| Supplemental Consolidated Balance Sheet Information | 7 . SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION
Accounts Receivable, net
The components of accounts receivable were as follows (in thousands):
March 31,
December 31,
2016
2015
Billed amounts
$ 148,921
$ 153,837
Engagements in process
103,134
80,102
Allowance for uncollectible billed amounts
(11,015)
(9,797)
Allowance for uncollectible engagements in process
(10,863)
(7,482)
Accounts receivable, net
$ 230,177
$ 216,660
Receivables attributable to engagements in process represent balances for services that have been performed and earned but have not been billed to the client. Services are generally billed on a monthly basis for the prior month’s services. Our allowance for uncollectible accounts is based on historical experience and management judgment and may change based on market conditions or specific client circumstances.
Prepaid Expenses and Other Current Assets
The components of prepaid expenses and other current assets were as follows (in thousands):
March 31,
December 31,
2016
2015
Notes receivable - current
$ 2,829
$ 3,342
Prepaid recruiting and retention incentives - current
11,020
9,688
Other prepaid expenses and other current assets
19,298
16,699
Prepaid expenses and other current assets
$ 33,147
$ 29,729
Other Assets
The components of other assets were as follows (in thousands):
March 31,
December 31,
2016
2015
Notes receivable - non-current
$ 2,119
$ 4,420
Capitalized client-facing software
1,406
1,567
Prepaid recruiting and retention incentives - non-current
15,256
14,009
Prepaid expenses and other non-current assets
2,262
2,535
Other assets
$ 21,043
$ 22,531
Notes receivable, current and non-current, represent unsecured employee loans. These loans were issued to recruit or r etain certain senior-level client-service employees . During the three months ended March 31, 2016 and 2015, no such loans were issued. The principal amount and accrued interest on these loans is either paid by the employee or forgiven by us over the term of the loans so long as the employee remains continuously employed by us and complies with certain contractual requirements. The expense associated with the forgiveness of the principal amount of the loans is amortized as compensation expense over the service period, which is consistent with the term of the loans.
Capitalized client-facing software is used by our clients as part of client engagements. These amounts are amortized into cost of services before reimbursable expenses over their estimated remaining useful life.
Prepaid recruiting and retention incentives, current and non-current, include sign-on and retention bonuses that are generally recoverable from an employee if the employee voluntarily terminates employment or if the employee’s employment is terminated for “cause” prior to fulfilling his or her obligations to us. These amounts are amortized as compensation expense over the period in which they are recoverable from the employee, generally in periods up to six years. During the three months ended March 31, 2016 and 2015 we granted $6.5 million and $1.6 million, respectively, of sign-on and retention bonuses, which have been included in current and non-current prepaid recruiting and retention incentives.
Property and Equipment, net
Property and equipment, net consisted of (in thousands):
March 31,
December 31,
2016
2015
Furniture, fixtures and equipment
$ 62,520
$ 63,995
Software
79,935
77,910
Leasehold improvements
43,161
40,560
Property and equipment, at cost
185,616
182,465
Less: accumulated depreciation
(109,717)
(105,748)
Property and equipment, net
$ 75,899
$ 76,717
During the three months ended March 31, 2016 , we recorded $ 5.0 million in property and equipment which included $2.0 million in our technology infrastructure and softwa re and $1.0 million in furniture . We also recorded $2.6 million in leasehold improvements ( $0.8 million was non-cash) related to the build-outs of various office spaces. During the three months ended March 31, 2016 , we retired $2.5 million in fully depreciated assets.
Other Current Liabilities
The components of other current liabilities were as follows (in thousands):
March 31,
December 31,
2016
2015
Deferred acquisition liabilities
$ 10,072
$ 1,665
Deferred revenue
16,702
19,317
Deferred rent - short term
2,983
2,909
Other current liabilities
2,574
8,256
Total other current liabilities
$ 32,331
$ 32,147
Other Non-Current Liabilities
The components of other non-current liabilities were as follows (in thousands):
March 31,
December 31,
2016
2015
Deferred acquisition liabilities
$
-
$ 8,300
Deferred rent - long term
14,453
14,358
Other non-current liabilities
6,618
6,298
Total other non-current liabilities
$ 21,071
$ 28,956
D eferred acquisition liabilities , current and non-current, at March 31, 2016 consisted of cash obligations related to definitive and contingent purchase price considerations recorded at net present value and fair value, respectively .
During the three months ended March 31, 2016, we made a payment of $5.5 million to the selling members of McKinnis for cash held in the business at closing, which reduced other current liabilities.
The current and non-current portion s of deferred rent relates to tenant allowances and incentives on lease arrangements for our office facilities that expire at various dates through 2028 .
At March 31, 2016 , other non-current liabilities included $2.4 million of performance-based long-term incentive compensation liabilities. As part of our long-term incentive program for select senior-level client service employees and leaders, we grant restricted stock units which vest three years from the grant date based on the achievement of certain performance targets during the prior year.
Deferred revenue represents advance billings to our clients for services that have not yet been performed and earned. |
