10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2018

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to ____________

Commission File No.            0-28274

Sykes Enterprises, Incorporated

(Exact name of Registrant as specified in its charter)

Florida	56-1383460
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

400 North Ashley Drive, Suite 2800, Tampa, FL    33602

(Address of principal executive offices)    (Zip Code)

Registrant’s telephone number, including area code: (813) 274-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒		Smaller reporting company	☐
Accelerated filer	☐	(Do not check if a smaller reporting company)	Emerging growth company	☐
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of July 19, 2018, there were 42,821,212 outstanding shares of common stock.

Sykes Enterprises, Incorporated and Subsidiaries

Form 10-Q

INDEX

PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets – June  30, 2018 and December 31, 2017 (Unaudited)	3
	Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) – Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)	5
	Condensed Consolidated Statement of Changes in Shareholders’ Equity – Six Months Ended June 30, 2018 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2018 and 2017 (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58
Item 4.	Controls and Procedures	59
Part II. OTHER INFORMATION		60
Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
	SIGNATURE	62

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PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except per share data)	June 30, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	162,422		$	343,734
Receivables, net		347,885			341,958
Prepaid expenses		23,516			22,132
Other current assets		19,140			19,743
Total current assets		552,963			727,567
Property and equipment, net		142,920			160,790
Goodwill, net		265,991			269,265
Intangibles, net		139,829			140,277
Deferred charges and other assets		32,698			29,193
	$	1,134,401		$	1,327,092
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	22,236		$	32,133
Accrued employee compensation and benefits		98,557			102,899
Income taxes payable		843			2,606
Deferred revenue and customer liabilities		32,503			34,717
Other accrued expenses and current liabilities		36,765			30,888
Total current liabilities		190,904			203,243
Deferred grants		2,913			3,233
Long-term debt		90,000			275,000
Long-term income tax liabilities		24,471			27,098
Other long-term liabilities		25,250			22,039
Total liabilities		333,538			530,613
Commitments and loss contingency (Note 13)
Shareholders’ equity:
Preferred stock, $0.01 par value per share, 10,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.01 par value per share, 200,000 shares authorized; 42,821 and 42,899 shares issued, respectively		428			429
Additional paid-in capital		282,622			282,385
Retained earnings		567,988			546,843
Accumulated other comprehensive income (loss)		(47,933	)		(31,104	)
Treasury stock at cost: 122 and 117 shares, respectively		(2,242	)		(2,074	)
Total shareholders’ equity		800,863			796,479
	$	1,134,401		$	1,327,092

See accompanying Notes to Condensed Consolidated Financial Statements.

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Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2018			2017			2018			2017
Revenues	$	396,785		$	375,438		$	811,156		$	759,452
Operating expenses:
Direct salaries and related costs		264,924			248,615			539,996			495,751
General and administrative		102,037			92,236			204,477			184,280
Depreciation, net		14,560			13,820			29,396			27,168
Amortization of intangibles		3,629			5,250			7,842			10,481
Impairment of long-lived assets		5,175			4,189			8,701			4,391
Total operating expenses		390,325			364,110			790,412			722,071
Income from operations		6,460			11,328			20,744			37,381
Other income (expense):
Interest income		175			144			346			299
Interest (expense)		(1,149	)		(1,865	)		(2,355	)		(3,564	)
Other income (expense), net		(537	)		793			(382	)		1,606
Total other income (expense), net		(1,511	)		(928	)		(2,391	)		(1,659	)
Income before income taxes		4,949			10,400			18,353			35,722
Income taxes		(2,229	)		1,555			227			8,165
Net income	$	7,178		$	8,845		$	18,126		$	27,557
Net income per common share:
Basic	$	0.17		$	0.21		$	0.43		$	0.66
Diluted	$	0.17		$	0.21		$	0.43		$	0.66
Weighted average common shares outstanding:
Basic		42,125			41,854			42,035			41,756
Diluted		42,160			41,934			42,197			41,919

See accompanying Notes to Condensed Consolidated Financial Statements.

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Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2018			2017			2018			2017
Net income	$	7,178		$	8,845		$	18,126		$	27,557
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments, net of taxes		(13,597	)		16,484			(13,306	)		20,382
Unrealized gain (loss) on net investment hedges, net of taxes		-			(2,936	)		-			(3,304	)
Unrealized gain (loss) on cash flow hedging instruments, net of taxes		(481	)		(396	)		(3,374	)		136
Unrealized actuarial gain (loss) related to pension liability, net of taxes		(46	)		(16	)		(129	)		(39	)
Unrealized gain (loss) on postretirement obligation, net of taxes		(10	)		(12	)		(20	)		(25	)
Other comprehensive income (loss), net of taxes		(14,134	)		13,124			(16,829	)		17,150
Comprehensive income (loss)	$	(6,956	)	$	21,969		$	1,297		$	44,707

See accompanying Notes to Condensed Consolidated Financial Statements.

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Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statement of Changes in Shareholders’ Equity

Six Months Ended June 30, 2018

(Unaudited)

	Common Stock						Additional					Accumulated Other
(in thousands)	Shares Issued			Amount			Paid-in Capital			Retained Earnings		Comprehensive Income (Loss)			Treasury Stock			Total
Balance at December 31, 2017		42,899		$	429		$	282,385		$	546,843	$	(31,104	)	$	(2,074	)	$	796,479
Cumulative effect of accounting change		-			-			-			3,019		-			-			3,019
Stock-based compensation expense		-			-			3,750			-		-			-			3,750
Issuance of common stock under equity award plans, net of forfeitures		40			-			168			-		-			(168	)		-
Shares repurchased for tax withholding on equity awards		(118	)		(1	)		(3,681	)		-		-			-			(3,682	)
Comprehensive income (loss)		-			-			-			18,126		(16,829	)		-			1,297
Balance at June 30, 2018		42,821		$	428		$	282,622		$	567,988	$	(47,933	)	$	(2,242	)	$	800,863

See accompanying Notes to Condensed Consolidated Financial Statements.

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Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
(in thousands)	2018			2017
Cash flows from operating activities:
Net income	$	18,126		$	27,557
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		29,651			27,423
Amortization of intangibles		7,842			10,481
Amortization of deferred grants		(344	)		(374	)
Impairment losses		8,701			4,391
Unrealized foreign currency transaction (gains) losses, net		(370	)		(611	)
Stock-based compensation expense		3,750			4,732
Deferred income tax provision (benefit)		1,070			9,785
Unrealized (gains) losses and premiums on financial instruments, net		625			42
Amortization of deferred loan fees		134			134
Imputed interest expense and fair value adjustments to contingent consideration		-			(633	)
Other		(90	)		144
Changes in assets and liabilities, net of acquisitions:
Receivables, net		(8,370	)		9,059
Prepaid expenses		(1,611	)		78
Other current assets		(2,016	)		(1,855	)
Deferred charges and other assets		(2,186	)		(1,008	)
Accounts payable		(5,499	)		2,420
Income taxes receivable / payable		(6,526	)		(14,086	)
Accrued employee compensation and benefits		(2,349	)		(1,779	)
Other accrued expenses and current liabilities		5,079			(2,916	)
Deferred revenue and customer liabilities		(155	)		2,398
Other long-term liabilities		1,922			(3,813	)
Net cash provided by operating activities		47,384			71,569
Cash flows from investing activities:
Capital expenditures		(26,232	)		(35,859	)
Cash paid for business acquisitions, net of cash acquired		-			(7,500	)
Purchase of intangible assets		(7,606	)		(275	)
Other		484			25
Net cash (used for) investing activities		(33,354	)		(43,609	)

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Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Continued)

	Six Months Ended June 30,
(in thousands)	2018			2017
Cash flows from financing activities:
Payments of long-term debt		(190,000	)		-
Proceeds from issuance of long-term debt		5,000			-
Shares repurchased for tax withholding on equity awards		(3,682	)		(3,860	)
Payments of contingent consideration related to acquisitions		-			(4,528	)
Other		38			107
Net cash (used for) financing activities		(188,644	)		(8,281	)
Effects of exchange rates on cash, cash equivalents and restricted cash		(6,748	)		15,159
Net increase (decrease) in cash, cash equivalents and restricted cash		(181,362	)		34,838
Cash, cash equivalents and restricted cash – beginning		344,805			267,594
Cash, cash equivalents and restricted cash – ending	$	163,443		$	302,432
Supplemental disclosures of cash flow information:
Cash paid during period for interest	$	1,975		$	3,066
Cash paid during period for income taxes	$	12,084		$	17,032
Non-cash transactions:
Property and equipment additions in accounts payable	$	2,637		$	3,742
Unrealized gain (loss) on postretirement obligation, net of taxes in accumulated other comprehensive income (loss)	$	(20	)	$	(25	)
Shares repurchased for tax withholding on equity awards included in current liabilities	$	-		$	119

See accompanying Notes to Condensed Consolidated Financial Statements.

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Sykes Enterprises, Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Six Months Ended June 30, 2018 and 2017

(Unaudited)

Note 1. Overview and Basis of Presentation

Business — Sykes Enterprises, Incorporated and consolidated subsidiaries (“SYKES” or the “Company”) is a leading provider of multichannel demand generation and global customer engagement services. SYKES provides differentiated full lifecycle customer engagement solutions and services to Global 2000 companies and their end customers primarily within the communications, financial services, technology, transportation and leisure, healthcare, retail and other industries. SYKES primarily provides customer engagement solutions and services with an emphasis on inbound multichannel demand generation, customer service and technical support to its clients’ customers. Utilizing SYKES’ integrated onshore/offshore global delivery model, SYKES provides its services through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. SYKES also provides various enterprise support services in the United States that include services for its clients’ internal support operations, from technical staffing services to outsourced corporate help desk services. In Europe, SYKES also provides fulfillment services, which includes order processing, payment processing, inventory control, product delivery and product returns handling. The Company has operations in two reportable segments entitled (1) the Americas, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim, in which the client base is primarily companies in the United States that are using the Company’s services to support their customer management needs; and (2) EMEA, which includes Europe, the Middle East and Africa.

2017 Tax Reform Act

In December 2017, the President of the United States (“U.S.”) signed into law the Tax Cuts and Jobs Act (the “2017 Tax Reform Act”). In general, the 2017 Tax Reform Act reduces the U.S. federal corporate tax rate from 35% to 21%, effective in 2018. The 2017 Tax Reform Act moves from a worldwide business taxation approach to a participation exemption regime. The 2017 Tax Reform Act also imposes base-erosion prevention measures on non-U.S. earnings of U.S. entities, as well as a one-time mandatory deemed repatriation tax on accumulated non-U.S. earnings which was recorded in the fourth quarter of 2017. The impact of the 2017 Tax Reform Act on the consolidated financial results began with the fourth quarter of 2017, the period of enactment. This impact, along with the transitional taxes discussed in Note 11, Income Taxes, is reflected in the Other segment.

Acquisition

On April 24, 2017, the Company entered into a definitive Asset Purchase Agreement (the “Purchase Agreement”) to acquire certain assets from a Global 2000 telecommunications services provider. The aggregate purchase price of $7.5 million was paid on May 31, 2017, using cash on hand, resulting in $6.0 million of property and equipment and $1.5 million of customer relationship intangibles (the “Telecommunications Asset acquisition”). The Purchase Agreement contains customary representations and warranties, indemnification obligations and covenants. The Telecommunications Asset acquisition was completed to strengthen and create new partnerships for the Company and expand its geographic footprint in North America. The results of the Telecommunications Assets’ operations have been included in the Company’s consolidated financial statements in the Americas segment since its acquisition on May 31, 2017.

The Company accounted for the Telecommunications Asset acquisition in accordance with ASC 805, Business Combinations, whereby the fair value of the purchase price was allocated to the tangible and identifiable intangible assets acquired based on their estimated fair values as of the closing date. The Company completed its analysis of the purchase price allocation during the second quarter of 2017.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, 2018. For further information, refer to the

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consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”) on March 1, 2018.

Principles of Consolidation — The condensed consolidated financial statements include the accounts of SYKES and its wholly-owned subsidiaries and controlled majority-owned subsidiaries. Investments in less than majority-owned subsidiaries in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Subsequent Events — Subsequent events or transactions have been evaluated through the date and time of issuance of the condensed consolidated financial statements. On July 9, 2018, the Company entered into and closed a definitive Share Sale Agreement (“Sale Agreement”) to acquire all the outstanding shares of WhistleOut Pty Ltd and WhistleOut Inc. (together, known as “WhistleOut”) for AUD 30.2 million ($22.4 million). See Note 19, Subsequent Event, for further information. There were no other material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements.

Cash, Cash Equivalents and Restricted cash — Cash and cash equivalents consist of cash and highly liquid short-term investments, primarily held in non-interest-bearing investments which have original maturities of less than 90 days. Restricted cash includes cash whereby the Company’s ability to use the funds at any time is contractually limited or is generally designated for specific purposes arising out of certain contractual or other obligations.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets that sum to the amounts reported in the Condensed Consolidated Statements of Cash Flows (in thousands):

	June 30, 2018		December 31, 2017		June 30, 2017		December 31, 2016
Cash and cash equivalents	$	162,422	$	343,734	$	301,451	$	266,675
Restricted cash included in “Other current assets”		153		154		158		160
Restricted cash included in “Deferred charges and other assets”		868		917		823		759
	$	163,443	$	344,805	$	302,432	$	267,594

Investments in Equity Method Investees — The Company uses the equity method to account for investments in companies if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company’s proportionate share of the net income or loss of an equity method investment is included in consolidated net income. Judgment regarding the level of influence over an equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.

The Company evaluates an equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and near-term prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. As of June 30, 2018 and December 31, 2017, the Company did not identify any instances where the carrying values of its equity method investments were not recoverable.

In July 2017, the Company made a strategic investment of $10.0 million in XSell Technologies, Inc. (“XSell”) for 32.8% of XSell’s preferred stock. The Company plans to incorporate XSell’s machine learning and artificial intelligence algorithms into its business. The Company believes this will increase the sales performance of its agents to drive revenue for its clients, improve the experience of the Company’s clients’ end customers and enhance brand

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loyalty, reduce the cost of customer care and leverage analytics and machine learning to source the best agents and improve their performance.

The Company’s net investment in XSell of $9.6 million and $9.8 million was included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, respectively. The Company paid $5.0 million in July 2017 with the remaining $5.0 million included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017. The Company’s proportionate share of XSell’s income (loss) of $(0.1) million and $(0.3) million was included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018, respectively (none in 2017).

Customer-Acquisition Advertising Costs — The Company’s advertising costs are expensed as incurred. Total advertising costs included in “Direct salaries and related costs” in the accompanying Condensed Consolidated Statements of Operations for the three months ended June 30, 2018 and 2017 were $12.0 million and $8.6 million, respectively, and $22.0 million and $18.4 million for the six months ended June 30, 2018 and 2017, respectively. Total advertising costs included in “General and administrative” in the accompanying Condensed Consolidated Statements of Operations for the three months ended June 30, 2018 and 2017 were less than $0.1 million and $0.1 million, respectively, and less than $0.1 million and $0.1 million for the six months ended June 30, 2018 and 2017, respectively.

Reclassifications — Certain balances in the prior period have been reclassified to conform to current period presentation.

New Accounting Standards Not Yet Adopted

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”) and subsequent amendments (together, “ASC 842”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840, Leases. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities have the option to either apply the amendments (1) at the beginning of the earliest period presented using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or (2) at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. There are also certain optional practical expedients that an entity may elect to apply.

The Company’s implementation team has compiled a detailed inventory of leases and a preliminary analysis of the impact to the financial statements. The Company continues to evaluate the critical factors of ASC 842. Based on an assessment of the Company’s business and system requirements, the implementation team has selected a lease accounting software solution to assist the Company in complying with ASC 842. The Company expects the adoption of ASC 842 to result in a material increase in the assets and liabilities on the consolidated balance sheets as a result of recognizing right-of-use assets and lease liabilities for existing operating leases based on the amount of the Company’s current lease commitments. The Company believes that the majority of its leases will maintain their current lease classification under ASC 842. The Company does not expect these amendments to have a material effect on its expense recognition timing or cash flows and, as a result, the Company expects the adoption of ASC 842 will result in an insignificant impact on the Company’s consolidated statements of income and on the consolidated statements of cash flows. The Company is continuing to evaluate the magnitude of the impact and related disclosures, as well as the timing and method of adoption, with respect to the transition method and optional practical expedients. The Company is also continuing to evaluate the full impact of ASC 842, as well as its impacts on its business processes, systems, and internal controls.

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Derivatives and Hedging

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedge Activities (“ASU 2017-12”). These amendments help simplify certain aspects of hedge accounting and better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. For cash flow and net investment hedges as of the adoption date, the guidance requires a modified retrospective approach. The amended presentation and disclosure guidance is required only prospectively. These amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early application permitted in any interim period after issuance of this update. The Company does not expect the adoption of ASU 2017-12 to materially impact its financial condition, results of operations, cash flows and disclosures.

Financial Instruments – Credit Losses

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). These amendments require measurement and recognition of expected versus incurred credit losses for financial assets held. These amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the guidance will have on its financial condition, results of operations and cash flows.

New Accounting Standards Recently Adopted

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) and subsequent amendments (together, “ASC 606”). ASC 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and indicates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. See Note 2, Revenues, for further details.

Financial Instruments

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). These amendments modify how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception applies to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under ASC 820, Fair Value Measurements, and as such, these investments may be measured at cost. These amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). These amendments clarify the presentation of cash receipts and payments in eight specific situations. These amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. These amendments have been applied using a retrospective transition method to each period presented. The adoption of ASU 2016-15 on January 1, 2018 did not have a material impact on the Company’s cash flows.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash (A Consensus of the FASB Emerging Issues Task Force (“ASU 2016-18”). These amendments clarify how entities should

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present restricted cash and restricted cash equivalents in the statement of cash flows, requiring entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. These amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. These amendments have been applied using a retrospective transition method to each period presented. The inclusion of restricted cash increased the beginning balance of cash in the Condensed Consolidated Statements of Cash Flows by $1.1 million for the six months ended June 30, 2018 and increased the beginning and ending balances of cash by $0.9 million and $1.0 million, respectively, for the six months ended June 30, 2017. Other than the change in presentation within the accompanying Condensed Consolidated Statements of Cash Flows, the retrospective adoption of ASU 2016-18 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Income Taxes

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory (“ASU 2016-16”). These amendments require recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. These amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The adoption of ASU 2016-16 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements and no cumulative-effect adjustment to retained earnings was required.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the 2017 Tax Reform Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period costs are both acceptable methods subject to an accounting policy election. The Company evaluated the accounting treatment options related to the GILTI provisions and elected to treat any potential GILTI inclusions as a current period cost. The election did not have a material impact on the Company’s consolidated financial statements.

In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). These amendments add various SEC paragraphs pursuant to the issuance of SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). SAB 118, issued in December 2017, directs taxpayers to consider the implications of the 2017 Tax Reform Act as provisional when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. As described in Note 11, Income Taxes, and in accordance with SAB 118, the Company recorded amounts that were considered provisional.

Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”). These amendments allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the 2017 Tax Reform Act. These amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendment in this update is permitted, including adoption in any interim period. These amendments can be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate tax rate in the 2017 Tax Reform Act is recognized. The early adoption of ASU 2018-02 on June 30, 2018 had no impact on the Company’s consolidated financial statements or disclosures.

Business Combinations

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) – Clarifying the Definition of a Business (“ASU 2017-01”). These amendments clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. These amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. These amendments were applied prospectively. The adoption of ASU 2017-01 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Retirement Benefits

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). These amendments require that an employer report the service cost component in the same line item or items as other

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compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic benefit cost are required to be presented in the income statement separately from the service cost component outside of a subtotal of income from operations. If a separate line item is not used, the line items used in the income statement to present other components of net benefit cost must be disclosed. These amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. These amendments were applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The amendments allow a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.

The Company adopted the income statement presentation aspects of ASU 2017-07 on a retrospective basis effective January 1, 2018. The following is a reconciliation of the effect of the reclassification of the interest cost and amortization of actuarial gain (loss) from operating expenses to other income (expense) in the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017 (in thousands):

	As Previously Reported		Adjustments Due to the Adoption of ASU 2017-07			As Revised
Three Months Ended June 30, 2017:
Direct salaries and related costs	$	248,643	$	(28	)	$	248,615
General and administrative		92,246		(10	)		92,236
Income from operations		11,290		38			11,328
Other income (expense), net		831		(38	)		793
Six Months Ended June 30, 2017:
Direct salaries and related costs	$	495,808	$	(57	)	$	495,751
General and administrative		184,300		(20	)		184,280
Income from operations		37,304		77			37,381
Other income (expense), net		1,683		(77	)		1,606

Note 2. Revenues

Adoption of ASC 606, Revenue from Contracts with Customers

On January 1, 2018, the Company adopted ASC 606, which includes ASU 2014-09 and all related amendments, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting for revenues under ASC 605, Revenue Recognition (“ASC 605”).

The Company recorded an increase to opening retained earnings of $3.0 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact, all in the Americas segment, primarily related to the change in timing of revenue recognition associated with certain customer contracts that provide fees upon renewal, as well as changes in estimating variable consideration with respect to penalties and holdback provisions for failure to meet specified minimum service levels and other performance-based contingencies. Revenues recognized under ASC 606 are expected to be slightly higher during 2018 than revenues would have been under ASC 605. This is primarily attributable to the change in the timing of revenue recognition, as discussed above. The impact on revenues recognized for the three and six months ended June 30, 2018 is reported below.

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The cumulative effect of the adjustments made to the Company’s Condensed Consolidated Balance Sheet as of December 31, 2017 for the line items impacted by the adoption of ASC 606 was as follows (in thousands):

	December 31, 2017		Adjustments     Due to the Adoption of ASC 606			January 1, 2018
Receivables, net	$	341,958	$	825		$	342,783
Deferred charges and other assets		29,193		2,045			31,238
Income taxes payable		2,606		697			3,303
Deferred revenue and customer liabilities		34,717		(1,048	)		33,669
Other long-term liabilities		22,039		202			22,241
Retained earnings		546,843		3,019			549,862

The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Balance Sheet as of June 30, 2018 were as follows (in thousands):

	As Reported		Balances Without the   Impact of the   ASC 606 Adoption			Effect of Adoption Increase   (Decrease)
June 30, 2018:
Receivables, net	$	347,885	$	345,932		$	1,953
Deferred charges and other assets		32,698		28,280			4,418
Income taxes payable		843		(733	)		1,576
Deferred revenue and customer liabilities		32,503		34,585			(2,082	)
Other long-term liabilities		25,250		25,524			(274	)
Retained earnings		567,988		560,837			7,151

The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Statement of Operations for the three months ended June 30, 2018 were as follows, along with the impact per share (in thousands, except per share data):

	As Reported			Balances Without the Impact of   the ASC 606   Adoption			Effect of   Adoption   Increase (Decrease)
Three Months Ended June 30, 2018:
Revenues	$	396,785		$	394,483		$	2,302
Income from operations		6,460			4,158			2,302
Income before income taxes		4,949			2,647			2,302
Income taxes		(2,229	)		(2,804	)		575
Net income		7,178			5,451			1,727
Net income per common share:
Basic	$	0.17		$	0.13		$	0.04
Diluted	$	0.17		$	0.13		$	0.04

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The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Statement of Operations for the six months ended June 30, 2018 were as follows, along with the impact per share (in thousands, except per share data):

	As Reported		Balances Without the Impact of   the ASC 606   Adoption			Effect of   Adoption   Increase (Decrease)
Six Months Ended June 30, 2018:
Revenues	$	811,156	$	805,759		$	5,397
Income from operations		20,744		15,347			5,397
Income before income taxes		18,353		12,956			5,397
Income taxes		227		(1,038	)		1,265
Net income		18,126		13,994			4,132
Net income per common share:
Basic	$	0.43	$	0.33		$	0.10
Diluted	$	0.43	$	0.33		$	0.10

The Company’s net cash provided by operating activities for the six months ended June 30, 2018 did not change due to the adoption of ASC 606.

Practical Expedients

The Company utilized the practical expedient that allows for the application of ASC 606 to a portfolio of contracts (or performance obligations) with similar characteristics if the entity reasonably expects that the effects on the financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio.

Costs of Obtaining Customer Contracts

ASC 606 requires an entity to recognize as an asset the incremental costs of obtaining a contract with a customer if the entity expects to recover those costs. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (e.g., a sales commission). Because the Company’s sales commissions are not directly incremental to obtaining customer contracts, they are expensed as incurred.

Recognition of Revenues Accounting Policy

The Company’s “Recognition of Revenues” accounting policy under ASC 606 is outlined below. For the Company’s accounting policy under ASC 605, see Note 1, Overview and Summary of Significant Accounting Policies, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

The Company recognizes revenues in accordance with ASC 606, whereby revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services.

Customer Engagement Solutions and Services

Under ASC 606, the Company accounts for a contract with a client when it has approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. The Company’s customer engagement solutions and services are classified as stand-ready performance obligations. Because the Company’s customers simultaneously receive and consume the benefits of its services as they are delivered, the performance obligations are satisfied over time. The Company recognizes revenues over time using output methods such as a per minute, per hour, per call, per transaction or per time and materials basis. These output methods faithfully depict the satisfaction of the Company’s obligation to deliver the services as requested and represent a direct measurement of value to the customer. The Company’s contracts have a single performance obligation as the promise to transfer the customer solutions and services are not separately identifiable from other promises in the contract, and therefore not distinct.

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The stated term of the Company’s contracts with customers range from 30 days to six years. The majority of these contracts include termination for convenience or without cause provisions allowing either party to cancel the contract without substantial cost or penalty within a defined notification period (“termination rights”), typically varying periods up to 180 days. Because of the termination rights, only the noncancelable portion qualifies as a legally enforceable contract under Step 1, Identify the Contract with a Customer, of ASC 606 (“Step 1”) and is accounted for as such, even if the customer is unlikely to exercise its termination right. Furthermore, the amounts excluded from assessment under Step 1 are, in effect, optional customer purchases of additional services.

If the termination right is only provided to the customer, the unsatisfied performance obligations will be evaluated as a customer option. The Company typically does not include options that would result in a material right. If options to purchase additional services or options to renew are included in customer contracts, the Company evaluates the option in order to determine if the arrangement includes promises that may represent a material right and needs to be accounted for as a performance obligation in the contract with the customer.

The Company’s primary billing terms are that payment is due upon receipt of the invoice, payable usually within 30 or 60 days. Invoices are generally issued on a monthly basis as control transfers and/or as services are rendered. Revenue recognition is limited to the established transaction price, the amount to which the Company expects to be entitled to under the contract, including the amount of expected fees for those contracts with renewal provisions, and the amount that is not contingent upon delivery of any future product or service or meeting other specified performance obligations. The transaction price, once determined, is allocated to the single performance obligation on a contract by contract basis.

The Company’s contracts include penalties and holdbacks provisions for failure to meet specified minimum service levels and other performance-based contingencies, as well as the right of certain of the Company’s clients to chargeback accounts that do not meet certain requirements for specified periods after a sale has occurred. Certain customers also receive cash discounts for early payment. These provisions are accounted for as variable consideration and are estimated using historical service and pricing trends, the individual contract provisions, and the Company’s best judgment at the time. None of these variable consideration components are subject to constraint due to the short time period to resolution, the Company’s extensive history with similar transactions, and the limited number of possible outcomes and third-party influence. The portion of the consideration received under the contract that the Company expects to ultimately refund to the customer is excluded from the transaction price and is recorded as a refund liability.

Other Revenues

In the Americas, the Company provides a range of enterprise support services including technical staffing services and outsourced corporate help desk services, primarily in the U.S. Revenues for enterprise support services are recognized over time using output methods such as number of positions filled similar to the Company’s outsourced customer engagement services and solutions.

In EMEA, the Company offers fulfillment services that are integrated with its customer care and technical support services. The Company’s fulfillment solutions include order processing, payment processing, inventory control, product delivery and product returns handling. Sales are recognized upon shipment to the customer and satisfaction of all obligations.

The Company also has miscellaneous other revenues in the Other segment.

In total, other revenues are immaterial, representing 0.6% and 0.5% of the Company’s consolidated total revenues for the three months ended June 30, 2018 and 2017, respectively, and 0.6% and 0.6% of the Company’s consolidated total revenues for the six months ended June 30, 2018 and 2017, respectively.

Disaggregated Revenues

The Company disaggregates its revenues from contracts with customers by service type and geographic location (see Note 16, Segments and Geographic Information), for each of its reportable segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by economic factors.

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The following table represents revenues from contracts with customers disaggregated by service type for the three and six months ended June 30, 2018 and 2017, by the reportable segment for each category (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
Customer engagement solutions and services	$	326,766	$	314,603	$	667,188	$	635,265
Other revenues		275		268		574		537
Total Americas		327,041		314,871		667,762		635,802
EMEA:
Customer engagement solutions and services		67,772		58,836		139,443		119,905
Other revenues		1,948		1,704		3,904		3,702
Total EMEA		69,720		60,540		143,347		123,607
Other:
Other revenues		24		27		47		43
Total Other		24		27		47		43
	$	396,785	$	375,438	$	811,156	$	759,452

Trade Accounts Receivable

The Company’s trade accounts receivable, net, consists of the following (in thousands):

	June 30, 2018		January 1, 2018
Trade accounts receivable, net, current (1)	$	334,818	$	332,014
Trade accounts receivable, net, noncurrent (2)		4,614		2,078
	$	339,432	$	334,092

⁽¹⁾ Included in “Receivables, net” in the accompanying Condensed Consolidated Balance Sheets. The January 1, 2018 balance includes the $0.8 million adjustment recorded upon adoption of ASC 606.

⁽²⁾ Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets. The January 1, 2018 balance includes a $2.1 million adjustment recorded upon adoption of ASC 606.

The Company’s noncurrent trade accounts receivable result from contracts with customers that include renewal provisions that take effect subsequent to the satisfaction of the associated performance obligations. Payment is expected upon renewal, which occurs in bi-annual and annual increments over the associated expected contract term, the majority of which range from two to five years.

Deferred Revenue and Customer Liabilities

Deferred revenue and customer liabilities consists of the following (in thousands):

	June 30, 2018		January 1, 2018
Deferred revenue	$	4,900	$	4,598
Customer arrangements with termination rights		18,498		21,755
Estimated refund liabilities (1)		9,105		7,316
	$	32,503	$	33,669

⁽¹⁾ The January 1, 2018 balance includes the $1.0 million adjustment recorded upon adoption of ASC 606.

Deferred Revenue

The Company receives up-front fees in connection with certain contracts. In accordance with ASC 606, the up-front fees are recorded as a contract liability only to the extent a legally enforceable contract exists, typically varying periods up to 180 days. Accordingly, the up-front fees allocated to the notification period are recorded as deferred revenue, while the fees that extend beyond the notification period are classified as a customer arrangement with termination rights.

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Revenues of $0.3 million and $4.2 million were recognized during the three and six months ended June 30, 2018, respectively, from amounts included in deferred revenue as of January 1, 2018.

The Company expects to recognize its deferred revenue as of June 30, 2018 over the next 180 days.

Customer Liabilities – Customer Arrangements with Termination Rights

Customer arrangements with termination rights represent the amount of up-front fees received for unsatisfied performance obligations for periods that extend beyond the legally enforceable contract period. All customer arrangements with termination rights are classified as current as the customer can terminate the contracts and demand pro-rata refunds of the up-front fees over varying periods, typically up to 180 days. The Company expects to recognize the majority of the customer arrangements with termination rights into revenue as the Company has not historically experienced a high rate of contract terminations.

Customer Liabilities – Refund Liabilities

Refund liabilities represent consideration received under the contract that the Company expects to ultimately refund to the customer and primarily relates to estimated penalties, holdbacks and chargebacks. Penalties and holdbacks result from the failure to meet specified minimum service levels in certain contracts and other performance-based contingencies. Chargebacks reflect the right of certain of the Company’s clients to chargeback accounts that do not meet certain requirements for specified periods after a sale has occurred.

Refund liabilities are generally resolved in 180 days, once it is determined whether the requisite service levels and client requirements were achieved to settle the contingency.

Note 3. Costs Associated with Exit or Disposal Activities

During the second quarter of 2018, the Company initiated a restructuring plan to streamline excess capacity through targeted seat reductions (the “Americas 2018 Exit Plan”) in an on-going effort to manage and optimize capacity utilization. The Americas 2018 Exit Plan includes, but is not limited to, closing customer contact management centers and consolidating leased space in various locations in the U.S. and Canada. The Company anticipates finalizing the remainder of the site closures under the Americas 2018 Exit Plan by December 2018.

The Company’s actions will result in a reduction in seats as well as anticipated general and administrative cost savings, including lower depreciation expense, resulting from the 2018 site closures.

The cumulative costs expected and incurred as a result of the Americas 2018 Exit Plan are outlined below as of June 30, 2018 (in thousands):

	Costs Expected To Be Incurred		Cumulative  Costs Incurred  To Date		Expected     Remaining     Costs
Lease obligations and facility exit costs (1)	$	6,692	$	3,028	$	3,664
Severance and related costs (2)		3,701		402		3,299
Severance and related costs (1)		488		219		269
Non-cash impairment charges		5,175		5,175		-
	$	16,056	$	8,824	$	7,232

⁽¹⁾ Relates to “General and administrative” costs.

⁽²⁾ Relates to “Direct salaries and related costs.”

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The expected remaining severance charges are anticipated to be incurred during the third quarter of 2018. The expected remaining lease obligations and facility exit costs are anticipated to be incurred primarily during the third quarter of 2018 with the balance during the fourth quarter of 2018.

The following table summarizes the accrued liability and related charges for the three and six months ended June 30, 2018 (none in 2017) (in thousands):

	Lease Obligations and Facility Exit Costs			Severance and Related Costs			Total
Balance at the beginning of the period	$	-		$	-		$	-
Charges included in “Direct salaries and related costs”		-			402			402
Charges included in “General and administrative”		3,028			219			3,247
Cash payments		(429	)		(131	)		(560	)
Balance sheet reclassifications (1)		216			-			216
Balance at the end of the period	$	2,815		$	490		$	3,305

⁽¹⁾ Consists of the reclassification of deferred rent balances for locations subject to closure to the restructuring liability.

Restructuring Liability Classification

The following table summarizes the Company’s short-term and long-term accrued liabilities associated with the Americas 2018 Exit Plan as of June 30, 2018 (none in 2017) (in thousands):

	Americas 2018 Exit Plan
Short-term accrued restructuring liability (1)	$	2,726
Short-term accrued restructuring liability (2)		490
Long-term accrued restructuring liability (3)		89
Ending accrual at June 30, 2018	$	3,305

⁽¹⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheet.

⁽²⁾ Included in “Accrued employee compensation and benefits” in the accompanying Condensed Consolidated Balance Sheet.

⁽³⁾ Included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheet.

The long-term accrued restructuring liability relates to future rent obligations to be paid through the remainder of the lease terms, the last of which ends in September 2019.

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Note 4. Fair Value

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy:

● Level 1 — Quoted prices for identical instruments in active markets.

● Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

● Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Fair Value of Financial Instruments — The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

● Cash, short-term and other investments, investments held in rabbi trust and accounts payable — The carrying values for cash, short-term and other investments, investments held in rabbi trust and accounts payable approximate their fair values.

● Foreign currency forward contracts and options — Foreign currency forward contracts and options, including premiums paid on options, are recognized at fair value based on quoted market prices of comparable instruments or, if none are available, on pricing models or formulas using current market and model assumptions, including adjustments for credit risk.

● Embedded derivatives — Embedded derivatives within certain hybrid lease agreements are bifurcated from the host contract and recognized at fair value based on pricing models or formulas using significant unobservable inputs, including adjustments for credit risk.

● Long-term debt — The carrying value of long-term debt approximates its estimated fair value as the debt bears interest based on variable market rates, as outlined in the debt agreement.

● Contingent consideration — The contingent consideration is recognized at fair value based on the discounted cash flow method.

Fair Value Measurements — ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820-10-20 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

ASC 825 Financial Instruments (“ASC 825”) permits an entity to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The Company has not elected to use the fair value option permitted under ASC 825 for any of its financial assets and financial liabilities that are not already recorded at fair value.

Determination of Fair Value — The Company generally uses quoted market prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access to determine fair value and classifies such items in Level 1. Fair values determined by Level 2 inputs utilize inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, and inputs other than quoted market prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, currency exchange rates, etc. Assets or liabilities valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

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The following section describes the valuation methodologies used by the Company to measure assets and liabilities at fair value on a recurring basis, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified.

Foreign Currency Forward Contracts and Options — The Company enters into foreign currency forward contracts and options over the counter and values such contracts using quoted market prices of comparable instruments or, if none are available, on pricing models or formulas using current market and model assumptions, including adjustments for credit risk. The key inputs include forward or option foreign currency exchange rates and interest rates. These items are classified in Level 2 of the fair value hierarchy.

Embedded Derivatives — The Company uses significant unobservable inputs to determine the fair value of embedded derivatives, which are classified in Level 3 of the fair value hierarchy. These unobservable inputs include expected cash flows associated with the lease, currency exchange rates on the day of commencement, as well as forward currency exchange rates, the results of which are adjusted for credit risk. These items are classified in Level 3 of the fair value hierarchy. See Note 6, Financial Derivatives, for further information.

Investments Held in Rabbi Trust — The investment assets of the rabbi trust are valued using quoted market prices in active markets, which are classified in Level 1 of the fair value hierarchy. For additional information about the deferred compensation plan, refer to Note 7, Investments Held in Rabbi Trust, and Note 15, Stock-Based Compensation.

Contingent Consideration — The Company uses significant unobservable inputs to determine the fair value of contingent consideration, which is classified in Level 3 of the fair value hierarchy. The contingent consideration recorded related to the acquisition of Qelp B.V. and its subsidiary (together, known as “Qelp”) and liabilities assumed as part of the Clear Link Holdings, LLC (“Clearlink”) acquisition was recognized at fair value using a discounted cash flow methodology and a discount rate of approximately 14.0% and 10.0%, respectively.

The Company’s assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 consist of the following as of June 30, 2018 (in thousands):

			Fair Value Measurements Using:
	Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	June 30, 2018		Level 1		Level 2		Level 3
Assets:
Foreign currency forward and option contracts(1)	$	1,354	$	-	$	1,354	$	-
Equity investments held in rabbi trust for the Deferred Compensation Plan(2)		8,557		8,557		-		-
Debt investments held in rabbi trust for the Deferred Compensation  Plan(2)		3,307		3,307		-		-
	$	13,218	$	11,864	$	1,354	$	-
Liabilities:
Foreign currency forward and option contracts(1)	$	1,903	$	-	$	1,903	$	-
Embedded derivatives(1)		598		-		-		598
	$	2,501	$	-	$	1,903	$	598

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The Company’s assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 consist of the following as of December 31, 2017 (in thousands):

			Fair Value Measurements Using:
	Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	December 31, 2017		Level 1		Level 2		Level 3
Assets:
Foreign currency forward and option contracts(1)	$	3,848	$	-	$	3,848	$	-
Embedded derivatives(1)		52		-		-		52
Equity investments held in rabbi trust for the Deferred Compensation Plan(2)		8,094		8,094		-		-
Debt investments held in rabbi trust for the Deferred Compensation Plan(2)		3,533		3,533		-		-
	$	15,527	$	11,627	$	3,848	$	52
Liabilities:
Foreign currency forward and option contracts(1)	$	256	$	-	$	256	$	-
Embedded derivatives(1)		579		-		-		579
	$	835	$	-	$	256	$	579

⁽¹⁾ See Note 6, Financial Derivatives, for the classification in the accompanying Condensed Consolidated Balance Sheets.

⁽²⁾ Included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets. See Note 7, Investments Held in Rabbi Trust.

Reconciliations of Fair Value Measurements Categorized within Level 3 of the Fair Value Hierarchy

Embedded Derivatives in Lease Agreements

A rollforward of the net asset (liability) activity in the Company’s fair value of the embedded derivatives is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Balance at the beginning of the period	$	(409	)	$	(375	)	$	(527	)	$	(555	)
Gains (losses) recognized in “Other income (expense), net”		(252	)		176			(165	)		315
Settlements		38			25			80			70
Effect of foreign currency		25			3			14			(1	)
Balance at the end of the period	$	(598	)	$	(171	)	$	(598	)	$	(171	)
Change in unrealized gains (losses) included in “Other income (expense), net” related to embedded derivatives held at the end of the period	$	(253	)	$	48		$	(171	)	$	183

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Contingent Consideration

A rollforward of the activity in the Company’s fair value of the contingent consideration (liability) is as follows (none in 2018) (in thousands):

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
Balance at the beginning of the period	$	(5,633	)	$	(6,100	)
Imputed interest		(34	)		(68	)
Fair value gain (loss) adjustments (1)		268			701
Settlements		4,402			4,528
Effect of foreign currency		(130	)		(188	)
Balance at the end of the period	$	(1,127	)	$	(1,127	)
Change in unrealized gains (losses) included in “General and administrative” related to contingent consideration outstanding at the end of the period	$	268		$	268

⁽¹⁾ Included in “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations.

The Company recorded a fair value gain of $0.3 million and $0.7 million in “General and administrative” during the three and six months ended June 30, 2017, respectively, related to the Clearlink contingent consideration. All outstanding Clearlink contingent consideration liabilities remaining as of June 30, 2017 were paid prior to December 31, 2017.

The Company paid $4.4 million in May 2017 to settle the outstanding Qelp contingent consideration obligation.

The Company accreted interest expense each period using the effective interest method until the contingent consideration reached the estimated future value. Interest expense related to the contingent consideration was included in “Interest (expense)” in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017.

Non-Recurring Fair Value

Certain assets, under certain conditions, are measured at fair value on a nonrecurring basis utilizing Level 3 inputs, including goodwill, other intangible assets, other long-lived assets and equity method investments. For these assets, measurement at fair value in periods subsequent to their initial recognition would be applicable if these assets were determined to be impaired. The adjusted carrying values for assets measured at fair value on a nonrecurring basis (no liabilities) subject to the requirements of ASC 820 were not material at June 30, 2018 and December 31, 2017.

The following table summarizes the total impairment losses related to nonrecurring fair value measurements of certain assets (no liabilities) subject to the requirements of ASC 820 (in thousands):

	Total Impairment (Loss)
	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
Property and equipment, net	$	(5,175)	$	(4,189)	$	(8,701)	$	(4,391)

In connection with the closure of certain under-utilized customer contact management centers in the U.S. and Canada, the Company recorded impairment charges of $5.2 million and $8.7 million related to leasehold improvements, equipment, furniture and fixtures which were not recoverable during the three and six months ended June 30, 2018, respectively. See Note 3, Costs Associated with Exit or Disposal Activities, for further information.

In connection with the closure of an under-utilized customer contact management center in the U.S., the Company recorded an impairment charge of $4.2 million during the three and six months ended June 30, 2017 related to leasehold improvements which were not recoverable and equipment, furniture and fixtures that could not be redeployed to other locations.

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The Company recorded an impairment charge of $0.2 million related to the write-down of a vacant and unused parcel of land in the U.S. to its estimated fair value during the six months ended June 30, 2017.

Note 5. Goodwill and Intangible Assets

Intangible Assets

The following table presents the Company’s purchased intangible assets as of June 30, 2018 (in thousands):

	Gross  Intangibles		Accumulated Amortization			Net  Intangibles		Weighted Average Amortization Period (years)
Intangible assets subject to amortization:
Customer relationships	$	169,749	$	(100,859	)	$	68,890		10
Trade names and trademarks		14,135		(9,651	)		4,484		7
Non-compete agreements		1,820		(1,356	)		464		3
Content library		526		(526	)		-		2
Proprietary software		1,040		(655	)		385		4
Intangible assets not subject to amortization:
Domain names		65,606		-			65,606		N/A
	$	252,876	$	(113,047)		$	139,829		5

The following table presents the Company’s purchased intangible assets as of December 31, 2017 (in thousands):

	Gross Intangibles		Accumulated Amortization			Net  Intangibles		Weighted Average Amortization Period (years)
Intangible assets subject to amortization:
Customer relationships	$	170,853	$	(95,175	)	$	75,678		10
Trade names and trademarks		14,138		(8,797	)		5,341		7
Non-compete agreements		1,820		(1,052	)		768		3
Content library		542		(542	)		-		2
Proprietary software		1,040		(585	)		455		4
Intangible assets not subject to amortization:
Domain names		58,035		-			58,035		N/A
	$	246,428	$	(106,151)		$	140,277		6

The Company’s estimated future amortization expense for the succeeding years relating to the purchased intangible assets resulting from acquisitions completed prior to June 30, 2018 is as follows (in thousands):

Years Ending December 31,	Amount
2018 (remaining six months)		7,230
2019		14,022
2020		11,348
2021		6,799
2022		5,714
2023		4,882
2024 and thereafter		24,228

Goodwill

Changes in goodwill for the six months ended June 30, 2018 consist of the following (in thousands):

	January 1,   2018		Acquisition		Effect of Foreign   Currency			June 30,     2018
Americas	$	258,496	$	-	$	(2,872	)	$	255,624
EMEA		10,769		-		(402	)		10,367
	$	269,265	$	-	$	(3,274	)	$	265,991

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Changes in goodwill for the year ended December 31, 2017 consist of the following (in thousands):

	January 1, 2017		Acquisition		Effect of Foreign Currency		December 31, 2017
Americas	$	255,842	$	390	$	2,264	$	258,496
EMEA		9,562		-		1,207		10,769
	$	265,404	$	390	$	3,471	$	269,265

The Company performs its annual goodwill impairment test during the third quarter, or more frequently if indicators of impairment exist.

For the annual goodwill impairment test, the Company elected to forgo the option to first assess qualitative factors and performed its annual quantitative goodwill impairment test as of July 31, 2017. Under ASC 350, the carrying value of assets is calculated at the reporting unit level. The quantitative assessment of goodwill includes comparing a reporting unit’s calculated fair value to its carrying value. The calculation of fair value requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth, the useful life over which cash flows will occur and determination of the Company’s weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. If the fair value of the reporting unit is less than its carrying value, goodwill is considered impaired and an impairment loss is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

The process of evaluating the fair value of the reporting units is highly subjective and requires significant judgment and estimates as the reporting units operate in a number of markets and geographical regions. The Company considered the income and market approaches to determine its best estimates of fair value, which incorporated the following significant assumptions:

● Revenue projections, including revenue growth during the forecast periods;

● EBITDA margin projections over the forecast periods;

● Estimated income tax rates;

● Estimated capital expenditures; and

● Discount rates based on various inputs, including the risks associated with the specific reporting units as well as their revenue growth and EBITDA margin assumptions.

As of July 31, 2017, the Company concluded that goodwill was not impaired for all six of its reporting units with goodwill, based on generally accepted valuation techniques and the significant assumptions outlined above. While the fair values of four of the six reporting units were substantially in excess of their carrying value, the Qelp and Clearlink reporting units’ fair value exceeded the respective carrying value, although not substantially.

The Qelp and Clearlink reporting units are at risk of future impairment if projected operating results are not met or other inputs into the fair value measurement change. However, as of June 30, 2018, the Company believes there were no indicators of impairment related to Qelp’s $10.4 million of goodwill or Clearlink’s $71.0 million of goodwill.

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Note 6. Financial Derivatives

Cash Flow Hedges – The Company has derivative assets and liabilities relating to outstanding forward contracts and options, designated as cash flow hedges, as defined under ASC 815 Derivatives and Hedging (“ASC 815”), consisting of Philippine Peso, Costa Rican Colon, Hungarian Forint and Romanian Leu contracts. These contracts are entered into to hedge the exposure to variability in the cash flows of a specific asset or liability, or of a forecasted transaction that is attributable to changes in exchange rates.

The deferred gains (losses) and related taxes on the Company’s cash flow hedges recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) in the accompanying Condensed Consolidated Balance Sheets are as follows (in thousands):

	June 30, 2018			December 31, 2017
Deferred gains (losses) in AOCI	$	(999	)	$	2,550
Tax on deferred gains (losses) in AOCI		96			(79	)
Deferred gains (losses) in AOCI, net of taxes	$	(903	)	$	2,471
Deferred gains (losses) expected to be reclassified to “Revenues” from AOCI during the next twelve months	$	(882	)

Deferred gains (losses) and other future reclassifications from AOCI will fluctuate with movements in the underlying market price of the forward contracts and options.

Non-Designated Hedges

Foreign Currency Forward Contracts – The Company also periodically enters into foreign currency hedge contracts that are not designated as hedges as defined under ASC 815. The purpose of these derivative instruments is to protect the Company’s interests against adverse foreign currency moves relating primarily to intercompany receivables and payables, and other assets and liabilities that are denominated in currencies other than the Company’s subsidiaries’ functional currencies. These contracts generally do not exceed 180 days in duration.

Embedded Derivatives – The Company enters into certain lease agreements which require payments not denominated in the functional currency of any substantial party to the agreements. The foreign currency component of these contracts meets the criteria under ASC 815 as embedded derivatives. The Company has determined that the embedded derivatives are not clearly and closely related to the economic characteristics and risks of the host contracts (lease agreements), and separate, stand-alone instruments with the same terms as the embedded derivative instruments would otherwise qualify as derivative instruments, thereby requiring separation from the lease agreements and recognition at fair value. Such instruments do not qualify for hedge accounting under ASC 815.

The Company had the following outstanding foreign currency forward contracts and options, and embedded derivatives (in thousands):

	June 30, 2018				December 31, 2017
Contract Type	Notional Amount in USD		Settle Through Date		Notional Amount in USD		Settle Through Date
Cash flow hedges:
Options:
US Dollars/Philippine Pesos	$	61,750		September 2019	$	78,000		December 2018
Forwards:
US Dollars/Philippine Pesos		53,400		September 2019		3,000		June 2018
US Dollars/Costa Rican Colones		82,500		August 2019		70,000		March 2019
Euros/Hungarian Forints		1,726		December 2018		3,554		December 2018
Euros/Romanian Leis		6,894		December 2018		13,977		December 2018
Non-designated hedges:
Forwards		6,153		September 2018		9,253		March 2018
Embedded derivatives		12,676		April 2030		13,519		April 2030

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Master netting agreements exist with each respective counterparty to reduce credit risk by permitting net settlement of derivative positions. In the event of default by the Company or one of its counterparties, these agreements include a set-off clause that provides the non-defaulting party the right to net settle all derivative transactions, regardless of the currency and settlement date. The maximum amount of loss due to credit risk that, based on gross fair value, the Company would incur if parties to the derivative transactions that make up the concentration failed to perform according to the terms of the contracts was $1.4 million and $3.8 million as of June 30, 2018 and December 31, 2017, respectively. After consideration of these netting arrangements and offsetting positions by counterparty, the total net settlement amount as it relates to these positions are asset positions of $0.9 million and $3.6 million as of June 30, 2018 and December 31, 2017, respectively, and liability positions of $1.4 million and $0 as of June 30, 2018 and December 31, 2017, respectively.

Although legally enforceable master netting arrangements exist between the Company and each counterparty, the Company has elected to present the derivative assets and derivative liabilities on a gross basis in the accompanying Condensed Consolidated Balance Sheets. Additionally, the Company is not required to pledge, nor is it entitled to receive, cash collateral related to these derivative transactions.

The following tables present the fair value of the Company’s derivative instruments included in the accompanying Condensed Consolidated Balance Sheets (in thousands):

	Derivative Assets
	June 30, 2018		December 31, 2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (1)	$	1,343	$	3,604
Foreign currency forward and option contracts (2)		11		-
		1,354		3,604
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (1)		-		244
Embedded derivatives (1)		-		9
Embedded derivatives (2)		-		43
Total derivative assets	$	1,354	$	3,900
	Derivative Liabilities
	June 30, 2018		December 31, 2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (3)	$	1,595	$	175
Foreign currency forward and option contracts (4)		129		81
		1,724		256
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (3)		179		-
Embedded derivatives (3)		108		189
Embedded derivatives (4)		490		390
Total derivative liabilities	$	2,501	$	835

⁽¹⁾ Included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽²⁾ Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽³⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

⁽⁴⁾ Included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheets.

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The following table presents the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended June 30, 2018 and 2017 (in thousands):

	Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)						Gain (Loss) Reclassified From AOCI Into “Revenues” (Effective Portion)					Gain (Loss) Recognized in “Revenues” on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	June 30,						June 30,					June 30,
	2018			2017			2018		2017			2018		2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	(305	)	$	(1,232	)	$	191	$	(820	)	$	2	$	-
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		-			(4,774	)		-		-			-		-
	$	(305)		$	(6,006)		$	191	$	(820)		$	2	$	-

The following table presents the gains (losses) recognized in “Other income (expense), net” of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,
	2018			2017
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	(93)		$	921
Embedded derivatives		(252	)		176
	$	(345	)	$	1,097

The following table presents the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the six months ended June 30, 2018 and 2017 (in thousands):

	Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)						Gain (Loss) Reclassified From AOCI Into “Revenues” (Effective Portion)					Gain (Loss) Recognized in “Revenues” on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	June 30,						June 30,					June 30,
	2018			2017			2018		2017			2018		2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	(3,001	)	$	(1,466	)	$	428	$	(1,580	)	$	8	$	-
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		-			(5,373	)		-		-			-		-
	$	(3,001)		$	(6,839)		$	428	$	(1,580)		$	8	$	-

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The following table presents the gains (losses) recognized in “Other income (expense), net” of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the six months ended June 30, 2018 and 2017 (in thousands):

	Six Months Ended June 30,
	2018			2017
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	(1,262	)	$	82
Embedded derivatives		(165	)		315
	$	(1,427	)	$	397

Note 7. Investments Held in Rabbi Trust

The Company’s investments held in rabbi trust, classified as trading securities and included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets, at fair value, consist of the following (in thousands):

	June 30, 2018				December 31, 2017
	Cost		Fair Value		Cost		Fair Value
Mutual funds	$	8,252	$	11,864	$	8,096	$	11,627

The mutual funds held in rabbi trust were 72% equity-based and 28% debt-based as of June 30, 2018. Net investment income (losses), included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Net realized gains (losses) from sale of trading securities	$	27	$	149	$	32	$	149
Dividend and interest income		43		25		68		39
Net unrealized holding gains (losses)		72		149		17		542
Net investment income (losses)	$	142	$	323	$	117	$	730

Note 8. Deferred Grants

Deferred grants, net of accumulated amortization, consist of the following (in thousands):

	June 30, 2018			December 31, 2017
Property grants	$	2,587		$	2,843
Lease grants		441			507
Employment grants		68			61
Total deferred grants		3,096			3,411
Less: Lease grants - short-term (1)		(115	)		(117	)
Less: Employment grants - short-term (1)		(68	)		(61	)
Total long-term deferred grants	$	2,913		$	3,233

⁽¹⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

Note 9. Borrowings

On May 12, 2015, the Company entered into a $440 million revolving credit facility (the “Credit Agreement”) with a group of lenders and KeyBank National Association, as Lead Arranger, Sole Book Runner, Administrative Agent, Swing Line Lender and Issuing Lender (“KeyBank”). The Credit Agreement is subject to certain borrowing limitations and includes certain customary financial and restrictive covenants.

The Credit Agreement includes a $200 million alternate-currency sub-facility, a $10 million swingline sub-facility and a $35 million letter of credit sub-facility, and may be used for general corporate purposes including acquisitions, share repurchases, working capital support and letters of credit, subject to certain limitations. The Company is not currently aware of any inability of its lenders to provide access to the full commitment of funds that exist under the

30

revolving credit facility, if necessary. However, there can be no assurance that such facility will be available to the Company, even though it is a binding commitment of the financial institutions.

The Credit Agreement matures on May 12, 2020, and had outstanding borrowings of $90.0 million and $275.0 million at June 30, 2018 and December 31, 2017, respectively, included in “Long-term debt” in the accompanying Condensed Consolidated Balance Sheets.

Borrowings under the Credit Agreement bear interest at the rates set forth in the Credit Agreement. In addition, the Company is required to pay certain customary fees, including a commitment fee determined quarterly based on the Company’s leverage ratio and due quarterly in arrears as calculated on the average unused amount of the Credit Agreement.

The Credit Agreement is guaranteed by all the Company’s existing and future direct and indirect material U.S. subsidiaries and secured by a pledge of 100% of the non-voting and 65% of the voting capital stock of all the direct foreign subsidiaries of the Company and those of the guarantors.

In May 2015, the Company paid an underwriting fee of $0.9 million for the Credit Agreement, which is deferred and amortized over the term of the loan, along with the deferred loan fees of $0.4 million related to the previous credit agreement.

The following table presents information related to our credit agreements (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Average daily utilization	$	100,110		$	267,000		$	110,691		$	267,000
Interest expense (1), (2)	$	915		$	1,600		$	1,916		$	3,043
Weighted average interest rate (2)		3.7	%		2.4	%		3.5	%		2.3	%

⁽¹⁾ Excludes the amortization of deferred loan fees.

⁽²⁾ Includes the commitment fee.

In January 2018, the Company repaid $175.0 million of long-term debt outstanding under its Credit Agreement, primarily using funds repatriated from its foreign subsidiaries.

Note 10. Accumulated Other Comprehensive Income (Loss)

The Company presents data in the Condensed Consolidated Statements of Changes in Shareholders’ Equity in accordance with ASC 220, Comprehensive Income (“ASC 220”). ASC 220 establishes rules for the reporting of comprehensive income (loss) and its components. The components of accumulated other comprehensive income (loss) consist of the following (in thousands):

	Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on Net Investment Hedge			Unrealized Gain (Loss) on Cash Flow Hedging Instruments			Unrealized Actuarial Gain (Loss) Related to Pension Liability			Unrealized Gain (Loss) on Post Retirement Obligation			Total
Balance at January 1, 2017	$	(72,393	)	$	6,266		$	(2,225	)	$	1,125		$	200		$	(67,027	)
Pre-tax amount		36,101			(8,352	)		2,276			527			(30	)		30,522
Tax (provision) benefit		-			3,132			(54	)		(18	)		-			3,060
Reclassification of (gain) loss to net income		-			-			2,444			(53	)		(50	)		2,341
Foreign currency translation		(23	)		-			30			(7	)		-			-
Balance at December 31, 2017		(36,315	)		1,046			2,471			1,574			120			(31,104	)
Pre-tax amount		(13,522	)		-			(2,993	)		-			-			(16,515	)
Tax (provision) benefit		-			-			194			7			-			201
Reclassification of (gain) loss to net income		-			-			(460	)		(35	)		(20	)		(515	)
Foreign currency translation		216			-			(115	)		(101	)		-			-
Balance at June 30, 2018	$	(49,621	)	$	1,046		$	(903	)	$	1,445		$	100		$	(47,933	)

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The following table summarizes the amounts reclassified to net income from accumulated other comprehensive income (loss) and the associated line item in the accompanying Condensed Consolidated Statements of Operations (in thousands):

	Three Months Ended     June 30,					Six Months Ended     June 30,					Statements of Operations
	2018		2017			2018		2017			Location
Gain (Loss) on Cash Flow Hedging Instruments: (1)
Pre-tax amount	$	193	$	(820	)	$	436	$	(1,580	)		Revenues
Tax (provision) benefit		17		17			24		58			Income taxes
Reclassification to net income		210		(803	)		460		(1,522	)
Actuarial Gain (Loss) Related to Pension Liability: (2)
Pre-tax amount		14		11			29		21			Other income (expense), net
Tax (provision) benefit		3		-			6		-			Income taxes
Reclassification to net income		17		11			35		21
Gain (Loss) on Post Retirement Obligation: (2),(3)
Reclassification to net income		10		13			20		25			Other income (expense), net
Total reclassification of gain (loss) to net income	$	237	$	(779	)	$	515	$	(1,476	)

⁽¹⁾ See Note 6, Financial Derivatives, for further information.

⁽²⁾ See Note 14, Defined Benefit Pension Plan and Postretirement Benefits, for further information.

⁽³⁾ No related tax (provision) benefit.

As discussed in Note 11, Income Taxes, for periods prior to December 31, 2017, any remaining outside basis differences associated with the Company’s investments in its foreign subsidiaries are considered to be indefinitely reinvested and no provision for income taxes on those earnings or translation adjustments has been provided.

Note 11. Income Taxes

The Company’s effective tax rates were (45.0)% and 15.0% for the three months ended June 30, 2018 and 2017, respectively. The decrease in the effective tax rate in 2018 compared to 2017 was primarily due to a $2.0 million increase in benefit associated with the settlement of tax audits and ancillary issues. In addition, the Company recognized a benefit of $0.5 million from the reduction in the U.S. federal corporate tax rate from 35% to 21% as a result of the 2017 Tax Reform Act. The decrease in the effective tax rate was also significantly affected by shifts in earnings among the various jurisdictions in which the Company operates. Several additional factors, none of which are individually material, also impacted the rate. The difference between the Company’s effective tax rate as compared to the U.S. statutory federal tax rate of 21.0% was primarily due to the aforementioned factors as well as the recognition of tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions and tax credits, partially offset by the tax impact of permanent differences, state income and foreign withholding.

The Company’s effective tax rates were 1.2% and 22.9% for the six months ended June 30, 2018 and 2017, respectively. The decrease in the effective tax rate was primarily due to the aforementioned $2.0 million increase in discrete benefit. In addition, the Company recognized a benefit of $1.1 million from the reduction in the U.S. federal corporate tax rate from 35% to 21% as a result of the 2017 Tax Reform Act. This was partially offset by a $0.6 million decrease in the amount of excess tax benefits from stock-based compensation recognized in the six months ended June 30, 2018 as compared to June 30, 2017. The decrease in the effective tax rate was also significantly affected by shifts in earnings among the various jurisdictions in which the Company operates. Several additional factors, none of which are individually material, also impacted the rate. The difference between the Company’s effective tax rate as compared to the U.S. statutory federal tax rate of 21.0% was primarily due to the aforementioned factors as well as the recognition of tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions and tax credits, partially offset by the tax impact of permanent differences, state income and foreign withholding.

The 2017 Tax Reform Act made significant changes to the Internal Revenue Code, including, but not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a participation exemption regime, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. The Company estimated its provision for income taxes in accordance with the 2017 Tax Reform Act and guidance available upon enactment and as a result

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recorded $32.7 million as additional income tax expense in the fourth quarter of 2017, the period in which the legislation was signed into law. The $32.7 million estimate includes the provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings of $32.7 million based on cumulative foreign earnings of $531.8 million and $1.0 million of foreign withholding taxes on certain anticipated distributions. The provisional tax expense was partially offset by a provisional benefit of $1.0 million related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future. The Company has not determined the need for nor recorded any adjustments to this provisional amount as of June 30, 2018. The Company anticipates finalizing these provisional amounts no later than the fourth quarter of 2018.

Prior to December 31, 2017, no additional income taxes have been provided for any remaining outside basis differences inherent in the Company’s investments in its foreign subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining outside basis difference in these entities is not practicable due to the inherent complexity of the multi-national tax environment in which the Company operates.

On December 22, 2017, the SEC issued SAB 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Reform Act. In accordance with SAB 118, the Company has determined that the deferred tax benefit recorded in connection with the remeasurement of certain deferred tax assets and liabilities and the current tax expense recorded in connection with the transition tax on the mandatory deemed repatriation of foreign earnings was a provisional amount and a reasonable estimate at June 30, 2018 and December 31, 2017. Additional work is necessary for a more detailed analysis of the Company’s deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of identification, but no later than one year from the enactment date.

The 2017 Tax Reform Act instituted a number of new provisions effective January 1, 2018, including GILTI, Foreign Derived Intangible Income (“FDII”) and Base Erosion and Anti-Abuse Tax (“BEAT”). The Company made a reasonable estimate of the impact of each of these provisions of the 2017 Tax Reform Act on its effective tax rate for the three and six months ended June 30, 2018 and determined that the resulting impact was not material. The Company will continue to refine its provisional estimates related to the GILTI, FDII and BEAT rules as additional information is made available.

The Company received assessments for the Canadian 2003-2009 audit. Requests for Competent Authority Assistance were filed with both the Canadian Revenue Agency and the U.S. Internal Revenue Service and the Company paid mandatory security deposits to Canada as part of this process. As of June 30, 2017, the Company determined that all material aspects of the Canadian audit were effectively settled pursuant to ASC 740. As a result, the Company recognized an income tax benefit of $1.2 million, net of the U.S. tax impact, at that time and the deposits were applied against the anticipated liability. During the three months ended June 30, 2018, the Company finalized procedures ancillary to the Canadian audit and recognized an additional $2.7 million income tax benefit due to the elimination of certain assessed penalties, interest and withholding taxes.

With the effective settlement of the Canadian audit, the Company has no significant tax jurisdictions under audit; however, the Company is currently under audit in several tax jurisdictions. The Company believes it is adequately reserved for the remaining audits and their resolution is not expected to have a material impact on its financial conditions and results of operations.

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Note 12. Earnings Per Share

Basic earnings per share are based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share includes the weighted average number of common shares outstanding during the respective periods and the further dilutive effect, if any, from stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust using the treasury stock method.

The numbers of shares used in the earnings per share computation are as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Basic:
Weighted average common shares outstanding		42,125		41,854		42,035		41,756
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust		35		80		162		163
Total weighted average diluted shares outstanding		42,160		41,934		42,197		41,919
Anti-dilutive shares excluded from the diluted earnings per share calculation		31		46		6		16

On August 18, 2011, the Company’s Board of Directors (the “Board”) authorized the Company to purchase up to 5.0 million shares of its outstanding common stock (the “2011 Share Repurchase Program”). On March 16, 2016, the Board authorized an increase of 5.0 million shares to the 2011 Share Repurchase Program for a total of 10.0 million shares. A total of 5.3 million shares have been repurchased under the 2011 Share Repurchase Program since inception. The shares are purchased, from time to time, through open market purchases or in negotiated private transactions, and the purchases are based on factors, including but not limited to, the stock price, management discretion and general market conditions. The 2011 Share Repurchase Program has no expiration date.

There were no shares repurchased under the Company’s share repurchase program during the three and six months ended June 30, 2018 and 2017.

Note 13. Commitments and Loss Contingency

Commitments

During the six months ended June 30, 2018, the Company entered into several leases in the ordinary course of business. The following is a schedule of future minimum rental payments required under operating leases that have noncancelable lease terms as of June 30, 2018 (in thousands):

	Amount
2018 (remaining six months)	$	630
2019		8,118
2020		8,520
2021		8,643
2022		7,959
2023		3,343
2024 and thereafter		8,211
	$	45,424

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During the six months ended June 30, 2018, the Company entered into agreements with third-party vendors in the ordinary course of business whereby the Company committed to purchase goods and services used in its normal operations. These agreements generally are not cancelable, range from one to five-year periods and may contain fixed or minimum annual commitments. Certain of these agreements allow for renegotiation of the minimum annual commitments. The following is a schedule of the future minimum purchases remaining under the agreements as of June 30, 2018 (in thousands):

	Amount
2018 (remaining six months)	$	10,237
2019		6,346
2020		1,699
2021		193
2022		-
2023		-
2024 and thereafter		-
	$	18,475

Loss Contingency

Contingencies are recorded in the consolidated financial statements when it is probable that a liability will be incurred and the amount of the loss is reasonably estimable, or otherwise disclosed, in accordance with ASC 450, Contingencies (“ASC 450”). Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosures related to such matter as appropriate and in compliance with ASC 450.

The Company received a state audit assessment and is currently rebutting the position. The Company has determined that the likelihood of a liability is reasonably possible and developed a range of possible loss up to $1.0 million, net of federal benefit.

The Company, from time to time, is involved in legal actions arising in the ordinary course of business. With respect to these matters, management believes that the Company has adequate legal defenses and/or, when possible and appropriate, has provided adequate accruals related to those matters such that the ultimate outcome will not have a material adverse effect on the Company’s financial position or results of operations.

Note 14. Defined Benefit Pension Plan and Postretirement Benefits

Defined Benefit Pension Plans

The following table provides information about the net periodic benefit cost for the Company’s pension plans (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Service cost	$	109		$	128		$	223		$	253
Interest cost		48			49			98			98
Recognized actuarial (gains)		(14	)		(11	)		(29	)		(21	)
	$	143		$	166		$	292		$	330

The Company’s service cost for its qualified pension plans was included in “Direct salaries and related costs” and “General and administrative” costs in its Condensed Consolidated Statements of Operations for the three and six months ended June 30, 3018 and 2017. The remaining components of net periodic benefit cost were included in “Other income (expense), net” in the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017. See Note 1, Overview and Basis of Presentation, for further information related to the adoption of ASU 2016-18.

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Employee Retirement Savings Plans

The Company maintains a 401(k) plan covering defined employees who meet established eligibility requirements. Under the plan provisions, the Company matches 50% of participant contributions to a maximum matching amount of 2% of participant compensation. The Company’s contributions included in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
401(k) plan contributions	$	344	$	309	$	803	$	620

Split-Dollar Life Insurance Arrangement

In 1996, the Company entered into a split-dollar life insurance arrangement to benefit the former Chairman and Chief Executive Officer of the Company. Under the terms of the arrangement, the Company retained a collateral interest in the policy to the extent of the premiums paid by the Company. The postretirement benefit obligation included in “Other long-term liabilities” and the unrealized gains (losses) included in “Accumulated other comprehensive income” in the accompanying Condensed Consolidated Balance Sheets were as follows (in thousands):

	June 30, 2018		December 31, 2017
Postretirement benefit obligation	$	12	$	15
Unrealized gains (losses) in AOCI (1)		100		120

⁽¹⁾ Unrealized gains (losses) are due to changes in discount rates related to the postretirement obligation.

Note 15. Stock-Based Compensation

The Company’s stock-based compensation plans include the 2011 Equity Incentive Plan, the Non-Employee Director Fee Plan and the Deferred Compensation Plan. The following table summarizes the stock-based compensation expense (primarily in the Americas) and income tax benefits related to the stock-based compensation (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Stock-based compensation (expense) (1)	$	(1,673	)	$	(2,261	)	$	(3,750	)	$	(4,732	)
Income tax benefit (2)		402			871			900			1,822

⁽¹⁾ Included in “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations.

⁽²⁾ Included in “Income taxes” in the accompanying Condensed Consolidated Statements of Operations.

There were no capitalized stock-based compensation costs as of June 30, 2018 and December 31, 2017.

Beginning January 1, 2017, as a result of the adoption of ASU 2016-09, Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), the Company began accounting for forfeitures as they occur, rather than estimating expected forfeitures. The net cumulative effect of this change was recognized as a $0.2 million reduction to retained earnings as of January 1, 2017. Additionally, excess tax benefits (deficiencies) from stock compensation are included in “Income taxes” in the accompanying Condensed Consolidated Statements of Operations subsequent to the adoption of ASU 2016-09.

2011 Equity Incentive Plan — The Company’s Board of Directors (the “Board”) adopted the Sykes Enterprises, Incorporated 2011 Equity Incentive Plan (the “2011 Plan”) on March 23, 2011, as amended on May 11, 2011 to reduce the number of shares of common stock available to 4.0 million shares. The 2011 Plan was approved by the shareholders at the May 2011 Annual Shareholders’ Meeting. The 2011 Plan replaced and superseded the Company’s 2001 Equity Incentive Plan (the “2001 Plan”), which expired on March 14, 2011. The outstanding awards granted under the 2001 Plan will remain in effect until their exercise, expiration or termination. The 2011 Plan permits the grant of restricted stock, stock appreciation rights, stock options and other stock-based awards to certain employees of the Company, members of the Company’s Board and certain non-employees who provide services to the Company in order to encourage them to remain in the employment of, or to faithfully provide services to, the Company and to increase their interest in the Company’s success.

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Stock Appreciation Rights — The Board, at the recommendation of the Compensation and Human Resources Development Committee (the “Compensation Committee”), has approved in the past, and may approve in the future, awards of stock-settled stock appreciation rights (“SARs”) for eligible participants. SARs represent the right to receive, without payment to the Company, a certain number of shares of common stock, as determined by the Compensation Committee, equal to the amount by which the fair market value of a share of common stock at the time of exercise exceeds the grant price. The SARs are granted at the fair market value of the Company’s common stock on the date of the grant and vest one-third on each of the first three anniversaries of the date of grant, provided the participant is employed by the Company on such date. The SARs have a term of 10 years from the date of grant. The fair value of each SAR is estimated on the date of grant using the Black-Scholes valuation model that uses various assumptions.

The following table summarizes the assumptions used to estimate the fair value of SARS granted:

	Six Months Ended June 30,
	2018			2017
Expected volatility		21.4	%		19.3	%
Weighted-average volatility		21.4	%		19.3	%
Expected dividend rate		0.0	%		0.0	%
Expected term (in years)		5.0			5.0
Risk-free rate		2.5	%		1.9	%

The following table summarizes SARs activity as of June 30, 2018 and for the six months then ended:

Stock Appreciation Rights	Shares (000s)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic  Value (000s)
Outstanding at January 1, 2018		734		$	-
Granted		333		$	-
Exercised		(43	)	$	-
Forfeited or expired		-		$	-
Outstanding at June 30, 2018		1,024		$	-		8.6	$	790
Vested or expected to vest at June 30, 2018		1,024		$	-		8.6	$	790
Exercisable at June 30, 2018		363		$	-		7.6	$	580

The following table summarizes information regarding SARs granted and exercised (in thousands, except per SAR amounts):

	Six Months Ended June 30,
	2018		2017
Number of SARs granted		333		396
Weighted average grant-date fair value per SAR	$	6.84	$	6.24
Intrinsic value of SARs exercised	$	305	$	1,678
Fair value of SARs vested	$	1,950	$	1,846

The following table summarizes nonvested SARs activity as of June 30, 2018 and for the six months then ended:

Nonvested Stock Appreciation Rights	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		600		$	6.88
Granted		333		$	6.84
Vested		(272	)	$	7.16
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		661		$	6.74

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As of June 30, 2018, there was $4.0 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested SARs granted under the 2011 Plan. This cost is expected to be recognized over a weighted average period of 1.5 years.

Restricted Shares – The Board, at the recommendation of the Compensation Committee, has approved in the past, and may approve in the future, awards of performance and employment-based restricted shares (“restricted shares”) for eligible participants. In some instances, where the issuance of restricted shares has adverse tax consequences to the recipient, the Board may instead issue restricted stock units (“RSUs”). The restricted shares are shares of the Company’s common stock (or in the case of RSUs, represent an equivalent number of shares of the Company’s common stock) which are issued to the participant subject to (a) restrictions on transfer for a period of time and (b) forfeiture under certain conditions. The performance goals, including revenue growth and income from operations targets, provide a range of vesting possibilities from 0% to 100% and will be measured at the end of the performance period. If the performance conditions are met for the performance period, the shares will vest and all restrictions on the transfer of the restricted shares will lapse (or in the case of RSUs, an equivalent number of shares of the Company’s common stock will be issued to the recipient). The Company recognizes compensation cost, net of actual forfeitures, based on the fair value (which approximates the current market price) of the restricted shares (and RSUs) on the date of grant ratably over the requisite service period based on the probability of achieving the performance goals.

Changes in the probability of achieving the performance goals from period to period will result in corresponding changes in compensation expense. The employment-based restricted shares currently outstanding vest one-third on each of the first three anniversaries of the date of grant, provided the participant is employed by the Company on such date.

The following table summarizes nonvested restricted shares/RSUs activity as of June 30, 2018 and for the six months then ended:

Nonvested Restricted Shares and RSUs	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		1,109		$	28.50
Granted		488		$	28.15
Vested		(323	)	$	25.78
Forfeited or expired		(59	)	$	27.00
Nonvested at June 30, 2018		1,215		$	29.15

The following table summarizes information regarding restricted shares/RSUs granted and vested (in thousands, except per restricted share/RSU amounts):

	Six Months Ended June 30,
	2018		2017
Number of restricted shares/RSUs granted		488		480
Weighted average grant-date fair value per restricted share/RSU	$	28.15	$	29.42
Fair value of restricted shares/RSUs vested	$	8,342	$	6,868

As of June 30, 2018, there was $32.3 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested restricted shares/RSUs granted under the 2011 Plan. This cost is expected to be recognized over a weighted average period of 1.8 years.

Non-Employee Director Fee Plan — The Company’s 2004 Non-Employee Director Fee Plan (the “2004 Fee Plan”), as amended on May 17, 2012, provided that all new non-employee directors joining the Board would receive an initial grant of shares of common stock on the date the new director is elected or appointed, the number of which will be determined by dividing $60,000 by the closing price of the Company’s common stock on the trading day immediately preceding the date a new director is elected or appointed, rounded to the nearest whole number of shares. The initial grant of shares vested in twelve equal quarterly installments, one-twelfth on the date of grant and an additional one-twelfth on each successive third monthly anniversary of the date of grant. The award lapses with respect to all unvested shares in the event the non-employee director ceases to be a director of the Company, and any unvested shares are forfeited.

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The 2004 Fee Plan also provided that each non-employee director would receive, on the day after the annual shareholders’ meeting, an annual retainer for service as a non-employee director (the “Annual Retainer”). Prior to May 17, 2012, the Annual Retainer was $95,000, of which $50,000 was payable in cash, and the remainder was paid in stock. The annual grant of cash vested in four equal quarterly installments, one-fourth on the day following the annual meeting of shareholders, and an additional one-fourth on each successive third monthly anniversary of the date of grant. The annual grant of shares paid to non-employee directors prior to May 17, 2012 vests in eight equal quarterly installments, one-eighth on the day following the annual meeting of shareholders, and an additional one-eighth on each successive third monthly anniversary of the date of grant. On May 17, 2012, upon the recommendation of the Compensation Committee, the Board adopted the Fifth Amended and Restated Non-Employee Director Fee Plan (the “Amendment”), which increased the common stock component of the Annual Retainer by $30,000, resulting in a total Annual Retainer of $125,000, of which $50,000 was payable in cash and the remainder paid in stock. In addition, the Amendment also changed the vesting period for the annual equity award, from a two-year vesting period, to a one-year vesting period (consisting of four equal quarterly installments, one-fourth on the date of grant and an additional one-fourth on each successive third monthly anniversary of the date of grant). The award lapses with respect to all unpaid cash and unvested shares in the event the non-employee director ceases to be a director of the Company, and any unvested shares and unpaid cash are forfeited.

In addition to the Annual Retainer award, the 2004 Fee Plan also provided for any non-employee Chairman of the Board to receive an additional annual cash award of $100,000, and each non-employee director serving on a committee of the Board to receive an additional annual cash award. The additional annual cash award for the Chairperson of the Audit Committee is $20,000 and Audit Committee members are entitled to an annual cash award of $10,000. The annual cash awards for the Chairpersons of the Compensation Committee, Finance Committee and Nominating and Corporate Governance Committee are $15,000, $12,500 and $12,500, respectively, and all other members of such committees are entitled to an annual cash award of $7,500.

The 2004 Fee Plan expired in May 2014, prior to the 2014 annual shareholders’ meeting. In March 2014, upon the recommendation of the Compensation Committee, the Board determined that, following the expiration of the 2004 Fee Plan, the compensation of non-employee Directors should continue on the same terms as provided in the Fifth Amended and Restated Non-Employee Director Fee Plan, except the amounts of cash and equity grants shall be determined annually by the Board and that the stock portion of such compensation would be issued under the 2011 Plan.

At the Board’s regularly scheduled meeting on December 10, 2014, upon the recommendation of the Compensation Committee, the Board determined that the amount of the cash and equity compensation payable to non-employee directors beginning on the date of the 2015 annual shareholders’ meeting would be increased as follows: cash compensation would be increased by $5,000 per year to a total of $55,000 and equity compensation would be increased by $25,000 per year to a total of $100,000. No change would be made in the additional amounts payable to the Chairman of the Board or the Chairs or members of the various Board committees for their service on such committees, and no changes would be made in the payment terms described above for such cash and equity compensation.

At the Board’s regularly scheduled meeting on December 6, 2016, upon the recommendation of the Compensation Committee, the Board determined that the amount of the cash compensation payable to non-employee directors beginning on the date of the 2017 annual shareholders’ meeting would be increased by $15,000 per year to a total of $70,000.

The Board may pay additional cash compensation to any non-employee director for services on behalf of the Board over and above those typically expected of directors, including but not limited to service on a special committee of the Board. Directors who are executive officers of the Company receive no compensation for service as members of either the Board of Directors or any committees of the Board.

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The following table summarizes nonvested common stock share award activity as of June 30, 2018 and for the six months then ended:

Nonvested Common Stock Share Awards	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		8		$	32.21
Granted		34		$	27.68
Vested		(15	)	$	29.87
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		27		$	27.73

The following table summarizes information regarding common stock share awards granted and vested (in thousands, except per share award amounts):

	Six Months Ended June 30,
	2018		2017
Number of share awards granted		34		24
Weighted average grant-date fair value per share award	$	27.68	$	32.93
Fair value of share awards vested	$	450	$	430

As of June 30, 2018, there was $0.7 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested common stock share awards granted under the Fee Plan. This cost is expected to be recognized over a weighted average period of less than one year.

Deferred Compensation Plan — The Company’s non-qualified Deferred Compensation Plan (the “Deferred Compensation Plan”), which is not shareholder-approved, was adopted by the Board effective December 17, 1998. It was last amended and restated on August 15, 2017, effective January 1, 2018. Eligibility is limited to a select group of key management and employees who are expected to receive an annualized base salary (which will not take into account bonuses or commissions) that exceeds the amount taken into account for purposes of determining highly compensated employees under Section 414(q) of the Internal Revenue Code of 1986 based on the current year’s base salary and applicable dollar amounts. The Deferred Compensation Plan provides participants with the ability to defer between 1% and 80% of their compensation (between 1% and 100% prior to June 30, 2016, the effective date of the first amendment) until the participant’s retirement, termination, disability or death, or a change in control of the Company. Using the Company’s common stock, the Company matches 50% of the amounts deferred by participants on a quarterly basis up to a total of $12,000 per year for the president, chief executive officer and executive vice presidents, $7,500 per year for senior vice presidents, global vice presidents and vice presidents, and, effective January 1, 2017, $5,000 per year for all other participants (there was no match for other participants prior to January 1, 2017, the effective date of the second amendment). Matching contributions and the associated earnings vest over a seven-year service period. Vesting will be accelerated in the event of the participant’s death or disability, a change in control or retirement (defined as separate from service after age 65). In the event of a distribution of benefits as a result of a change in control of the Company, the Company will increase the benefit by an amount sufficient to offset the income tax obligations created by the distribution of benefits. Deferred compensation amounts used to pay benefits, which are held in a rabbi trust, include investments in various mutual funds and shares of the Company’s common stock (see Note 7, Investments Held in Rabbi Trust).

As of June 30, 2018 and December 31, 2017, liabilities of $11.8 million and $11.6 million, respectively, of the Deferred Compensation Plan were recorded in “Accrued employee compensation and benefits” in the accompanying Condensed Consolidated Balance Sheets. Additionally, the Company’s common stock match associated with the Deferred Compensation Plan, with a carrying value of approximately $2.2 million and $2.1 million as of June 30, 2018 and December 31, 2017, respectively, is included in “Treasury stock” in the accompanying Condensed Consolidated Balance Sheets.

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The following table summarizes nonvested common stock activity as of June 30, 2018 and for the six months then ended:

Nonvested Common Stock	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		3		$	29.56
Granted		10		$	28.86
Vested		(7	)	$	28.89
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		6		$	29.19

The following table summarizes information regarding shares of common stock granted and vested (in thousands, except per common stock amounts):

	Six Months Ended June 30,
	2018		2017
Number of shares of common stock granted		10		10
Weighted average grant-date fair value per common stock	$	28.86	$	30.66
Fair value of common stock vested	$	213	$	240
Cash used to settle the obligation	$	644	$	422

As of June 30, 2018, there was $0.1 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested common stock granted under the Deferred Compensation Plan. This cost is expected to be recognized over a weighted average period of 3.7 years.

Note 16. Segments and Geographic Information

The Company operates within two regions, the Americas and EMEA. Each region represents a reportable segment comprised of aggregated regional operating segments, which portray similar economic characteristics. The Company aligns its business into two segments to effectively manage the business and support the customer care needs of every client and to respond to the demands of the Company’s global customers.

The reportable segments consist of (1) the Americas, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim, and provides outsourced customer engagement solutions (with an emphasis on inbound technical support, digital support and demand generation, and customer service) and technical staffing and (2) EMEA, which includes Europe, the Middle East and Africa, and provides outsourced customer engagement solutions (with an emphasis on technical support and customer service) and fulfillment services. The sites within Latin America, Australia and the Asia Pacific Rim are included in the Americas segment given the nature of the business and client profile, which is primarily made up of U.S.-based companies that are using the Company’s services in these locations to support their customer engagement needs.

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Information about the Company’s reportable segments is as follows (in thousands):

	Americas			EMEA			Other (1)			Consolidated
Three Months Ended June 30, 2018:
Revenues	$	327,041		$	69,720		$	24		$	396,785
Percentage of revenues		82.4	%		17.6	%		0.0	%		100.0	%
Depreciation, net	$	12,335		$	1,476		$	749		$	14,560
Amortization of intangibles	$	3,415		$	214		$	-		$	3,629
Income (loss) from operations	$	19,824		$	2,220		$	(15,584	)	$	6,460
Total other income (expense), net								(1,511	)		(1,511	)
Income taxes								2,229			2,229
Net income										$	7,178
Three Months Ended June 30, 2017:
Revenues	$	314,871		$	60,540		$	27		$	375,438
Percentage of revenues		83.9	%		16.1	%		0.0	%		100.0	%
Depreciation, net	$	11,842		$	1,254		$	724		$	13,820
Amortization of intangibles	$	4,989		$	261		$	-		$	5,250
Income (loss) from operations	$	26,127		$	2,163		$	(16,962)		$	11,328
Total other income (expense), net								(928	)		(928	)
Income taxes								(1,555	)		(1,555	)
Net income										$	8,845
Six Months Ended June 30, 2018:
Revenues	$	667,762		$	143,347		$	47		$	811,156
Percentage of revenues		82.3	%		17.7	%		0.0	%		100.0	%
Depreciation, net	$	25,018		$	2,887		$	1,491		$	29,396
Amortization of intangibles	$	7,407		$	435		$	-		$	7,842
Income (loss) from operations	$	45,688		$	6,859		$	(31,803)		$	20,744
Total other income (expense), net								(2,391	)		(2,391	)
Income taxes								(227	)		(227	)
Net income										$	18,126
Six Months Ended June 30, 2017:
Revenues	$	635,802		$	123,607		$	43		$	759,452
Percentage of revenues		83.7	%		16.3	%		0.0	%		100.0	%
Depreciation, net	$	23,310		$	2,440		$	1,418		$	27,168
Amortization of intangibles	$	9,967		$	514		$	—		$	10,481
Income (loss) from operations	$	64,099		$	7,743		$	(34,461)		$	37,381
Total other income (expense), net								(1,659	)		(1,659	)
Income taxes								(8,165	)		(8,165	)
Net income										$	27,557

⁽¹⁾ Other items (including corporate and other costs, other income and expense, and income taxes) are included for purposes of reconciling to the Company’s consolidated totals as shown in the tables above for the periods shown. Inter-segment revenues are not material to the Americas and EMEA segment results.

The Company’s reportable segments are evaluated regularly by its chief operating decision maker to decide how to allocate resources and assess performance. The chief operating decision maker evaluates performance based upon reportable segment revenue and income (loss) from operations. Because assets by segment are not reported to or used by the Company’s chief operating decision maker to allocate resources, or to assess performance, total assets by segment are not disclosed.

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The following table represents a disaggregation of revenue from contracts with customers by geographic location for the three and six months ended June 30, 2018 and 2017, by the reportable segment for each category (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
United States	$	165,648	$	151,654	$	337,094	$	305,298
The Philippines		56,571		56,779		116,657		115,319
Costa Rica		30,973		32,924		63,048		66,249
Canada		24,828		27,020		52,017		56,742
El Salvador		20,584		18,369		40,595		36,714
People’s Republic of China		8,149		9,282		17,497		18,542
Australia		7,700		6,440		15,402		13,090
Mexico		5,632		5,832		11,950		11,441
Other		6,956		6,571		13,502		12,407
Total Americas		327,041		314,871		667,762		635,802
EMEA:
Germany		22,404		18,457		46,579		38,894
Sweden		13,674		14,043		27,804		28,344
United Kingdom		11,960		9,407		25,307		19,140
Romania		8,191		6,685		16,327		13,078
Other		13,491		11,948		27,330		24,151
Total EMEA		69,720		60,540		143,347		123,607
Total Other		24		27		47		43
	$	396,785	$	375,438	$	811,156	$	759,452

Revenues are attributed to countries based on location of customer, except for revenues for The Philippines, Costa Rica, the People’s Republic of China and India which are primarily comprised of customers located in the U.S., but serviced by centers in those respective geographic locations.

Note 17. Other Income (Expense)

Other income (expense), net consists of the following (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Foreign currency transaction gains (losses)	$	641		$	(535	)	$	2,089		$	644
Gains (losses) on derivative instruments not designated as hedges		(345	)		1,097			(1,427	)		397
Other miscellaneous income (expense)		(833	)		231			(1,044	)		565
	$	(537	)	$	793		$	(382	)	$	1,606

Note 18. Related Party Transactions

In January 2008, the Company entered into a lease for a customer engagement center located in Kingstree, South Carolina. The landlord, Kingstree Office One, LLC, is an entity controlled by John H. Sykes, the founder, former Chairman and former Chief Executive Officer of the Company and the father of Charles Sykes, President and Chief Executive Officer of the Company. The lease payments on the 20-year lease were negotiated at or below market rates, and the lease is cancellable at the option of the Company. The Company paid $0.1 million to the landlord during both the three months ended June 30, 2018 and 2017 and $0.2 million during both the six months ended June 30, 2018 and 2017 under the terms of the lease.

During the three and six months ended June 30, 2018, the Company contracted to receive services from XSell, an equity method investee, for $0.1 million. There were no such transactions in 2017. These related party transactions occurred in the normal course of business on terms and conditions that are similar to those of transactions with unrelated parties and, therefore, were measured at the exchange amount.

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Note 19. Subsequent Event

On July 9, 2018, the Company as guarantor and its wholly-owned subsidiaries, Sykes Australia Pty Ltd, an Australian company, and Clear Link Technologies, LLC, a Delaware limited liability company, entered into a Sale Agreement with WhistleOut Nominees Pty Ltd as trustee for the WhistleOut Holdings Unit Trust, CPC Investments USA Pty Ltd, JJZL Pty Ltd, Kenneth Wong as trustee for Wong Family Trust and C41 Pty Ltd as trustee for the Ottery Family Trust (together, the “Sellers”) to acquire all of the outstanding shares of WhistleOut.

The aggregate purchase price of AUD 30.2 million ($22.4 million), paid at the closing of the transaction on July 9, 2018, is subject to certain post-closing adjustments related to WhistleOut’s working capital. The purchase price was funded through $22.0 million of additional borrowings under the Company’s Credit Agreement. The Sale Agreement provides for a three-year, retention based earnout of AUD 14.0 million.

The Sale Agreement contains customary representations and warranties, indemnification obligations and covenants.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Sykes Enterprises, Incorporated

Tampa, Florida

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheet of Sykes Enterprises, Incorporated and subsidiaries (the “Company”) as of June 30, 2018, the related condensed consolidated statements of operations and comprehensive income (loss) for the three-month and six-month periods ended June 30, 2018 and 2017, changes in shareholders’ equity for the six-month period ended June 30, 2018, and of cash flows for the six-month periods ended June 30, 2018 and 2017, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2017, and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 1, 2018, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2017, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Tampa, Florida

August 7, 2018

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion should be read in conjunction with the condensed consolidated financial statements and notes included elsewhere in this report and the consolidated financial statements and notes in the Sykes Enterprises, Incorporated (“SYKES,” “our,” “we” or “us”) Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”).

Our discussion and analysis may contain forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations, estimates, forecasts, and projections about SYKES, our beliefs, and assumptions made by us. In addition, we may make other written or oral statements, which constitute forward-looking statements, from time to time. Words such as “believe,” “estimate,” “project,” “expect,” “intend,” “may,” “anticipate,” “plan,” “seek,” variations of such words, and similar expressions are intended to identify such forward-looking statements. Similarly, statements that describe our future plans, objectives, or goals also are forward-looking statements. These statements are not guarantees of future performance and are subject to a number of risks and uncertainties, including those discussed below and elsewhere in this report. Our actual results may differ materially from what is expressed or forecasted in such forward-looking statements, and undue reliance should not be placed on such statements. All forward-looking statements are made as of the date hereof, and we undertake no obligation to update any such forward-looking statements, whether as a result of new information, future events or otherwise.

Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to: (i) the impact of economic recessions in the U.S. and other parts of the world, (ii) fluctuations in global business conditions and the global economy, (iii) currency fluctuations, (iv) the timing of significant orders for our products and services, (v) variations in the terms and the elements of services offered under our standardized contract including those for future bundled service offerings, (vi) changes in applicable accounting principles or interpretations of such principles, (vii) difficulties or delays in implementing our bundled service offerings, (viii) failure to achieve sales, marketing and other objectives, (ix) construction delays of new or expansion of existing customer engagement centers, (x) delays in our ability to develop new products and services and market acceptance of new products and services, (xi) rapid technological change, (xii) loss or addition of significant clients, (xiii) political and country-specific risks inherent in conducting business abroad, (xiv) our ability to attract and retain key management personnel, (xv) our ability to continue the growth of our support service revenues through additional technical and customer engagement centers, (xvi) our ability to further penetrate into vertically integrated markets, (xvii) our ability to expand our global presence through strategic alliances and selective acquisitions, (xviii) our ability to continue to establish a competitive advantage through sophisticated technological capabilities, (xix) the ultimate outcome of any lawsuits, (xx) our ability to recognize deferred revenue through delivery of products or satisfactory performance of services, (xxi) our dependence on the demand for outsourcing, (xxii) risk of interruption of technical and customer engagement center operations due to such factors as fire, earthquakes, inclement weather and other disasters, power failures, telecommunication failures, unauthorized intrusions, computer viruses and other emergencies, (xxiii) the existence of substantial competition, (xxiv) the early termination of contracts by clients, (xxv) the ability to obtain and maintain grants and other incentives (tax or otherwise), (xxvi) the potential of cost savings/synergies associated with acquisitions not being realized, or not being realized within the anticipated time period, (xxvii) risks related to the integration of the acquisitions and the impairment of any related goodwill, and (xxviii) other risk factors that are identified in our most recent Annual Report on Form 10-K, including factors identified under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Executive Summary

We are a leading provider of multichannel demand generation and global comprehensive customer engagement services. We provide differentiated full lifecycle customer engagement solutions and services to Global 2000 companies and their end customers primarily in the communications, financial services, technology, transportation and leisure, healthcare, retail and other industries. Our differentiated full lifecycle management services platform effectively engages customers at every touchpoint within the customer journey, including digital marketing and acquisition, sales expertise, customer service, technical support and retention. We serve our clients through two geographic operating regions: the Americas (United States, Canada, Latin America, Australia and the Asia Pacific Rim) and EMEA (Europe, the Middle East and Africa). Our Americas and EMEA regions primarily provide customer engagement solutions and services with an emphasis on inbound multichannel demand generation, customer service and technical support to our clients’ customers. These services, which represented 99.4% and 99.5% of consolidated revenues during the three months ended June 30, 2018 and 2017, respectively, and 99.4% and 99.4% of consolidated

46

revenues during the six months ended June 30, 2018 and 2017, respectively, are delivered through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. We also provide various enterprise support services in the United States (“U.S.”) that include services for our clients’ internal support operations, from technical staffing services to outsourced corporate help desk services. In Europe, we also provide fulfillment services, which includes order processing, payment processing, inventory control, product delivery and product returns handling. Our complete service offering helps our clients acquire, retain and increase the lifetime value of their customer relationships. We have developed an extensive global reach with customer engagement centers across six continents, including North America, South America, Europe, Asia, Australia and Africa. We deliver cost-effective solutions that generate demand, enhance the customer service experience, promote stronger brand loyalty, and bring about high levels of performance and profitability.

Recent Developments

Americas 2018 Exit Plan

During the second quarter of 2018, we initiated a restructuring plan to streamline excess capacity through targeted seat reductions (the “Americas 2018 Exit Plan”) in an on-going effort to manage and optimize capacity utilization. The Americas 2018 Exit Plan includes, but is not limited to, closing customer contact management centers and consolidating leased space in various locations in the U.S. and Canada. We anticipate finalizing the remainder of the site closures under the Americas 2018 Exit Plan by December 2018.

The actions are expected to impact approximately 4,500 seats, of which 2,200 seats have been rationalized as of June 30, 2018. We anticipate annualized gross general and administrative cost savings, including lower depreciation expense, of approximately $24.6 million as a result of the 2018 site closures.

See Note 3, Costs Associated with Exit and Disposal Activities, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.

2017 Tax Reform Act

In December 2017, the President of the United States (“U.S.”) signed into law the Tax Cuts and Jobs Act (the “2017 Tax Reform Act”). In general, the 2017 Tax Reform Act reduces the U.S. federal corporate tax rate from 35% to 21%, effective in 2018. The 2017 Tax Reform Act moves from a worldwide business taxation approach to a participation exemption regime. The 2017 Tax Reform Act also imposes base-erosion prevention measures on non-U.S. earnings of U.S. entities, as well as a one-time mandatory deemed repatriation tax on accumulated non-U.S. earnings which was recorded in the fourth quarter of 2017. The impact of the 2017 Tax Reform Act on our consolidated financial results began with the fourth quarter of 2017, the period of enactment. This impact, along with the transitional taxes discussed in Note 11, Income Taxes, of the accompanying “Notes to Condensed Consolidated Financial Statements” is reflected in the Other segment.

Acquisition of Telecommunications Assets

In May 2017, we completed the acquisition of certain assets of a Global 2000 telecommunications service provider (the “Telecommunications Asset acquisition”) to strengthen and create new partnerships and expand our geographic footprint in North America. The total purchase price of $7.5 million was funded through cash on hand. The results of operations of the Telecommunications Asset acquisition have been reflected in our consolidated financial statements since May 31, 2017.

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Results of Operations

The following table sets forth, for the periods indicated, the amounts presented in the accompanying Condensed Consolidated Statements of Operations as well as the change between the respective periods:

	Three Months Ended June 30,									Six Months Ended June 30,
(in thousands)	2018			2017			$ Change			2018			2017			$ Change
Revenues	$	396,785		$	375,438		$	21,347		$	811,156		$	759,452		$	51,704
Operating expenses:
Direct salaries and related costs		264,924			248,615			16,309			539,996			495,751			44,245
General and administrative		102,037			92,236			9,801			204,477			184,280			20,197
Depreciation, net		14,560			13,820			740			29,396			27,168			2,228
Amortization of intangibles		3,629			5,250			(1,621	)		7,842			10,481			(2,639	)
Impairment of long-lived assets		5,175			4,189			986			8,701			4,391			4,310
Total operating expenses		390,325			364,110			26,215			790,412			722,071			68,341
Income from operations		6,460			11,328			(4,868	)		20,744			37,381			(16,637	)
Other income (expense):
Interest income		175			144			31			346			299			47
Interest (expense)		(1,149	)		(1,865	)		716			(2,355	)		(3,564	)		1,209
Other income (expense), net		(537	)		793			(1,330	)		(382	)		1,606			(1,988	)
Total other income (expense), net		(1,511	)		(928	)		(583	)		(2,391	)		(1,659	)		(732	)
Income before income taxes		4,949			10,400			(5,451	)		18,353			35,722			(17,369	)
Income taxes		(2,229	)		1,555			(3,784	)		227			8,165			(7,938	)
Net income	$	7,178		$	8,845		$	(1,667	)	$	18,126		$	27,557		$	(9,431	)

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Revenues

	Three Months Ended June 30,
	2018			2017
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change
Americas	$	327,041	82.4%	$	314,871	83.9%	$	12,170
EMEA		69,720	17.6%		60,540	16.1%		9,180
Other		24	0.0%		27	0.0%		(3	)
Consolidated	$	396,785	100.0%	$	375,438	100.0%	$	21,347

Consolidated revenues increased $21.3 million, or 5.7%, for the three months ended June 30, 2018 from the comparable period in 2017.

The increase in Americas’ revenues was due to higher volumes from existing clients of $17.7 million, new clients of $8.8 million and a positive foreign currency impact of $2.7 million, partially offset by end-of-life client programs of $17.0 million. Revenues from our offshore operations represented 39.4% of Americas’ revenues in 2018, compared to 41.2% for the comparable period in 2017.

The increase in EMEA’s revenues was due to higher volumes from existing clients of $3.9 million, new clients of $1.1 million and a positive foreign currency impact of $4.7 million, partially offset by end-of-life client programs of $0.5 million.

We adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and subsequent amendments (together, “ASC 606”) on January 1, 2018. See Note 2, Revenues, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.

On a consolidated basis, we had 51,200 brick-and-mortar seats as of June 30, 2018, a decrease of 200 seats from the comparable period in 2017. The capacity utilization rate on a combined basis was 70% compared to 72% in the comparable period in 2017.

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On a segment basis, 43,900 seats were located in the Americas, a decrease of 500 seats from the comparable period in 2017, and 7,300 seats were located in EMEA, an increase of 300 seats from the comparable period in 2017. Capacity utilization rates as of June 30, 2018 were 68% for the Americas and 77% for EMEA, compared to 71% and 80%, respectively, in the comparable period in 2017. The decrease in utilization in the Americas was primarily due to operational inefficiencies, capacity additions in certain geographies to address demand opportunities and also in part by the short-term inefficiencies created by the progress in implementing initiatives to rationalize underutilized capacity. We are executing on initiatives to rationalize up to 10% of our total seat capacity on a gross basis by the end of 2018. We strive to attain a capacity utilization rate of 85% at each of our locations.

Direct Salaries and Related Costs

	Three Months Ended June 30,
	2018			2017
(in thousands)	Amount		% of   Revenues	Amount		% of   Revenues	$ Change		Change in % of Revenues
Americas	$	214,502	65.6%	$	205,000	65.1%	$	9,502	0.5%
EMEA		50,422	72.3%		43,615	72.0%		6,807	0.3%
Consolidated	$	264,924	66.8%	$	248,615	66.2%	$	16,309	0.6%

The increase of $16.3 million in direct salaries and related costs included a positive foreign currency impact of $0.2 million in the Americas and a negative foreign currency impact of $3.1 million in EMEA.

The increase in Americas’ direct salaries and related costs, as a percentage of revenues, was primarily attributable to higher customer-acquisition advertising costs of 0.9% and higher severance costs of 0.2%, partially offset by lower auto tow claim costs of 0.4% and lower other costs of 0.2%.

The increase in EMEA’s direct salaries and related costs, as a percentage of revenues, was primarily attributable to higher communications costs of 0.2%, higher fulfillment materials costs of 0.1%, higher recruiting costs of 0.1%, higher travel costs of 0.1%, higher facility and office supplies of 0.1% and higher other costs of 0.4%, partially offset by lower compensation costs of 0.7%.

General and Administrative

	Three Months Ended June 30,
	2018			2017
(in thousands)	Amount		% of   Revenues	Amount		% of   Revenues	$ Change			Change in % of Revenues
Americas	$	71,790	22.0%	$	62,724	19.9%	$	9,066		2.1%
EMEA		15,388	22.1%		13,247	21.9%		2,141		0.2%
Other		14,859	-		16,265	-		(1,406	)	-
Consolidated	$	102,037	25.7%	$	92,236	24.6%	$	9,801		1.1%

The increase of $9.8 million in general and administrative expenses included a positive foreign currency impact of $0.2 million in the Americas and a negative foreign currency impact of $0.9 million in EMEA.

The increase in Americas’ general and administrative expenses, as a percentage of revenues, was primarily attributable to higher facility-related costs of 0.8% resulting from the Americas 2018 Exit Plan (see Note 3, Costs Associated with Exit and Disposal Activities, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information), higher compensations costs of 0.7%, higher software and maintenance costs of 0.3% and higher legal and professional fees of 0.3%.

The increase in EMEA’s general and administrative expenses, as a percentage of revenues, was primarily attributable to higher recruiting costs of 0.3%, higher software and maintenance costs of 0.2% and higher other costs of 0.3%, partially offset by lower advertising and marketing costs of 0.3% and lower legal and professional costs of 0.3%.

The decrease of $1.4 million in Other general and administrative expenses, which includes corporate and other costs, was primarily attributable to lower compensation costs of $0.7 million, lower legal and professional fees of $0.6 million, lower merger and integration costs of $0.1 million and lower other costs of $0.2 million, partially offset by higher software and maintenance costs of $0.2 million.

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Depreciation, Amortization and Impairment of Long-Lived Assets

	Three Months Ended June 30,
	2018				2017
(in thousands)	Amount		% of   Revenues		Amount		% of   Revenues		$ Change			Change in % of Revenues
Depreciation, net:
Americas	$	12,335		3.8%	$	11,842		3.8%	$	493			0.0%
EMEA		1,476		2.1%		1,254		2.1%		222			0.0%
Other		749		-		724		-		25			-
Consolidated	$	14,560		3.7%	$	13,820		3.7%	$	740			0.0%
Amortization of intangibles:
Americas	$	3,415		1.0%	$	4,989		1.6%	$	(1,574	)		-0.6%
EMEA		214		0.3%		261		0.4%		(47	)		-0.1%
Other		-		-		-		-		-			-
Consolidated	$	3,629		0.9%	$	5,250		1.4%	$	(1,621	)		-0.5%
Impairment of long-lived assets:
Americas	$	5,175		1.6%	$	4,189		1.3%	$	986			0.3%
EMEA		-		0.0%		-		0.0%		-			0.0%
Other		-		-		-		-		-			-
Consolidated	$	5,175		1.3%	$	4,189		1.1%	$	986			0.2%

The increase in depreciation was primarily due to new depreciable fixed assets placed into service supporting site expansions and infrastructure upgrades, partially offset by certain fully depreciated fixed assets.

The decrease in amortization was primarily due to certain fully amortized intangible assets.

See Note 3, Costs Associated with Exit and Disposal Activities, and Note 4, Fair Value, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information regarding the impairment of long-lived assets.

Other Income (Expense)

	Three Months Ended June 30,
(in thousands)	2018			2017			$ Change
Interest income	$	175		$	144		$	31
Interest (expense)	$	(1,149	)	$	(1,865	)	$	716
Other income (expense), net:
Foreign currency transaction gains (losses)	$	641		$	(535	)	$	1,176
Gains (losses) on derivative instruments not designated as hedges		(345	)		1,097			(1,442	)
Other miscellaneous income (expense)		(833	)		231			(1,064	)
Total other income (expense), net	$	(537	)	$	793		$	(1,330	)

Interest income remained relatively consistent with the comparable period.

The decrease in interest (expense) was primarily due to a decrease in the outstanding borrowings under the Credit Agreement as a result of a $175.0 million repayment in January 2018, partially offset by an increase in weighted average interest rates on outstanding borrowings.

The change in other miscellaneous income (expense) was primarily due to payroll tax compliance costs, the net investment income (losses) related to the investments held in a rabbi trust and losses from our equity method investee, XSell. See Note 7, Investments Held in Rabbi Trust, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.

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Income Taxes

	Three Months Ended June 30,
(in thousands)	2018			2017			$ Change
Income before income taxes	$	4,949		$	10,400		$	(5,451	)
Income taxes		(2,229	)		1,555		$	(3,784	)
							% Change
Effective tax rate		-45.0	%		15.0	%		-60.0	%

The decrease in the effective tax rate in 2018 compared to 2017 was primarily due to a $2.0 million increase in benefit related to the settlement of tax audits and ancillary issues. In addition, we recognized a benefit of $0.5 million from the reduction in the U.S. federal corporate tax rate from 35% to 21% as a result of the 2017 Tax Reform Act. The decrease in the effective tax rate was also significantly affected by shifts in earnings among the various jurisdictions in which we operate. Several additional factors, none of which are individually material, also impacted the rate.

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Revenues

	Six Months Ended June 30,
	2018			2017
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change
Americas	$	667,762	82.3%	$	635,802	83.7%	$	31,960
EMEA		143,347	17.7%		123,607	16.3%		19,740
Other		47	0.0%		43	0.0%		4
Consolidated	$	811,156	100.0%	$	759,452	100.0%	$	51,704

Consolidated revenues increased $51.7 million, or 6.8%, for the six months ended June 30, 2018 from the comparable period in 2017.

The increase in Americas’ revenues was due to higher volumes from existing clients of $48.9 million, new clients of $13.4 million and a positive foreign currency impact of $6.6 million, partially offset by end-of-life client programs of $36.9 million. Revenues from our offshore operations represented 39.4% of Americas’ revenues in 2018, compared to 41.0% for the comparable period in 2017.

The increase in EMEA’s revenues was due to higher volumes from existing clients of $5.8 million, new clients of $2.0 million and a positive foreign currency impact of $13.3 million, partially offset by end-of-life client programs of $1.4 million.

See Note 2, Revenues, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information regarding the adoption of ASC 606.

Direct Salaries and Related Costs

	Six Months Ended June 30,
	2018			2017
(in thousands)	Amount		% of   Revenues	Amount		% of   Revenues	$ Change		Change in % of Revenues
Americas	$	437,655	65.5%	$	408,702	64.3%	$	28,953	1.2%
EMEA		102,341	71.4%		87,049	70.4%		15,292	1.0%
Consolidated	$	539,996	66.6%	$	495,751	65.3%	$	44,245	1.3%

The increase of $44.2 million in direct salaries and related costs included a negative foreign currency impact of $0.5 million in the Americas and a negative foreign currency impact of $9.0 million in EMEA.

The increase in Americas’ direct salaries and related costs, as a percentage of revenues, was primarily attributable to higher compensation costs of 1.1% driven by a decrease in agent productivity due to operational inefficiencies principally within the financial services, transportation and communications verticals in the current period, higher customer-acquisition advertising costs of 0.4% and higher other costs of 0.2%, partially offset by lower auto tow claim costs of 0.3% and lower recruiting costs of 0.2%.

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The increase in EMEA’s direct salaries and related costs, as a percentage of revenues, was primarily attributable to higher compensation costs of 0.3%, higher communications costs of 0.2%, higher recruiting costs of 0.1% and higher other costs of 0.4%.

General and Administrative

	Six Months Ended June 30,
	2018			2017
(in thousands)	Amount		% of   Revenues	Amount		% of   Revenues	$ Change			Change in % of Revenues
Americas	$	143,293	21.5%	$	125,333	19.7%	$	17,960		1.8%
EMEA		30,825	21.5%		25,861	20.9%		4,964		0.6%
Other		30,359	-		33,086	-		(2,727	)	-
Consolidated	$	204,477	25.2%	$	184,280	24.3%	$	20,197		0.9%

The increase of $20.2 million in general and administrative expenses included a positive foreign currency impact of $0.1 million in the Americas and a negative foreign currency impact of $2.8 million in EMEA.

The increase in Americas’ general and administrative expenses, as a percentage of revenues, was primarily attributable to higher compensations costs of 0.7%, higher facility-related costs of 0.4% resulting from the Americas 2018 Exit Plan (see Note 3, Costs Associated with Exit and Disposal Activities, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information), higher software and maintenance costs of 0.3%, higher ongoing facility-related costs of 0.2%, higher legal and professional fees of 0.2% and higher other costs of 0.2%, partially offset by lower technology equipment and maintenance costs of 0.2%.

The increase in EMEA’s general and administrative expenses, as a percentage of revenues, was primarily attributable to higher recruiting costs of 0.4%, higher compensation costs of 0.2% and higher other costs of 0.5%, partially offset by lower advertising and marketing costs of 0.3% and lower legal and professional fees of 0.2%.

The decrease of $2.7 million in Other general and administrative expenses, which includes corporate and other costs, was primarily attributable to lower compensation costs of $2.0 million, lower legal and professional fees of $0.9 million, lower merger and integration costs of $0.2 million and lower travel costs of $0.2 million, partially offset by higher software and maintenance costs of $0.2 million, higher severance costs of $0.2 million and higher other costs of $0.2 million.

Depreciation, Amortization and Impairment of Long-Lived Assets

	Six Months Ended June 30,
	2018			2017
(in thousands)	Amount		% of   Revenues	Amount		% of   Revenues		$ Change			Change in % of Revenues
Depreciation, net:
Americas	$	25,018	3.7%	$	23,310		3.7%	$	1,708			0.0%
EMEA		2,887	2.0%		2,440		2.0%		447			0.0%
Other		1,491	-		1,418		-		73			-
Consolidated	$	29,396	3.6%	$	27,168		3.6%	$	2,228			0.0%
Amortization of intangibles:
Americas	$	7,407	1.1%	$	9,967		1.6%	$	(2,560	)		-0.5%
EMEA		435	0.3%		514		0.4%		(79	)		-0.1%
Other		-	-		-		-		-			-
Consolidated	$	7,842	1.0%	$	10,481		1.4%	$	(2,639	)		-0.4%
Impairment of long-lived assets:
Americas	$	8,701	1.3%	$	4,391		0.7%	$	4,310			0.6%
EMEA		-	0.0%		-		0.0%		-			0.0%
Other		-	-		-		-		-			-
Consolidated	$	8,701	1.1%	$	4,391		0.6%	$	4,310			0.5%

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The increase in depreciation was primarily due to new depreciable fixed assets placed into service supporting site expansions and infrastructure upgrades, partially offset by certain fully depreciated fixed assets.

The decrease in amortization was primarily due to certain fully amortized intangible assets.

See Note 3, Costs Associated with Exit and Disposal Activities, and Note 4, Fair Value, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information regarding the impairment of long-lived assets.

Other Income (Expense)

	Six Months Ended June 30,
(in thousands)	2018			2017			$ Change
Interest income	$	346		$	299		$	47
Interest (expense)	$	(2,355	)	$	(3,564	)	$	1,209
Other income (expense), net:
Foreign currency transaction gains (losses)	$	2,089		$	644		$	1,445
Gains (losses) on derivative instruments not designated as hedges		(1,427	)		397			(1,824	)
Other miscellaneous income (expense)		(1,044	)		565			(1,609	)
Total other income (expense), net	$	(382	)	$	1,606		$	(1,988	)

Interest income remained relatively consistent with the comparable period.

The decrease in interest (expense) was primarily due to a decrease in the outstanding borrowings under the Credit Agreement as a result of the $175.0 million repayment in January 2018, partially offset by an increase in weighted average interest rates on outstanding borrowings.

The change in other miscellaneous income (expense) was primarily due to payroll tax compliance costs, the net investment income (losses) related to the investments held in a rabbi trust and losses from our equity method investee, XSell. See Note 7, Investments Held in Rabbi Trust, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.

Income Taxes

	Six Months Ended June 30,
(in thousands)	2018			2017			$ Change
Income before income taxes	$	18,353		$	35,722		$	(17,369	)
Income taxes		227			8,165		$	(7,938	)
							% Change
Effective tax rate		1.2	%		22.9	%		-21.7	%

The decrease in the effective tax rate in 2018 compared to 2017 was primarily due to a $2.0 million increase in benefit related to the settlement of tax audits and ancillary issues. In addition, we recognized a benefit of $1.1 million from the reduction in the U.S. federal corporate tax rate from 35% to 21% as a result of the 2017 Tax Reform Act. This was partially offset by a $0.6 million decrease in the amount of excess tax benefits from stock-based compensation recognized in 2018 as compared to 2017. The decrease in the effective tax rate was also significantly affected by shifts in earnings among the various jurisdictions in which we operate. Several additional factors, none of which are individually material, also impacted the rate.

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Client Concentration

Our top ten clients accounted for approximately 45.8% and 48.7% of our consolidated revenues in the three months ended June 30, 2018 and 2017, respectively, and approximately 45.9% and 49.1% of our consolidated revenues in the six months ended June 30, 2018 and 2017, respectively.

Total revenues by segment from AT&T Corporation (“AT&T”), a major provider of communication services for which we provide various customer support services over several distinct lines of AT&T businesses, were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
	Amount		% of Revenues	Amount		% of Revenues	Amount		% of Revenues	Amount		% of Revenues
Americas	$	40,947	12.5%	$	55,627	17.7%	$	82,935	12.4%	$	117,161	18.4%
EMEA		-	0.0%		-	0.0%		-	0.0%		-	0.0%
	$	40,947	10.3%	$	55,627	14.8%	$	82,935	10.2%	$	117,161	15.4%

We have multiple distinct contracts with AT&T spread across multiple lines of businesses, which expire at varying dates between 2018 and 2020. We have historically renewed most of these contracts. However, there is no assurance that these contracts will be renewed, or if renewed, will be on terms as favorable as the existing contracts. Each line of business is governed by separate business terms, conditions and metrics. Each line of business also has a separate decision maker such that a loss of one line of business would not necessarily impact our relationship with the client and decision makers on other lines of business. The loss of (or the failure to retain a significant amount of business with) any of our key clients, including AT&T, could have a material adverse effect on our performance. Many of our contracts contain penalty provisions for failure to meet minimum service levels and are cancelable by the client at any time or on short notice. Also, clients may unilaterally reduce their use of our services under our contracts without penalty.

Total revenues by segment from our next largest client, which was in the financial services vertical in each of the periods, were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
	Amount		% of  Revenues	Amount		% of  Revenues	Amount		% of  Revenues	Amount		% of  Revenues
Americas	$	29,922	9.1%	$	24,818	7.9%	$	60,531	9.1%	$	47,744	7.5%
EMEA		-	0.0%		-	0.0%		-	0.0%		-	0.0%
	$	29,922	7.5%	$	24,818	6.6%	$	60,531	7.5%	$	47,744	6.3%

Other than AT&T, total revenues by segment of our clients that each individually represents 10% or greater of that segment’s revenues in each of the periods were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
	Amount		% of  Revenues	Amount		% of  Revenues	Amount		% of  Revenues	Amount		% of  Revenues
Americas	$	-	0.0%	$	-	0.0%	$	-	0.0%	$	-	0.0%
EMEA		25,996	37.3%		18,819	31.1%		53,641	37.4%		50,523	40.9%
	$	25,996	6.6%	$	18,819	5.0%	$	53,641	6.6%	$	50,523	6.7%

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Business Outlook

For the three months ended September 30, 2018, we anticipate the following financial results:

● Revenues in the range of $402.0 million to $407.0 million;

● Effective tax rate of approximately 14%;

● Fully diluted share count of approximately 42.2 million;

● Diluted earnings per share in the range of $0.33 to $0.36; and

● Capital expenditures in the range of $12.0 million to $15.0 million.

For the twelve months ended December 31, 2018, we anticipate the following financial results:

● Revenues in the range of $1,630.0 million to $1,640.0 million;

● Effective tax rate of approximately 12%;

● Fully diluted share count of approximately 42.2 million;

● Diluted earnings per share in the range of $1.30 to $1.37; and

● Capital expenditures in the range of $45.0 million to $50.0 million.

We are revising our full-year 2018 revenue outlook downward by approximately $50.0 million relative to the outlook provided in May 2018. Roughly half, or $25.0 million, of the revision is related to a combination of weakness in the communications vertical representing approximately $10.0 million and $15.0 million related to the decision we made to discontinue a specific program – as opposed to shifting it to another geography or at-home, as has been the case with others – because of its long-term viability in the market it was operating. Another approximately $15.0 million of the revision is related to foreign exchange volatility, with the remainder related to a slight extension in the sales cycle as well as a ramp of new client and program wins, partially offset by the contribution from WhistleOut. The benefits of the capacity rationalization initiatives are expected to start flowing through in the fourth quarter of 2018, which should yield significant improvement in year-over-year operating margins relative to the fourth quarter of 2017. Additionally, based on the rapid pace of progress reported thus far, we expect to rationalize a few hundred additional seats, bringing the total gross number of seats rationalized close to the upper end of the 10% target outlined in our May 2018 outlook.

Our third quarter 2018 business outlook anticipates a pre-tax charge of approximately $8.1 million, or $0.15 on an after-tax basis, related to capacity rationalization. The pre-tax charge is expected to be mostly in cash. The full-year outlook reflects a pre-tax charge of approximately $22.3 million, or $0.40 on an after-tax basis, split roughly evenly between non-cash and cash.

Our revenues and earnings per share assumptions for the third quarter and full year 2018 are based on foreign exchange rates as of July 2018. Therefore, the continued volatility in foreign exchange rates between the U.S. Dollar and the functional currencies of the markets we serve could have a further impact, positive or negative, on revenues and earnings per share relative to the business outlook for the third quarter and full-year as discussed above.

We anticipate total other interest income (expense), net of approximately $(1.0) million for the third quarter and $(4.6) million for the full year 2018. The amounts in the other interest income (expense), net, however, exclude the potential impact of any future foreign exchange gains or losses.

We expect a further reduction in our full-year 2018 effective tax rate compared to what was provided in our May 2018 outlook due largely to discrete benefits in the second quarter of 2018.

Not included in this guidance is the impact of any future acquisitions, share repurchase activities or a potential sale of previously exited customer engagement centers.

Liquidity and Capital Resources

Our primary sources of liquidity are generally cash flows generated by operating activities and from available borrowings under our revolving credit facility. We utilize these capital resources to make capital expenditures associated primarily with our customer engagement services, invest in technology applications and tools to further develop our service offerings and for working capital and other general corporate purposes, including repurchase of our common stock in the open market and to fund acquisitions. In future periods, we anticipate similar uses of these funds.

On August 18, 2011, the Board authorized us to purchase up to 5.0 million shares of our outstanding common stock (the “2011 Share Repurchase Program”). On March 16, 2016, the Board authorized an increase of 5.0 million shares to the 2011 Share Repurchase Program, for a total of 10.0 million. A total of 5.3 million shares have been repurchased under the 2011 Share Repurchase Program since inception. The shares are purchased, from time to time, through open market purchases or in negotiated private transactions, and the purchases are based on factors, including but not limited to, the stock price, management discretion and general market conditions. The 2011 Share Repurchase Program has no expiration date.

During the six months ended June 30, 2018, cash increased $47.4 million from operating activities, $5.0 million from proceeds from issuance of long-term debt and $0.4 million from other investing and financing activities. This increase was offset by $190.0 million used to repay long-term debt, $26.2 million used for capital expenditures, a $7.6 million purchase of intangible assets and $3.7 million to repurchase common stock for tax withholding on equity awards, resulting in a $181.4 million decrease in available cash, cash equivalents and restricted cash (including the unfavorable effects of foreign currency exchange rates on cash, cash equivalents and restricted cash of $6.7 million).

Net cash flows provided by operating activities for the six months ended June 30, 2018 were $47.4 million, compared to $71.6 million for the comparable period in 2017. The $24.2 million decrease in net cash flows from operating activities was due to a $9.4 million decrease in net income, a net decrease of $10.2 million in cash flows from assets and liabilities and a $4.6 million decrease in non-cash reconciling items such as depreciation, amortization, impairment and deferred income tax provision (benefit). The $10.2 million decrease in 2018 from 2017 in cash flows from assets and liabilities was principally a result of a $17.4 million increase in accounts receivable, a $3.0 million increase in other assets and a $2.6 million decrease in deferred revenue, partially offset by a $7.6 million decrease in taxes receivable, net, and a $5.2 million increase in other liabilities. The $17.4 million increase in the change in accounts receivable in the six months ended June 30, 2018 over the comparable period in 2017 was primarily due to the timing of billings and collections. The $7.6 million decrease in the change in taxes receivable, net, in the six months ended

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June 30, 2018 over the comparable period in 2017 was primarily due to the effective settlement of the Canadian Revenue Agency audit and an increase in tax liabilities.

Capital expenditures, which are generally funded by cash generated from operating activities, available cash balances and borrowings available under our credit facilities, were $26.2 million for the six months ended June 30, 2018, compared to $35.9 million for the comparable period in 2017, a decrease of $9.7 million. In 2018, we anticipate capital expenditures in the range of $45.0 million to $50.0 million, primarily for new seat additions, facility upgrades, maintenance and systems infrastructure.

On May 12, 2015, we entered into a $440 million revolving credit facility (the “Credit Agreement”) with a group of lenders and KeyBank National Association, as Lead Arranger, Sole Book Runner and Administrative Agent, Swing Line Lender and Issuing Lender (“KeyBank”). The Credit Agreement is subject to certain borrowing limitations and includes certain customary financial and restrictive covenants. At June 30, 2018, we were in compliance with all loan requirements of the Credit Agreement and had $90.0 million of outstanding borrowings under this facility.

Our Credit Agreement had an average daily utilization of $100.1 million and $267.0 million during the three months ended June 30, 2018 and 2017, respectively, and $110.7 million and $267.0 million during the six months ended June 30, 2018 and 2017, respectively. During the three months ended June 30, 2018 and 2017, the related interest expense, including the commitment fee and excluding the amortization of deferred loan fees, was $0.9 million and $1.6 million, respectively, which represented weighted average interest rates of 3.7% and 2.4%, respectively. During the six months ended June 30, 2018 and 2017, the related interest expense, including the commitment fee and excluding the amortization of deferred loan fees, was $1.9 million and $3.0 million, respectively, which represented weighted average interest rates of 3.5% and 2.3%, respectively.

The Credit Agreement includes a $200 million alternate-currency sub-facility, a $10 million swingline sub-facility and a $35 million letter of credit sub-facility, and may be used for general corporate purposes including acquisitions, share repurchases, working capital support and letters of credit, subject to certain limitations. We are not currently aware of any inability of our lenders to provide access to the full commitment of funds that exist under the Credit Agreement, if necessary. However, there can be no assurance that such facility will be available to us, even though it is a binding commitment of the financial institutions. The Credit Agreement will mature on May 12, 2020.

Borrowings under the Credit Agreement bear interest at the rates set forth in the Credit Agreement. In addition, we are required to pay certain customary fees, including a commitment fee determined quarterly based on our leverage ratio and due quarterly in arrears as calculated on the average unused amount of the Credit Agreement.

The Credit Agreement is guaranteed by all our existing and future direct and indirect material U.S. subsidiaries and secured by a pledge of 100% of the non-voting and 65% of the voting capital stock of all of our direct foreign subsidiaries and those of the guarantors.

We received assessments for the Canadian 2003-2009 audit. Requests for Competent Authority Assistance were filed with both the Canadian Revenue Agency and the U.S. Internal Revenue Service and we paid mandatory security deposits to Canada as part of this process of approximately $13.8 million. As of June 30, 2017, we determined that all material aspects of the Canadian audit were effectively settled pursuant to ASC 740, Income Taxes. As a result, we recognized a net income tax benefit of $1.2 million and the deposits were netted against the anticipated liability at that time. During the three months ended June 30, 2018, we finalized procedures ancillary to the Canadian audit and recognized an additional $2.7 million income tax benefit due to the elimination of certain penalties, interest and assessed withholding taxes.

With the effective settlement of the Canadian audit, we have no significant tax jurisdictions under audit; however, we are currently under audit in several tax jurisdictions. We believe we are adequately reserved for the remaining audits and their resolution is not expected to have a material impact on our financial condition and results of operations.

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The 2017 Tax Reform Act provides for a one-time transition tax based on our undistributed foreign earnings on which we previously had deferred U.S. income taxes. We recorded a $28.3 million provisional liability, which is net of $5.0 million of available tax credits, for our one-time transition tax. As of June 30, 2018, $2.1 million of the provisional liability was netted in “Income taxes receivable” and $3.8 million was included in “Income taxes payable” as of December 31, 2017 in the accompanying Condensed Consolidated Balance Sheets. As of June 30, 2018 and December 31, 2017, $22.4 million and $24.5 million, respectively, of the long-term provisional liability were included in “Long-term income tax liabilities” in the accompanying Condensed Consolidated Balance Sheets. This transition tax liability will be paid over the next eight years. As of December 31, 2017, no additional income taxes have been provided for any remaining outside basis difference inherent in our investments in our foreign subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations.

On July 9, 2018, we entered into and closed a definitive Share Sale Agreement to acquire all the outstanding shares of WhistleOut Pty Ltd and WhistleOut Inc. (together, “WhistleOut”) for AUD 30.2 million ($22.4 million). The purchase price was paid upon closing using $22.0 million of additional borrowings under our Credit Agreement. WhistleOut is a consumer comparison platform focused on mobile, broadband and pay TV services, principally across Australia and the U.S. The acquisition broadens our digital marketing capabilities geographically and extends our home services product portfolio.

As of June 30, 2018, we had $162.4 million in cash and cash equivalents, of which approximately 87.9%, or $142.7 million, was held in international operations. As a result of the 2017 Tax Reform Act, most of these funds will not be subject to additional taxes if repatriated to the United States. There are circumstances where we may be unable to repatriate some of the cash and cash equivalents held by our international operations due to country restrictions.

We expect our current cash levels and cash flows from operations to be adequate to meet our anticipated working capital needs, including investment activities such as capital expenditures and debt repayment for the next twelve months and the foreseeable future. However, from time to time, we may borrow funds under our Credit Agreement as a result of the timing of our working capital needs, including capital expenditures.

Our cash resources could also be affected by various risks and uncertainties, including but not limited to, the risks described in our Annual Report on Form 10-K for the year ended December 31, 2017.

Off-Balance Sheet Arrangements and Other

As of June 30, 2018, we did not have any material commercial commitments, including guarantees or standby repurchase obligations, or any relationships with unconsolidated entities or financial partnerships, including entities often referred to as structured finance or special purpose entities or variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

From time to time, during the normal course of business, we may make certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. These include, but are not limited to: (i) indemnities to clients, vendors and service providers pertaining to claims based on negligence or willful misconduct and (ii) indemnities involving breach of contract, the accuracy of representations and warranties, or other liabilities assumed by us in certain contracts. In addition, we have agreements whereby we will indemnify certain officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that limits our exposure and enables us to recover a portion of any future amounts paid. We believe the applicable insurance coverage is generally adequate to cover any estimated potential liability under these indemnification agreements. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential for future payments we could be obligated to make. We have not recorded any liability for these indemnities, commitments and other guarantees in the accompanying Condensed Consolidated Balance Sheets. In addition, we have some client contracts that do not contain contractual provisions for the limitation of liability and other client contracts that contain agreed upon exceptions to limitation of liability. We have not recorded any liability in the accompanying Condensed Consolidated Balance Sheets with respect to any client contracts under which we have or may have unlimited liability.

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Contractual Obligations

During the six months ended June 30, 2018, we repaid $185.0 million, net, of long-term debt outstanding under our Credit Agreement, primarily using funds repatriated from our foreign subsidiaries, resulting in a remaining outstanding debt balance of $90.0 million.

See Note 13, Commitments and Loss Contingency, to the accompanying “Notes to Condensed Consolidated Financial Statements” for operating leases and purchase obligations entered into in the normal course of business during the six months ended June 30, 2018.

See Note 19, Subsequent Event, to the accompanying “Notes to Condensed Consolidated Financial Statements” for information related to an acquisition we completed on July 9, 2018.

Except for the contractual obligations mentioned above, there have not been any material changes to the outstanding contractual obligations from the disclosure in our Annual Report on Form 10-K as of and for the year ended December 31, 2017.

Critical Accounting Estimates

See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017 for a discussion of our critical accounting estimates.

The adoption of ASC 606 did not result in a material change to our “Recognition of Revenues” critical accounting estimate. See Note 2, Revenues, of the accompanying “Notes to Condensed Consolidated Financial Statements” for further information on the adoption of ASC 606.

New Accounting Standards Not Yet Adopted

See Note 1, Overview and Basis of Presentation, of the accompanying “Notes to Condensed Consolidated Financial Statements” for information related to recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Risk

Our earnings and cash flows are subject to fluctuations due to changes in currency exchange rates. We are exposed to foreign currency exchange rate fluctuations when subsidiaries with functional currencies other than the U.S. Dollar (“USD”) are translated into our USD consolidated financial statements. As exchange rates vary, those results, when translated, may vary from expectations and adversely impact profitability. The cumulative translation effects for subsidiaries using functional currencies other than USD are included in “Accumulated other comprehensive income (loss)” in shareholders’ equity. Movements in non-USD currency exchange rates may negatively or positively affect our competitive position, as exchange rate changes may affect business practices and/or pricing strategies of non-U.S. based competitors.

We employ a foreign currency risk management program that periodically utilizes derivative instruments to protect against unanticipated fluctuations in certain earnings and cash flows caused by volatility in foreign currency exchange (“FX”) rates. We also utilize derivative contracts to hedge intercompany receivables and payables that are denominated in a foreign currency and to hedge net investments in foreign operations.

We serve a number of U.S.-based clients using customer engagement center capacity in The Philippines and Costa Rica, which are within our Americas segment. Although a substantial portion of the costs incurred to render services under these contracts are denominated in Philippine Pesos (“PHP”) and Costa Rican Colones (“CRC”), the contracts with these clients are priced in USDs, which represent FX exposures. Additionally, our EMEA segment services clients in Hungary and Romania with a substantial portion of the costs incurred to render services under these contracts denominated in Hungarian Forints (“HUF”) and Romanian Leis (“RON”), where the contracts are priced in Euros (“EUR”).

In order to hedge a portion of our anticipated revenues denominated in USD and EUR, we had outstanding forward contracts and options as of June 30, 2018 with counterparties through September 2019 with notional amounts totaling $206.3 million. As of June 30, 2018, we had net total derivative liabilities associated with these contracts with a fair value of $0.4 million. If the USD was to weaken against the PHP and CRC and the EUR was to weaken against the

58

HUF and RON by 10% from current period-end levels, we would incur a loss of approximately $18.6 million on the underlying exposures of the derivative instruments. However, this loss would be mitigated by corresponding gains on the underlying exposures.

We had outstanding forward exchange contracts as of June 30, 2018 with notional amounts totaling $6.2 million that are not designated as hedges. The purpose of these derivative instruments is to protect against FX volatility pertaining to intercompany receivables and payables, and other assets and liabilities that are denominated in currencies other than our subsidiaries’ functional currencies. As of June 30, 2018, the fair value of these derivatives was a net liability of $0.2 million. The potential loss in fair value at June 30, 2018, for these contracts resulting from a hypothetical 10% adverse change in the foreign currency exchange rates is approximately $1.3 million. However, this loss would be mitigated by corresponding gains on the underlying exposures.

We had embedded derivative contracts with notional amounts totaling $12.7 million that are not designated as hedges. As of June 30, 2018, the fair value of these derivatives was a net liability of $0.6 million. The potential loss in fair value at June 30, 2018, for these contracts resulting from a hypothetical 10% adverse change in the foreign currency exchange rates is approximately $1.9 million. However, this loss would be mitigated by corresponding gains on the underlying exposures.

We evaluate the credit quality of potential counterparties to derivative transactions and only enter into contracts with those considered to have minimal credit risk. We periodically monitor changes to counterparty credit quality as well as our concentration of credit exposure to individual counterparties.

We do not use derivative financial instruments for speculative trading purposes, nor do we hedge our foreign currency exposure in a manner that entirely offsets the effects of changes in foreign exchange rates. As a general rule, we do not use financial instruments to hedge local currency denominated operating expenses in countries where a natural hedge exists. For example, in many countries, revenue from the local currency services substantially offsets the local currency denominated operating expenses.

Interest Rate Risk

Our exposure to interest rate risk results from variable rate debt outstanding under our revolving credit facility. We pay interest on outstanding borrowings at interest rates that fluctuate based upon changes in various base rates. As of June 30, 2018, we had $90.0 million in borrowings outstanding under the revolving credit facility. Based on our level of variable rate debt outstanding during the three and six months ended June 30, 2018, a 1.0% increase in the weighted average interest rate, which generally equals the LIBOR rate plus an applicable margin, would have had an impact of $0.2 million and $0.5 million, respectively, on our results of operations.

We have not historically used derivative instruments to manage exposure to changes in interest rates.

Fluctuations in Quarterly Results

For the year ended December 31, 2017, quarterly revenues as a percentage of total consolidated annual revenues were approximately 24%, 24%, 26% and 26%, respectively, for each of the respective quarters of the year. We have experienced and anticipate that in the future we will experience variations in quarterly revenues. The variations are due to the timing of new contracts and renewal of existing contracts, the timing and frequency of client spending for customer engagement services, non-U.S. currency fluctuations, and the seasonal pattern of customer engagement support and fulfillment services.

Item 4. Controls and Procedures

As of June 30, 2018, under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a – 15(e) under the Securities Exchange Act of 1934, as amended. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time period specified by the SEC’s rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We concluded that, as of June 30, 2018, our disclosure controls and procedures were effective at the reasonable assurance level.

There were no changes in our internal controls over financial reporting during the quarter ended June 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

59

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in legal actions arising in the ordinary course of business. With respect to these matters, we believe that we have adequate legal defenses and/or, when possible and appropriate, has provided adequate accruals related to those matters such that the ultimate outcome will not have a material adverse effect on our future financial position or results of operations.

Item 1A. Risk Factors

For risk factors, see Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2017.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Below is a summary of stock repurchases for the three months ended June 30, 2018 (in thousands, except average price per share). See Note 12, Earnings Per Share, of “Notes to Condensed Consolidated Financial Statements” for information regarding our stock repurchase program.

Period	Total Number of Shares   Purchased		Average     Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or  Programs		Maximum Number of Shares That May Yet Be Purchased Under Plans or Programs (1)
April 1, 2018 - April 30, 2018		-	$	-		-		4,748
May 1, 2018 - May 31, 2018		-	$	-		-		4,748
June 1, 2018 - June 30, 2018		-	$	-		-		4,748
Total		-				-		4,748

⁽¹⁾ The total number of shares approved for repurchase under the 2011 Share Repurchase Plan dated August 18, 2011, as amended on March 16, 2017, is 10.0 million. The 2011 Share Repurchase Plan has no expiration date.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

60

Item 6. Exhibits

The following documents are filed as an exhibit to this Report:

No.	Description
15*	Awareness letter.
31.1*	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a).
31.2*	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a).
32.1**	Certification of Chief Executive Officer, pursuant to 18 U.S.C. §1350.
32.2**	Certification of Chief Financial Officer, pursuant to 18 U.S.C. §1350.
101.INS*+	XBRL Instance Document
101.SCH*+	XBRL Taxonomy Extension Schema Document
101.CAL*+	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*+	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*+	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*+	XBRL Taxonomy Extension Definition Linkbase Document
*	Filed herewith as an Exhibit.
**	Furnished herewith as an Exhibit.
+	Submitted electronically with this Quarterly Report.

61

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SYKES ENTERPRISES, INCORPORATED
	(Registrant)
Date: August 7, 2018	By: /s/ John Chapman
	John Chapman
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

62

EX-15

Exhibit 15

August 7, 2018

Sykes Enterprises, Incorporated

400 North Ashley Drive

Tampa, Florida

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of Sykes Enterprises, Incorporated and subsidiaries for the periods ended June 30, 2018, and 2017, as indicated in our report dated August 7, 2018; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, is incorporated by reference in Registration Statement No. 333-178670 on Form S-8.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ Deloitte & Touche LLP

Tampa, Florida

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a)

I, Charles E. Sykes, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sykes Enterprises, Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal quarter (the company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: August 7, 2018

/s/ Charles E. Sykes

Charles E. Sykes, President, Chief Executive Officer and Director

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a)

I, John Chapman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sykes Enterprises, Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal quarter (the company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: August 7, 2018

/s/ John Chapman

John Chapman, Executive Vice President and Chief Financial Officer   

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Sykes Enterprises, Incorporated (the “Company”) on Form 10-Q for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles E. Sykes, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 7, 2018     By: /s/ Charles E. Sykes

                                              Charles E. Sykes

                                              President and Chief Executive Officer and Director

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Sykes Enterprises, Incorporated (the “Company”) on Form 10-Q for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Chapman, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 7, 2018     By: /s/ John Chapman

                                              John Chapman

                                              Executive Vice President and Chief Financial Officer

                                              (Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 19, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	SYKE
Entity Registrant Name	SYKES ENTERPRISES INC
Entity Central Index Key	0001010612
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		42,821,212

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 162,422	$ 343,734
Receivables, net	347,885	341,958
Prepaid expenses	23,516	22,132
Other current assets	19,140	19,743
Total current assets	552,963	727,567
Property and equipment, net	142,920	160,790
Goodwill, net	265,991	269,265
Intangibles, net	139,829	140,277
Deferred charges and other assets	32,698	29,193
Total assets	1,134,401	1,327,092
Current liabilities:
Accounts payable	22,236	32,133
Accrued employee compensation and benefits	98,557	102,899
Income taxes payable	843	2,606
Deferred revenue and customer liabilities	32,503	34,717
Other accrued expenses and current liabilities	36,765	30,888
Total current liabilities	190,904	203,243
Deferred grants	2,913	3,233
Long-term debt	90,000	275,000
Long-term income tax liabilities	24,471	27,098
Other long-term liabilities	25,250	22,039
Total liabilities	333,538	530,613
Commitments and loss contingency (Note 13)
Shareholders' equity:
Preferred stock, $0.01 par value per share, 10,000 shares authorized; no shares issued and outstanding
Common stock, $0.01 par value per share, 200,000 shares authorized; 42,821 and 42,899 shares issued, respectively	428	429
Additional paid-in capital	282,622	282,385
Retained earnings	567,988	546,843
Accumulated other comprehensive income (loss)	(47,933)	(31,104)
Treasury stock at cost: 122 and 117 shares, respectively	(2,242)	(2,074)
Total shareholders' equity	800,863	796,479
Total liabilities and shareholders' equity	$ 1,134,401	$ 1,327,092

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	42,821,000	42,899,000
Treasury stock, shares	122,000	117,000

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Revenues	$ 396,785	$ 375,438	$ 811,156	$ 759,452
Operating expenses:
Direct salaries and related costs	264,924	248,615	539,996	495,751
General and administrative	102,037	92,236	204,477	184,280
Depreciation, net	14,560	13,820	29,396	27,168
Amortization of intangibles	3,629	5,250	7,842	10,481
Impairment of long-lived assets	5,175	4,189	8,701	4,391
Total operating expenses	390,325	364,110	790,412	722,071
Income from operations	6,460	11,328	20,744	37,381
Other income (expense):
Interest income	175	144	346	299
Interest (expense)	(1,149)	(1,865)	(2,355)	(3,564)
Other income (expense), net	(537)	793	(382)	1,606
Total other income (expense), net	(1,511)	(928)	(2,391)	(1,659)
Income before income taxes	4,949	10,400	18,353	35,722
Income taxes	(2,229)	1,555	227	8,165
Net income	$ 7,178	$ 8,845	$ 18,126	$ 27,557
Net income per common share:
Basic	$ 0.17	$ 0.21	$ 0.43	$ 0.66
Diluted	$ 0.17	$ 0.21	$ 0.43	$ 0.66
Weighted average common shares outstanding:
Basic	42,125	41,854	42,035	41,756
Diluted	42,160	41,934	42,197	41,919

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 7,178	$ 8,845	$ 18,126	$ 27,557
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments, net of taxes	(13,597)	16,484	(13,306)	20,382
Unrealized gain (loss) on net investment hedges, net of taxes		(2,936)		(3,304)
Unrealized gain (loss) on cash flow hedging instruments, net of taxes	(481)	(396)	(3,374)	136
Unrealized actuarial gain (loss) related to pension liability, net of taxes	(46)	(16)	(129)	(39)
Unrealized gain (loss) on postretirement obligation, net of taxes	(10)	(12)	(20)	(25)
Other comprehensive income (loss), net of taxes	(14,134)	13,124	(16,829)	17,150
Comprehensive income (loss)	$ (6,956)	$ 21,969	$ 1,297	$ 44,707

XML

Condensed Consolidated Statements of Changes in Shareholders' Equity - 6 months ended Jun. 30, 2018 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]
Beginning Balance at Dec. 31, 2017	$ 796,479	$ 429	$ 282,385	$ 546,843	$ (31,104)	$ (2,074)
Beginning Balance, shares at Dec. 31, 2017		42,899
Stock-based compensation expense	3,750		3,750
Issuance of common stock under equity award plans, net of forfeitures			168			(168)
Issuance of common stock under equity award plans, net of forfeitures, Share		40
Shares repurchased for tax withholding on equity awards	(3,682)	$ (1)	(3,681)
Shares repurchased for tax withholding on equity awards, Share		(118)
Comprehensive income (loss)	1,297			18,126	(16,829)
Ending Balance at Jun. 30, 2018	800,863	$ 428	$ 282,622	567,988	$ (47,933)	$ (2,242)
Ending Balance, shares at Jun. 30, 2018		42,821
Cumulative effect of accounting change | Accounting Standards Update 2014-09 [Member]	$ 3,019			$ 3,019

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 18,126	$ 27,557
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	29,651	27,423
Amortization of intangibles	7,842	10,481
Amortization of deferred grants	(344)	(374)
Impairment losses	8,701	4,391
Unrealized foreign currency transaction (gains) losses, net	(370)	(611)
Stock-based compensation expense	3,750	4,732
Deferred income tax provision (benefit)	1,070	9,785
Unrealized (gains) losses and premiums on financial instruments, net	625	42
Amortization of deferred loan fees	134	134
Imputed interest expense and fair value adjustments to contingent consideration		(633)
Other	(90)	144
Changes in assets and liabilities, net of acquisitions:
Receivables, net	(8,370)	9,059
Prepaid expenses	(1,611)	78
Other current assets	(2,016)	(1,855)
Deferred charges and other assets	(2,186)	(1,008)
Accounts payable	(5,499)	2,420
Income taxes receivable / payable	(6,526)	(14,086)
Accrued employee compensation and benefits	(2,349)	(1,779)
Other accrued expenses and current liabilities	5,079	(2,916)
Deferred revenue and customer liabilities	(155)	2,398
Other long-term liabilities	1,922	(3,813)
Net cash provided by operating activities	47,384	71,569
Cash flows from investing activities:
Capital expenditures	(26,232)	(35,859)
Cash paid for business acquisitions, net of cash acquired		(7,500)
Purchase of intangible assets	(7,606)	(275)
Other	484	25
Net cash (used for) investing activities	(33,354)	(43,609)
Cash flows from financing activities:
Payments of long-term debt	(190,000)
Proceeds from issuance of long-term debt	5,000
Shares repurchased for tax withholding on equity awards	(3,682)	(3,860)
Payments of contingent consideration related to acquisitions		(4,528)
Other	38	107
Net cash (used for) financing activities	(188,644)	(8,281)
Effects of exchange rates on cash, cash equivalents and restricted cash	(6,748)	15,159
Net increase (decrease) in cash, cash equivalents and restricted cash	(181,362)	34,838
Cash, cash equivalents and restricted cash - beginning	344,805	267,594
Cash, cash equivalents and restricted cash - ending	163,443	302,432
Supplemental disclosures of cash flow information:
Cash paid during period for interest	1,975	3,066
Cash paid during period for income taxes	12,084	17,032
Non-cash transactions:
Property and equipment additions in accounts payable	2,637	3,742
Unrealized gain (loss) on postretirement obligation, net of taxes in accumulated other comprehensive income (loss)	$ (20)	(25)
Shares repurchased for tax withholding on equity awards included in current liabilities		$ 119

XML

Overview and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Overview and Basis of Presentation

Note 1. Overview and Basis of Presentation

Business — Sykes Enterprises, Incorporated and consolidated subsidiaries (“SYKES” or the “Company”) is a leading provider of multichannel demand generation and global customer engagement services. SYKES provides differentiated full lifecycle customer engagement solutions and services to Global 2000 companies and their end customers primarily within the communications, financial services, technology, transportation and leisure, healthcare, retail and other industries. SYKES primarily provides customer engagement solutions and services with an emphasis on inbound multichannel demand generation, customer service and technical support to its clients’ customers. Utilizing SYKES’ integrated onshore/offshore global delivery model, SYKES provides its services through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. SYKES also provides various enterprise support services in the United States that include services for its clients’ internal support operations, from technical staffing services to outsourced corporate help desk services. In Europe, SYKES also provides fulfillment services, which includes order processing, payment processing, inventory control, product delivery and product returns handling. The Company has operations in two reportable segments entitled (1) the Americas, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim, in which the client base is primarily companies in the United States that are using the Company’s services to support their customer management needs; and (2) EMEA, which includes Europe, the Middle East and Africa.

2017 Tax Reform Act

In December 2017, the President of the United States (“U.S.”) signed into law the Tax Cuts and Jobs Act (the “2017 Tax Reform Act”). In general, the 2017 Tax Reform Act reduces the U.S. federal corporate tax rate from 35% to 21%, effective in 2018. The 2017 Tax Reform Act moves from a worldwide business taxation approach to a participation exemption regime. The 2017 Tax Reform Act also imposes base-erosion prevention measures on non-U.S. earnings of U.S. entities, as well as a one-time mandatory deemed repatriation tax on accumulated non-U.S. earnings which was recorded in the fourth quarter of 2017. The impact of the 2017 Tax Reform Act on the consolidated financial results began with the fourth quarter of 2017, the period of enactment. This impact, along with the transitional taxes discussed in Note 11, Income Taxes, is reflected in the Other segment.

Acquisition

On April 24, 2017, the Company entered into a definitive Asset Purchase Agreement (the “Purchase Agreement”) to acquire certain assets from a Global 2000 telecommunications services provider. The aggregate purchase price of $7.5 million was paid on May 31, 2017, using cash on hand, resulting in $6.0 million of property and equipment and $1.5 million of customer relationship intangibles (the “Telecommunications Asset acquisition”). The Purchase Agreement contains customary representations and warranties, indemnification obligations and covenants. The Telecommunications Asset acquisition was completed to strengthen and create new partnerships for the Company and expand its geographic footprint in North America. The results of the Telecommunications Assets’ operations have been included in the Company’s consolidated financial statements in the Americas segment since its acquisition on May 31, 2017.

The Company accounted for the Telecommunications Asset acquisition in accordance with ASC 805, Business Combinations, whereby the fair value of the purchase price was allocated to the tangible and identifiable intangible assets acquired based on their estimated fair values as of the closing date. The Company completed its analysis of the purchase price allocation during the second quarter of 2017.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, 2018. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”) on March 1, 2018.

Principles of Consolidation — The condensed consolidated financial statements include the accounts of SYKES and its wholly-owned subsidiaries and controlled majority-owned subsidiaries. Investments in less than majority-owned subsidiaries in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Subsequent Events — Subsequent events or transactions have been evaluated through the date and time of issuance of the condensed consolidated financial statements. On July 9, 2018, the Company entered into and closed a definitive Share Sale Agreement (“Sale Agreement”) to acquire all the outstanding shares of WhistleOut Pty Ltd and WhistleOut Inc. (together, known as “WhistleOut”) for AUD 30.2 million ($22.4 million). See Note 19, Subsequent Event, for further information. There were no other material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements.

Cash, Cash Equivalents and Restricted cash — Cash and cash equivalents consist of cash and highly liquid short-term investments, primarily held in non-interest-bearing investments which have original maturities of less than 90 days. Restricted cash includes cash whereby the Company’s ability to use the funds at any time is contractually limited or is generally designated for specific purposes arising out of certain contractual or other obligations.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets that sum to the amounts reported in the Condensed Consolidated Statements of Cash Flows (in thousands):

	June 30, 2018		December 31, 2017		June 30, 2017		December 31, 2016
Cash and cash equivalents	$	162,422	$	343,734	$	301,451	$	266,675
Restricted cash included in “Other current assets”		153		154		158		160
Restricted cash included in “Deferred charges and other assets”		868		917		823		759
	$	163,443	$	344,805	$	302,432	$	267,594

Investments in Equity Method Investees — The Company uses the equity method to account for investments in companies if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company’s proportionate share of the net income or loss of an equity method investment is included in consolidated net income. Judgment regarding the level of influence over an equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.

The Company evaluates an equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and near-term prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. As of June 30, 2018 and December 31, 2017, the Company did not identify any instances where the carrying values of its equity method investments were not recoverable.

In July 2017, the Company made a strategic investment of $10.0 million in XSell Technologies, Inc. (“XSell”) for 32.8% of XSell’s preferred stock. The Company plans to incorporate XSell’s machine learning and artificial intelligence algorithms into its business. The Company believes this will increase the sales performance of its agents to drive revenue for its clients, improve the experience of the Company’s clients’ end customers and enhance brand loyalty, reduce the cost of customer care and leverage analytics and machine learning to source the best agents and improve their performance.

The Company’s net investment in XSell of $9.6 million and $9.8 million was included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, respectively. The Company paid $5.0 million in July 2017 with the remaining $5.0 million included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017. The Company’s proportionate share of XSell’s income (loss) of $(0.1) million and $(0.3) million was included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018, respectively (none in 2017).

Customer-Acquisition Advertising Costs — The Company’s advertising costs are expensed as incurred. Total advertising costs included in “Direct salaries and related costs” in the accompanying Condensed Consolidated Statements of Operations for the three months ended June 30, 2018 and 2017 were $12.0 million and $8.6 million, respectively, and $22.0 million and $18.4 million for the six months ended June 30, 2018 and 2017, respectively. Total advertising costs included in “General and administrative” in the accompanying Condensed Consolidated Statements of Operations for the three months ended June 30, 2018 and 2017 were less than $0.1 million and $0.1 million, respectively, and less than $0.1 million and $0.1 million for the six months ended June 30, 2018 and 2017, respectively.

Reclassifications — Certain balances in the prior period have been reclassified to conform to current period presentation.

New Accounting Standards Not Yet Adopted

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”) and subsequent amendments (together, “ASC 842”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840, Leases. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities have the option to either apply the amendments (1) at the beginning of the earliest period presented using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or (2) at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. There are also certain optional practical expedients that an entity may elect to apply.

The Company’s implementation team has compiled a detailed inventory of leases and a preliminary analysis of the impact to the financial statements. The Company continues to evaluate the critical factors of ASC 842. Based on an assessment of the Company’s business and system requirements, the implementation team has selected a lease accounting software solution to assist the Company in complying with ASC 842. The Company expects the adoption of ASC 842 to result in a material increase in the assets and liabilities on the consolidated balance sheets as a result of recognizing right-of-use assets and lease liabilities for existing operating leases based on the amount of the Company’s current lease commitments. The Company believes that the majority of its leases will maintain their current lease classification under ASC 842. The Company does not expect these amendments to have a material effect on its expense recognition timing or cash flows and, as a result, the Company expects the adoption of ASC 842 will result in an insignificant impact on the Company’s consolidated statements of income and on the consolidated statements of cash flows. The Company is continuing to evaluate the magnitude of the impact and related disclosures, as well as the timing and method of adoption, with respect to the transition method and optional practical expedients. The Company is also continuing to evaluate the full impact of ASC 842, as well as its impacts on its business processes, systems, and internal controls.

Derivatives and Hedging

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedge Activities (“ASU 2017-12”). These amendments help simplify certain aspects of hedge accounting and better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. For cash flow and net investment hedges as of the adoption date, the guidance requires a modified retrospective approach. The amended presentation and disclosure guidance is required only prospectively. These amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early application permitted in any interim period after issuance of this update. The Company does not expect the adoption of ASU 2017-12 to materially impact its financial condition, results of operations, cash flows and disclosures.

Financial Instruments – Credit Losses

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). These amendments require measurement and recognition of expected versus incurred credit losses for financial assets held. These amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the guidance will have on its financial condition, results of operations and cash flows.

New Accounting Standards Recently Adopted

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) and subsequent amendments (together, “ASC 606”). ASC 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and indicates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. See Note 2, Revenues, for further details.

Financial Instruments

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). These amendments modify how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception applies to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under ASC 820, Fair Value Measurements, and as such, these investments may be measured at cost. These amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). These amendments clarify the presentation of cash receipts and payments in eight specific situations. These amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. These amendments have been applied using a retrospective transition method to each period presented. The adoption of ASU 2016-15 on January 1, 2018 did not have a material impact on the Company’s cash flows.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash (A Consensus of the FASB Emerging Issues Task Force (“ASU 2016-18”). These amendments clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows, requiring entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. These amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. These amendments have been applied using a retrospective transition method to each period presented. The inclusion of restricted cash increased the beginning balance of cash in the Condensed Consolidated Statements of Cash Flows by $1.1 million for the six months ended June 30, 2018 and increased the beginning and ending balances of cash by $0.9 million and $1.0 million, respectively, for the six months ended June 30, 2017. Other than the change in presentation within the accompanying Condensed Consolidated Statements of Cash Flows, the retrospective adoption of ASU 2016-18 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Income Taxes

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory (“ASU 2016-16”). These amendments require recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. These amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The adoption of ASU 2016-16 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements and no cumulative-effect adjustment to retained earnings was required.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the 2017 Tax Reform Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period costs are both acceptable methods subject to an accounting policy election. The Company evaluated the accounting treatment options related to the GILTI provisions and elected to treat any potential GILTI inclusions as a current period cost. The election did not have a material impact on the Company’s consolidated financial statements.

In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). These amendments add various SEC paragraphs pursuant to the issuance of SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). SAB 118, issued in December 2017, directs taxpayers to consider the implications of the 2017 Tax Reform Act as provisional when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. As described in Note 11, Income Taxes, and in accordance with SAB 118, the Company recorded amounts that were considered provisional.

Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”). These amendments allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the 2017 Tax Reform Act. These amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendment in this update is permitted, including adoption in any interim period. These amendments can be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate tax rate in the 2017 Tax Reform Act is recognized. The early adoption of ASU 2018-02 on June 30, 2018 had no impact on the Company’s consolidated financial statements or disclosures.

Business Combinations

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) – Clarifying the Definition of a Business (“ASU 2017-01”). These amendments clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. These amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. These amendments were applied prospectively. The adoption of ASU 2017-01 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Retirement Benefits

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). These amendments require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic benefit cost are required to be presented in the income statement separately from the service cost component outside of a subtotal of income from operations. If a separate line item is not used, the line items used in the income statement to present other components of net benefit cost must be disclosed. These amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. These amendments were applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The amendments allow a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.

The Company adopted the income statement presentation aspects of ASU 2017-07 on a retrospective basis effective January 1, 2018. The following is a reconciliation of the effect of the reclassification of the interest cost and amortization of actuarial gain (loss) from operating expenses to other income (expense) in the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017 (in thousands):

	As Previously Reported		Adjustments Due to the Adoption of ASU 2017-07			As Revised
Three Months Ended June 30, 2017:
Direct salaries and related costs	$	248,643	$	(28	)	$	248,615
General and administrative		92,246		(10	)		92,236
Income from operations		11,290		38			11,328
Other income (expense), net		831		(38	)		793
Six Months Ended June 30, 2017:
Direct salaries and related costs	$	495,808	$	(57	)	$	495,751
General and administrative		184,300		(20	)		184,280
Income from operations		37,304		77			37,381
Other income (expense), net		1,683		(77	)		1,606

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Revenues

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenues

Note 2. Revenues

Adoption of ASC 606, Revenue from Contracts with Customers

On January 1, 2018, the Company adopted ASC 606, which includes ASU 2014-09 and all related amendments, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting for revenues under ASC 605, Revenue Recognition (“ASC 605”).

The Company recorded an increase to opening retained earnings of $3.0 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact, all in the Americas segment, primarily related to the change in timing of revenue recognition associated with certain customer contracts that provide fees upon renewal, as well as changes in estimating variable consideration with respect to penalties and holdback provisions for failure to meet specified minimum service levels and other performance-based contingencies. Revenues recognized under ASC 606 are expected to be slightly higher during 2018 than revenues would have been under ASC 605. This is primarily attributable to the change in the timing of revenue recognition, as discussed above. The impact on revenues recognized for the three and six months ended June 30, 2018 is reported below.

The cumulative effect of the adjustments made to the Company’s Condensed Consolidated Balance Sheet as of December 31, 2017 for the line items impacted by the adoption of ASC 606 was as follows (in thousands):

	December 31, 2017		Adjustments     Due to the Adoption of ASC 606			January 1, 2018
Receivables, net	$	341,958	$	825		$	342,783
Deferred charges and other assets		29,193		2,045			31,238
Income taxes payable		2,606		697			3,303
Deferred revenue and customer liabilities		34,717		(1,048	)		33,669
Other long-term liabilities		22,039		202			22,241
Retained earnings		546,843		3,019			549,862

The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Balance Sheet as of June 30, 2018 were as follows (in thousands):

	As Reported		Balances Without the   Impact of the   ASC 606 Adoption			Effect of Adoption Increase   (Decrease)
June 30, 2018:
Receivables, net	$	347,885	$	345,932		$	1,953
Deferred charges and other assets		32,698		28,280			4,418
Income taxes payable		843		(733	)		1,576
Deferred revenue and customer liabilities		32,503		34,585			(2,082	)
Other long-term liabilities		25,250		25,524			(274	)
Retained earnings		567,988		560,837			7,151

The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Statement of Operations for the three months ended June 30, 2018 were as follows, along with the impact per share (in thousands, except per share data):

	As Reported			Balances Without the Impact of   the ASC 606   Adoption			Effect of   Adoption   Increase (Decrease)
Three Months Ended June 30, 2018:
Revenues	$	396,785		$	394,483		$	2,302
Income from operations		6,460			4,158			2,302
Income before income taxes		4,949			2,647			2,302
Income taxes		(2,229	)		(2,804	)		575
Net income		7,178			5,451			1,727
Net income per common share:
Basic	$	0.17		$	0.13		$	0.04
Diluted	$	0.17		$	0.13		$	0.04

The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Statement of Operations for the six months ended June 30, 2018 were as follows, along with the impact per share (in thousands, except per share data):

	As Reported		Balances Without the Impact of   the ASC 606   Adoption			Effect of   Adoption   Increase (Decrease)
Six Months Ended June 30, 2018:
Revenues	$	811,156	$	805,759		$	5,397
Income from operations		20,744		15,347			5,397
Income before income taxes		18,353		12,956			5,397
Income taxes		227		(1,038	)		1,265
Net income		18,126		13,994			4,132
Net income per common share:
Basic	$	0.43	$	0.33		$	0.10
Diluted	$	0.43	$	0.33		$	0.10

The Company’s net cash provided by operating activities for the six months ended June 30, 2018 did not change due to the adoption of ASC 606.

Practical Expedients

The Company utilized the practical expedient that allows for the application of ASC 606 to a portfolio of contracts (or performance obligations) with similar characteristics if the entity reasonably expects that the effects on the financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio.

Costs of Obtaining Customer Contracts

ASC 606 requires an entity to recognize as an asset the incremental costs of obtaining a contract with a customer if the entity expects to recover those costs. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (e.g., a sales commission). Because the Company’s sales commissions are not directly incremental to obtaining customer contracts, they are expensed as incurred.

Recognition of Revenues Accounting Policy

The Company’s “Recognition of Revenues” accounting policy under ASC 606 is outlined below. For the Company’s accounting policy under ASC 605, see Note 1, Overview and Summary of Significant Accounting Policies, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

The Company recognizes revenues in accordance with ASC 606, whereby revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services.

Customer Engagement Solutions and Services

Under ASC 606, the Company accounts for a contract with a client when it has approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. The Company’s customer engagement solutions and services are classified as stand-ready performance obligations. Because the Company’s customers simultaneously receive and consume the benefits of its services as they are delivered, the performance obligations are satisfied over time. The Company recognizes revenues over time using output methods such as a per minute, per hour, per call, per transaction or per time and materials basis. These output methods faithfully depict the satisfaction of the Company’s obligation to deliver the services as requested and represent a direct measurement of value to the customer. The Company’s contracts have a single performance obligation as the promise to transfer the customer solutions and services are not separately identifiable from other promises in the contract, and therefore not distinct.

The stated term of the Company’s contracts with customers range from 30 days to six years. The majority of these contracts include termination for convenience or without cause provisions allowing either party to cancel the contract without substantial cost or penalty within a defined notification period (“termination rights”), typically varying periods up to 180 days. Because of the termination rights, only the noncancelable portion qualifies as a legally enforceable contract under Step 1, Identify the Contract with a Customer, of ASC 606 (“Step 1”) and is accounted for as such, even if the customer is unlikely to exercise its termination right. Furthermore, the amounts excluded from assessment under Step 1 are, in effect, optional customer purchases of additional services.

If the termination right is only provided to the customer, the unsatisfied performance obligations will be evaluated as a customer option. The Company typically does not include options that would result in a material right. If options to purchase additional services or options to renew are included in customer contracts, the Company evaluates the option in order to determine if the arrangement includes promises that may represent a material right and needs to be accounted for as a performance obligation in the contract with the customer.

The Company’s primary billing terms are that payment is due upon receipt of the invoice, payable usually within 30 or 60 days. Invoices are generally issued on a monthly basis as control transfers and/or as services are rendered. Revenue recognition is limited to the established transaction price, the amount to which the Company expects to be entitled to under the contract, including the amount of expected fees for those contracts with renewal provisions, and the amount that is not contingent upon delivery of any future product or service or meeting other specified performance obligations. The transaction price, once determined, is allocated to the single performance obligation on a contract by contract basis.

The Company’s contracts include penalties and holdbacks provisions for failure to meet specified minimum service levels and other performance-based contingencies, as well as the right of certain of the Company’s clients to chargeback accounts that do not meet certain requirements for specified periods after a sale has occurred. Certain customers also receive cash discounts for early payment. These provisions are accounted for as variable consideration and are estimated using historical service and pricing trends, the individual contract provisions, and the Company’s best judgment at the time. None of these variable consideration components are subject to constraint due to the short time period to resolution, the Company’s extensive history with similar transactions, and the limited number of possible outcomes and third-party influence. The portion of the consideration received under the contract that the Company expects to ultimately refund to the customer is excluded from the transaction price and is recorded as a refund liability.

Other Revenues

In the Americas, the Company provides a range of enterprise support services including technical staffing services and outsourced corporate help desk services, primarily in the U.S. Revenues for enterprise support services are recognized over time using output methods such as number of positions filled similar to the Company’s outsourced customer engagement services and solutions.

In EMEA, the Company offers fulfillment services that are integrated with its customer care and technical support services. The Company’s fulfillment solutions include order processing, payment processing, inventory control, product delivery and product returns handling. Sales are recognized upon shipment to the customer and satisfaction of all obligations.

The Company also has miscellaneous other revenues in the Other segment.

In total, other revenues are immaterial, representing 0.6% and 0.5% of the Company’s consolidated total revenues for the three months ended June 30, 2018 and 2017, respectively, and 0.6% and 0.6% of the Company’s consolidated total revenues for the six months ended June 30, 2018 and 2017, respectively.

Disaggregated Revenues

The Company disaggregates its revenues from contracts with customers by service type and geographic location (see Note 16, Segments and Geographic Information), for each of its reportable segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by economic factors.

The following table represents revenues from contracts with customers disaggregated by service type for the three and six months ended June 30, 2018 and 2017, by the reportable segment for each category (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
Customer engagement solutions and services	$	326,766	$	314,603	$	667,188	$	635,265
Other revenues		275		268		574		537
Total Americas		327,041		314,871		667,762		635,802
EMEA:
Customer engagement solutions and services		67,772		58,836		139,443		119,905
Other revenues		1,948		1,704		3,904		3,702
Total EMEA		69,720		60,540		143,347		123,607
Other:
Other revenues		24		27		47		43
Total Other		24		27		47		43
	$	396,785	$	375,438	$	811,156	$	759,452

Trade Accounts Receivable

The Company’s trade accounts receivable, net, consists of the following (in thousands):

	June 30, 2018		January 1, 2018
Trade accounts receivable, net, current (1)	$	334,818	$	332,014
Trade accounts receivable, net, noncurrent (2)		4,614		2,078
	$	339,432	$	334,092

⁽¹⁾ Included in “Receivables, net” in the accompanying Condensed Consolidated Balance Sheets. The January 1, 2018 balance includes the $0.8 million adjustment recorded upon adoption of ASC 606.

⁽²⁾ Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets. The January 1, 2018 balance includes a $2.1 million adjustment recorded upon adoption of ASC 606.

The Company’s noncurrent trade accounts receivable result from contracts with customers that include renewal provisions that take effect subsequent to the satisfaction of the associated performance obligations. Payment is expected upon renewal, which occurs in bi-annual and annual increments over the associated expected contract term, the majority of which range from two to five years.

Deferred Revenue and Customer Liabilities

Deferred revenue and customer liabilities consists of the following (in thousands):

	June 30, 2018		January 1, 2018
Deferred revenue	$	4,900	$	4,598
Customer arrangements with termination rights		18,498		21,755
Estimated refund liabilities (1)		9,105		7,316
	$	32,503	$	33,669

⁽¹⁾ The January 1, 2018 balance includes the $1.0 million adjustment recorded upon adoption of ASC 606.

Deferred Revenue

The Company receives up-front fees in connection with certain contracts. In accordance with ASC 606, the up-front fees are recorded as a contract liability only to the extent a legally enforceable contract exists, typically varying periods up to 180 days. Accordingly, the up-front fees allocated to the notification period are recorded as deferred revenue, while the fees that extend beyond the notification period are classified as a customer arrangement with termination rights.

Revenues of $0.3 million and $4.2 million were recognized during the three and six months ended June 30, 2018, respectively, from amounts included in deferred revenue as of January 1, 2018.

The Company expects to recognize its deferred revenue as of June 30, 2018 over the next 180 days.

Customer Liabilities – Customer Arrangements with Termination Rights

Customer arrangements with termination rights represent the amount of up-front fees received for unsatisfied performance obligations for periods that extend beyond the legally enforceable contract period. All customer arrangements with termination rights are classified as current as the customer can terminate the contracts and demand pro-rata refunds of the up-front fees over varying periods, typically up to 180 days. The Company expects to recognize the majority of the customer arrangements with termination rights into revenue as the Company has not historically experienced a high rate of contract terminations.

Customer Liabilities – Refund Liabilities

Refund liabilities represent consideration received under the contract that the Company expects to ultimately refund to the customer and primarily relates to estimated penalties, holdbacks and chargebacks. Penalties and holdbacks result from the failure to meet specified minimum service levels in certain contracts and other performance-based contingencies. Chargebacks reflect the right of certain of the Company’s clients to chargeback accounts that do not meet certain requirements for specified periods after a sale has occurred.

Refund liabilities are generally resolved in 180 days, once it is determined whether the requisite service levels and client requirements were achieved to settle the contingency.

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Costs Associated with Exit or Disposal Activities

6 Months Ended

Jun. 30, 2018

Restructuring and Related Activities [Abstract]

Costs Associated with Exit or Disposal Activities

Note 3. Costs Associated with Exit or Disposal Activities

During the second quarter of 2018, the Company initiated a restructuring plan to streamline excess capacity through targeted seat reductions (the “Americas 2018 Exit Plan”) in an on-going effort to manage and optimize capacity utilization. The Americas 2018 Exit Plan includes, but is not limited to, closing customer contact management centers and consolidating leased space in various locations in the U.S. and Canada. The Company anticipates finalizing the remainder of the site closures under the Americas 2018 Exit Plan by December 2018.

The Company’s actions will result in a reduction in seats as well as anticipated general and administrative cost savings, including lower depreciation expense, resulting from the 2018 site closures.

The cumulative costs expected and incurred as a result of the Americas 2018 Exit Plan are outlined below as of June 30, 2018 (in thousands):

	Costs Expected To Be Incurred		Cumulative  Costs Incurred  To Date		Expected     Remaining     Costs
Lease obligations and facility exit costs (1)	$	6,692	$	3,028	$	3,664
Severance and related costs (2)		3,701		402		3,299
Severance and related costs (1)		488		219		269
Non-cash impairment charges		5,175		5,175		-
	$	16,056	$	8,824	$	7,232

⁽¹⁾ Relates to “General and administrative” costs.

⁽²⁾ Relates to “Direct salaries and related costs.”

The expected remaining severance charges are anticipated to be incurred during the third quarter of 2018. The expected remaining lease obligations and facility exit costs are anticipated to be incurred primarily during the third quarter of 2018 with the balance during the fourth quarter of 2018.

The following table summarizes the accrued liability and related charges for the three and six months ended June 30, 2018 (none in 2017) (in thousands):

	Lease Obligations and Facility Exit Costs			Severance and Related Costs			Total
Balance at the beginning of the period	$	-		$	-		$	-
Charges included in “Direct salaries and related costs”		-			402			402
Charges included in “General and administrative”		3,028			219			3,247
Cash payments		(429	)		(131	)		(560	)
Balance sheet reclassifications (1)		216			-			216
Balance at the end of the period	$	2,815		$	490		$	3,305

⁽¹⁾ Consists of the reclassification of deferred rent balances for locations subject to closure to the restructuring liability.

Restructuring Liability Classification

The following table summarizes the Company’s short-term and long-term accrued liabilities associated with the Americas 2018 Exit Plan as of June 30, 2018 (none in 2017) (in thousands):

	Americas 2018 Exit Plan
Short-term accrued restructuring liability (1)	$	2,726
Short-term accrued restructuring liability (2)		490
Long-term accrued restructuring liability (3)		89
Ending accrual at June 30, 2018	$	3,305

⁽¹⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheet.

⁽²⁾ Included in “Accrued employee compensation and benefits” in the accompanying Condensed Consolidated Balance Sheet.

⁽³⁾ Included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheet.

The long-term accrued restructuring liability relates to future rent obligations to be paid through the remainder of the lease terms, the last of which ends in September 2019.

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Fair Value

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value

Note 4. Fair Value

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy:

● Level 1 — Quoted prices for identical instruments in active markets.

● Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

● Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Fair Value of Financial Instruments — The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

● Cash, short-term and other investments, investments held in rabbi trust and accounts payable — The carrying values for cash, short-term and other investments, investments held in rabbi trust and accounts payable approximate their fair values.

● Foreign currency forward contracts and options — Foreign currency forward contracts and options, including premiums paid on options, are recognized at fair value based on quoted market prices of comparable instruments or, if none are available, on pricing models or formulas using current market and model assumptions, including adjustments for credit risk.

● Embedded derivatives — Embedded derivatives within certain hybrid lease agreements are bifurcated from the host contract and recognized at fair value based on pricing models or formulas using significant unobservable inputs, including adjustments for credit risk.

● Long-term debt — The carrying value of long-term debt approximates its estimated fair value as the debt bears interest based on variable market rates, as outlined in the debt agreement.

● Contingent consideration — The contingent consideration is recognized at fair value based on the discounted cash flow method.

Fair Value Measurements — ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820-10-20 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

ASC 825 Financial Instruments (“ASC 825”) permits an entity to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The Company has not elected to use the fair value option permitted under ASC 825 for any of its financial assets and financial liabilities that are not already recorded at fair value.

Determination of Fair Value —The Company generally uses quoted market prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access to determine fair value and classifies such items in Level 1. Fair values determined by Level 2 inputs utilize inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, and inputs other than quoted market prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, currency exchange rates, etc. Assets or liabilities valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

The following section describes the valuation methodologies used by the Company to measure assets and liabilities at fair value on a recurring basis, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified.

Foreign Currency Forward Contracts and Options — The Company enters into foreign currency forward contracts and options over the counter and values such contracts using quoted market prices of comparable instruments or, if none are available, on pricing models or formulas using current market and model assumptions, including adjustments for credit risk. The key inputs include forward or option foreign currency exchange rates and interest rates. These items are classified in Level 2 of the fair value hierarchy.

Embedded Derivatives — The Company uses significant unobservable inputs to determine the fair value of embedded derivatives, which are classified in Level 3 of the fair value hierarchy. These unobservable inputs include expected cash flows associated with the lease, currency exchange rates on the day of commencement, as well as forward currency exchange rates, the results of which are adjusted for credit risk. These items are classified in Level 3 of the fair value hierarchy. See Note 6, Financial Derivatives, for further information.

Investments Held in Rabbi Trust — The investment assets of the rabbi trust are valued using quoted market prices in active markets, which are classified in Level 1 of the fair value hierarchy. For additional information about the deferred compensation plan, refer to Note 7, Investments Held in Rabbi Trust, and Note 15, Stock-Based Compensation.

Contingent Consideration — The Company uses significant unobservable inputs to determine the fair value of contingent consideration, which is classified in Level 3 of the fair value hierarchy. The contingent consideration recorded related to the acquisition of Qelp B.V. and its subsidiary (together, known as “Qelp”) and liabilities assumed as part of the Clear Link Holdings, LLC (“Clearlink”) acquisition was recognized at fair value using a discounted cash flow methodology and a discount rate of approximately 14.0% and 10.0%, respectively.

The Company’s assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 consist of the following as of June 30, 2018 (in thousands):

			Fair Value Measurements Using:
	Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	June 30, 2018		Level 1		Level 2		Level 3
Assets:
Foreign currency forward and option contracts(1)	$	1,354	$	-	$	1,354	$	-
Equity investments held in rabbi trust for the Deferred Compensation Plan(2)		8,557		8,557		-		-
Debt investments held in rabbi trust for the Deferred Compensation  Plan(2)		3,307		3,307		-		-
	$	13,218	$	11,864	$	1,354	$	-
Liabilities:
Foreign currency forward and option contracts(1)	$	1,903	$	-	$	1,903	$	-
Embedded derivatives(1)		598		-		-		598
	$	2,501	$	-	$	1,903	$	598

The Company’s assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 consist of the following as of December 31, 2017 (in thousands):

			Fair Value Measurements Using:
	Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	December 31, 2017		Level 1		Level 2		Level 3
Assets:
Foreign currency forward and option contracts(1)	$	3,848	$	-	$	3,848	$	-
Embedded derivatives(1)		52		-		-		52
Equity investments held in rabbi trust for the Deferred Compensation Plan(2)		8,094		8,094		-		-
Debt investments held in rabbi trust for the Deferred Compensation Plan(2)		3,533		3,533		-		-
	$	15,527	$	11,627	$	3,848	$	52
Liabilities:
Foreign currency forward and option contracts(1)	$	256	$	-	$	256	$	-
Embedded derivatives(1)		579		-		-		579
	$	835	$	-	$	256	$	579

⁽¹⁾ See Note 6, Financial Derivatives, for the classification in the accompanying Condensed Consolidated Balance Sheets.

⁽²⁾ Included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets. See Note 7, Investments Held in Rabbi Trust.

Reconciliations of Fair Value Measurements Categorized within Level 3 of the Fair Value Hierarchy

Embedded Derivatives in Lease Agreements

A rollforward of the net asset (liability) activity in the Company’s fair value of the embedded derivatives is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Balance at the beginning of the period	$	(409	)	$	(375	)	$	(527	)	$	(555	)
Gains (losses) recognized in “Other income (expense), net”		(252	)		176			(165	)		315
Settlements		38			25			80			70
Effect of foreign currency		25			3			14			(1	)
Balance at the end of the period	$	(598	)	$	(171	)	$	(598	)	$	(171	)
Change in unrealized gains (losses) included in “Other income (expense), net” related to embedded derivatives held at the end of the period	$	(253	)	$	48		$	(171	)	$	183

Contingent Consideration

A rollforward of the activity in the Company’s fair value of the contingent consideration (liability) is as follows (none in 2018) (in thousands):

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
Balance at the beginning of the period	$	(5,633	)	$	(6,100	)
Imputed interest		(34	)		(68	)
Fair value gain (loss) adjustments (1)		268			701
Settlements		4,402			4,528
Effect of foreign currency		(130	)		(188	)
Balance at the end of the period	$	(1,127	)	$	(1,127	)
Change in unrealized gains (losses) included in “General and administrative” related to contingent consideration outstanding at the end of the period	$	268		$	268

⁽¹⁾ Included in “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations.

The Company recorded a fair value gain of $0.3 million and $0.7 million in “General and administrative” during the three and six months ended June 30, 2017, respectively, related to the Clearlink contingent consideration. All outstanding Clearlink contingent consideration liabilities remaining as of June 30, 2017 were paid prior to December 31, 2017.

The Company paid $4.4 million in May 2017 to settle the outstanding Qelp contingent consideration obligation.

The Company accreted interest expense each period using the effective interest method until the contingent consideration reached the estimated future value. Interest expense related to the contingent consideration was included in “Interest (expense)” in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017.

Non-Recurring Fair Value

Certain assets, under certain conditions, are measured at fair value on a nonrecurring basis utilizing Level 3 inputs, including goodwill, other intangible assets, other long-lived assets and equity method investments. For these assets, measurement at fair value in periods subsequent to their initial recognition would be applicable if these assets were determined to be impaired. The adjusted carrying values for assets measured at fair value on a nonrecurring basis (no liabilities) subject to the requirements of ASC 820 were not material at June 30, 2018 and December 31, 2017.

The following table summarizes the total impairment losses related to nonrecurring fair value measurements of certain assets (no liabilities) subject to the requirements of ASC 820 (in thousands):

	Total Impairment (Loss)
	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
Property and equipment, net	$	(5,175)	$	(4,189)	$	(8,701)	$	(4,391)

In connection with the closure of certain under-utilized customer contact management centers in the U.S. and Canada, the Company recorded impairment charges of $5.2 million and $8.7 million related to leasehold improvements, equipment, furniture and fixtures which were not recoverable during the three and six months ended June 30, 2018, respectively. See Note 3, Costs Associated with Exit or Disposal Activities, for further information.

In connection with the closure of an under-utilized customer contact management center in the U.S., the Company recorded an impairment charge of $4.2 million during the three and six months ended June 30, 2017 related to leasehold improvements which were not recoverable and equipment, furniture and fixtures that could not be redeployed to other locations.

The Company recorded an impairment charge of $0.2 million related to the write-down of a vacant and unused parcel of land in the U.S. to its estimated fair value during the six months ended June 30, 2017.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets

Intangible Assets

The following table presents the Company’s purchased intangible assets as of June 30, 2018 (in thousands):

	Gross  Intangibles		Accumulated Amortization			Net  Intangibles		Weighted Average Amortization Period (years)
Intangible assets subject to amortization:
Customer relationships	$	169,749	$	(100,859	)	$	68,890		10
Trade names and trademarks		14,135		(9,651	)		4,484		7
Non-compete agreements		1,820		(1,356	)		464		3
Content library		526		(526	)		-		2
Proprietary software		1,040		(655	)		385		4
Intangible assets not subject to amortization:
Domain names		65,606		-			65,606		N/A
	$	252,876	$	(113,047)		$	139,829		5

The following table presents the Company’s purchased intangible assets as of December 31, 2017 (in thousands):

	Gross Intangibles		Accumulated Amortization			Net  Intangibles		Weighted Average Amortization Period (years)
Intangible assets subject to amortization:
Customer relationships	$	170,853	$	(95,175	)	$	75,678		10
Trade names and trademarks		14,138		(8,797	)		5,341		7
Non-compete agreements		1,820		(1,052	)		768		3
Content library		542		(542	)		-		2
Proprietary software		1,040		(585	)		455		4
Intangible assets not subject to amortization:
Domain names		58,035		-			58,035		N/A
	$	246,428	$	(106,151)		$	140,277		6

The Company’s estimated future amortization expense for the succeeding years relating to the purchased intangible assets resulting from acquisitions completed prior to June 30, 2018 is as follows (in thousands):

Years Ending December 31,	Amount
2018 (remaining six months)		7,230
2019		14,022
2020		11,348
2021		6,799
2022		5,714
2023		4,882
2024 and thereafter		24,228

Goodwill

Changes in goodwill for the six months ended June 30, 2018 consist of the following (in thousands):

	January 1,   2018		Acquisition		Effect of Foreign   Currency			June 30,     2018
Americas	$	258,496	$	-	$	(2,872	)	$	255,624
EMEA		10,769		-		(402	)		10,367
	$	269,265	$	-	$	(3,274	)	$	265,991

Changes in goodwill for the year ended December 31, 2017 consist of the following (in thousands):

	January 1, 2017		Acquisition		Effect of Foreign Currency		December 31, 2017
Americas	$	255,842	$	390	$	2,264	$	258,496
EMEA		9,562		-		1,207		10,769
	$	265,404	$	390	$	3,471	$	269,265

The Company performs its annual goodwill impairment test during the third quarter, or more frequently if indicators of impairment exist.

For the annual goodwill impairment test, the Company elected to forgo the option to first assess qualitative factors and performed its annual quantitative goodwill impairment test as of July 31, 2017. Under ASC 350, the carrying value of assets is calculated at the reporting unit level. The quantitative assessment of goodwill includes comparing a reporting unit’s calculated fair value to its carrying value. The calculation of fair value requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth, the useful life over which cash flows will occur and determination of the Company’s weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. If the fair value of the reporting unit is less than its carrying value, goodwill is considered impaired and an impairment loss is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

The process of evaluating the fair value of the reporting units is highly subjective and requires significant judgment and estimates as the reporting units operate in a number of markets and geographical regions. The Company considered the income and market approaches to determine its best estimates of fair value, which incorporated the following significant assumptions:

● Revenue projections, including revenue growth during the forecast periods;

● EBITDA margin projections over the forecast periods;

● Estimated income tax rates;

● Estimated capital expenditures; and

● Discount rates based on various inputs, including the risks associated with the specific reporting units as well as their revenue growth and EBITDA margin assumptions.

As of July 31, 2017, the Company concluded that goodwill was not impaired for all six of its reporting units with goodwill, based on generally accepted valuation techniques and the significant assumptions outlined above. While the fair values of four of the six reporting units were substantially in excess of their carrying value, the Qelp and Clearlink reporting units’ fair value exceeded the respective carrying value, although not substantially.

The Qelp and Clearlink reporting units are at risk of future impairment if projected operating results are not met or other inputs into the fair value measurement change. However, as of June 30, 2018, the Company believes there were no indicators of impairment related to Qelp’s $10.4 million of goodwill or Clearlink’s $71.0 million of goodwill.

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Financial Derivatives

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Derivatives

Note 6. Financial Derivatives

Cash Flow Hedges – The Company has derivative assets and liabilities relating to outstanding forward contracts and options, designated as cash flow hedges, as defined under ASC 815 Derivatives and Hedging (“ASC 815”), consisting of Philippine Peso, Costa Rican Colon, Hungarian Forint and Romanian Leu contracts. These contracts are entered into to hedge the exposure to variability in the cash flows of a specific asset or liability, or of a forecasted transaction that is attributable to changes in exchange rates.

The deferred gains (losses) and related taxes on the Company’s cash flow hedges recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) in the accompanying Condensed Consolidated Balance Sheets are as follows (in thousands):

	June 30, 2018			December 31, 2017
Deferred gains (losses) in AOCI	$	(999	)	$	2,550
Tax on deferred gains (losses) in AOCI		96			(79	)
Deferred gains (losses) in AOCI, net of taxes	$	(903	)	$	2,471
Deferred gains (losses) expected to be reclassified to “Revenues” from AOCI during the next twelve months	$	(882	)

Deferred gains (losses) and other future reclassifications from AOCI will fluctuate with movements in the underlying market price of the forward contracts and options.

Non-Designated Hedges

Foreign Currency Forward Contracts – The Company also periodically enters into foreign currency hedge contracts that are not designated as hedges as defined under ASC 815. The purpose of these derivative instruments is to protect the Company’s interests against adverse foreign currency moves relating primarily to intercompany receivables and payables, and other assets and liabilities that are denominated in currencies other than the Company’s subsidiaries’ functional currencies. These contracts generally do not exceed 180 days in duration.

Embedded Derivatives – The Company enters into certain lease agreements which require payments not denominated in the functional currency of any substantial party to the agreements. The foreign currency component of these contracts meets the criteria under ASC 815 as embedded derivatives. The Company has determined that the embedded derivatives are not clearly and closely related to the economic characteristics and risks of the host contracts (lease agreements), and separate, stand-alone instruments with the same terms as the embedded derivative instruments would otherwise qualify as derivative instruments, thereby requiring separation from the lease agreements and recognition at fair value. Such instruments do not qualify for hedge accounting under ASC 815.

The Company had the following outstanding foreign currency forward contracts and options, and embedded derivatives (in thousands):

	June 30, 2018				December 31, 2017
Contract Type	Notional Amount in USD		Settle Through Date		Notional Amount in USD		Settle Through Date
Cash flow hedges:
Options:
US Dollars/Philippine Pesos	$	61,750		September 2019	$	78,000		December 2018
Forwards:
US Dollars/Philippine Pesos		53,400		September 2019		3,000		June 2018
US Dollars/Costa Rican Colones		82,500		August 2019		70,000		March 2019
Euros/Hungarian Forints		1,726		December 2018		3,554		December 2018
Euros/Romanian Leis		6,894		December 2018		13,977		December 2018
Non-designated hedges:
Forwards		6,153		September 2018		9,253		March 2018
Embedded derivatives		12,676		April 2030		13,519		April 2030

Master netting agreements exist with each respective counterparty to reduce credit risk by permitting net settlement of derivative positions. In the event of default by the Company or one of its counterparties, these agreements include a set-off clause that provides the non-defaulting party the right to net settle all derivative transactions, regardless of the currency and settlement date. The maximum amount of loss due to credit risk that, based on gross fair value, the Company would incur if parties to the derivative transactions that make up the concentration failed to perform according to the terms of the contracts was $1.4 million and $3.8 million as of June 30, 2018 and December 31, 2017, respectively. After consideration of these netting arrangements and offsetting positions by counterparty, the total net settlement amount as it relates to these positions are asset positions of $0.9 million and $3.6 million as of June 30, 2018 and December 31, 2017, respectively, and liability positions of $1.4 million and $0 as of June 30, 2018 and December 31, 2017, respectively.

Although legally enforceable master netting arrangements exist between the Company and each counterparty, the Company has elected to present the derivative assets and derivative liabilities on a gross basis in the accompanying Condensed Consolidated Balance Sheets. Additionally, the Company is not required to pledge, nor is it entitled to receive, cash collateral related to these derivative transactions.

The following tables present the fair value of the Company’s derivative instruments included in the accompanying Condensed Consolidated Balance Sheets (in thousands):

	Derivative Assets
	June 30, 2018		December 31, 2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (1)	$	1,343	$	3,604
Foreign currency forward and option contracts (2)		11		-
		1,354		3,604
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (1)		-		244
Embedded derivatives (1)		-		9
Embedded derivatives (2)		-		43
Total derivative assets	$	1,354	$	3,900
	Derivative Liabilities
	June 30, 2018		December 31, 2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (3)	$	1,595	$	175
Foreign currency forward and option contracts (4)		129		81
		1,724		256
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (3)		179		-
Embedded derivatives (3)		108		189
Embedded derivatives (4)		490		390
Total derivative liabilities	$	2,501	$	835

⁽¹⁾ Included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽²⁾ Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽³⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

⁽⁴⁾ Included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheets.

The following table presents the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended June 30, 2018 and 2017 (in thousands):

	Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)						Gain (Loss) Reclassified From AOCI Into “Revenues” (Effective Portion)					Gain (Loss) Recognized in “Revenues” on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	June 30,						June 30,					June 30,
	2018			2017			2018		2017			2018		2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	(305	)	$	(1,232	)	$	191	$	(820	)	$	2	$	-
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		-			(4,774	)		-		-			-		-
	$	(305)		$	(6,006)		$	191	$	(820)		$	2	$	-

The following table presents the gains (losses) recognized in “Other income (expense), net” of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,
	2018			2017
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	(93)		$	921
Embedded derivatives		(252	)		176
	$	(345	)	$	1,097

The following table presents the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the six months ended June 30, 2018 and 2017 (in thousands):

	Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)						Gain (Loss) Reclassified From AOCI Into “Revenues” (Effective Portion)					Gain (Loss) Recognized in “Revenues” on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	June 30,						June 30,					June 30,
	2018			2017			2018		2017			2018		2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	(3,001	)	$	(1,466	)	$	428	$	(1,580	)	$	8	$	-
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		-			(5,373	)		-		-			-		-
	$	(3,001)		$	(6,839)		$	428	$	(1,580)		$	8	$	-

The following table presents the gains (losses) recognized in “Other income (expense), net” of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the six months ended June 30, 2018 and 2017 (in thousands):

	Six Months Ended June 30,
	2018			2017
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	(1,262	)	$	82
Embedded derivatives		(165	)		315
	$	(1,427	)	$	397

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Investments Held in Rabbi Trust

6 Months Ended

Jun. 30, 2018

Investments, Debt and Equity Securities [Abstract]

Investments Held in Rabbi Trust

Note 7. Investments Held in Rabbi Trust

The Company’s investments held in rabbi trust, classified as trading securities and included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets, at fair value, consist of the following (in thousands):

	June 30, 2018				December 31, 2017
	Cost		Fair Value		Cost		Fair Value
Mutual funds	$	8,252	$	11,864	$	8,096	$	11,627

The mutual funds held in rabbi trust were 72% equity-based and 28% debt-based as of June 30, 2018. Net investment income (losses), included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Net realized gains (losses) from sale of trading securities	$	27	$	149	$	32	$	149
Dividend and interest income		43		25		68		39
Net unrealized holding gains (losses)		72		149		17		542
Net investment income (losses)	$	142	$	323	$	117	$	730

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Deferred Grants

6 Months Ended

Jun. 30, 2018

Text Block [Abstract]

Deferred Grants

Note 8. Deferred Grants

Deferred grants, net of accumulated amortization, consist of the following (in thousands):

	June 30, 2018			December 31, 2017
Property grants	$	2,587		$	2,843
Lease grants		441			507
Employment grants		68			61
Total deferred grants		3,096			3,411
Less: Lease grants - short-term (1)		(115	)		(117	)
Less: Employment grants - short-term (1)		(68	)		(61	)
Total long-term deferred grants	$	2,913		$	3,233

⁽¹⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

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Borrowings

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Borrowings

Note 9. Borrowings

On May 12, 2015, the Company entered into a $440 million revolving credit facility (the “Credit Agreement”) with a group of lenders and KeyBank National Association, as Lead Arranger, Sole Book Runner, Administrative Agent, Swing Line Lender and Issuing Lender (“KeyBank”). The Credit Agreement is subject to certain borrowing limitations and includes certain customary financial and restrictive covenants.

The Credit Agreement includes a $200 million alternate-currency sub-facility, a $10 million swingline sub-facility and a $35 million letter of credit sub-facility, and may be used for general corporate purposes including acquisitions, share repurchases, working capital support and letters of credit, subject to certain limitations. The Company is not currently aware of any inability of its lenders to provide access to the full commitment of funds that exist under the revolving credit facility, if necessary. However, there can be no assurance that such facility will be available to the Company, even though it is a binding commitment of the financial institutions.

The Credit Agreement matures on May 12, 2020, and had outstanding borrowings of $90.0 million and $275.0 million at June 30, 2018 and December 31, 2017, respectively, included in “Long-term debt” in the accompanying Condensed Consolidated Balance Sheets.

Borrowings under the Credit Agreement bear interest at the rates set forth in the Credit Agreement. In addition, the Company is required to pay certain customary fees, including a commitment fee determined quarterly based on the Company’s leverage ratio and due quarterly in arrears as calculated on the average unused amount of the Credit Agreement.

The Credit Agreement is guaranteed by all the Company’s existing and future direct and indirect material U.S. subsidiaries and secured by a pledge of 100% of the non-voting and 65% of the voting capital stock of all the direct foreign subsidiaries of the Company and those of the guarantors.

In May 2015, the Company paid an underwriting fee of $0.9 million for the Credit Agreement, which is deferred and amortized over the term of the loan, along with the deferred loan fees of $0.4 million related to the previous credit agreement.

The following table presents information related to our credit agreements (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Average daily utilization	$	100,110		$	267,000		$	110,691		$	267,000
Interest expense (1), (2)	$	915		$	1,600		$	1,916		$	3,043
Weighted average interest rate (2)		3.7	%		2.4	%		3.5	%		2.3	%

⁽¹⁾ Excludes the amortization of deferred loan fees.

⁽²⁾ Includes the commitment fee.

In January 2018, the Company repaid $175.0 million of long-term debt outstanding under its Credit Agreement, primarily using funds repatriated from its foreign subsidiaries.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 10. Accumulated Other Comprehensive Income (Loss)

The Company presents data in the Condensed Consolidated Statements of Changes in Shareholders’ Equity in accordance with ASC 220, Comprehensive Income (“ASC 220”). ASC 220 establishes rules for the reporting of comprehensive income (loss) and its components. The components of accumulated other comprehensive income (loss) consist of the following (in thousands):

	Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on Net Investment Hedge			Unrealized Gain (Loss) on Cash Flow Hedging Instruments			Unrealized Actuarial Gain (Loss) Related to Pension Liability			Unrealized Gain (Loss) on Post Retirement Obligation			Total
Balance at January 1, 2017	$	(72,393	)	$	6,266		$	(2,225	)	$	1,125		$	200		$	(67,027	)
Pre-tax amount		36,101			(8,352	)		2,276			527			(30	)		30,522
Tax (provision) benefit		-			3,132			(54	)		(18	)		-			3,060
Reclassification of (gain) loss to net income		-			-			2,444			(53	)		(50	)		2,341
Foreign currency translation		(23	)		-			30			(7	)		-			-
Balance at December 31, 2017		(36,315	)		1,046			2,471			1,574			120			(31,104	)
Pre-tax amount		(13,522	)		-			(2,993	)		-			-			(16,515	)
Tax (provision) benefit		-			-			194			7			-			201
Reclassification of (gain) loss to net income		-			-			(460	)		(35	)		(20	)		(515	)
Foreign currency translation		216			-			(115	)		(101	)		-			-
Balance at June 30, 2018	$	(49,621	)	$	1,046		$	(903	)	$	1,445		$	100		$	(47,933	)

The following table summarizes the amounts reclassified to net income from accumulated other comprehensive income (loss) and the associated line item in the accompanying Condensed Consolidated Statements of Operations (in thousands):

	Three Months Ended     June 30,					Six Months Ended     June 30,					Statements of Operations
	2018		2017			2018		2017			Location
Gain (Loss) on Cash Flow Hedging Instruments: (1)
Pre-tax amount	$	193	$	(820	)	$	436	$	(1,580	)		Revenues
Tax (provision) benefit		17		17			24		58			Income taxes
Reclassification to net income		210		(803	)		460		(1,522	)
Actuarial Gain (Loss) Related to Pension Liability: (2)
Pre-tax amount		14		11			29		21			Other income (expense), net
Tax (provision) benefit		3		-			6		-			Income taxes
Reclassification to net income		17		11			35		21
Gain (Loss) on Post Retirement Obligation: (2),(3)
Reclassification to net income		10		13			20		25			Other income (expense), net
Total reclassification of gain (loss) to net income	$	237	$	(779	)	$	515	$	(1,476	)

⁽¹⁾ See Note 6, Financial Derivatives, for further information.

⁽²⁾ See Note 14, Defined Benefit Pension Plan and Postretirement Benefits, for further information.

⁽³⁾ No related tax (provision) benefit.

As discussed in Note 11, Income Taxes, for periods prior to December 31, 2017, any remaining outside basis differences associated with the Company’s investments in its foreign subsidiaries are considered to be indefinitely reinvested and no provision for income taxes on those earnings or translation adjustments has been provided.

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note 11. Income Taxes

The Company’s effective tax rates were (45.0)% and 15.0% for the three months ended June 30, 2018 and 2017, respectively. The decrease in the effective tax rate in 2018 compared to 2017 was primarily due to a $2.0 million increase in benefit associated with the settlement of tax audits and ancillary issues. In addition, the Company recognized a benefit of $0.5 million from the reduction in the U.S. federal corporate tax rate from 35% to 21% as a result of the 2017 Tax Reform Act. The decrease in the effective tax rate was also significantly affected by shifts in earnings among the various jurisdictions in which the Company operates. Several additional factors, none of which are individually material, also impacted the rate. The difference between the Company’s effective tax rate as compared to the U.S. statutory federal tax rate of 21.0% was primarily due to the aforementioned factors as well as the recognition of tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions and tax credits, partially offset by the tax impact of permanent differences, state income and foreign withholding.

The Company’s effective tax rates were 1.2% and 22.9% for the six months ended June 30, 2018 and 2017, respectively. The decrease in the effective tax rate was primarily due to the aforementioned $2.0 million increase in discrete benefit. In addition, the Company recognized a benefit of $1.1 million from the reduction in the U.S. federal corporate tax rate from 35% to 21% as a result of the 2017 Tax Reform Act. This was partially offset by a $0.6 million decrease in the amount of excess tax benefits from stock-based compensation recognized in the six months ended June 30, 2018 as compared to June 30, 2017. The decrease in the effective tax rate was also significantly affected by shifts in earnings among the various jurisdictions in which the Company operates. Several additional factors, none of which are individually material, also impacted the rate. The difference between the Company’s effective tax rate as compared to the U.S. statutory federal tax rate of 21.0% was primarily due to the aforementioned factors as well as the recognition of tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions and tax credits, partially offset by the tax impact of permanent differences, state income and foreign withholding.

The 2017 Tax Reform Act made significant changes to the Internal Revenue Code, including, but not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a participation exemption regime, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. The Company estimated its provision for income taxes in accordance with the 2017 Tax Reform Act and guidance available upon enactment and as a result recorded $32.7 million as additional income tax expense in the fourth quarter of 2017, the period in which the legislation was signed into law. The $32.7 million estimate includes the provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings of $32.7 million based on cumulative foreign earnings of $531.8 million and $1.0 million of foreign withholding taxes on certain anticipated distributions. The provisional tax expense was partially offset by a provisional benefit of $1.0 million related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future. The Company has not determined the need for nor recorded any adjustments to this provisional amount as of June 30, 2018. The Company anticipates finalizing these provisional amounts no later than the fourth quarter of 2018.

Prior to December 31, 2017, no additional income taxes have been provided for any remaining outside basis differences inherent in the Company’s investments in its foreign subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining outside basis difference in these entities is not practicable due to the inherent complexity of the multi-national tax environment in which the Company operates.

On December 22, 2017, the SEC issued SAB 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Reform Act. In accordance with SAB 118, the Company has determined that the deferred tax benefit recorded in connection with the remeasurement of certain deferred tax assets and liabilities and the current tax expense recorded in connection with the transition tax on the mandatory deemed repatriation of foreign earnings was a provisional amount and a reasonable estimate at June 30, 2018 and December 31, 2017. Additional work is necessary for a more detailed analysis of the Company’s deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of identification, but no later than one year from the enactment date.

The 2017 Tax Reform Act instituted a number of new provisions effective January 1, 2018, including GILTI, Foreign Derived Intangible Income (“FDII”) and Base Erosion and Anti-Abuse Tax (“BEAT”). The Company made a reasonable estimate of the impact of each of these provisions of the 2017 Tax Reform Act on its effective tax rate for the three and six months ended June 30, 2018 and determined that the resulting impact was not material. The Company will continue to refine its provisional estimates related to the GILTI, FDII and BEAT rules as additional information is made available.

The Company received assessments for the Canadian 2003-2009 audit. Requests for Competent Authority Assistance were filed with both the Canadian Revenue Agency and the U.S. Internal Revenue Service and the Company paid mandatory security deposits to Canada as part of this process. As of June 30, 2017, the Company determined that all material aspects of the Canadian audit were effectively settled pursuant to ASC 740. As a result, the Company recognized an income tax benefit of $1.2 million, net of the U.S. tax impact, at that time and the deposits were applied against the anticipated liability. During the three months ended June 30, 2018, the Company finalized procedures ancillary to the Canadian audit and recognized an additional $2.7 million income tax benefit due to the elimination of certain assessed penalties, interest and withholding taxes.

With the effective settlement of the Canadian audit, the Company has no significant tax jurisdictions under audit; however, the Company is currently under audit in several tax jurisdictions. The Company believes it is adequately reserved for the remaining audits and their resolution is not expected to have a material impact on its financial conditions and results of operations.

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Earnings Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Note 12. Earnings Per Share

Basic earnings per share are based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share includes the weighted average number of common shares outstanding during the respective periods and the further dilutive effect, if any, from stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust using the treasury stock method.

The numbers of shares used in the earnings per share computation are as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Basic:
Weighted average common shares outstanding		42,125		41,854		42,035		41,756
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust		35		80		162		163
Total weighted average diluted shares outstanding		42,160		41,934		42,197		41,919
Anti-dilutive shares excluded from the diluted earnings per share calculation		31		46		6		16

On August 18, 2011, the Company’s Board of Directors (the “Board”) authorized the Company to purchase up to 5.0 million shares of its outstanding common stock (the “2011 Share Repurchase Program”). On March 16, 2016, the Board authorized an increase of 5.0 million shares to the 2011 Share Repurchase Program for a total of 10.0 million shares. A total of 5.3 million shares have been repurchased under the 2011 Share Repurchase Program since inception. The shares are purchased, from time to time, through open market purchases or in negotiated private transactions, and the purchases are based on factors, including but not limited to, the stock price, management discretion and general market conditions. The 2011 Share Repurchase Program has no expiration date.

There were no shares repurchased under the Company’s share repurchase program during the three and six months ended June 30, 2018 and 2017.

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Commitments and Loss Contingency

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Loss Contingency

Note 13. Commitments and Loss Contingency

Commitments

During the six months ended June 30, 2018, the Company entered into several leases in the ordinary course of business. The following is a schedule of future minimum rental payments required under operating leases that have noncancelable lease terms as of June 30, 2018 (in thousands):

	Amount
2018 (remaining six months)	$	630
2019		8,118
2020		8,520
2021		8,643
2022		7,959
2023		3,343
2024 and thereafter		8,211
	$	45,424

During the six months ended June 30, 2018, the Company entered into agreements with third-party vendors in the ordinary course of business whereby the Company committed to purchase goods and services used in its normal operations. These agreements generally are not cancelable, range from one to five-year periods and may contain fixed or minimum annual commitments. Certain of these agreements allow for renegotiation of the minimum annual commitments. The following is a schedule of the future minimum purchases remaining under the agreements as of June 30, 2018 (in thousands):

	Amount
2018 (remaining six months)	$	10,237
2019		6,346
2020		1,699
2021		193
2022		-
2023		-
2024 and thereafter		-
	$	18,475

Loss Contingency

Contingencies are recorded in the consolidated financial statements when it is probable that a liability will be incurred and the amount of the loss is reasonably estimable, or otherwise disclosed, in accordance with ASC 450, Contingencies (“ASC 450”). Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosures related to such matter as appropriate and in compliance with ASC 450.

The Company received a state audit assessment and is currently rebutting the position. The Company has determined that the likelihood of a liability is reasonably possible and developed a range of possible loss up to $1.0 million, net of federal benefit.

The Company, from time to time, is involved in legal actions arising in the ordinary course of business. With respect to these matters, management believes that the Company has adequate legal defenses and/or, when possible and appropriate, has provided adequate accruals related to those matters such that the ultimate outcome will not have a material adverse effect on the Company’s financial position or results of operations.

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Defined Benefit Pension Plan and Postretirement Benefits

6 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Defined Benefit Pension Plan and Postretirement Benefits

Note 14. Defined Benefit Pension Plan and Postretirement Benefits

Defined Benefit Pension Plans

The following table provides information about the net periodic benefit cost for the Company’s pension plans (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Service cost	$	109		$	128		$	223		$	253
Interest cost		48			49			98			98
Recognized actuarial (gains)		(14	)		(11	)		(29	)		(21	)
	$	143		$	166		$	292		$	330

The Company’s service cost for its qualified pension plans was included in “Direct salaries and related costs” and “General and administrative” costs in its Condensed Consolidated Statements of Operations for the three and six months ended June 30, 3018 and 2017. The remaining components of net periodic benefit cost were included in “Other income (expense), net” in the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017. See Note 1, Overview and Basis of Presentation, for further information related to the adoption of ASU 2016-18.

Employee Retirement Savings Plans

The Company maintains a 401(k) plan covering defined employees who meet established eligibility requirements. Under the plan provisions, the Company matches 50% of participant contributions to a maximum matching amount of 2% of participant compensation. The Company’s contributions included in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
401(k) plan contributions	$	344	$	309	$	803	$	620

Split-Dollar Life Insurance Arrangement

In 1996, the Company entered into a split-dollar life insurance arrangement to benefit the former Chairman and Chief Executive Officer of the Company. Under the terms of the arrangement, the Company retained a collateral interest in the policy to the extent of the premiums paid by the Company. The postretirement benefit obligation included in “Other long-term liabilities” and the unrealized gains (losses) included in “Accumulated other comprehensive income” in the accompanying Condensed Consolidated Balance Sheets were as follows (in thousands):

	June 30, 2018		December 31, 2017
Postretirement benefit obligation	$	12	$	15
Unrealized gains (losses) in AOCI (1)		100		120

⁽¹⁾ Unrealized gains (losses) are due to changes in discount rates related to the postretirement obligation.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Note 15. Stock-Based Compensation

The Company’s stock-based compensation plans include the 2011 Equity Incentive Plan, the Non-Employee Director Fee Plan and the Deferred Compensation Plan. The following table summarizes the stock-based compensation expense (primarily in the Americas) and income tax benefits related to the stock-based compensation (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Stock-based compensation (expense) (1)	$	(1,673	)	$	(2,261	)	$	(3,750	)	$	(4,732	)
Income tax benefit (2)		402			871			900			1,822

⁽¹⁾ Included in “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations.

⁽²⁾ Included in “Income taxes” in the accompanying Condensed Consolidated Statements of Operations.

There were no capitalized stock-based compensation costs as of June 30, 2018 and December 31, 2017.

Beginning January 1, 2017, as a result of the adoption of ASU 2016-09, Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), the Company began accounting for forfeitures as they occur, rather than estimating expected forfeitures. The net cumulative effect of this change was recognized as a $0.2 million reduction to retained earnings as of January 1, 2017. Additionally, excess tax benefits (deficiencies) from stock compensation are included in “Income taxes” in the accompanying Condensed Consolidated Statements of Operations subsequent to the adoption of ASU 2016-09.

2011 Equity Incentive Plan — The Company’s Board of Directors (the “Board”) adopted the Sykes Enterprises, Incorporated 2011 Equity Incentive Plan (the “2011 Plan”) on March 23, 2011, as amended on May 11, 2011 to reduce the number of shares of common stock available to 4.0 million shares. The 2011 Plan was approved by the shareholders at the May 2011 Annual Shareholders’ Meeting. The 2011 Plan replaced and superseded the Company’s 2001 Equity Incentive Plan (the “2001 Plan”), which expired on March 14, 2011. The outstanding awards granted under the 2001 Plan will remain in effect until their exercise, expiration or termination. The 2011 Plan permits the grant of restricted stock, stock appreciation rights, stock options and other stock-based awards to certain employees of the Company, members of the Company’s Board and certain non-employees who provide services to the Company in order to encourage them to remain in the employment of, or to faithfully provide services to, the Company and to increase their interest in the Company’s success.

Stock Appreciation Rights — The Board, at the recommendation of the Compensation and Human Resources Development Committee (the “Compensation Committee”), has approved in the past, and may approve in the future, awards of stock-settled stock appreciation rights (“SARs”) for eligible participants. SARs represent the right to receive, without payment to the Company, a certain number of shares of common stock, as determined by the Compensation Committee, equal to the amount by which the fair market value of a share of common stock at the time of exercise exceeds the grant price. The SARs are granted at the fair market value of the Company’s common stock on the date of the grant and vest one-third on each of the first three anniversaries of the date of grant, provided the participant is employed by the Company on such date. The SARs have a term of 10 years from the date of grant. The fair value of each SAR is estimated on the date of grant using the Black-Scholes valuation model that uses various assumptions.

The following table summarizes the assumptions used to estimate the fair value of SARS granted:

	Six Months Ended June 30,
	2018			2017
Expected volatility		21.4	%		19.3	%
Weighted-average volatility		21.4	%		19.3	%
Expected dividend rate		0.0	%		0.0	%
Expected term (in years)		5.0			5.0
Risk-free rate		2.5	%		1.9	%

The following table summarizes SARs activity as of June 30, 2018 and for the six months then ended:

Stock Appreciation Rights	Shares (000s)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic  Value (000s)
Outstanding at January 1, 2018		734		$	-
Granted		333		$	-
Exercised		(43	)	$	-
Forfeited or expired		-		$	-
Outstanding at June 30, 2018		1,024		$	-		8.6	$	790
Vested or expected to vest at June 30, 2018		1,024		$	-		8.6	$	790
Exercisable at June 30, 2018		363		$	-		7.6	$	580

The following table summarizes information regarding SARs granted and exercised (in thousands, except per SAR amounts):

	Six Months Ended June 30,
	2018		2017
Number of SARs granted		333		396
Weighted average grant-date fair value per SAR	$	6.84	$	6.24
Intrinsic value of SARs exercised	$	305	$	1,678
Fair value of SARs vested	$	1,950	$	1,846

The following table summarizes nonvested SARs activity as of June 30, 2018 and for the six months then ended:

Nonvested Stock Appreciation Rights	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		600		$	6.88
Granted		333		$	6.84
Vested		(272	)	$	7.16
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		661		$	6.74

As of June 30, 2018, there was $4.0 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested SARs granted under the 2011 Plan. This cost is expected to be recognized over a weighted average period of 1.5 years.

Restricted Shares – The Board, at the recommendation of the Compensation Committee, has approved in the past, and may approve in the future, awards of performance and employment-based restricted shares (“restricted shares”) for eligible participants. In some instances, where the issuance of restricted shares has adverse tax consequences to the recipient, the Board may instead issue restricted stock units (“RSUs”). The restricted shares are shares of the Company’s common stock (or in the case of RSUs, represent an equivalent number of shares of the Company’s common stock) which are issued to the participant subject to (a) restrictions on transfer for a period of time and (b) forfeiture under certain conditions. The performance goals, including revenue growth and income from operations targets, provide a range of vesting possibilities from 0% to 100% and will be measured at the end of the performance period. If the performance conditions are met for the performance period, the shares will vest and all restrictions on the transfer of the restricted shares will lapse (or in the case of RSUs, an equivalent number of shares of the Company’s common stock will be issued to the recipient). The Company recognizes compensation cost, net of actual forfeitures, based on the fair value (which approximates the current market price) of the restricted shares (and RSUs) on the date of grant ratably over the requisite service period based on the probability of achieving the performance goals.

Changes in the probability of achieving the performance goals from period to period will result in corresponding changes in compensation expense. The employment-based restricted shares currently outstanding vest one-third on each of the first three anniversaries of the date of grant, provided the participant is employed by the Company on such date.

The following table summarizes nonvested restricted shares/RSUs activity as of June 30, 2018 and for the six months then ended:

Nonvested Restricted Shares and RSUs	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		1,109		$	28.50
Granted		488		$	28.15
Vested		(323	)	$	25.78
Forfeited or expired		(59	)	$	27.00
Nonvested at June 30, 2018		1,215		$	29.15

The following table summarizes information regarding restricted shares/RSUs granted and vested (in thousands, except per restricted share/RSU amounts):

	Six Months Ended June 30,
	2018		2017
Number of restricted shares/RSUs granted		488		480
Weighted average grant-date fair value per restricted share/RSU	$	28.15	$	29.42
Fair value of restricted shares/RSUs vested	$	8,342	$	6,868

As of June 30, 2018, there was $32.3 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested restricted shares/RSUs granted under the 2011 Plan. This cost is expected to be recognized over a weighted average period of 1.8 years.

Non-Employee Director Fee Plan — The Company’s 2004 Non-Employee Director Fee Plan (the “2004 Fee Plan”), as amended on May 17, 2012, provided that all new non-employee directors joining the Board would receive an initial grant of shares of common stock on the date the new director is elected or appointed, the number of which will be determined by dividing $60,000 by the closing price of the Company’s common stock on the trading day immediately preceding the date a new director is elected or appointed, rounded to the nearest whole number of shares. The initial grant of shares vested in twelve equal quarterly installments, one-twelfth on the date of grant and an additional one-twelfth on each successive third monthly anniversary of the date of grant. The award lapses with respect to all unvested shares in the event the non-employee director ceases to be a director of the Company, and any unvested shares are forfeited.

The 2004 Fee Plan also provided that each non-employee director would receive, on the day after the annual shareholders’ meeting, an annual retainer for service as a non-employee director (the “Annual Retainer”). Prior to May 17, 2012, the Annual Retainer was $95,000, of which $50,000 was payable in cash, and the remainder was paid in stock. The annual grant of cash vested in four equal quarterly installments, one-fourth on the day following the annual meeting of shareholders, and an additional one-fourth on each successive third monthly anniversary of the date of grant. The annual grant of shares paid to non-employee directors prior to May 17, 2012 vests in eight equal quarterly installments, one-eighth on the day following the annual meeting of shareholders, and an additional one-eighth on each successive third monthly anniversary of the date of grant. On May 17, 2012, upon the recommendation of the Compensation Committee, the Board adopted the Fifth Amended and Restated Non-Employee Director Fee Plan (the “Amendment”), which increased the common stock component of the Annual Retainer by $30,000, resulting in a total Annual Retainer of $125,000, of which $50,000 was payable in cash and the remainder paid in stock. In addition, the Amendment also changed the vesting period for the annual equity award, from a two-year vesting period, to a one-year vesting period (consisting of four equal quarterly installments, one-fourth on the date of grant and an additional one-fourth on each successive third monthly anniversary of the date of grant). The award lapses with respect to all unpaid cash and unvested shares in the event the non-employee director ceases to be a director of the Company, and any unvested shares and unpaid cash are forfeited.

In addition to the Annual Retainer award, the 2004 Fee Plan also provided for any non-employee Chairman of the Board to receive an additional annual cash award of $100,000, and each non-employee director serving on a committee of the Board to receive an additional annual cash award. The additional annual cash award for the Chairperson of the Audit Committee is $20,000 and Audit Committee members are entitled to an annual cash award of $10,000. The annual cash awards for the Chairpersons of the Compensation Committee, Finance Committee and Nominating and Corporate Governance Committee are $15,000, $12,500 and $12,500, respectively, and all other members of such committees are entitled to an annual cash award of $7,500.

The 2004 Fee Plan expired in May 2014, prior to the 2014 annual shareholders’ meeting. In March 2014, upon the recommendation of the Compensation Committee, the Board determined that, following the expiration of the 2004 Fee Plan, the compensation of non-employee Directors should continue on the same terms as provided in the Fifth Amended and Restated Non-Employee Director Fee Plan, except the amounts of cash and equity grants shall be determined annually by the Board and that the stock portion of such compensation would be issued under the 2011 Plan.

At the Board’s regularly scheduled meeting on December 10, 2014, upon the recommendation of the Compensation Committee, the Board determined that the amount of the cash and equity compensation payable to non-employee directors beginning on the date of the 2015 annual shareholders’ meeting would be increased as follows: cash compensation would be increased by $5,000 per year to a total of $55,000 and equity compensation would be increased by $25,000 per year to a total of $100,000. No change would be made in the additional amounts payable to the Chairman of the Board or the Chairs or members of the various Board committees for their service on such committees, and no changes would be made in the payment terms described above for such cash and equity compensation.

At the Board’s regularly scheduled meeting on December 6, 2016, upon the recommendation of the Compensation Committee, the Board determined that the amount of the cash compensation payable to non-employee directors beginning on the date of the 2017 annual shareholders’ meeting would be increased by $15,000 per year to a total of $70,000.

The Board may pay additional cash compensation to any non-employee director for services on behalf of the Board over and above those typically expected of directors, including but not limited to service on a special committee of the Board. Directors who are executive officers of the Company receive no compensation for service as members of either the Board of Directors or any committees of the Board.

The following table summarizes nonvested common stock share award activity as of June 30, 2018 and for the six months then ended:

Nonvested Common Stock Share Awards	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		8		$	32.21
Granted		34		$	27.68
Vested		(15	)	$	29.87
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		27		$	27.73

The following table summarizes information regarding common stock share awards granted and vested (in thousands, except per share award amounts):

	Six Months Ended June 30,
	2018		2017
Number of share awards granted		34		24
Weighted average grant-date fair value per share award	$	27.68	$	32.93
Fair value of share awards vested	$	450	$	430

As of June 30, 2018, there was $0.7 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested common stock share awards granted under the Fee Plan. This cost is expected to be recognized over a weighted average period of less than one year.

Deferred Compensation Plan — The Company’s non-qualified Deferred Compensation Plan (the “Deferred Compensation Plan”), which is not shareholder-approved, was adopted by the Board effective December 17, 1998. It was last amended and restated on August 15, 2017, effective January 1, 2018. Eligibility is limited to a select group of key management and employees who are expected to receive an annualized base salary (which will not take into account bonuses or commissions) that exceeds the amount taken into account for purposes of determining highly compensated employees under Section 414(q) of the Internal Revenue Code of 1986 based on the current year’s base salary and applicable dollar amounts. The Deferred Compensation Plan provides participants with the ability to defer between 1% and 80% of their compensation (between 1% and 100% prior to June 30, 2016, the effective date of the first amendment) until the participant’s retirement, termination, disability or death, or a change in control of the Company. Using the Company’s common stock, the Company matches 50% of the amounts deferred by participants on a quarterly basis up to a total of $12,000 per year for the president, chief executive officer and executive vice presidents, $7,500 per year for senior vice presidents, global vice presidents and vice presidents, and, effective January 1, 2017, $5,000 per year for all other participants (there was no match for other participants prior to January 1, 2017, the effective date of the second amendment). Matching contributions and the associated earnings vest over a seven-year service period. Vesting will be accelerated in the event of the participant’s death or disability, a change in control or retirement (defined as separate from service after age 65). In the event of a distribution of benefits as a result of a change in control of the Company, the Company will increase the benefit by an amount sufficient to offset the income tax obligations created by the distribution of benefits. Deferred compensation amounts used to pay benefits, which are held in a rabbi trust, include investments in various mutual funds and shares of the Company’s common stock (see Note 7, Investments Held in Rabbi Trust).

As of June 30, 2018 and December 31, 2017, liabilities of $11.8 million and $11.6 million, respectively, of the Deferred Compensation Plan were recorded in “Accrued employee compensation and benefits” in the accompanying Condensed Consolidated Balance Sheets. Additionally, the Company’s common stock match associated with the Deferred Compensation Plan, with a carrying value of approximately $2.2 million and $2.1 million as of June 30, 2018 and December 31, 2017, respectively, is included in “Treasury stock” in the accompanying Condensed Consolidated Balance Sheets.

The following table summarizes nonvested common stock activity as of June 30, 2018 and for the six months then ended:

Nonvested Common Stock	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		3		$	29.56
Granted		10		$	28.86
Vested		(7	)	$	28.89
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		6		$	29.19

The following table summarizes information regarding shares of common stock granted and vested (in thousands, except per common stock amounts):

	Six Months Ended June 30,
	2018		2017
Number of shares of common stock granted		10		10
Weighted average grant-date fair value per common stock	$	28.86	$	30.66
Fair value of common stock vested	$	213	$	240
Cash used to settle the obligation	$	644	$	422

As of June 30, 2018, there was $0.1 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested common stock granted under the Deferred Compensation Plan. This cost is expected to be recognized over a weighted average period of 3.7 years.

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Segments and Geographic Information

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Segments and Geographic Information

Note 16. Segments and Geographic Information

The Company operates within two regions, the Americas and EMEA. Each region represents a reportable segment comprised of aggregated regional operating segments, which portray similar economic characteristics. The Company aligns its business into two segments to effectively manage the business and support the customer care needs of every client and to respond to the demands of the Company’s global customers.

The reportable segments consist of (1) the Americas, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim, and provides outsourced customer engagement solutions (with an emphasis on inbound technical support, digital support and demand generation, and customer service) and technical staffing and (2) EMEA, which includes Europe, the Middle East and Africa, and provides outsourced customer engagement solutions (with an emphasis on technical support and customer service) and fulfillment services. The sites within Latin America, Australia and the Asia Pacific Rim are included in the Americas segment given the nature of the business and client profile, which is primarily made up of U.S.-based companies that are using the Company’s services in these locations to support their customer engagement needs.

Information about the Company’s reportable segments is as follows (in thousands):

	Americas			EMEA			Other (1)			Consolidated
Three Months Ended June 30, 2018:
Revenues	$	327,041		$	69,720		$	24		$	396,785
Percentage of revenues		82.4	%		17.6	%		0.0	%		100.0	%
Depreciation, net	$	12,335		$	1,476		$	749		$	14,560
Amortization of intangibles	$	3,415		$	214		$	-		$	3,629
Income (loss) from operations	$	19,824		$	2,220		$	(15,584	)	$	6,460
Total other income (expense), net								(1,511	)		(1,511	)
Income taxes								2,229			2,229
Net income										$	7,178
Three Months Ended June 30, 2017:
Revenues	$	314,871		$	60,540		$	27		$	375,438
Percentage of revenues		83.9	%		16.1	%		0.0	%		100.0	%
Depreciation, net	$	11,842		$	1,254		$	724		$	13,820
Amortization of intangibles	$	4,989		$	261		$	-		$	5,250
Income (loss) from operations	$	26,127		$	2,163		$	(16,962)		$	11,328
Total other income (expense), net								(928	)		(928	)
Income taxes								(1,555	)		(1,555	)
Net income										$	8,845
Six Months Ended June 30, 2018:
Revenues	$	667,762		$	143,347		$	47		$	811,156
Percentage of revenues		82.3	%		17.7	%		0.0	%		100.0	%
Depreciation, net	$	25,018		$	2,887		$	1,491		$	29,396
Amortization of intangibles	$	7,407		$	435		$	-		$	7,842
Income (loss) from operations	$	45,688		$	6,859		$	(31,803)		$	20,744
Total other income (expense), net								(2,391	)		(2,391	)
Income taxes								(227	)		(227	)
Net income										$	18,126
Six Months Ended June 30, 2017:
Revenues	$	635,802		$	123,607		$	43		$	759,452
Percentage of revenues		83.7	%		16.3	%		0.0	%		100.0	%
Depreciation, net	$	23,310		$	2,440		$	1,418		$	27,168
Amortization of intangibles	$	9,967		$	514		$	—		$	10,481
Income (loss) from operations	$	64,099		$	7,743		$	(34,461)		$	37,381
Total other income (expense), net								(1,659	)		(1,659	)
Income taxes								(8,165	)		(8,165	)
Net income										$	27,557

⁽¹⁾ Other items (including corporate and other costs, other income and expense, and income taxes) are included for purposes of reconciling to the Company’s consolidated totals as shown in the tables above for the periods shown. Inter-segment revenues are not material to the Americas and EMEA segment results.

The Company’s reportable segments are evaluated regularly by its chief operating decision maker to decide how to allocate resources and assess performance. The chief operating decision maker evaluates performance based upon reportable segment revenue and income (loss) from operations. Because assets by segment are not reported to or used by the Company’s chief operating decision maker to allocate resources, or to assess performance, total assets by segment are not disclosed.

The following table represents a disaggregation of revenue from contracts with customers by geographic location for the three and six months ended June 30, 2018 and 2017, by the reportable segment for each category (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
United States	$	165,648	$	151,654	$	337,094	$	305,298
The Philippines		56,571		56,779		116,657		115,319
Costa Rica		30,973		32,924		63,048		66,249
Canada		24,828		27,020		52,017		56,742
El Salvador		20,584		18,369		40,595		36,714
People’s Republic of China		8,149		9,282		17,497		18,542
Australia		7,700		6,440		15,402		13,090
Mexico		5,632		5,832		11,950		11,441
Other		6,956		6,571		13,502		12,407
Total Americas		327,041		314,871		667,762		635,802
EMEA:
Germany		22,404		18,457		46,579		38,894
Sweden		13,674		14,043		27,804		28,344
United Kingdom		11,960		9,407		25,307		19,140
Romania		8,191		6,685		16,327		13,078
Other		13,491		11,948		27,330		24,151
Total EMEA		69,720		60,540		143,347		123,607
Total Other		24		27		47		43
	$	396,785	$	375,438	$	811,156	$	759,452

Revenues are attributed to countries based on location of customer, except for revenues for The Philippines, Costa Rica, the People’s Republic of China and India which are primarily comprised of customers located in the U.S., but serviced by centers in those respective geographic locations.

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Other Income (Expense)

6 Months Ended

Jun. 30, 2018

Other Income and Expenses [Abstract]

Other Income (Expense)

Note 17. Other Income (Expense)

Other income (expense), net consists of the following (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Foreign currency transaction gains (losses)	$	641		$	(535	)	$	2,089		$	644
Gains (losses) on derivative instruments not designated as hedges		(345	)		1,097			(1,427	)		397
Other miscellaneous income (expense)		(833	)		231			(1,044	)		565
	$	(537	)	$	793		$	(382	)	$	1,606

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Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note 18. Related Party Transactions

In January 2008, the Company entered into a lease for a customer engagement center located in Kingstree, South Carolina. The landlord, Kingstree Office One, LLC, is an entity controlled by John H. Sykes, the founder, former Chairman and former Chief Executive Officer of the Company and the father of Charles Sykes, President and Chief Executive Officer of the Company. The lease payments on the 20-year lease were negotiated at or below market rates, and the lease is cancellable at the option of the Company. The Company paid $0.1 million to the landlord during both the three months ended June 30, 2018 and 2017 and $0.2 million during both the six months ended June 30, 2018 and 2017 under the terms of the lease.

During the three and six months ended June 30, 2018, the Company contracted to receive services from XSell, an equity method investee, for $0.1 million. There were no such transactions in 2017. These related party transactions occurred in the normal course of business on terms and conditions that are similar to those of transactions with unrelated parties and, therefore, were measured at the exchange amount.

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Subsequent Event

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Event

Note 19. Subsequent Event

On July 9, 2018, the Company as guarantor and its wholly-owned subsidiaries, Sykes Australia Pty Ltd, an Australian company, and Clear Link Technologies, LLC, a Delaware limited liability company, entered into a Sale Agreement with WhistleOut Nominees Pty Ltd as trustee for the WhistleOut Holdings Unit Trust, CPC Investments USA Pty Ltd, JJZL Pty Ltd, Kenneth Wong as trustee for Wong Family Trust and C41 Pty Ltd as trustee for the Ottery Family Trust (together, the “Sellers”) to acquire all of the outstanding shares of WhistleOut.

The aggregate purchase price of AUD 30.2 million ($22.4 million), paid at the closing of the transaction on July 9, 2018, is subject to certain post-closing adjustments related to WhistleOut’s working capital. The purchase price was funded through $22.0 million of additional borrowings under the Company’s Credit Agreement. The Sale Agreement provides for a three-year, retention based earnout of AUD 14.0 million.

The Sale Agreement contains customary representations and warranties, indemnification obligations and covenants.

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Overview and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business

Business — Sykes Enterprises, Incorporated and consolidated subsidiaries (“SYKES” or the “Company”) is a leading provider of multichannel demand generation and global customer engagement services. SYKES provides differentiated full lifecycle customer engagement solutions and services to Global 2000 companies and their end customers primarily within the communications, financial services, technology, transportation and leisure, healthcare, retail and other industries. SYKES primarily provides customer engagement solutions and services with an emphasis on inbound multichannel demand generation, customer service and technical support to its clients’ customers. Utilizing SYKES’ integrated onshore/offshore global delivery model, SYKES provides its services through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. SYKES also provides various enterprise support services in the United States that include services for its clients’ internal support operations, from technical staffing services to outsourced corporate help desk services. In Europe, SYKES also provides fulfillment services, which includes order processing, payment processing, inventory control, product delivery and product returns handling. The Company has operations in two reportable segments entitled (1) the Americas, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim, in which the client base is primarily companies in the United States that are using the Company’s services to support their customer management needs; and (2) EMEA, which includes Europe, the Middle East and Africa.

2017 Tax Reform Act

In December 2017, the President of the United States (“U.S.”) signed into law the Tax Cuts and Jobs Act (the “2017 Tax Reform Act”). In general, the 2017 Tax Reform Act reduces the U.S. federal corporate tax rate from 35% to 21%, effective in 2018. The 2017 Tax Reform Act moves from a worldwide business taxation approach to a participation exemption regime. The 2017 Tax Reform Act also imposes base-erosion prevention measures on non-U.S. earnings of U.S. entities, as well as a one-time mandatory deemed repatriation tax on accumulated non-U.S. earnings which was recorded in the fourth quarter of 2017. The impact of the 2017 Tax Reform Act on the consolidated financial results began with the fourth quarter of 2017, the period of enactment. This impact, along with the transitional taxes discussed in Note 11, Income Taxes, is reflected in the Other segment.

Acquisition

On April 24, 2017, the Company entered into a definitive Asset Purchase Agreement (the “Purchase Agreement”) to acquire certain assets from a Global 2000 telecommunications services provider. The aggregate purchase price of $7.5 million was paid on May 31, 2017, using cash on hand, resulting in $6.0 million of property and equipment and $1.5 million of customer relationship intangibles (the “Telecommunications Asset acquisition”). The Purchase Agreement contains customary representations and warranties, indemnification obligations and covenants. The Telecommunications Asset acquisition was completed to strengthen and create new partnerships for the Company and expand its geographic footprint in North America. The results of the Telecommunications Assets’ operations have been included in the Company’s consolidated financial statements in the Americas segment since its acquisition on May 31, 2017.

The Company accounted for the Telecommunications Asset acquisition in accordance with ASC 805, Business Combinations, whereby the fair value of the purchase price was allocated to the tangible and identifiable intangible assets acquired based on their estimated fair values as of the closing date. The Company completed its analysis of the purchase price allocation during the second quarter of 2017.

Basis of Presentation

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, 2018. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”) on March 1, 2018.

Principles of Consolidation

Principles of Consolidation — The condensed consolidated financial statements include the accounts of SYKES and its wholly-owned subsidiaries and controlled majority-owned subsidiaries. Investments in less than majority-owned subsidiaries in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Subsequent Events

Subsequent Events — Subsequent events or transactions have been evaluated through the date and time of issuance of the condensed consolidated financial statements. On July 9, 2018, the Company entered into and closed a definitive Share Sale Agreement (“Sale Agreement”) to acquire all the outstanding shares of WhistleOut Pty Ltd and WhistleOut Inc. (together, known as “WhistleOut”) for AUD 30.2 million ($22.4 million). See Note 19, Subsequent Event, for further information. There were no other material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted cash — Cash and cash equivalents consist of cash and highly liquid short-term investments, primarily held in non-interest-bearing investments which have original maturities of less than 90 days. Restricted cash includes cash whereby the Company’s ability to use the funds at any time is contractually limited or is generally designated for specific purposes arising out of certain contractual or other obligations.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets that sum to the amounts reported in the Condensed Consolidated Statements of Cash Flows (in thousands):

	June 30, 2018		December 31, 2017		June 30, 2017		December 31, 2016
Cash and cash equivalents	$	162,422	$	343,734	$	301,451	$	266,675
Restricted cash included in “Other current assets”		153		154		158		160
Restricted cash included in “Deferred charges and other assets”		868		917		823		759
	$	163,443	$	344,805	$	302,432	$	267,594

Investments in Equity Method Investees

Investments in Equity Method Investees — The Company uses the equity method to account for investments in companies if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company’s proportionate share of the net income or loss of an equity method investment is included in consolidated net income. Judgment regarding the level of influence over an equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.

The Company evaluates an equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and near-term prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. As of June 30, 2018 and December 31, 2017, the Company did not identify any instances where the carrying values of its equity method investments were not recoverable.

In July 2017, the Company made a strategic investment of $10.0 million in XSell Technologies, Inc. (“XSell”) for 32.8% of XSell’s preferred stock. The Company plans to incorporate XSell’s machine learning and artificial intelligence algorithms into its business. The Company believes this will increase the sales performance of its agents to drive revenue for its clients, improve the experience of the Company’s clients’ end customers and enhance brand loyalty, reduce the cost of customer care and leverage analytics and machine learning to source the best agents and improve their performance.

The Company’s net investment in XSell of $9.6 million and $9.8 million was included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, respectively. The Company paid $5.0 million in July 2017 with the remaining $5.0 million included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017. The Company’s proportionate share of XSell’s income (loss) of $(0.1) million and $(0.3) million was included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018, respectively (none in 2017).

Customer-Acquisition Advertising Costs

Customer-Acquisition Advertising Costs — The Company’s advertising costs are expensed as incurred. Total advertising costs included in “Direct salaries and related costs” in the accompanying Condensed Consolidated Statements of Operations for the three months ended June 30, 2018 and 2017 were $12.0 million and $8.6 million, respectively, and $22.0 million and $18.4 million for the six months ended June 30, 2018 and 2017, respectively. Total advertising costs included in “General and administrative” in the accompanying Condensed Consolidated Statements of Operations for the three months ended June 30, 2018 and 2017 were less than $0.1 million and $0.1 million, respectively, and less than $0.1 million and $0.1 million for the six months ended June 30, 2018 and 2017, respectively.

Reclassifications

Reclassifications — Certain balances in the prior period have been reclassified to conform to current period presentation.

New Accounting Standards Not Yet Adopted

New Accounting Standards Not Yet Adopted

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”) and subsequent amendments (together, “ASC 842”). These amendments require the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840, Leases. These amendments also require qualitative disclosures along with specific quantitative disclosures. These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities have the option to either apply the amendments (1) at the beginning of the earliest period presented using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or (2) at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. There are also certain optional practical expedients that an entity may elect to apply.

The Company’s implementation team has compiled a detailed inventory of leases and a preliminary analysis of the impact to the financial statements. The Company continues to evaluate the critical factors of ASC 842. Based on an assessment of the Company’s business and system requirements, the implementation team has selected a lease accounting software solution to assist the Company in complying with ASC 842. The Company expects the adoption of ASC 842 to result in a material increase in the assets and liabilities on the consolidated balance sheets as a result of recognizing right-of-use assets and lease liabilities for existing operating leases based on the amount of the Company’s current lease commitments. The Company believes that the majority of its leases will maintain their current lease classification under ASC 842. The Company does not expect these amendments to have a material effect on its expense recognition timing or cash flows and, as a result, the Company expects the adoption of ASC 842 will result in an insignificant impact on the Company’s consolidated statements of income and on the consolidated statements of cash flows. The Company is continuing to evaluate the magnitude of the impact and related disclosures, as well as the timing and method of adoption, with respect to the transition method and optional practical expedients. The Company is also continuing to evaluate the full impact of ASC 842, as well as its impacts on its business processes, systems, and internal controls.

Derivatives and Hedging

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedge Activities (“ASU 2017-12”). These amendments help simplify certain aspects of hedge accounting and better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. For cash flow and net investment hedges as of the adoption date, the guidance requires a modified retrospective approach. The amended presentation and disclosure guidance is required only prospectively. These amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early application permitted in any interim period after issuance of this update. The Company does not expect the adoption of ASU 2017-12 to materially impact its financial condition, results of operations, cash flows and disclosures.

Financial Instruments – Credit Losses

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). These amendments require measurement and recognition of expected versus incurred credit losses for financial assets held. These amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the guidance will have on its financial condition, results of operations and cash flows.

New Accounting Standards Recently Adopted

New Accounting Standards Recently Adopted

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) and subsequent amendments (together, “ASC 606”). ASC 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and indicates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. See Note 2, Revenues, for further details.

Financial Instruments

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). These amendments modify how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception applies to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under ASC 820, Fair Value Measurements, and as such, these investments may be measured at cost. These amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). These amendments clarify the presentation of cash receipts and payments in eight specific situations. These amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. These amendments have been applied using a retrospective transition method to each period presented. The adoption of ASU 2016-15 on January 1, 2018 did not have a material impact on the Company’s cash flows.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash (A Consensus of the FASB Emerging Issues Task Force (“ASU 2016-18”). These amendments clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows, requiring entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. These amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. These amendments have been applied using a retrospective transition method to each period presented. The inclusion of restricted cash increased the beginning balance of cash in the Condensed Consolidated Statements of Cash Flows by $1.1 million for the six months ended June 30, 2018 and increased the beginning and ending balances of cash by $0.9 million and $1.0 million, respectively, for the six months ended June 30, 2017. Other than the change in presentation within the accompanying Condensed Consolidated Statements of Cash Flows, the retrospective adoption of ASU 2016-18 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Income Taxes

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory (“ASU 2016-16”). These amendments require recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. These amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The adoption of ASU 2016-16 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements and no cumulative-effect adjustment to retained earnings was required.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the 2017 Tax Reform Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period costs are both acceptable methods subject to an accounting policy election. The Company evaluated the accounting treatment options related to the GILTI provisions and elected to treat any potential GILTI inclusions as a current period cost. The election did not have a material impact on the Company’s consolidated financial statements.

In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). These amendments add various SEC paragraphs pursuant to the issuance of SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). SAB 118, issued in December 2017, directs taxpayers to consider the implications of the 2017 Tax Reform Act as provisional when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. As described in Note 11, Income Taxes, and in accordance with SAB 118, the Company recorded amounts that were considered provisional.

Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”). These amendments allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the 2017 Tax Reform Act. These amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendment in this update is permitted, including adoption in any interim period. These amendments can be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate tax rate in the 2017 Tax Reform Act is recognized. The early adoption of ASU 2018-02 on June 30, 2018 had no impact on the Company’s consolidated financial statements or disclosures.

Business Combinations

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) – Clarifying the Definition of a Business (“ASU 2017-01”). These amendments clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. These amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. These amendments were applied prospectively. The adoption of ASU 2017-01 on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.

Retirement Benefits

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). These amendments require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic benefit cost are required to be presented in the income statement separately from the service cost component outside of a subtotal of income from operations. If a separate line item is not used, the line items used in the income statement to present other components of net benefit cost must be disclosed. These amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. These amendments were applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The amendments allow a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.

The Company adopted the income statement presentation aspects of ASU 2017-07 on a retrospective basis effective January 1, 2018. The following is a reconciliation of the effect of the reclassification of the interest cost and amortization of actuarial gain (loss) from operating expenses to other income (expense) in the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017 (in thousands):

	As Previously Reported		Adjustments Due to the Adoption of ASU 2017-07			As Revised
Three Months Ended June 30, 2017:
Direct salaries and related costs	$	248,643	$	(28	)	$	248,615
General and administrative		92,246		(10	)		92,236
Income from operations		11,290		38			11,328
Other income (expense), net		831		(38	)		793
Six Months Ended June 30, 2017:
Direct salaries and related costs	$	495,808	$	(57	)	$	495,751
General and administrative		184,300		(20	)		184,280
Income from operations		37,304		77			37,381
Other income (expense), net		1,683		(77	)		1,606

Financial Instruments

ASC 825 Financial Instruments (“ASC 825”) permits an entity to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The Company has not elected to use the fair value option permitted under ASC 825 for any of its financial assets and financial liabilities that are not already recorded at fair value.

Determination of Fair Value — The Company generally uses quoted market prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access to determine fair value and classifies such items in Level 1. Fair values determined by Level 2 inputs utilize inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, and inputs other than quoted market prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, currency exchange rates, etc. Assets or liabilities valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

The following section describes the valuation methodologies used by the Company to measure assets and liabilities at fair value on a recurring basis, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified.

Foreign Currency Forward Contracts and Options — The Company enters into foreign currency forward contracts and options over the counter and values such contracts using quoted market prices of comparable instruments or, if none are available, on pricing models or formulas using current market and model assumptions, including adjustments for credit risk. The key inputs include forward or option foreign currency exchange rates and interest rates. These items are classified in Level 2 of the fair value hierarchy.

Embedded Derivatives — The Company uses significant unobservable inputs to determine the fair value of embedded derivatives, which are classified in Level 3 of the fair value hierarchy. These unobservable inputs include expected cash flows associated with the lease, currency exchange rates on the day of commencement, as well as forward currency exchange rates, the results of which are adjusted for credit risk. These items are classified in Level 3 of the fair value hierarchy. See Note 6, Financial Derivatives, for further information.

Investments Held in Rabbi Trust — The investment assets of the rabbi trust are valued using quoted market prices in active markets, which are classified in Level 1 of the fair value hierarchy. For additional information about the deferred compensation plan, refer to Note 7, Investments Held in Rabbi Trust, and Note 15, Stock-Based Compensation.

Contingent Consideration — The Company uses significant unobservable inputs to determine the fair value of contingent consideration, which is classified in Level 3 of the fair value hierarchy. The contingent consideration recorded related to the acquisition of Qelp B.V. and its subsidiary (together, known as “Qelp”) and liabilities assumed as part of the Clear Link Holdings, LLC (“Clearlink”) acquisition was recognized at fair value using a discounted cash flow methodology and a discount rate of approximately 14.0% and 10.0%, respectively.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy:

● Level 1 — Quoted prices for identical instruments in active markets.

● Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

● Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Fair Value of Financial Instruments — The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

● Cash, short-term and other investments, investments held in rabbi trust and accounts payable — The carrying values for cash, short-term and other investments, investments held in rabbi trust and accounts payable approximate their fair values.

● Foreign currency forward contracts and options — Foreign currency forward contracts and options, including premiums paid on options, are recognized at fair value based on quoted market prices of comparable instruments or, if none are available, on pricing models or formulas using current market and model assumptions, including adjustments for credit risk.

● Embedded derivatives — Embedded derivatives within certain hybrid lease agreements are bifurcated from the host contract and recognized at fair value based on pricing models or formulas using significant unobservable inputs, including adjustments for credit risk.

● Long-term debt — The carrying value of long-term debt approximates its estimated fair value as the debt bears interest based on variable market rates, as outlined in the debt agreement.

● Contingent consideration — The contingent consideration is recognized at fair value based on the discounted cash flow method.

Fair Value Measurements — ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820-10-20 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

Foreign Currency and Derivative Instruments

 Cash Flow Hedges – The Company has derivative assets and liabilities relating to outstanding forward contracts and options, designated as cash flow hedges, as defined under ASC 815 Derivatives and Hedging (“ASC 815”), consisting of Philippine Peso, Costa Rican Colon, Hungarian Forint and Romanian Leu contracts. These contracts are entered into to hedge the exposure to variability in the cash flows of a specific asset or liability, or of a forecasted transaction that is attributable to changes in exchange rates.

Earnings Per Share

Basic earnings per share are based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share includes the weighted average number of common shares outstanding during the respective periods and the further dilutive effect, if any, from stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust using the treasury stock method.

Segments and Geographic Information

The Company operates within two regions, the Americas and EMEA. Each region represents a reportable segment comprised of aggregated regional operating segments, which portray similar economic characteristics. The Company aligns its business into two segments to effectively manage the business and support the customer care needs of every client and to respond to the demands of the Company’s global customers.

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Overview and Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2018

Summary of Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets that sum to the amounts reported in the Condensed Consolidated Statements of Cash Flows (in thousands):

	June 30, 2018		December 31, 2017		June 30, 2017		December 31, 2016
Cash and cash equivalents	$	162,422	$	343,734	$	301,451	$	266,675
Restricted cash included in “Other current assets”		153		154		158		160
Restricted cash included in “Deferred charges and other assets”		868		917		823		759
	$	163,443	$	344,805	$	302,432	$	267,594

Accounting Standards Update 2014-09 [Member]

Summary of Impact of Adoption of Accounting Standards

The cumulative effect of the adjustments made to the Company’s Condensed Consolidated Balance Sheet as of December 31, 2017 for the line items impacted by the adoption of ASC 606 was as follows (in thousands):

	December 31, 2017		Adjustments     Due to the Adoption of ASC 606			January 1, 2018
Receivables, net	$	341,958	$	825		$	342,783
Deferred charges and other assets		29,193		2,045			31,238
Income taxes payable		2,606		697			3,303
Deferred revenue and customer liabilities		34,717		(1,048	)		33,669
Other long-term liabilities		22,039		202			22,241
Retained earnings		546,843		3,019			549,862

Accounting Standards Update 2017-07 [Member]

Summary of Impact of Adoption of Accounting Standards

The following is a reconciliation of the effect of the reclassification of the interest cost and amortization of actuarial gain (loss) from operating expenses to other income (expense) in the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017 (in thousands):

	As Previously Reported		Adjustments Due to the Adoption of ASU 2017-07			As Revised
Three Months Ended June 30, 2017:
Direct salaries and related costs	$	248,643	$	(28	)	$	248,615
General and administrative		92,246		(10	)		92,236
Income from operations		11,290		38			11,328
Other income (expense), net		831		(38	)		793
Six Months Ended June 30, 2017:
Direct salaries and related costs	$	495,808	$	(57	)	$	495,751
General and administrative		184,300		(20	)		184,280
Income from operations		37,304		77			37,381
Other income (expense), net		1,683		(77	)		1,606

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Revenues (Tables)

6 Months Ended

Jun. 30, 2018

Revenues from Contracts with Customers Disaggregated by Service Type

The following table represents revenues from contracts with customers disaggregated by service type for the three and six months ended June 30, 2018 and 2017, by the reportable segment for each category (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
Customer engagement solutions and services	$	326,766	$	314,603	$	667,188	$	635,265
Other revenues		275		268		574		537
Total Americas		327,041		314,871		667,762		635,802
EMEA:
Customer engagement solutions and services		67,772		58,836		139,443		119,905
Other revenues		1,948		1,704		3,904		3,702
Total EMEA		69,720		60,540		143,347		123,607
Other:
Other revenues		24		27		47		43
Total Other		24		27		47		43
	$	396,785	$	375,438	$	811,156	$	759,452

Summary of Trade Accounts Receivable, Net

The Company’s trade accounts receivable, net, consists of the following (in thousands):

	June 30, 2018		January 1, 2018
Trade accounts receivable, net, current (1)	$	334,818	$	332,014
Trade accounts receivable, net, noncurrent (2)		4,614		2,078
	$	339,432	$	334,092

⁽¹⁾ Included in “Receivables, net” in the accompanying Condensed Consolidated Balance Sheets. The January 1, 2018 balance includes the $0.8 million adjustment recorded upon adoption of ASC 606.

⁽²⁾ Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets. The January 1, 2018 balance includes a $2.1 million adjustment recorded upon adoption of ASC 606.

Components of Deferred Revenue and Customer Liabilities

Deferred revenue and customer liabilities consists of the following (in thousands):

	June 30, 2018		January 1, 2018
Deferred revenue	$	4,900	$	4,598
Customer arrangements with termination rights		18,498		21,755
Estimated refund liabilities (1)		9,105		7,316
	$	32,503	$	33,669

⁽¹⁾ The January 1, 2018 balance includes the $1.0 million adjustment recorded upon adoption of ASC 606.

Accounting Standards Update 2014-09 [Member]

Summary of Impact of Adoption of Accounting Standards

The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Balance Sheet as of June 30, 2018 were as follows (in thousands):

	As Reported		Balances Without the   Impact of the   ASC 606 Adoption			Effect of Adoption Increase   (Decrease)
June 30, 2018:
Receivables, net	$	347,885	$	345,932		$	1,953
Deferred charges and other assets		32,698		28,280			4,418
Income taxes payable		843		(733	)		1,576
Deferred revenue and customer liabilities		32,503		34,585			(2,082	)
Other long-term liabilities		25,250		25,524			(274	)
Retained earnings		567,988		560,837			7,151

The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Statement of Operations for the three months ended June 30, 2018 were as follows, along with the impact per share (in thousands, except per share data):

	As Reported			Balances Without the Impact of   the ASC 606   Adoption			Effect of   Adoption   Increase (Decrease)
Three Months Ended June 30, 2018:
Revenues	$	396,785		$	394,483		$	2,302
Income from operations		6,460			4,158			2,302
Income before income taxes		4,949			2,647			2,302
Income taxes		(2,229	)		(2,804	)		575
Net income		7,178			5,451			1,727
Net income per common share:
Basic	$	0.17		$	0.13		$	0.04
Diluted	$	0.17		$	0.13		$	0.04

The financial statement line items impacted by the adoption of ASC 606 in the Company’s Condensed Consolidated Statement of Operations for the six months ended June 30, 2018 were as follows, along with the impact per share (in thousands, except per share data):

	As Reported		Balances Without the Impact of   the ASC 606   Adoption			Effect of   Adoption   Increase (Decrease)
Six Months Ended June 30, 2018:
Revenues	$	811,156	$	805,759		$	5,397
Income from operations		20,744		15,347			5,397
Income before income taxes		18,353		12,956			5,397
Income taxes		227		(1,038	)		1,265
Net income		18,126		13,994			4,132
Net income per common share:
Basic	$	0.43	$	0.33		$	0.10
Diluted	$	0.43	$	0.33		$	0.10

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Costs Associated with Exit or Disposal Activities (Tables)

6 Months Ended

Jun. 30, 2018

Restructuring and Related Activities [Abstract]

Cumulative Costs Expected and Incurred as a Result of Exit Plan

The cumulative costs expected and incurred as a result of the Americas 2018 Exit Plan are outlined below as of June 30, 2018 (in thousands):

	Costs Expected To Be Incurred		Cumulative  Costs Incurred  To Date		Expected     Remaining     Costs
Lease obligations and facility exit costs (1)	$	6,692	$	3,028	$	3,664
Severance and related costs (2)		3,701		402		3,299
Severance and related costs (1)		488		219		269
Non-cash impairment charges		5,175		5,175		-
	$	16,056	$	8,824	$	7,232

⁽¹⁾ Relates to “General and administrative” costs.

⁽²⁾ Relates to “Direct salaries and related costs.”

Summary of Accrued Liability and Related Charges

The following table summarizes the accrued liability and related charges for the three and six months ended June 30, 2018 (none in 2017) (in thousands):

	Lease Obligations and Facility Exit Costs			Severance and Related Costs			Total
Balance at the beginning of the period	$	-		$	-		$	-
Charges included in “Direct salaries and related costs”		-			402			402
Charges included in “General and administrative”		3,028			219			3,247
Cash payments		(429	)		(131	)		(560	)
Balance sheet reclassifications (1)		216			-			216
Balance at the end of the period	$	2,815		$	490		$	3,305

⁽¹⁾ Consists of the reclassification of deferred rent balances for locations subject to closure to the restructuring liability.

Summary of Company's Short-term and Long-term Accrued Liability with Exit Plan

The following table summarizes the Company’s short-term and long-term accrued liabilities associated with the Americas 2018 Exit Plan as of June 30, 2018 (none in 2017) (in thousands):

	Americas 2018 Exit Plan
Short-term accrued restructuring liability (1)	$	2,726
Short-term accrued restructuring liability (2)		490
Long-term accrued restructuring liability (3)		89
Ending accrual at June 30, 2018	$	3,305

⁽¹⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheet.

⁽²⁾ Included in “Accrued employee compensation and benefits” in the accompanying Condensed Consolidated Balance Sheet.

⁽³⁾ Included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheet.

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company’s assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 consist of the following as of June 30, 2018 (in thousands):

			Fair Value Measurements Using:
	Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	June 30, 2018		Level 1		Level 2		Level 3
Assets:
Foreign currency forward and option contracts(1)	$	1,354	$	-	$	1,354	$	-
Equity investments held in rabbi trust for the Deferred Compensation Plan(2)		8,557		8,557		-		-
Debt investments held in rabbi trust for the Deferred Compensation  Plan(2)		3,307		3,307		-		-
	$	13,218	$	11,864	$	1,354	$	-
Liabilities:
Foreign currency forward and option contracts(1)	$	1,903	$	-	$	1,903	$	-
Embedded derivatives(1)		598		-		-		598
	$	2,501	$	-	$	1,903	$	598

The Company’s assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 consist of the following as of December 31, 2017 (in thousands):

			Fair Value Measurements Using:
	Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	December 31, 2017		Level 1		Level 2		Level 3
Assets:
Foreign currency forward and option contracts(1)	$	3,848	$	-	$	3,848	$	-
Embedded derivatives(1)		52		-		-		52
Equity investments held in rabbi trust for the Deferred Compensation Plan(2)		8,094		8,094		-		-
Debt investments held in rabbi trust for the Deferred Compensation Plan(2)		3,533		3,533		-		-
	$	15,527	$	11,627	$	3,848	$	52
Liabilities:
Foreign currency forward and option contracts(1)	$	256	$	-	$	256	$	-
Embedded derivatives(1)		579		-		-		579
	$	835	$	-	$	256	$	579

⁽¹⁾ See Note 6, Financial Derivatives, for the classification in the accompanying Condensed Consolidated Balance Sheets.

⁽²⁾ Included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets. See Note 7, Investments Held in Rabbi Trust.

Rollforward of Net Asset (Liability) Activity of Fair Value of Embedded Derivatives

A rollforward of the net asset (liability) activity in the Company’s fair value of the embedded derivatives is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Balance at the beginning of the period	$	(409	)	$	(375	)	$	(527	)	$	(555	)
Gains (losses) recognized in “Other income (expense), net”		(252	)		176			(165	)		315
Settlements		38			25			80			70
Effect of foreign currency		25			3			14			(1	)
Balance at the end of the period	$	(598	)	$	(171	)	$	(598	)	$	(171	)
Change in unrealized gains (losses) included in “Other income (expense), net” related to embedded derivatives held at the end of the period	$	(253	)	$	48		$	(171	)	$	183

Rollforward of Fair Value of Contingent Consideration (Liability)

Contingent Consideration

A rollforward of the activity in the Company’s fair value of the contingent consideration (liability) is as follows (none in 2018) (in thousands):

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
Balance at the beginning of the period	$	(5,633	)	$	(6,100	)
Imputed interest		(34	)		(68	)
Fair value gain (loss) adjustments (1)		268			701
Settlements		4,402			4,528
Effect of foreign currency		(130	)		(188	)
Balance at the end of the period	$	(1,127	)	$	(1,127	)
Change in unrealized gains (losses) included in “General and administrative” related to contingent consideration outstanding at the end of the period	$	268		$	268

⁽¹⁾ Included in “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations.

Summary of Total Impairment Losses Related to Nonrecurring Fair Value Measurements of Certain Assets

The following table summarizes the total impairment losses related to nonrecurring fair value measurements of certain assets (no liabilities) subject to the requirements of ASC 820 (in thousands):

	Total Impairment (Loss)
	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
Property and equipment, net	$	(5,175)	$	(4,189)	$	(8,701)	$	(4,391)

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Company's Purchased Intangible Assets

The following table presents the Company’s purchased intangible assets as of June 30, 2018 (in thousands):

	Gross  Intangibles		Accumulated Amortization			Net  Intangibles		Weighted Average Amortization Period (years)
Intangible assets subject to amortization:
Customer relationships	$	169,749	$	(100,859	)	$	68,890		10
Trade names and trademarks		14,135		(9,651	)		4,484		7
Non-compete agreements		1,820		(1,356	)		464		3
Content library		526		(526	)		-		2
Proprietary software		1,040		(655	)		385		4
Intangible assets not subject to amortization:
Domain names		65,606		-			65,606		N/A
	$	252,876	$	(113,047)		$	139,829		5

The following table presents the Company’s purchased intangible assets as of December 31, 2017 (in thousands):

	Gross Intangibles		Accumulated Amortization			Net  Intangibles		Weighted Average Amortization Period (years)
Intangible assets subject to amortization:
Customer relationships	$	170,853	$	(95,175	)	$	75,678		10
Trade names and trademarks		14,138		(8,797	)		5,341		7
Non-compete agreements		1,820		(1,052	)		768		3
Content library		542		(542	)		-		2
Proprietary software		1,040		(585	)		455		4
Intangible assets not subject to amortization:
Domain names		58,035		-			58,035		N/A
	$	246,428	$	(106,151)		$	140,277		6

Estimated Future Amortization Expense

The Company’s estimated future amortization expense for the succeeding years relating to the purchased intangible assets resulting from acquisitions completed prior to June 30, 2018 is as follows (in thousands):

Years Ending December 31,	Amount
2018 (remaining six months)		7,230
2019		14,022
2020		11,348
2021		6,799
2022		5,714
2023		4,882
2024 and thereafter		24,228

Changes in Goodwill

Changes in goodwill for the six months ended June 30, 2018 consist of the following (in thousands):

	January 1,   2018		Acquisition		Effect of Foreign   Currency			June 30,     2018
Americas	$	258,496	$	-	$	(2,872	)	$	255,624
EMEA		10,769		-		(402	)		10,367
	$	269,265	$	-	$	(3,274	)	$	265,991

Changes in goodwill for the year ended December 31, 2017 consist of the following (in thousands):

	January 1, 2017		Acquisition		Effect of Foreign Currency		December 31, 2017
Americas	$	255,842	$	390	$	2,264	$	258,496
EMEA		9,562		-		1,207		10,769
	$	265,404	$	390	$	3,471	$	269,265

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Financial Derivatives (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Deferred Gains (Losses) and Related Taxes on Cash Flow Hedges

The deferred gains (losses) and related taxes on the Company’s cash flow hedges recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) in the accompanying Condensed Consolidated Balance Sheets are as follows (in thousands):

	June 30, 2018			December 31, 2017
Deferred gains (losses) in AOCI	$	(999	)	$	2,550
Tax on deferred gains (losses) in AOCI		96			(79	)
Deferred gains (losses) in AOCI, net of taxes	$	(903	)	$	2,471
Deferred gains (losses) expected to be reclassified to “Revenues” from AOCI during the next twelve months	$	(882	)

Outstanding Foreign Currency Forward Contracts, Options and Embedded Derivatives

The Company had the following outstanding foreign currency forward contracts and options, and embedded derivatives (in thousands):

	June 30, 2018				December 31, 2017
Contract Type	Notional Amount in USD		Settle Through Date		Notional Amount in USD		Settle Through Date
Cash flow hedges:
Options:
US Dollars/Philippine Pesos	$	61,750		September 2019	$	78,000		December 2018
Forwards:
US Dollars/Philippine Pesos		53,400		September 2019		3,000		June 2018
US Dollars/Costa Rican Colones		82,500		August 2019		70,000		March 2019
Euros/Hungarian Forints		1,726		December 2018		3,554		December 2018
Euros/Romanian Leis		6,894		December 2018		13,977		December 2018
Non-designated hedges:
Forwards		6,153		September 2018		9,253		March 2018
Embedded derivatives		12,676		April 2030		13,519		April 2030

Derivative Instruments Fair Value

The following tables present the fair value of the Company’s derivative instruments included in the accompanying Condensed Consolidated Balance Sheets (in thousands):

	Derivative Assets
	June 30, 2018		December 31, 2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (1)	$	1,343	$	3,604
Foreign currency forward and option contracts (2)		11		-
		1,354		3,604
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (1)		-		244
Embedded derivatives (1)		-		9
Embedded derivatives (2)		-		43
Total derivative assets	$	1,354	$	3,900
	Derivative Liabilities
	June 30, 2018		December 31, 2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (3)	$	1,595	$	175
Foreign currency forward and option contracts (4)		129		81
		1,724		256
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (3)		179		-
Embedded derivatives (3)		108		189
Embedded derivatives (4)		490		390
Total derivative liabilities	$	2,501	$	835

⁽¹⁾ Included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽²⁾ Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽³⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

⁽⁴⁾ Included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheets.

Effect of the Company's Derivative Instruments

The following table presents the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended June 30, 2018 and 2017 (in thousands):

	Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)						Gain (Loss) Reclassified From AOCI Into “Revenues” (Effective Portion)					Gain (Loss) Recognized in “Revenues” on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	June 30,						June 30,					June 30,
	2018			2017			2018		2017			2018		2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	(305	)	$	(1,232	)	$	191	$	(820	)	$	2	$	-
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		-			(4,774	)		-		-			-		-
	$	(305)		$	(6,006)		$	191	$	(820)		$	2	$	-

The following table presents the gains (losses) recognized in “Other income (expense), net” of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,
	2018			2017
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	(93)		$	921
Embedded derivatives		(252	)		176
	$	(345	)	$	1,097

The following table presents the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the six months ended June 30, 2018 and 2017 (in thousands):

	Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)						Gain (Loss) Reclassified From AOCI Into “Revenues” (Effective Portion)					Gain (Loss) Recognized in “Revenues” on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	June 30,						June 30,					June 30,
	2018			2017			2018		2017			2018		2017
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	(3,001	)	$	(1,466	)	$	428	$	(1,580	)	$	8	$	-
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		-			(5,373	)		-		-			-		-
	$	(3,001)		$	(6,839)		$	428	$	(1,580)		$	8	$	-

The following table presents the gains (losses) recognized in “Other income (expense), net” of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the six months ended June 30, 2018 and 2017 (in thousands):

	Six Months Ended June 30,
	2018			2017
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	(1,262	)	$	82
Embedded derivatives		(165	)		315
	$	(1,427	)	$	397

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Investments Held in Rabbi Trust (Tables)

6 Months Ended

Jun. 30, 2018

Investments, Debt and Equity Securities [Abstract]

Investments Held in Rabbi Trust, Classified as Trading

The Company’s investments held in rabbi trust, classified as trading securities and included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets, at fair value, consist of the following (in thousands):

	June 30, 2018				December 31, 2017
	Cost		Fair Value		Cost		Fair Value
Mutual funds	$	8,252	$	11,864	$	8,096	$	11,627

Components of Investment Income (Losses), Included in Other Income (Expense), Net in Accompanying Consolidated Statements of Operations

The mutual funds held in rabbi trust were 72% equity-based and 28% debt-based as of June 30, 2018. Net investment income (losses), included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Net realized gains (losses) from sale of trading securities	$	27	$	149	$	32	$	149
Dividend and interest income		43		25		68		39
Net unrealized holding gains (losses)		72		149		17		542
Net investment income (losses)	$	142	$	323	$	117	$	730

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Deferred Grants (Tables)

6 Months Ended

Jun. 30, 2018

Text Block [Abstract]

Schedule of Deferred Grants, Net of Accumulated Amortization

Deferred grants, net of accumulated amortization, consist of the following (in thousands):

	June 30, 2018			December 31, 2017
Property grants	$	2,587		$	2,843
Lease grants		441			507
Employment grants		68			61
Total deferred grants		3,096			3,411
Less: Lease grants - short-term (1)		(115	)		(117	)
Less: Employment grants - short-term (1)		(68	)		(61	)
Total long-term deferred grants	$	2,913		$	3,233

⁽¹⁾ Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

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Borrowings (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Information Related to Credit Agreements

The following table presents information related to our credit agreements (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Average daily utilization	$	100,110		$	267,000		$	110,691		$	267,000
Interest expense (1), (2)	$	915		$	1,600		$	1,916		$	3,043
Weighted average interest rate (2)		3.7	%		2.4	%		3.5	%		2.3	%

⁽¹⁾ Excludes the amortization of deferred loan fees.

⁽²⁾ Includes the commitment fee.

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Components of Accumulated Other Comprehensive Income (Loss)

The Company presents data in the Condensed Consolidated Statements of Changes in Shareholders’ Equity in accordance with ASC 220, Comprehensive Income (“ASC 220”). ASC 220 establishes rules for the reporting of comprehensive income (loss) and its components. The components of accumulated other comprehensive income (loss) consist of the following (in thousands):

	Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on Net Investment Hedge			Unrealized Gain (Loss) on Cash Flow Hedging Instruments			Unrealized Actuarial Gain (Loss) Related to Pension Liability			Unrealized Gain (Loss) on Post Retirement Obligation			Total
Balance at January 1, 2017	$	(72,393	)	$	6,266		$	(2,225	)	$	1,125		$	200		$	(67,027	)
Pre-tax amount		36,101			(8,352	)		2,276			527			(30	)		30,522
Tax (provision) benefit		-			3,132			(54	)		(18	)		-			3,060
Reclassification of (gain) loss to net income		-			-			2,444			(53	)		(50	)		2,341
Foreign currency translation		(23	)		-			30			(7	)		-			-
Balance at December 31, 2017		(36,315	)		1,046			2,471			1,574			120			(31,104	)
Pre-tax amount		(13,522	)		-			(2,993	)		-			-			(16,515	)
Tax (provision) benefit		-			-			194			7			-			201
Reclassification of (gain) loss to net income		-			-			(460	)		(35	)		(20	)		(515	)
Foreign currency translation		216			-			(115	)		(101	)		-			-
Balance at June 30, 2018	$	(49,621	)	$	1,046		$	(903	)	$	1,445		$	100		$	(47,933	)

Amounts Reclassified to Net Income from Accumulated Other Comprehensive Income (Loss)

The following table summarizes the amounts reclassified to net income from accumulated other comprehensive income (loss) and the associated line item in the accompanying Condensed Consolidated Statements of Operations (in thousands):

	Three Months Ended     June 30,					Six Months Ended     June 30,					Statements of Operations
	2018		2017			2018		2017			Location
Gain (Loss) on Cash Flow Hedging Instruments: (1)
Pre-tax amount	$	193	$	(820	)	$	436	$	(1,580	)		Revenues
Tax (provision) benefit		17		17			24		58			Income taxes
Reclassification to net income		210		(803	)		460		(1,522	)
Actuarial Gain (Loss) Related to Pension Liability: (2)
Pre-tax amount		14		11			29		21			Other income (expense), net
Tax (provision) benefit		3		-			6		-			Income taxes
Reclassification to net income		17		11			35		21
Gain (Loss) on Post Retirement Obligation: (2),(3)
Reclassification to net income		10		13			20		25			Other income (expense), net
Total reclassification of gain (loss) to net income	$	237	$	(779	)	$	515	$	(1,476	)

⁽¹⁾ See Note 6, Financial Derivatives, for further information.

⁽²⁾ See Note 14, Defined Benefit Pension Plan and Postretirement Benefits, for further information.

⁽³⁾ No related tax (provision) benefit.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Numbers of Shares Used in Earnings Per Share Computation

The numbers of shares used in the earnings per share computation are as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Basic:
Weighted average common shares outstanding		42,125		41,854		42,035		41,756
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust		35		80		162		163
Total weighted average diluted shares outstanding		42,160		41,934		42,197		41,919
Anti-dilutive shares excluded from the diluted earnings per share calculation		31		46		6		16

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Commitments and Loss Contingency (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The following is a schedule of future minimum rental payments required under operating leases that have noncancelable lease terms as of June 30, 2018 (in thousands):

	Amount
2018 (remaining six months)	$	630
2019		8,118
2020		8,520
2021		8,643
2022		7,959
2023		3,343
2024 and thereafter		8,211
	$	45,424

Schedule of Future Minimum Purchases Remaining under Agreements

The following is a schedule of the future minimum purchases remaining under the agreements as of June 30, 2018 (in thousands):

	Amount
2018 (remaining six months)	$	10,237
2019		6,346
2020		1,699
2021		193
2022		-
2023		-
2024 and thereafter		-
	$	18,475

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Defined Benefit Pension Plan and Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Net Periodic Benefit Cost and Other Accumulated Comprehensive Income for Pension Plans

The following table provides information about the net periodic benefit cost for the Company’s pension plans (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Service cost	$	109		$	128		$	223		$	253
Interest cost		48			49			98			98
Recognized actuarial (gains)		(14	)		(11	)		(29	)		(21	)
	$	143		$	166		$	292		$	330

Company's Contributions to Employee Retirement Savings Plans

The Company’s contributions included in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
401(k) plan contributions	$	344	$	309	$	803	$	620

Post-Retirement Benefit Obligation and Unrealized Gain (Losses)

The postretirement benefit obligation included in “Other long-term liabilities” and the unrealized gains (losses) included in “Accumulated other comprehensive income” in the accompanying Condensed Consolidated Balance Sheets were as follows (in thousands):

	June 30, 2018		December 31, 2017
Postretirement benefit obligation	$	12	$	15
Unrealized gains (losses) in AOCI (1)		100		120

⁽¹⁾ Unrealized gains (losses) are due to changes in discount rates related to the postretirement obligation.

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Expense, Income Tax Benefits Related to Stock-Based Compensation and Excess Tax Benefits (Provision) Recorded by Company

The following table summarizes the stock-based compensation expense (primarily in the Americas) and income tax benefits related to the stock-based compensation (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Stock-based compensation (expense) (1)	$	(1,673	)	$	(2,261	)	$	(3,750	)	$	(4,732	)
Income tax benefit (2)		402			871			900			1,822

⁽¹⁾ Included in “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations.

⁽²⁾ Included in “Income taxes” in the accompanying Condensed Consolidated Statements of Operations.

Summary of Assumptions Used to Estimate Fair Value

The following table summarizes the assumptions used to estimate the fair value of SARS granted:

	Six Months Ended June 30,
	2018			2017
Expected volatility		21.4	%		19.3	%
Weighted-average volatility		21.4	%		19.3	%
Expected dividend rate		0.0	%		0.0	%
Expected term (in years)		5.0			5.0
Risk-free rate		2.5	%		1.9	%

Summary of Stock Appreciation Rights Activity

The following table summarizes SARs activity as of June 30, 2018 and for the six months then ended:

Stock Appreciation Rights	Shares (000s)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic  Value (000s)
Outstanding at January 1, 2018		734		$	-
Granted		333		$	-
Exercised		(43	)	$	-
Forfeited or expired		-		$	-
Outstanding at June 30, 2018		1,024		$	-		8.6	$	790
Vested or expected to vest at June 30, 2018		1,024		$	-		8.6	$	790
Exercisable at June 30, 2018		363		$	-		7.6	$	580

Weighted Average Grant Date of SARs Granted and Total Intrinsic Value of SARs Exercised

The following table summarizes information regarding SARs granted and exercised (in thousands, except per SAR amounts):

	Six Months Ended June 30,
	2018		2017
Number of SARs granted		333		396
Weighted average grant-date fair value per SAR	$	6.84	$	6.24
Intrinsic value of SARs exercised	$	305	$	1,678
Fair value of SARs vested	$	1,950	$	1,846

Summary of Nonvested Stock Appreciation Rights

The following table summarizes nonvested SARs activity as of June 30, 2018 and for the six months then ended:

Nonvested Stock Appreciation Rights	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		600		$	6.88
Granted		333		$	6.84
Vested		(272	)	$	7.16
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		661		$	6.74

Summary of Nonvested Restricted Shares and Restricted Stock Units

The following table summarizes nonvested restricted shares/RSUs activity as of June 30, 2018 and for the six months then ended:

Nonvested Restricted Shares and RSUs	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		1,109		$	28.50
Granted		488		$	28.15
Vested		(323	)	$	25.78
Forfeited or expired		(59	)	$	27.00
Nonvested at June 30, 2018		1,215		$	29.15

Summary of Weighted Average Grant-Date Fair Value Granted and Total Fair Value of Restricted Shares and Restricted Stock Units Vested

The following table summarizes information regarding restricted shares/RSUs granted and vested (in thousands, except per restricted share/RSU amounts):

	Six Months Ended June 30,
	2018		2017
Number of restricted shares/RSUs granted		488		480
Weighted average grant-date fair value per restricted share/RSU	$	28.15	$	29.42
Fair value of restricted shares/RSUs vested	$	8,342	$	6,868

Summary of Nonvested Common Stock Units and Share Awards

The following table summarizes nonvested common stock share award activity as of June 30, 2018 and for the six months then ended:

Nonvested Common Stock Share Awards	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		8		$	32.21
Granted		34		$	27.68
Vested		(15	)	$	29.87
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		27		$	27.73

Summary of Weighted Average Grant-Date Fair Value of Common Stock Units and Share Awards Granted and Total Fair Value of Common Stock Units and Share Awards Vested

The following table summarizes information regarding common stock share awards granted and vested (in thousands, except per share award amounts):

	Six Months Ended June 30,
	2018		2017
Number of share awards granted		34		24
Weighted average grant-date fair value per share award	$	27.68	$	32.93
Fair value of share awards vested	$	450	$	430

Summary of Nonvested Common Stock

The following table summarizes nonvested common stock activity as of June 30, 2018 and for the six months then ended:

Nonvested Common Stock	Shares (000s)			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2018		3		$	29.56
Granted		10		$	28.86
Vested		(7	)	$	28.89
Forfeited or expired		-		$	-
Nonvested at June 30, 2018		6		$	29.19

Summary of Weighted Average Grant-Date Fair Value of Common Stock Awarded and Cash Used to Settle Company's Obligation under Deferred Compensation

The following table summarizes information regarding shares of common stock granted and vested (in thousands, except per common stock amounts):

	Six Months Ended June 30,
	2018		2017
Number of shares of common stock granted		10		10
Weighted average grant-date fair value per common stock	$	28.86	$	30.66
Fair value of common stock vested	$	213	$	240
Cash used to settle the obligation	$	644	$	422

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Segments and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Company's Reportable Segments

Information about the Company’s reportable segments is as follows (in thousands):

	Americas			EMEA			Other (1)			Consolidated
Three Months Ended June 30, 2018:
Revenues	$	327,041		$	69,720		$	24		$	396,785
Percentage of revenues		82.4	%		17.6	%		0.0	%		100.0	%
Depreciation, net	$	12,335		$	1,476		$	749		$	14,560
Amortization of intangibles	$	3,415		$	214		$	-		$	3,629
Income (loss) from operations	$	19,824		$	2,220		$	(15,584	)	$	6,460
Total other income (expense), net								(1,511	)		(1,511	)
Income taxes								2,229			2,229
Net income										$	7,178
Three Months Ended June 30, 2017:
Revenues	$	314,871		$	60,540		$	27		$	375,438
Percentage of revenues		83.9	%		16.1	%		0.0	%		100.0	%
Depreciation, net	$	11,842		$	1,254		$	724		$	13,820
Amortization of intangibles	$	4,989		$	261		$	-		$	5,250
Income (loss) from operations	$	26,127		$	2,163		$	(16,962)		$	11,328
Total other income (expense), net								(928	)		(928	)
Income taxes								(1,555	)		(1,555	)
Net income										$	8,845
Six Months Ended June 30, 2018:
Revenues	$	667,762		$	143,347		$	47		$	811,156
Percentage of revenues		82.3	%		17.7	%		0.0	%		100.0	%
Depreciation, net	$	25,018		$	2,887		$	1,491		$	29,396
Amortization of intangibles	$	7,407		$	435		$	-		$	7,842
Income (loss) from operations	$	45,688		$	6,859		$	(31,803)		$	20,744
Total other income (expense), net								(2,391	)		(2,391	)
Income taxes								(227	)		(227	)
Net income										$	18,126
Six Months Ended June 30, 2017:
Revenues	$	635,802		$	123,607		$	43		$	759,452
Percentage of revenues		83.7	%		16.3	%		0.0	%		100.0	%
Depreciation, net	$	23,310		$	2,440		$	1,418		$	27,168
Amortization of intangibles	$	9,967		$	514		$	—		$	10,481
Income (loss) from operations	$	64,099		$	7,743		$	(34,461)		$	37,381
Total other income (expense), net								(1,659	)		(1,659	)
Income taxes								(8,165	)		(8,165	)
Net income										$	27,557

⁽¹⁾ Other items (including corporate and other costs, other income and expense, and income taxes) are included for purposes of reconciling to the Company’s consolidated totals as shown in the tables above for the periods shown. Inter-segment revenues are not material to the Americas and EMEA segment results.

Operations by Geographic Location

The following table represents a disaggregation of revenue from contracts with customers by geographic location for the three and six months ended June 30, 2018 and 2017, by the reportable segment for each category (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas:
United States	$	165,648	$	151,654	$	337,094	$	305,298
The Philippines		56,571		56,779		116,657		115,319
Costa Rica		30,973		32,924		63,048		66,249
Canada		24,828		27,020		52,017		56,742
El Salvador		20,584		18,369		40,595		36,714
People’s Republic of China		8,149		9,282		17,497		18,542
Australia		7,700		6,440		15,402		13,090
Mexico		5,632		5,832		11,950		11,441
Other		6,956		6,571		13,502		12,407
Total Americas		327,041		314,871		667,762		635,802
EMEA:
Germany		22,404		18,457		46,579		38,894
Sweden		13,674		14,043		27,804		28,344
United Kingdom		11,960		9,407		25,307		19,140
Romania		8,191		6,685		16,327		13,078
Other		13,491		11,948		27,330		24,151
Total EMEA		69,720		60,540		143,347		123,607
Total Other		24		27		47		43
	$	396,785	$	375,438	$	811,156	$	759,452

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Other Income (Expense) (Tables)

6 Months Ended

Jun. 30, 2018

Other Income and Expenses [Abstract]

Other Income (Expense), Net

Other income (expense), net consists of the following (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Foreign currency transaction gains (losses)	$	641		$	(535	)	$	2,089		$	644
Gains (losses) on derivative instruments not designated as hedges		(345	)		1,097			(1,427	)		397
Other miscellaneous income (expense)		(833	)		231			(1,044	)		565
	$	(537	)	$	793		$	(382	)	$	1,606

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Overview and Basis of Presentation - Additional Information (Detail) $ in Millions						1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 09, 2018 USD ($)	Jul. 09, 2018 AUD ($)	Dec. 20, 2017	May 31, 2017 USD ($)	Apr. 24, 2017	Jul. 31, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) Segment	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Jan. 01, 2018 USD ($)	Jan. 01, 2017 USD ($)	Dec. 31, 2016 USD ($)
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of reportable segments | Segment									2
Statutory federal income tax rate							21.00%	35.00%	21.00%	35.00%
Increase in cash, cash equivalents and restricted cash							$ 163,443,000	$ 302,432,000	$ 163,443,000	$ 302,432,000	$ 344,805,000			$ 267,594,000
XSell Technologies Inc [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Equity method investment, ownership percentage						32.80%
Equity method investment paid						$ 5,000,000
Deferred Charges and Other Assets [Member] | XSell Technologies Inc [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Equity method investment						$ 10,000,000	9,600,000		9,600,000		9,800,000
Other Accrued Expenses and Current Liabilities [Member] | XSell Technologies Inc [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Remaining payment on equity method investment							5,000,000		5,000,000		$ 5,000,000
Other Income (Expense), Net [Member] | XSell Technologies Inc [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Income (loss) from equity method investments							(100,000)	0	(300,000)	0
Direct Salaries and Related Costs [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Total advertising costs							12,000,000	8,600,000	22,000,000	18,400,000
General and Administrative [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Total advertising costs							$ 100,000	100,000
Accounting Standards Update 2016-18 [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Increase in cash, cash equivalents and restricted cash								$ 1,000,000		1,000,000		$ 1,100,000	$ 900,000
Maximum [Member] | General and Administrative [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Total advertising costs									$ 100,000	$ 100,000
US Federal Rate Prior To The 2017 Tax Reform Act [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Statutory federal income tax rate			35.00%					35.00%		35.00%	35.00%
US 2017 Tax Reform Act [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Statutory federal income tax rate							21.00%		21.00%
Global 2000 Telecommunications Services Provider [Member] | Americas [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Effective date of acquisition					May 31, 2017
Aggregate purchase price				$ 7,500,000
Property and equipment acquired				6,000,000
Date of Acquisition agreement					Apr. 24, 2017
Global 2000 Telecommunications Services Provider [Member] | Americas [Member] | Customer Relationships [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Intangibles acquired				$ 1,500,000
WhistleOut [Member] | Subsequent Event [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Effective date of acquisition	Jul. 09, 2018	Jul. 09, 2018
Aggregate purchase price	$ 22,400,000	$ 30.2

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Overview and Basis of Presentation - Summary of Cash and Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	$ 162,422	$ 343,734	$ 301,451	$ 266,675
Cash and Cash Equivalents and Restricted Cash	163,443	344,805	302,432	267,594
Other Current Assets [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash included in "Other current assets"	153	154	158	160
Deferred Charges and Other Assets [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash included in "Deferred charges and other assets"	$ 868	$ 917	$ 823	$ 759

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Overview and Basis of Presentation - Schedule of Impact of Adopting ASU 2017-07 on Statement of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Direct salaries and related costs	$ 264,924	$ 248,615	$ 539,996	$ 495,751
General and administrative	102,037	92,236	204,477	184,280
Income from operations	6,460	11,328	20,744	37,381
Other income (expense), net	$ (537)	793	$ (382)	1,606
As Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Direct salaries and related costs		248,643		495,808
General and administrative		92,246		184,300
Income from operations		11,290		37,304
Other income (expense), net		831		1,683
Accounting Standards Update 2017-07 [Member] | Adjustments Due to the Adoption of ASU 2017-07 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Direct salaries and related costs		(28)		(57)
General and administrative		(10)		(20)
Income from operations		38		77
Other income (expense), net		$ (38)		$ (77)

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Revenues - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue, performance obligation satisfied over time, method used, description			The Company recognizes revenues over time using output methods such as a per minute, per hour, per call, per transaction or per time and materials basis.
Stated contract term			30 days to six years
Non-cancelable contract term			Varying periods up to 180 days
Description of payment terms			The Company’s primary billing terms are that payment is due upon receipt of the invoice, payable usually within 30 or 60 days.
Percentage of revenue	100.00%	100.00%	100.00%	100.00%
Deferred revenue recognized in the period	$ 300		$ 4,200
Revenue remaining performance obligation expected timing of satisfaction explanation			The Company expects to recognize its deferred revenue as of June 30, 2018 over the next 180 days.
Refund liabilities timing of resolution explanation			Refund liabilities are generally resolved in 180 days, once it is determined whether the requisite service levels and client requirements were achieved to settle the contingency.
Accounting Standards Update 2014-09 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained earnings	3,019		$ 3,019
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained earnings	$ 3,019		$ 3,019		$ 3,000
Other Revenues [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percentage of revenue	0.60%	0.50%	0.60%	0.60%

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Revenues - Summary of Impact of Adoption of Accounting Standards (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Receivables, net	$ 347,885		$ 347,885		$ 342,783	$ 341,958
Deferred charges and other assets	32,698		32,698		31,238	29,193
Income taxes payable	843		843		3,303	2,606
Deferred revenue and customer liabilities	32,503		32,503		33,669	34,717
Other long-term liabilities	25,250		25,250		22,241	22,039
Retained earnings	567,988		567,988		549,862	$ 546,843
Revenues	396,785	$ 375,438	811,156	$ 759,452
Income from operations	6,460	11,328	20,744	37,381
Income before income taxes	4,949	10,400	18,353	35,722
Income taxes	(2,229)	1,555	227	8,165
Net income	$ 7,178	$ 8,845	$ 18,126	$ 27,557
Net income per common share:
Basic	$ 0.17	$ 0.21	$ 0.43	$ 0.66
Diluted	$ 0.17	$ 0.21	$ 0.43	$ 0.66
Balances Without the Impact of the ASC 606 Adoption [Member] | Accounting Standards Update 2014-09 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Receivables, net	$ 345,932		$ 345,932
Deferred charges and other assets	28,280		28,280
Income taxes payable	(733)		(733)
Deferred revenue and customer liabilities	34,585		34,585
Other long-term liabilities	25,524		25,524
Retained earnings	560,837		560,837
Revenues	394,483		805,759
Income from operations	4,158		15,347
Income before income taxes	2,647		12,956
Income taxes	(2,804)		(1,038)
Net income	$ 5,451		$ 13,994
Net income per common share:
Basic	$ 0.13		$ 0.33
Diluted	$ 0.13		$ 0.33
Effect of Adoption Increase (Decrease) [Member] | Accounting Standards Update 2014-09 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Receivables, net	$ 1,953		$ 1,953		825
Deferred charges and other assets	4,418		4,418		2,045
Income taxes payable	1,576		1,576		697
Deferred revenue and customer liabilities	(2,082)		(2,082)		(1,048)
Other long-term liabilities	(274)		(274)		202
Retained earnings	7,151		7,151		$ 3,019
Revenues	2,302		5,397
Income from operations	2,302		5,397
Income before income taxes	2,302		5,397
Income taxes	575		1,265
Net income	$ 1,727		$ 4,132
Net income per common share:
Basic	$ 0.04		$ 0.10
Diluted	$ 0.04		$ 0.10

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Revenues - Revenues from Contracts with Customers Disaggregated by Service Type (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation of Revenue [Line Items]
Revenues	$ 396,785	$ 375,438	$ 811,156	$ 759,452
Americas [Member]
Disaggregation of Revenue [Line Items]
Revenues	327,041	314,871	667,762	635,802
Americas [Member] | Customer Engagement Services [Member]
Disaggregation of Revenue [Line Items]
Revenues	326,766	314,603	667,188	635,265
Americas [Member] | Other Revenues [Member]
Disaggregation of Revenue [Line Items]
Revenues	275	268	574	537
EMEA [Member]
Disaggregation of Revenue [Line Items]
Revenues	69,720	60,540	143,347	123,607
EMEA [Member] | Customer Engagement Services [Member]
Disaggregation of Revenue [Line Items]
Revenues	67,772	58,836	139,443	119,905
EMEA [Member] | Other Revenues [Member]
Disaggregation of Revenue [Line Items]
Revenues	1,948	1,704	3,904	3,702
Other Segment [Member]
Disaggregation of Revenue [Line Items]
Revenues	24	27	47	43
Other Segment [Member] | Other Revenues [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 24	$ 27	$ 47	$ 43

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Revenues - Summary of Trade Accounts Receivable, Net (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade accounts receivable, net	$ 339,432	$ 334,092
Receivables Net, Current [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade accounts receivable, net, current	334,818	332,014
Deferred Charges and Other Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade accounts receivable, net, noncurrent	$ 4,614	$ 2,078

XML

Revenues - Summary of Trade Accounts Receivable, Net (Parenthetical) (Detail) - Accounting Standards Update 2014-09 [Member] - Effect of Adoption Increase (Decrease) [Member] $ in Millions	Jan. 01, 2018 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade accounts receivable, net, current	$ 0.8
Trade accounts receivable, net, noncurrent	$ 2.1

XML

Revenues - Components of Deferred Revenue and Customer Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Schedule of Deferred Revenue and Customer Liabilities [Line Items]
Deferred revenue and customer liabilities	$ 32,503	$ 33,669	$ 34,717
Deferred Revenue and Customer Liabilities [Member]
Schedule of Deferred Revenue and Customer Liabilities [Line Items]
Deferred revenue	4,900	4,598
Customer arrangements with termination rights	18,498	21,755
Estimated refund liabilities	$ 9,105	$ 7,316

XML

Revenues - Components of Deferred Revenue and Customer Liabilities (Parenthetical) (Detail) $ in Millions	Jan. 01, 2018 USD ($)
Accounting Standards Update 2014-09 [Member] | Effect of Adoption Increase (Decrease) [Member]
Deferred Revenue and Customer Liabilities [Abstract]
Estimated refund liabilities	$ 1.0

XML

Costs Associated with Exit or Disposal Activities - Cumulative Costs Expected and Incurred as a Result of Exit Plan (Detail) - 2018 Exit Plan [Member] - Americas [Member] $ in Thousands	Jun. 30, 2018 USD ($)
Restructuring Cost and Reserve [Line Items]
Costs Expected To Be Incurred	$ 16,056
Cumulative Costs Incurred To Date	8,824
Expected Remaining Costs	7,232
Non-Cash Impairment Charges [Member]
Restructuring Cost and Reserve [Line Items]
Costs Expected To Be Incurred	5,175
Cumulative Costs Incurred To Date	5,175
General and Administrative [Member] | Lease Obligations and Facility Exit Costs [Member]
Restructuring Cost and Reserve [Line Items]
Costs Expected To Be Incurred	6,692
Cumulative Costs Incurred To Date	3,028
Expected Remaining Costs	3,664
General and Administrative [Member] | Severance and Related Costs [Member]
Restructuring Cost and Reserve [Line Items]
Costs Expected To Be Incurred	488
Cumulative Costs Incurred To Date	219
Expected Remaining Costs	269
Direct Salaries and Related Costs [Member] | Severance and Related Costs [Member]
Restructuring Cost and Reserve [Line Items]
Costs Expected To Be Incurred	3,701
Cumulative Costs Incurred To Date	402
Expected Remaining Costs	$ 3,299

XML

Costs Associated with Exit or Disposal Activities - Summary of Accrued Liability and Related Charges (Detail) - Americas [Member] - 2018 Exit Plan [Member] - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period	$ 0	$ 0
Cash payments	(560)	(560)
Balance sheet reclassifications	216	216
Balance at the end of the period	3,305	3,305
Lease Obligations and Facility Exit Costs [Member]
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period	0	0
Cash payments	(429)	(429)
Balance sheet reclassifications	216	216
Balance at the end of the period	2,815	2,815
Severance and Related Costs [Member]
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period	0	0
Cash payments	(131)	(131)
Balance at the end of the period	490	490
Direct Salaries and Related Costs [Member]
Restructuring Reserve [Roll Forward]
Restructuring charges	402	402
Direct Salaries and Related Costs [Member] | Severance and Related Costs [Member]
Restructuring Reserve [Roll Forward]
Restructuring charges	402	402
General and Administrative [Member]
Restructuring Reserve [Roll Forward]
Restructuring charges	3,247	3,247
General and Administrative [Member] | Lease Obligations and Facility Exit Costs [Member]
Restructuring Reserve [Roll Forward]
Restructuring charges	3,028	3,028
General and Administrative [Member] | Severance and Related Costs [Member]
Restructuring Reserve [Roll Forward]
Restructuring charges	$ 219	$ 219

XML

Costs Associated with Exit or Disposal Activities - Summary of Company's Short-term and Long-term Accrued Liability with Exit Plan (Detail) - 2018 Exit Plan [Member] - Americas [Member] - USD ($) $ in Thousands	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Restructuring Cost and Reserve [Line Items]
Ending accrual at June 30, 2018	$ 3,305	$ 0	$ 0
Other Accrued Expenses and Current Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Short-term accrued restructuring liability	2,726
Accrued Employee Compensation and Benefits [Member]
Restructuring Cost and Reserve [Line Items]
Short-term accrued restructuring liability	490
Other Long-Term Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Long-term accrued restructuring liability	$ 89

XML

Cost Associated with Exit or Disposal Activities - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018
Americas [Member] | 2018 Exit Plan [Member]
Restructuring Cost and Reserve [Line Items]
Lease termination date	Sep. 30, 2019

XML

Fair Value - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	May 31, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payments of contingent consideration related to acquisitions					$ 4,528
Impairment charge		$ 5,175	$ 4,189	$ 8,701	4,391
Land [Member] | Property and Equipment [Member] | Americas [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment charge					200
Costumer Contact Management Center [Member] | Leasehold Improvements Equipment Furniture and Fixtures [Member] | Property and Equipment [Member] | U.S. and Canada [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment charge		$ 5,200	4,200	$ 8,700	4,200
Qelp [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payments of contingent consideration related to acquisitions	$ 4,400				4,400
Qelp [Member] | Measurement Input, Discount Rate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value discount rate		14.00%		14.00%
Clearlink [Member] | Measurement Input, Discount Rate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value discount rate		10.00%		10.00%
Clearlink [Member] | General and Administrative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value gain (loss) adjustments on contingent consideration			268		701
Clearlink [Member] | General and Administrative [Member] | (Gain) Loss Due to Changes in the Probability of Achievement of Revenue Targets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value gain (loss) adjustments on contingent consideration			$ 300		$ 700

XML

Fair Value - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Assets:
Derivative Assets	$ 1,354	$ 3,900
Total assets	13,218	15,527
Liabilities:
Derivative Liabilities	2,501	835
Total liabilities	2,501	835
Foreign Currency Forward and Option Contracts [Member] | Other Long-Term Liabilities and Other Accrued Expenses and Current Liabilities [Member]
Liabilities:
Derivative Liabilities	1,903	256
Foreign Currency Forward and Option Contracts [Member] | Other Current Assets, Deferred Charges and Other Assets [Member]
Assets:
Derivative Assets	1,354	3,848
Embedded Derivatives [Member] | Other Current Assets, Deferred Charges and Other Assets [Member]
Assets:
Derivative Assets		52
Embedded Derivatives [Member] | Other Long-Term Liabilities and Other Accrued Expenses and Current Liabilities [Member]
Liabilities:
Derivative Liabilities	598	579
Equity Investments Held in Rabbi Trust for the Deferred Compensation Plan [Member] | Other Current Assets [Member]
Assets:
Investments held in rabbi trust for the Deferred Compensation Plan	8,557	8,094
Debt Investments Held in Rabbi Trust for the Deferred Compensation Plan [Member] | Other Current Assets [Member]
Assets:
Investments held in rabbi trust for the Deferred Compensation Plan	3,307	3,533
Quoted Prices in Active Markets For Identical Assets Level 1 [Member]
Assets:
Total assets	11,864	11,627
Quoted Prices in Active Markets For Identical Assets Level 1 [Member] | Equity Investments Held in Rabbi Trust for the Deferred Compensation Plan [Member] | Other Current Assets [Member]
Assets:
Investments held in rabbi trust for the Deferred Compensation Plan	8,557	8,094
Quoted Prices in Active Markets For Identical Assets Level 1 [Member] | Debt Investments Held in Rabbi Trust for the Deferred Compensation Plan [Member] | Other Current Assets [Member]
Assets:
Investments held in rabbi trust for the Deferred Compensation Plan	3,307	3,533
Significant Other Observable Inputs Level 2 [Member]
Assets:
Total assets	1,354	3,848
Liabilities:
Total liabilities	1,903	256
Significant Other Observable Inputs Level 2 [Member] | Foreign Currency Forward and Option Contracts [Member] | Other Long-Term Liabilities and Other Accrued Expenses and Current Liabilities [Member]
Liabilities:
Derivative Liabilities	1,903	256
Significant Other Observable Inputs Level 2 [Member] | Foreign Currency Forward and Option Contracts [Member] | Other Current Assets, Deferred Charges and Other Assets [Member]
Assets:
Derivative Assets	1,354	3,848
Significant Unobservable Inputs Level 3 [Member]
Assets:
Total assets		52
Liabilities:
Total liabilities	598	579
Significant Unobservable Inputs Level 3 [Member] | Embedded Derivatives [Member] | Other Current Assets, Deferred Charges and Other Assets [Member]
Assets:
Derivative Assets		52
Significant Unobservable Inputs Level 3 [Member] | Embedded Derivatives [Member] | Other Long-Term Liabilities and Other Accrued Expenses and Current Liabilities [Member]
Liabilities:
Derivative Liabilities	$ 598	$ 579

XML

Fair Value - Rollforward of Net Asset (Liability) Activity of Fair Value of Embedded Derivatives (Detail) - Embedded Derivatives [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at the beginning of the period	$ (409)	$ (375)	$ (527)	$ (555)
Settlements	38	25	80	70
Effect of foreign currency	25	3	14	(1)
Balance at the end of the period	(598)	(171)	(598)	(171)
Other Income (Expense), Net [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Gains (losses) recognized in "Other income (expense), net"	(252)	176	(165)	315
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract]
Change in unrealized gains (losses) included in "Other income (expense), net" related to embedded derivatives held at the end of the period	$ (253)	$ 48	$ (171)	$ 183

XML

Fair Value - Rollforward of Fair Value of Contingent Consideration (Liability) (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration (liability), Beginning Balance	$ (5,633)	$ (6,100)
Imputed interest	(34)	(68)
Settlements	4,402	4,528
Effect of foreign currency	(130)	(188)
Contingent Consideration (liability), Ending Balance	(1,127)	(1,127)
General and Administrative [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract]
Change in unrealized gains (losses) included in "General and administrative" related to contingent consideration outstanding at the end of the period	268	268
Clearlink [Member] | General and Administrative [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value gain (loss) adjustments	$ 268	$ 701

XML

Fair Value - Summary of Total Impairment Losses Related to Nonrecurring Fair Value Measurements of Certain Assets (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impairment of long-lived assets	$ (5,175)	$ (4,189)	$ (8,701)	$ (4,391)
Significant Unobservable Inputs Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Property and Equipment [Member] | Americas [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
Impairment of long-lived assets	$ (5,175)	$ (4,189)	$ (8,701)	$ (4,391)

XML

Goodwill and Intangible Assets - Company's Purchased Intangible Assets (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 252,876	$ 246,428
Accumulated Amortization	(113,047)	(106,151)
Net Intangibles	$ 139,829	$ 140,277
Weighted Average Amortization Period (years)	5 years	6 years
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 169,749	$ 170,853
Accumulated Amortization	(100,859)	(95,175)
Net Intangibles	$ 68,890	$ 75,678
Weighted Average Amortization Period (years)	10 years	10 years
Trade Name and Trademarks [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 14,135	$ 14,138
Accumulated Amortization	(9,651)	(8,797)
Net Intangibles	$ 4,484	$ 5,341
Weighted Average Amortization Period (years)	7 years	7 years
Non-Compete Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 1,820	$ 1,820
Accumulated Amortization	(1,356)	(1,052)
Net Intangibles	$ 464	$ 768
Weighted Average Amortization Period (years)	3 years	3 years
Content Library [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 526	$ 542
Accumulated Amortization	$ (526)	$ (542)
Weighted Average Amortization Period (years)	2 years	2 years
Proprietary Software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 1,040	$ 1,040
Accumulated Amortization	(655)	(585)
Net Intangibles	$ 385	$ 455
Weighted Average Amortization Period (years)	4 years	4 years
Domain Names Not Subject To Amortization [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 65,606	$ 58,035
Net Intangibles	$ 65,606	$ 58,035

XML

Goodwill and Intangible Assets - Estimated Future Amortization Expense (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2018 (remaining six months)	$ 7,230
2019	14,022
2020	11,348
2021	6,799
2022	5,714
2023	4,882
2024 and thereafter	$ 24,228

XML

Goodwill and Intangible Assets - Changes in Goodwill (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Goodwill [Line Items]
Beginning Balance, Goodwill Net	$ 269,265	$ 265,404
Acquisition		390
Effect of Foreign Currency	(3,274)	3,471
Ending Balance, Goodwill Net	265,991	269,265
Americas [Member]
Goodwill [Line Items]
Beginning Balance, Goodwill Net	258,496	255,842
Acquisition		390
Effect of Foreign Currency	(2,872)	2,264
Ending Balance, Goodwill Net	255,624	258,496
EMEA [Member]
Goodwill [Line Items]
Beginning Balance, Goodwill Net	10,769	9,562
Effect of Foreign Currency	(402)	1,207
Ending Balance, Goodwill Net	$ 10,367	$ 10,769

XML

Goodwill and Intangible Assets - Additional Information (Detail)	3 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($) Reporting_Unit	Dec. 31, 2016 USD ($)
Goodwill [Line Items]
Number of reporting units | Reporting_Unit		6
Number of reporting units, fair value in excess of carrying value | Reporting_Unit		4
Goodwill	$ 265,991,000	$ 269,265,000	$ 265,404,000
Qelp [Member]
Goodwill [Line Items]
Goodwill Impairment Loss	0
Goodwill	10,400,000
Clearlink [Member]
Goodwill [Line Items]
Goodwill Impairment Loss	0
Goodwill	$ 71,000,000

XML

Financial Derivatives - Deferred Gains (Losses) and Related Taxes on Cash Flow Hedges (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Deferred gains (losses) in AOCI	$ (999)	$ 2,550
Tax on deferred gains (losses) in AOCI	96	(79)
Deferred gains (losses) in AOCI, net of taxes	(903)	$ 2,471
Deferred gains (losses) expected to be reclassified to "Revenues" from AOCI during the next twelve months	$ (882)

XML

Financial Derivatives - Additional Information (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Maximum period of foreign currency hedge contracts	180 days
Maximum amount of loss due to credit risk	$ 1,400,000	$ 3,800,000
Total net settlement amount asset positions	900,000	3,600,000
Total net settlement amount liability positions	$ 1,400,000	$ 0

XML

Financial Derivatives - Outstanding Foreign Currency Forward Contracts, Options and Embedded Derivatives (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Option Contracts [Member] | US Dollars/Philippine Pesos [Member]
Derivative [Line Items]
Notional Amount	$ 61,750	$ 78,000
Settle Through Date	Sep. 30, 2019	Dec. 31, 2018
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Forwards [Member] | US Dollars/Philippine Pesos [Member]
Derivative [Line Items]
Notional Amount	$ 53,400	$ 3,000
Settle Through Date	Sep. 30, 2019	Jun. 30, 2018
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Forwards [Member] | US Dollars/Costa Rican Colones [Member]
Derivative [Line Items]
Notional Amount	$ 82,500	$ 70,000
Settle Through Date	Aug. 31, 2019	Mar. 31, 2019
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Forwards [Member] | Euros/Hungarian Forints [Member]
Derivative [Line Items]
Notional Amount	$ 1,726	$ 3,554
Settle Through Date	Dec. 31, 2018	Dec. 31, 2018
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Forwards [Member] | Euros/Romanian Leis [Member]
Derivative [Line Items]
Notional Amount	$ 6,894	$ 13,977
Settle Through Date	Dec. 31, 2018	Dec. 31, 2018
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Forwards [Member]
Derivative [Line Items]
Notional Amount	$ 6,153	$ 9,253
Settle Through Date	Sep. 30, 2018	Mar. 31, 2018
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member]
Derivative [Line Items]
Notional Amount	$ 12,676	$ 13,519
Settle Through Date	Apr. 30, 2030	Apr. 30, 2030

XML

Financial Derivatives - Derivative Instruments Fair Value (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Derivative Assets	$ 1,354	$ 3,900
Derivative Liabilities	2,501	835
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets		244
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Other Accrued Expenses and Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	179
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets		9
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member] | Deferred Charges and Other Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets		43
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member] | Other Accrued Expenses and Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	108	189
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member] | Other Long-Term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	490	390
Cash Flow Hedges [Member] | Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Option Contracts [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	1,354	3,604
Derivative Liabilities	1,724	256
Cash Flow Hedges [Member] | Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Other Current Assets [Member] | Option Contracts [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	1,343	3,604
Cash Flow Hedges [Member] | Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Deferred Charges and Other Assets [Member] | Option Contracts [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	11
Cash Flow Hedges [Member] | Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Other Accrued Expenses and Current Liabilities [Member] | Option Contracts [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	1,595	175
Cash Flow Hedges [Member] | Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Other Long-Term Liabilities [Member] | Option Contracts [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	$ 129	$ 81

XML

Financial Derivatives - Effect of Company's Derivative Instruments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)	$ (305)	$ (6,006)	$ (3,001)	$ (6,839)
Gain (Loss) Reclassified From AOCI Into "Revenues" (Effective Portion)	191	(820)	428	(1,580)
Gain (Loss) Recognized in "Revenues" on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	2		8
Gain (Loss) Recognized in Other Income (Expense) on Derivatives	(345)	1,097	(1,427)	397
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Foreign Currency Forward Contracts [Member] | Option Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)	(305)	(1,232)	(3,001)	(1,466)
Gain (Loss) Reclassified From AOCI Into "Revenues" (Effective Portion)	191	(820)	428	(1,580)
Gain (Loss) Recognized in "Revenues" on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	2		8
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Net Investment Hedges [Member] | Foreign Currency Forward Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)		(4,774)		(5,373)
Other Income (Expense), Net [Member] | Derivatives Not Designated as Hedging Instruments under ASC 815 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Other Income (Expense) on Derivatives	(345)	1,097	(1,427)	397
Other Income (Expense), Net [Member] | Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Other Income (Expense) on Derivatives	(93)	921	(1,262)	82
Other Income (Expense), Net [Member] | Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Other Income (Expense) on Derivatives	$ (252)	$ 176	$ (165)	$ 315

XML

Investments Held in Rabbi Trust - Investments Held in Rabbi Trust, Classified as Trading (Detail) - Mutual Funds [Member] - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule of Trading Securities and Other Trading Assets [Line Items]
Mutual funds, Cost	$ 8,252	$ 8,096
Other Current Assets [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Mutual funds, Fair Value	$ 11,864	$ 11,627

XML

Investments Held in Rabbi Trust - Additional Information (Detail)	Jun. 30, 2018
Equity-Based Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Mutual funds held in rabbi trust	72.00%
Debt-Based Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Mutual funds held in rabbi trust	28.00%

XML

Investments Held in Rabbi Trust - Components of Investment Income (Losses), Included in Other Income (Expense), Net in Accompanying Consolidated Statements of Operations (Detail) - Other Income (Expense), Net [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net realized gains (losses) from sale of trading securities	$ 27	$ 149	$ 32	$ 149
Dividend and interest income	43	25	68	39
Net unrealized holding gains (losses)	72	149	17	542
Net investment income (losses)	$ 142	$ 323	$ 117	$ 730

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Deferred Grants - Schedule of Deferred Grants, Net of Accumulated Amortization (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Deferred Revenue Arrangement [Line Items]
Lease grants	$ 441	$ 507
Employment grants	68	61
Total deferred grants	3,096	3,411
Total long-term deferred grants	2,913	3,233
Long Term Deferred Grants Net [Member]
Deferred Revenue Arrangement [Line Items]
Property grants	2,587	2,843
Total long-term deferred grants	2,913	3,233
Other Accrued Expenses and Current Liabilities [Member]
Deferred Revenue Arrangement [Line Items]
Less: Lease grants - short-term	(115)	(117)
Less: Employment grants - short-term	$ (68)	$ (61)

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Borrowings - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Jan. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	May 31, 2015	May 12, 2015
Line of Credit Facility [Line Items]
Outstanding borrowings		$ 90,000,000		$ 90,000,000	$ 275,000,000
Long-term debt repaid				190,000,000
Current Credit Agreement [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity							$ 440,000,000
Line of credit facility, expiration date		May 12, 2020
Outstanding borrowings		$ 90,000,000		$ 90,000,000	$ 275,000,000
Credit agreement customary fees description			The Company is required to pay certain customary fees, including a commitment fee determined quarterly based on the Company's leverage ratio and due quarterly in arrears as calculated on the average unused amount of the Credit Agreement
Underwriting fee for credit agreement						$ 900,000
Long-term debt repaid	$ 175,000,000
Current Credit Agreement [Member] | Non-Voting Capital Stock Direct Foreign Subsidiaries [Member]
Line of Credit Facility [Line Items]
Percentage of capital stock pledged under credit agreement			100.00%
Current Credit Agreement [Member] | Voting Capital Stock Direct Foreign Subsidiaries [Member]
Line of Credit Facility [Line Items]
Percentage of capital stock pledged under credit agreement			65.00%
Prior Credit Agreement [Member]
Line of Credit Facility [Line Items]
Underwriting fee for credit agreement			$ 400,000
Current Credit Agreement Alternate-Currency Sub-Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity							200,000,000
Current Credit Agreement Swingline Sub-Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity							10,000,000
Current Credit Agreement Letter of Credit Sub-Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity							$ 35,000,000

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Borrowings - Information Related to Credit Agreements (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Line of Credit Facility [Abstract]
Average daily utilization of borrowings	$ 100,110	$ 267,000	$ 110,691	$ 267,000
Interest expense	$ 915	$ 1,600	$ 1,916	$ 3,043
Weighted average interest rate	3.70%	2.40%	3.50%	2.30%

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Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	$ (31,104)	$ (67,027)
Pre-tax amount	(16,515)	30,522
Tax (provision) benefit	201	3,060
Reclassification of (gain) loss to net income	(515)	2,341
Ending balance, accumulated other comprehensive income (loss)	(47,933)	(31,104)
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	(36,315)	(72,393)
Pre-tax amount	(13,522)	36,101
Foreign currency translation	216	(23)
Ending balance, accumulated other comprehensive income (loss)	(49,621)	(36,315)
Unrealized Gain (Loss) on Net Investment Hedge [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	1,046	6,266
Pre-tax amount		(8,352)
Tax (provision) benefit		3,132
Ending balance, accumulated other comprehensive income (loss)	1,046	1,046
Unrealized Gain (Loss) on Cash Flow Hedging Instruments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	2,471	(2,225)
Pre-tax amount	(2,993)	2,276
Tax (provision) benefit	194	(54)
Reclassification of (gain) loss to net income	(460)	2,444
Foreign currency translation	(115)	30
Ending balance, accumulated other comprehensive income (loss)	(903)	2,471
Unrealized Actuarial Gain (Loss) Related to Pension Liability [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	1,574	1,125
Pre-tax amount		527
Tax (provision) benefit	7	(18)
Reclassification of (gain) loss to net income	(35)	(53)
Foreign currency translation	(101)	(7)
Ending balance, accumulated other comprehensive income (loss)	1,445	1,574
Unrealized Gain (Loss) on Post Retirement Obligation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	120	200
Pre-tax amount		(30)
Reclassification of (gain) loss to net income	(20)	(50)
Ending balance, accumulated other comprehensive income (loss)	$ 100	$ 120

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Accumulated Other Comprehensive Income (Loss) - Amounts Reclassified to Net Income from Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pre-tax amount	$ 4,949	$ 10,400	$ 18,353	$ 35,722
Tax (provision) benefit	(2,229)	1,555	227	8,165
Reclassification of gain (loss) to net income	7,178	8,845	18,126	27,557
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification of gain (loss) to net income	237	(779)	515	(1,476)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Gain (Loss) on Cash Flow Hedging Instruments [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Tax (provision) benefit	17	17	24	58
Reclassification of gain (loss) to net income	210	(803)	460	(1,522)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Actuarial Gain (Loss) Related to Pension Liability [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Tax (provision) benefit	3		6
Reclassification of gain (loss) to net income	17	11	35	21
Reclassification out of Accumulated Other Comprehensive Income [Member] | Revenues [Member] | Gain (Loss) on Cash Flow Hedging Instruments [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pre-tax amount	193	(820)	436	(1,580)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Other Income (Expense), Net [Member] | Actuarial Gain (Loss) Related to Pension Liability [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pre-tax amount	14	11	29	21
Reclassification out of Accumulated Other Comprehensive Income [Member] | Other Income (Expense), Net [Member] | Gain (Loss) on Post Retirement Obligation [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification of gain (loss) to net income	$ 10	$ 13	$ 20	$ 25

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Income Taxes - Additional Information (Detail) - USD ($)		3 Months Ended			6 Months Ended		12 Months Ended
	Dec. 20, 2017	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Income Tax [Line Items]
Effective rate of tax		(45.00%)		15.00%	1.20%	22.90%
Statutory federal income tax rate		21.00%		35.00%	21.00%	35.00%
Increase in benefit associated with settlement of tax audits and ancillary issues		$ (2,000,000)			$ (2,000,000)
Decrease in amount of excess tax benefits from stock-based compensation					600,000
Undistributed earnings of foreign subsidiaries			$ 531,800,000				$ 531,800,000
Canada Revenue Agency [Member]
Income Tax [Line Items]
Income tax benefit recognized on settlement of Canadian audit		$ (2,700,000)		$ (1,200,000)	$ (2,700,000)	$ (1,200,000)
US Federal Rate Prior To The 2017 Tax Reform Act [Member]
Income Tax [Line Items]
Statutory federal income tax rate	35.00%			35.00%		35.00%	35.00%
US 2017 Tax Reform Act [Member]
Income Tax [Line Items]
Statutory federal income tax rate		21.00%			21.00%
Change in tax rate, income tax expense (benefit)		$ 500,000			$ 1,100,000
Additional income tax expense/benefit attributable to the enactment of the 2017 Tax Reform Act			32,700,000				$ 32,700
US 2017 Tax Reform Act [Member] | One-Time Transition Tax on Mandatory Deemed Repatriation of Foreign Earnings [Member]
Income Tax [Line Items]
Additional income tax expense/benefit attributable to the enactment of the 2017 Tax Reform Act			32,700,000				32,700,000
US 2017 Tax Reform Act [Member] | Foreign Withholding Taxes on Certain Anticipated Distributions [Member]
Income Tax [Line Items]
Additional income tax expense/benefit attributable to the enactment of the 2017 Tax Reform Act			1,000,000				1,000,000
US 2017 Tax Reform Act [Member] | Remeasurement of Certain Deferred Tax Assets and Liabilities [Member]
Income Tax [Line Items]
Additional income tax expense/benefit attributable to the enactment of the 2017 Tax Reform Act			$ (1,000,000)				$ (1,000,000)

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Earnings Per Share - Numbers of Shares Used in Earnings Per Share Computation (Detail) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Basic:
Weighted average common shares outstanding	42,125	41,854	42,035	41,756
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust	35	80	162	163
Total weighted average diluted shares outstanding	42,160	41,934	42,197	41,919
Anti-dilutive shares excluded from the diluted earnings per share calculation	31	46	6	16

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2016	Mar. 16, 2016	Aug. 18, 2011
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Repurchased	0	0	0	0
2011 Share Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Maximum amount of shares authorized for repurchase						10,000,000	5,000,000
Total Number of Shares Repurchased					5,300,000
Increase in shares authorized for repurchase						5,000,000

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Commitments and Loss Contingency - Schedule of Future Minimum Rental Payments under Operating Leases (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2018 (remaining six months)	$ 630
2019	8,118
2020	8,520
2021	8,643
2022	7,959
2023	3,343
2024 and thereafter	8,211
Total minimum payments required	$ 45,424

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Commitments and Loss Contingency - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018 USD ($)
Minimum [Member]
Long-term Purchase Commitment [Line Items]
Term of agreements with third party vendors	1 year
Loss Contingency, net of federal benefit	$ 0
Maximum [Member]
Long-term Purchase Commitment [Line Items]
Term of agreements with third party vendors	5 years
Loss Contingency, net of federal benefit	$ 1,000,000

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Commitments and Loss Contingency - Schedule of Future Minimum Purchases Remaining under Agreements (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
2018 (remaining six months)	$ 10,237
2019	6,346
2020	1,699
2021	193
2022	0
2023	0
2024 and thereafter	0
Total minimum payments required	$ 18,475

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Defined Benefit Pension Plan and Postretirement Benefits - Net Periodic Benefit Cost for Pension Plans (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost	$ 109	$ 128	$ 223	$ 253
Interest cost	48	49	98	98
Recognized actuarial (gains)	(14)	(11)	(29)	(21)
Net periodic benefit cost	$ 143	$ 166	$ 292	$ 330

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Defined Benefit Pension Plan and Postretirement Benefits - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Percentage of employer's contribution based on participants contribution	50.00%
Maximum [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Percentage of employer's contribution based on participants compensation	2.00%

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Defined Benefit Pension Plan and Postretirement Benefits - Company's Contributions to Employee Retirement Savings Plans (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Retirement Benefits [Abstract]
401(k) plan contributions	$ 344	$ 309	$ 803	$ 620

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Defined Benefit Pension Plan and Postretirement Benefits - Post-Retirement Benefit Obligation and Unrealized Gain (Losses) (Detail) - Split-Dollar Life Insurance Arrangement [Member] - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Postretirement benefit obligation	$ 12	$ 15
Unrealized gains (losses) in AOCI	$ 100	$ 120

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Stock-Based Compensation - Stock-Based Compensation Expense, Income Tax Benefits Related to Stock-Based Compensation and Excess Tax Benefits (Provision) Recorded by Company (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation (expense)	$ (1,673)	$ (2,261)	$ (3,750)	$ (4,732)
Income Taxes [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax benefit	$ 402	$ 871	$ 900	$ 1,822

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Stock-Based Compensation - Additional Information (Detail) - USD ($)			6 Months Ended			12 Months Ended
	Dec. 06, 2016	Dec. 10, 2014	Jun. 30, 2018	Dec. 31, 2016	Jun. 30, 2016	May 18, 2012	May 16, 2012	Dec. 31, 2017	Jan. 01, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Capitalized stock-based compensation costs			$ 0					$ 0
Retained Earnings [Member] | Accounting Standards Update 2016-09 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net cumulative effect reduction to retained earnings									$ 200,000
2011 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock available under the 2011 plan			4,000,000
2011 Equity Incentive Plan [Member] | Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years
Share-based compensation vesting period			One-third on each of the first three anniversaries of the date of grant
Weighted average period			1 year 6 months
Total unrecognized compensation cost			$ 4,000,000
2011 Equity Incentive Plan [Member] | Restricted Shares and Restricted Stock Units (RSU's) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation vesting period			One-third on each of the first three anniversaries of the date of grant
Weighted average period			1 year 9 months 18 days
Total unrecognized compensation cost			$ 32,300,000
2011 Equity Incentive Plan [Member] | Restricted Shares and Restricted Stock Units (RSU's) [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of vesting possibilities			0.00%
2011 Equity Incentive Plan [Member] | Restricted Shares and Restricted Stock Units (RSU's) [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of vesting possibilities			100.00%
Non-Employee Director Fee Plan [Member] | Common Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Plan expiration date			May 31, 2014
Total unrecognized compensation cost			$ 700,000
Value of initial granted shares of common stock to new non employee director			$ 60,000
Vesting period of initial granted shares of common stock to new non employee director			Twelve equal quarterly installments, one-twelfth on the date of grant and an additional one-twelfth on each successive third monthly anniversary of the date of grant.
Value of Annual Retainer to Non-Employee Director						$ 125,000	$ 95,000
Annual Retainer payable in cash to Non Employee Director	$ 70,000	$ 55,000				50,000	$ 50,000
Amended vesting period of cash Annual retainer to non-employee chairman and committee members			Vested in four equal quarterly installments, one-fourth on the day following the annual meeting of shareholders, and an additional one-fourth on each successive third monthly anniversary of the date of grant
Vesting period of annual granted shares of common stock to non-employee director			Vests in eight equal quarterly installments, one-eighth on the day following the annual meeting of shareholders, and an additional one-eighth on each successive third monthly anniversary of the date of grant
Increased stock component of annual retainer		25,000				$ 30,000
Vesting period for the annual equity award						1 year	2 years
Amended vesting period of annual granted shares of common stock to non-employee director			Four equal quarterly installments, one-fourth on the date of grant and an additional one-fourth on each successive third monthly anniversary of the date of grant
Additional annual cash award to be given to any non employee chairman of board			$ 100,000
Additional annual cash award to be given to Chairperson of the audit committee			20,000
Additional annual cash award to be given to audit committee members			10,000
Annual cash awards for the members of the Compensation Committee, Finance Committee and Nominating and Corporate Governance Committee			7,500
Annual cash awards for the Chairpersons of the Compensation Committee			15,000
Annual cash awards for the Chairpersons of the Finance Committee			12,500
Annual cash awards for the Chairpersons of the Nominating and Corporate Governance Committee			$ 12,500
Annual Retainer payable in stock to Non Employee Director		100,000
Increased cash component of annual retainer	$ 15,000	$ 5,000
Non-Employee Director Fee Plan [Member] | Common Stock Awards [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period			1 year
Deferred Compensation Plan [Member] | Accrued Employee Compensation and Benefits [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accrued employee compensation and benefits			$ 11,800,000					11,600,000
Deferred Compensation Plan [Member] | Common Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period			3 years 8 months 12 days
Total unrecognized compensation cost			$ 100,000
Percentage of contribution in respect of amounts deferred by certain senior management participants			50.00%
Vesting period of matching contributions and associated earnings			7 years
Deferred Compensation Plan [Member] | Common Stock Awards [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation plan, percentage of employee deferral				1.00%	1.00%
Deferred Compensation Plan [Member] | Common Stock Awards [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amounts deferred by certain senior management personnel			$ 5,000
Deferred compensation plan, percentage of employee deferral				80.00%	100.00%
Deferred Compensation Plan [Member] | Common Stock Awards [Member] | Treasury Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock match associated with the deferred compensation plan carrying value			2,200,000					$ 2,100,000
Deferred Compensation Plan [Member] | Common Stock Awards [Member] | President, Chief Executive Officer and Executive Vice Presidents [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amounts deferred by certain senior management personnel			12,000
Deferred Compensation Plan [Member] | Common Stock Awards [Member] | Senior Vice President, Global Vice Presidents and Vice Presidents [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amounts deferred by certain senior management personnel			$ 7,500
2001 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Plan expiration date			Mar. 14, 2011

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Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value (Detail) - Stock Appreciation Rights (SARs) [Member] - 2011 Equity Incentive Plan [Member]	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	21.40%	19.30%
Weighted-average volatility	21.40%	19.30%
Expected dividend rate	0.00%	0.00%
Expected term (in years)	5 years	5 years
Risk-free rate	2.50%	1.90%

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Stock-Based Compensation - Summary of Stock Appreciation Rights Activity (Detail) - Stock Appreciation Rights (SARs) [Member] - 2011 Equity Incentive Plan [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Shares, beginning balance	734
Granted, Shares	333	396
Exercised, Shares	(43)
Forfeited or expired, Shares	0
Outstanding Shares, ending balance	1,024
Vested or expected to vest, Shares	1,024
Exercisable, Shares	363
Outstanding, Weighted Average Exercise Price, beginning balance	$ 0
Granted, Weighted Average Exercise Price	0
Exercised, Weighted Average Exercise Price	0
Forfeited or expired, Weighted Average Exercise Price	0
Outstanding, Weighted Average Exercise Price, ending balance	0
Vested or expected to vest, Weighted Average Exercise Price	0
Exercisable, Weighted Average Exercise Price	$ 0
Outstanding, Weighted Average Remaining Contractual Term	8 years 7 months 6 days
Vested or expected to vest, Weighted Average Remaining Contractual Term	8 years 7 months 6 days
Exercisable, Weighted Average Remaining Contractual Term	7 years 7 months 6 days
Outstanding, Aggregate Intrinsic Value	$ 790
Vested or expected to vest, Aggregate Intrinsic Value	790
Exercisable, Aggregate Intrinsic Value	$ 580

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Stock-Based Compensation - Weighted Average Grant Date of SARs Granted and Total Intrinsic Value of SARs Exercised (Detail) - Stock Appreciation Rights (SARs) [Member] - 2011 Equity Incentive Plan [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares	333	396
Weighted average grant-date fair value per SAR	$ 6.84	$ 6.24
Intrinsic value of SARs exercised	$ 305	$ 1,678
Fair value of vested	$ 1,950	$ 1,846

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Stock-Based Compensation - Summary of Nonvested Stock Appreciation Rights (Detail) - Stock Appreciation Rights (SARs) [Member] - 2011 Equity Incentive Plan [Member] - $ / shares shares in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested Shares, beginning balance	600
Granted, Shares	333	396
Vested, Shares	(272)
Forfeited or expired, Shares	0
Nonvested Shares, ending balance	661
Nonvested, Weighted Average Grant-Date Fair Value, beginning balance	$ 6.88
Granted, Weighted Average Grant-Date Fair Value	6.84	$ 6.24
Vested, Weighted Average Grant-Date Fair Value	7.16
Forfeited or expired, Weighted Average Grant-Date Fair Value	0
Nonvested, Weighted Average Grant-Date Fair Value, ending balance	$ 6.74

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Stock-Based Compensation - Summary of Nonvested Restricted Shares and Restricted Stock Units (Detail) - Restricted Shares and Restricted Stock Units (RSU's) [Member] - 2011 Equity Incentive Plan [Member] - $ / shares shares in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested Shares, beginning balance	1,109
Granted, Shares	488	480
Vested, Shares	(323)
Forfeited, Shares	(59)
Nonvested Shares, ending balance	1,215
Nonvested, Weighted Average Grant-Date Fair Value, beginning balance	$ 28.50
Granted, Weighted Average Grant-Date Fair Value	28.15	$ 29.42
Vested, Weighted Average Grant-Date Fair Value	25.78
Forfeited or expired, Weighted Average Grant-Date Fair Value	27.00
Nonvested, Weighted Average Grant-Date Fair Value, ending balance	$ 29.15

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Stock-Based Compensation - Summary of Weighted Average Grant-Date Fair Value Granted and Total Fair Value of Restricted Shares and Restricted Stock Units Vested (Detail) - Restricted Shares and Restricted Stock Units (RSU's) [Member] - 2011 Equity Incentive Plan [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares	488	480
Weighted average grant-date fair value	$ 28.15	$ 29.42
Fair value of vested	$ 8,342	$ 6,868

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Stock-Based Compensation - Summary of Nonvested Common Stock Units and Share Awards (Detail) - Common Stock Awards [Member] - Non-Employee Director Fee Plan [Member] - $ / shares shares in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested Shares, beginning balance	8
Granted, Shares	34	24
Vested, Shares	(15)
Forfeited, Shares	0
Nonvested Shares, ending balance	27
Nonvested, Weighted Average Grant-Date Fair Value, beginning balance	$ 32.21
Granted, Weighted Average Grant-Date Fair Value	27.68	$ 32.93
Vested, Weighted Average Grant-Date Fair Value	29.87
Forfeited or expired, Weighted Average Grant-Date Fair Value	0
Nonvested, Weighted Average Grant-Date Fair Value, ending balance	$ 27.73

XML

Stock-Based Compensation - Summary of Weighted Average Grant-Date Fair Value of Common Stock Units and Share Awards Granted and Total Fair Value of Common Stock Units and Share Awards Vested (Detail) - Common Stock Awards [Member] - Non-Employee Director Fee Plan [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares	34	24
Weighted average grant-date fair value	$ 27.68	$ 32.93
Fair value of vested	$ 450	$ 430

XML

Stock-Based Compensation - Summary of Nonvested Common Stock (Detail) - Common Stock Awards [Member] - Deferred Compensation Plan [Member] - $ / shares shares in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested Shares, beginning balance	3
Granted, Shares	10	10
Vested, Shares	(7)
Forfeited, Shares	0
Nonvested Shares, ending balance	6
Nonvested, Weighted Average Grant-Date Fair Value, beginning balance	$ 29.56
Granted, Weighted Average Grant-Date Fair Value	28.86	$ 30.66
Vested, Weighted Average Grant-Date Fair Value	28.89
Forfeited or expired, Weighted Average Grant-Date Fair Value	0
Nonvested, Weighted Average Grant-Date Fair Value, ending balance	$ 29.19

XML

Stock-Based Compensation - Summary of Weighted Average Grant-Date Fair Value of Common Stock Awarded and Cash Used to Settle Company's Obligation under Deferred Compensation (Detail) - Common Stock Awards [Member] - Deferred Compensation Plan [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares	10	10
Weighted average grant-date fair value	$ 28.86	$ 30.66
Fair value of vested	$ 213	$ 240
Cash used to settle the obligation	$ 644	$ 422

XML

Segments and Geographic Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018 Segment Region
Segment Reporting [Abstract]
Number of operating regions | Region	2
Number of reportable segments | Segment	2

XML

Segments and Geographic Information - Company's Reportable Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information [Line Items]
Revenues	$ 396,785	$ 375,438	$ 811,156	$ 759,452
Percentage of revenues	100.00%	100.00%	100.00%	100.00%
Depreciation, net	$ 14,560	$ 13,820	$ 29,396	$ 27,168
Amortization of intangibles	3,629	5,250	7,842	10,481
Income (loss) from operations	6,460	11,328	20,744	37,381
Total other income (expense), net	(1,511)	(928)	(2,391)	(1,659)
Income taxes	2,229	(1,555)	(227)	(8,165)
Net income	7,178	8,845	18,126	27,557
Americas [Member]
Segment Reporting Information [Line Items]
Revenues	327,041	314,871	667,762	635,802
Americas [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues	$ 327,041	$ 314,871	$ 667,762	$ 635,802
Percentage of revenues	82.40%	83.90%	82.30%	83.70%
Depreciation, net	$ 12,335	$ 11,842	$ 25,018	$ 23,310
Amortization of intangibles	3,415	4,989	7,407	9,967
Income (loss) from operations	19,824	26,127	45,688	64,099
EMEA [Member]
Segment Reporting Information [Line Items]
Revenues	69,720	60,540	143,347	123,607
EMEA [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues	$ 69,720	$ 60,540	$ 143,347	$ 123,607
Percentage of revenues	17.60%	16.10%	17.70%	16.30%
Depreciation, net	$ 1,476	$ 1,254	$ 2,887	$ 2,440
Amortization of intangibles	214	261	435	514
Income (loss) from operations	2,220	2,163	6,859	7,743
Other Segments [Member]
Segment Reporting Information [Line Items]
Revenues	$ 24	$ 27	$ 47	$ 43
Percentage of revenues	0.00%	0.00%	0.00%	0.00%
Depreciation, net	$ 749	$ 724	$ 1,491	$ 1,418
Income (loss) from operations	(15,584)	(16,962)	(31,803)	(34,461)
Total other income (expense), net	(1,511)	(928)	(2,391)	(1,659)
Income taxes	$ 2,229	$ (1,555)	$ (227)	$ (8,165)

XML

Segments and Geographic Information - Operation by Geographic Location (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information [Line Items]
Revenue	$ 396,785	$ 375,438	$ 811,156	$ 759,452
Americas [Member]
Segment Reporting Information [Line Items]
Revenue	327,041	314,871	667,762	635,802
Americas [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	327,041	314,871	667,762	635,802
Americas [Member] | Operating Segments [Member] | United States [Member]
Segment Reporting Information [Line Items]
Revenue	165,648	151,654	337,094	305,298
Americas [Member] | Operating Segments [Member] | The Philippines [Member]
Segment Reporting Information [Line Items]
Revenue	56,571	56,779	116,657	115,319
Americas [Member] | Operating Segments [Member] | Costa Rica [Member]
Segment Reporting Information [Line Items]
Revenue	30,973	32,924	63,048	66,249
Americas [Member] | Operating Segments [Member] | Canada [Member]
Segment Reporting Information [Line Items]
Revenue	24,828	27,020	52,017	56,742
Americas [Member] | Operating Segments [Member] | El Salvador [Member]
Segment Reporting Information [Line Items]
Revenue	20,584	18,369	40,595	36,714
Americas [Member] | Operating Segments [Member] | China [Member]
Segment Reporting Information [Line Items]
Revenue	8,149	9,282	17,497	18,542
Americas [Member] | Operating Segments [Member] | Australia [Member]
Segment Reporting Information [Line Items]
Revenue	7,700	6,440	15,402	13,090
Americas [Member] | Operating Segments [Member] | Mexico [Member]
Segment Reporting Information [Line Items]
Revenue	5,632	5,832	11,950	11,441
Americas [Member] | Operating Segments [Member] | Other [Member]
Segment Reporting Information [Line Items]
Revenue	6,956	6,571	13,502	12,407
EMEA [Member]
Segment Reporting Information [Line Items]
Revenue	69,720	60,540	143,347	123,607
EMEA [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	69,720	60,540	143,347	123,607
EMEA [Member] | Operating Segments [Member] | Other [Member]
Segment Reporting Information [Line Items]
Revenue	13,491	11,948	27,330	24,151
EMEA [Member] | Operating Segments [Member] | Germany [Member]
Segment Reporting Information [Line Items]
Revenue	22,404	18,457	46,579	38,894
EMEA [Member] | Operating Segments [Member] | Sweden [Member]
Segment Reporting Information [Line Items]
Revenue	13,674	14,043	27,804	28,344
EMEA [Member] | Operating Segments [Member] | United Kingdom [Member]
Segment Reporting Information [Line Items]
Revenue	11,960	9,407	25,307	19,140
EMEA [Member] | Operating Segments [Member] | Romania [Member]
Segment Reporting Information [Line Items]
Revenue	8,191	6,685	16,327	13,078
Other Segment [Member]
Segment Reporting Information [Line Items]
Revenue	$ 24	$ 27	$ 47	$ 43

XML

Other Income (Expense) - Other Income (Expense), Net (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Other Nonoperating Income (Expense) [Abstract]
Foreign currency transaction gains (losses)	$ 641	$ (535)	$ 2,089	$ 644
Gains (losses) on derivative instruments not designated as hedges	(345)	1,097	(1,427)	397
Other miscellaneous income (expense)	(833)	231	(1,044)	565
Other income (expense)	$ (537)	$ 793	$ (382)	$ 1,606

XML

Related Party Transactions - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Jan. 31, 2008	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Schedule of Other Related Party Transactions [Line Items]
Duration of lease	20 years
Payment to landlord under the lease terms		$ 100,000	$ 100,000	$ 200,000	$ 200,000
Equity Method Investee [Member] | XSell Technologies Inc [Member]
Schedule of Other Related Party Transactions [Line Items]
Payment to equity method investee		$ 100,000	$ 0	$ 100,000	$ 0

XML

Subsequent Event - Additional Information (Detail) $ in Thousands, $ in Millions			6 Months Ended
	Jul. 09, 2018 USD ($)	Jul. 09, 2018 AUD ($)	Jun. 30, 2018 USD ($)
Subsequent Event [Line Items]
Additional Borrowings to Fund Acquisition			$ 5,000
WhistleOut [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Aggregate purchase price	$ 22,400	$ 30.2
Effective date of acquisition	Jul. 09, 2018	Jul. 09, 2018
Earnout period	3 years	3 years
Earnout		$ 14.0
WhistleOut [Member] | Subsequent Event [Member] | Current Credit Agreement [Member]
Subsequent Event [Line Items]
Additional Borrowings to Fund Acquisition	$ 22,000