10-Q
TTEC HOLDINGS, INC. filed this Form 10-Q on 11/07/2018
Entire Document
 

Table of Contents

TTEC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

A rollforward of the activity in the Company’s fair value of the contingent consideration payable is as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

 

 

    

Imputed

    

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

Interest /

 

September 30,

 

 

 

2017

 

Acquisitions

 

Payments

 

Adjustments

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Welltok

 

$

399

 

$

 —

 

$

(399)

 

$

 —

 

$

 —

 

SCS

 

 

 —

 

 

2,731

 

 

 —

 

 

20

 

 

2,751

 

Total

 

$

399

 

$

2,731

 

$

(399)

 

$

20

 

$

2,751

 

 

 

 

(8)INCOME TAXES

In December 2017, the United States enacted comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the "2017 Tax Act") that, among other things, reduces the U.S. federal corporate income tax rate from 35% to 21% and implements a territorial tax system, but imposes an alternative “base erosion and anti-abuse tax” (“BEAT”), and an incremental tax on global intangible low taxed foreign income (“GILTI”) effective January 1, 2018.

The Company’s selection of an accounting policy with respect to both the new GILTI and BEAT rules is to compute the related taxes in the period the entity becomes subject to GILTI. A reasonable estimate of the effects of these provisions has  been included in the first, second and third quarter financial statements.

The ultimate impact of the 2017 Tax Act may materially differ from the provisional amounts recorded, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions taken as a result of the Tax Act. In addition, foreign and state governments may enact tax laws in response to the Tax Act that could result in further changes to global taxation and materially affect the Company’s financial position and results of operations. The Company expects to complete our analysis of the impacts of the 2017 Tax Act within the measurement period in accordance with SAB 118.

Under the principles of SAB 118, the Company has continued to reassess their liability under the 2017 Tax Act in relation to the one-time mandatory repatriation tax on accumulated foreign earnings on domestic corporations effective for the 2017 tax year. As a result of that reassessment, an amount of $0.9 million, previously reserved as a tax contingency, was reclassified to the long term income taxes payable as a result of the guidance provided under Notice 2018-26.

The Company accounts for income taxes in accordance with the accounting literature for income taxes, which requires recognition of deferred tax assets and liabilities for the expected future income tax consequences of transactions that have been included in the Consolidated Financial Statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. Quarterly, the Company assesses the likelihood 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 September 30, 2018, the Company had $22.3 million of gross deferred tax assets (after a $10.1 million valuation allowance) and net deferred tax assets (after deferred tax liabilities) of $11.6 million related to the U.S. and international tax jurisdictions whose recoverability is dependent upon future profitability.

The effective tax rate for the three and nine months ended September 30, 2018 was 21.9% and 19.7%, respectively. The effective tax rate for the three and nine months ended September 30, 2017 was 11.7% and 15.0%, respectively. 

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