |
Deferred Revenue and Costs | Deferred Revenue and Costs The Company records amounts billed and received, but not earned, as deferred revenue. These amounts are recorded in Deferred revenue or as a component of Other long-term liabilities in the accompanying Consolidated Balance Sheets based on the period over which the Company expects to render services. We defer revenue for initial training that occurs upon commencement of a new contract if that training is billed separately because the training is not considered to provide standalone value from other services. Accordingly, the corresponding training costs, consisting primarily of labor and related expenses, are also deferred. In these circumstances, both the training revenue and costs are amortized straight-line over the life of the contract as a component of Revenue and Cost of services, respectively. In situations where these initial training costs are not billed separately, but rather included in the hourly service rates paid by the client over the life of the contract, no deferral is necessary as the revenue is being recognized over the life of the contract and the associated training costs are expensed as incurred. |
Rent Expense | Rent Expense The Company has negotiated certain rent holidays, landlord/tenant incentives and escalations in the base price of rent payments over the initial term of its operating leases. The initial term could include the “build-out” period of leases, where no rent payments are typically due. The Company recognizes rent holidays and rent escalations on a straight-line basis to rent expense over the lease term. The landlord/tenant incentives are recorded as an increase to deferred rent liabilities and amortized on a straight line basis to rent expense over the initial lease term. |
Asset Retirement Obligations | Asset Retirement Obligations Asset retirement obligations relate to legal obligations associated with the retirement of long-lived assets resulting from the acquisition, construction, development and/or normal use of the underlying assets. The Company records all asset retirement obligations at estimated fair value. The Company’s asset retirement obligations primarily relate to clauses in its customer engagement center operating leases which require the Company to return the leased premises to its original condition. The associated asset retirement obligations are capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset. The liability, reported within Other long-term liabilities, is accreted through charges to operating expenses. If the asset retirement obligation is settled for an amount other than the carrying amount of the liability, the Company recognizes a gain or loss on settlement. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“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. While ASU-2014-09 was originally effective for fiscal years and interim periods within those years beginning after December 15, 2016, in August 2015, the FASB issued ASU 2015-14, “Deferral of Effective Date”, deferring the effective date by one year, to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Earlier adoption was permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. ASU 2014-09 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. In June 2017, FASB issued ASU 2017-10, “Service Concession Arrangements”, which will be adopted along with the ASU 2014-09 guidance. The Company assigned a project manager and team, selected an external consulting company to assist through the project, completed the project assessment phase, and has finalized its implementation approach. The Company has evaluated the adoption impact of the updated accounting guidance on our consolidated financial statements and continues to evaluate the impact on disclosures and internal controls. The new guidance will impact: (i) revenue associated with certain taxes, which will be recognized on a net basis versus the current gross treatment; (ii) the timing of revenue recognition associated with upfront fees on certain contracts; and (iii) the timing of recognition related to certain elements of variable consideration. The Company adopted this updated accounting guidance beginning January 1, 2018 using the modified retrospective method under which it will recognize a cumulative-effect adjustment in the range of $9 million to $12 million. In February 2016, the FASB issued ASU 2016-02, “ Leases ”, which amends the existing accounting standards for lease accounting, including requiring lessees, to recognize most leases on their balance sheets related to the rights and obligations created by those leases and making targeted changes to lessor accounting. The ASU also requires new disclosures regarding the amounts, timing, and uncertainty of cash flows arising from leases. The ASU is effective for interim and annual periods beginning on or after December 15, 2018 and early adoption is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently assessing the impact on the consolidated financial statements and related disclosures, evaluating software solutions and other tracking methods, and finalizing the implementation approach. In March 2016, the FASB issued ASU 2016-09, “ Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting ”, which amends the existing accounting standards related to stock-based compensation. The ASU simplifies several aspects of accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is effective for interim and annual periods beginning on or after December 15, 2016. Beginning with the first quarter of 2017, the Company has adopted the new guidance as applicable and this adoption did not have a material impact on its financial position, results of operation or related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows ”. ASU 2016-15 is intended to reduce diversity in practice regarding how certain cash transactions are presented and classified in the Consolidated Statement of Cash Flows by providing guidance on eight specific cash flow issues. The ASU is effective for interim and annual periods beginning on or after December 15, 2017 and early adoption is permitted. The Company is currently assessing the impact on the consolidated statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other: Simplifying the Accounting for Goodwill Impairment ”. ASU 2017-04 removes the need to complete Step 2 of any goodwill impairment test that has failed Step 1. The goodwill impairment will now be calculated as the amount by which a reporting unit’s carrying value exceeds its fair value. The ASU is effective for interim and annual periods beginning on or after December 15, 2019 and early adoption is permitted. The Company early adopted this standard as of January 1, 2017. In August 2017, the FASB issued ASU 2017-12, “ Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. ASU 2017-12 amends and simplifies existing guidance for derivatives and hedges including aligning accounting with companies’ risk management strategies and increasing disclosure transparency regarding both the scope and results of hedging programs. The changes include designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The ASU is effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact on the consolidated statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, “ Income Statement - Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” . ASU 2018-02 allows companies the option to reclassify stranded tax effects from Accumulated other comprehensive income (loss) (AOCI) to retained earnings resulting from the newly enacted corporate tax rate in the Tax Cuts and Jobs Act. If adopted, the ASU is effective in years beginning after December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact on the consolidated statements and related disclosures. |
OVERVIEW AND BASIS OF PRESENT32
OVERVIEW AND BASIS OF PRESENTATION (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
OVERVIEW AND BASIS OF PRESENTATION [Abstract] | |
Schedule of property, plant and equipment useful lives | Depreciation and amortization are computed on the straight-line method based on the following estimated useful lives: Building 30 years Computer equipment and software 3 to 7 years Telephone equipment 4 to 7 years Furniture and fixtures 5 years Leasehold improvements Lesser of economic useful life (typically 10 years) or original lease term Other 3 to 7 years |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
ACQUISITIONS [ABSTRACT] | |
Schedule of Assets Acquired and Liabilities Assumed | The following summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. (in thousands): Preliminary Estimate of Acquisition Date Fair Value Cash $ 5,997 Accounts receivable, net 5,187 Prepaid expenses 1,248 Other current assets 670 Property, plant and equipment 2,182 Income tax receivable 1,691 Customer relationships 37,200 Goodwill 39,272 $ 93,447 Accounts payable $ 2,914 Accrued employee compensation and benefits 5,249 Accrued expenses 104 Deferred tax liability 11,402 Other 340 $ 20,009 Total purchase price $ 73,438 The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands): Acquisition Date Fair Value Cash $ — Accounts receivable, net 15,959 Prepaid expenses 241 Other current assets 51 Property, plant and equipment 7,594 Customer relationships 35,000 Goodwill 35,272 $ 94,117 Accounts payable $ 1 Accrued employee compensation and benefits 346 Accrued expenses 386 Deferred tax liabilities 15,273 Deferred revenue 399 $ 16,405 Total purchase price $ 77,712 The following summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. (in thousands): Acquisition Date Fair Value Cash $ 2,655 Accounts receivable, net 18,449 Other assets 615 Property, plant and equipment 3,161 Deferred tax assets, net 638 Customer relationships 10,500 Goodwill 20,275 56,293 Accounts payable 1,199 Accrued employee compensation and benefits 2,418 Accrued expenses 2,597 Other 1,678 7,892 Total purchase price $ 48,401 |
Assets and Liabilities Held for Sale | The following table presents information related to the major components of assets and liabilities that were classified as held for sale in the Consolidated Balance Sheet as of December 31, 2017. As of December 31, 2017 Cash $ — Accounts receivable, net 6,151 Allowance for doubtful accounts — Other assets 303 Property, plant and equipment 49 Deferred tax assets, net — Customer relationships 999 Goodwill 3,033 Other intangible assets — Allowance for reduction of assets held for sale (2,700) Total assets $ 7,835 Accounts payable $ 413 Accrued employee compensation and benefits 833 Accrued expenses 54 Other 22 Total liabilities $ 1,322 |
SEGMENT INFORMATION (TABLES)
SEGMENT INFORMATION (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT INFORMATION [ABSTRACT] | |
Schedule of Segment Selected Financial Data | The following tables present certain financial data by segment (in thousands): Year Ended December 31, 2017 Depreciation Gross Intersegment Net & Income from Revenue Sales Revenue Amortization Operations Customer Management Services $ 1,141,779 $ (19) $ 1,141,760 $ 52,193 $ 78,206 Customer Growth Services 128,698 — 128,698 2,959 7,803 Customer Technology Services 138,918 (337) 138,581 7,092 12,047 Customer Strategy Services 68,326 — 68,326 2,263 2,433 Total $ 1,477,721 $ (356) $ 1,477,365 $ 64,507 $ 100,489 Year Ended December 31, 2016 Depreciation Gross Intersegment Net & Income from Revenue Sales Revenue Amortization Operations Customer Management Services $ 924,654 $ (329) $ 924,325 $ 48,770 $ 50,541 Customer Growth Services 141,005 — 141,005 5,905 6,969 Customer Technology Services 141,865 (611) 141,254 10,645 933 Customer Strategy Services 68,674 — 68,674 3,355 (5,691) Total $ 1,276,198 $ (940) $ 1,275,258 $ 68,675 $ 52,752 Year Ended December 31, 2015 Depreciation Gross Intersegment Net & Income from Revenue Sales Revenue Amortization Operations Customer Management Services $ 913,272 $ — $ 913,272 $ 44,633 $ 58,018 Customer Growth Services 129,021 — 129,021 6,065 3,077 Customer Technology Services 157,838 (232) 157,606 9,775 13,339 Customer Strategy Services 86,856 — 86,856 3,335 15,746 Total $ 1,286,987 $ (232) $ 1,286,755 $ 63,808 $ 90,180 For the Year Ended December 31, 2017 2016 2015 Capital Expenditures Customer Management Services $ 48,069 $ 40,321 $ 56,570 Customer Growth Services 871 4,185 4,681 Customer Technology Services 2,308 5,217 4,216 Customer Strategy Services 710 1,109 1,128 Total $ 51,958 $ 50,832 $ 66,595 December 31, 2017 2016 2015 Total Assets Customer Management Services $ 869,594 $ 585,679 $ 525,470 Customer Growth Services 41,036 71,540 75,291 Customer Technology Services 100,351 115,537 146,480 Customer Strategy Services 67,755 73,548 96,086 Total $ 1,078,736 $ 846,304 $ 843,327 December 31, 2017 2016 2015 Goodwill Customer Management Services $ 119,497 $ 42,589 $ 23,218 Customer Growth Services 24,439 24,439 24,439 Customer Technology Services 40,839 41,500 41,500 Customer Strategy Services 21,919 21,120 25,026 Total $ 206,694 $ 129,648 $ 114,183 |
Schedule of Revenue by Geographic Area | The following tables present certain financial data based upon the geographic location where the services are provided (in thousands): As of and for the Year Ended December 31, 2017 2016 2015 Revenue United States $ 820,597 $ 693,023 $ 679,959 Philippines 353,122 351,853 343,013 Latin America 130,082 122,347 147,267 Europe / Middle East / Africa 62,597 65,866 78,182 Asia Pacific / India 36,715 28,219 32,554 Canada 74,252 13,950 5,780 Total $ 1,477,365 $ 1,275,258 $ 1,286,755 Property, plant and equipment, gross United States $ 490,110 $ 441,222 $ 415,918 Philippines 137,683 133,214 140,712 Latin America 51,451 50,605 49,464 Europe / Middle East / Africa 10,231 8,805 14,567 Asia Pacific / India 24,592 23,484 23,181 Canada 15,912 19,988 16,239 Total $ 729,979 $ 677,318 $ 660,081 Other long-term assets United States $ 46,029 $ 36,442 $ 34,007 Philippines 7,753 8,194 5,220 Latin America 1,475 1,161 1,161 Europe / Middle East / Africa 1,950 1,099 811 Asia Pacific / India 4,326 110 165 Canada 324 514 1,122 Total $ 61,857 $ 47,520 $ 42,486 |
ACCOUNTS RECEIVABLE AND SIGNI35
ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable, net in the accompanying Consolidated Balance Sheets consists of the following (in thousands): December 31, 2017 2016 Accounts receivable $ 386,672 $ 301,470 Less: Allowance for doubtful accounts (921) (662) Accounts receivable, net $ 385,751 $ 300,808 |
Schedule of Change in Allowance for Doubtful Accounts | Activity in the Company’s Allowance for doubtful accounts consists of the following (in thousands): December 31, 2017 2016 2015 Balance, beginning of year $ 662 $ 2,176 $ 3,425 Provision for doubtful accounts 458 1,164 1,465 Uncollectible receivables written-off (180) (2,670) (2,035) Effect of foreign currency and other (19) (8) (679) Balance, end of year $ 921 $ 662 $ 2,176 |
Schedule of Revenue from Significant Clients | Year Ended December 31, 2017 2016 2015 Telecommunications client 9 % 10 % 10 % |
Schedule of Accounts Receivable Outstanding from Significant Clients | Accounts receivable from this client was as follows (in thousands): Year Ended December 31, 2017 2016 2015 Telecommunications client $ 26,920 $ 28,080 $ 23,953 |
PROPERTY PLANT AND EQUIPMENT (T
PROPERTY PLANT AND EQUIPMENT (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY PLANT AND EQUIPMENT [ABSTRACT] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): December 31, 2017 2016 Land and buildings $ 38,858 $ 38,868 Computer equipment and software 390,899 364,854 Telephone equipment 46,521 42,858 Furniture and fixtures 76,856 68,248 Leasehold improvements 176,467 162,232 Motor vehicles 158 143 Construction-in-progress and other 220 115 Property, plant and equipment, gross 729,979 677,318 Less: Accumulated depreciation and amortization (566,682) (526,281) Property, plant and equipment, net $ 163,297 $ 151,037 |
GOODWILL (TABLES)
GOODWILL (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL [ABSTRACT] | |
Schedule of Goodwill Rollforward | Goodwill consisted of the following (in thousands): Effect of December 31, Acquisitions / Foreign December 31, 2016 Adjustments Impairments Currency 2017 Customer Management Services $ 42,589 $ 73,934 $ — $ 2,974 $ 119,497 Customer Growth Services 24,439 — — — 24,439 Customer Technology Services 41,500 (661) — — 40,839 Customer Strategy Services 21,120 — — 799 21,919 Total $ 129,648 $ 73,273 $ — $ 3,773 $ 206,694 Effect of December 31, Acquisitions / Foreign December 31, 2015 Adjustments Impairments Currency 2016 Customer Management Services $ 23,218 $ 21,030 $ (1,363) $ (296) $ 42,589 Customer Growth Services 24,439 — — — 24,439 Customer Technology Services 41,500 — — — 41,500 Customer Strategy Services 25,026 (3,033) — (873) 21,120 Total $ 114,183 $ 17,997 $ (1,363) $ (1,169) $ 129,648 |
OTHER INTANGIBLE ASSETS (TABLES
OTHER INTANGIBLE ASSETS (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
OTHER INTANGIBLE ASSETS [Abstract] | |
Schedule of Intangible Assets (Excluding Goodwill) | Other intangible assets which are included in Other long-term assets in the accompanying Consolidated Balance Sheets consisted of the following (in thousands): Acquisitions Effect of December 31, and Foreign December 31, 2016 Amortization Impairments Adjustments Currency 2017 Customer relationships, gross $ 50,454 $ — $ — $ 72,492 $ 1,829 $ 124,775 Customer relationships - accumulated amortization (25,943) (7,213) — (210) (194) (33,560) Other intangible assets, gross 4,589 — — 151 44 4,784 Other intangible assets - accumulated amortization (3,978) (254) — 1 318 (3,913) Trade name - indefinite life 5,665 — (5,322) — (343) — Other intangible assets, net $ 30,787 $ (7,467) $ (5,322) $ 72,434 $ 1,654 $ 92,086 Acquisitions Effect of December 31, and Foreign December 31, 2015 Amortization Impairments Adjustments Currency 2016 Customer relationships, gross $ 62,257 $ — $ (17,150) $ 6,588 $ (1,241) $ 50,454 Customer relationships - accumulated amortization (30,180) (7,246) 6,120 5,097 266 (25,943) Other intangible assets, gross 13,750 — (5,566) (3,701) 106 4,589 Other intangible assets - accumulated amortization (8,755) (2,285) 3,956 2,929 177 (3,978) Trade name - indefinite life 14,143 — (8,682) — 204 5,665 Other intangible assets, net $ 51,215 $ (9,531) $ (21,322) $ 10,913 $ (488) $ 30,787 |
Future Amortization Expense of Finite Lived Intangible Assets | Expected future amortization of other intangible assets as of December 31, 2017 is as follows (in thousands): 2018 $ 10,903 2019 10,682 2020 9,381 2021 8,850 2022 8,160 Thereafter 44,110 Total $ 92,086 |
DERIVATIVES (TABLES)
DERIVATIVES (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
DERIVATIVES [ABSTRACT] | |
Schedule of Cash Flow Hedges OCI Rollforward | Year Ended December 31, 2017 2016 2015 Aggregate unrealized net gain/(loss) at beginning of period $ (32,393) $ (26,885) $ (18,345) Add: Net gain/(loss) from change in fair value of cash flow hedges 31,053 11,242 (16,349) Less: Net (gain)/loss reclassified to earnings from effective hedges (14,406) (16,750) 7,809 Aggregate unrealized net gain/(loss) at end of period $ (15,746) $ (32,393) $ (26,885) |
Schedule of Notional Amounts of Outstanding Cash Flow Hedges | Local Currency U.S. Dollar % Maturing Contracts Notional Notional in the next Maturing As of December 31, 2017 Amount Amount 12 months Through Philippine Peso 10,685,000 219,917 (1) 62.3 % August 2021 Mexican Peso 1,609,000 93,589 41.0 % May 2021 $ 313,506 Local Currency U.S. Dollar Notional Notional As of December 31, 2016 Amount Amount Philippine Peso 14,315,000 301,134 (1) Mexican Peso 2,089,000 129,375 $ 430,509 (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 December 31, 2017 and December 31, 2016. |
Schedule of Interest Rate Swaps | Contract Contract Notional Variable Rate Fixed Rate Commencement Maturity December 31, 2016 Amount Received Paid Date Date Swap $ 15 million 1 - month LIBOR 3.14 % May 2012 May 2017 |
Schedule of Derivatives Instruments on Balance Sheet | December 31, 2017 Designated Not Designated as Hedging as Hedging Designation: Instruments Instruments Foreign Interest Foreign Derivative contract type: Exchange Rate Exchange Derivative classification: Cash Flow Cash Flow Fair Value Fair value and location of derivative in the Consolidated Balance Sheet: Prepaids and other current assets $ 220 $ — $ 1,603 Other long-term assets 393 — — Other current liabilities (15,603) — (133) Other long-term liabilities (11,266) — — Total fair value of derivatives, net $ (26,256) $ — $ 1,470 December 31, 2016 Designated Not Designated as Hedging as Hedging Designation: Instruments Instruments Foreign Interest Foreign Derivative contract type: Exchange Rate Exchange Derivative classification: Cash Flow Cash Flow Fair Value Fair value and location of derivative in the Consolidated Balance Sheet: Prepaids and other current assets $ 1,178 $ — $ 1,606 Other long-term assets — — — Other current liabilities (23,503) (147) (866) Other long-term liabilities (31,714) — — Total fair value of derivatives, net $ (54,039) $ (147) $ 740 |
Schedule of Derivative Impact on Statement of Comprehensive Income | Year Ended December 31, 2017 2016 Designated as Hedging Designated as Hedging Designation: Instruments Instruments Foreign Interest Foreign Interest Derivative contract type: Exchange Rate Exchange 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 $ (14,336) $ (70) $ (16,438) $ (312) Amount and location of net gain or (loss) reclassified from Accumulated OCI to income - effective portion: Revenue $ (22,792) $ — $ (28,025) $ — Interest expense — (115) — (534) Year Ended December 31, 2017 2016 Designation: Not Designated as Hedging Instruments Not Designated as Hedging Instruments Derivative contract type: Foreign Exchange Foreign Exchange Forward Forward Derivative classification: Contracts Fair Value Contracts Fair Value Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income (Loss): Cost of services $ — $ — $ — $ — Other income (expense), net — 1,350 — (5,826) |
FAIR VALUE (TABLES)
FAIR VALUE (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE [Abstract] | |
Schedule of Fair Value Derivative Assets and Liabilities | The following is a summary of the Company’s fair value measurements for its net derivative assets (liabilities) as of December 31, 2017 and 2016 (in thousands): As of December 31, 2017 Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) At Fair Value Cash flow hedges $ — $ (26,256) $ — $ (26,256) Interest rate swaps — — — — Fair value hedges — 1,470 — 1,470 Total net derivative asset (liability) $ — $ (24,786) $ — $ (24,786) As of December 31, 2016 Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) At Fair Value Cash flow hedges $ — $ (54,039) $ — $ (54,039) Interest rate swaps — (147) — (147) Fair value hedges — 740 — 740 Total net derivative asset (liability) $ — $ (53,446) $ — $ (53,446) |
Schedule of Fair Value Assets and Liabilities | The following is a summary of the Company’s fair value measurements as of December 31, 2017 and 2016 (in thousands): As of December 31, 2017 Fair Value Measurements Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Derivative instruments, net $ — $ — $ — Total assets $ — $ — $ — Liabilities Deferred compensation plan liability $ — $ (13,219) $ — Derivative instruments, net — (24,786) — Contingent consideration — — (399) Total liabilities $ — $ (38,005) $ (399) As of December 31, 2016 Fair Value Measurements Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Derivative instruments, net $ — $ — $ — Total assets $ — $ — $ — Liabilities Deferred compensation plan liability $ — $ (10,841) $ — Derivative instruments, net — (53,446) — Contingent consideration — — (1,808) Total liabilities $ — $ (64,287) $ (1,808) |
Schedule of Business Acquisitions by Acquisition Contingent Consideration | A rollforward of the activity in the Company’s fair value of the contingent consideration is as follows (in thousands): Imputed December 31, Interest / December 31, 2016 Acquisitions Payments Adjustments 2017 Welltok 1,250 — (851) — 399 Atelka 558 — (582) 24 — Total $ 1,808 $ — $ (1,433) $ 24 $ 399 Imputed December 31, Interest / December 31, 2015 Acquisitions Payments Adjustments 2016 iKnowtion $ 500 $ — $ (500) $ — $ — Sofica 3,153 — (3,146) (7) — rogenSi 9,797 — (5,793) (4,004) — Welltok — 1,250 — — 1,250 Atelka — 558 — — 558 Total $ 13,450 $ 1,808 $ (9,439) $ (4,011) $ 1,808 |
INCOME TAXES (TABLES)
INCOME TAXES (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES [ABSTRACT] | |
Sources of Pre-Tax Accounting Income | The sources of pre-tax operating income are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Domestic $ 10,909 $ (6,216) $ 25,402 Foreign 77,978 56,514 60,487 Total $ 88,887 $ 50,298 $ 85,889 |
Components of Income Tax Expense (Benefit) | The United States recently enacted comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the "2017 Tax Act") that, among other things, reduces the U.S. federal corporate income tax rate from 35% to 21% and implements a territorial tax system, but imposes an alternative “base erosion and anti-abuse tax” (“BEAT”), and an incremental tax on global intangible low taxed foreign income (“GILTI”) effective January 1, 2018. In addition, the law imposes a one-time mandatory repatriation tax on accumulated foreign earnings on domestic corporations effective for the 2017 tax year. In response, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act and allows the registrant to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The Company has not completed its final analysis of the full impact of the 2017 Act on its tax provisions. However, the Company has recognized the provisional impacts related to the one-time transition tax and revaluation of deferred tax balances and included these estimates in our consolidated financial statements for the year ended December 31, 2017. The significant components of this expense include (i) the remeasurement of net deferred tax assets at the lower enacted U.S. federal corporate tax rate, which resulted in a net $1.1 million increase in income tax expense; and (ii) the deemed repatriation tax on unremitted non-U.S. earnings and profits that were previously tax deferred and other tax impacts of the 2017 Tax Act, which resulted in a $62.4 million increase in income tax expense, net of deductions and credits. No amount was booked related to withholding taxes on the changes in indefinite reinvestment assertion on the potential repatriation of foreign earnings as it is the Company’s determination that there would be no material additional amount of tax if the related foreign cash was repatriated to the United States. The Company has not completed its analysis in regard to the full tax impact related to a change in indefinite reinvestment reassertion as the computation is complex and impacted by the provisional calculations outlined above. No additional income taxes have been provided for any remaining outside basis difference inherent in our foreign subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations. Determination of any unrecognized deferred tax liability related to the outside basis difference in investments in foreign subsidiaries is not practicable due to the inherent complexity of the multi-national tax environment in which we operate. The ultimate impact of the 2017 Tax Act may materially differ from the provisional amounts recorded, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the Tax Act. In addition, foreign and state governments may enact tax laws in response to the Tax Act that could result in further changes to global taxation and materially affect our financial position and results of operations. Our selection of an accounting policy with respect to the new GILTI rules will depend in part on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI, and if so, what the impact is expected to be. We have not yet computed a reasonable estimate of the effect of this provision, and therefore, we have not made a policy decision regarding whether to record deferred taxes related to GILTI nor have we made any adjustments related to GILTI tax in our year-end financial statements. We expect to complete our analysis of the impacts of the 2017 Tax Act within the measurement period in accordance with SAB 118. The components of the Company’s Provision for (benefit from) income taxes are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current provision for (benefit from) Federal $ 48,556 $ (373) $ 4,094 State 99 372 1,829 Foreign 12,643 14,447 4,764 Total current provision for (benefit from) 61,298 14,446 10,687 Deferred provision for (benefit from) Federal 14,441 (2,390) (1,895) State 707 103 1,085 Foreign 1,629 704 10,127 Total deferred provision for (benefit from) 16,777 (1,583) 9,317 Total provision for (benefit from) income taxes $ 78,075 $ 12,863 $ 20,004 |
Effective Income Tax Rate Reconciliation Table | The following reconciles the Company’s effective tax rate to the federal statutory rate (in thousands): Year Ended December 31, 2017 2016 2015 Income tax per U.S. federal statutory rate (35%) $ 31,110 $ 17,605 $ 30,062 State income taxes, net of federal deduction 460 (158) 1,603 Change in valuation allowances (924) (129) 3,923 Foreign income taxes at different rates than the U.S. (14,417) (10,206) (14,490) Foreign withholding taxes 323 590 958 Losses in international markets without tax benefits 1,098 2,474 1,999 Nondeductible compensation under Section 162(m) 647 104 512 Liabilities for uncertain tax positions 1,607 (133) 1,756 Permanent difference related to foreign exchange gains 142 388 162 (Income) losses of foreign branch operations (824) (635) (517) Non-taxable earnings of noncontrolling interest (1,030) (1,128) (1,349) Foreign dividend less foreign tax credits (4,798) (4,646) (4,425) Increase in deferred tax liability - branch losses in UK — — (2,530) Decrease (increase) to deferred tax asset - change in tax rate 1,101 443 (526) State income tax credits 207 100 (1,477) Foreign earnings taxed currently in U.S. 3,143 3,673 2,839 Taxes related to prior year filings (865) 2,554 344 Taxes related to US tax reform 61,569 — — Other (474) 1,967 1,160 Income tax per effective tax rate $ 78,075 $ 12,863 $ 20,004 |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred income tax assets and liabilities are summarized as follows (in thousands): Year Ended December 31, 2017 2016 Deferred tax assets, gross Accrued workers compensation, deferred compensation and employee benefits $ 8,597 $ 11,212 Allowance for doubtful accounts, insurance and other accruals 2,197 3,348 Amortization of deferred rent liabilities 2,352 3,362 Net operating losses 17,887 20,253 Equity compensation 1,481 2,489 Customer acquisition and deferred revenue accruals 7,026 11,739 Federal and state tax credits, net 50 7,439 Depreciation and amortization — 4,671 Unrealized losses on derivatives 3,137 13,815 Contract acquisition costs — 1,044 Other 1,557 2,331 Total deferred tax assets, gross 44,284 81,703 Valuation allowances (9,526) (9,949) Total deferred tax assets, net 34,758 71,754 Deferred tax liabilities Depreciation and amortization (12,850) — Contract acquisition costs (5,331) — Intangible assets (15,405) (17,971) Other (446) (357) Total deferred tax liabilities (34,032) (18,328) Net deferred tax assets $ 726 $ 53,426 |
Valuation Allowance Rollforward | Activity in the Company’s valuation allowance accounts consists of the following (in thousands): Year Ended December 31, 2017 2016 2015 Beginning balance $ 9,949 $ 10,139 $ 10,721 Additions of deferred income tax expense 2,044 1,914 4,300 Reductions of deferred income tax expense (2,467) (2,104) (4,882) Ending balance $ 9,526 $ 9,949 $ 10,139 |
Expiration of Net Operating Loss Carryforwards | As of December 31, 2017, after consideration of all tax loss and tax credit carry back opportunities, the Company had tax affected tax loss carry forwards worldwide expiring as follows (in thousands): 2018 $ 98 2019 205 2020 319 2021 160 After 2021 9,687 No expiration 5,282 Total $ 15,751 |
Reserve for Uncertain Tax Positions Rollforward | The tabular reconciliation of the reserve for uncertain tax benefits on a gross basis without interest for the three years ended December 31, 2017 is presented below (in thousands): Balance as of December 31, 2014 $ 1,661 Additions for current year tax positions 1,048 Reductions in prior year tax positions — Balance as of December 31, 2015 2,709 Additions for current year tax positions 826 Reductions in prior year tax positions (1,153) Balance as of December 31, 2016 2,382 Additions for current year tax positions 916 Reductions in prior year tax positions — Balance as of December 31, 2017 $ 3,298 |
Jurisdictions Open to Income Tax Examination | The following table presents the major tax jurisdictions and tax years that are open as of December 31, 2017 and subject to examination by the respective tax authorities: Tax Jurisdiction Tax Year Ended United States 2014 to present Australia 2013 to present Brazil 2012 to present Canada 2009 to present Mexico 2012 to present Philippines 2015 to present |
RESTRUCTURING CHARGES, INTEGR42
RESTRUCTURING CHARGES, INTEGRATION CHARGES AND IMPAIRMENT (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract] | |
Schedule of Restructuring Liabilities | Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015, respectively, is as follows (in thousands): Year Ended December 31, 2017 2016 2015 Reduction in force Customer Management Services $ 1,012 $ 2,837 $ 1,482 Customer Growth Services — 147 22 Customer Technology Services 94 324 13 Customer Strategy Services 55 92 297 Total $ 1,161 $ 3,400 $ 1,814 Year Ended December 31, 2017 2016 2015 Facility exit and other charges Customer Management Services $ 2,050 $ 959 $ — Customer Growth Services — — — Customer Technology Services 84 33 — Customer Strategy Services 85 — — Total $ 2,219 $ 992 $ — |
Schedule of Restructuring Liability Rollforward | A rollforward of the activity in the Company’s restructuring accruals for the years ended December 31, 2017 and 2016, respectively, is as follows (in thousands): Reduction Facility Exit and in Force Other Charges Total Balance as of December 31, 2015 $ 806 $ — $ 806 Expense 3,728 992 4,720 Payments (2,646) (894) (3,540) Changes due to foreign currency (92) — (92) Changes in estimates (328) — (328) Balance as of December 31, 2016 1,468 98 1,566 Expense 1,316 2,219 3,535 Payments (1,892) (908) (2,800) Changes due to foreign currency (43) — (43) Changes in estimates (155) — (155) Balance as of December 31, 2017 $ 694 $ 1,409 $ 2,103 |
DEFERRED REVENUE AND COSTS (TAB
DEFERRED REVENUE AND COSTS (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
DEFERRED REVENUE AND COSTS [ABSTRACT] | |
Classification of Deferred Revenue on Balance Sheet | Deferred revenue in the accompanying Consolidated Balance Sheets consist of the following (in thousands): December 31, 2017 2016 Deferred Revenue - Current $ 21,628 $ 23,318 Deferred Revenue - Long-term 9,632 8,851 Total Deferred Revenue $ 31,260 $ 32,169 |
Classification of Deferred Costs on Balance Sheet | Deferred costs in the accompanying Consolidated Balance Sheets consist of the following (in thousands): December 31, 2017 2016 Deferred Costs - Current $ 13,649 $ 14,755 Deferred Costs - Long-term 9,654 8,124 Total Deferred Costs $ 23,303 $ 22,879 |
LEASES (TABLES)
LEASES (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
LEASES [ABSTRACT] | |
Schedule of Future Minimum Lease Payments | The future minimum rental payments and receipts required under non-cancelable operating leases as of December 31, 2017 are as follows (in thousands): Operating Sub-Lease Leases Income 2018 $ 44,177 $ (2,470) 2019 34,528 (2,470) 2020 26,471 (2,470) 2021 20,854 (206) 2022 17,215 — Thereafter 30,984 — Total $ 174,229 $ (7,616) |
Schedule of Change in Asset Retirement Obligation Liability | . Following is a summary of the amounts recorded (in thousands): Balance at Balance at December 31, Additions and December 31, 2016 Modifications Accretion Settlements 2017 ARO liability total $ 1,861 $ 317 $ 7 $ (247) $ 1,938 Balance at Balance at December 31, Additions and December 31, 2015 Modifications Accretion Settlements 2016 ARO liability total $ 1,641 $ 333 $ 15 $ (128) $ 1,861 |
MANDATORILY REDEEMABLE NONCON45
MANDATORILY REDEEMABLE NONCONTROLLING INTEREST (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
Mandatorily Redeemable Noncontrolling Interest [Abstract] | |
Mandatorily Redeemable Noncontrolling Interest Rollforward | A rollforward of the mandatorily redeemable noncontrolling interest is as follows (in thousands): Year Ended December 31, 2017 2016 Mandatorily redeemable noncontrolling interest, January 1 $ — $ 4,131 Net income attributable to mandatorily redeemable noncontrolling interest — — Working capital distributed to mandatorily redeemable noncontrolling interest — (492) Change in redemption value — 466 Purchase of mandatorily redeemable noncontrolling interest — (4,105) Mandatorily redeemable noncontrolling interest, December 31 $ — $ — |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [ABSTRACT] | |
Schedule of 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 Derivative Translation Valuation, Net Other, Net Adjustment of Tax of Tax Totals Accumulated other comprehensive income (loss) at December 31, 2014 $ (33,352) $ (18,345) $ (577) $ (52,274) Other comprehensive income (loss) before reclassifications (37,844) (16,349) (3,614) (57,807) Amounts reclassified from accumulated other comprehensive income (loss) — 7,809 907 8,716 Net current period other comprehensive (income) loss (37,844) (8,540) (2,707) (49,091) Accumulated other comprehensive income (loss) at December 31, 2015 $ (71,196) $ (26,885) $ (3,284) $ (101,365) Accumulated other comprehensive income (loss) at December 31, 2015 $ (71,196) $ (26,885) $ (3,284) $ (101,365) Other comprehensive income (loss) before reclassifications (20,812) 11,242 1,902 (7,668) Amounts reclassified from accumulated other comprehensive income (loss) — (16,750) (1,181) (17,931) Net current period other comprehensive income (loss) (20,812) (5,508) 721 (25,599) Accumulated other comprehensive income (loss) at December 31, 2016 $ (92,008) $ (32,393) $ (2,563) $ (126,964) Accumulated other comprehensive income (loss) at December 31, 2016 $ (92,008) $ (32,393) $ (2,563) $ (126,964) Other comprehensive income (loss) before reclassifications 7,908 31,053 575 39,536 Amounts reclassified from accumulated other comprehensive income (loss) — (14,406) (470) (14,876) Net current period other comprehensive income (loss) 7,908 16,647 105 24,660 Accumulated other comprehensive income (loss) at December 31, 2017 $ (84,100) $ (15,746) $ (2,458) $ (102,304) |
Schedule of reclassifications from Accumulated other comprehensive income (loss) | The following table presents the classification and amount of the reclassifications from Accumulated other comprehensive income (loss) to the Statement of Comprehensive Income (Loss) (in thousands): Statement of For the Year Ended December 31, Comprehensive Income 2017 2016 2015 (Loss) Classification Derivative valuation Loss on foreign currency forward exchange contracts $ (22,792) $ (28,025) $ (12,410) Revenue Loss on interest rate swaps (115) (534) (1,053) Interest expense Tax effect 8,501 11,809 5,654 Provision for income taxes $ (14,406) $ (16,750) $ (7,809) Net income (loss) Other Actuarial loss on defined benefit plan $ (522) $ (1,310) $ (1,008) Cost of services Tax effect 52 129 101 Provision for income taxes $ (470) $ (1,181) $ (907) Net income (loss) |
NET INCOME PER SHARE (TABLES)
NET INCOME PER SHARE (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
Net income per share attributable to TeleTech stockholders | |
Schedule of Diluted Shares Calculation | The following table sets forth the computation of basic and diluted shares for the periods indicated (in thousands): Year Ended December 31, 2017 2016 2015 Shares used in basic earnings per share calculation 45,826 47,423 48,370 Effect of dilutive securities: Stock options 10 10 275 Restricted stock units 536 286 338 Performance-based restricted stock units 10 17 28 Total effects of dilutive securities 556 313 641 Shares used in dilutive earnings per share calculation 46,382 47,736 49,011 |
EMPLOYEE COMPENSATION PLANS (TA
EMPLOYEE COMPENSATION PLANS (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE COMPENSATION PLANS [Abstract] | |
Summary of non-vested RSU's and performance-based RSU's | Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2016 1,167,621 $ 25.29 Granted 731,817 $ 29.56 Vested (439,601) $ 24.25 Cancellations/expirations (169,410) $ 26.77 Unvested as of December 31, 2017 1,290,427 $ 27.87 |
Schedule of stock option assumptions | Year Ended December 31, 2011 Risk-free interest rate 2.1 % Expected life in years - 2.7 Expected volatility 54.4 % Dividend yield — % Weighted-average volatility 54.4 % |
Summary of stock option activity | Weighted Weighted Average Aggregate Average Remaining Intrinsic Exercise Contract Value Shares Price Term in Years (000’s) Outstanding as of December 31, 2016 191,666 $ 22.83 Exercises (60,000) $ 35.81 $ 194 Post-vest cancellations/expirations (16,666) $ 17.31 Outstanding as of December 31, 2017 115,000 $ 16.86 Vested and exercisable as of December 31, 2017 15,000 $ 13.87 $ 396 |
OTHER FINANCIAL INFORMATION (TA
OTHER FINANCIAL INFORMATION (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
OTHER FINANCIAL INFORMATION [ABSTRACT] | |
Table of Self Insurance Liabilities | Self-insurance liabilities of the Company which are included in Accrued employee compensation and benefits and Other accrued expenses in the accompanying Consolidated Balance Sheets were as follows (in thousands): December 31, 2017 2016 Workers compensation $ 5,312 $ 1,523 Employee health and dental insurance 1,631 4,908 Total self-insurance liabilities $ 6,943 $ 6,431 |
QUARTERLY FINANCIAL DATA (UNA50
QUARTERLY FINANCIAL DATA (UNAUDITED) (TABLES) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) [ABSTRACT] | |
Schedule of Quarterly Financial Information [Table Text Block] | The following tables present certain quarterly financial data for the year ended December 31, 2017 (in thousands except per share amounts). First Second Third Fourth Quarter Quarter Quarter Quarter Revenue $ 338,277 $ 353,429 $ 359,036 $ 426,623 Cost of services 253,898 268,004 275,548 312,618 Selling, general and administrative 43,220 43,985 45,167 49,942 Depreciation and amortization 14,500 16,258 16,515 17,234 Restructuring and integration charges, net 169 3,593 6,006 4,897 Impairment losses — — — 5,322 Income from operations 26,490 21,589 15,800 36,610 Other income (expense) (932) (4,198) 1,846 (8,318) (Provision for) benefit from income taxes (5,391) (1,597) (2,071) (69,016) Non-controlling interest (922) (1,100) (806) (728) Net income (loss) attributable to TTEC stockholders $ 19,245 $ 14,694 $ 14,769 $ (41,452) Weighted average shares outstanding Basic 45,950 45,662 45,838 45,856 Diluted 46,315 46,150 46,367 46,461 Net income per share attributable to TTEC stockholders Basic $ 0.42 $ 0.32 $ 0.32 $ (0.90) Diluted $ 0.42 $ 0.32 $ 0.32 $ (0.89) The following tables present certain quarterly financial data for the year ended December 31, 2016 (in thousands except per share amounts). First Second Third Fourth Quarter Quarter Quarter Quarter Revenue $ 312,410 $ 305,105 $ 312,796 $ 344,947 Cost of services 231,340 226,768 233,541 249,943 Selling, general and administrative 45,500 44,774 40,628 44,895 Depreciation and amortization 17,729 17,221 16,811 16,914 Restructuring and integration charges, net 88 114 3,688 502 Impairment losses — — 5,602 26,448 Income from operations 17,753 16,228 12,526 6,245 Other income (expense) (1,320) (734) (690) 290 Provision for income taxes (4,528) (2,952) 813 (6,196) Non-controlling interest (680) (926) (1,198) (953) Net income attributable to TTEC stockholders $ 11,225 $ 11,616 $ 11,451 $ (614) Weighted average shares outstanding Basic 48,368 47,873 47,081 46,386 Diluted 48,746 48,221 47,315 46,677 Net income per share attributable to TTEC stockholders Basic $ 0.23 $ 0.24 $ 0.24 $ (0.01) Diluted $ 0.23 $ 0.24 $ 0.24 $ (0.01) |
OVERVIEW AND BASIS OF PRESENT51
OVERVIEW AND BASIS OF PRESENTATION (OVERVIEW) (DETAILS) | Dec. 31, 2017employee |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Number of employees | 56,000 |
Percepta LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
ownership percentage | 55.00% |
Iknowtion | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
ownership percentage | 100.00% |
Motif [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
ownership percentage | 100.00% |
OVERVIEW AND BASIS OF PRESENT52
OVERVIEW AND BASIS OF PRESENTATION (DETAILS) | 12 Months Ended |
Dec. 31, 2017 | |
Building | |
Property Plant and Equipment Line Items | |
Useful life | 30 years |
Furniture And Fixtures | |
Property Plant and Equipment Line Items | |
Useful life | 5 years |
Leasehold Improvements | |
Property Plant and Equipment Line Items | |
Useful life | 10 years |
Minimum | Computer Equipment and software | |
Property Plant and Equipment Line Items | |
Useful life | 3 years |
Minimum | Telephone Equipment | |
Property Plant and Equipment Line Items | |
Useful life | 4 years |
Minimum | Other | |
Property Plant and Equipment Line Items | |
Useful life | 3 years |
Maximum | Computer Equipment and software | |
Property Plant and Equipment Line Items | |
Useful life | 7 years |
Maximum | Telephone Equipment | |
Property Plant and Equipment Line Items | |
Useful life | 7 years |
Maximum | Other | |
Property Plant and Equipment Line Items | |
Useful life | 7 years |
OVERVIEW AND BASIS OF PRESENT53
OVERVIEW AND BASIS OF PRESENTATION (NARRATIVE) (DETAILS) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ 300 | $ (200) | $ 700 | $ (300) | ||||||||||||||||
Impairment losses | $ 5,322 | $ 0 | $ 0 | $ 0 | $ 26,448 | $ 5,602 | $ 0 | $ 0 | $ 5,322 | $ 32,050 | $ 8,100 | |||||||||
Other Comprehensive Income, Other, Net of Tax | $ 105 | $ 721 | (2,707) | |||||||||||||||||
Tax Authorities Member | ||||||||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ 1,100 | 301 | $ 358 | $ 137 | $ 123 | $ 180 | ||||||||||||||
Government Authorities [Member] | ||||||||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ 1,750 | $ 234 | 645 | $ 406 | $ 466 | |||||||||||||||
Sofica [Member] | ||||||||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||||||||
Other comprehensive income before reclassifications - foreign currency translation adjustment | $ 3,200 | $ 1,500 | $ 1,700 | |||||||||||||||||
Philippines pension liability [Member] | ||||||||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||||||||
Other Comprehensive Income, Other, Net of Tax | $ 2,700 | |||||||||||||||||||
WebMetro | ||||||||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||||||||||
Impairment losses | $ 2,900 | $ 600 | $ 2,300 |
OVERVIEW AND BASIS OF PRESENT54
OVERVIEW AND BASIS OF PRESENTATION (ACCOUNTING POLICIES NARRATIVE) (DETAILS) - Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 3 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 12 years |
ACQUISITIONS (ASSETS ACQUIRED T
ACQUISITIONS (ASSETS ACQUIRED TABLE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Nov. 08, 2017 | Apr. 03, 2017 | Dec. 31, 2016 | Nov. 09, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||||
Total deferred tax assets, net | $ 34,758 | $ 71,754 | ||||
Goodwill | 206,694 | 129,648 | $ 114,183 | |||
Accrued employee compensation and benefits | $ 83,997 | $ 66,133 | ||||
Motif [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 5,997 | |||||
Accounts receivable. | 5,187 | |||||
Prepaid Expenses | 1,248 | |||||
Other assets | 670 | |||||
Property, plant and equipment. | 2,182 | |||||
Income Taxes Receivable | 1,691 | |||||
Goodwill | 39,272 | |||||
Total assets acquired | 93,447 | |||||
Accounts payable | 2,914 | |||||
Accrued employee compensation and benefits | 5,249 | |||||
Accrued expenses | 104 | |||||
Deferred tax liabilities | 11,402 | |||||
Deferred revenue. | 340 | |||||
Total liabilities assumed | 20,009 | |||||
Total purchase price | 73,438 | |||||
Motif [Member] | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 37,200 | |||||
Connextions | ||||||
Business Acquisition [Line Items] | ||||||
Accounts receivable. | $ 15,959 | |||||
Prepaid Expenses | 241 | |||||
Other assets | 51 | |||||
Property, plant and equipment. | 7,594 | |||||
Goodwill | 35,272 | |||||
Total assets acquired | 94,117 | |||||
Accounts payable | 1 | |||||
Accrued employee compensation and benefits | 346 | |||||
Accrued expenses | 386 | |||||
Deferred tax liabilities | 15,273 | |||||
Deferred revenue. | 399 | |||||
Total liabilities assumed | 16,405 | |||||
Total purchase price | 77,712 | |||||
Connextions | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 35,000 | |||||
Atelka [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 2,655 | |||||
Accounts receivable. | 18,449 | |||||
Other assets | 615 | |||||
Property, plant and equipment. | 3,161 | |||||
Total deferred tax assets, net | 638 | |||||
Goodwill | 20,275 | |||||
Total assets acquired | 56,293 | |||||
Accounts payable | 1,199 | |||||
Accrued employee compensation and benefits | 2,418 | |||||
Accrued expenses | 2,597 | |||||
Other | 1,678 | |||||
Total liabilities assumed | 7,892 | |||||
Total purchase price | 48,401 | |||||
Atelka [Member] | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 10,500 |
ACQUISITIONS AND DIVESTITURES56
ACQUISITIONS AND DIVESTITURES (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assets and Liabilities Held for Sale [Line Items] | ||
Loss on assets held-for-sale | $ 2,578 | |
Total assets held for sale | 7,835 | $ 10,715 |
Total liabilities held for sale | 1,322 | $ 1,357 |
Business Unit From Customer Growth Services And Customer Strategy Services Segments | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Assets and Liabilities Held for Sale [Line Items] | ||
Accounts receivable, net - assets held for sale | 6,151 | |
Other assets held for sale | 303 | |
Property, Plant and Equipment - assets held for sale | 49 | |
Goodwill - assets held for sale | 3,033 | |
Allowance for reduction of assets held for sale | (2,700) | |
Total assets held for sale | 7,835 | |
Accounts payable held for sale | 413 | |
Accrued employee compensation and benefits | 833 | |
Accrued expenses. | 54 | |
Other liabilities held for sale | 22 | |
Total liabilities held for sale | 1,322 | |
Business Unit From Customer Growth Services And Customer Strategy Services Segments | Disposal Group, Held-for-sale, Not Discontinued Operations | Customer Relationships | ||
Assets and Liabilities Held for Sale [Line Items] | ||
Intangible assets held for sale | $ 999 |
ACQUISITIONS AND DIVESTITURES57
ACQUISITIONS AND DIVESTITURES (NARRATIVE) (DETAILS) $ in Thousands, $ in Millions | Nov. 08, 2017USD ($) | Apr. 03, 2017USD ($) | Nov. 09, 2016CAD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Nov. 09, 2016USD ($) |
Business Acquisition [Line Items] | ||||||||||||||||
Other liabilities, noncurrent | $ 95,243 | $ 71,664 | $ 95,243 | $ 71,664 | ||||||||||||
Contingent Consideration, at fair value | 399 | 1,808 | $ 13,450 | 399 | 1,808 | $ 13,450 | ||||||||||
Revenue of Acquirees since Acquisition Date, Actual | 172,300 | 10,000 | ||||||||||||||
Income (loss) from operations of Acquirees since Acquisition Date, Actual | (700) | (300) | ||||||||||||||
Proceeds from sale of business | 636 | 0 | 0 | |||||||||||||
Gain on sale of business | 908 | 0 | 0 | |||||||||||||
Other nonoperating income expense | 1,869 | 9,555 | 2,157 | |||||||||||||
Business Combination Pro Forma Information Amortization Expense of Acquirees Since Acquisition | 3,500 | 100 | ||||||||||||||
Business Acquisition, Pro Forma Revenue | 1,541,600 | 1,489,100 | ||||||||||||||
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations, Net of Tax | 11,500 | 31,100 | ||||||||||||||
Investments in non-marketable equity investments | 1,384 | 3,179 | 9,000 | |||||||||||||
Motif [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of Voting Interests Acquired | 70.00% | |||||||||||||||
Description of Acquired Entity | Motif, Inc., a California corporation ("Motif"). Motif is a digital trust and safety services company serving eCommerce marketplaces, online retailers, travel agencies and financial services companies. Motif provides omni-channel community moderation services via voice, email and chat from delivery centers in India and the Philippines via approximately 2,700 employees | |||||||||||||||
Payments to Acquire Businesses | $ 46,800 | |||||||||||||||
Total purchase price | $ 73,438 | |||||||||||||||
Other liabilities, noncurrent | 27,800 | $ 27,800 | ||||||||||||||
Contingent Consideration Arrangements, Basis for Amount | The Company also agreed to purchase the remaining 30% interest in Motif from Motif's founders ("founders' shares") no later than May 2020 ("30% buyout period"). The Company agreed to pay for the founders' shares at a purchase price based on Motif's fiscal year 2020's adjusted normalized EBITDA, $5.0 million in cash, and 30% of the excess cash present in the business at the time of the buyout; or if the buyout occurs prior to May 2020, the trailing twelve months EBITDA, calculated from the most recently completed full monthly period ending prior to the date of the buyout triggering event, $5.0 million in cash, and 30% of the excess cash in the business at that point. | |||||||||||||||
Motif [Member] | Customer Relationships | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 years | |||||||||||||||
Connextions | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Description of Acquired Entity | Connextions, Inc., a health care customer service provider company, from OptumHealth Holdings, LLC. Connextions is being integrated into the health care vertical of the CMS segment of the Company. Connextions employed approximately 2,000 at several centers in the U.S. | |||||||||||||||
Payments to Acquire Businesses | $ 80,000 | |||||||||||||||
Total purchase price | $ 77,712 | |||||||||||||||
Payments for Previous Acquisition | $ 1,800 | |||||||||||||||
Proceeds from Previous Acquisition | $ 4,100 | |||||||||||||||
Connextions | Customer Relationships | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years | |||||||||||||||
Atelka [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Date of Acquisition | Nov. 9, 2016 | |||||||||||||||
Description of Acquired Entity | On November 9, 2016, the Company acquired all of the outstanding shares of Atelka Enterprise Inc. ("Atelka"), a Canadian customer contact center management and business process outsourcing services company that serves Canadian telecommunications, logistics, and entertainment clients. This acquisition was an addition to the CMS segment. Atelka employs approximately 2,800 in Quebec, Ontario, New Brunswick and Prince Edward Island. | |||||||||||||||
Total purchase price | $ 48,401 | |||||||||||||||
Cost of Acquired Entity, Up Front Cash Consideration | 47,500 | |||||||||||||||
Acquisition hold-back payment | $ 1,400 | |||||||||||||||
Discount rate | 0.00% | |||||||||||||||
Contingent Consideration, at fair value | 0 | 558 | 0 | $ 0 | 558 | 0 | ||||||||||
Increase (decrease) in contingent consideration payable | $ 600 | |||||||||||||||
Atelka [Member] | CAD | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total purchase price | $ 65 | |||||||||||||||
Increase (decrease) in contingent consideration payable | $ 0.8 | |||||||||||||||
Atelka [Member] | Customer Relationships | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years | |||||||||||||||
rogenSi | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Discount rate | 4.60% | |||||||||||||||
Contingent Consideration, at fair value | 0 | 9,797 | 0 | 9,797 | ||||||||||||
Increase (decrease) in contingent consideration payable | $ 4,300 | 300 | $ 800 | |||||||||||||
Sofica [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Discount rate | 5.00% | |||||||||||||||
Contingent Consideration, at fair value | $ 0 | $ 3,153 | $ 0 | $ 3,153 | ||||||||||||
Increase (decrease) in contingent consideration payable | $ 500 | |||||||||||||||
CafeX [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Equity Method Investment, Ownership Percentage | 17.20% | 17.20% | 17.20% | 17.20% | ||||||||||||
Investments in non-marketable equity investments | $ 1,100 | $ 4,300 |
SEGMENT INFORMATION (SEGMENT FI
SEGMENT INFORMATION (SEGMENT FINANCIALS) (DETAILS) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 01, 2017 | |
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | $ 426,623 | $ 359,036 | $ 353,429 | $ 338,277 | $ 344,947 | $ 312,796 | $ 305,105 | $ 312,410 | $ 1,477,365 | $ 1,275,258 | $ 1,286,755 | |
Depreciation and amortization | 17,234 | 16,515 | 16,258 | 14,500 | 16,914 | 16,811 | 17,221 | 17,729 | 64,507 | 68,675 | 63,808 | |
Income (Loss) from Operations | 36,610 | $ 15,800 | $ 21,589 | $ 26,490 | 6,245 | $ 12,526 | $ 16,228 | $ 17,753 | 100,489 | 52,752 | 90,180 | |
Capital Expenditures | 51,958 | 50,832 | 66,595 | |||||||||
Total Assets | 1,078,736 | 846,304 | 1,078,736 | 846,304 | 843,327 | |||||||
Goodwill | 206,694 | 129,648 | 206,694 | 129,648 | 114,183 | |||||||
Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 1,477,721 | 1,276,198 | 1,286,987 | |||||||||
Intersegment Eliminations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | (356) | (940) | (232) | |||||||||
Customer Management Services | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 1,141,760 | 924,325 | 913,272 | |||||||||
Depreciation and amortization | 52,193 | 48,770 | 44,633 | |||||||||
Income (Loss) from Operations | 78,206 | 50,541 | 58,018 | |||||||||
Capital Expenditures | 48,069 | 40,321 | 56,570 | |||||||||
Total Assets | 869,594 | 585,679 | 869,594 | 585,679 | 525,470 | |||||||
Goodwill | 119,497 | 42,589 | 119,497 | 42,589 | 23,218 | |||||||
Customer Management Services | Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 1,141,779 | 924,654 | 913,272 | |||||||||
Customer Management Services | Intersegment Eliminations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | (19) | (329) | 0 | |||||||||
Customer Growth Services | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 128,698 | 141,005 | 129,021 | |||||||||
Depreciation and amortization | 2,959 | 5,905 | 6,065 | |||||||||
Income (Loss) from Operations | 7,803 | 6,969 | 3,077 | |||||||||
Capital Expenditures | 871 | 4,185 | 4,681 | |||||||||
Total Assets | 41,036 | 71,540 | 41,036 | 71,540 | 75,291 | |||||||
Goodwill | 24,439 | 24,439 | 24,439 | 24,439 | 24,439 | |||||||
Customer Growth Services | Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 128,698 | 141,005 | 129,021 | |||||||||
Customer Growth Services | Intersegment Eliminations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 0 | 0 | 0 | |||||||||
Customer Technology Services | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 138,581 | 141,254 | 157,606 | |||||||||
Depreciation and amortization | 7,092 | 10,645 | 9,775 | |||||||||
Income (Loss) from Operations | 12,047 | 933 | 13,339 | |||||||||
Capital Expenditures | 2,308 | 5,217 | 4,216 | |||||||||
Total Assets | 100,351 | 115,537 | 100,351 | 115,537 | 146,480 | |||||||
Goodwill | 40,839 | 41,500 | 40,839 | 41,500 | 41,500 | |||||||
Customer Technology Services | Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 138,918 | 141,865 | 157,838 | |||||||||
Customer Technology Services | Intersegment Eliminations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | (337) | (611) | (232) | |||||||||
Customer Strategy Services | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 68,326 | 68,674 | 86,856 | |||||||||
Depreciation and amortization | 2,263 | 3,355 | 3,335 | |||||||||
Income (Loss) from Operations | 2,433 | (5,691) | 15,746 | |||||||||
Capital Expenditures | 710 | 1,109 | 1,128 | |||||||||
Total Assets | 67,755 | 73,548 | 67,755 | 73,548 | 96,086 | |||||||
Goodwill | $ 21,919 | $ 21,120 | 21,919 | 21,120 | 25,026 | $ 22,000 | ||||||
Customer Strategy Services | Operating Segments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | 68,326 | 68,674 | 86,856 | |||||||||
Customer Strategy Services | Intersegment Eliminations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net Revenue | $ 0 | $ 0 | $ 0 |
SEGMENT INFORMATION (REVENUE GE
SEGMENT INFORMATION (REVENUE GEOGRAPHY) (DETAILS) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales Revenue Services Net | $ 426,623 | $ 359,036 | $ 353,429 | $ 338,277 | $ 344,947 | $ 312,796 | $ 305,105 | $ 312,410 | $ 1,477,365 | $ 1,275,258 | $ 1,286,755 |
Property, plant and equipment, gross | 729,979 | 677,318 | 729,979 | 677,318 | 660,081 | ||||||
Other long-term assets | 61,857 | 47,520 | 61,857 | 47,520 | 42,486 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales Revenue Services Net | 820,597 | 693,023 | 679,959 | ||||||||
Property, plant and equipment, gross | 490,110 | 441,222 | 490,110 | 441,222 | 415,918 | ||||||
Other long-term assets | 46,029 | 36,442 | 46,029 | 36,442 | 34,007 | ||||||
Philippines | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales Revenue Services Net | 353,122 | 351,853 | 343,013 | ||||||||
Property, plant and equipment, gross | 137,683 | 133,214 | 137,683 | 133,214 | 140,712 | ||||||
Other long-term assets | 7,753 | 8,194 | 7,753 | 8,194 | 5,220 | ||||||
Latin America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales Revenue Services Net | 130,082 | 122,347 | 147,267 | ||||||||
Property, plant and equipment, gross | 51,451 | 50,605 | 51,451 | 50,605 | 49,464 | ||||||
Other long-term assets | 1,475 | 1,161 | 1,475 | 1,161 | 1,161 | ||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales Revenue Services Net | 74,252 | 13,950 | 5,780 | ||||||||
Property, plant and equipment, gross | 15,912 | 19,988 | 15,912 | 19,988 | 16,239 | ||||||
Other long-term assets | 324 | 514 | 324 | 514 | 1,122 | ||||||
Europe Middle East Africa | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales Revenue Services Net | 62,597 | 65,866 | 78,182 | ||||||||
Property, plant and equipment, gross | 10,231 | 8,805 | 10,231 | 8,805 | 14,567 | ||||||
Other long-term assets | 1,950 | 1,099 | 1,950 | 1,099 | 811 | ||||||
Asia Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales Revenue Services Net | 36,715 | 28,219 | 32,554 | ||||||||
Property, plant and equipment, gross | 24,592 | 23,484 | 24,592 | 23,484 | 23,181 | ||||||
Other long-term assets | $ 4,326 | $ 110 | $ 4,326 | $ 110 | $ 165 |
ACCOUNTS RECEIVABLE (SCHEDULE O
ACCOUNTS RECEIVABLE (SCHEDULE OF ACCOUNTS RECEIVABLE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS [Abstract] | ||
Accounts receivable | $ 386,672 | $ 301,470 |
Less: Allowance for doubtful accounts | (921) | (662) |
Accounts Receivable, Net, Current, Total | $ 385,751 | $ 300,808 |
ACCOUNTS RECEIVABLE (SCHEDULE61
ACCOUNTS RECEIVABLE (SCHEDULE OF CHANGE IN ALLOWANCE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS [Abstract] | |||
Balance, beginning of year | $ 662 | $ 2,176 | $ 3,425 |
Provision for doubtful accounts | 458 | 1,164 | 1,465 |
Uncollectible receivables written-off | (180) | (2,670) | (2,035) |
Effect of foreign currency | (19) | (8) | (679) |
Balance, end of year | $ 921 | $ 662 | $ 2,176 |
ACCOUNTS RECEIVABLE (SIGNIFICAN
ACCOUNTS RECEIVABLE (SIGNIFICANT CLIENTS TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk, Percentage of Revenue from Major Customer | |||
Accounts receivable, net | $ 385,751 | $ 300,808 | |
Revenue | Customer Concentration Risk | |||
Concentration Risk, Percentage of Revenue from Major Customer | |||
Concentration risk percentage | 9.00% | 10.00% | 10.00% |
Accounts Receivable | Credit Concentration Risk | |||
Concentration Risk, Percentage of Revenue from Major Customer | |||
Accounts receivable, net | $ 26,920 | $ 28,080 | $ 23,953 |
PROPERTY PLANT AND EQUIPMENT (P
PROPERTY PLANT AND EQUIPMENT (PPE BREAKOUT BY TYPE TABLE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Property Plant and Equipment Line Items | |||
Property, plant and equipment, gross | $ 729,979 | $ 677,318 | $ 660,081 |
Less: Accumulated depreciation and amortization | (566,682) | (526,281) | |
Property, Plant and Equipment, Net, Total | 163,297 | 151,037 | |
Land And Building | |||
Property Plant and Equipment Line Items | |||
Property, plant and equipment, gross | 38,858 | 38,868 | |
Technology Equipment | |||
Property Plant and Equipment Line Items | |||
Property, plant and equipment, gross | 390,899 | 364,854 | |
Equipment | |||
Property Plant and Equipment Line Items | |||
Property, plant and equipment, gross | 46,521 | 42,858 | |
Furniture And Fixtures | |||
Property Plant and Equipment Line Items | |||
Property, plant and equipment, gross | 76,856 | 68,248 | |
Leasehold Improvements | |||
Property Plant and Equipment Line Items | |||
Property, plant and equipment, gross | 176,467 | 162,232 | |
Vehicles | |||
Property Plant and Equipment Line Items | |||
Property, plant and equipment, gross | 158 | 143 | |
Construction In Progress | |||
Property Plant and Equipment Line Items | |||
Property, plant and equipment, gross | $ 220 | $ 115 |
PROPERTY PLANT AND EQUIPMENT (N
PROPERTY PLANT AND EQUIPMENT (NARRATIVE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Depreciation and amortization expense for property, plant and equipment | $ 57,000 | $ 59,100 | $ 54,000 |
Property, plant and equipment, net | 163,297 | 151,037 | |
Software Development [Member] | |||
Property, plant and equipment, net | $ 8,500 | $ 10,100 |
GOODWILL (GOODWILL ROLLFORWARD)
GOODWILL (GOODWILL ROLLFORWARD) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | ||
Beginning balance, goodwill | $ 129,648 | $ 114,183 |
Acquisitions / Adjustments | 73,273 | (17,997) |
Impairments | (1,363) | |
Effect of Foreign Currency | 3,773 | (1,169) |
Ending balance, goodwill | 206,694 | 129,648 |
Customer Management Services | ||
Goodwill [Line Items] | ||
Beginning balance, goodwill | 42,589 | 23,218 |
Acquisitions / Adjustments | 73,934 | (21,030) |
Impairments | (1,363) | |
Effect of Foreign Currency | 2,974 | (296) |
Ending balance, goodwill | 119,497 | 42,589 |
Customer Growth Services | ||
Goodwill [Line Items] | ||
Beginning balance, goodwill | 24,439 | 24,439 |
Acquisitions / Adjustments | 0 | 0 |
Ending balance, goodwill | 24,439 | 24,439 |
Customer Technology Services | ||
Goodwill [Line Items] | ||
Beginning balance, goodwill | 41,500 | 41,500 |
Acquisitions / Adjustments | (661) | 0 |
Ending balance, goodwill | 40,839 | 41,500 |
Customer Strategy Services | ||
Goodwill [Line Items] | ||
Beginning balance, goodwill | 21,120 | 25,026 |
Acquisitions / Adjustments | 0 | 3,033 |
Effect of Foreign Currency | 799 | (873) |
Ending balance, goodwill | $ 21,919 | $ 21,120 |
GOODWILL (NARRATIVE) (DETAILS)
GOODWILL (NARRATIVE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 01, 2017 |
ValuationAllowanceForImpairmentOfRecognizedServicingAssetsLineItems | |||||||||||||
Goodwill | $ 206,694 | $ 206,694 | $ 129,648 | $ 206,694 | $ 129,648 | $ 114,183 | |||||||
Goodwill, Impaired, Method for Fair Value Determination | The process of evaluating the fair value of the reporting units is highly subjective and requires significant judgment and estimates as the reporting units operate in a number of markets and geographical regions. We used a market approach and an income approach to determine our best estimates of fair value which incorporated the following significant assumptions:Revenue projections, including revenue growth during the forecast periods ranging from (3.2)% to 7.8%;EBITDA margin projections held relatively flat over the forecast periods ranging from 10% to 21.4%;Estimated income tax rates of 14.6% to 34.3%;Estimated capital expenditures ranging from $0.8 million to $40.4 million; andDiscount rates ranging from 10% to 16% based on various inputs, including the risks associated with the specific reporting units, the country of operations as well as their revenue growth and EBITDA margin assumptions. | ||||||||||||
Impairment losses | 5,322 | $ 0 | $ 0 | $ 0 | 26,448 | $ 5,602 | $ 0 | $ 0 | 5,322 | 32,050 | 8,100 | ||
Customer Management Services | |||||||||||||
ValuationAllowanceForImpairmentOfRecognizedServicingAssetsLineItems | |||||||||||||
Goodwill | $ 119,497 | 119,497 | 42,589 | 119,497 | 42,589 | 23,218 | |||||||
Customer Strategy Services | |||||||||||||
ValuationAllowanceForImpairmentOfRecognizedServicingAssetsLineItems | |||||||||||||
Goodwill | 21,919 | 21,919 | 21,120 | 21,919 | 21,120 | 25,026 | $ 22,000 | ||||||
Fair value of a reporting unit in excess of carrying value expressed as a percentage | 44.00% | ||||||||||||
Customer Growth Services | |||||||||||||
ValuationAllowanceForImpairmentOfRecognizedServicingAssetsLineItems | |||||||||||||
Goodwill | 24,439 | 24,439 | 24,439 | 24,439 | 24,439 | 24,439 | |||||||
Customer Technology Services | |||||||||||||
ValuationAllowanceForImpairmentOfRecognizedServicingAssetsLineItems | |||||||||||||
Goodwill | $ 40,839 | $ 40,839 | 41,500 | $ 40,839 | $ 41,500 | $ 41,500 | |||||||
Humanify - reporting unit | Customer Management Services | |||||||||||||
ValuationAllowanceForImpairmentOfRecognizedServicingAssetsLineItems | |||||||||||||
Goodwill, Impaired, Method for Fair Value Determination | For the goodwill impairment analysis, the Company calculated the fair value of the Humanify reporting unit and compared that to the updated carrying value and determined that the fair value was not in excess of its carrying value. Key assumptions used in the fair value calculation for goodwill impairment testing include, but are not limited to, revenue growth of approximately $300 thousand to $1 million per year through 2027, a perpetual growth rate of 3%, a discount rate of 16.75%, and negative EBITDA through 2020 growing to a 15.6% EBITDA for the terminal year | ||||||||||||
Humanify - reporting unit | Customer Management Services | Other Intangible Assets | |||||||||||||
ValuationAllowanceForImpairmentOfRecognizedServicingAssetsLineItems | |||||||||||||
Impairment losses | $ 10,800 |
OTHER INTANGIBLE ASSETS (SCHEDU
OTHER INTANGIBLE ASSETS (SCHEDULE OF INTANGIBLE ASSETS TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Begginning balance, accumulated amortization of other intangible assets | $ 30,787 | $ 51,215 |
Amortization | (7,467) | (9,531) |
Impairments | (5,322) | (21,322) |
Acquisitions and Adjustments | 72,434 | 10,913 |
Effect of Foreign Currency | 1,654 | (488) |
Ending balance, accumulated amortization of other intangible assets | 92,086 | 30,787 |
Customer Relationships | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Begginning balance, accumulated amortization of other intangible assets | 50,454 | 62,257 |
Amortization | 0 | |
Impairments | (17,150) | |
Acquisitions and Adjustments | 72,492 | 6,588 |
Effect of Foreign Currency | 1,829 | (1,241) |
Ending balance, accumulated amortization of other intangible assets | 124,775 | 50,454 |
Customer Relationships Accumulated Amortization | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Begginning balance, accumulated amortization of other intangible assets | (25,943) | (30,180) |
Amortization | (7,213) | (7,246) |
Impairments accumulated amortization | 6,120 | |
Acquisitions and Adjustments | (210) | 5,097 |
Effect of Foreign Currency | (194) | 266 |
Ending balance, accumulated amortization of other intangible assets | (33,560) | (25,943) |
Other Intangible Assets | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Begginning balance, accumulated amortization of other intangible assets | 4,589 | 13,750 |
Amortization | 0 | |
Impairments | (5,566) | |
Acquisitions and Adjustments | 151 | (3,701) |
Effect of Foreign Currency | 44 | 106 |
Ending balance, accumulated amortization of other intangible assets | 4,784 | 4,589 |
Other Intangible Assets Accumulated Amortization | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Begginning balance, accumulated amortization of other intangible assets | (3,978) | (8,755) |
Amortization | (254) | (2,285) |
Impairments accumulated amortization | 3,956 | |
Acquisitions and Adjustments | 1 | 2,929 |
Effect of Foreign Currency | 318 | 177 |
Ending balance, accumulated amortization of other intangible assets | (3,913) | (3,978) |
Trade Names | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Begginning balance, accumulated amortization of other intangible assets | 5,665 | 14,143 |
Amortization | 0 | |
Impairments | (5,322) | (8,682) |
Effect of Foreign Currency | $ (343) | 204 |
Ending balance, accumulated amortization of other intangible assets | $ 5,665 |
OTHER INTANGIBLE ASSETS (FUTURE
OTHER INTANGIBLE ASSETS (FUTURE AMORTIZATION EXPENSE TABLE) (DETAILS) $ in Thousands | Dec. 31, 2017USD ($) |
OTHER INTANGIBLE ASSETS [Abstract] | |
2,018 | $ 10,903 |
2,019 | 10,682 |
2,020 | 9,381 |
2,021 | 8,850 |
2,022 | 8,160 |
Thereafter | 44,110 |
Total, finite lived intangible assets | $ 92,086 |
OTHER INTANGIBLE ASSETS (NARRAT
OTHER INTANGIBLE ASSETS (NARRATIVE) (DETAILS) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted Average Useful Life [Line Items] | |||||||||||
Amortization expense related to intangible assets | $ 7,467,000 | $ 9,531,000 | |||||||||
Impairment losses | $ 5,322,000 | $ 0 | $ 0 | $ 0 | $ 26,448,000 | $ 5,602,000 | $ 0 | $ 0 | 5,322,000 | 32,050,000 | $ 8,100,000 |
CTS - Avaya | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Impairment of Intangible Assets, Finite-lived | 900,000 | 400,000 | |||||||||
Impairment losses | 11,300,000 | $ 700,000 | |||||||||
CSS - component held-for-sale | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Amortization expense related to intangible assets | 7,500,000 | $ 9,500,000 | $ 9,700,000 | ||||||||
Customer Relationships | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Amortization expense related to intangible assets | $ 0 | ||||||||||
Customer Relationships | CTS - Avaya | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Impairment losses | 9,200,000 | ||||||||||
Customer Relationships | CSS - component held-for-sale | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Weighted average useful life of intangible assets | 8 years 9 months 18 days | ||||||||||
Trade Names | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Amortization expense related to intangible assets | $ 0 | ||||||||||
Trade Names | CTS - eLoyalty | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Impairment of Intangible Assets, Finite-lived | 0 | ||||||||||
Impairment losses | 3,300,000 | ||||||||||
Trade Names | CSS - PRG | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Impairment losses | $ 2,000,000 | ||||||||||
Trade Names | CTS - Avaya | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Impairment losses | 400,000 | ||||||||||
Trade Names | CSS - rogenSi | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Estimated royalty rate | 2.00% | ||||||||||
Growth rate | 3.00% | ||||||||||
Discount rate | 18.20% | ||||||||||
Impairment of Intangible Assets, Finite-lived | 0 | $ 3,100,000 | |||||||||
Impairment losses | 3,000,000 | $ 1,200,000 | |||||||||
Trade Names | CSS - component held-for-sale | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Estimated royalty rate | 3.75% | ||||||||||
Growth rate | 3.00% | ||||||||||
Discount rate | 19.20% | ||||||||||
Impairment of Intangible Assets, Finite-lived | $ 2,000,000 | ||||||||||
Impairment losses | $ 3,300,000 | ||||||||||
Trade Names | Technology Solutions Group | CTS - Avaya | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Estimated royalty rate | 0.50% | ||||||||||
Growth rate | 3.00% | ||||||||||
Discount rate | 19.00% | ||||||||||
Other Intangible Assets | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Amortization expense related to intangible assets | $ 0 | ||||||||||
Other Intangible Assets | CSS - component held-for-sale | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Weighted average useful life of intangible assets | 3 years 9 months 18 days | ||||||||||
Non-compete intangible assets | CTS - Avaya | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Impairment losses | 400,000 | ||||||||||
Fixed Assets | CTS - Avaya | |||||||||||
Weighted Average Useful Life [Line Items] | |||||||||||
Impairment losses | $ 1,300,000 |
DERIVATIVES (OCI ROLLFORWARD) (
DERIVATIVES (OCI ROLLFORWARD) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
DERIVATIVES [ABSTRACT] | |||
Aggregate unrealized net gain/(loss) at beginning of year | $ (32,393) | $ (26,885) | $ (18,345) |
Add: Net gain/(loss) from change in fair value of cash flow hedges | 31,053 | 11,242 | (16,349) |
Less: Net (gain)/loss reclassified to earnings from effective hedges | (14,406) | (16,750) | 7,809 |
Aggregate unrealized net gain/(loss) at end of period | $ (15,746) | $ (32,393) | $ (26,885) |
DERIVATIVES (NOTIONAL TABLE) (D
DERIVATIVES (NOTIONAL TABLE) (DETAILS) ₱ in Thousands, $ in Thousands, $ in Thousands | Dec. 31, 2017PHP (₱) | Dec. 31, 2017MXN ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016PHP (₱) | Dec. 31, 2016MXN ($) | Dec. 31, 2016USD ($) |
Derivative [Line Items] | ||||||
Notional Amount | $ 15,000 | |||||
Foreign Exchange Forward | ||||||
Derivative [Line Items] | ||||||
Notional Amount | $ 313,506 | 430,509 | ||||
Foreign Exchange Forward | PHP | ||||||
Derivative [Line Items] | ||||||
Notional Amount | ₱ 10,685,000 | $ 219,917 | ₱ 14,315,000 | 301,134 | ||
% Maturing in the Next 12 Months | 62.30% | 62.30% | 62.30% | |||
Foreign Exchange Forward | MXN | ||||||
Derivative [Line Items] | ||||||
Notional Amount | $ 1,609,000 | $ 93,589 | $ 2,089,000 | $ 129,375 | ||
% Maturing in the Next 12 Months | 41.00% | 41.00% | 41.00% |
DERIVATIVES (INTEREST RATE SWAP
DERIVATIVES (INTEREST RATE SWAPS) (DETAILS) $ in Millions | Dec. 31, 2016USD ($) |
DERIVATIVES [ABSTRACT] | |
Notional Amount | $ 15 |
Fixed Rate Paid | 3.14% |
DERIVATIVES (BALANCE SHEET CLAS
DERIVATIVES (BALANCE SHEET CLASSIFICATION) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total net derivative asset (liability) | $ (26,256) | $ (54,039) |
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) | 220 | 1,178 |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Other assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total net derivative asset (liability) | 393 | |
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) | (15,603) | (23,503) |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Total net derivative asset (liability) | (11,266) | (31,714) |
Designated as Hedging Instruments [Member] | Interest Rate | Cash Flow [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total net derivative asset (liability) | (147) | |
Designated as Hedging Instruments [Member] | Interest Rate | Cash Flow [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total net derivative asset (liability) | (147) | |
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total net derivative asset (liability) | 1,470 | 740 |
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) | 1,603 | 1,606 |
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) | $ (133) | $ (866) |
DERIVATIVES (INCOME STATEMENT C
DERIVATIVES (INCOME STATEMENT CLASSIFICATION) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Interest Expense. | $ 13,734 | $ 7,943 | $ 7,538 |
Other nonoperating income expense | 1,869 | 9,555 | $ 2,157 |
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: | (14,336) | (16,438) | |
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Reclassification from accumulated other comprehensive income | Revenue | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Revenues | (22,792) | (28,025) | |
Designated as Hedging Instruments [Member] | Interest Rate | 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: | (70) | (312) | |
Designated as Hedging Instruments [Member] | Interest Rate | Cash Flow [Member] | Reclassification from accumulated other comprehensive income | Interest Expense | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Interest Expense. | (115) | (534) | |
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Reclassification from accumulated other comprehensive income | Other income (expense), net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Other nonoperating income expense | $ 1,350 | $ (5,826) |
DERIVATIVES (NARRATIVE) (DETAIL
DERIVATIVES (NARRATIVE) (DETAILS) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Notional Amount | $ 15 | |
Fair Value [Member] | ||
Derivative [Line Items] | ||
Notional Amount | $ 176.2 | $ 227.8 |
FAIR VALUE (DERIVATIVES TABLE)
FAIR VALUE (DERIVATIVES TABLE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
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 | $ (26,256) | $ (54,039) |
Interest rate swaps | 0 | (147) |
Fair value hedges | 1,470 | 740 |
Total net derivative asset (liability) | (24,786) | (53,446) |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash flow hedges | (26,256) | (54,039) |
Interest rate swaps | 0 | (147) |
Fair value hedges | 1,470 | 740 |
Total net derivative asset (liability) | $ (24,786) | $ (53,446) |
FAIR VALUE (FAIR VALUE ASSETS A
FAIR VALUE (FAIR VALUE ASSETS AND LIABILITIES) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Liabilities [Abstract] | |||
Contingent consideration | $ (399) | $ (1,808) | $ (13,450) |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Liabilities [Abstract] | |||
Deferred compensation plan liability | (13,219) | (10,841) | |
Derivative instruments, net | (24,786) | (53,446) | |
Total liabilities | (38,005) | (64,287) | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Liabilities [Abstract] | |||
Contingent consideration | (399) | (1,808) | |
Total liabilities | $ (399) | $ (1,808) |
FAIR VALUE (CONTINGENT CONSIDER
FAIR VALUE (CONTINGENT CONSIDERATION TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business acquisitions, Contingent Consideration [Line Items] | ||
Beginning balance, contingent consideration payable | $ 1,808 | $ 13,450 |
Acquisitions | 1,808 | |
Payments | (1,433) | (9,439) |
Imputed Interest/ Adjustment | 24 | (4,011) |
Ending balance, contingent consideration payable | 399 | 1,808 |
Iknowtion | ||
Business acquisitions, Contingent Consideration [Line Items] | ||
Beginning balance, contingent consideration payable | 0 | 500 |
Payments | (500) | |
Ending balance, contingent consideration payable | 0 | |
Sofica [Member] | ||
Business acquisitions, Contingent Consideration [Line Items] | ||
Beginning balance, contingent consideration payable | 0 | 3,153 |
Payments | (3,146) | |
Imputed Interest/ Adjustment | (7) | |
Ending balance, contingent consideration payable | 0 | |
rogenSi | ||
Business acquisitions, Contingent Consideration [Line Items] | ||
Beginning balance, contingent consideration payable | 0 | 9,797 |
Payments | (5,793) | |
Imputed Interest/ Adjustment | (4,004) | |
Ending balance, contingent consideration payable | 0 | |
Welltok | ||
Business acquisitions, Contingent Consideration [Line Items] | ||
Beginning balance, contingent consideration payable | 1,250 | 0 |
Acquisitions | 1,250 | |
Payments | (851) | |
Ending balance, contingent consideration payable | 399 | 1,250 |
Atelka [Member] | ||
Business acquisitions, Contingent Consideration [Line Items] | ||
Beginning balance, contingent consideration payable | 558 | 0 |
Acquisitions | 558 | |
Payments | (582) | |
Imputed Interest/ Adjustment | 24 | |
Ending balance, contingent consideration payable | $ 0 | $ 558 |
FAIR VALUE (NARRATIVE) (DETAILS
FAIR VALUE (NARRATIVE) (DETAILS) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business acquisitions, Contingent Consideration [Line Items] | |||||||
Average interest rate on annual borrowings | 2.20% | 1.50% | |||||
Iknowtion | |||||||
Business acquisitions, Contingent Consideration [Line Items] | |||||||
Discount rate | 21.00% | ||||||
Sofica [Member] | |||||||
Business acquisitions, Contingent Consideration [Line Items] | |||||||
Discount rate | 5.00% | ||||||
Increase (decrease) in contingent consideration payable | $ 0.5 | ||||||
rogenSi | |||||||
Business acquisitions, Contingent Consideration [Line Items] | |||||||
Discount rate | 4.60% | ||||||
Increase (decrease) in contingent consideration payable | $ 4.3 | $ 0.3 | $ 0.8 | ||||
Atelka [Member] | |||||||
Business acquisitions, Contingent Consideration [Line Items] | |||||||
Discount rate | 0.00% | ||||||
Increase (decrease) in contingent consideration payable | $ 0.6 |
INCOME TAXES (SOURCES OF PRE-TA
INCOME TAXES (SOURCES OF PRE-TAX INCOME TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Sources of pre-tax accounting income | |||
Domestic | $ 10,909 | $ (6,216) | $ 25,402 |
Foreign | 77,978 | 56,514 | 60,487 |
Income before income taxes | $ 88,887 | $ 50,298 | $ 85,889 |
INCOME TAXES (PROVISION TABLE)
INCOME TAXES (PROVISION TABLE) (DETAILS) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current provision | |||||||||||
Federal current | $ 48,556 | $ (373) | $ 4,094 | ||||||||
State current | 99 | 372 | 1,829 | ||||||||
Foreign current | 12,643 | 14,447 | 4,764 | ||||||||
Total current provision | 61,298 | 14,446 | 10,687 | ||||||||
Deferred provision (benefit) | |||||||||||
Federal deferred | 14,441 | (2,390) | (1,895) | ||||||||
State deferred | 707 | 103 | 1,085 | ||||||||
Foreign deferred | 1,629 | 704 | 10,127 | ||||||||
Deferred Income Tax Expense (Benefit), Total | 16,777 | (1,583) | 9,317 | ||||||||
Income Tax Expense (Benefit), Total | $ 69,016 | $ 2,071 | $ 1,597 | $ 5,391 | $ 6,196 | $ (813) | $ 2,952 | $ 4,528 | $ 78,075 | $ 12,863 | $ 20,004 |
INCOME TAXES (TAX RATE RECONCIL
INCOME TAXES (TAX RATE RECONCILIATION TABLE) (DETAILS) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective tax rate reconciliation | |||||||||||
Income tax per U.S. federal statutory rate (35%) | $ 31,110 | $ 17,605 | $ 30,062 | ||||||||
State income taxes, net of federal deduction | 460 | (158) | 1,603 | ||||||||
Change in valuation allowances | (924) | (129) | 3,923 | ||||||||
Foreign income taxes at different rates than the U.S. | (14,417) | (10,206) | (14,490) | ||||||||
Foreign withholding taxes | 323 | 590 | 958 | ||||||||
Losses in international markets without tax benefits | 1,098 | 2,474 | 1,999 | ||||||||
Nondeductible compensation under Section 162(m) | 647 | 104 | 512 | ||||||||
Liabilities for uncertain tax positions | 1,607 | (133) | 1,756 | ||||||||
Permanent difference related to foreign exchange gains | 142 | 388 | 162 | ||||||||
(Income)/losses of foreign branch operations | (824) | (635) | (517) | ||||||||
Non-taxable earnings of minority interest | (1,030) | (1,128) | (1,349) | ||||||||
Foreign dividend less foreign tax credits | (4,798) | (4,646) | (4,425) | ||||||||
Increase in deferred tax liability - branch losses in UK | (2,530) | ||||||||||
Decrease (increase) to deferred tax asset - change in state tax rate | 1,101 | 443 | (526) | ||||||||
State income tax credits | (207) | (100) | 1,477 | ||||||||
Foreign earnings taxed currently in U.S. | 3,143 | 3,673 | 2,839 | ||||||||
Taxes related to prior year filings | (865) | 2,554 | 344 | ||||||||
Taxes related to US tax reform | $ 62,400 | 61,569 | 0 | ||||||||
Other | (474) | 1,967 | 1,160 | ||||||||
Income Tax Expense (Benefit), Total | $ 69,016 | $ 2,071 | $ 1,597 | $ 5,391 | $ 6,196 | $ (813) | $ 2,952 | $ 4,528 | $ 78,075 | $ 12,863 | $ 20,004 |
INCOME TAXES (DTA AND DTL TABLE
INCOME TAXES (DTA AND DTL TABLE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets, gross | ||||
Accrued workers compensation, deferred compensation and employee benefits | $ 8,597 | $ 11,212 | ||
Allowance for doubtful accounts, insurance and other accruals | 2,197 | 3,348 | ||
Amortization of deferred rent liabilities | 2,352 | 3,362 | ||
Net operating losses | 17,887 | 20,253 | ||
Equity compensation | 1,481 | 2,489 | ||
Customer acquisition and deferred revenue accruals | 7,026 | 11,739 | ||
Federal and state tax credits, net | 50 | 7,439 | ||
Depreciation and amortization | 0 | 4,671 | ||
Unrealized losses on derivatives | 3,137 | 13,815 | ||
DTA Contract Acquisition Costs | 0 | 1,044 | ||
Other | 1,557 | 2,331 | ||
Total deferred tax assets, gross | 44,284 | 81,703 | ||
Valuation allowances | (9,526) | (9,949) | $ (10,139) | $ (10,721) |
Deferred Tax Assets, Net of Valuation Allowance, Total | 34,758 | 71,754 | ||
Deferred tax liabilities | ||||
Depreciation and amortization | (12,850) | 0 | ||
Contract acquisition costs | (5,331) | 0 | ||
Intangible Assets | (15,405) | (17,971) | ||
Other | (446) | (357) | ||
Total deferred tax liabilities | (34,032) | (18,328) | ||
Deferred Tax Assets, Net, Total | $ 726 | $ 53,426 |
INCOME TAXES (VALUATION ALLOWAN
INCOME TAXES (VALUATION ALLOWANCE ROLLFORWARD TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
INCOME TAXES [ABSTRACT] | |||
Beginning balance, deferred income tax valuation allowance | $ 9,949 | $ 10,139 | $ 10,721 |
Additions to Deferred Income Tax Expense | 2,044 | 1,914 | 4,300 |
Reduction of Deferred Income Tax Expense | (2,467) | (2,104) | (4,882) |
Ending balance, deferred income tax valuation allowance | $ 9,526 | $ 9,949 | $ 10,139 |
INCOME TAXES (OPERATING LOSS CA
INCOME TAXES (OPERATING LOSS CARRY FORWARDS TABLE) (DETAILS) $ in Thousands | Dec. 31, 2017USD ($) |
INCOME TAXES [ABSTRACT] | |
2,018 | $ 98 |
2,019 | 205 |
2,020 | 319 |
2,021 | 160 |
After 2,021 | 9,687 |
No expiration | 5,282 |
Total | $ 15,751 |
INCOME TAXES (UNCERTAIN TAX BEN
INCOME TAXES (UNCERTAIN TAX BENEFITS TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits Rollforward | |||
Beginning balance, unrecognized tax benefits | $ 2,382 | $ 2,709 | $ 1,661 |
Additions for current year tax positions | 916 | 826 | 1,048 |
Reductions in prior year tax positions | 0 | (1,153) | 0 |
Ending balance, unrecognized tax benefits | $ 3,298 | $ 2,382 | $ 2,709 |
INCOME TAXES (JURISDICTIONS OPE
INCOME TAXES (JURISDICTIONS OPEN TO TAX EXAMINATIONS TABLE) (DETAILS) | 12 Months Ended |
Dec. 31, 2017 | |
United States | |
Income Tax Examination [Line Items] | |
Tax Years Ended | 2014 to present |
Australia | |
Income Tax Examination [Line Items] | |
Tax Years Ended | 2013 to present |
Brazil | |
Income Tax Examination [Line Items] | |
Tax Years Ended | 2012 to present |
Canada | |
Income Tax Examination [Line Items] | |
Tax Years Ended | 2009 to present |
Mexico | |
Income Tax Examination [Line Items] | |
Tax Years Ended | 2012 to present |
Philippines | |
Income Tax Examination [Line Items] | |
Tax Years Ended | 2015 to present |
INCOME TAXES (NARRATIVE) (DETAI
INCOME TAXES (NARRATIVE) (DETAILS) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement Narrative [Line Items] | ||||||||||||
Total deferred tax assets, net | $ 34,758 | $ 71,754 | $ 34,758 | $ 71,754 | ||||||||
Valuation allowances | 9,526 | 9,949 | $ 9,526 | 9,949 | $ 10,139 | $ 10,721 | ||||||
Net Change in Valuation Allowance | 600 | 400 | $ 1,000 | $ 100 | ||||||||
Income Tax Holidays Description | The Company has been granted "Tax Holidays" as an incentive to attract foreign investment by the governments of the Philippines and Costa Rica. Generally, a Tax Holiday is an agreement between the Company and a foreign government under which the Company receives certain tax benefits in that country, such as exemption from taxation on profits derived from export-related activities. In the Philippines, the Company has been granted multiple agreements with an initial period of four years and additional periods for varying years, expiring at various times between 2017 and 2019. | |||||||||||
Income Tax Holiday Termination Date | 2017 and 2019 | |||||||||||
Aggregate Effect on Income Tax Expense for Income Tax Holiday Jurisdictions | $ 11,900 | $ 12,400 | $ 12,200 | |||||||||
Diluted Net Income Per Share Effect For Income Tax Holiday Jurisdictions | $ 0.26 | $ 0.27 | $ 0.25 | |||||||||
Total Interest and Penalties Accrued Related to Uncertain Tax Positions Recorded in Balance Sheets | 1,800 | $ 693 | $ 1,800 | $ 693 | $ 709 | |||||||
Reserve for Uncertain Tax Benefits, Net | 3,300 | $ 3,500 | ||||||||||
Decrease of Unrecognized Tax Benefits over Next 12 Months | 5,100 | 5,100 | ||||||||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 3,900 | 3,900 | ||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | 300 | $ (200) | $ 700 | $ (300) | ||||||||
Settlement with Taxing Authority [Member] | ||||||||||||
Income Statement Narrative [Line Items] | ||||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ 800 | |||||||||||
Expired statute of limitations [Member] | ||||||||||||
Income Statement Narrative [Line Items] | ||||||||||||
Tax Adjustments, Settlements, and Unusual Provisions | $ 500 | $ 300 | ||||||||||
State Tax Credits And Nol [Member] | ||||||||||||
Income Statement Narrative [Line Items] | ||||||||||||
Net Change in Valuation Allowance | 100 | |||||||||||
United States | ||||||||||||
Income Statement Narrative [Line Items] | ||||||||||||
Total deferred tax assets, net | 4,200 | $ 4,200 | ||||||||||
Income Tax Examination Years Under Audit | 2014 through 2016 | |||||||||||
Foreign Jurisdictions | ||||||||||||
Income Statement Narrative [Line Items] | ||||||||||||
Total deferred tax assets, net | $ 3,500 | $ 3,500 | ||||||||||
Canada | ||||||||||||
Income Statement Narrative [Line Items] | ||||||||||||
Income Tax Examination Years Under Audit | 2009 and 2010 | |||||||||||
United Kingdom Ireland Australia | Not Realizable Standard [Member] | ||||||||||||
Income Statement Narrative [Line Items] | ||||||||||||
Net Change in Valuation Allowance | $ 2,100 | |||||||||||
Argentina New Zealand Belgium Turkey UK | Not Realizable Standard [Member] | ||||||||||||
Income Statement Narrative [Line Items] | ||||||||||||
Net Change in Valuation Allowance | $ (2,500) |
RESTRUCTURING AND INTEGRATION C
RESTRUCTURING AND INTEGRATION CHARGES AND IMPAIRMENT LOSSES (LIABILITY CLASSIFICATION TABLE) (DETAILS) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||||||||||
Reduction in force | $ 1,161 | $ 3,400 | $ 1,814 | ||||||||
Facility exit charges | 2,219 | 992 | |||||||||
Restructuring charges, net | $ 4,897 | $ 6,006 | $ 3,593 | $ 169 | $ 502 | $ 3,688 | $ 114 | $ 88 | 14,665 | 4,392 | 1,814 |
Customer Management Services | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Reduction in force | 1,012 | 2,837 | 1,482 | ||||||||
Facility exit charges | 2,050 | 959 | 0 | ||||||||
Customer Growth Services | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Reduction in force | 147 | 22 | |||||||||
Facility exit charges | 0 | 0 | 0 | ||||||||
Customer Technology Services | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Reduction in force | 94 | 324 | 13 | ||||||||
Facility exit charges | 84 | 33 | 0 | ||||||||
Customer Strategy Services | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Reduction in force | 55 | 92 | 297 | ||||||||
Facility exit charges | $ 85 | $ 0 | $ 0 |
RESTRUCTURING CHARGES AND IMPAI
RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES (LIABLITY ROLLFORWARD TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance, restructuring reserve | $ 1,566 | $ 806 |
Expense | 3,535 | 4,720 |
Payments | (2,800) | (3,540) |
Changes due to foreign currency | (43) | (92) |
Change in estimates | (155) | (328) |
Ending balance, restructuring reserve | 2,103 | 1,566 |
Reduction in Force [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance, restructuring reserve | 1,468 | 806 |
Expense | 1,316 | 3,728 |
Payments | (1,892) | (2,646) |
Changes due to foreign currency | (43) | (92) |
Change in estimates | (155) | (328) |
Ending balance, restructuring reserve | 694 | 1,468 |
Facility Exit and Other Charges [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance, restructuring reserve | 98 | |
Expense | 2,219 | 992 |
Payments | (908) | (894) |
Ending balance, restructuring reserve | $ 1,409 | $ 98 |
RESTRUCTURING AND INTEGRATION91
RESTRUCTURING AND INTEGRATION CHARGES AND IMPAIRMENT LOSSES (NARRATIVE) (DETAILS) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reduction in force | $ 1,161,000 | $ 3,400,000 | $ 1,814,000 | ||
Facility exit charges | $ 2,219,000 | 992,000 | |||
Impaired Long-Lived Assets Held and Used, Asset Description | During each of the periods presented, the Company evaluated the annual recoverability of its leasehold improvement assets at certain customer engagement centers. | ||||
Impaired Long-Lived Assets Held and Used, Method for Determining 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. | ||||
Customer Management Services | |||||
Reduction in force | $ 1,012,000 | 2,837,000 | 1,482,000 | ||
Facility exit charges | 2,050,000 | 959,000 | 0 | ||
Customer Management Services | Leasehold Improvements | |||||
Restructuring impairment losses | 0 | $ 0 | $ 400,000 | ||
Connextions | |||||
Reduction in force | 400,000 | ||||
Termination fee | 600,000 | ||||
Integration charges | $ 3,900,000 | $ 5,600,000 | |||
Facility exit charges | $ 1,400,000 | ||||
Connextions | Leasehold Improvements | |||||
Integration charges | $ 3,500,000 |
INDEBTEDNESS (NARRATIVE) (DETAI
INDEBTEDNESS (NARRATIVE) (DETAILS) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 11, 2016 |
INDEBTEDNESS [ABSTRACT] | |||
Initiation date of current line of credit agreement | Feb. 11, 2016 | ||
Line of Credit Facility, Expiration Date | Feb. 11, 2021 | ||
Initial Borrowing Capacity | $ 900,000,000 | ||
Maximum borrowing capacity | $ 1,200,000,000 | ||
Line of Credit Facility, Interest Rate Description | On October 30, 2017, the Company entered into a Third Amendment to the Credit Agreement and exercised the Credit Facility's accordion feature to increase the total commitment under the Credit Facility to $1.2 billion. All other material terms of the Credit Agreement remained unchanged.Base rate loans bear interest at a rate equal to the greatest of (i) Wells Fargo's prime rate, (ii) one half of 1% in excess of the federal funds effective rate, and (iii) 1.25% in excess of the one month London Interbank Offered Rate ("LIBOR"); plus in each case a margin of 0% to 0.75% based on the Company's net leverage ratio. Eurodollar loans bear interest at LIBOR plus a margin of 1.0% to 1.75% based on the Company's net leverage ratio. Alternate currency loans bear interest at rates applicable to their respective currencies. | ||
Line of Credit Facility, Commitment Fee Description | The Credit Facility commitment fees are payable to the lenders in an amount equal to the unused portion of the Credit Facility at a rate of 0.125% to 0.250% based on the Company's net leverage ratio.The Company is obligated to maintain a maximum net leverage ratio of 3.25 to 1.00, and a minimum interest coverage ratio of 2.50 to 1.00. | ||
Description of line of credit agreement | The Credit Agreement provides for a secured revolving credit facility that matures on February 11, 2021 with an initial maximum aggregate commitment of $900.0 million, and an accordion feature of up to $1.2 billion in the aggregate, if certain conditions are satisfied. | ||
Borrowings outstanding on credit facility | $ 344,000,000 | $ 217,300,000 | |
Average daily utilization under credit facility | 494,700,000 | $ 375,300,000 | |
Letters of credit issued under credit facility | 4,500,000 | ||
Remaining borrowing capacity under credit facility | 350,000,000 | ||
Letters Of Credit Issued Outside Line Of Credit Facility | $ 700,000 |
DEFERRED REVENUE AND COSTS (DEF
DEFERRED REVENUE AND COSTS (DEFERRED REVENUE CLASSIFICATION TABLE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
DEFERRED REVENUE AND COSTS [ABSTRACT] | ||
Deferred revenue - current | $ 21,628 | $ 23,318 |
Deferred revenue - long-term | 9,632 | 8,851 |
Total deferred revenue | $ 31,260 | $ 32,169 |
DEFERRED REVENUE AND COSTS (D94
DEFERRED REVENUE AND COSTS (DEFERRED COSTS CLASSIFICATION TABLE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
DEFERRED REVENUE AND COSTS [ABSTRACT] | ||
Deferred costs - current | $ 13,649 | $ 14,755 |
Deferred costs - long-term | 9,654 | 8,124 |
Total deferred costs | $ 23,303 | $ 22,879 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (NARRATIVE) (DETAILS) $ in Millions | Dec. 31, 2017USD ($) |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Letters of credit issued under credit facility | $ 4.5 |
Letters of credit issued outside credit facility | $ 0.7 |
LEASES (FUTURE MINIMUM LEASE PA
LEASES (FUTURE MINIMUM LEASE PAYMENTS TABLE) (DETAILS) $ in Thousands | Dec. 31, 2017USD ($) |
LEASES [ABSTRACT] | |
2,018 | $ 44,177 |
2,019 | 34,528 |
2,020 | 26,471 |
2,021 | 20,854 |
2,022 | 17,215 |
Thereafter | 30,984 |
Total future minimum lease payments | 174,229 |
2,018 | (2,470) |
2,019 | (2,470) |
2,020 | (2,470) |
2,021 | (206) |
Sublease Income Total | $ (7,616) |
LEASES (ASSET RETIREMENT SCHEDU
LEASES (ASSET RETIREMENT SCHEDULE TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
LEASES [ABSTRACT] | ||
Beginning balance, asset retirement obligation | $ 1,861 | $ 1,641 |
Additions and modifications | 317 | 333 |
Accretion | 7 | 15 |
Settlements | (247) | (128) |
Ending balance, asset retirement obligation | $ 1,938 | $ 1,861 |
LEASES (NARRATIVE) (DETAILS)
LEASES (NARRATIVE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
LEASES [ABSTRACT] | |||
Rent expense recognized, net, under operating leases | $ 46,300 | $ 39,500 | $ 37,700 |
Deferred rent liability | $ 15,714 | $ 15,256 |
MANDATORILY REDEEMABLE NONCON99
MANDATORILY REDEEMABLE NONCONTROLLING INTEREST (ROLLFORWARD TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Mandatorily redeemable noncontrolling interest [Line Items] | |||
Net income attributable to mandatorily redeemable noncontrolling interest | $ 10,812 | $ 37,435 | $ 65,885 |
Change in redemption value | (466) | (1,113) | |
Purchase of mandatorily redeemable noncontrolling interest | $ 0 | (4,105) | 0 |
Iknowtion | |||
Mandatorily redeemable noncontrolling interest [Line Items] | |||
ownership percentage | 100.00% | ||
Mandatorily redeemable noncontrolling interest, January 1 | 4,131 | ||
Working capital distributed to mandatorily redeemable noncontrolling interest | (492) | ||
Change in redemption value | 466 | ||
Purchase of mandatorily redeemable noncontrolling interest | $ (4,105) | ||
Mandatorily redeemable noncontrolling interest, December 31 | $ 4,131 |
MANDATORILY REDEEMABLE NONCO100
MANDATORILY REDEEMABLE NONCONTROLLING INTEREST (NARRATIVE) (DETAILS) | 12 Months Ended |
Dec. 31, 2017 | |
Mandatorily Redeemable Noncontrolling Interest [Abstract] | |
Description of mandatorily redeemable noncontrolling interest | The Company held an 80% interest in iKnowtion until January 1, 2016 when the additional 20% was purchased. In the event iKnowtion met certain EBITDA targets for calendar year 2015, the purchase and sale agreement required TTEC 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 represented a contingent redemption feature which the Company determined was probable of being achieved.Based on final EBITDA for 2015, the payment for the remaining 20% was completed in April 2016 for the value shown in the table below in accordance with the purchase and sale agreement.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. |
ACCUMULATED OTHER COMPREHENS101
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (ROLLFORWARD TABLE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, value | $ (361,895) | $ (440,817) | $ (463,250) |
Ending balance, value | (362,845) | (361,895) | (440,817) |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, value | 126,964 | 101,365 | 52,274 |
Other comprehensive income (loss) before reclassifications | 39,536 | (7,668) | (57,807) |
Amounts reclassified from accumulated other comprehensive income (loss) | (14,876) | (17,931) | 8,716 |
Net current period other comprehensive income (loss) | 24,660 | (25,599) | (49,091) |
Ending balance, value | 102,304 | 126,964 | 101,365 |
Foreign Currency Translation Adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, value | 92,008 | 71,196 | 33,352 |
Other comprehensive income (loss) before reclassifications | 7,908 | (20,812) | (37,844) |
Net current period other comprehensive income (loss) | 7,908 | (20,812) | (37,844) |
Ending balance, value | 84,100 | 92,008 | 71,196 |
Derivative Valuation, Net of Tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, value | 32,393 | 26,885 | 18,345 |
Other comprehensive income (loss) before reclassifications | 31,053 | 11,242 | (16,349) |
Amounts reclassified from accumulated other comprehensive income (loss) | (14,406) | (16,750) | 7,809 |
Net current period other comprehensive income (loss) | 16,647 | (5,508) | (8,540) |
Ending balance, value | 15,746 | 32,393 | 26,885 |
Other, Net of Tax. | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, value | 2,563 | 3,284 | 577 |
Other comprehensive income (loss) before reclassifications | 575 | 1,902 | (3,614) |
Amounts reclassified from accumulated other comprehensive income (loss) | (470) | (1,181) | 907 |
Net current period other comprehensive income (loss) | 105 | 721 | (2,707) |
Ending balance, value | $ 2,458 | $ 2,563 | $ 3,284 |
ACCUMULATED OTHER COMPREHENS102
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (INCOME STATEMENT CLASSIFICATION TABLE) (DETAILS) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Sales Revenue Services Net | $ 426,623 | $ 359,036 | $ 353,429 | $ 338,277 | $ 344,947 | $ 312,796 | $ 305,105 | $ 312,410 | $ 1,477,365 | $ 1,275,258 | $ 1,286,755 |
Interest Expense. | 13,734 | 7,943 | 7,538 | ||||||||
Benefit from (provision for) income taxes | $ (69,016) | $ (2,071) | $ (1,597) | $ (5,391) | $ (6,196) | $ 813 | $ (2,952) | $ (4,528) | (78,075) | (12,863) | (20,004) |
Net income | 10,812 | 37,435 | 65,885 | ||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Net Income (Loss) - Other | 14,876 | 17,931 | (8,716) | ||||||||
Derivative Valuation, Net of Tax | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Net Income (Loss) - Other | 14,406 | 16,750 | (7,809) | ||||||||
Tax effect | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Provision for income taxes - Other | 52 | 129 | 101 | ||||||||
Cost of Services | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Cost of services | 522 | 1,310 | 1,008 | ||||||||
Reclassification from accumulated other comprehensive income | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Net Income (Loss) - Other | 470 | 1,181 | 907 | ||||||||
Reclassification from accumulated other comprehensive income | Derivative Valuation, Net of Tax | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Net income | (14,406) | (16,750) | (7,809) | ||||||||
Reclassification from accumulated other comprehensive income | Tax effect | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Benefit from (provision for) income taxes | (8,501) | (11,809) | (5,654) | ||||||||
Foreign Exchange Forward | Reclassification from accumulated other comprehensive income | Foreign Currency Translation Adjustment | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Sales Revenue Services Net | (22,792) | (28,025) | (12,410) | ||||||||
Interest Rate | Reclassification from accumulated other comprehensive income | Loss on interest rate swaps | |||||||||||
Presentation of Income Statement Reclassifications [Line Items] | |||||||||||
Interest Expense. | $ (115) | $ (534) | $ (1,053) |
NET INCOME PER SHARE (DILUTED S
NET INCOME PER SHARE (DILUTED SHARES TABLE) (DETAILS) - shares shares in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||||||||
Shares used in basic earnings per share calculation | 45,856 | 45,838 | 45,662 | 45,950 | 46,386 | 47,081 | 47,873 | 48,368 | 45,826 | 47,423 | 48,370 |
Effect of dilutive securities: | |||||||||||
Stock options | 10 | 10 | 275 | ||||||||
Restricted stock units | 536 | 286 | 338 | ||||||||
Performance-based restricted stock units | 10 | 17 | 28 | ||||||||
Total effects of dilutive securities | 556 | 313 | 641 | ||||||||
Shares used in dilutive earnings per share calculation | 46,461 | 46,367 | 46,150 | 46,315 | 46,677 | 47,315 | 48,221 | 48,746 | 46,382 | 47,736 | 49,011 |
NET INCOME PER SHARE (NARRATIVE
NET INCOME PER SHARE (NARRATIVE) (DETAILS) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options [Member] | |||
Anti-dilutive options to purchase common stock [Line Items] | |||
Anti-dilutive securities | 0 | 100,000 | 100,000 |
Restricted Stock Units (RSUs) [Member] | |||
Anti-dilutive options to purchase common stock [Line Items] | |||
Anti-dilutive securities | 0 | 100,000 | 400,000 |
EMPLOYEE COMPENSATION PLANS (RS
EMPLOYEE COMPENSATION PLANS (RSU ROLLFORWARD TABLE) (DETAILS) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
RSU Rollforward by Shares | |
Unvested as of December 31, 2015, shares | shares | 1,167,621 |
Granted, shares | shares | 731,817 |
Vested, shares | shares | (439,601) |
Cancellations/expirations, shares | shares | (169,410) |
Unvested as of December 31, 2016, shares | shares | 1,290,427 |
RSU Rollforward by Weighted Average Grant Date Fair Value | |
Unvested as of December 31, 2015, weighted average grant date fair value | $ / shares | $ 25.29 |
Granted, weighted average grant date fair value | $ / shares | 29.56 |
Vested, weighted average grant date fair value | $ / shares | 24.25 |
Cancellations/expirations, weighted average grant date fair value | $ / shares | 26.77 |
Unvested as of December 31, 2016, weighted average grant date fair value | $ / shares | $ 27.87 |
EMPLOYEE COMPENSATION PLANS (OP
EMPLOYEE COMPENSATION PLANS (OPTION ASSUMPTIONS TABLE) (DETAILS) | 12 Months Ended |
Dec. 31, 2011 | |
Assumptions Used in Determining Fair Value of Stock Options | |
Risk-free interest rate | 2.10% |
Expected life in years | 2 years 8 months 12 days |
Expected volatility | 54.40% |
Dividend yield | 0.00% |
Weighted-average volatility | 54.40% |
EMPLOYEE COMPENSATION PLANS 107
EMPLOYEE COMPENSATION PLANS (OPTIONS ROLLFORWARD TABLE) (DETAILS) $ / shares in Units, $ in Thousands | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares |
Stock Option Rollforward by Shares | ||
Outstanding as of December 31, 2016, shares | shares | 191,666 | |
Exercises, shares | shares | (60,000) | |
Post-vest cancellations/expirations, shares | shares | (16,666) | |
Outstanding as of December 31, 2017, shares | shares | 115,000 | 115,000 |
Vested and exercisable as of December 31, 2017, shares | shares | 15,000 | 15,000 |
Stock Option Rollforward by Weighted Average Exercise Price | ||
Outstanding as of December 31, 2016, weighted average exercise price | $ / shares | $ 22.83 | |
Exercises, weighted average exercise price | $ / shares | 35.81 | |
Post-vest cancellations/expirations, weighted average exercise price | $ / shares | 17.31 | |
Outstanding as of December 31, 2017, weighted average exercise price | $ / shares | $ 16.86 | 16.86 |
Vested and exercisable as of December 31, 2017, weighted average exercise price | $ / shares | $ 13.87 | $ 13.87 |
Weighted Average Contract Term In Years [Abstract] | ||
Outstanding as of December 31, 2017, weighted average remaining contract term in years | 3 years 5 months 16 days | |
Vested and exercisable as of December 31, 2017, weighted average remaining contract term in years | 8 months 16 days | |
Aggregate Intrinsic Value [Abstract] | ||
Intrinsic Value of Options Exercised | $ | $ 194 | |
Vested and exercisable as of December 31, 2017, aggregate intrinsic value | $ | $ 396 | $ 396 |
EMPLOYEE COMPENSATION PLANS (NA
EMPLOYEE COMPENSATION PLANS (NARRATIVE) (DETAILS) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Company Match on US Defined Contribution Plans | $ 5,700 | $ 5,100 | $ 4,600 | ||
Shares Authorized under Current Equity Compensation Plan | 4,000,000 | 4,000,000 | |||
Shares Available for Issuance under Current Equity Compensation Plan | 1,100,000 | 1,100,000 | |||
Exercise of stock options, share | 60,000 | ||||
Equity-based compensation expense | $ 11,852 | 9,773 | 11,304 | ||
Total Tax Benefit Recognized for Equity-Based Compensation Expense | $ 6,800 | 5,000 | 6,700 | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period Weighted Average Grant Date Fair Value | $ 29.56 | ||||
Intrinsic Value of Non-Vested RSUs | $ 51,900 | $ 51,900 | |||
Intrinsic Value of Options Exercised | 194 | ||||
Fair Value of Shares Vested | 0 | ||||
Proceeds from exercise of stock options | 2,150 | 371 | 825 | ||
Recognized Tax Benefit from Exercise of Stock Options | 0 | 200 | 1,000 | ||
Stock Options [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Intrinsic Value of Options Exercised | 194,000 | $ 400,000 | $ 13,900 | ||
Stock Options [Member] | Key Employee1 [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Options Granted to Key Employees | 150,000 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unrecognized Compensation Expense | 23,700 | $ 23,700 | |||
Requisite Service Period | 1 year 6 months | ||||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period Weighted Average Grant Date Fair Value | $ 29.56 | $ 26.60 | $ 26.52 | ||
Intrinsic Value of RSUs Vested | $ 10,600 | $ 10,800 | $ 13,000 | ||
Restricted Stock Units (RSUs) [Member] | Executive Vice President [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Equity-based compensation expense | $ 400 | 100 | |||
Cost of Services | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Equity-based compensation expense | $ 4,100 | 3,100 | 2,900 | ||
Selling General And Administrative Expenses [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Equity-based compensation expense | $ 6,700 | $ 8,400 |
STOCK REPURCHASE PROGRAM (NARRA
STOCK REPURCHASE PROGRAM (NARRATIVE) (DETAILS) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | 194 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | |
STOCK REPURCHASE PROGRAM [ABSTRACT] | ||||
Cumulative Authorized Share Repurchase Allowance | $ 762,300 | $ 762,300 | ||
Treasury Stock Purchases, Shares | 46.1 | |||
Cost of Treasury Stock Purchases | 18,328 | $ 74,683 | $ 17,231 | $ 735,800 |
Remaining Allowance Stock Repurchase Program | 26,600 | $ 26,600 | ||
Purchases of common stock, share | 46.1 | |||
Purchases of common stock, value | $ 18,328 | $ 74,683 | $ 17,231 | $ 735,800 |
RELATED PARTY TRANSACTIONS (NAR
RELATED PARTY TRANSACTIONS (NARRATIVE) (DETAILS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction Line Items | |||
OperatingLeasesFutureMinimumPaymentsDue | $ 174,229 | ||
Airmax [Member] | |||
Related Party Transaction Line Items | |||
Purchases from Related Party | 1,100 | $ 1,000 | $ 1,700 |
Accounts Payable Due from Related Party | 375 | ||
Conversent [Member] | |||
Related Party Transaction Line Items | |||
Purchases from Related Party | 70 | 100 | |
Netlink [Member] | |||
Related Party Transaction Line Items | |||
Purchases from Related Party | 98 | ||
CafeX [Member] | |||
Related Party Transaction Line Items | |||
Purchases from Related Party | 100 | $ 400 | $ 250 |
Motif [Member] | |||
Related Party Transaction Line Items | |||
OperatingLeasesFutureMinimumPaymentsDue | $ 142 |
OTHER FINANCIAL INFORMATION (SE
OTHER FINANCIAL INFORMATION (SELF INSURANCE LIABILITIES TABLE) (DETAILS) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
OTHER FINANCIAL INFORMATION [ABSTRACT] | ||
Worker's compensation | $ 5,312 | $ 1,523 |
Employee health and dental insurance | 1,631 | 4,908 |
Total self insurance liabilities | $ 6,943 | $ 6,431 |
QUARTERLY FINANCIAL DATA (UN112
QUARTERLY FINANCIAL DATA (UNAUDITED) (QUARTERLY FINANCIALS TABLE) (DETAILS) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) [ABSTRACT] | |||||||||||
Sales Revenue Services Net | $ 426,623 | $ 359,036 | $ 353,429 | $ 338,277 | $ 344,947 | $ 312,796 | $ 305,105 | $ 312,410 | $ 1,477,365 | $ 1,275,258 | $ 1,286,755 |
Cost of services | (312,618) | (275,548) | (268,004) | (253,898) | (249,943) | (233,541) | (226,768) | (231,340) | (1,110,068) | (941,592) | (928,247) |
Selling, general and administrative | (49,942) | (45,167) | (43,985) | (43,220) | (44,895) | (40,628) | (44,774) | (45,500) | (182,314) | (175,797) | (194,606) |
Depreciation and amortization | (17,234) | (16,515) | (16,258) | (14,500) | (16,914) | (16,811) | (17,221) | (17,729) | (64,507) | (68,675) | (63,808) |
Restructuring charges, net | (4,897) | (6,006) | (3,593) | (169) | (502) | (3,688) | (114) | (88) | (14,665) | (4,392) | (1,814) |
Impairment losses | (5,322) | 0 | 0 | 0 | (26,448) | (5,602) | 0 | 0 | (5,322) | (32,050) | (8,100) |
Income from operations | 36,610 | 15,800 | 21,589 | 26,490 | 6,245 | 12,526 | 16,228 | 17,753 | 100,489 | 52,752 | 90,180 |
Other income (expense) | (8,318) | 1,846 | (4,198) | (932) | 290 | (690) | (734) | (1,320) | (11,602) | (2,454) | (4,291) |
Benefit from (provision for) income taxes | (69,016) | (2,071) | (1,597) | (5,391) | (6,196) | 813 | (2,952) | (4,528) | (78,075) | (12,863) | (20,004) |
Net income attributable to noncontrolling interest | (728) | (806) | (1,100) | (922) | (953) | (1,198) | (926) | (680) | (3,556) | (3,757) | (4,219) |
Net income (loss) attributable to TeleTech stockholders | $ (41,452) | $ 14,769 | $ 14,694 | $ 19,245 | $ (614) | $ 11,451 | $ 11,616 | $ 11,225 | $ 7,256 | $ 33,678 | $ 61,666 |
Weighted average shares outstanding | |||||||||||
Basic | 45,856 | 45,838 | 45,662 | 45,950 | 46,386 | 47,081 | 47,873 | 48,368 | 45,826 | 47,423 | 48,370 |
Diluted | 46,461 | 46,367 | 46,150 | 46,315 | 46,677 | 47,315 | 48,221 | 48,746 | 46,382 | 47,736 | 49,011 |
Net income per share attributable to TeleTech stockholders | |||||||||||
Basic | $ (0.90) | $ 0.32 | $ 0.32 | $ 0.42 | $ (0.01) | $ 0.24 | $ 0.24 | $ 0.23 | $ 0.16 | $ 0.71 | $ 1.27 |
Diluted | $ (0.89) | $ 0.32 | $ 0.32 | $ 0.42 | $ (0.01) | $ 0.24 | $ 0.24 | $ 0.23 | $ 0.16 | $ 0.71 | $ 1.26 |
QUARTERLY FINANCIAL DATA (UN113
QUARTERLY FINANCIAL DATA (UNAUDITED) (NARRATIVE) (DETAILS) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loss on assets held-for-sale | $ 2,578 | ||||||||||
Interest Expense. | 13,734 | $ 7,943 | $ 7,538 | ||||||||
Taxes related to US tax reform | $ 62,400 | $ 61,569 | 0 | ||||||||
Benefit to Income Taxes Related to Restructuring Charges | 1,900 | $ 2,400 | $ 1,500 | $ 200 | $ 1,300 | ||||||
Net Change in Valuation Allowance | 600 | 400 | $ 1,000 | $ 100 | |||||||
Benefit to Income Taxes Related to Impairments | 1,900 | 8,300 | 1,500 | ||||||||
Benefit to Income Taxes Related to Dispositon of Assets | 1,300 | ||||||||||
Expense to Income Taxes Related to Dispositon of Assets | 400 | 1,300 | |||||||||
Tax Adjustments, Settlements, and Unusual Provisions | 300 | (200) | 700 | $ (300) | |||||||
Expense to Income Taxes Related to Uncertain Tax Position | 400 | $ 600 | $ 700 | ||||||||
Expense Related to Tax Rate Changes | $ 500 | ||||||||||
Excess tax benefit from equity-based awards | 200 | $ 1,000 | $ 700 | $ 300 | $ 557 | $ (823) | |||||
Connextions | |||||||||||
Interest Expense. | 5,250 | ||||||||||
Motif [Member] | |||||||||||
Interest Expense. | $ 1,200 |