10-K
TTEC HOLDINGS, INC. filed this Form 10-K on 03/06/2019
Entire Document
 

Table of Contents

TTEC HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Company’s deferred income tax assets and liabilities are summarized as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

    

2018

    

2017

 

Deferred tax assets, gross

 

 

 

 

 

 

 

Accrued workers compensation, deferred compensation and employee benefits

 

$

8,724

 

$

8,597

 

Allowance for doubtful accounts, insurance and other accruals

 

 

3,301

 

 

2,197

 

Amortization of deferred rent liabilities

 

 

2,614

 

 

2,352

 

Net operating losses

 

 

18,475

 

 

17,887

 

Equity compensation

 

 

1,348

 

 

1,481

 

Customer acquisition and deferred revenue accruals

 

 

13,894

 

 

7,026

 

Federal and state tax credits, net

 

 

549

 

 

50

 

Unrealized losses on derivatives

 

 

2,035

 

 

3,137

 

Impairment of equity investment

 

 

4,221

 

 

 —

 

Other

 

 

1,001

 

 

1,557

 

Total deferred tax assets, gross

 

 

56,162

 

 

44,284

 

Valuation allowances

 

 

(10,867)

 

 

(9,526)

 

Total deferred tax assets, net

 

 

45,295

 

 

34,758

 

Deferred tax liabilities

 

 

 

 

 

 

 

Depreciation and amortization

 

 

(15,547)

 

 

(12,850)

 

Contract acquisition costs

 

 

(8,519)

 

 

(5,331)

 

Intangible assets

 

 

(15,890)

 

 

(15,405)

 

Other

 

 

(187)

 

 

(446)

 

Total deferred tax liabilities

 

 

(40,143)

 

 

(34,032)

 

Net deferred tax assets

 

$

5,152

 

$

726

 

 

Quarterly, the Company assesses the likelihood by jurisdiction that its net deferred tax assets will be recovered. Based on the weight of all available evidence, both positive and negative, the Company records a valuation allowance against deferred tax assets when it is more-likely-than-not that a future tax benefit will not be realized.

As of December 31, 2018 the Company had approximately $3.0 million of net deferred tax assets in the U.S. and $2.2 million of net deferred tax assets related to certain international locations whose recoverability is dependent upon their future profitability. As of December 31, 2018 the deferred tax valuation allowance was $10.9 million and related primarily to tax losses in foreign jurisdictions which do not meet the “more-likely-than-not” standard under current accounting guidance.

When there is a change in judgment concerning the recovery of deferred tax assets in future periods, a valuation allowance is recorded into earnings during the quarter in which the change in judgment occurred. In 2018, the Company made adjustments to its deferred tax assets and corresponding valuation allowances. The net change to the valuation allowance consisted of the following: a $1.6 million increase related to capital loss carry forwards and other credit carry forwards not expected to be utilized, a $1.4 million increase in valuation allowance in the United Kingdom, Ireland, Canada, Luxembourg, Turkey and Australia for deferred tax assets that do not meet the “more-likely-than-not” standard, and a $1.6 million release of valuation allowance in Argentina, New Zealand, Belgium, and the United States and various other jurisdictions related to the utilization or write-off of deferred tax assets.

Activity in the Company’s valuation allowance accounts consists of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

    

2018

    

2017

    

2016

 

Beginning balance

 

$

9,526

 

$

9,949

 

$

10,139

 

Additions of deferred income tax expense

 

 

2,913

 

 

2,044

 

 

1,914

 

Reductions of deferred income tax expense

 

 

(1,572)

 

 

(2,467)

 

 

(2,104)

 

Ending balance

 

$

10,867

 

$

9,526

 

$

9,949

 

 

F-38