4 unchanged sentences
(Amounts in thousands, except share amounts)
−Removed: September 30,
Current assets
Cash and cash equivalents
−Removed: Accounts receivable, net of allowance of $ 6,046 and $ 5,067
+Added: Accounts receivable, net of allowance of $ 5,032 and $ 5,409 , respectively
Prepaids and other current assets
8 unchanged sentences
Total long-term assets
−Removed: LIABILITIES, STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY
+Added: LIABILITIES AND STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY
Current liabilities
21 unchanged sentences
10,000,000 shares authorized;
−Removed: zero shares outstanding as of September 30, 2021 and December 31, 2020
+Added: zero shares outstanding as of March 31, 2022 and December 31, 2021
Common stock;
1 unchanged sentence
150,000,000 shares authorized;
−Removed: 46,988,762 and 46,737,033 shares outstanding as of September 30, 2021 and December 31, 2020, respectively
+Added: 47,035,634 and 46,990,031 shares outstanding as of March 31, 2022 and December 31, 2021, respectively
Additional paid-in capital
Treasury stock at cost:
−Removed: 35,063,491 and 35,315,220 shares as of September 30, 2021 and December 31, 2020, respectively
+Added: 35,016,619 and 35,062,222 shares as of March 31, 2022 and December 31, 2021, respectively
Accumulated other comprehensive income (loss)
2 unchanged sentences
Total stockholders’ equity
−Removed: Total liabilities, stockholders’ equity and mezzanine equity
+Added: Total liabilities and stockholders’ equity and mezzanine equity
The accompanying notes are an integral part of these consolidated financial statements.
3 unchanged sentences
(Amounts in thousands, except per share amounts)
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
Operating expenses
32 unchanged sentences
(Amounts in thousands)
−Removed: Three months ended September 30, 2020 and 2021
−Removed: Stockholders’ Equity of the Company
−Removed: Comprehensive
−Removed: Noncontrolling
−Removed: Paid-in Capital
−Removed: Income (Loss)
−Removed: Balance as of June 30, 2020
−Removed: Dividends to shareholders ($ 0.40 per common share)
−Removed: Dividends distributed to noncontrolling interest
−Removed: Foreign currency translation adjustments
−Removed: Derivatives valuation, net of tax
−Removed: Vesting of restricted stock units
−Removed: Equity-based compensation expense
−Removed: Other, net of tax
−Removed: Balance as of September 30, 2020
−Removed: Stockholders’ Equity of the Company
−Removed: Comprehensive
−Removed: Noncontrolling
−Removed: Paid-in Capital
−Removed: Income (Loss)
−Removed: Balance as of June 30, 2021
−Removed: Dividends to shareholders ($ 0.47 per common share)
−Removed: Acquisition of noncontrolling interest
−Removed: Dividends distributed to noncontrolling interest
−Removed: Foreign currency translation adjustments
−Removed: Derivatives valuation, net of tax
−Removed: Vesting of restricted stock units
−Removed: Equity-based compensation expense
−Removed: Other, net of tax
−Removed: Balance as of September 30, 2021
−Removed: Nine months ended September 30, 2020 and 2021
+Added: Three months ended March 31, 2021 and 2022
Stockholders’ Equity of the Company
5 unchanged sentences
Dividends to shareholders ($ 0.43 per common share)
−Removed: Acquisition of noncontrolling interest
Dividends distributed to noncontrolling interest
4 unchanged sentences
Other, net of tax
−Removed: Balance as of September 30, 2020
+Added: Balance as of March 31, 2021
Stockholders’ Equity of the Company
5 unchanged sentences
Dividends to shareholders ($ 0.50 per common share)
−Removed: Acquisition of noncontrolling interest
Dividends distributed to noncontrolling interest
4 unchanged sentences
Other, net of tax
−Removed: Balance as of September 30, 2021
+Added: Balance as of March 31, 2022
The accompanying notes are an integral part of these consolidated financial statements.
3 unchanged sentences
(Amounts in thousands)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Cash flows from operating activities
6 unchanged sentences
(Gain) loss on disposal of assets
−Removed: Loss on dissolution of subsidiary
Impairment losses
12 unchanged sentences
Purchases of property, plant and equipment, net of acquisitions
−Removed: Acquisitions, net of cash acquired of $ 18,638 and $ 3,123 , respectively
+Added: Acquisitions, net of cash acquired of zero and zero , respectively
Net cash used in investing activities
7 unchanged sentences
Payments of debt issuance costs
−Removed: Net cash provided by (used in) financing activities
+Added: Net cash used in financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
−Removed: Increase in cash, cash equivalents and restricted cash
+Added: (Decrease) increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
14 unchanged sentences
TTEC Holdings, Inc.
−Removed: (“TTEC”, or “the Company”) is a leading global customer experience as a service (“CXaaS”) partner for many of the world’s iconic brands, Fortune 1000 companies, government agencies, and disruptive growth companies.
−Removed: TTEC helps its clients deliver frictionless customer experiences, strengthen customer relationships, brand recognition and loyalty through personalized interactions, improve their Net Promoter Score, customer satisfaction and quality assurance, and lower their total cost to serve by combining innovative digital solutions with best-in-class service capabilities to enable and deliver simplified, consistent and seamless customer experience across channels and phases of the customer lifecycle.
+Added: (“TTEC”, “the Company”;
+Added: pronounced “T-TEC”) is a leading global customer experience as a service (“CXaaS”) partner for many of the world’s most iconic and disruptive brands.
+Added: TTEC designs, builds, orchestrates, and delivers seamless digitally enabled customer experiences that are designed to increase brand value, customer loyalty, revenue and profitability through personalized, outcome-based interactions.
+Added: The Company helps clients improve their customer satisfaction while lowering their total cost to serve by combining innovative digital solutions with service capabilities that deliver a frictionless customer experience (“CX”) across different channels and phases of the customer lifecycle.
TTEC’s 62,000 employees serve clients in the automotive, communication, financial services, national/federal and state and local governments, healthcare, logistics, media and entertainment, e-tail/retail, technology, travel and transportation industries via operations in the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Costa Rica, Germany, Greece, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, Singapore, South Africa, Thailand, and the United Kingdom.
−Removed: The Company reports its financial information based on two segments:
+Added: The Company operates and reports its financial results of operation through two business segments:
TTEC Digital and TTEC Engage.
−Removed: ● TTEC Digital provides the CX technology services and platforms to support the Company’s clients’ customer interaction delivery infrastructure.
−Removed: The segment designs, builds and operates the omnichannel ecosystem in a cloud, on premise, or hybrid environment, and fully integrates, orchestrates, and administers highly scalable, feature-rich CX technology applications.
−Removed: ● TTEC Engage provides the CX managed services to support the Company’s clients’ end-to-end customer interaction delivery by providing the essential CX omnichannel and application technologies, human resources, recruiting, training and production, at-home or facility-based delivery infrastructure on a global scale, and engagement processes.
−Removed: This segment provides full-service digital, omnichannel customer engagement, supporting customer care, customer acquisition, growth and retention, and fraud detection and prevention services.
−Removed: TTEC Digital and TTEC Engage strategically come together under the Company’s unified offering, Humanify ® Customer Experience as a Service, which drives measurable customer results for clients through the delivery of personalized, omnichannel experiences.
−Removed: The Company’s Humanify ® cloud platform provides a fully integrated ecosystem of CX offerings, including messaging, artificial intelligence, machine learning, robotic process automation, analytics, cybersecurity, customer relationship management, knowledge management, journey orchestration, and traditional voice solutions.
−Removed: The Company’s end-to-end platform differentiates the Company from many competitors by combining design, strategic consulting, best-in-class technology, data analytics, process optimization, system integration and operational excellence.
+Added: ● TTEC Digita l is one of the largest pure-play CX technology service providers with expertise in CX strategy, digital consulting, and transformation enabled by proprietary CX applications and technology partnerships.
+Added: TTEC Digital designs, builds, and operates robust digital experiences for clients and their customers through the contextual integration and orchestration of customer relationship management (“CRM”), data, analytics, CXaaS technology, and intelligent automation to ensure high-quality, scalable CX outcomes.
+Added: ● TTEC Engage provides the digitally enabled CX managed services to support our clients’ end-to-end customer interaction delivery at scale.
+Added: The segment delivers omnichannel customer care, tech support, order fulfillment, customer acquisition, growth, and retention services with industry specialization and distinctive CX capabilities for hypergrowth brands.
+Added: TTEC Engage also delivers digitally enabled back office and industry specific specialty services including artificial intelligence (“AI”) operations, content moderation, and fraud management services.
+Added: TTEC Digital and TTEC Engage strategically come together under our unified offering, Humanify ® CXaaS, which drives measurable customer results for clients through the delivery of personalized, omnichannel experiences.
+Added: Our Humanify ® cloud platform provides a fully integrated ecosystem of CX offerings, including messaging, AI, machine learning, robotic process automation, analytics, cybersecurity, CRM, knowledge management, journey orchestration, and traditional voice solutions.
+Added: Our end-to-end CXaaS platform differentiates us from competitors by combining design, strategic consulting, technology, data analytics, process optimization, system integration, and operational excellence along with our decades of industry know-how.
+Added: This unified offering is value-oriented, outcome-based and delivered to large enterprises, governments, and hypergrowth companies on a global scale.
Basis of Presentation
20 unchanged sentences
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets that sum to the amounts reported in the Condensed Consolidated Statement of Cash Flows (in thousands):
−Removed: September 30, 2021
+Added: March 31, 2022
December 31, 2021
1 unchanged sentence
Restricted cash included in "Prepaid and other current assets"
−Removed: Restricted cash included in "Other noncurrent assets"
Concentration of Credit Risk
8 unchanged sentences
Recently Adopted Accounting Pronouncements
−Removed: In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes” (ASC 740), which is intended to simplify various aspects related to income tax accounting.
+Added: In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which now requires the acquirer to account for revenue contracts in accordance with Topic 606 as if it had acquired the contract, versus recording these assets and liabilities at fair value on acquisition date.
The ASU is effective for interim and annual periods beginning on or after December 15, 2022, with early adoption permitted.
−Removed: The Company adopted the new guidance effective January 1, 2021 and the adoption had no effect on the financial statements or related disclosures during the quarter.
+Added: The Company adopted the new guidance during the fourth quarter of 2021 which required application to all acquisitions completed during the adoption year.
+Added: See further discussion in Note 2.
Other Accounting Pronouncements
−Removed: In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform” (Topic 848), which provides optional expedients and exceptions for contracts, hedging relationships, and other transactions affected by reference rate reform due to the anticipated cessation of the London Interbank Offered Rate (”LIBOR”) on or before December 31, 2021.
−Removed: The ASU is effective from March 12, 2020, through December 31, 2022 and could impact the accounting for LIBOR provisions in the Company’s credit facility agreement.
+Added: In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform” (Topic 848), which provides optional expedients and exceptions for contracts, hedging relationships, and other transactions affected by reference rate reform due to the anticipated cessation of the London Interbank Offered Rate (”LIBOR”).
+Added: The ASU is effective from March 12, 2020, may be applied prospectively and could impact the accounting for LIBOR provisions in the Company’s credit facility agreement.
In addition, in January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform – Scope,” which clarified the scope of ASC 848 relating to contract modifications.
8 unchanged sentences
The Company finalized the net working capital adjustment for $ 0.1 million during the third quarter of 2021 which was paid by Avtex to the Company in the third quarter of 2021.
+Added: During the fourth quarter of 2021, TTEC implemented ASU 2021-08 which required an accounting modification to the deferred revenue balance as of the acquisition date (see discussion above in Note 1).
+Added: The deferred revenue balance was evaluated as if TTEC had been the company securing the initial contract and accounted for these contracts in accordance with ASC 606.
+Added: Based on this re-assessment, the $ 4.9 million reduction initially recorded to deferred revenue in connection with the purchase price accounting was eliminated and an offsetting increase to Goodwill was recorded as of the acquisition date.
+Added: In connection with this modification, revenue of $ 3.4 million was recorded in the fourth quarter of 2021 related to deferred revenue from the second and third quarters of 2021.
+Added: A multi-period excess earnings method under the income approach was used to estimate the fair value of the customer relationships intangible asset.
+Added: The significant assumptions utilized in calculating the fair value of the customer relationships intangible asset were the customer attrition rate, revenue growth rates, forecasted EBITDA, contributory asset charge, and the discount rate.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: The following summarizes the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):
+Added: The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):
Acquisition Date
15 unchanged sentences
Total purchase price
−Removed: The estimates of fair value of identifiable assets acquired and liabilities assumed are preliminary, pending finalization of the valuation and tax returns, thus are subject to revisions that may result in adjustments to the value presented above.
−Removed: The Avtex customer relationships, intellectual property intangible, and tradename have been estimated based on the initial valuation and will be amortized over estimated useful lives of 9 , 3 , and 1 years , respectively.
−Removed: The goodwill recognized from the Avtex acquisition is estimated to be attributable, but not limited to, the acquired workforce and expected synergies with the TTEC Digital segment.
−Removed: The tax basis of the acquired intangibles and goodwill will be deductible for income tax purposes.
+Added: In the first quarter of 2022, the Company finalized the valuation of Avtex for the acquisition date assets acquired and liabilities assumed and determined that no material adjustments to any of the balances were required.
+Added: The Avtex customer relationships, intellectual property intangible, and tradename are being amortized over useful lives of 9 , 3 , and 1 years , respectively.
+Added: The goodwill recognized from the Avtex acquisition is attributable, but not limited to, the acquired workforce and expected synergies with the TTEC Digital segment.
+Added: The tax basis of the acquired intangibles and goodwill will be materially deductible for income tax purposes.
The acquired goodwill and intangibles and operating results of Avtex are reported within the TTEC Digital segment from the date of acquisition.
−Removed: On August 5, 2020 , TTEC Digital, LLC closed the first phase of the acquisition of the VoiceFoundry business by acquiring 100 % of the business’s net assets in the U.S.
−Removed: and U.K., (the “VF US Transaction”).
−Removed: VoiceFoundry is a preferred Amazon Connect cloud contact center service and implementation partner .
−Removed: The business has been integrated into the TTEC Digital segment and is being fully consolidated into the financial statements of TTEC.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Total cash paid at acquisition was $ 34.3 million.
−Removed: The VF US Transaction is subject to customary representations and warranties, holdbacks, and working capital adjustments.
−Removed: The VF US Transaction includes two contingent payments over the next two years with each payment having a maximum value of $ 7.4 million based on VF US’s EBITDA performance for 2020 and 2021.
−Removed: The Company finalized the net working capital adjustment for $ 0.3 million which was paid to VoiceFoundry during the first quarter of 2021.
−Removed: The fair value of the contingent consideration has been estimated using a Monte Carlo model.
−Removed: The model was based on current expected EBITDA performance, a discount rate of 23.1 %, a volatility rate of 47 %, and an adjusted risk-free rate of 2.6 %.
−Removed: Based on the model, a $ 10.9 million expected future payment was calculated and recorded as of the acquisition date.
−Removed: During the fourth quarter of 2020, the first quarter of 2021 and the second quarter of 2021, a $ 3.2 million expense, a $ 0.5 million expense and a $ 0.2 million expense, respectively, were recorded related to fair value adjustments of the estimated contingent consideration based on revised estimates of EBITDA performance for 2021.
−Removed: These expenses were included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss).
−Removed: During the first quarter of 2021, the contingent payment related to 2020 was finalized at a value of $ 7.4 million and was paid in April 2021.
−Removed: As of September 30, 2021, the value of the accrual is $ 7.4 million and is included in Other accrued expenses in the accompanying Consolidated Balance Sheets.
−Removed: A multi-period excess earnings method under the income approach was used to estimate the fair value of the customer relationships intangible asset.
−Removed: The significant assumption utilized in calculating the fair value of the customer relationships intangible asset was the customer attrition rate.
−Removed: The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):
−Removed: Acquisition Date
−Removed: Accounts receivable, net
−Removed: Prepaid and other assets
−Removed: Customer relationships
−Removed: Accounts payable
−Removed: Accrued employee compensation
−Removed: Deferred revenue
−Removed: Total purchase price
−Removed: In the first quarter of 2021, the Company finalized the valuation of VF US for the acquisition date assets acquired and liabilities assumed and determined that no material adjustments to any of the balances were required.
−Removed: The VF US customer relationships and tradename are being amortized over useful lives of 4 and 2 years , respectively.
−Removed: The goodwill recognized from the VF US Transaction is attributable, but not limited to, the acquired workforce and expected synergies with the TTEC Digital segment.
−Removed: The tax basis of the acquired intangibles and goodwill will be deductible for income tax purposes.
−Removed: The acquired goodwill and intangibles and operating results of VF US are reported within the TTEC Digital segment from the date of acquisition.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: VoiceFoundry ASEAN
−Removed: On November 4, 2020 , TTEC Europe BV, a subsidiary of the Company, closed the final phase of the acquisition of the VoiceFoundry business by acquiring 100 % of the issued stock of Saasy Ventures Pty Ltd.
−Removed: (“the VF ASEAN Transaction”).
−Removed: The business has been integrated into the TTEC Digital segment and is being fully consolidated into the financial statements of TTEC.
−Removed: Total cash paid at acquisition was $ 15.2 million.
−Removed: The VF ASEAN Transaction is subject to customary representations and warranties, holdbacks, and working capital adjustments.
−Removed: The VF ASEAN Transaction includes two contingent payments over the next two years with each payment having a maximum value of $ 2.2 million based on VF ASEAN’s EBITDA performance for 2020 and 2021.
−Removed: The Company finalized the net working capital adjustment for $ 0.2 million which was paid from VoiceFoundry during the third quarter of 2021.
−Removed: The fair value of the contingent consideration has been estimated using a Monte Carlo model.
−Removed: The model was based on current expected EBITDA performance, a discount rate of 18.4 %, a volatility rate of 50 %, and an adjusted risk-free rate of 1.6 %.
−Removed: Based on the model, a $ 2.8 million expected future payment was calculated and recorded as of the acquisition date.
−Removed: During the fourth quarter of 2020, the first quarter of 2021 and the second quarter of 2021, a $ 1.2 million expense, a $ 0.4 million expense and a $ 0.1 million benefit, respectively, were recorded related to fair value adjustments of the estimated contingent consideration based on estimates of EBITDA performance for 2020 and 2021.
−Removed: These expenses/benefits were included in Other income (expense) in the Consolidated Statements of Comprehensive Income (Loss).
−Removed: During the first quarter of 2021, the contingent payment related to 2020 was finalized at a value of $ 2.2 million and was paid in April 2021.
−Removed: As of September 30, 2021, the value of the accrual is $ 2.1 million and is included in Other accrued expenses in the accompanying Consolidated Balance Sheets.
−Removed: The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):
−Removed: Acquisition Date
−Removed: Accounts receivable, net
−Removed: Prepaid and other expenses
−Removed: Income tax receivable
−Removed: Property, plant and equipment
−Removed: Customer relationships
−Removed: Accounts payable
−Removed: Accrued employee compensation
−Removed: Deferred revenue
−Removed: Deferred tax liability
−Removed: Other accrued liabilities
−Removed: Total purchase price
−Removed: In the second quarter of 2021, the Company finalized the valuation for VF ASEAN for the acquisition date assets acquired and liabilities assumed and determined that no material adjustments to any of the balances were required.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The VF ASEAN customer relationships and tradename are being amortized over useful lives of 4 and 2 years , respectively.
−Removed: The goodwill recognized from the VF ASEAN Transaction is attributable, but not limited to, the acquired workforce and expected synergies with the TTEC Digital segment.
−Removed: The tax basis of the acquired intangibles and goodwill will not be deductible for income tax purposes.
−Removed: The acquired goodwill and intangibles and operating results of VF ASEAN are reported within the TTEC Digital segment from the date of acquisition.
−Removed: On February 7, 2020 , the Company acquired, through its subsidiary TTEC Digital, LLC, 70 % of the outstanding shares of capital stock of Serendebyte Inc., a Delaware corporation (“the Serendebyte Transaction”).
−Removed: Serendebyte is an autonomous customer experience and intelligent automation solutions provider based in India, the United States, and Canada .
−Removed: The business has been integrated into the TTEC Digital segment and is being fully consolidated into the financial statements of TTEC.
−Removed: Total cash paid at acquisition, for 70 % of the outstanding shares of capital stock, was $ 9.0 million.
−Removed: The Serendebyte Transaction is subject to customary representations and warranties, holdbacks, and a net working capital adjustment.
−Removed: The Company finalized the net working capital adjustment for $ 0.8 million during the second quarter of 2020 which was paid by Serendebyte to the Company in the second quarter of 2020.
−Removed: As of the closing of the Serendebyte Transaction, Serendebyte’s founder and certain members of its management continued to hold the remaining 30 % interest in Serendebyte, Inc.
−Removed: (“Remaining Interest”).
−Removed: Between January 31, 2023 and December 31, 2023, Serendebyte’s founder and the management team shall have an option to sell to TTEC Digital, LLC and TTEC Digital, LLC shall have an option to purchase the Remaining Interest at a purchase price equal to a multiple of Serendebyte’s adjusted trailing twelve month EBITDA for this particular acquisition.
−Removed: The noncontrolling interest was recorded at fair value on the date of acquisition.
−Removed: The fair value was based on significant inputs not observable in the market (Level 3 inputs) including forecasted earnings, discount rate of 35% , working capital requirements and applicable tax rates.
−Removed: The noncontrolling interest was valued at $ 3.8 million at the acquisition date and is shown as Redeemable noncontrolling interest in the accompanying Consolidated Balance Sheets.
−Removed: The Company recognizes changes in the redemption value of the Redeemable noncontrolling interest immediately as they occur but does not reduce the carrying value below the carrying value determined in accordance with ASC 810 (that amount being determined based on the allocation of income or loss to the noncontrolling interest as adjusted for distributions).
−Removed: At each subsequent reporting date, the current redeemable value is calculated and, if necessary, an adjustment is recorded to increase or decrease the noncontrolling interest account to reflect the appropriate balance, with the corresponding adjustment to retained earnings.
−Removed: As of September 30, 2021, no adjustments have been recorded related to changes in the estimated redemption value.
−Removed: As a condition to closing, Serendebyte’s founder and certain members of the management team agreed to continue their affiliation with Serendebyte at least through 2023, and the founder agreed not to compete with TTEC for a period of four years after the disposition of the Remaining Interest.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):
−Removed: Acquisition Date
−Removed: Accounts receivable, net
−Removed: Prepaid and other assets
−Removed: Property, plant and equipment
−Removed: Deferred tax assets
−Removed: Customer relationships
−Removed: Accounts payable
−Removed: Accrued employee compensation and benefits
−Removed: Accrued income taxes
−Removed: Accrued expenses
−Removed: Deferred tax liabilities - long-term
−Removed: Total purchase price
−Removed: In the fourth quarter of 2020, the Company finalized the valuation of Serendebyte for the acquisition date assets acquired and liabilities assumed and determined no material adjustments to any of the balances were required.
−Removed: At the date of the purchase, an additional $ 2.2 million of cash was retained in the entity that was withdrawn by the holders of the Remaining Interest during the second quarter of 2020.
−Removed: The Serendebyte customer relationships and tradename are being amortized over useful lives of 5 and 3 years , respectively.
−Removed: The goodwill recognized from the Serendebyte acquisition is attributable, but not limited to, the acquired workforce and expected synergies with the TTEC Digital segment.
−Removed: The tax basis of the acquired intangibles and goodwill will not be deductible for income tax purposes.
−Removed: The acquired goodwill and intangibles and operating results of Serendebyte are reported within the TTEC Digital segment from the date of acquisition.
Financial Impact of Acquired Businesses
−Removed: The acquired businesses purchased in 2021 and 2020 noted above contributed revenues of $ 130.4 million and net income of $ 9.9 million, inclusive of $ 11.8 million of acquired intangible amortization, to the Company for the nine months ended September 30, 2021.
−Removed: The unaudited proforma financial results for the nine months ended September 30, 2021 and 2020, combines the consolidated results of the Company, Avtex, VoiceFoundry US, VoiceFoundry ASEAN and Serendebyte assuming the acquisitions had been completed on January 1, 2020.
−Removed: The reported revenue and net income of $ 1,660.7 million and $ 112.2 million would have been $ 1,707.8 million and $ 115.0 million for the nine months ended September 30, 2021, respectively, on an unaudited proforma basis.
−Removed: For 2020, the reported revenue and net income of $ 1,378.3 million and $ 74.2 million would have been $ 1,516.3 million and $ 83.7 million for the nine months ended September 30, 2020, respectively, on an unaudited basis.
−Removed: The unaudited proforma 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.
−Removed: Additionally, the proforma consolidated results do not reflect any anticipated synergies expected as a result of the acquisition.
+Added: The acquired business purchased in 2021 noted above contributed revenues of $ 53.4 million and net income $ 2.8 million, to the Company for the quarter ended March 31, 2022.
+Added: The unaudited proforma financial results for the three months ended March 31, 2021, combines the consolidated results of the Company and Avtex assuming the acquisition had been completed on January 1, 2020.
+Added: The reported revenue and net income of $ 539.2 million and $ 50.4 million would have been $ 586.2 million and $ 53.6 million for the three months ended March 31, 2021, respectively, on an unaudited proforma basis.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: In the ordinary course of business, the Company operates different legal entities around the globe that have functional currencies other than USD.
−Removed: From time to time, the Company liquidates some of the entities when they are no longer needed to operate its business, and also forms new entities to support the needs of the business.
−Removed: The liquidation proceedings may take different forms, take considerable amount of time, and may also result in losses or gains unrelated to operations.
−Removed: In the second quarter ended June 30, 2020, the Company exited a foreign subsidiary that resulted in a non-cash $ 2.5 million loss included in Other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss) from the realization of the Accumulated other comprehensive income (loss), which represents the currency translation adjustment of the investment in the foreign subsidiary.
−Removed: Similarly, in the third quarter ended September 30, 2020, the Company exited two foreign subsidiaries that ceased operations and were removed from the consolidated financial statements as of the reporting period ended September 30, 2020.
−Removed: As a result of the deconsolidation, a non-cash $ 17.4 million loss was included in Other income (expense), net in the Consolidated Statement of Comprehensive Income (Loss).
−Removed: The majority of this loss related to the realization of the Accumulated other comprehensive income (loss) balance which represents the currency translation adjustment of the investment in the foreign subsidiaries.
−Removed: The operating income of these subsidiaries prior to dissolution was not material to the year-to-date consolidated results of the Company.
+Added: The Company did not have any material, nonrecurring proforma adjustments directly attributable to the business combination included in the reported proforma revenue earnings.
+Added: These proforma amounts have been calculated after applying the Company’s accounting policies and adjusting the respective acquired businesses’ results to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied from the date indicated, with the consequential tax effects.
+Added: The unaudited proforma consolidated results are not to be considered indicative of the results if this acquisition occurred in the periods mentioned above, or indicative of future operations or results.
+Added: Additionally, the proforma consolidated results do not reflect any anticipated synergies expected as a result of the acquisition.
+Added: Subsequent Event
+Added: Certain Assets of Faneuil
+Added: On April 1, 2022 , the Company completed an asset acquisition through its subsidiary TTEC Government Solutions LLC, of certain public sector citizen experience contracts in the transportation infrastructure and healthcare exchange industries from Faneuil, Inc., a subsidiary of ALJ Regional Holdings, Inc.
+Added: The business will operate as part of the TTEC Engage segment and will be fully consolidated into the financial statements of TTEC.
+Added: The Faneuil acquisition will be recorded as a business combination under ASC 805, Business Combinations, with identifiable assets acquired and liabilities assumed recorded at their estimated fair values as of the acquisition date.
+Added: Total cash paid at acquisition was $ 142.3 million less customary hold-backs related to representations and warranties, plus certain future contingent payments and customary adjustments.
+Added: In addition, Faneuil agreed to grant to TTEC Government Solutions LLC a three-year call right and right of first offer to purchase certain other assets of Faneuil in its utilities and commercial healthcare verticals, and certain proprietary technology.
+Added: The initial accounting for the business combination is incomplete at the time of this filing due to the limited amount of time since the acquisition date and the ongoing status of the valuation.
+Added: Therefore, it is impracticable for the Company to provide the major classes of assets acquired and liabilities assumed or proforma revenue and earnings.
(3) SEGMENT INFORMATION
The Company reports the following two segments:
−Removed: TTEC Digital provides the CX technology services and platforms to support the Company’s clients’ customer interaction delivery infrastructure.
−Removed: The segment designs, builds and operates the omnichannel ecosystem in a cloud, on premise, or hybrid environment, and fully integrates, orchestrates, and administers highly scalable, feature-rich CX technology applications.
−Removed: These solutions are critical to enabling and accelerating digital transformation for the Company’s clients.
+Added: TTEC Digita l is one of the largest pure-play CX technology service providers with expertise in CX strategy, digital consulting and transformation enabled by proprietary CX applications and technology partnerships.
+Added: TTEC Digital designs, builds, and operates robust digital experiences for clients and their customers through the contextual integration and orchestration of CRM, data, analytics, CXaaS technology, and intelligent automation to ensure high-quality, scalable CX outcomes.
● Technology Services:
−Removed: the Company’s technology services design, integrate and operate highly scalable, digital omnichannel technology solutions in the cloud, on premise, or hybrid environment, including journey orchestration, automation and AI, knowledge management, and workforce productivity.
+Added: Our technology services design, integrate, and operate highly scalable, digital omnichannel technology solutions in the cloud, on premise, or hybrid environment, including journey orchestration, automation and AI, knowledge management, and workforce productivity.
● Professional Services:
−Removed: the Company’s management consulting practices deliver customer experience strategy, analytics, process optimization, and learning and performance services.
−Removed: TTEC Engage delivers the CX managed services to support the Company’s clients’ end-to-end customer interaction delivery, by providing the essential CX omnichannel and application technologies, human resources, recruiting, training and production, at-home or facility-based delivery infrastructure on a global scale, and engagement processes.
−Removed: This segment provides full-service digital, omnichannel customer engagement, supporting customer care, customer acquisition, growth and retention, and fraud detection and prevention services.
−Removed: ● Customer Acquisition Services:
−Removed: the Company’s customer growth and acquisition services optimize the buying journeys for acquiring new customers by leveraging technology and analytics to deliver personal experiences that increase the quantity and quality of leads and customers.
−Removed: ● Customer Care Services:
−Removed: the Company’s customer care services provide turnkey contact center solutions, including digital omnichannel technologies, associate recruiting and training, facilities, and operational expertise to create exceptional customer experiences across all touchpoints.
+Added: Our management consulting practices deliver customer experience strategy, analytics, process optimization, and learning and performance services.
+Added: TTEC Engage provides the digitally enabled CX managed services to support our clients’ end-to-end customer interaction delivery at scale.
+Added: The segment delivers omnichannel customer care, tech support, order fulfillment, customer acquisition, growth, and retention services with industry specialization and distinctive CX capabilities for hypergrowth brands.
+Added: TTEC Engage also delivers digitally enabled back office and industry specific specialty services including AI operations, content moderation, and fraud management services.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: ● Fraud Prevention Services:
−Removed: the Company’s digital fraud detection and prevention services proactively identify and prevent fraud and provide community content moderation and compliance.
+Added: ● Customer Acquisition, Growth, and Retention Services:
+Added: Our customer growth and acquisition services optimize the buying journeys for acquiring new customers by leveraging technology and analytics to deliver personal experiences that we believe increase the quantity and quality of leads and customers.
+Added: ● Customer Care, Tech Support, and Order Fulfillment Services:
+Added: Our customer care, technical support, and order fulfillment services provide turnkey contact center solutions, including digital omnichannel technologies, associate recruiting and training, facilities, and operational expertise to create exceptional customer experiences across all touchpoints.
+Added: ● Digitally Enabled Back Office and Specialty Services:
+Added: Our digital AI operations, content moderation, and fraud detection and prevention services provide clients with data tagging and annotation capabilities to train and enable AI platforms, community content moderation, and compliance to meet client content standards, and proactive fraud solutions to assist our clients in the detection and prevention of fraud.
The Company allocates to each segment its portion of corporate operating expenses.
1 unchanged sentence
The following tables present certain financial data by segment (in thousands):
−Removed: Three Months Ended September 30, 2021
−Removed: Three Months Ended September 30, 2020
−Removed: Nine Months Ended September 30, 2021
−Removed: Nine Months Ended September 30, 2020
+Added: Three Months Ended March 31, 2022
+Added: Three Months Ended March 31, 2021
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Capital Expenditures
+Added: March 31, 2022
+Added: December 31, 2021
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: September 30, 2021
−Removed: December 31, 2020
−Removed: September 30, 2021
−Removed: December 31, 2020
The following table presents revenue based upon the geographic location where the services are provided (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
United States
−Removed: Latin America
Europe / Middle East / Africa
+Added: Latin America
Asia Pacific / India
(4) SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS
−Removed: The Company had one client that contributed in excess of 10% of total revenue for the nine months ended September 30, 2021;
−Removed: this client operates in the financial services industry and is included in the TTEC Engage segment.
−Removed: This client contributed 13.3 % and 11.8 % of total revenue for the nine months ended September 30, 2021 and 2020, respectively.
+Added: The Company had one client that contributed in excess of 10% of total revenue for the three months ended March 31, 2022;
+Added: this client operates in the automotive industry and is included in the TTEC Engage segment.
+Added: This client contributed 10.4 % and 8.8 % of total revenue for the three months ended March 31, 2022 and 2021, respectively.
+Added: The Company had one client that contributed in excess of 10% of total revenue for the three months ended March 31, 2021;
+Added: this client operates in the financial services sector.
+Added: This client contributed 7.3 % and 15.7 % of total revenue for the three months ended March 31, 2022 and 2021, respectively.
The Company does have clients with aggregate revenue exceeding $ 100 million annually and the loss of one or more of these clients could have a material adverse effect on the Company’s business, operating results, or financial condition.
1 unchanged sentence
To limit the Company’s credit risk with its clients, management performs periodic credit evaluations, maintains allowances for credit losses and may require pre-payment for services from certain clients.
−Removed: Based on currently available information, management does not believe significant credit risk existed as of September 30, 2021.
−Removed: In connection with the implementation of ASC 326 as of January 1, 2020, the Company analyzed the prior history of credit losses on revenue for TTEC as a whole and separately for each of the two segments.
−Removed: Based on this evaluation, no modification to the allowance for credit losses balance was necessary as of the implementation date.
−Removed: At the end of each quarter beginning with March 31, 2020, an allowance for credit losses will be calculated based on the current quarterly revenue multiplied by the historical loss percentage of the prior three year period and recorded in the income statement.
−Removed: In addition to the evaluation of historical losses, the Company considers current and future economic conditions and events such as changes in customer credit quality and liquidity.
−Removed: The Company will write-off accounts receivable against this allowance when the Company determines a balance is uncollectible.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Based on currently available information, management does not believe significant credit risk existed as of March 31, 2022.
Activity in the Company’s Allowance for credit losses consists of the following (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
−Removed: Balance, beginning of period
+Added: Three Months Ended March 31,
+Added: Balance, beginning of year
Provision for credit losses
1 unchanged sentence
Effect of foreign currency
−Removed: Balance, end of period
−Removed: On October 15, 2018, Sears Holding Corporation (“Sears”) announced that it had filed a petition for bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York.
−Removed: As of September 30, 2021 and December 31, 2020, TTEC had approximately $ 2.7 million in pre-petition accounts receivables outstanding related to Sears;
−Removed: during the fourth quarter of 2018 a $ 2.7 million allowance for uncollectible accounts was recorded and included in Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss).
+Added: Balance, end of year
Accounts Receivable Sales Agreement
6 unchanged sentences
The cash proceeds from this Agreement are included in the change in accounts receivable within the operating activities section of the Consolidated Statements of Cash Flow.
−Removed: As of September 30, 2021, the Company had factored $ 74.5 million of accounts receivable;
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
+Added: As of March 31, 2022 and December 31, 2021, the Company had factored $ 88.7 million and $ 97.7 million, respectively, of accounts receivable;
under the Agreement discounts on these receivables were not material during the quarter.
−Removed: As of September 30, 2021, the Company had collected $ 19.0 million of cash from customers which had not been remitted to the Bank.
+Added: As of March 31, 2022, the Company had collected $ 15.4 million of cash from customers which had not been remitted to the Bank.
The unremitted cash is restricted cash and is included within Prepaid and other current assets with the corresponding liability included in Accrued expenses on the Consolidated Balance Sheet.
−Removed: The Company has not recorded any servicing assets or liabilities as of September 30, 2021 as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements.
−Removed: (5) GOODWILL AND OTHER INTANGIBLE ASSETS
+Added: The Company has not recorded any servicing assets or liabilities as of March 31, 2022 as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements.
Goodwill consisted of the following (in thousands):
Acquisitions /
−Removed: September 30,
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
The Company performs a goodwill impairment assessment on at least an annual basis.
The Company conducts its annual goodwill impairment assessment during the fourth quarter, or more frequently, if indicators of impairment exist.
−Removed: During the quarter ended September 30, 2021, the Company assessed whether any such indicators of impairment existed and concluded there were none.
+Added: During the quarter ended March 31, 2022, the Company assessed whether any such indicators of impairment existed and concluded there were none.
(6) DERIVATIVES
5 unchanged sentences
Conversely, the fair value of derivative liabilities reflects the Company’s creditworthiness.
−Removed: As of September 30, 2021, the Company has not experienced, nor does it anticipate, any issues related to derivative counterparty defaults.
−Removed: The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020 (in thousands and net of tax):
−Removed: Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
+Added: As of March 31, 2022, the Company has not experienced, nor does it anticipate, any issues related to derivative counterparty defaults.
+Added: The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the three months ended March 31, 2022 and 2021 (in thousands and net of tax):
+Added: Three Months Ended March 31,
Aggregate unrealized net gain/(loss) at beginning of period
2 unchanged sentences
Aggregate unrealized net gain/(loss) at end of period
−Removed: The Company’s foreign exchange cash flow hedging instruments as of September 30, 2021 and December 31, 2020 are summarized as follows (amounts in thousands).
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
+Added: The Company’s foreign exchange cash flow hedging instruments as of March 31, 2022 and December 31, 2021 are summarized as follows (amounts in thousands).
All hedging instruments are forward contracts.
−Removed: As of September 30, 2021
+Added: As of March 31, 2022
Canadian Dollar
+Added: December 2022
Philippine Peso
−Removed: September 2024
December 2024
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: December 2024
As of December 31, 2021
2 unchanged sentences
(1) Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S.
−Removed: dollars on September 30, 2021 and December 31, 2020.
+Added: dollars on March 31, 2022 and December 31, 2021.
Fair Value Hedges
1 unchanged sentence
Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings in Other income (expense), net.
−Removed: As of September 30, 2021 and December 31, 2020 the total notional amounts of the Company’s forward contracts used as fair value hedges were $ 28.3 million and $ 35.5 million, respectively.
+Added: As of March 31, 2022 and December 31, 2021 the total notional amounts of the Company’s forward contracts used as fair value hedges were $ 41.7 million and $ 32.9 million, respectively.
Derivative Valuation and Settlements
−Removed: The Company’s derivatives as of September 30, 2021 and December 31, 2020 were as follows (in thousands):
−Removed: September 30, 2021
+Added: The Company’s derivatives as of March 31, 2022 and December 31, 2021 were as follows (in thousands):
+Added: March 31, 2022
Not Designated
20 unchanged sentences
Total fair value of derivatives, net
−Removed: The effects of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the three months ended September 30, 2021 and 2020 were as follows (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Designated as Hedging
−Removed: Derivative contract type:
−Removed: Foreign Exchange
−Removed: Derivative classification:
−Removed: Amount of gain or (loss) recognized in Other comprehensive income (loss) - effective portion, net of tax
−Removed: Amount and location of net gain or (loss) reclassified from Accumulated OCI to income - effective portion:
−Removed: Three Months Ended September 30,
−Removed: Not Designated as Hedging Instruments
−Removed: Derivative contract type:
−Removed: Foreign Exchange
−Removed: Derivative classification:
−Removed: Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income (Loss):
−Removed: Other income (expense), net
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The effects of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2021 and 2020 were as follows (in thousands):
−Removed: Nine Months Ended September 30,
+Added: The effects of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2022 and 2021 were as follows (in thousands):
+Added: Three Months Ended March 31,
Designated as Hedging
4 unchanged sentences
Amount and location of net gain or (loss) reclassified from Accumulated OCI to income - effective portion:
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Not Designated as Hedging Instruments
10 unchanged sentences
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.
−Removed: 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.
−Removed: This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
−Removed: The following presents information as of September 30, 2021 and December 31, 2020 for the Company’s assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value.
−Removed: Accounts Receivable and Payable - The amounts recorded in the accompanying balance sheets approximate fair value because of their short-term nature.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
+Added: 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.
+Added: This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
+Added: The following presents information as of March 31, 2022 and December 31, 2021 for the Company’s assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value.
+Added: 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.
1 unchanged sentence
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.
−Removed: As of September 30, 2021, the investment in CaféX Communication, Inc., which consisted of the Company’s total $ 15.6 million investment, is fully impaired to zero.
+Added: As of March 31, 2022, the investment in CaféX Communication, Inc., which consisted of the Company’s total $ 15.6 million investment, is fully impaired to zero.
Debt - The Company’s debt consists primarily of the Company’s Credit Facility, 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).
−Removed: As of September 30, 2021 and December 31, 2020, the Company had $ 805.0 million and $ 385.0 million, respectively, of borrowings outstanding under the Credit Facility.
−Removed: During the third quarter of 2021 outstanding borrowings accrued interest at an average rate of 1.3 % per annum, excluding unused commitment fees.
+Added: As of March 31, 2022 and December 31, 2021, the Company had $ 803.0 million and $ 791.0 million, respectively, of borrowings outstanding under the Credit Facility.
+Added: During the first quarter of 2022 outstanding borrowings accrued interest at an average rate of 1.3 % per annum, 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.
1 unchanged sentence
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.
−Removed: As of September 30, 2021, credit risk did not materially change the fair value of the Company’s derivative contracts.
−Removed: The following is a summary of the Company’s fair value measurements for its net derivative assets (liabilities) as of September 30, 2021 and December 31, 2020 (in thousands):
−Removed: As of September 30, 2021
+Added: As of March 31, 2022, credit risk did not materially change the fair value of the Company’s derivative contracts.
+Added: The following is a summary of the Company’s fair value measurements for its net derivative assets (liabilities) as of March 31, 2022 and December 31, 2021 (in thousands):
+Added: As of March 31, 2022
Fair Value Measurements Using
6 unchanged sentences
Total net derivative asset (liability)
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
As of December 31, 2021
7 unchanged sentences
Total net derivative asset (liability)
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The following is a summary of the Company’s fair value measurements as of September 30, 2021 and December 31, 2020 (in thousands):
−Removed: As of September 30, 2021
+Added: The following is a summary of the Company’s fair value measurements as of March 31, 2022 and December 31, 2021 (in thousands):
+Added: As of March 31, 2022
Fair Value Measurements Using
23 unchanged sentences
Redeemable noncontrolling interest
−Removed: Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan structured as a Rabbi trust for certain eligible employees.
−Removed: 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.
−Removed: The deferred compensation liability represents the combined values of market investments against which participant accounts are tracked.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: Contingent Consideration - The Company recorded contingent consideration related to the acquisitions of VF US and VF ASEAN.
+Added: Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan structured as a Rabbi trust for certain eligible employees.
+Added: 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.
+Added: The deferred compensation liability represents the combined values of market investments against which participant accounts are tracked.
+Added: Contingent Consideration - The Company recorded contingent consideration related to the acquisitions of VF US and VF ASEAN that closed during 2020.
The contingent payable for VF US was calculated using a Monte Carlo simulation including a discount rate of 23.1 %.
1 unchanged sentence
The measurements were based on significant inputs not observable in the market.
−Removed: The Company will record interest expense each quarter using the effective interest method until the future value of these contingent payments reaches the expected total future value.
−Removed: During the first, second and fourth quarters of 2020, the Company recorded fair value adjustments to the contingent consideration associated with the acquisition of FCR LLC based on decreased estimates of EBITDA which caused the estimated payable to decrease.
−Removed: Accordingly, a $ 3.3 million decrease, a $ 1.1 million decrease and a $ 1.8 million decrease to the payable were recorded as of March 31, 2020, June 30, 2020 and December 31, 2020, respectively, and were included in Other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).
−Removed: As of December 31, 2020, the final calculated contingent consideration for FCR was zero.
−Removed: During the fourth quarter of 2020, the first quarter of 2021 and the second quarter of 2021, the Company recorded fair value adjustments to the contingent consideration associated with the VF US and VF ASEAN acquisitions based on increased actual results and estimates of EBITDA for 2021 which caused the payables to increase.
−Removed: Accordingly, a combined $ 4.3 million increase, $ 0.9 million increase and $ 0.2 million increase, to the payables were recorded as of December 31, 2020, March 31, 2021 and June 30, 2021, respectively, and were included in Other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).
−Removed: As of September 30, 2021, the expected future contingent consideration for the VF US and VF ASEAN acquisitions is $ 9.5 million.
+Added: The Company recorded interest expense each period using the effective interest method until the future value of these contingent payments reached the expected total future value.
+Added: During the fourth quarter of 2020, the first quarter of 2021, the second quarter of 2021 and the fourth quarter of 2021, the Company recorded fair value adjustments to the contingent consideration associated with the VF US and VF ASEAN acquisitions based on increased actual results and estimates of EBITDA for 2021 which caused the payables to increase.
+Added: Accordingly, a combined $ 4.3 million increase, $ 0.9 million increase, $ 0.2 million increase and a $ 0.1 million increase to the payables were recorded as of December 31, 2020, March 31, 2021, June 30, 2021 and December 31, 2021, respectively, and were included in Other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).
+Added: As of March 31, 2022, the expected future contingent consideration for the VF US and VF ASEAN acquisitions were finalized at $ 9.6 million and were paid in March 2022.
A rollforward of the activity in the Company’s fair value of the contingent consideration payable is as follows (in thousands):
−Removed: September 30,
(8) INCOME TAXES
4 unchanged sentences
The Company’s selection of an accounting policy with respect to both the global intangible low taxed foreign income (“GILTI”) and base erosion and anti-abuse tax (“BEAT”) rules is to compute the related taxes in the period the entity becomes subject to either GILTI or BEAT.
−Removed: As of September 30, 2021, the Company had $ 15.1 million of gross deferred tax assets (after a $ 26.3 million valuation allowance) and a net deferred tax asset of $ 9.5 million (after deferred tax liabilities of $ 5.6 million) related to the United States and international tax jurisdictions whose recoverability is dependent upon future profitability.
+Added: As of March 31, 2022, the Company had $ 15.1 million of net deferred tax assets (after a $ 29.4 million valuation allowance) and a net deferred tax asset of $ 10.2 million (after deferred tax liabilities of $ 5.0 million) related to the United States and international tax jurisdictions whose recoverability is dependent upon future profitability.
+Added: The effective tax rate for the three months ended March 31, 2022 and 2021 was 17.6 % and 22.5 %, respectively.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: In accordance with ASC 740, during the third quarter of 2020 the Company recorded a liability of $ 1.7 million related to an uncertain tax position.
−Removed: The effective tax rate for the three and nine months ended September 30, 2021 was 30.6 % and 21.9 %, respectively.
−Removed: The effective tax rate for the three and nine months ended September 30, 2020 was 25.9 % and 26.5 %, respectively.
The Company’s U.S.
income tax returns filed for the tax years ending December 31, 2017 to present, remain open tax years .
−Removed: The Company has been notified of the intent to audit or is currently under audit of income taxes for the United States for tax year 2017 and 2018 , the Philippines for tax years 2017, 2018 and 2020 , Ireland for 2018 through 2020 , the state of California for tax years 2017 through 2018 , New York City for tax years 2017 through 2019 , and the state of Florida for tax years 2017 through 2019 .
+Added: The Company has been notified of the intent to audit or is currently under audit of income taxes for the United States for tax year 2017 and 2018 , the Philippines for tax year 2020 , the state of California for tax years 2017 through 2018 , the state of Washington for tax years 2017 through 2019 , and India for tax years 2017 through 2019.
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.
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.
−Removed: In the first quarter of 2020, changes to the valuation allowance were recorded in the amounts of $ 0.3 million, for deferred tax assets that did not meet the “more-likely-than-not” standard.
−Removed: In the second quarter of 2020, changes to the valuation allowance were recorded in the amount of $ 0.9 million for assets that were redetermined to meet the “more-likely-than-not” standard.
−Removed: In the first and third quarters of 2021, changes to the valuation allowance were recorded in the amount of $ 2.4 million and $ 6.4 million, respectively, for assets that did not meet the “more-likely-than-not” standard.
+Added: In the first, third and fourth quarters of 2021, changes to the valuation allowance were recorded in the amount of $ 2.4 million, $ 6.4 million and $ 5.1 million, respectively, for assets that did not meet the “more-likely-than-not” standard.
+Added: In the first quarter of 2022, $ 1.3 million was released from the valuation allowance for assets that are expected to be recognized in the future.
The Company has been granted “Tax Holidays” as an incentive to attract foreign investment by the government of the Philippines.
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.
−Removed: 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 2021 and 2022 .
−Removed: The aggregate effect on income tax expense for the three months ended September 30, 2021 and 2020 was approximately $ 0.5 million benefit and $ 1.1 million benefit, respectively, which had an impact on diluted net income per share of $ 0.01 and $ 0.02 , respectively.
−Removed: The aggregate effect on income tax expense for the nine months ended September 30, 2021 and 2020 was approximately $ 4.2 million and $ 2.2 million benefit, respectively, which had an impact on diluted net income per share of $ 0.09 and $ 0.05 , respectively.
−Removed: (9) RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES
−Removed: Restructuring Charges
−Removed: During 2021 and 2020, the Company continued restructuring activities primarily associated with reductions in the Company’s capacity, the workforce in certain locations, and related management in both segments to better align the capacity and workforce with current business needs.
−Removed: TTEC determined it would close several delivery centers servicing the Engage segment and the expenses related to early termination fees and cease use lease accruals were recorded.
−Removed: This expense was included in the Restructuring charges, net in the Consolidated Statements of Comprehensive Income (Loss).
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: A summary of the expenses recorded in Restructuring charges, net in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020, respectively, is as follows (in thousands):
−Removed: Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
−Removed: Reduction in force
−Removed: Facility exit and other charges
−Removed: A rollforward of the activity in the Company’s restructuring accrual is as follows (in thousands):
−Removed: Facility Exit and
−Removed: Other Charges
−Removed: Balance as of December 31, 2020
−Removed: Change due to foreign currency
−Removed: Change in estimates
−Removed: Balance as of September 30, 2021
−Removed: The remaining restructuring and other accruals are expected to be paid or extinguished during the next twelve months and are all classified as current liabilities within Other accrued expenses in the Consolidated Balance Sheets.
−Removed: Severance Charges
−Removed: In the normal course of business, the Company will pay severance to terminated employees related to programs that are ending when such employees are no longer needed and cannot be repurposed to a new program.
−Removed: During the second quarter of 2020, a $ 3.0 million accrual was recorded with the expense included in Cost of services during the quarter ended June 30, 2020.
−Removed: During the third and fourth quarters of 2020, a total of $ 1.6 million was paid and a $ 0.3 million reduction in expense was recorded.
−Removed: During the first, second and third quarters of 2021, a total of $ 0.5 million was paid and a $ 0.6 million reduction in expense was recorded.
−Removed: The accrual is expected to be paid or extinguished during the next three months and thus is classified as current liabilities within Other accrued expenses in the Consolidated Balance Sheets.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Impairment Losses
−Removed: During each of the periods presented, the Company evaluated the recoverability of its leasehold improvement assets at certain customer engagement centers.
−Removed: 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.
−Removed: The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value.
−Removed: To determine fair value, the Company used Level 3 inputs in its discounted cash flows analysis.
−Removed: Assumptions included the amount and timing of estimated future cash flows and assumed discount rates.
−Removed: During the three and nine months ended September 30, 2021 the Company recognized impairment losses, net related to leasehold improvement assets and right of use lease assets of $( 0.3 ) million and $ 0.4 million, respectively, across the TTEC Digital and TTEC Engage segments.
−Removed: During the three and nine months ended September 30, 2020 the Company recognized impairment losses, net related to leasehold improvement assets and right of use lease assets of $ 0.9 million and $ 1.6 million, respectively, across the TTEC Digital and TTEC Engage segments.
+Added: In the Philippines, the Company has been granted multiple agreements with an initial period of tax at 0% for four years, which will be fully expired in 2022 and additional periods at a reduced tax rate, expiring at various times beginning in 2030.
+Added: The aggregate benefit to income tax expense for the three months ended March 31, 2022 and 2021 was approximately $ 0.9 million and $ 1.1 million, respectively, which had an impact on diluted net income per share of $ 0.02 and $ 0.02 , respectively.
(9) COMMITMENTS AND CONTINGENCIES
Credit Facility
−Removed: On March 25, 2021, the Company entered into a Fifth Amendment to its Amended and Restated Credit Agreement and Amended (the “Credit Agreement”) and Restated Security Agreement originally dated as of June 3, 2013, (collectively, the “Credit Facility”) to increase the total commitments by $ 300 million to $ 1.2 billion by exercising the accordion feature that was included in the senior secured revolving credit facility with a syndicate of lenders led by Wells Fargo Bank, National Association, as agent, swingline and fronting lender.
−Removed: The Credit Facility matures on February 14, 2024 .
−Removed: The $300 million increase is in the form of a term loan, which can be prepaid anytime and will become due February 14, 2024, contemporaneously with the expiration of the revolving line of credit.
+Added: On November 23, 2021 , the Company entered into a Sixth Amendment to the Amended and Restated Credit Agreement and Amendment (“the Credit Agreement”) and Restated Security Agreement originally dated June 3, 2013, (collectively, the “Credit Facility”) to convert the $300 million term loan included in the total Credit Facility commitments, that was previously agreed on March 25, 2021 as part of the Fifth Amendment to the Credit Agreement, into a $ 1.5 billion senior secured revolving Credit Facility with a syndicate of lenders led by Wells Fargo, National Association, as agent, swingline and fronting lender.
+Added: The Credit Facility matures on November 23, 2026.
+Added: We primarily use our Credit Facility to fund working capital, general operations, dividends, acquisitions and other strategic activities.
+Added: On March 25, 2021, the Company entered into a Fifth Amendment to its Credit Agreement and Credit Facility to increase the total commitments by $ 300 million to $ 1.2 billion by exercising the accordion feature that was included in the senior secured revolving credit facility.
+Added: The $300 million increase was in the form of a term loan, could be prepaid anytime and would become due February 14, 2024, contemporaneously with the expiration of the revolving line of credit.
The maximum commitment under the Credit Facility is $ 1.5 billion in the aggregate, if certain conditions are satisfied.
The Credit Facility commitment fees are payable to the lenders in an amount equal to the unused portion of the Credit Facility multiplied by a rate per annum as determined by reference to the Company’s net leverage ratio.
−Removed: The Credit Agreement contains customary affirmative, negative, and financial covenants, which remained unchanged from the 2016 Credit Facility, except that the Company is now obligated to maintain a maximum net leverage ratio of 3.50 to 1.00, and a minimum interest coverage ratio of 2.50 to 1.00.
+Added: The Credit Agreement contains customary affirmative, negative, and financial covenants.
The Credit Agreement permits accounts receivable factoring up to the greater of $ 100 million or 25 percent of the average book value of all accounts receivable over the most recent twelve-month period.
+Added: The Credit Agreement also permits the utilization of up to $100 million of limits within the Credit Facility for letters of credit to be used in the business.
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
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 LIBOR;
3 unchanged sentences
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.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
The Company primarily utilizes its Credit Facility to fund working capital, general operations, dividends and other strategic activities, such as the acquisitions described in Note 2.
−Removed: As of September 30, 2021 and December 31, 2020, the Company had borrowings of $ 805.0 million and $ 385.0 million, respectively, under its Credit Facility, and its average daily utilization was $ 747.9 million and $ 597.9 million for the nine months ended September 30, 2021 and 2020, respectively.
−Removed: The Company had increased borrowings under the Credit Facility from late March 2020 through late September 2020, related to precautionary measures taken to proactively strengthen the Company’s cash reserves and financial flexibility in response to COVID-19 related uncertainties.
−Removed: As of September 30, 2020, those additional borrowings had been repaid.
+Added: As of March 31, 2022 and December 31, 2021, the Company had borrowings of $ 803.0 million and $ 791.0 million, respectively, under its Credit Facility, and its average daily utilization was $ 917.8 million and $ 446.1 million for the three months ended March 31, 2022 and 2021, respectively.
During early April 2021, the Company increased borrowings by approximately $ 500 million in connection with the acquisition of Avtex (see Note 2).
−Removed: Based on the current level of availability based on the covenant calculations, the Company’s remaining borrowing capacity was approximately $ 390 million as of September 30, 2021.
−Removed: As of September 30, 2021, the Company was in compliance with all covenants and conditions under its Credit Agreement.
+Added: Based on the current level of availability based on the covenant calculations, the Company’s remaining borrowing capacity was approximately $ 525 million as of March 31, 2022.
+Added: As of March 31, 2022, the Company was in compliance with all covenants and conditions under its Credit Agreement.
Letters of Credit
−Removed: As of September 30, 2021, outstanding letters of credit under the Credit Facility totaled $ 2.6 million and primarily guaranteed workers’ compensation and other insurance related obligations.
−Removed: As of September 30, 2021, letters of credit and contract performance guarantees issued outside of the Credit Agreement totaled $ 0.4 million.
+Added: As of March 31, 2022, outstanding letters of credit under the Credit Facility totaled $ 12.6 million and primarily guaranteed workers’ compensation and other insurance related obligations.
+Added: As of March 31, 2022, letters of credit and contract performance guarantees issued outside of the Credit Agreement totaled $ 0.4 million.
+Added: Indebtedness under the Credit Agreement is guaranteed by certain of the Company’s present and future domestic subsidiaries.
Legal Proceedings
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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.
−Removed: Operating leases are included in the Consolidated Balance Sheet as Operating lease assets, Current operating lease liabilities and Non-current operating lease liabilities.
−Removed: Finance leases are included in Property, plant and equipment, Other current liabilities and Other long-term liabilities in the Consolidated Balance Sheet.
−Removed: The Company primarily leases real estate and equipment under various arrangements that provide the Company the right of use for the underlying asset that require lease payments over the lease term.
−Removed: The Company determines the value of each lease by computing the present value of each lease payment using the interest rate implicit in the lease, if available;
−Removed: otherwise the Company estimates its incremental borrowing rate over the lease term.
−Removed: The Company determines its incremental borrowing rate based on its estimated credit risk with adjustments for each individual leases’ geographical risk and lease term.
−Removed: Operating lease assets also include prepaid rent and initial direct costs less any tenant improvements.
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The Company’s real estate portfolio typically includes one or more options to renew , with renewal terms that generally can extend the lease term from one to 10 years .
−Removed: The exercise of these lease renewal options is at the Company’s discretion and is included in the lease term only if the Company is reasonably certain to exercise.
−Removed: The Company also has service arrangements whereby it controls specific space provided by a third-party service provider.
−Removed: These arrangements meet the definition of a lease and are accounted for under ASC 842.
−Removed: Lease expense for operating leases is recognized on a straight-line basis over the lease term and is included in the Consolidated Statements of Comprehensive Income (Loss).
−Removed: The Company’s lease agreements do not contain any material residual value guarantees or restrictive guarantees.
−Removed: The components of lease expense for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands):
−Removed: Location in Statements of
−Removed: Three Months Ended September 30,
−Removed: Comprehensive Income (Loss)
−Removed: Amortization of ROU assets - finance leases
−Removed: Depreciation and amortization
−Removed: Interest on lease liabilities - finance leases
−Removed: Interest expense
−Removed: Operating lease cost (cost resulting from lease payments)
−Removed: Cost of services
−Removed: Operating lease cost (cost resulting from lease payments)
−Removed: Selling, general and administrative
−Removed: Operating lease cost (cost resulting from lease payments)
−Removed: Restructuring
−Removed: Operating lease cost
−Removed: Operating lease cost (cost resulting from lease payments)
−Removed: Other income (expense), net
−Removed: Short-term lease cost
−Removed: Cost of services
−Removed: Variable lease cost (cost excluded from lease payments)
−Removed: Cost of services
−Removed: Sublease income
−Removed: Selling, general and administrative
−Removed: Sublease income
−Removed: Other income (expense), net
−Removed: Total lease cost
−Removed: Location in Statements of
−Removed: Nine Months Ended September 30,
−Removed: Comprehensive Income (Loss)
−Removed: Amortization of ROU assets - finance leases
−Removed: Depreciation and amortization
−Removed: Interest on lease liabilities - finance leases
−Removed: Interest expense
−Removed: Operating lease cost (cost resulting from lease payments)
−Removed: Cost of services
−Removed: Operating lease cost (cost resulting from lease payments)
−Removed: Selling, general and administrative
−Removed: Operating lease cost (cost resulting from lease payments)
−Removed: Restructuring
−Removed: Operating lease cost
−Removed: Operating lease cost (cost resulting from lease payments)
−Removed: Other income (expense), net
−Removed: Short-term lease cost
−Removed: Cost of services
−Removed: Variable lease cost (cost excluded from lease payments)
−Removed: Cost of services
−Removed: Sublease income
−Removed: Selling, general and administrative
−Removed: Sublease income
−Removed: Other income (expense), net
−Removed: Total lease cost
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Other supplementary information for the three and nine months ended September 30, 2021 and 2020 are as follows (dollar values in thousands):
−Removed: Three Months Ended September 30,
−Removed: Finance lease - operating cash flows
−Removed: Finance lease - financing cash flows
−Removed: Operating lease - operating cash flows (fixed payments)
−Removed: New ROU assets - operating leases
−Removed: Modified ROU assets - operating leases
−Removed: New ROU assets - finance leases
−Removed: Nine Months Ended September 30,
−Removed: Finance lease - operating cash flows
−Removed: Finance lease - financing cash flows
−Removed: Operating lease - operating cash flows (fixed payments)
−Removed: New ROU assets - operating leases
−Removed: Modified ROU assets - operating leases
−Removed: New ROU assets - finance leases
−Removed: September 30, 2021
−Removed: December 31, 2020
−Removed: Weighted average remaining lease term - finance leases
−Removed: Weighted average remaining lease term - operating leases
−Removed: Weighted average discount rate - finance leases
−Removed: Weighted average discount rate - operating leases
−Removed: Operating and financing lease right-of-use assets and lease liabilities within the Consolidated Balance Sheet as of September 30, 2021 and December 31, 2020 are as follows (in thousands):
−Removed: Location in Balance Sheet
−Removed: September 30, 2021
−Removed: December 31, 2020
−Removed: Operating lease assets
−Removed: Operating lease assets
−Removed: Finance lease assets
−Removed: Property, plant and equipment, net
−Removed: Total leased assets
−Removed: Current operating lease liabilities
−Removed: Other current liabilities
−Removed: Non-current operating lease liabilities
−Removed: Other long-term liabilities
−Removed: Total lease liabilities
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: The future minimum operating lease and finance lease payments required under non-cancelable leases as of September 30, 2021 and December 31, 2020 are as follows (in thousands):
−Removed: September 30, 2021
−Removed: Total minimum lease payments
−Removed: Less imputed interest
−Removed: Total lease liability
−Removed: December 31, 2020
−Removed: Total minimum lease payments
−Removed: Less imputed interest
−Removed: Total lease liability
−Removed: In 2008, the Company sub-leased one of its customer engagement centers to a third party for the remaining term of the lease.
−Removed: The sub-lease began on January 1, 2009 and rental income will be recognized on a straight-line basis over the term of the sub-lease through 2026 .
−Removed: In 2017, the Company sub-leased one of its office spaces for the remaining term of the original lease.
−Removed: The sub-lease began on November 6, 2017 and ended on May 31, 2021 .
−Removed: In 2019, the Company sub-leased one of its office spaces for the remaining term of the original lease.
−Removed: The sub-lease began on March 1, 2019 and ends July 31, 2023 .
−Removed: In 2020, the Company sub-leased one of its office spaces for the remaining term of the original lease.
−Removed: The sub-lease began on February 6, 2020 and ends June 14, 2023 .
−Removed: (12) OTHER LONG-TERM LIABILITIES
−Removed: The components of Other long-term liabilities as of September 30, 2021 and December 31, 2020 are as follows (in thousands):
−Removed: September 30, 2021
−Removed: December 31, 2020
−Removed: Deferred revenue
−Removed: Deferred compensation plan
−Removed: Deferred social security taxes
+Added: (10) DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS
+Added: Revenue recognized for the three months ended March 31, 2022 from amounts included in deferred revenue as of December 31, 2021 was $ 78.2 million.
+Added: Revenue recognized for the three months ended March 31, 2021 from amounts included in deferred revenue as of December 31, 2020 was $ 36.3 million.
+Added: Remaining performance obligations (RPO) represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods.
+Added: The Company’s RPO excludes performance obligations from on-demand arrangements as there are no minimum purchase commitments associated with these arrangements, and certain time and materials contracts that are billed in arrears.
TTEC HOLDINGS, INC.
1 unchanged sentence
Notes to Consolidated Financial Statements
−Removed: (13) NONCONTROLLING INTEREST
−Removed: The following table reconciles equity attributable to noncontrolling interest in the Company’s subsidiary (in thousands):
−Removed: Nine Months Ended September 30,
−Removed: Noncontrolling interest, January 1
−Removed: Net income attributable to noncontrolling interest
−Removed: Dividends distributed to noncontrolling interest
−Removed: Foreign currency translation adjustments
−Removed: Noncontrolling interest, September 30
+Added: As of March 31, 2022, the Company’s RPO was $ 310.0 million, which will be delivered and recognized within the next three year s.
+Added: However, the amount and timing of revenue recognition are generally driven by customer consumption, which can extend beyond the original contract term in cases where customers are permitted to roll over unused capacity to future periods, generally upon the purchase of additional capacity at renewal.
(11) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
5 unchanged sentences
Net current period other comprehensive income (loss)
−Removed: Accumulated other comprehensive income (loss) at September 30, 2020
+Added: Accumulated other comprehensive income (loss) at March 31, 2021
Accumulated other comprehensive income (loss) at December 31, 2021
2 unchanged sentences
Net current period other comprehensive income (loss)
−Removed: Accumulated other comprehensive income (loss) at September 30, 2021
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Accumulated other comprehensive income (loss) at March 31, 2022
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):
−Removed: For the Three Months Ended September 30,
−Removed: Comprehensive Income
−Removed: (Loss) Classification
−Removed: Derivative valuation
−Removed: Gain on foreign currency forward exchange contracts
−Removed: Provision for income taxes
−Removed: Net income (loss)
−Removed: Actuarial loss on defined benefit plan
−Removed: Cost of services
−Removed: Provision for income taxes
−Removed: Net income (loss)
−Removed: For the Nine Months Ended September 30,
+Added: For the Three Months Ended
Comprehensive Income
8 unchanged sentences
Net income (loss)
+Added: TTEC HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements
(12) WEIGHTED AVERAGE SHARE COUNTS
The following table sets forth the computation of basic and diluted shares for the periods indicated (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Shares used in basic earnings per share calculation
4 unchanged sentences
Shares used in dilutive earnings per share calculation
−Removed: TTEC HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: For the three months ended September 30, 2021 and 2020, there were Restricted Stock Units (“RSUs”) of four thousand and zero , respectively, outstanding which were excluded from the computation of diluted net income per share because the effect would have been anti-dilutive.
−Removed: For the nine months ended September 30, 2021 and 2020, there were RSUs of 78 thousand and 167 thousand, respectively, outstanding which were excluded from the computation of diluted net income per share because the effect would have been anti-dilutive.
+Added: For the three months ended March 31, 2022 and 2021, there were Restricted Stock Units (“RSUs”) of 193 thousand and zero , respectively, outstanding which were excluded from the computation of diluted net income per share because the effect would have been anti-dilutive.
(13) EQUITY-BASED COMPENSATION PLANS
All equity-based awards to employees are recognized in the Consolidated Statements of Comprehensive Income (Loss) at the fair value of the award on the grant date.
−Removed: During the three and nine months ended September 30, 2021 and 2020, the Company recognized total equity-based compensation expense of $ 4.6 million and $ 12.0 million and $ 3.5 million and $ 9.5 million, respectively.
−Removed: Of this total compensation expenses, $ 2.0 million and $ 4.4 million were recognized in Cost of services and $ 2.6 million and $ 7.6 million were recognized in Selling, general and administrative during the three and nine months ended September 30, 2021, respectively.
−Removed: During the three and nine months ended September 30, 2020, the Company recognized compensation expense of $ 1.3 million and $ 3.4 million in Cost of services and $ 2.2 million and $ 6.1 million in Selling, general and administrative, respectively.
+Added: During the three months ended March 31, 2022 and 2021, the Company recognized total equity-based compensation expense of $ 3.7 million and $ 4.0 million, respectively.
+Added: Of this total compensation expenses, $ 1.6 million and $ 1.3 million were recognized in Cost of services and $ 2.1 million and $ 2.7 million were recognized in Selling, general and administrative during the three months ended March 31, 2022 and 2021, respectively.
Restricted Stock Unit Grants
−Removed: During the nine months ended September 30, 2021 and 2020, the Company granted 219,883 and 539,697 RSUs, respectively, to new and existing employees, which vest over four to five years .
−Removed: The Company recognized compensation expense related to RSUs of $ 4.1 million and $ 10.0 million for the three and nine months ended September 30, 2021, respectively.
−Removed: The Company recognized compensation expense related to RSUs of $3.1 million and $8.5 million for the three and nine months ended September 30, 2020, respectively.
−Removed: As of September 30, 2021, there was approximately $ 37.3 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to RSUs granted under the Company’s equity plans.
+Added: During the three months ended March 31, 2022 and 2021, the Company granted 20,643 and 44,471 RSUs, respectively, to new and existing employees, which vest over four to five years .
+Added: The Company recognized compensation expense related to RSUs of $ 3.6 million and $ 3.3 million for the three months ended March 31, 2022 and 2021, respectively.
+Added: As of March 31, 2022, there was approximately $ 35.3 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to RSUs granted under the Company’s equity plans.
Performance Based Restricted Stock Unit Grants
4 unchanged sentences
Each fiscal year’s adjusted operating income will determine the award amount.
−Removed: The Company recognized compensation expense related to PRSUs of $ 0.3 million and $ 0.8 million, respectively, for the three and nine months ended September 30, 2021.
−Removed: The Company recognized compensation expense related to PRSUs of $ 0.4 million and $ 1.1 million, respectively, for the three and nine months ended September 30, 2020.
+Added: The Company recognized compensation expense related to PRSUs of zero and $ 0.3 million, respectively, for the three months ended March 31, 2022 and 2021.
During 2020, the Company awarded PRSUs that are subject to service and performance vesting conditions.
3 unchanged sentences
Each fiscal year’s revenue and adjusted operating income will determine the award amount.
−Removed: The Company recognized compensation expense related to PRSUs of $ 0.2 million and $ 1.2 million, respectively, for the three and nine months ended September 30, 2021.
+Added: The Company recognized compensation expense related to PRSUs of $ 0.4 million and $ 0.5 million, respectively, for the three months ended March 31, 2022 and 2021.
TTEC HOLDINGS, INC.
2 unchanged sentences
During 2021, the Company awarded PRSUs that are subject to service and performance vesting conditions.
−Removed: If defined minimum targets are met, the annual value of the PRSUs issued will be between $1.2 million and $4.9 million and vest immediately.
+Added: If defined minimum targets are met, the annual value of the PRSUs issued will be between $ 1.2 million and $ 4.9 million and vest immediately in 2024.
If the defined minimum targets are not met, then no shares will be issued.
−Removed: The number of shares awarded are based on the Company’s annual revenue and adjusted operating income for the fiscal year 2023.
+Added: The number of shares that will be awarded will be based on the Company’s annual revenue and adjusted operating income for the fiscal year 2023.
Fiscal year’s 2023 revenue and adjusted operating income will determine the award amount.
Expense for these awards will begin at the start of the requisite service period, beginning January 1, 2023.
+Added: During 2022, the Company made awards of two different PRSU programs that are subject to service and performance vesting conditions:
+Added: ordinary course annual PRSUs and one-time stretch financial goals PRSUs.
+Added: For the ordinary course annual PRSUs, if defined minimum targets are met, the annual value of the PRSUs issued will be between $ 0.9 million and $ 3.5 million and vest immediately in March 2025.
+Added: If the defined minimum targets are not met, then no shares will be issued.
+Added: The number of shares that will be awarded will be based on the Company’s annual revenue and adjusted EBITDA for the fiscal year 2024.
+Added: Fiscal year’s 2024 revenue and adjusted EBITDA will determine the award amount.
+Added: The one-time stretch financial goals PRSUs, if defined minimum targets at TTEC Engage and TTEC Digital business segments’ levels, are met, the value of the PRSUs issued will be between 0.0 million shares and 0.5 million shares and will vest immediately in March 2026.
+Added: If the defined minimum targets are not met, then no shares will be issued.
+Added: The number of shares to be awarded will be based on the TTEC Engage and TTEC Digital business segments’ annual revenue and adjusted EBITDA for the fiscal year 2025.
+Added: Expense for these awards will begin at the start of the requisite service period, beginning January 1, 2024 and January 1, 2025, respectively.
(14) RELATED PARTY TRANSACTIONS
2 unchanged sentences
Tuchman, Chairman and Chief Executive Officer of the Company, has an indirect 100% beneficial ownership interest in Avion and Airmax.
−Removed: During the nine months ended September 30, 2021 and 2020, the Company expensed $ 0.5 million and $ 0.3 million, respectively, to Avion and Airmax for services provided to the Company.
−Removed: There was $ 50 thousand in payments due and outstanding to Avion and Airmax as of September 30, 2021.
−Removed: Paolillo, Chief Financial and Administrative Officer of the Company, is a member of the board of directors of Welltok, Inc., a consumer health SaaS company.
−Removed: Welltok, Inc.
−Removed: is a partner with the Company in a joint venture Welltok TTEC Communications, LLC.
−Removed: During the nine months ended September 30, 2021 and 2020, the Company recorded revenue of $ 1.2 million and $ 2.4 million, respectively, in connection with work performed through the joint venture.
+Added: During the three months ended March 31, 2022 and 2021, the Company expensed $ 0.1 million and $ 0.3 million, respectively, to Avion and Airmax for services provided to the Company.
+Added: There was $ 88 thousand in payments due and outstanding to Avion and Airmax as of March 31, 2022.
+Added: Paolillo, Global Chief Operating Officer of the Company, was a member of the board of directors of Welltok, Inc., a consumer health SaaS company, and partner of the Company in the TTEC Welltok joint venture.
+Added: During the three months ended March 31, 2022 and 2021, the Company recorded revenue of $ 0.4 million and $ 0.5 million, respectively, in connection with work performed through the joint venture.
+Added: As of December 2021, Ms.
+Added: Paolillo is no longer a member of the board of directors of Welltok, Inc.
+Added: and the joint venture has been wound down, but TTEC continues to service revenue for Welltok, Inc.
Paolillo is a member of the board of directors of Unisys, a global information technology company.
−Removed: During the nine months ended September 30, 2021, the Company recorded revenue of $ 0.4 million in connection with services performed for Unisys.
+Added: During the three months ended March 31, 2022 and 2021, the Company recorded revenue of $ 32 thousand and $ 0.2 million, respectively, in connection with services performed for Unisys.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
2 unchanged sentences
We caution you not to rely unduly on any forward-looking statements.
−Removed: Actual results may differ materially from those expressed in the forward-looking statements, and you should review and consider carefully the risks, uncertainties and other factors that affect our business and may cause such differences as outlined in Part II, Item 1A.
−Removed: Risk Factors of this report and in Item 1A.
+Added: Actual results may differ materially from those expressed in the forward-looking statements, and you should review and consider carefully the risks, uncertainties and other factors that affect our business and may cause such differences as outlined in Part II.
+Added: Item 1A Risk Factors of this report and Item 1A.
Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021.
7 unchanged sentences
our M&A activity, including our ability to identify, acquire and properly integrate acquired businesses in accordance with our strategy;
−Removed: the risk related to our international operations;
+Added: the risk related to our international operations including risks associated with the Russian invasion of Ukraine in the first quarter of 2022 and impacts it may have on our clients’ European based business and the Company’s business;
the risks related to legal and regulatory impact on our operations, including rapidly changing laws that regulate our and our clients’ business, such as data privacy and data protection laws, regulatory changes impacting our healthcare businesses, financial and public sector specific regulations, our ability to comply with these laws timely and cost effectively;
and the cost of wage and hour litigation in the United States;
−Removed: the impact of the COVID-19 pandemic and post-pandemic economic and regulatory realities on our business and our clients’ business;
+Added: the impact of the post COVID-19 pandemic economic recovery and regulatory realities on our business and our clients’ business;
and risks inherent in our equity structure including our controlling shareholder risk, and Delaware choice of dispute resolution risks.
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.