10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March 31, 2016
¨	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  x                 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  x                 No  ¨

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

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨ Smaller reporting company  ¨

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

Yes  ¨                 No  x

As of April 26, 2016, there were 42,613,318 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 – March 31, 2016 and December 31, 2015 (Unaudited)	3
Condensed Consolidated Statements of Operations – Three Months Ended March 31, 2016 and 2015 (Unaudited)	4
Condensed Consolidated Statements of Comprehensive Income (Loss) – Three Months Ended March 31, 2016 and 2015 (Unaudited)	5
Condensed Consolidated Statements of Changes in Shareholders’ Equity – Three Months Ended March 31, 2016 (Unaudited)	6
Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2016 and 2015 (Unaudited)	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.   Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.  Controls and Procedures	50
Part II.  OTHER INFORMATION	51
Item 1.  Legal Proceedings	51
Item 1A.  Risk Factors	51
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.  Defaults Upon Senior Securities	51
Item 4.  Mine Safety Disclosures	51
Item 5.  Other Information	51
Item 6.  Exhibits	52
SIGNATURE	53

2

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except per share data)	March 31, 2016		December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	259,885	$	235,358
Receivables, net		286,252		277,096
Prepaid expenses		21,080		17,321
Other current assets		13,447		33,262
Total current assets		580,664		563,037
Property and equipment, net		118,116		111,962
Goodwill, net		199,038		195,733
Intangibles, net		47,885		50,896
Deferred charges and other assets		41,577		26,144
	$	987,280	$	947,772
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	20,887	$	23,255
Accrued employee compensation and benefits		80,124		77,246
Current deferred income tax liabilities		-		1,120
Income taxes payable		2,016		1,959
Deferred revenue		30,564		28,119
Other accrued expenses and current liabilities		26,692		21,476
Total current liabilities		160,283		153,175
Deferred grants		4,620		4,810
Long-term debt		70,000		70,000
Long-term income tax liabilities		19,636		18,512
Other long-term liabilities		25,998		22,595
Total liabilities		280,537		269,092
Commitments and loss contingency (Note 14)
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; 42,639 and 42,785 shares issued, respectively		426		428
Additional paid-in capital		275,178		275,380
Retained earnings		472,279		458,325
Accumulated other comprehensive income (loss)		(39,267)		(53,662)
Treasury stock at cost: 115 and 113 shares, respectively		(1,873)		(1,791)
Total shareholders’ equity		706,743		678,680
	$	987,280	$	947,772

See accompanying Notes to Condensed Consolidated Financial Statements.

3

Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
(in thousands, except per share data)	2016		2015
Revenues	$	320,746	$	323,685
Operating expenses:
Direct salaries and related costs		205,555		213,927
General and administrative		80,510		72,727
Depreciation, net		10,784		11,059
Amortization of intangibles		3,627		3,431
Total operating expenses		300,476		301,144
Income from operations		20,270		22,541
Other income (expense):
Interest income		153		166
Interest (expense)		(808)		(439)
Other income (expense)		553		(829)
Total other income (expense)		(102)		(1,102)
Income before income taxes		20,168		21,439
Income taxes		6,214		5,800
Net income	$	13,954	$	15,639
Net income per common share:
Basic	$	0.33	$	0.37
Diluted	$	0.33	$	0.37
Weighted average common shares outstanding:
Basic		41,704		42,181
Diluted		42,023		42,440

See accompanying Notes to Condensed Consolidated Financial Statements.

4

Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended March 31,
(in thousands)	2016		2015
Net income	$	13,954	$	15,639
Other comprehensive income (loss), net of taxes:
Foreign currency translation gain (loss), net of taxes		13,899		(27,124)
Unrealized gain (loss) on net investment hedges, net of taxes		(1,930)		3,903
Unrealized actuarial gain (loss) related to pension liability, net of taxes		9		(8)
Unrealized gain (loss) on cash flow hedging instruments, net of taxes		2,430		1,415
Unrealized gain (loss) on postretirement obligation, net of taxes		(13)		(15)
Other comprehensive income (loss), net of taxes		14,395		(21,829)
Comprehensive income (loss)	$	28,349	$	(6,190)

See accompanying Notes to Condensed Consolidated Financial Statements.

5

Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Changes in Shareholders’ Equity

Three Months Ended March 31, 2016

(Unaudited)

									Accumulated
	Common Stock								Other
	Shares				Additional		Retained		Comprehensive		Treasury
(in thousands)	Issued		Amount		Paid-in Capital		Earnings		Income (Loss)		Stock		Total
Balance at December 31, 2015		42,785	$	428	$	275,380	$	458,325	$	(53,662)	$	(1,791)	$	678,680
Stock-based compensation expense		-		-		2,182		-		-		-		2,182
Excess tax benefit (deficiency) from stock-based compensation		-		-		1,911		-		-		-		1,911
Issuance of common stock under equity award plans, net of shares withheld for employee taxes		(146)		(2)		(4,295)		-		-		(82)		(4,379)
Comprehensive income (loss)		-		-		-		13,954		14,395		-		28,349
Balance at March 31, 2016		42,639	$	426	$	275,178	$	472,279	$	(39,267)	$	(1,873)	$	706,743

See accompanying Notes to Condensed Consolidated Financial Statements.

6

Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
(in thousands)	2016		2015
Cash flows from operating activities :
Net income	$	13,954	$	15,639
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		10,954		11,255
Amortization of intangibles		3,627		3,431
Amortization of deferred grants		(226)		(199)
Unrealized foreign currency transaction (gains) losses, net		(947)		(277)
Stock-based compensation expense		2,182		1,996
Excess tax (benefit) from stock-based compensation		(1,911)		(169)
Deferred income tax provision (benefit)		(1,562)		2,748
Unrealized (gains) losses on financial instruments, net		349		(70)
Amortization of deferred loan fees		67		65
Imputed interest expense and fair value adjustments to contingent consideration		213		-
Other		(245)		148
Changes in assets and liabilities, net of acquisition:
Receivables		(7,458)		8,716
Prepaid expenses		(3,601)		(160)
Other current assets		339		(11,391)
Deferred charges and other assets		(980)		2,144
Accounts payable		(2,844)		(26)
Income taxes receivable / payable		2,592		737
Accrued employee compensation and benefits		1,509		(4,174)
Other accrued expenses and current liabilities		5,206		1,430
Deferred revenue		949		(3,234)
Other long-term liabilities		3,350		33
Net cash provided by operating activities		25,517		28,642
Cash flows from investing activities:
Capital expenditures		(16,205)		(10,869)
Proceeds from sale of property and equipment		26		50
Investment in restricted cash		(225)		(5)
Release of restricted cash		8		-
Net investment hedge settlement		10,339		-
Net cash (used for) investing activities		(6,057)		(10,824)

7

Sykes Enterprises, Incorporated and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Continued)

	Three Months Ended March 31,
(in thousands)	2016		2015
Cash flows from financing activities:
Payments of long-term debt		-		(1,000)
Excess tax benefit from stock-based compensation		1,911		169
Cash paid for repurchase of common stock		-		(5,136)
Proceeds from grants		22		49
Shares repurchased for minimum tax withholding on equity awards		(4,379)		(1,131)
Net cash (used for) financing activities		(2,446)		(7,049)
Effects of exchange rates on cash and cash equivalents		7,513		(11,842)
Net increase (decrease) in cash and cash equivalents		24,527		(1,073)
Cash and cash equivalents – beginning		235,358		215,137
Cash and cash equivalents – ending	$	259,885	$	214,064
Supplemental disclosures of cash flow information:
Cash paid during period for interest	$	406	$	368
Cash paid during period for income taxes	$	3,781	$	5,606
Non-cash transactions:
Property and equipment additions in accounts payable	$	4,831	$	2,070
Unrealized gain (loss) on postretirement obligation in accumulated other comprehensive income (loss)	$	(13)	$	(15)
Shares repurchased for minimum tax withholding on common stock and restricted stock under equity awards included in current liabilities	$	487	$	127

See accompanying Notes to Condensed Consolidated Financial Statements.

8

Sykes Enterprises, Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Three Months Ended March 31, 2016 and 2015

(Unaudited)

Note 1. Overview and Basis of Presentation

Business — Sykes Enterprises, Incorporated and consolidated subsidiaries (“SYKES” or the “Company”) provides comprehensive outsourced customer contact management solutions and services in the business process outsourcing arena to companies, primarily within the communications, financial services, technology/consumer, transportation and leisure, and healthcare industries. SYKES provides flexible, high-quality outsourced customer contact management services (with an emphasis on inbound technical support and customer service), which includes customer assistance, healthcare and roadside assistance, technical support and product sales to its clients’ customers. Utilizing SYKES’ integrated onshore/offshore global delivery model, SYKES provides its services through multiple communication channels encompassing phone, e-mail, social media, text messaging, chat and digital self-service. SYKES complements its outsourced customer contact management services with various enterprise support services in the United States that encompass services for a company’s 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.

Acquisition — In July 2015, the Company completed the acquisition of Qelp B.V. and its subsidiary (together, known as “Qelp”), pursuant to a definitive Share Sale and Purchase Agreement, dated July 2, 2015. The Company has reflected the operating results in the Condensed Consolidated Statements of Operations since July 2, 2015. See Note 2, Acquisition of Qelp, for additional information on the acquisition.

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 months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, 2016. 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, 2015, as filed with the Securities and Exchange Commission (“SEC”) on February 29, 2016.

Principles of Consolidation — The condensed consolidated financial statements include the accounts of SYKES and its wholly-owned subsidiaries and controlled majority-owned subsidiaries. All significant 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 April 1, 2016, the Company acquired 100% of the outstanding membership units of Clear Link Holdings, LLC (“Clearlink”). In conjunction with the acquisition of Clearlink, the Company borrowed $216.0 million under its existing credit agreement. See Note 20, Subsequent Event, for further information. There were no other material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements.

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

9

New Accounting Standards Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The amendments in ASU 2014-09 outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and indicate 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. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date” (“ASU 2015-14”). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that period. An entity should apply the amendments using either the full retrospective approach or retrospectively with a cumulative effect of initially applying the amendments recognized at the date of initial application. The Company is currently evaluating the methods of adoption and the impact that the adoption of ASU 2014-09 may have on its financial condition, results of operations and cash flows.

In January 2016, the FASB issued ASC 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 have to measure equity investments that do not result in consolidation and are not accounted 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 will apply 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 Company does not expect the adoption of ASU 2016-01 to materially impact its financial condition, results of operations and cash flows.

In February 2016, the FASB issued ASC 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). 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 are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial condition, results of operations and cash flows.

In March 2016, the FASB issued ASC 2016-05, “Derivatives and Hedging (Topic 815) – Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”). These amendments clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Entities have the option to apply the amendments on either a prospective basis or a modified retrospective basis. The Company is evaluating the methods of adoption but does not expect the adoption of ASU 2016-05 to materially impact its financial condition, results of operations and cash flows.

In March 2016, the FASB issued ASC 2016-08, “Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”). These amendments clarify the implementation guidance on principal versus agent considerations and require entities to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. These amendments affect the guidance in ASU 2014-09, which is not yet effective. The effective date and transition requirements for ASU 2016-08 are the same as the effective date and transition requirements of ASU 2014-09, as updated by ASU 2015-14.

10

In March 2016, the FASB issued ASC 2016-09, “Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). These amendments are intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. These amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. Entities have the option to apply the amendments on either a prospective basis or a modified retrospective basis. The Company is currently evaluating the impact the guidance will have on its financial condition, results of operations and cash flows.

In April 2016, the FASB issued ASC 2016-10, “Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing” (“ASU 2016-10”). These amendments clarify the identification of performance obligations and the licensing implementation guidance. These amendments affect the guidance in ASU 2014-09, which is not yet effective. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements of ASU 2014-09, as updated by ASU 2015-14.

New Accounting Standards Recently Adopted

In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation (Topic 718) Accounting for Share-Based  Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation” (“ASC 718”), as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments either (1) prospective to all awards granted or modified after the effective date or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015-01”). This amendment eliminates from U.S. GAAP the concept of extraordinary items as part of the FASB’s initiative to reduce complexity in accounting standards. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments either prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of ASU 2015-01 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810) Amendments to the Consolidation Analysis)” (“ASU 2015-02”). These amendments are intended to improve targeted areas of the consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. These amendments affect the consolidation evaluation for reporting organizations. In addition, the amendments simplify and improve current U.S. GAAP by reducing the number of consolidation models. The amendments are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments using either a modified retrospective approach or retrospectively. The adoption of ASU 2015-02 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of  Debt Issuance Costs” (“ASU 2015-03”). These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. These amendments are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Entities should apply the amendments retrospectively. The adoption of ASU 2015-03 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

11

In April 2015, the FASB issued ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (“ASU 2015-05”). These amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. These amendments are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015; early adoption is permitted. Entities can adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. The adoption of ASU 2015-05 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In September 2015, the FASB issued ASC 2015-16, “Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). These amendments eliminate the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected measurement or recognition of amounts initially recognized. As an alternative, the amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. These amendments are effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2015-16 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In November 2015, the FASB issued ASC 2015-17, “Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). These amendments require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The existing requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by these amendments. These amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Early adoption is permitted as of the beginning of the interim or annual reporting period. The adoption of ASU 2015-17 on January 1, 2016 resulted in the reclassification of $12.0 million of current deferred tax assets included in “Other current assets” and $1.1 million of current deferred tax liabilities included in “Current deferred income tax liabilities” to noncurrent deferred income tax assets and liabilities. All future deferred tax assets and liabilities will be classified as noncurrent. No prior periods were adjusted.

Note 2. Acquisition of Qelp

On July 2, 2015, the Company’s wholly-owned subsidiaries, Sykes Enterprises Incorporated B.V. and Sykes Enterprises Incorporated Holdings B.V., both Netherlands companies, entered into a definitive Share Sale and Purchase Agreement (the “Purchase Agreement”) with MobileTimes B.V., Yarra B.V., From The Mountain Consultancy B.V. and Sticting Administratiekantoor Qelp (the “Sellers”), all of which are Netherlands companies, to acquire all of the outstanding shares of Qelp B.V. and its wholly owned subsidiary (together, known as “Qelp”.) The strategic acquisition of Qelp (the “Qelp acquisition”) was to further broaden and strengthen the Company’s service portfolio around digital self-service customer support and extend its reach into adjacent, but complementary, markets. Pursuant to Federal income tax regulations, no amount of intangibles or goodwill from this acquisition will be deductible for tax purposes. The results of Qelp’s operations have been included in the Company’s consolidated financial statements since its acquisition on July 2, 2015 (the “acquisition date”).

The consideration consisted of an initial purchase price and a contingent purchase price. The initial purchase price of $9.8 million, including certain post-closing adjustments relating to Qelp’s working capital, was funded through cash on hand upon the closing of the transaction on July 2, 2015. The contingent purchase price to be paid over a three year period is based on achieving targets tied to revenues and earnings before interest, income taxes, depreciation and amortization (“EBITDA”) for the years ended December 31, 2016, 2017 and 2018, not to exceed EUR 10.0 million.

12

As of the acquisition date, the total consideration paid or to be paid by the Company for the Qelp acquisition is summarized below (in thousands):

	Total
Cash	$	9,885
Contingent consideration		6,000
Working capital adjustment		(65)
	$	15,820

The fair value of the contingent consideration was estimated using the discounted cash flow method, and was included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheets (see Note 4, Fair Value, for further information). As part of the discounted cash flow method, the Company calculated an adjusted weighted average cost of capital (“WACC”) specifically attributable to the future payments of the contingent consideration. Based on the forecasted revenue and profitability scenarios and their respective probabilities of occurrence, the Company estimated the present value of the probability-adjusted future payments utilizing an adjusted WACC for the potential future payments. The Company believes that its estimates and assumptions are reasonable, but there is significant judgment involved. Changes in the fair value of the contingent consideration liabilities subsequent to the acquisition will be recorded in the Company’s Consolidated Statements of Operations.

The Company accounted for the Qelp acquisition in accordance with ASC 805 (“ASC 805”) “Business Combinations,” whereby the fair value of the purchase price was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed from Qelp based on their estimated fair values as of the closing date. The Company completed its analysis of the purchase price allocation during the fourth quarter of 2015.

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed, all included in the EMEA segment (in thousands):

	July 2, 2015
Cash and cash equivalents	$	450
Receivables (1)		1,471
Prepaid expenses		24
Total current assets		1,945
Property and equipment		2,168
Goodwill		10,054
Intangibles		6,000
Deferred charges and other assets		55
Short-term debt		(323)
Accrued employee compensation and benefits		(207)
Income taxes payable		(94)
Deferred revenue		(967)
Other accrued expenses and current liabilities		(1,030)
Total current liabilities		(2,621)
Other long-term liabilities (2)		(1,781)
	$	15,820
(1) The fair value equals the gross contractual value of the receivables. (2) Primarily includes long-term deferred tax liabilities.

Fair values were based on management’s estimates and assumptions including variations of the income approach, the cost approach and the market approach.

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The following table presents the Company’s purchased intangibles assets as of July 2, 2015, the acquisition date (in thousands):

	Amount Assigned		Weighted Average   Amortization Period   (years)
Customer relationships	$	5,400		7
Trade name and trademarks		100		3
Content library		500		2
	$	6,000		7

Note 3. Costs Associated with Exit or Disposal Activities

In connection with the Company’s initiatives to streamline excess capacity in The Philippines and various locations in the U.S. (the “Exit Plans”), the Company has paid $7.6 million in cash through March 31, 2016. The cumulative costs expected and incurred as a result of the Exit Plans were as follows as of March 31, 2016 (in thousands):

	Americas Fourth   Quarter 2011   Exit Plan		Americas Third   Quarter 2010   Exit Plan		Total
Lease obligations and facility exit costs	$	1,365	$	6,729	$	8,094
Non-cash impairment charges		480		3,847		4,327
Total	$	1,845	$	10,576	$	12,421

The following table summarizes the accrued liability associated with the Exit Plans’ exit or disposal activities and related charges for the three months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016		2015
Beginning accrual	$	733	$	1,558
Lease obligations and facility exit costs		-		-
Cash payments (1)		(206)		(212)
Ending accrual	$	527	$	1,346
(1) Related to lease obligations and facility exit costs.

Restructuring Liability Classification

The following table summarizes the Company’s short-term and long-term accrued liabilities associated with its exit and disposal activities, by plan, as of March 31, 2016 and December 31, 2015 (in thousands):

	Americas Fourth Quarter 2011 Exit Plan		Americas Third  Quarter 2010  Exit Plan		Total
March 31, 2016
Short-term accrued restructuring liability (1)	$	121	$	406	$	527
Long-term accrued restructuring liability (2)		-		-		-
Ending accrual at March 31, 2016	$	121	$	406	$	527
December 31, 2015
Short-term accrued restructuring liability (1)	$	144	$	487	$	631
Long-term accrued restructuring liability (2)		22		80		102
Ending accrual at December 31, 2015	$	166	$	567	$	733

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

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The remaining restructuring liability relates to future rent obligations to be paid through the remainder of the lease terms, the last of which ends in February 2017.

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 it re-prices at varying interest rates.

● 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

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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.

Money Market and Open-End Mutual Funds — The Company uses quoted market prices in active markets to determine the fair value. These items are classified in Level 1 of the fair value hierarchy.

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; 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 16, Stock-Based Compensation.

Guaranteed Investment Certificates — Guaranteed investment certificates, with variable interest rates linked to the prime rate, approximate fair value due to the automatic ability to re-price with changes in the market; such items are classified in Level 2 of the fair value hierarchy.

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 was recognized at fair value using a discounted cash flow methodology and a discount rate of 14.0%. The discount rate is dependent on the specific risks of the acquisition including the country of operation, the nature of services and complexity of the acquired business, and other similar factors, all of which are significant inputs not observable in the market. Significant increases or decreases in any of the inputs in isolation would result in a significantly higher or lower fair value measurement.

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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 (in thousands):

				Fair Value Measurements at March 31, 2016 Using:
				Quoted Prices		Significant
				in Active		Other		Significant
				Markets For		Observable		Unobservable
		Balance at		Identical Assets		Inputs		Inputs
		March 31, 2016		Level (1)		Level (2)		Level (3)
Assets:
Foreign currency forward and option contracts	(1)	$	2,817	$	-	$	2,817	$	-
Embedded derivatives	(1)		139		-		-		139
Equity investments held in a rabbi trust for the Deferred Compensation Plan	(2)		6,325		6,325		-		-
Debt investments held in a rabbi trust for the Deferred Compensation Plan	(2)		1,803		1,803		-		-
Guaranteed investment certificates	(3)		86		-		86		-
		$	11,170	$	8,128	$	2,903	$	139
Liabilities:
Long-term debt	(4)	$	70,000	$	-	$	70,000	$	-
Foreign currency forward and option contracts	(1)		3,692		-		3,692		-
Embedded derivatives	(1)		81		-		-		81
Contingent consideration included in “Other long-term liabilities”	(5)		6,806		-		-		6,806
		$	80,579	$	-	$	73,692	$	6,887
				Fair Value Measurements at December 31, 2015 Using:
		Balance at		Quoted Prices in Active Markets For  Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
		December 31, 2015		Level (1)		Level (2)		Level (3)
Assets:
Foreign currency forward and option contracts	(1)	$	10,962	$	-	$	10,962	$	-
Equity investments held in a rabbi trust for the Deferred Compensation Plan	(2)		6,229		6,229		-		-
Debt investments held in a rabbi trust for the Deferred Compensation Plan	(2)		1,622		1,622		-		-
Guaranteed investment certificates	(3)		86		-		86		-
		$	18,899	$	7,851	$	11,048	$	-
Liabilities:
Long-term debt	(4)	$	70,000	$	-	$	70,000	$	-
Foreign currency forward and option contracts	(1)		835		-		835		-
Contingent consideration included in “Other long-term liabilities”	(5)		6,280		-		-		6,280
		$	77,115	$	-	$	70,835	$	6,280

⁽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.

⁽³⁾  Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽⁴⁾  The carrying value of long-term debt approximates its estimated fair value as it re-prices at varying interest rates. See Note 10, Borrowings.

⁽⁵⁾  In the accompanying Condensed Consolidated Balance Sheets.

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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):

	Fair Value
Balance at December 31, 2015	$	-
Gain (loss) recognized in “Other income (expense)” (1)		56
Effect of foreign currency		2
Balance at March 31, 2016	$	58
Unrealized gain (loss) for the three months ended March 31, 2016	$	55
(1)  Includes realized and unrealized gain (loss).

Contingent Consideration

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

	Fair Value
Balance at January 1, 2015	$	-
Acquisition (1)		6,000
Payments		-
Imputed interest/adjustments		408
Effect of foreign currency		(128)
Balance at December 31, 2015		6,280
Acquisition		-
Payments		-
Imputed interest/adjustments		213
Effect of foreign currency		313
Balance at March 31, 2016	$	6,806
(1)  Related to the Qelp acquisition on July 2, 2015. See Note 2, Acquisition of Qelp.

The Company did not record any fair value adjustments to the contingent consideration as the key assumptions used to calculate the fair value at the acquisition date remained consistent at March 31, 2016. Should the assumptions regarding probability of achievement of certain revenue and EBITDA targets change in future periods, the change in fair value of the contingent consideration will be recognized in the accompanying Condensed Consolidated Statements of Operations. The Company accretes interest expense each period using the effective interest method until the contingent consideration reaches the estimated future value of $9.1 million. Interest expense related to the contingent consideration is included in “Interest (expense)” in the accompanying Condensed Consolidated Statements of Operations.

Non-Recurring Fair Value

Certain assets, under certain conditions, are measured at fair value on a nonrecurring basis utilizing Level 3 inputs, like those associated with acquired businesses, including goodwill, other intangible assets and other long-lived assets. 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 March 31, 2016 and December 31, 2015.

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Note 5.  Goodwill and Intangible Assets

Intangible Assets

The following table presents the Company’s purchased intangible assets as of March 31, 2016 (in thousands):

	Gross Intangibles		Accumulated         Amortization		Net Intangibles		Weighted Average   Amortization Period (years)
Customer relationships	$	103,999	$	(62,328)	$	41,671		8
Trade names and trademarks		11,703		(5,810)		5,893		8
Content library		514		(193)		321		2
Non-compete agreements		1,196		(1,196)		-		2
Proprietary software		850		(850)		-		2
Favorable lease agreement		449		(449)		-		2
	$	118,711	$	(70,826)	$	47,885		8

The following table presents the Company’s purchased intangible assets as of December 31, 2015 (in thousands):

	Gross Intangibles		Accumulated         Amortization		Net Intangibles		Weighted Average   Amortization Period (years)
Customer relationships	$	102,594	$	(58,294)	$	44,300		8
Trade names and trademarks		11,698		(5,470)		6,228		8
Content library		491		(123)		368		2
Non-compete agreements		1,190		(1,190)		-		2
Proprietary software		850		(850)		-		2
Favorable lease agreement		449		(449)		-		2
	$	117,272	$	(66,376)	$	50,896		8

The Company’s estimated future amortization expense for the succeeding years relating to the purchased intangible assets resulting from acquisitions completed prior to March 31, 2016, is as follows (in thousands):

Years Ending December 31,	Amount
2016 (remaining nine months)	$	11,056
2017		14,554
2018		8,282
2019		7,679
2020		5,169
2021		784
2022 and thereafter		361

Goodwill

Changes in goodwill for the three months ended March 31, 2016 consist of the following (in thousands):

					Effect of Foreign
	January 1, 2016		Acquisition		Currency		March 31, 2016
Americas	$	186,049	$	-	$	2,797	$	188,846
EMEA		9,684		-		508		10,192
	$	195,733	$	-	$	3,305	$	199,038

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Changes in goodwill for the year ended December 31, 2015 consist of the following (in thousands):

					Effect of Foreign
	January 1, 2015		Acquisition (1)		Currency		December 31, 2015
Americas	$	193,831	$	-	$	(7,782)	$	186,049
EMEA		-		10,054		(370)		9,684
	$	193,831	$	10,054	$	(8,152)	$	195,733
(1)  See Note 2, Acquisition of Qelp, for further information.

The Company has five reporting units with goodwill and 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 two-step goodwill impairment test as of July 31, 2015. 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 recorded to the extent that the fair value of the goodwill within the reporting unit is less than its carrying value.

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 used an average of 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, 2015, the Company concluded that goodwill was not impaired for all five of the reporting units. While the fair values of four of the reporting units were substantially in excess of their carrying value, the Qelp reporting unit’s fair value approximated its carrying value due to the proximity to the acquisition date of July 2, 2015. The newly acquired Qelp reporting unit’s carrying value was $15.6 million at July 31, 2015, including $9.9 million of goodwill.

The Qelp reporting unit is at risk for future impairment if projected operating results are not met or other inputs into the fair value measurement change. However, as of March 31, 2016 and December 31, 2015, there was no impairment as the fair value of the reporting unit exceeded its carrying value by a small margin. The Company will continue to review the calculated fair value of this reporting unit.

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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 protect against the risk that the eventual cash flows resulting from such transactions will be adversely affected by 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):

	March 31, 2016		December 31, 2015
Deferred gains (losses) in AOCI	$	2,008	$	(558)
Tax on deferred gains (losses) in AOCI		(105)		31
Deferred gains (losses) in AOCI, net of taxes	$	1,903	$	(527)
Deferred gains (losses) expected to be reclassified to “Revenues” from AOCI during the next twelve months	$	2,008

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

Net Investment Hedge – The Company enters into foreign exchange forward contracts to hedge its net investment in certain foreign operations, as defined under ASC 815. The purpose of these derivative instruments is to protect the Company’s interests against the risk that the net assets of certain foreign subsidiaries will be adversely affected by changes in exchange rates and economic exposures related to the Company’s foreign currency-based investments in these subsidiaries.

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.

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

	As of March 31, 2016			As of December 31, 2015
Contract Type	Notional     Amount in     USD		Settle Through     Date	Notional      Amount in      USD		Settle Through      Date
Cash flow hedges:
Options:
Philippine Pesos	$	71,500	March 2017	$	71,750	December 2016
Forwards:
Costa Rican Colones		23,000	December 2016		34,500	November 2016
Hungarian Forints		2,050	December 2016		-	-
Romanian Leis		5,060	December 2016		-	-
Net investment hedges:
Forwards:
Euros		65,229	September 2017		63,470	March 2016
Non-designated hedges:
Forwards		61,262	June 2016		50,603	March 2016
Embedded derivatives		12,210	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 $3.0 million and $11.0 million as of March 31, 2016 and December 31, 2015, 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 $2.5 million and $10.2 million as of March 31, 2016 and December 31, 2015, respectively, and liability positions of $3.3 million and $0.1 million as of March 31, 2016 and December 31, 2015, 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.

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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
	March 31, 2016		December 31, 2015
	Fair Value		Fair Value
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (1)	$	2,748	$	544
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts (1)		-		10,161
		2,748		10,705
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (1)		69		257
Embedded derivatives (1)		10		-
Embedded derivatives (2)		129		-
Total derivative assets	$	2,956	$	10,962
	Derivative Liabilities
	March 31, 2016		December 31, 2015
	Fair Value		Fair Value
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (3)	$	14	$	396
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts (4)		3,290		-
		3,304		396
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (3)		388		439
Embedded derivatives (3)		3		-
Embedded derivatives (4)		78		-
Total derivative liabilities	$	3,773	$	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 tables present the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended March 31, 2016 and 2015 (in thousands):

	Gain (Loss) Recognized in     AOCI on Derivatives     (Effective Portion)				Gain (Loss) Reclassified From Accumulated AOCI   Into “Revenues” (Effective   Portion)				Gain (Loss) Recognized in  “Revenues” on Derivatives  (Ineffective Portion and Amount  Excluded from Effectiveness Testing)
	March 31,				March 31,				March 31,
	2016		2015		2016		2015		2016		2015
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	2,503	$	2,055	$	(54)	$	589	$	-	$	1
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		(3,112)		6,358		-		-		-		-
	$	(609)	$	8,413	$	(54)	$	589	$	-	$	1

	Gain (Loss) Recognized   in “Other income (expense)” on Derivatives
	March 31,
	2016		2015
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	795	$	(164)
Embedded derivatives		(56)		-
	$	739	$	(164)

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):

	March 31, 2016				December 31, 2015
	Cost		Fair Value		Cost		Fair Value
Mutual funds	$	6,109	$	8,128	$	6,217	$	7,851

The mutual funds held in rabbi trust were 78% equity-based and 22% debt-based as of March 31, 2016. Net investment income (losses), included in “Other income (expense)” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):

	Three Months Ended March 31,
	2016		2015
Gross realized gains from sale of trading securities	$	-	$	3
Gross realized (losses) from sale of trading securities		-		(1)
Dividend and interest income		9		5
Net unrealized holding gains (losses)		20		123
Net investment income (losses)	$	29	$	130

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Note 8. Deferred Revenue

Deferred revenue consists of the following (in thousands):

	March 31, 2016		December 31, 2015
Future service	$	23,880	$	22,112
Estimated potential penalties and holdbacks		6,684		6,007
	$	30,564	$	28,119

Note 9. Deferred Grants

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

	March 31, 2016		December 31, 2015
Property grants	$	4,207	$	4,377
Lease grants		494		513
Employment grants		143		149
Total deferred grants		4,844		5,039
Less: Property grants - short-term (1)		-		-
Less: Lease grants - short-term (1)		(81)		(80)
Less: Employment grants - short-term (1)		(143)		(149)
Total long-term deferred grants	$	4,620	$	4,810

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

Note 10. Borrowings

On May 12, 2015, the Company entered into a $440 million revolving credit facility (the “2015 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 2015 Credit Agreement is subject to certain borrowing limitations and includes certain customary financial and restrictive covenants.

The 2015 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.

Borrowings consist of the following (in thousands):

	March 31, 2016		December 31, 2015
Revolving credit facility	$	70,000	$	70,000
Less: Current portion		-		-
Total long-term debt	$	70,000	$	70,000

The 2015 Credit Agreement matures on May 12, 2020 and has no varying installments due.

Borrowings under the 2015 Credit Agreement bear interest at the rates set forth in the 2015 Credit Agreement. In addition, the Company is required to pay certain customary fees, including a commitment fee of 0.125%, which is due quarterly in arrears and calculated on the average unused amount of the 2015 Credit Agreement.

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The 2015 Credit Agreement is guaranteed by all of 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 2015 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 March 31,
	2016		2015
Average daily utilization	$	70,000	$	74,322
Interest expense, including commitment fee (1)	$	375	$	319
Weighted average interest rate		2.1%		1.7%
(1)  Excludes the amortization of deferred loan fees.

Note 11. 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     Gain (Loss)		Unrealized   Gain (Loss) on   Net Investment Hedge		Unrealized   Actuarial Gain   (Loss) Related to Pension Liability		Unrealized   Gain (Loss) on   Cash Flow Hedging Instruments		Unrealized   Gain (Loss) on   Post Retirement Obligation		Total
Balance at January 1, 2015	$	(22,076)	$	276	$	1,008	$	(111)	$	342	$	(20,561)
Pre-tax amount		(37,178)		6,101		121		1,708		(12)		(29,260)
Tax (provision) benefit		-		(2,207)		(2)		32		-		(2,177)
Reclassification of (gain) loss to net income		647		-		(53)		(2,195)		(63)		(1,664)
Foreign currency translation		6		-		(45)		39		-		-
Balance at December 31, 2015		(58,601)		4,170		1,029		(527)		267		(53,662)
Pre-tax amount		13,929		(3,112)		-		2,503		-		13,320
Tax (provision) benefit		-		1,182		-		(117)		-		1,065
Reclassification of (gain) loss to net income		-		-		(12)		35		(13)		10
Foreign currency translation		(30)		-		21		9		-		-
Balance at March 31, 2016	$	(44,702)	$	2,240	$	1,038	$	1,903	$	254	$	(39,267)

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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 March 31,				Statements of Operations
	2016		2015		Location
Actuarial Gain (Loss) Related to Pension Liability: (1)
Pre-tax amount	$	12	$	11	Direct salaries and related costs
Tax (provision) benefit		-		-	Income taxes
Reclassification to net income		12		11
Gain (Loss) on Cash Flow Hedging Instruments: (2)
Pre-tax amount		(54)		590	Revenues
Tax (provision) benefit		19		6	Income taxes
Reclassification to net income		(35)		596
Gain (Loss) on Post Retirement Obligation: (1)
Pre-tax amount		13		14	General and administrative
Tax (provision) benefit		-		-	Income taxes
Reclassification to net income		13		14
Total reclassification of gain (loss) to net
income	$	(10)	$	621

(1)	See Note 15, Defined Benefit Pension Plan and Postretirement Benefits, for further information.
(2)	See Note 6, Financial Derivatives, for further information.

Except as discussed in Note 12, Income Taxes, earnings 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 have been provided.

Note 12. Income Taxes

The Company’s effective tax rate was 30.8% and 27.1% for the three months ended March 31, 2016 and 2015, respectively. The increase in the effective tax rate is predominately due to several factors, including shifts in earnings among the various jurisdictions in which the Company operates, none of which are individually material. The difference between the Company’s effective tax rate of 30.8% as compared to the U.S. statutory federal income tax rate of 35.0% was primarily due to the recognition of tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions, changes in uncertain tax positions, adjustments of valuation allowances and tax credits, partially offset by the tax impact of permanent differences and foreign withholding taxes.

Earnings associated with the investments in the Company’s foreign subsidiaries are considered to be indefinitely reinvested outside of the U.S. Therefore, a U.S. provision for income taxes on those earnings or translation adjustments has not been recorded, as permitted by criterion outlined in ASC 740 “Income Taxes.” Determination of any unrecognized deferred tax liability related to investments in foreign subsidiaries is not practicable due to the inherent complexity of the multi-national tax environment in which the Company operates.

The Company is currently under audit in several tax jurisdictions. 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. The total amount of deposits, net of the effects of foreign exchange rate adjustments, are $14.3 million and $13.4 million as of March 31, 2016 and December 31, 2015, respectively, and are included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets. Although the outcome of examinations by taxing authorities is always uncertain, the Company believes it is adequately reserved for these audits and resolution is not expected to have a material impact on its financial condition and results of operations.

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The significant tax jurisdictions currently under audit are as follows:

Tax Jurisdiction	Tax Years Ended
Canada	2003 to 2009

Note 13. 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 March 31,
	2016		2015
Basic:
Weighted average common shares outstanding		41,704		42,181
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust		319		259
Total weighted average diluted shares outstanding		42,023		42,440
Anti-dilutive shares excluded from the diluted earnings per share calculation		20		21

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. A total of 4.9 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.

The shares repurchased under the Company’s share repurchase programs were as follows (in thousands, except per share amounts) (none in 2016):

	Total Number						Total Cost of
	of Shares		Range of Prices Paid Per Share				Shares
	Repurchased		Low		High		Repurchased
Three Months Ended:
March 31, 2015		221	$	22.81	$	23.46	$	5,136

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Note 14. Commitments and Loss Contingency

Commitments

During the three months ended March 31, 2016, 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 March 31, 2016 (in thousands):

	Amount
2016 (remaining nine months)	$	1,973
2017		4,125
2018		3,978
2019		3,994
2020		3,524
2021		1,642
2022 and thereafter		54
Total minimum payments required	$	19,290

During the three months ended March 31, 2016, 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 March 31, 2016 (in thousands):

	Amount
2016 (remaining nine months)	$	6,542
2017		865
2018		402
2019		-
2020		-
2021		-
2022 and thereafter		-
Total minimum payments required	$	7,809

The July 2015 Qelp acquisition included contingent consideration of $6.0 million, based on achieving targets tied to revenues and EBITDA for the years ended December 31, 2016, 2017 and 2018. The estimated future value of the contingent consideration is $9.1 million and is expected to be paid over a three year period.

Except as outlined above, there have not been any material changes to the outstanding contractual obligations from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2015.

Loss Contingency

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, 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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Note 15. 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 March 31,
	2016		2015
Service cost	$	118	$	115
Interest cost		44		36
Recognized actuarial (gains)		(12)		(11)
Net periodic benefit cost	$	150	$	140

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 March 31,
	2016		2015
401(k) plan contributions	$	285	$	283

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):

	March 31, 2016		December 31, 2015
Postretirement benefit obligation	$	35	$	37
Unrealized gains (losses) in AOCI (1)	$	254	$	267

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

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Note 16. 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), income tax benefits related to the stock-based compensation and excess tax benefits (deficiencies) (in thousands):

	Three Months Ended March 31,
	2016		2015
Stock-based compensation (expense) (1)	$	(2,182)	$	(1,996)
Income tax benefit (2)		829		729
Excess tax benefit (deficiency) from stock-based compensation (3)		1,911		169

⁽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.

⁽³⁾  Included in “Additional paid-in capital” in the accompanying Condensed Consolidated Statements of Changes in Shareholders’ Equity.

There were no capitalized stock-based compensation costs as of March 31, 2016 and December 31, 2015.

2011 Equity Incentive Plan — The Company’s 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 of Directors 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 SARs activity as of March 31, 2016 and for the three months then ended:

					Weighted
					Average
			Weighted		Remaining		Aggregate
			Average Exercise		Contractual		Intrinsic Value
Stock Appreciation Rights	Shares (000s)		Price		Term (in years)		(000s)
Outstanding at January 1, 2016		481	$	-
Granted		-	$	-
Exercised		(34)	$	-
Forfeited or expired		-	$	-
Outstanding at March 31, 2016		447	$	-		7.9	$	3,646
Vested or expected to vest at March 31, 2016		447	$	-		7.9	$	3,646
Exercisable at March 31, 2016		236	$	-		7.2	$	2,212

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

	Three Months Ended March 31,
	2016		2015
Number of SARs granted		-		-
Weighted average grant-date fair value per SAR	$	-	$	-
Intrinsic value of SARs exercised	$	413	$	402
Fair value of SARs vested	$	1,520	$	1,302

The following table summarizes nonvested SARs activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Stock Appreciation Rights	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		424	$	7.50
Granted		-	$	-
Vested		(213)	$	7.14
Forfeited or expired		-	$	-
Nonvested at March 31, 2016		211	$	7.86

As of March 31, 2016, there was $1.6 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested SARs granted under the 2011 Plan. This cost is expected to be recognized over a weighted average period of 1.3 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 estimated 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 March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Restricted Shares and RSUs	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		1,246	$	20.03
Granted		-	$	-
Vested		(421)	$	16.10
Forfeited or expired		(65)	$	15.25
Nonvested at March 31, 2016		760	$	22.62

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

	Three Months Ended March 31,
	2016		2015
Number of restricted shares/RSUs granted		-		-
Weighted average grant-date fair value per restricted share/RSU	$	-	$	-
Fair value of restricted shares/RSUs vested	$	6,785	$	2,019

As of March 31, 2016, based on the probability of achieving the performance goals, there was $12.0 million of total unrecognized compensation cost, net of estimated 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 1.6 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 Shareholder 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, 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 shareholder 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

33

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.

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.

The following table summarizes nonvested common stock share award activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Common Stock Share Awards	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		11	$	23.74
Granted		2	$	28.97
Vested		(8)	$	24.53
Forfeited or expired		(1)	$	24.70
Nonvested at March 31, 2016		4	$	24.70

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

	Three Months Ended March 31,
	2016		2015
Number of share awards granted		2		-
Weighted average grant-date fair value per share award	$	28.97	$	-
Fair value of share awards vested	$	190	$	160

As of March 31, 2016, there was $0.1 million of total unrecognized compensation cost, net of estimated 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 1.1 years.

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 20, 2014, effective as of January 1, 2014. It provides certain eligible employees the ability to defer any portion of their compensation 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 certain senior management participants on a quarterly basis up to a total of $12,000 per year for the president, chief executive officer and executive vice presidents and $7,500 per year for senior vice presidents, global vice presidents and vice presidents (participants below the level of vice president are not eligible to receive matching contributions from the Company). Matching contributions and the associated earnings vest over a seven year service period. 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 March 31, 2016 and December 31, 2015, liabilities of $8.1 million and $7.9 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 $1.7 million and $1.6 million at March 31, 2016 and December 31, 2015, 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 March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Common Stock	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		3	$	19.53
Granted		4	$	30.18
Vested		(5)	$	27.96
Forfeited or expired		-	$	-
Nonvested at March 31, 2016		2	$	22.12

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

	Three Months Ended March 31,
	2016		2015
Number of shares of common stock granted		4		5
Weighted average grant-date fair value per common stock	$	30.18	$	24.85
Fair value of common stock vested	$	122	$	129
Cash used to settle the obligation	$	359	$	65

As of March 31, 2016, there was less than $0.1 million of total unrecognized compensation cost, net of estimated 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 2.7 years.

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Note 17. 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 contact management solutions (with an emphasis on technical support and customer service) and technical staffing and (2) EMEA, which includes Europe, the Middle East and Africa, and provides outsourced customer contact management 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 contact management needs.

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

	Americas		EMEA		Other (1)		Consolidated
Three Months Ended March 31, 2016:
Revenues	$	262,076	$	58,625	$	45	$	320,746
Percentage of revenues		81.7%		18.3%		0.0%		100.0%
Depreciation, net	$	9,176	$	1,164	$	444	$	10,784
Amortization of intangibles	$	3,368	$	259	$	-	$	3,627
Income (loss) from operations	$	32,987	$	3,410	$	(16,127)	$	20,270
Other (expense), net								(102)
Income taxes								(6,214)
Net income							$	13,954
Total assets as of March 31, 2016	$	1,080,628	$	1,490,462	$	(1,583,810)	$	987,280
Three Months Ended March 31, 2015:
Revenues	$	264,173	$	59,495	$	17	$	323,685
Percentage of revenues		81.6%		18.4%		0.0%		100.0%
Depreciation, net	$	9,580	$	1,143	$	336	$	11,059
Amortization of intangibles	$	3,431	$	-	$	-	$	3,431
Income (loss) from operations	$	32,541	$	3,788	$	(13,788)	$	22,541
Other (expense), net								(1,102)
Income taxes								(5,800)
Net income							$	15,639
Total assets as of March 31, 2015	$	1,069,686	$	1,370,912	$	(1,521,514)	$	919,084

⁽¹⁾  Other items (including corporate and other costs, impairment costs, other income and expense, and income taxes) are shown for purposes of reconciling to the Company’s consolidated totals as shown in the tables above for the three months ended March 31, 2016 and 2015. Inter-segment revenues are not material to the Americas and EMEA segment results. The Company evaluates the performance of its geographic segments based on revenues and income (loss) from operations, and does not include segment assets or other income and expense items for management reporting purposes.

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Note 18. Other Income (Expense)

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

	Three Months Ended March 31,
	2016		2015
Foreign currency transaction gains (losses)	$	1,346	$	(935)
Gains (losses) on foreign currency derivative instruments not designated as hedges		(739)		(164)
Other miscellaneous income (expense)		(54)		270
	$	553	$	(829)

Note 19. Related Party Transactions

In January 2008, the Company entered into a lease for a customer contact management 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 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. There are significant penalties for early cancellation which decrease over time. The Company paid $0.1 million to the landlord during both the three months ended March 31, 2016 and 2015 under the terms of the lease.

Note 20. Subsequent Event

On April 1, 2016, the Company, one of its wholly-owned subsidiaries (“Merger Sub”), Clear Link Holdings, LLC, a Delaware limited liability company (“Clearlink”), and Pamlico Capital Management, L.P., as the representative of the equity holders of Clearlink, completed the acquisition outlined in the definitive Agreement and Plan of Merger (the “Merger Agreement”) dated March 6, 2016.

Pursuant to the terms of the Merger Agreement and subject to the conditions set forth therein, Clearlink merged into Merger Sub, with Merger Sub surviving as an indirect wholly-owned subsidiary of the Company (the “Merger”).

In the Merger, each outstanding membership unit of Clearlink was converted into the right to receive an amount in cash as set forth in the Merger Agreement. The aggregate cash consideration paid in the Merger was approximately $209.5 million, which included $3.1 million of Clearlink’s cash and cash equivalents at the closing of the Merger, and subject to certain post-closing adjustments relating to Clearlink’s working capital at the closing of the Merger. Approximately $2.6 million of the purchase price was placed in an escrow account as security for the indemnification obligations of Clearlink’s members under the Merger Agreement. The Company has obtained an insurance policy which will provide $20.7 million of coverage to the Company for breaches of most of the representations and warranties of Clearlink in the Merger Agreement, subject to a deductible.

On April 1, 2016, the Company borrowed $216.0 million under its 2015 Credit Agreement in connection with the acquisition of Clearlink, of which $4.0 million represented a short-term loan to Clearlink for working capital purposes. During the three months ended March 31, 2016, the Company incurred $1.4 million of merger and integration costs, which were included in “General and administrative” costs in the accompanying Condensed Consolidated Statement of Operations.

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

The Company will account for the Clearlink acquisition under the purchase method of accounting for business combinations. Accordingly, the purchase price will be allocated to the underlying net assets in proportion to estimates of their respective fair values. Any excess of the purchase price over the estimated fair value of the net assets acquired will be recorded as goodwill.

The Company has excluded the purchase price allocation and pro forma disclosures for the Clearlink acquisition as the initial accounting is currently incomplete. The Company is currently in the process of performing its valuation related to the acquired assets and liabilities. The Company will reflect the preliminary valuation of the net assets

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acquired in its second quarter 2016 Condensed Consolidated Financial Statements. In addition, the results of Clearlink’s operations will be included in the Company’s Consolidated Financial Statements as of the closing date of the Clearlink acquisition, April 1, 2016.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Sykes Enterprises, Incorporated

400 North Ashley Drive

Tampa, Florida

We have reviewed the accompanying condensed consolidated balance sheet of Sykes Enterprises, Incorporated and subsidiaries (the “Company”) as of March 31, 2016, and the related condensed consolidated statements of operations and comprehensive income (loss) for the three-month periods ended March 31, 2016 and 2015, of changes in shareholders’ equity for the three-month period ended March 31, 2016, and of cash flows for the three-month periods ended March 31, 2016 and 2015. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 Public Company Accounting Oversight Board (United States), 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.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting 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), the consolidated balance sheet of Sykes Enterprises, Incorporated and subsidiaries as of December 31, 2015, 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 February 29, 2016, 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, 2015 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Deloitte & Touche LLP

Tampa, Florida

May 3, 2016

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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, 2015, 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 contact management 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 contact management 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 trend toward outsourcing, (xxii) risk of interruption of technical and customer contact management 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 which 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 provide comprehensive customer contact management solutions and services to a wide range of clients including Global 2000 companies, medium-sized businesses and public institutions around the world, primarily in the communications, financial services, technology/consumer, transportation and leisure and healthcare industries. 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 groups primarily provide customer contact management services (with an emphasis on inbound technical support and customer service), which include customer assistance, healthcare and roadside assistance, technical support and product sales to our clients’ customers. These services, which represented 99.1% and 98.6% of consolidated revenues during the three months ended March 31, 2016 and 2015, respectively, are delivered through multiple communication channels encompassing phone, e-mail, social media, text messaging, chat and digital self-service.

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We also provide various enterprise support services in the United States (“U.S.”) that include services for our client’s 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 contact management centers throughout the United States, Canada, Europe, Latin America, Australia, the Asia Pacific Rim and Africa.

Acquisition of Qelp

In July 2015, we completed the acquisition of Qelp B.V. and its subsidiary (together, known as “Qelp”), to further broaden and strengthen our service portfolio around digital self-service customer support and extend our reach into adjacent, but complementary, markets. We refer to such acquisition herein as the “Qelp acquisition.”

The total purchase price of $15.8 million was funded by $9.8 million in cash on hand and contingent consideration with a fair value of $6.0 million as of July 2, 2015.

The results of operations of Qelp have been reflected in the accompanying Condensed Consolidated Statements of Operations since July 2, 2015.

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 March 31,
(in thousands)	2016		2015		2016 $ Change
Revenues	$	320,746	$	323,685	$	(2,939)
Operating expenses:
Direct salaries and related costs		205,555		213,927		(8,372)
General and administrative		80,510		72,727		7,783
Depreciation, net		10,784		11,059		(275)
Amortization of intangibles		3,627		3,431		196
Total operating expenses		300,476		301,144		(668)
Income from operations		20,270		22,541		(2,271)
Other income (expense):
Interest income		153		166		(13)
Interest (expense)		(808)		(439)		(369)
Other income (expense)		553		(829)		1,382
Total other income (expense)		(102)		(1,102)		1,000
Income before income taxes		20,168		21,439		(1,271)
Income taxes		6,214		5,800		414
Net income	$	13,954	$	15,639	$	(1,685)

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Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

Revenues

	Three Months Ended March 31,
	2016				2015
(in thousands)	Amount		% of Revenues		Amount		% of Revenues		$ Change
Americas	$	262,076		81.7%	$	264,173		81.6%	$	(2,097)
EMEA		58,625		18.3%		59,495		18.4%		(870)
Other		45		0.0%		17		0.0%		28
Consolidated	$	320,746		100.0%	$	323,685		100.0%	$	(2,939)

Consolidated revenues decreased $2.9 million, or (0.9)%, for the three months ended March 31, 2016 from the comparable period in 2015.

The decrease in Americas’ revenues was due to end-of-life client programs of $9.6 million and a negative foreign currency impact of $6.2 million, partially offset by new clients of $11.3 million and higher volumes from existing clients of $2.4 million. Revenues from our offshore operations represented 45.4% of Americas’ revenues, compared to 42.2% for the comparable period in 2015.

The decrease in EMEA’s revenues was due to end-of-life client programs of $2.7 million and a negative foreign currency impact of $1.9 million, partially offset by new clients of $2.1 million and higher volumes from existing clients of $1.6 million.

On a consolidated basis, we had 43,100 brick-and-mortar seats as of March 31, 2016, an increase of 3,200 seats from the comparable period in 2015. This increase in seats was primarily due to seat additions to support higher projected demand in the financial services, technology and communications verticals. The capacity utilization rate on a combined basis was 78% compared to 80% in the comparable period in 2015. This decrease was due to a significant increase in the seat count related to projected client demand.

On a geographic segment basis, 37,000 seats were located in the Americas, an increase of 3,800 seats from the comparable period in 2015, and 6,100 seats were located in EMEA, a decrease of 600 seats from the comparable period in 2015. Capacity utilization rates as of March 31, 2016 were 77% for the Americas and 82% for EMEA, compared to 78% and 88%, respectively, in the comparable period in 2015, with the slight decrease in utilization in the Americas primarily due to seat additions for higher projected demand and the decrease in utilization in EMEA primarily due to lower demand in certain existing clients, certain end-of-life client programs and the rationalization of seats in a highly utilized center due to a planned program expiration. We strive to attain a capacity utilization rate of 85% at each of our locations.

We added 2,400 seats on a gross basis in the first quarter of 2016, with total gross seats of 5,700 planned for the full year. We plan to add another 1,900 in gross seats in the second quarter of 2016. However, we plan to rationalize 1,600 seats in 2016, 700 of which are expected in the second quarter of 2016, in addition to the 500 rationalized in the first quarter of 2016. Total seat count on a net basis for the full year is expected to increase of 4,100 in 2016 versus 2015.

Direct Salaries and Related Costs

	Three Months Ended March 31,
	2016				2015
(in thousands)	Amount		% of     Revenues		Amount		% of     Revenues		$ Change		Change in % of   Revenues
Americas	$	163,647		62.4%	$	171,099		64.8%	$	(7,452)		-2.4%
EMEA		41,908		71.5%		42,828		72.0%		(920)		-0.5%
Consolidated	$	205,555		64.1%	$	213,927		66.1%	$	(8,372)		-2.0%

The decrease of $8.4 million in direct salaries and related costs included a positive foreign currency impact of $5.5 million in the Americas and a positive foreign currency impact of $1.3 million in EMEA.

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The decrease in Americas’ direct salaries and related costs, as a percentage of revenues, was primarily attributable to lower compensation costs of 0.9% driven by increased agent productivity principally within the communications vertical in the current period, lower communication costs of 0.7%, lower auto tow claim costs of 0.6% and lower other costs of 0.2%.

The decrease in EMEA’s direct salaries and related costs, as a percentage of revenues, was primarily attributable to lower postage costs of 0.5%, lower recruiting costs of 0.3%, lower severance costs of 0.2%, lower fulfillment materials costs of 0.1% and lower other costs of 0.4%, partially offset by higher compensation costs of 1.0% driven by a decrease in agent productivity principally within the technology and communications verticals in the current period.

General and Administrative

	Three Months Ended March 31,
	2016				2015
(in thousands)	Amount		% of     Revenues		Amount		% of     Revenues		$ Change		Change in % of   Revenues
Americas	$	52,898		20.2%	$	47,522		18.0%	$	5,376		2.2%
EMEA		11,884		20.3%		11,736		19.7%		148		0.6%
Other		15,728		-		13,469		-		2,259		-
Consolidated	$	80,510		25.1%	$	72,727		22.5%	$	7,783		2.6%

The increase of $7.8 million in general and administrative expenses included a positive foreign currency impact of $1.5 million in the Americas and a positive foreign currency impact of $0.4 million in EMEA.

The increase in Americas’ general and administrative expenses, as a percentage of revenues, was primarily attributable to higher compensation costs of 1.0% driven by end-of-life client programs without a commensurate reduction in the associated labor costs, higher facility-related costs of 0.7%, higher consulting costs of 0.2% and higher other costs of 0.3%.

The increase in EMEA’s general and administrative expenses, as a percentage of revenues, was primarily attributable to higher compensation costs of 0.7%, higher consulting costs of 0.2% and higher other costs of 0.4%, partially offset by lower facility-related costs of 0.7%.

The increase of $2.3 million in Other general and administrative expenses, which includes corporate and other costs, was primarily attributable to higher merger and integration costs of $1.4 million, higher compensation costs of $0.9 million, higher consulting costs of $0.2 million and higher travel costs of $0.2 million, partially offset by lower training costs of $0.2 million and lower other costs of $0.2 million.

Depreciation and Amortization

	Three Months Ended March 31,
	2016				2015
(in thousands)	Amount		% of     Revenues		Amount		% of     Revenues		$ Change		Change in % of   Revenues
Depreciation, net:
Americas	$	9,176		3.5%	$	9,580		3.6%	$	(404)		-0.1%
EMEA		1,164		2.0%		1,143		1.9%		21		0.1%
Other		444		-		336		-		108		-
Consolidated	$	10,784		3.4%	$	11,059		3.4%	$	(275)		0.0%
Amortization of intangibles:
Americas	$	3,368		1.3%	$	3,431		1.3%	$	(63)		0.0%
EMEA		259		0.4%		-		0.0%		259		0.4%
Other		-		-		-		-		-		-
Consolidated	$	3,627		1.1%	$	3,431		1.1%	$	196		0.0%

The decrease in depreciation was primarily due to certain fully depreciated net fixed assets, partially offset by new depreciable fixed assets placed into service.

The increase in amortization was primarily due to the addition of intangible assets acquired in conjunction with the July 2015 Qelp acquisition, partially offset by certain fully amortized intangible assets.

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Other Income (Expense)

	Three Months Ended March 31,
(in thousands)	2016		2015		$ Change
Interest income	$	153	$	166	$	(13)
Interest (expense)	$	(808)	$	(439)	$	(369)
Other income (expense):
Foreign currency transaction gains (losses)	$	1,346	$	(935)	$	2,281
Gains (losses) on foreign currency derivative instruments not designated as hedges		(739)		(164)		(575)
Other miscellaneous income (expense)		(54)		270		(324)
Total other income (expense)	$	553	$	(829)	$	1,382

Interest income remained consistent with the comparable period in 2015.

The increase in interest (expense) was primarily due to interest accretion on the contingent consideration related to the July 2015 Qelp acquisition.

Income Taxes

	Three Months Ended March 31,
(in thousands)	2016		2015		$ Change
Income before income taxes	$	20,168	$	21,439	$	(1,271)
Income taxes	$	6,214	$	5,800	$	414
					% Change
Effective tax rate		30.8%		27.1%		3.7%

The increase in the effective tax rate in 2016 compared to 2015 is due to several factors, including fluctuations in earnings among the various jurisdictions in which we operate, none of which are individually material.

Client Concentration

Our top ten clients accounted for approximately 49.0% and 49.8% of our consolidated revenues in the three months ended March 31, 2016 and 2015, 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 March 31,
	2016				2015
	Amount		% of     Revenues		Amount		% of     Revenues
Americas	$	51,144		19.5%	$	60,023		22.7%
EMEA		-		0.0%		750		1.3%
	$	51,144		15.9%	$	60,773		18.8%

We have multiple distinct contracts with AT&T spread across multiple lines of businesses, which expire at varying dates between 2016 and 2018. 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.

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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 March 31,
	2016				2015
	Amount		% of Revenues		Amount		% of Revenues
Americas	$	20,054		7.7%	$	14,794		5.6%
EMEA		-		0.0%		-		0.0%
	$	20,054		6.3%	$	14,794		4.6%

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 March 31,
	2016				2015
	Amount		% of Revenues		Amount		% of Revenues
Americas	$	-		0.0%	$	-		0.0%
EMEA		22,996		39.2%		23,890		40.2%
	$	22,996		7.2%	$	23,890		7.4%

Business Outlook

For the three months ended June 30, 2016, we anticipate the following financial results:

· Revenues in the range of $322.0 million to $326.0 million;

· Effective tax rate of approximately 35.0%;

· Fully diluted share count of approximately 42.1 million;

· Diluted earnings per share in the range of $0.23 to $0.25; and

· Capital expenditures in the range of $20.0 million to $25.0 million

For the twelve months ended December 31, 2016, we anticipate the following financial results:

· Revenues in the range of $1,348.0 million to $1,362.0 million;

· Effective tax rate of approximately 31.0%;

· Fully diluted share count of approximately 42.4 million;

· Diluted earnings per share in the range of $1.50 to $1.57; and

· Capital expenditures in the range of $65.0 million to $70.0 million

Our second quarter and full-year 2016 business outlook, as outlined above, does not reflect the revenue and earnings contributions, including the impact of interest and incremental transaction expenses, associated with the Clearlink acquisition, which closed April 1, 2016. Our full-year 2016 outlook, however, does reflect the $1.4 million in merger and integration costs incurred in the first quarter of 2016. As stated previously, we plan to update for the Clearlink revenue and earnings contribution when we report our second quarter 2016 results.

We continue to experience demand trends consistent with what was discussed in our previous business outlook. The forecasted increase in the full year 2016 revenue ranges reflects principally the impact of favorable foreign exchange rate movements relative to the U.S. Dollar, which are expected to be relatively neutral to full-year diluted earnings per share. Our second quarter revenue outlook relative to the first quarter of 2016 and compared to the same period last year reflects the favorable revenue contribution from the on-going ramps. However, the combination of costs associated with the capacity additions and agent ramps, which are heavily first-half weighted, are expected to impact operating margins in the second quarter of 2016 relative to the first quarter of 2016, and compared to the same period last year.

Our revenues and earnings per share assumptions for the second quarter and full-year 2016 are based on foreign exchange rates as of April 2016. 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 second quarter and full-year, as discussed above.

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We anticipate total other interest income (expense), net of approximately $(1.0) million for the second quarter and $(2.9) million for the full year 2016. These amounts include the accretion on the Qelp contingent consideration, which is expected to be $(0.2) million in the second quarter of 2016 and approximately $(1.0) million for the year. The amounts, however, exclude the potential impact of any future foreign exchange gains or losses in other income (expense).

Not included in this guidance is the impact of any future acquisitions, share repurchase activities or a potential sale of previously exited customer contact management 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 contact management 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 intend 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. A total of 4.9 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 three months ended March 31, 2016, cash increased $25.5 million from operating activities, $10.3 million from the settlement of the net investment hedge, $1.9 million from excess tax benefits from stock-based compensation and $0.1 million from other increases. The increase in cash was offset by $16.2 million used for capital expenditures, $4.4 million to repurchase common stock for minimum tax withholding on equity awards and a $0.2 million investment in restricted cash, resulting in a $24.5 million increase in available cash (including the favorable effects of foreign currency exchange rates on cash and cash equivalents of $7.5 million).

Net cash flows provided by operating activities for the three months ended March 31, 2016 were $25.5 million, compared to $28.6 million for the comparable period in 2015. The $3.1 million decrease in net cash flows from operating activities was due to a $1.7 million decrease in net income and a $6.4 million decrease in non-cash reconciling items such as depreciation, amortization, unrealized foreign currency transaction (gains) losses and deferred income taxes, partially offset by a net increase of $5.0 million in cash flows from assets and liabilities. The $5.0 million increase in 2016 from 2015 in cash flows from assets and liabilities was principally a result of a $10.0 million increase in other liabilities, a $5.2 million decrease in other assets, a $4.2 million increase in deferred revenue and a $1.8 million increase in taxes payable, partially offset by a $16.2 million increase in accounts receivable. The $16.2 million increase in the change in accounts receivable was primarily due to the timing of billings and collections in the three months ended March 31, 2016 over the comparable period in 2015. The $10.0 million increase in the change in other liabilities was primarily due to $5.7 million related to the timing of accrued employee compensation and benefits, and $3.3 million related to the decrease in fair value of the net investment hedge in the three months ended March 31, 2016 over the comparable period in 2015.

Capital expenditures, which are generally funded by cash generated from operating activities, available cash balances and borrowings available under our credit facilities, were $16.2 million for the three months ended March 31, 2016, compared to $10.9 million for the comparable period in 2015, an increase of $5.3 million. In 2016, we anticipate capital expenditures in the range of $65.0 million to $70.0 million, primarily for new seat additions, Enterprise Resource Planning upgrades, facility upgrades, maintenance and systems infrastructure.

On May 12, 2015, we entered into a $440 million revolving credit facility (the “2015 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 2015 Credit Agreement is subject to certain

46

borrowing limitations and includes certain customary financial and restrictive covenants. At March 31, 2016, we were in compliance with all loan requirements of the 2015 Credit Agreement and had $70.0 million of outstanding borrowings under this facility as of March 31, 2016. On April 1, 2016, we borrowed $216.0 million under our 2015 Credit Agreement in connection with the acquisition of Clear Link Holdings, LLC (“Clearlink”). See Note 20, Subsequent Event, of “Notes to Condensed Consolidated Financial Statements” for further information.

Our credit agreements had an average daily utilization of $70.0 million and $74.3 million during the three months ended March 31, 2016 and 2015, respectively. During the three months ended March 31, 2016 and 2015, the related interest expense, including the commitment fee and excluding the amortization of deferred loan fees, was $0.4 million and $0.3 million, respectively, which represented weighted average interest rates of 2.1% and 1.7%, respectively.

The 2015 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 2015 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 2015 Credit Agreement will mature on May 12, 2020.

Borrowings under the 2015 Credit Agreement bear interest at the rates set forth in the 2015 Credit Agreement. In addition, we are required to pay certain customary fees, including a commitment fee of 0.125%, which is due quarterly in arrears and calculated on the average unused amount of the 2015 Credit Agreement.

The 2015 Credit Agreement is guaranteed by all of 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 are currently under audit in several tax jurisdictions. 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. The total amount of deposits, net of the effects of foreign exchange rate adjustments, are $14.3 million and $13.4 million as of March 31, 2016 and December 31, 2015, respectively, and are included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets. Although the outcome of examinations by taxing authorities is always uncertain, we believe we are adequately reserved for these audits and resolution is not expected to have a material impact on our financial condition and results of operations.

In July 2015, we completed the acquisition of Qelp B.V. and its subsidiary (together, known as “Qelp”) pursuant to the definitive Share Sale and Purchase Agreement, dated July 2, 2015. The purchase price of $15.8 million was funded through cash on hand of $9.8 million and contingent consideration of $6.0 million. The estimated future value of the contingent consideration is $9.1 million and is expected to be paid over a three year period.

As of March 31, 2016, we had $259.9 million in cash and cash equivalents, of which approximately 91.3%, or $237.4 million, was held in international operations and is deemed to be indefinitely reinvested offshore. These funds may be subject to additional taxes if repatriated to the United States, including withholding tax applied by the country of origin and an incremental U.S. income tax, net of allowable foreign tax credits. 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 do not intend nor currently foresee a need to repatriate these funds. We expect our current domestic cash levels and cash flows from operations to be adequate to meet our domestic 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 2015 Credit Agreement as a result of the timing of our working capital needs, including capital expenditures. Additionally, we expect our current foreign cash levels and cash flows from foreign operations to be adequate to meet our foreign anticipated working capital needs, including investment activities such as capital expenditures for the next twelve months and the foreseeable future.

If we should require more cash in the U.S. than is provided by our domestic operations for significant discretionary unforeseen activities such as acquisitions of businesses and share repurchases, we could elect to repatriate future

47

foreign earnings and/or raise capital in the U.S through additional borrowings or debt/equity issuances. These alternatives could result in higher effective tax rates, interest expense and/or dilution of earnings. We have borrowed funds domestically and continue to have the ability to borrow additional funds domestically at reasonable interest rates.

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, 2015.

Off-Balance Sheet Arrangements and Other

As of March 31, 2016, 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.

Contractual Obligations

The following table summarizes the material changes to our contractual cash obligations as of March 31, 2016, and the effect these obligations are expected to have on liquidity and cash flow in future periods (in thousands):

	Payments Due By Period
	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		After 5 Years		Other
Operating leases (1)	$	19,290	$	1,973	$	8,103	$	7,518	$	1,696	$	-
Purchase obligations (2)		7,809		6,542		1,267		-		-		-
	$	27,099	$	8,515	$	9,370	$	7,518	$	1,696	$	-

⁽¹⁾  Amounts represent the expected cash payments under our operating leases.

⁽²⁾  Amounts represent the expected cash payments under our purchase obligations, which include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable without penalty.

On April 1, 2016, in conjunction with the acquisition of Clearlink, the Company borrowed $216.0 million under the 2015 Credit Agreement, which matures on May 12, 2020. See Note 20, Subsequent Event, of “Notes to Condensed Consolidated Financial Statements” for further information.

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, 2015 filed on February 29, 2016.

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Critical Accounting Estimates

See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report and Form 10-K for the year ended December 31, 2015 filed on February 29, 2015 for a discussion of our critical accounting estimates.

There have been no material changes to our critical accounting estimates in 2016.

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

In order to hedge a portion of our anticipated cash flow requirements denominated in PHP, CRC, HUF and RON, we had outstanding forward contracts and options as of March 31, 2016 with counterparties through March 2017 with notional amounts totaling $101.6 million. As of March 31, 2016, we had net total derivative assets associated with these contracts with a fair value of $2.7 million, which will settle within the next 12 months. If the USD was to weaken against the PHP and CRC and the EUR was to weaken against the HUF and RON by 10% from current period-end levels, we would incur a loss of approximately $8.3 million on the underlying exposures of the derivative instruments. However, this loss would be mitigated by corresponding gains on the underlying exposures.

We had forward exchange contracts with notional amounts totaling $65.2 million to hedge net investments in our foreign operations. The purpose of these derivative instruments is to protect against the risk that the net assets of certain foreign subsidiaries will be adversely affected by changes in exchange rates and economic exposures related to our foreign currency-based investments in these subsidiaries. As of March 31, 2016, the fair value of these derivatives was a net liability of $3.3 million. The potential loss in fair value at March 31, 2016, for these contracts resulting from a hypothetical 10% adverse change in the foreign currency exchange rates is approximately $6.7 million. However, this loss would be mitigated by corresponding gains on the underlying exposures.

We had forward exchange contracts with notional amounts totaling $61.3 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 March 31, 2016, the fair value of these derivatives was a net liability of $0.3 million.

49

The potential loss in fair value at March 31, 2016, for these contracts resulting from a hypothetical 10% adverse change in the foreign currency exchange rates is approximately $2.2 million. However, this loss would be mitigated by corresponding gains on the underlying exposures.

We had embedded derivative contracts with notional amounts totaling $12.2 million that are not designated as hedges. As of March 31, 2016, the fair value of these derivatives was a net asset of $0.1 million. The potential loss in fair value at March 31, 2016, for these contracts resulting from a hypothetical 10% adverse change in the foreign currency exchange rates is approximately $2.0 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 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 March 31, 2016, we had $70.0 million in borrowings outstanding under the revolving credit facility. Based on our level of variable rate debt outstanding during the three months ended March 31, 2016, 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 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, 2015, quarterly revenues as a percentage of total consolidated annual revenues were approximately 25%, 24%, 25% 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 contact management services, non-U.S. currency fluctuations, and the seasonal pattern of customer contact management support and fulfillment services.

Item 4.  Controls and Procedures

As of March 31, 2016, 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 March 31, 2016, 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 March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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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 provided adequate accruals for related costs 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, 2015 filed on February 29, 2016.

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

Below is a summary of stock repurchases for the three months ended March 31, 2016 (in thousands, except average price per share). See Note 13, 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)
January 1, 2016 - January 31, 2016		-	$	-		-		138
February 1, 2016 - February 29, 2016		-	$	-		-		138
March 1, 2016 - March 31, 2016		-	$	-		-		5,138
Total		-				-		5,138

⁽¹⁾  The total number of shares approved for repurchase under the 2011 Share Repurchase Plan was increased by 5.0 million shares to 10.0 million shares as of March 16, 2016. 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.

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Item 6.  Exhibits

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

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

52

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: May 3, 2016	By:    /s/ John Chapman
	John Chapman
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

53

EXHIBIT INDEX

Exhibit Number
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

54

EX-15

Exhibit 15

May 3, 2016

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 March 31, 2016, and 2015, as indicated in our report dated May 3, 2016; 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 March 31, 2016, is incorporated by reference in Registration Statement Nos. 333-23681, 333-76629, 333-88359, 333-73260, 333-125178 and 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: May 3, 2016

/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: May 3, 2016

/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 March 31, 2016 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: May 3, 2016	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 March 31, 2016 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: May 3, 2016	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.

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	Mar. 31, 2016	Apr. 26, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
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		42,613,318

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 259,885	$ 235,358
Receivables, net	286,252	277,096
Prepaid expenses	21,080	17,321
Other current assets	13,447	33,262
Total current assets	580,664	563,037
Property and equipment, net	118,116	111,962
Goodwill, net	199,038	195,733
Intangibles, net	47,885	50,896
Deferred charges and other assets	41,577	26,144
Total assets	987,280	947,772
Current liabilities:
Accounts payable	20,887	23,255
Accrued employee compensation and benefits	80,124	77,246
Current deferred income tax liabilities		1,120
Income taxes payable	2,016	1,959
Deferred revenue	30,564	28,119
Other accrued expenses and current liabilities	26,692	21,476
Total current liabilities	160,283	153,175
Deferred grants	4,620	4,810
Long-term debt	70,000	70,000
Long-term income tax liabilities	19,636	18,512
Other long-term liabilities	25,998	22,595
Total liabilities	$ 280,537	$ 269,092
Commitments and loss contingency (Note 14)
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; 42,639 and 42,785 shares issued, respectively	$ 426	$ 428
Additional paid-in capital	275,178	275,380
Retained earnings	472,279	458,325
Accumulated other comprehensive income (loss)	(39,267)	(53,662)
Treasury stock at cost: 115 and 113 shares, respectively	(1,873)	(1,791)
Total shareholders' equity	706,743	678,680
Total liabilities and shareholders' equity	$ 987,280	$ 947,772

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
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	42,639,000	42,785,000
Treasury stock, shares	115,000	113,000

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Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Revenues	$ 320,746	$ 323,685
Operating expenses:
Direct salaries and related costs	205,555	213,927
General and administrative	80,510	72,727
Depreciation, net	10,784	11,059
Amortization of intangibles	3,627	3,431
Total operating expenses	300,476	301,144
Income from operations	20,270	22,541
Other income (expense):
Interest income	153	166
Interest (expense)	(808)	(439)
Other income (expense)	553	(829)
Total other income (expense)	(102)	(1,102)
Income before income taxes	20,168	21,439
Income taxes	6,214	5,800
Net income	$ 13,954	$ 15,639
Net income per common share:
Basic	$ 0.33	$ 0.37
Diluted	$ 0.33	$ 0.37
Weighted average common shares outstanding:
Basic	41,704	42,181
Diluted	42,023	42,440

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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 13,954	$ 15,639
Other comprehensive income (loss), net of taxes:
Foreign currency translation gain (loss), net of taxes	13,899	(27,124)
Unrealized gain (loss) on net investment hedges, net of taxes	(1,930)	3,903
Unrealized actuarial gain (loss) related to pension liability, net of taxes	9	(8)
Unrealized gain (loss) on cash flow hedging instruments, net of taxes	2,430	1,415
Unrealized gain (loss) on postretirement obligation, net of taxes	(13)	(15)
Other comprehensive income (loss), net of taxes	14,395	(21,829)
Comprehensive income (loss)	$ 28,349	$ (6,190)

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Condensed Consolidated Statements of Changes in Shareholders' Equity - 3 months ended Mar. 31, 2016 - 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, 2015	$ 678,680	$ 428	$ 275,380	$ 458,325	$ (53,662)	$ (1,791)
Beginning Balance, shares at Dec. 31, 2015		42,785
Stock-based compensation expense	2,182		2,182
Excess tax benefit (deficiency) from stock-based compensation	1,911		1,911
Issuance of common stock under equity award plans, net of shares withheld for employee taxes	(4,379)	$ (2)	(4,295)			(82)
Issuance of common stock under equity award plans, net of shares withheld for employee taxes, shares		(146)
Comprehensive income (loss)	28,349			13,954	14,395
Ending Balance at Mar. 31, 2016	$ 706,743	$ 426	$ 275,178	$ 472,279	$ (39,267)	$ (1,873)
Ending Balance, shares at Mar. 31, 2016		42,639

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 13,954	$ 15,639
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	10,954	11,255
Amortization of intangibles	3,627	3,431
Amortization of deferred grants	(226)	(199)
Unrealized foreign currency transaction (gains) losses, net	(947)	(277)
Stock-based compensation expense	2,182	1,996
Excess tax (benefit) from stock-based compensation	(1,911)	(169)
Deferred income tax provision (benefit)	(1,562)	2,748
Unrealized (gains) losses on financial instruments, net	349	(70)
Amortization of deferred loan fees	67	65
Imputed interest expense and fair value adjustments to contingent consideration	213
Other	(245)	148
Changes in assets and liabilities, net of acquisition:
Receivables	(7,458)	8,716
Prepaid expenses	(3,601)	(160)
Other current assets	339	(11,391)
Deferred charges and other assets	(980)	2,144
Accounts payable	(2,844)	(26)
Income taxes receivable / payable	2,592	737
Accrued employee compensation and benefits	1,509	(4,174)
Other accrued expenses and current liabilities	5,206	1,430
Deferred revenue	949	(3,234)
Other long-term liabilities	3,350	33
Net cash provided by operating activities	25,517	28,642
Cash flows from investing activities:
Capital expenditures	(16,205)	(10,869)
Proceeds from sale of property and equipment	26	50
Investment in restricted cash	(225)	(5)
Release of restricted cash	8
Net investment hedge settlement	10,339
Net cash (used for) investing activities	(6,057)	(10,824)
Cash flows from financing activities:
Payments of long-term debt		(1,000)
Excess tax benefit from stock-based compensation	1,911	169
Cash paid for repurchase of common stock		(5,136)
Proceeds from grants	22	49
Shares repurchased for minimum tax withholding on equity awards	(4,379)	(1,131)
Net cash (used for) financing activities	(2,446)	(7,049)
Effects of exchange rates on cash and cash equivalents	7,513	(11,842)
Net increase (decrease) in cash and cash equivalents	24,527	(1,073)
Cash and cash equivalents - beginning	235,358	215,137
Cash and cash equivalents - ending	259,885	214,064
Supplemental disclosures of cash flow information:
Cash paid during period for interest	406	368
Cash paid during period for income taxes	3,781	5,606
Non-cash transactions:
Property and equipment additions in accounts payable	4,831	2,070
Unrealized gain (loss) on postretirement obligation in accumulated other comprehensive income (loss)	(13)	(15)
Shares repurchased for minimum tax withholding on common stock and restricted stock under equity awards included in current liabilities	$ 487	$ 127

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Overview and Basis of Presentation

3 Months Ended

Mar. 31, 2016

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”) provides comprehensive outsourced customer contact management solutions and services in the business process outsourcing arena to companies, primarily within the communications, financial services, technology/consumer, transportation and leisure, and healthcare industries. SYKES provides flexible, high-quality outsourced customer contact management services (with an emphasis on inbound technical support and customer service), which includes customer assistance, healthcare and roadside assistance, technical support and product sales to its clients’ customers. Utilizing SYKES’ integrated onshore/offshore global delivery model, SYKES provides its services through multiple communication channels encompassing phone, e-mail, social media, text messaging, chat and digital self-service. SYKES complements its outsourced customer contact management services with various enterprise support services in the United States that encompass services for a company’s 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.

Acquisition — In July 2015, the Company completed the acquisition of Qelp B.V. and its subsidiary (together, known as “Qelp”), pursuant to a definitive Share Sale and Purchase Agreement, dated July 2, 2015. The Company has reflected the operating results in the Condensed Consolidated Statements of Operations since July 2, 2015. See Note 2, Acquisition of Qelp, for additional information on the acquisition.

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 months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, 2016. 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, 2015, as filed with the Securities and Exchange Commission (“SEC”) on February 29, 2016.

Principles of Consolidation — The condensed consolidated financial statements include the accounts of SYKES and its wholly-owned subsidiaries and controlled majority-owned subsidiaries. All significant 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 April 1, 2016, the Company acquired 100% of the outstanding membership units of Clear Link Holdings, LLC (“Clearlink”). In conjunction with the acquisition of Clearlink, the Company borrowed $216.0 million under its existing credit agreement. See Note 20, Subsequent Event, for further information. There were no other material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements.

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

New Accounting Standards Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The amendments in ASU 2014-09 outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and indicate 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. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date” (“ASU 2015-14”). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that period. An entity should apply the amendments using either the full retrospective approach or retrospectively with a cumulative effect of initially applying the amendments recognized at the date of initial application. The Company is currently evaluating the methods of adoption and the impact that the adoption of ASU 2014-09 may have on its financial condition, results of operations and cash flows.

In January 2016, the FASB issued ASC 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 have to measure equity investments that do not result in consolidation and are not accounted 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 will apply 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 Company does not expect the adoption of ASU 2016-01 to materially impact its financial condition, results of operations and cash flows.

In February 2016, the FASB issued ASC 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). 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 are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial condition, results of operations and cash flows.

In March 2016, the FASB issued ASC 2016-05, “Derivatives and Hedging (Topic 815) – Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”). These amendments clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Entities have the option to apply the amendments on either a prospective basis or a modified retrospective basis. The Company is evaluating the methods of adoption but does not expect the adoption of ASU 2016-05 to materially impact its financial condition, results of operations and cash flows.

In March 2016, the FASB issued ASC 2016-08, “Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”). These amendments clarify the implementation guidance on principal versus agent considerations and require entities to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. These amendments affect the guidance in ASU 2014-09, which is not yet effective. The effective date and transition requirements for ASU 2016-08 are the same as the effective date and transition requirements of ASU 2014-09, as updated by ASU 2015-14.

In March 2016, the FASB issued ASC 2016-09, “Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). These amendments are intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. These amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. Entities have the option to apply the amendments on either a prospective basis or a modified retrospective basis. The Company is currently evaluating the impact the guidance will have on its financial condition, results of operations and cash flows.

In April 2016, the FASB issued ASC 2016-10, “Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing” (“ASU 2016-10”). These amendments clarify the identification of performance obligations and the licensing implementation guidance. These amendments affect the guidance in ASU 2014-09, which is not yet effective. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements of ASU 2014-09, as updated by ASU 2015-14.

New Accounting Standards Recently Adopted

In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation (Topic 718) Accounting for Share-Based  Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation” (“ASC 718”), as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments either (1) prospective to all awards granted or modified after the effective date or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015-01”). This amendment eliminates from U.S. GAAP the concept of extraordinary items as part of the FASB’s initiative to reduce complexity in accounting standards. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments either prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of ASU 2015-01 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810) Amendments to the Consolidation Analysis)” (“ASU 2015-02”). These amendments are intended to improve targeted areas of the consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. These amendments affect the consolidation evaluation for reporting organizations. In addition, the amendments simplify and improve current U.S. GAAP by reducing the number of consolidation models. The amendments are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments using either a modified retrospective approach or retrospectively. The adoption of ASU 2015-02 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of  Debt Issuance Costs” (“ASU 2015-03”). These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. These amendments are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Entities should apply the amendments retrospectively. The adoption of ASU 2015-03 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In April 2015, the FASB issued ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (“ASU 2015-05”). These amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. These amendments are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015; early adoption is permitted. Entities can adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. The adoption of ASU 2015-05 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In September 2015, the FASB issued ASC 2015-16, “Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). These amendments eliminate the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected measurement or recognition of amounts initially recognized. As an alternative, the amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. These amendments are effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2015-16 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In November 2015, the FASB issued ASC 2015-17, “Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). These amendments require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The existing requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by these amendments. These amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Early adoption is permitted as of the beginning of the interim or annual reporting period. The adoption of ASU 2015-17 on January 1, 2016 resulted in the reclassification of $12.0 million of current deferred tax assets included in “Other current assets” and $1.1 million of current deferred tax liabilities included in “Current deferred income tax liabilities” to noncurrent deferred income tax assets and liabilities. All future deferred tax assets and liabilities will be classified as noncurrent. No prior periods were adjusted.

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Acquisition of Qelp

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Acquisition of Qelp

Note 2. Acquisition of Qelp

On July 2, 2015, the Company’s wholly-owned subsidiaries, Sykes Enterprises Incorporated B.V. and Sykes Enterprises Incorporated Holdings B.V., both Netherlands companies, entered into a definitive Share Sale and Purchase Agreement (the “Purchase Agreement”) with MobileTimes B.V., Yarra B.V., From The Mountain Consultancy B.V. and Sticting Administratiekantoor Qelp (the “Sellers”), all of which are Netherlands companies, to acquire all of the outstanding shares of Qelp B.V. and its wholly owned subsidiary (together, known as “Qelp”.) The strategic acquisition of Qelp (the “Qelp acquisition”) was to further broaden and strengthen the Company’s service portfolio around digital self-service customer support and extend its reach into adjacent, but complementary, markets. Pursuant to Federal income tax regulations, no amount of intangibles or goodwill from this acquisition will be deductible for tax purposes. The results of Qelp’s operations have been included in the Company’s consolidated financial statements since its acquisition on July 2, 2015 (the “acquisition date”).

The consideration consisted of an initial purchase price and a contingent purchase price. The initial purchase price of $9.8 million, including certain post-closing adjustments relating to Qelp’s working capital, was funded through cash on hand upon the closing of the transaction on July 2, 2015. The contingent purchase price to be paid over a three year period is based on achieving targets tied to revenues and earnings before interest, income taxes, depreciation and amortization (“EBITDA”) for the years ended December 31, 2016, 2017 and 2018, not to exceed EUR 10.0 million.

As of the acquisition date, the total consideration paid or to be paid by the Company for the Qelp acquisition is summarized below (in thousands):

	Total
Cash	$	9,885
Contingent consideration		6,000
Working capital adjustment		(65)
	$	15,820

The fair value of the contingent consideration was estimated using the discounted cash flow method, and was included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheets (see Note 4, Fair Value, for further information). As part of the discounted cash flow method, the Company calculated an adjusted weighted average cost of capital (“WACC”) specifically attributable to the future payments of the contingent consideration. Based on the forecasted revenue and profitability scenarios and their respective probabilities of occurrence, the Company estimated the present value of the probability-adjusted future payments utilizing an adjusted WACC for the potential future payments. The Company believes that its estimates and assumptions are reasonable, but there is significant judgment involved. Changes in the fair value of the contingent consideration liabilities subsequent to the acquisition will be recorded in the Company’s Consolidated Statements of Operations.

The Company accounted for the Qelp acquisition in accordance with ASC 805 (“ASC 805”) “Business Combinations,” whereby the fair value of the purchase price was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed from Qelp based on their estimated fair values as of the closing date. The Company completed its analysis of the purchase price allocation during the fourth quarter of 2015.

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed, all included in the EMEA segment (in thousands):

	July 2, 2015
Cash and cash equivalents	$	450
Receivables (1)		1,471
Prepaid expenses		24
Total current assets		1,945
Property and equipment		2,168
Goodwill		10,054
Intangibles		6,000
Deferred charges and other assets		55
Short-term debt		(323)
Accrued employee compensation and benefits		(207)
Income taxes payable		(94)
Deferred revenue		(967)
Other accrued expenses and current liabilities		(1,030)
Total current liabilities		(2,621)
Other long-term liabilities (2)		(1,781)
	$	15,820
(1) The fair value equals the gross contractual value of the receivables. (2) Primarily includes long-term deferred tax liabilities.

Fair values were based on management’s estimates and assumptions including variations of the income approach, the cost approach and the market approach.

The following table presents the Company’s purchased intangibles assets as of July 2, 2015, the acquisition date (in thousands):

	Amount Assigned		Weighted Average   Amortization Period   (years)
Customer relationships	$	5,400		7
Trade name and trademarks		100		3
Content library		500		2
	$	6,000		7

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Costs Associated with Exit or Disposal Activities

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Costs Associated with Exit or Disposal Activities

Note 3. Costs Associated with Exit or Disposal Activities

In connection with the Company’s initiatives to streamline excess capacity in The Philippines and various locations in the U.S. (the “Exit Plans”), the Company has paid $7.6 million in cash through March 31, 2016. The cumulative costs expected and incurred as a result of the Exit Plans were as follows as of March 31, 2016 (in thousands):

	Americas Fourth   Quarter 2011   Exit Plan		Americas Third   Quarter 2010   Exit Plan		Total
Lease obligations and facility exit costs	$	1,365	$	6,729	$	8,094
Non-cash impairment charges		480		3,847		4,327
Total	$	1,845	$	10,576	$	12,421

The following table summarizes the accrued liability associated with the Exit Plans’ exit or disposal activities and related charges for the three months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016		2015
Beginning accrual	$	733	$	1,558
Lease obligations and facility exit costs		-		-
Cash payments (1)		(206)		(212)
Ending accrual	$	527	$	1,346
(1) Related to lease obligations and facility exit costs.

Restructuring Liability Classification

The following table summarizes the Company’s short-term and long-term accrued liabilities associated with its exit and disposal activities, by plan, as of March 31, 2016 and December 31, 2015 (in thousands):

	Americas Fourth Quarter 2011 Exit Plan		Americas Third  Quarter 2010  Exit Plan		Total
March 31, 2016
Short-term accrued restructuring liability (1)	$	121	$	406	$	527
Long-term accrued restructuring liability (2)		-		-		-
Ending accrual at March 31, 2016	$	121	$	406	$	527
December 31, 2015
Short-term accrued restructuring liability (1)	$	144	$	487	$	631
Long-term accrued restructuring liability (2)		22		80		102
Ending accrual at December 31, 2015	$	166	$	567	$	733

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

The remaining restructuring liability relates to future rent obligations to be paid through the remainder of the lease terms, the last of which ends in February 2017.

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Fair Value

3 Months Ended

Mar. 31, 2016

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 it re-prices at varying interest rates.

● 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 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.

Money Market and Open-End Mutual Funds — The Company uses quoted market prices in active markets to determine the fair value. These items are classified in Level 1 of the fair value hierarchy.

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; 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 16, Stock-Based Compensation.

Guaranteed Investment Certificates — Guaranteed investment certificates, with variable interest rates linked to the prime rate, approximate fair value due to the automatic ability to re-price with changes in the market; such items are classified in Level 2 of the fair value hierarchy.

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 was recognized at fair value using a discounted cash flow methodology and a discount rate of 14.0%. The discount rate is dependent on the specific risks of the acquisition including the country of operation, the nature of services and complexity of the acquired business, and other similar factors, all of which are significant inputs not observable in the market. Significant increases or decreases in any of the inputs in isolation would result in a significantly higher or lower fair value measurement.

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 (in thousands):

				Fair Value Measurements at March 31, 2016 Using:
				Quoted Prices		Significant
				in Active		Other		Significant
				Markets For		Observable		Unobservable
		Balance at		Identical Assets		Inputs		Inputs
		March 31, 2016		Level (1)		Level (2)		Level (3)
Assets:
Foreign currency forward and option contracts	(1)	$	2,817	$	-	$	2,817	$	-
Embedded derivatives	(1)		139		-		-		139
Equity investments held in a rabbi trust for the Deferred Compensation Plan	(2)		6,325		6,325		-		-
Debt investments held in a rabbi trust for the Deferred Compensation Plan	(2)		1,803		1,803		-		-
Guaranteed investment certificates	(3)		86		-		86		-
		$	11,170	$	8,128	$	2,903	$	139
Liabilities:
Long-term debt	(4)	$	70,000	$	-	$	70,000	$	-
Foreign currency forward and option contracts	(1)		3,692		-		3,692		-
Embedded derivatives	(1)		81		-		-		81
Contingent consideration included in “Other long-term liabilities”	(5)		6,806		-		-		6,806
		$	80,579	$	-	$	73,692	$	6,887
				Fair Value Measurements at December 31, 2015 Using:
		Balance at		Quoted Prices in Active Markets For  Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
		December 31, 2015		Level (1)		Level (2)		Level (3)
Assets:
Foreign currency forward and option contracts	(1)	$	10,962	$	-	$	10,962	$	-
Equity investments held in a rabbi trust for the Deferred Compensation Plan	(2)		6,229		6,229		-		-
Debt investments held in a rabbi trust for the Deferred Compensation Plan	(2)		1,622		1,622		-		-
Guaranteed investment certificates	(3)		86		-		86		-
		$	18,899	$	7,851	$	11,048	$	-
Liabilities:
Long-term debt	(4)	$	70,000	$	-	$	70,000	$	-
Foreign currency forward and option contracts	(1)		835		-		835		-
Contingent consideration included in “Other long-term liabilities”	(5)		6,280		-		-		6,280
		$	77,115	$	-	$	70,835	$	6,280

⁽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.

⁽³⁾  Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽⁴⁾  The carrying value of long-term debt approximates its estimated fair value as it re-prices at varying interest rates. See Note 10, Borrowings.

⁽⁵⁾  In the accompanying Condensed Consolidated Balance Sheets.

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):

	Fair Value
Balance at December 31, 2015	$	-
Gain (loss) recognized in “Other income (expense)” (1)		56
Effect of foreign currency		2
Balance at March 31, 2016	$	58
Unrealized gain (loss) for the three months ended March 31, 2016	$	55
(1)  Includes realized and unrealized gain (loss).

Contingent Consideration

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

	Fair Value
Balance at January 1, 2015	$	-
Acquisition (1)		6,000
Payments		-
Imputed interest/adjustments		408
Effect of foreign currency		(128)
Balance at December 31, 2015		6,280
Acquisition		-
Payments		-
Imputed interest/adjustments		213
Effect of foreign currency		313
Balance at March 31, 2016	$	6,806
(1)  Related to the Qelp acquisition on July 2, 2015. See Note 2, Acquisition of Qelp.

The Company did not record any fair value adjustments to the contingent consideration as the key assumptions used to calculate the fair value at the acquisition date remained consistent at March 31, 2016. Should the assumptions regarding probability of achievement of certain revenue and EBITDA targets change in future periods, the change in fair value of the contingent consideration will be recognized in the accompanying Condensed Consolidated Statements of Operations. The Company accretes interest expense each period using the effective interest method until the contingent consideration reaches the estimated future value of $9.1 million. Interest expense related to the contingent consideration is included in “Interest (expense)” in the accompanying Condensed Consolidated Statements of Operations.

Non-Recurring Fair Value

Certain assets, under certain conditions, are measured at fair value on a nonrecurring basis utilizing Level 3 inputs, like those associated with acquired businesses, including goodwill, other intangible assets and other long-lived assets. 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 March 31, 2016 and December 31, 2015.

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2016

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 March 31, 2016 (in thousands):

	Gross Intangibles		Accumulated         Amortization		Net Intangibles		Weighted Average   Amortization Period (years)
Customer relationships	$	103,999	$	(62,328)	$	41,671		8
Trade names and trademarks		11,703		(5,810)		5,893		8
Content library		514		(193)		321		2
Non-compete agreements		1,196		(1,196)		-		2
Proprietary software		850		(850)		-		2
Favorable lease agreement		449		(449)		-		2
	$	118,711	$	(70,826)	$	47,885		8

The following table presents the Company’s purchased intangible assets as of December 31, 2015 (in thousands):

	Gross Intangibles		Accumulated         Amortization		Net Intangibles		Weighted Average   Amortization Period (years)
Customer relationships	$	102,594	$	(58,294)	$	44,300		8
Trade names and trademarks		11,698		(5,470)		6,228		8
Content library		491		(123)		368		2
Non-compete agreements		1,190		(1,190)		-		2
Proprietary software		850		(850)		-		2
Favorable lease agreement		449		(449)		-		2
	$	117,272	$	(66,376)	$	50,896		8

The Company’s estimated future amortization expense for the succeeding years relating to the purchased intangible assets resulting from acquisitions completed prior to March 31, 2016, is as follows (in thousands):

Years Ending December 31,	Amount
2016 (remaining nine months)	$	11,056
2017		14,554
2018		8,282
2019		7,679
2020		5,169
2021		784
2022 and thereafter		361

Goodwill

Changes in goodwill for the three months ended March 31, 2016 consist of the following (in thousands):

					Effect of Foreign
	January 1, 2016		Acquisition		Currency		March 31, 2016
Americas	$	186,049	$	-	$	2,797	$	188,846
EMEA		9,684		-		508		10,192
	$	195,733	$	-	$	3,305	$	199,038

Changes in goodwill for the year ended December 31, 2015 consist of the following (in thousands):

					Effect of Foreign
	January 1, 2015		Acquisition (1)		Currency		December 31, 2015
Americas	$	193,831	$	-	$	(7,782)	$	186,049
EMEA		-		10,054		(370)		9,684
	$	193,831	$	10,054	$	(8,152)	$	195,733
(1)  See Note 2, Acquisition of Qelp, for further information.

The Company has five reporting units with goodwill and 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 two-step goodwill impairment test as of July 31, 2015. 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 recorded to the extent that the fair value of the goodwill within the reporting unit is less than its carrying value.

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 used an average of 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, 2015, the Company concluded that goodwill was not impaired for all five of the reporting units. While the fair values of four of the reporting units were substantially in excess of their carrying value, the Qelp reporting unit’s fair value approximated its carrying value due to the proximity to the acquisition date of July 2, 2015. The newly acquired Qelp reporting unit’s carrying value was $15.6 million at July 31, 2015, including $9.9 million of goodwill.

The Qelp reporting unit is at risk for future impairment if projected operating results are not met or other inputs into the fair value measurement change. However, as of March 31, 2016 and December 31, 2015, there was no impairment as the fair value of the reporting unit exceeded its carrying value by a small margin. The Company will continue to review the calculated fair value of this reporting unit.

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Financial Derivatives

3 Months Ended

Mar. 31, 2016

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 protect against the risk that the eventual cash flows resulting from such transactions will be adversely affected by 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):

	March 31, 2016		December 31, 2015
Deferred gains (losses) in AOCI	$	2,008	$	(558)
Tax on deferred gains (losses) in AOCI		(105)		31
Deferred gains (losses) in AOCI, net of taxes	$	1,903	$	(527)
Deferred gains (losses) expected to be reclassified to “Revenues” from AOCI during the next twelve months	$	2,008

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

Net Investment Hedge – The Company enters into foreign exchange forward contracts to hedge its net investment in certain foreign operations, as defined under ASC 815. The purpose of these derivative instruments is to protect the Company’s interests against the risk that the net assets of certain foreign subsidiaries will be adversely affected by changes in exchange rates and economic exposures related to the Company’s foreign currency-based investments in these subsidiaries.

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):

	As of March 31, 2016			As of December 31, 2015
Contract Type	Notional     Amount in     USD		Settle Through     Date	Notional      Amount in      USD		Settle Through      Date
Cash flow hedges:
Options:
Philippine Pesos	$	71,500	March 2017	$	71,750	December 2016
Forwards:
Costa Rican Colones		23,000	December 2016		34,500	November 2016
Hungarian Forints		2,050	December 2016		-	-
Romanian Leis		5,060	December 2016		-	-
Net investment hedges:
Forwards:
Euros		65,229	September 2017		63,470	March 2016
Non-designated hedges:
Forwards		61,262	June 2016		50,603	March 2016
Embedded derivatives		12,210	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 $3.0 million and $11.0 million as of March 31, 2016 and December 31, 2015, 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 $2.5 million and $10.2 million as of March 31, 2016 and December 31, 2015, respectively, and liability positions of $3.3 million and $0.1 million as of March 31, 2016 and December 31, 2015, 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
	March 31, 2016		December 31, 2015
	Fair Value		Fair Value
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (1)	$	2,748	$	544
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts (1)		-		10,161
		2,748		10,705
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (1)		69		257
Embedded derivatives (1)		10		-
Embedded derivatives (2)		129		-
Total derivative assets	$	2,956	$	10,962
	Derivative Liabilities
	March 31, 2016		December 31, 2015
	Fair Value		Fair Value
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (3)	$	14	$	396
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts (4)		3,290		-
		3,304		396
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (3)		388		439
Embedded derivatives (3)		3		-
Embedded derivatives (4)		78		-
Total derivative liabilities	$	3,773	$	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 tables present the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended March 31, 2016 and 2015 (in thousands):

	Gain (Loss) Recognized in     AOCI on Derivatives     (Effective Portion)				Gain (Loss) Reclassified From Accumulated AOCI   Into “Revenues” (Effective    Portion)				Gain (Loss) Recognized in  “Revenues” on Derivatives  (Ineffective Portion and Amount  Excluded from Effectiveness Testing)
	March 31,				March 31,				March 31,
	2016		2015		2016		2015		2016		2015
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	2,503	$	2,055	$	(54)	$	589	$	-	$	1
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		(3,112)		6,358		-		-		-		-
	$	(609)	$	8,413	$	(54)	$	589	$	-	$	1

	Gain (Loss) Recognized   in “Other income (expense)” on Derivatives
	March 31,
	2016		2015
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	795	$	(164)
Embedded derivatives		(56)		-
	$	739	$	(164)

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Investments Held in Rabbi Trust

3 Months Ended

Mar. 31, 2016

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):

	March 31, 2016				December 31, 2015
	Cost		Fair Value		Cost		Fair Value
Mutual funds	$	6,109	$	8,128	$	6,217	$	7,851

The mutual funds held in rabbi trust were 78% equity-based and 22% debt-based as of March 31, 2016. Net investment income (losses), included in “Other income (expense)” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):

	Three Months Ended March 31,
	2016		2015
Gross realized gains from sale of trading securities	$	-	$	3
Gross realized (losses) from sale of trading securities		-		(1)
Dividend and interest income		9		5
Net unrealized holding gains (losses)		20		123
Net investment income (losses)	$	29	$	130

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Deferred Revenue

3 Months Ended

Mar. 31, 2016

Deferred Revenue Disclosure [Abstract]

Deferred Revenue

Note 8. Deferred Revenue

Deferred revenue consists of the following (in thousands):

	March 31, 2016		December 31, 2015
Future service	$	23,880	$	22,112
Estimated potential penalties and holdbacks		6,684		6,007
	$	30,564	$	28,119

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Deferred Grants

3 Months Ended

Mar. 31, 2016

Text Block [Abstract]

Deferred Grants

Note 9. Deferred Grants

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

	March 31, 2016		December 31, 2015
Property grants	$	4,207	$	4,377
Lease grants		494		513
Employment grants		143		149
Total deferred grants		4,844		5,039
Less: Property grants - short-term (1)		-		-
Less: Lease grants - short-term (1)		(81)		(80)
Less: Employment grants - short-term (1)		(143)		(149)
Total long-term deferred grants	$	4,620	$	4,810
(1)	Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

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Borrowings

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Borrowings

Note 10. Borrowings

On May 12, 2015, the Company entered into a $440 million revolving credit facility (the “2015 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 2015 Credit Agreement is subject to certain borrowing limitations and includes certain customary financial and restrictive covenants.

The 2015 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.

Borrowings consist of the following (in thousands):

	March 31, 2016		December 31, 2015
Revolving credit facility	$	70,000	$	70,000
Less: Current portion		-		-
Total long-term debt	$	70,000	$	70,000

The 2015 Credit Agreement matures on May 12, 2020 and has no varying installments due.

Borrowings under the 2015 Credit Agreement bear interest at the rates set forth in the 2015 Credit Agreement. In addition, the Company is required to pay certain customary fees, including a commitment fee of 0.125%, which is due quarterly in arrears and calculated on the average unused amount of the 2015 Credit Agreement.

The 2015 Credit Agreement is guaranteed by all of 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 2015 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 March 31,
	2016		2015
Average daily utilization	$	70,000	$	74,322
Interest expense, including commitment fee (1)	$	375	$	319
Weighted average interest rate		2.1%		1.7%
(1)  Excludes the amortization of deferred loan fees.

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 11. 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     Gain (Loss)		Unrealized   Gain (Loss) on   Net Investment Hedge		Unrealized   Actuarial Gain   (Loss) Related to Pension Liability		Unrealized   Gain (Loss) on   Cash Flow Hedging Instruments		Unrealized   Gain (Loss) on   Post Retirement Obligation		Total
Balance at January 1, 2015	$	(22,076)	$	276	$	1,008	$	(111)	$	342	$	(20,561)
Pre-tax amount		(37,178)		6,101		121		1,708		(12)		(29,260)
Tax (provision) benefit		-		(2,207)		(2)		32		-		(2,177)
Reclassification of (gain) loss to net income		647		-		(53)		(2,195)		(63)		(1,664)
Foreign currency translation		6		-		(45)		39		-		-
Balance at December 31, 2015		(58,601)		4,170		1,029		(527)		267		(53,662)
Pre-tax amount		13,929		(3,112)		-		2,503		-		13,320
Tax (provision) benefit		-		1,182		-		(117)		-		1,065
Reclassification of (gain) loss to net income		-		-		(12)		35		(13)		10
Foreign currency translation		(30)		-		21		9		-		-
Balance at March 31, 2016	$	(44,702)	$	2,240	$	1,038	$	1,903	$	254	$	(39,267)

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 March 31,				Statements of Operations
	2016		2015		Location
Actuarial Gain (Loss) Related to Pension Liability: (1)
Pre-tax amount	$	12	$	11	Direct salaries and related costs
Tax (provision) benefit		-		-	Income taxes
Reclassification to net income		12		11
Gain (Loss) on Cash Flow Hedging Instruments: (2)
Pre-tax amount		(54)		590	Revenues
Tax (provision) benefit		19		6	Income taxes
Reclassification to net income		(35)		596
Gain (Loss) on Post Retirement Obligation: (1)
Pre-tax amount		13		14	General and administrative
Tax (provision) benefit		-		-	Income taxes
Reclassification to net income		13		14
Total reclassification of gain (loss) to net
income	$	(10)	$	621
(1)	See Note 15, Defined Benefit Pension Plan and Postretirement Benefits, for further information.
(2)	See Note 6, Financial Derivatives, for further information.

Except as discussed in Note 12, Income Taxes, earnings 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 have been provided.

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Note 12. Income Taxes

The Company’s effective tax rate was 30.8% and 27.1% for the three months ended March 31, 2016 and 2015, respectively. The increase in the effective tax rate is predominately due to several factors, including shifts in earnings among the various jurisdictions in which the Company operates, none of which are individually material. The difference between the Company’s effective tax rate of 30.8% as compared to the U.S. statutory federal income tax rate of 35.0% was primarily due to the recognition of tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions, changes in uncertain tax positions, adjustments of valuation allowances and tax credits, partially offset by the tax impact of permanent differences and foreign withholding taxes.

Earnings associated with the investments in the Company’s foreign subsidiaries are considered to be indefinitely reinvested outside of the U.S. Therefore, a U.S. provision for income taxes on those earnings or translation adjustments has not been recorded, as permitted by criterion outlined in ASC 740 “Income Taxes.” Determination of any unrecognized deferred tax liability related to investments in foreign subsidiaries is not practicable due to the inherent complexity of the multi-national tax environment in which the Company operates.

The Company is currently under audit in several tax jurisdictions. 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. The total amount of deposits, net of the effects of foreign exchange rate adjustments, are $14.3 million and $13.4 million as of March 31, 2016 and December 31, 2015, respectively, and are included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets. Although the outcome of examinations by taxing authorities is always uncertain, the Company believes it is adequately reserved for these audits and resolution is not expected to have a material impact on its financial condition and results of operations.

The significant tax jurisdictions currently under audit are as follows:

Tax Jurisdiction	Tax Years Ended
Canada	2003 to 2009

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Earnings Per Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Note 13. 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 March 31,
	2016		2015
Basic:
Weighted average common shares outstanding		41,704		42,181
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust		319		259
Total weighted average diluted shares outstanding		42,023		42,440
Anti-dilutive shares excluded from the diluted earnings per share calculation		20		21

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. A total of 4.9 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.

The shares repurchased under the Company’s share repurchase programs were as follows (in thousands, except per share amounts) (none in 2016):

	Total Number						Total Cost of
	of Shares		Range of Prices Paid Per Share				Shares
	Repurchased		Low		High		Repurchased
Three Months Ended:
March 31, 2015		221	$	22.81	$	23.46	$	5,136

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Commitments and Loss Contingency

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Loss Contingency

Note 14. Commitments and Loss Contingency

Commitments

During the three months ended March 31, 2016, 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 March 31, 2016 (in thousands):

	Amount
2016 (remaining nine months)	$	1,973
2017		4,125
2018		3,978
2019		3,994
2020		3,524
2021		1,642
2022 and thereafter		54
Total minimum payments required	$	19,290

During the three months ended March 31, 2016, 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 March 31, 2016 (in thousands):

	Amount
2016 (remaining nine months)	$	6,542
2017		865
2018		402
2019		-
2020		-
2021		-
2022 and thereafter		-
Total minimum payments required	$	7,809

The July 2015 Qelp acquisition included contingent consideration of $6.0 million, based on achieving targets tied to revenues and EBITDA for the years ended December 31, 2016, 2017 and 2018. The estimated future value of the contingent consideration is $9.1 million and is expected to be paid over a three year period.

Except as outlined above, there have not been any material changes to the outstanding contractual obligations from the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2015.

Loss Contingency

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, 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

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Defined Benefit Pension Plan and Postretirement Benefits

Note 15. 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 March 31,
	2016		2015
Service cost	$	118	$	115
Interest cost		44		36
Recognized actuarial (gains)		(12)		(11)
Net periodic benefit cost	$	150	$	140

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 March 31,
	2016		2015
401(k) plan contributions	$	285	$	283

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):

	March 31, 2016		December 31, 2015
Postretirement benefit obligation	$	35	$	37
Unrealized gains (losses) in AOCI (1)	$	254	$	267
(1)  Unrealized gains (losses) are impacted by changes in discount rates related to the postretirement obligation.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

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

Stock-Based Compensation

Note 16. 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), income tax benefits related to the stock-based compensation and excess tax benefits (deficiencies) (in thousands):

	Three Months Ended March 31,
	2016		2015
Stock-based compensation (expense) (1)	$	(2,182)	$	(1,996)
Income tax benefit (2)		829		729
Excess tax benefit (deficiency) from stock-based compensation (3)		1,911		169

⁽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.

⁽³⁾  Included in “Additional paid-in capital” in the accompanying Condensed Consolidated Statements of Changes in Shareholders’ Equity.

There were no capitalized stock-based compensation costs as of March 31, 2016 and December 31, 2015.

2011 Equity Incentive Plan — The Company’s 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 of Directors 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 SARs activity as of March 31, 2016 and for the three months then ended:

					Weighted
					Average
			Weighted		Remaining		Aggregate
			Average Exercise		Contractual		Intrinsic Value
Stock Appreciation Rights	Shares (000s)		Price		Term (in years)		(000s)
Outstanding at January 1, 2016		481	$	-
Granted		-	$	-
Exercised		(34)	$	-
Forfeited or expired		-	$	-
Outstanding at March 31, 2016		447	$	-		7.9	$	3,646
Vested or expected to vest at March 31, 2016		447	$	-		7.9	$	3,646
Exercisable at March 31, 2016		236	$	-		7.2	$	2,212

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

	Three Months Ended March 31,
	2016		2015
Number of SARs granted		-		-
Weighted average grant-date fair value per SAR	$	-	$	-
Intrinsic value of SARs exercised	$	413	$	402
Fair value of SARs vested	$	1,520	$	1,302

The following table summarizes nonvested SARs activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Stock Appreciation Rights	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		424	$	7.50
Granted		-	$	-
Vested		(213)	$	7.14
Forfeited or expired		-	$	-
Nonvested at March 31, 2016		211	$	7.86

As of March 31, 2016, there was $1.6 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested SARs granted under the 2011 Plan. This cost is expected to be recognized over a weighted average period of 1.3 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 estimated 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 March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Restricted Shares and RSUs	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		1,246	$	20.03
Granted		-	$	-
Vested		(421)	$	16.10
Forfeited or expired		(65)	$	15.25
Nonvested at March 31, 2016		760	$	22.62

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

	Three Months Ended March 31,
	2016		2015
Number of restricted shares/RSUs granted		-		-
Weighted average grant-date fair value per restricted share/RSU	$	-	$	-
Fair value of restricted shares/RSUs vested	$	6,785	$	2,019

As of March 31, 2016, based on the probability of achieving the performance goals, there was $12.0 million of total unrecognized compensation cost, net of estimated 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 1.6 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 Shareholder 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, 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 shareholder 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.

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.

The following table summarizes nonvested common stock share award activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Common Stock Share Awards	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		11	$	23.74
Granted		2	$	28.97
Vested		(8)	$	24.53
Forfeited or expired		(1)	$	24.70
Nonvested at March 31, 2016		4	$	24.70

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

	Three Months Ended March 31,
	2016		2015
Number of share awards granted		2		-
Weighted average grant-date fair value per share award	$	28.97	$	-
Fair value of share awards vested	$	190	$	160

As of March 31, 2016, there was $0.1 million of total unrecognized compensation cost, net of estimated 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 1.1 years.

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 20, 2014, effective as of January 1, 2014. It provides certain eligible employees the ability to defer any portion of their compensation 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 certain senior management participants on a quarterly basis up to a total of $12,000 per year for the president, chief executive officer and executive vice presidents and $7,500 per year for senior vice presidents, global vice presidents and vice presidents (participants below the level of vice president are not eligible to receive matching contributions from the Company). Matching contributions and the associated earnings vest over a seven year service period. 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 March 31, 2016 and December 31, 2015, liabilities of $8.1 million and $7.9 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 $1.7 million and $1.6 million at March 31, 2016 and December 31, 2015, respectively, is included in “Treasury stock” in the accompanying Condensed Consolidated Balance Sheets.

The following table summarizes nonvested common stock activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Common Stock	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		3	$	19.53
Granted		4	$	30.18
Vested		(5)	$	27.96
Forfeited or expired		-	$	-
Nonvested at March 31, 2016		2	$	22.12

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

	Three Months Ended March 31,
	2016		2015
Number of shares of common stock granted		4		5
Weighted average grant-date fair value per common stock	$	30.18	$	24.85
Fair value of common stock vested	$	122	$	129
Cash used to settle the obligation	$	359	$	65

As of March 31, 2016, there was less than $0.1 million of total unrecognized compensation cost, net of estimated 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 2.7 years.

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Segments and Geographic Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segments and Geographic Information

Note 17. 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 contact management solutions (with an emphasis on technical support and customer service) and technical staffing and (2) EMEA, which includes Europe, the Middle East and Africa, and provides outsourced customer contact management 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 contact management needs.

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

	Americas		EMEA		Other (1)		Consolidated
Three Months Ended March 31, 2016:
Revenues	$	262,076	$	58,625	$	45	$	320,746
Percentage of revenues		81.7%		18.3%		0.0%		100.0%
Depreciation, net	$	9,176	$	1,164	$	444	$	10,784
Amortization of intangibles	$	3,368	$	259	$	-	$	3,627
Income (loss) from operations	$	32,987	$	3,410	$	(16,127)	$	20,270
Other (expense), net								(102)
Income taxes								(6,214)
Net income							$	13,954
Total assets as of March 31, 2016	$	1,080,628	$	1,490,462	$	(1,583,810)	$	987,280
Three Months Ended March 31, 2015:
Revenues	$	264,173	$	59,495	$	17	$	323,685
Percentage of revenues		81.6%		18.4%		0.0%		100.0%
Depreciation, net	$	9,580	$	1,143	$	336	$	11,059
Amortization of intangibles	$	3,431	$	-	$	-	$	3,431
Income (loss) from operations	$	32,541	$	3,788	$	(13,788)	$	22,541
Other (expense), net								(1,102)
Income taxes								(5,800)
Net income							$	15,639
Total assets as of March 31, 2015	$	1,069,686	$	1,370,912	$	(1,521,514)	$	919,084

⁽¹⁾  Other items (including corporate and other costs, impairment costs, other income and expense, and income taxes) are shown for purposes of reconciling to the Company’s consolidated totals as shown in the tables above for the three months ended March 31, 2016 and 2015. Inter-segment revenues are not material to the Americas and EMEA segment results. The Company evaluates the performance of its geographic segments based on revenues and income (loss) from operations, and does not include segment assets or other income and expense items for management reporting purposes.

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Other Income (Expense)

3 Months Ended

Mar. 31, 2016

Other Income and Expenses [Abstract]

Other Income (Expense)

Note 18. Other Income (Expense)

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

	Three Months Ended March 31,
	2016		2015
Foreign currency transaction gains (losses)	$	1,346	$	(935)
Gains (losses) on foreign currency derivative instruments not designated as hedges		(739)		(164)
Other miscellaneous income (expense)		(54)		270
	$	553	$	(829)

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Related Party Transactions

3 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

Related Party Transactions

Note 19. Related Party Transactions

In January 2008, the Company entered into a lease for a customer contact management 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 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. There are significant penalties for early cancellation which decrease over time. The Company paid $0.1 million to the landlord during both the three months ended March 31, 2016 and 2015 under the terms of the lease.

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Subsequent Event

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

Subsequent Event

Note 20. Subsequent Event

On April 1, 2016, the Company, one of its wholly-owned subsidiaries (“Merger Sub”), Clear Link Holdings, LLC, a Delaware limited liability company (“Clearlink”), and Pamlico Capital Management, L.P., as the representative of the equity holders of Clearlink, completed the acquisition outlined in the definitive Agreement and Plan of Merger (the “Merger Agreement”) dated March 6, 2016.

Pursuant to the terms of the Merger Agreement and subject to the conditions set forth therein, Clearlink merged into Merger Sub, with Merger Sub surviving as an indirect wholly-owned subsidiary of the Company (the “Merger”).

In the Merger, each outstanding membership unit of Clearlink was converted into the right to receive an amount in cash as set forth in the Merger Agreement. The aggregate cash consideration paid in the Merger was approximately $209.5 million, which included $3.1 million of Clearlink’s cash and cash equivalents at the closing of the Merger, and subject to certain post-closing adjustments relating to Clearlink’s working capital at the closing of the Merger. Approximately $2.6 million of the purchase price was placed in an escrow account as security for the indemnification obligations of Clearlink’s members under the Merger Agreement. The Company has obtained an insurance policy which will provide $20.7 million of coverage to the Company for breaches of most of the representations and warranties of Clearlink in the Merger Agreement, subject to a deductible.

On April 1, 2016, the Company borrowed $216.0 million under its 2015 Credit Agreement in connection with the acquisition of Clearlink, of which $4.0 million represented a short-term loan to Clearlink for working capital purposes. During the three months ended March 31, 2016, the Company incurred $1.4 million of merger and integration costs, which were included in “General and administrative” costs in the accompanying Condensed Consolidated Statement of Operations.

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

The Company will account for the Clearlink acquisition under the purchase method of accounting for business combinations. Accordingly, the purchase price will be allocated to the underlying net assets in proportion to estimates of their respective fair values. Any excess of the purchase price over the estimated fair value of the net assets acquired will be recorded as goodwill.

The Company has excluded the purchase price allocation and pro forma disclosures for the Clearlink acquisition as the initial accounting is currently incomplete. The Company is currently in the process of performing its valuation related to the acquired assets and liabilities. The Company will reflect the preliminary valuation of the net assets acquired in its second quarter 2016 Condensed Consolidated Financial Statements. In addition, the results of Clearlink’s operations will be included in the Company’s Consolidated Financial Statements as of the closing date of the Clearlink acquisition, April 1, 2016.

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Overview and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business

Business — Sykes Enterprises, Incorporated and consolidated subsidiaries (“SYKES” or the “Company”) provides comprehensive outsourced customer contact management solutions and services in the business process outsourcing arena to companies, primarily within the communications, financial services, technology/consumer, transportation and leisure, and healthcare industries. SYKES provides flexible, high-quality outsourced customer contact management services (with an emphasis on inbound technical support and customer service), which includes customer assistance, healthcare and roadside assistance, technical support and product sales to its clients’ customers. Utilizing SYKES’ integrated onshore/offshore global delivery model, SYKES provides its services through multiple communication channels encompassing phone, e-mail, social media, text messaging, chat and digital self-service. SYKES complements its outsourced customer contact management services with various enterprise support services in the United States that encompass services for a company’s 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.

Acquisition — In July 2015, the Company completed the acquisition of Qelp B.V. and its subsidiary (together, known as “Qelp”), pursuant to a definitive Share Sale and Purchase Agreement, dated July 2, 2015. The Company has reflected the operating results in the Condensed Consolidated Statements of Operations since July 2, 2015. See Note 2, Acquisition of Qelp, for additional information on the acquisition.

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 months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, 2016. 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, 2015, as filed with the Securities and Exchange Commission (“SEC”) on February 29, 2016.

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. All significant 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 April 1, 2016, the Company acquired 100% of the outstanding membership units of Clear Link Holdings, LLC (“Clearlink”). In conjunction with the acquisition of Clearlink, the Company borrowed $216.0 million under its existing credit agreement. See Note 20, Subsequent Event, for further information. There were no other material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements.

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

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The amendments in ASU 2014-09 outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and indicate 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. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date” (“ASU 2015-14”). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that period. An entity should apply the amendments using either the full retrospective approach or retrospectively with a cumulative effect of initially applying the amendments recognized at the date of initial application. The Company is currently evaluating the methods of adoption and the impact that the adoption of ASU 2014-09 may have on its financial condition, results of operations and cash flows.

In January 2016, the FASB issued ASC 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 have to measure equity investments that do not result in consolidation and are not accounted 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 will apply 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 Company does not expect the adoption of ASU 2016-01 to materially impact its financial condition, results of operations and cash flows.

In February 2016, the FASB issued ASC 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). 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 are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial condition, results of operations and cash flows.

In March 2016, the FASB issued ASC 2016-05, “Derivatives and Hedging (Topic 815) – Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”). These amendments clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Entities have the option to apply the amendments on either a prospective basis or a modified retrospective basis. The Company is evaluating the methods of adoption but does not expect the adoption of ASU 2016-05 to materially impact its financial condition, results of operations and cash flows.

In March 2016, the FASB issued ASC 2016-08, “Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”). These amendments clarify the implementation guidance on principal versus agent considerations and require entities to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. These amendments affect the guidance in ASU 2014-09, which is not yet effective. The effective date and transition requirements for ASU 2016-08 are the same as the effective date and transition requirements of ASU 2014-09, as updated by ASU 2015-14.

In March 2016, the FASB issued ASC 2016-09, “Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). These amendments are intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. These amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. Entities have the option to apply the amendments on either a prospective basis or a modified retrospective basis. The Company is currently evaluating the impact the guidance will have on its financial condition, results of operations and cash flows.

In April 2016, the FASB issued ASC 2016-10, “Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing” (“ASU 2016-10”). These amendments clarify the identification of performance obligations and the licensing implementation guidance. These amendments affect the guidance in ASU 2014-09, which is not yet effective. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements of ASU 2014-09, as updated by ASU 2015-14.

New Accounting Standards Recently Adopted

New Accounting Standards Recently Adopted

In June 2014, the FASB issued ASU 2014-12, “Compensation – Stock Compensation (Topic 718) Accounting for Share-Based  Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation” (“ASC 718”), as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments either (1) prospective to all awards granted or modified after the effective date or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015-01”). This amendment eliminates from U.S. GAAP the concept of extraordinary items as part of the FASB’s initiative to reduce complexity in accounting standards. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments either prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of ASU 2015-01 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810) Amendments to the Consolidation Analysis)” (“ASU 2015-02”). These amendments are intended to improve targeted areas of the consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. These amendments affect the consolidation evaluation for reporting organizations. In addition, the amendments simplify and improve current U.S. GAAP by reducing the number of consolidation models. The amendments are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments using either a modified retrospective approach or retrospectively. The adoption of ASU 2015-02 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of  Debt Issuance Costs” (“ASU 2015-03”). These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. These amendments are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Entities should apply the amendments retrospectively. The adoption of ASU 2015-03 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In April 2015, the FASB issued ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (“ASU 2015-05”). These amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. These amendments are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015; early adoption is permitted. Entities can adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. The adoption of ASU 2015-05 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In September 2015, the FASB issued ASC 2015-16, “Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). These amendments eliminate the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected measurement or recognition of amounts initially recognized. As an alternative, the amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. These amendments are effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2015-16 on January 1, 2016 did not have a material impact on the financial condition, results of operations and cash flows of the Company.

In November 2015, the FASB issued ASC 2015-17, “Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). These amendments require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The existing requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by these amendments. These amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Early adoption is permitted as of the beginning of the interim or annual reporting period. The adoption of ASU 2015-17 on January 1, 2016 resulted in the reclassification of $12.0 million of current deferred tax assets included in “Other current assets” and $1.1 million of current deferred tax liabilities included in “Current deferred income tax liabilities” to noncurrent deferred income tax assets and liabilities. All future deferred tax assets and liabilities will be classified as noncurrent. No prior periods were adjusted.

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 it re-prices at varying interest rates.

● 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.

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 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.

Money Market and Open-End Mutual Funds — The Company uses quoted market prices in active markets to determine the fair value. These items are classified in Level 1 of the fair value hierarchy.

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; 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 16, Stock-Based Compensation.

Guaranteed Investment Certificates — Guaranteed investment certificates, with variable interest rates linked to the prime rate, approximate fair value due to the automatic ability to re-price with changes in the market; such items are classified in Level 2 of the fair value hierarchy.

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 was recognized at fair value using a discounted cash flow methodology and a discount rate of 14.0%. The discount rate is dependent on the specific risks of the acquisition including the country of operation, the nature of services and complexity of the acquired business, and other similar factors, all of which are significant inputs not observable in the market. Significant increases or decreases in any of the inputs in isolation would result in a significantly higher or lower fair value measurement.

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 protect against the risk that the eventual cash flows resulting from such transactions will be adversely affected by changes in exchange rates.

Income Taxes

Earnings associated with the investments in the Company’s foreign subsidiaries are considered to be indefinitely reinvested outside of the U.S. Therefore, a U.S. provision for income taxes on those earnings or translation adjustments has not been recorded, as permitted by criterion outlined in ASC 740 “Income Taxes.” Determination of any unrecognized deferred tax liability related to investments in foreign subsidiaries is not practicable due to the inherent complexity of the multi-national tax environment in which the Company operates.

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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Acquisition of Qelp (Tables) - Qelp [Member]

3 Months Ended

Mar. 31, 2016

Summary of Consideration Paid

As of the acquisition date, the total consideration paid or to be paid by the Company for the Qelp acquisition is summarized below (in thousands):

	Total
Cash	$	9,885
Contingent consideration		6,000
Working capital adjustment		(65)
	$	15,820

Summary of Acquisition Date Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed, all included in the EMEA segment (in thousands):

	July 2, 2015
Cash and cash equivalents	$	450
Receivables (1)		1,471
Prepaid expenses		24
Total current assets		1,945
Property and equipment		2,168
Goodwill		10,054
Intangibles		6,000
Deferred charges and other assets		55
Short-term debt		(323)
Accrued employee compensation and benefits		(207)
Income taxes payable		(94)
Deferred revenue		(967)
Other accrued expenses and current liabilities		(1,030)
Total current liabilities		(2,621)
Other long-term liabilities (2)		(1,781)
	$	15,820
(1) The fair value equals the gross contractual value of the receivables. (2) Primarily includes long-term deferred tax liabilities.

Summary of Purchased Intangible Assets

The following table presents the Company’s purchased intangibles assets as of July 2, 2015, the acquisition date (in thousands):

	Amount Assigned		Weighted Average   Amortization Period   (years)
Customer relationships	$	5,400		7
Trade name and trademarks		100		3
Content library		500		2
	$	6,000		7

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Costs Associated with Exit or Disposal Activities (Tables)

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Cumulative Costs Expected and Incurred as a Result of Exit Plans

The cumulative costs expected and incurred as a result of the Exit Plans were as follows as of March 31, 2016 (in thousands):

	Americas Fourth   Quarter 2011   Exit Plan		Americas Third   Quarter 2010   Exit Plan		Total
Lease obligations and facility exit costs	$	1,365	$	6,729	$	8,094
Non-cash impairment charges		480		3,847		4,327
Total	$	1,845	$	10,576	$	12,421

Summary of Accrued Liability Associated with Exit Plans' Exit or Disposal Activities and Related Charges (Reversals)

The following table summarizes the accrued liability associated with the Exit Plans’ exit or disposal activities and related charges for the three months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016		2015
Beginning accrual	$	733	$	1,558
Lease obligations and facility exit costs		-		-
Cash payments (1)		(206)		(212)
Ending accrual	$	527	$	1,346
(1) Related to lease obligations and facility exit costs.

Summary of Accrued Liability Associated with the Company's Exit Plans

The following table summarizes the Company’s short-term and long-term accrued liabilities associated with its exit and disposal activities, by plan, as of March 31, 2016 and December 31, 2015 (in thousands):

	Americas Fourth Quarter 2011 Exit Plan		Americas Third  Quarter 2010  Exit Plan		Total
March 31, 2016
Short-term accrued restructuring liability (1)	$	121	$	406	$	527
Long-term accrued restructuring liability (2)		-		-		-
Ending accrual at March 31, 2016	$	121	$	406	$	527
December 31, 2015
Short-term accrued restructuring liability (1)	$	144	$	487	$	631
Long-term accrued restructuring liability (2)		22		80		102
Ending accrual at December 31, 2015	$	166	$	567	$	733

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

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2016

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 (in thousands):

				Fair Value Measurements at March 31, 2016 Using:
				Quoted Prices		Significant
				in Active		Other		Significant
				Markets For		Observable		Unobservable
		Balance at		Identical Assets		Inputs		Inputs
		March 31, 2016		Level (1)		Level (2)		Level (3)
Assets:
Foreign currency forward and option contracts	(1)	$	2,817	$	-	$	2,817	$	-
Embedded derivatives	(1)		139		-		-		139
Equity investments held in a rabbi trust for the Deferred Compensation Plan	(2)		6,325		6,325		-		-
Debt investments held in a rabbi trust for the Deferred Compensation Plan	(2)		1,803		1,803		-		-
Guaranteed investment certificates	(3)		86		-		86		-
		$	11,170	$	8,128	$	2,903	$	139
Liabilities:
Long-term debt	(4)	$	70,000	$	-	$	70,000	$	-
Foreign currency forward and option contracts	(1)		3,692		-		3,692		-
Embedded derivatives	(1)		81		-		-		81
Contingent consideration included in “Other long-term liabilities”	(5)		6,806		-		-		6,806
		$	80,579	$	-	$	73,692	$	6,887
				Fair Value Measurements at December 31, 2015 Using:
		Balance at		Quoted Prices in Active Markets For  Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
		December 31, 2015		Level (1)		Level (2)		Level (3)
Assets:
Foreign currency forward and option contracts	(1)	$	10,962	$	-	$	10,962	$	-
Equity investments held in a rabbi trust for the Deferred Compensation Plan	(2)		6,229		6,229		-		-
Debt investments held in a rabbi trust for the Deferred Compensation Plan	(2)		1,622		1,622		-		-
Guaranteed investment certificates	(3)		86		-		86		-
		$	18,899	$	7,851	$	11,048	$	-
Liabilities:
Long-term debt	(4)	$	70,000	$	-	$	70,000	$	-
Foreign currency forward and option contracts	(1)		835		-		835		-
Contingent consideration included in “Other long-term liabilities”	(5)		6,280		-		-		6,280
		$	77,115	$	-	$	70,835	$	6,280

⁽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.

⁽³⁾  Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽⁴⁾  The carrying value of long-term debt approximates its estimated fair value as it re-prices at varying interest rates. See Note 10, Borrowings.

⁽⁵⁾  In the accompanying Condensed Consolidated Balance Sheets.

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):

	Fair Value
Balance at December 31, 2015	$	-
Gain (loss) recognized in “Other income (expense)” (1)		56
Effect of foreign currency		2
Balance at March 31, 2016	$	58
Unrealized gain (loss) for the three months ended March 31, 2016	$	55
(1)  Includes realized and unrealized gain (loss).

Rollforward of Fair Value of Contingent Consideration

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

	Fair Value
Balance at January 1, 2015	$	-
Acquisition (1)		6,000
Payments		-
Imputed interest/adjustments		408
Effect of foreign currency		(128)
Balance at December 31, 2015		6,280
Acquisition		-
Payments		-
Imputed interest/adjustments		213
Effect of foreign currency		313
Balance at March 31, 2016	$	6,806
(1)  Related to the Qelp acquisition on July 2, 2015. See Note 2, Acquisition of Qelp.

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Company's Purchased Intangible Assets

The following table presents the Company’s purchased intangible assets as of March 31, 2016 (in thousands):

	Gross Intangibles		Accumulated         Amortization		Net Intangibles		Weighted Average   Amortization Period (years)
Customer relationships	$	103,999	$	(62,328)	$	41,671		8
Trade names and trademarks		11,703		(5,810)		5,893		8
Content library		514		(193)		321		2
Non-compete agreements		1,196		(1,196)		-		2
Proprietary software		850		(850)		-		2
Favorable lease agreement		449		(449)		-		2
	$	118,711	$	(70,826)	$	47,885		8

The following table presents the Company’s purchased intangible assets as of December 31, 2015 (in thousands):

	Gross Intangibles		Accumulated         Amortization		Net Intangibles		Weighted Average   Amortization Period (years)
Customer relationships	$	102,594	$	(58,294)	$	44,300		8
Trade names and trademarks		11,698		(5,470)		6,228		8
Content library		491		(123)		368		2
Non-compete agreements		1,190		(1,190)		-		2
Proprietary software		850		(850)		-		2
Favorable lease agreement		449		(449)		-		2
	$	117,272	$	(66,376)	$	50,896		8

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 March 31, 2016, is as follows (in thousands):

Years Ending December 31,	Amount
2016 (remaining nine months)	$	11,056
2017		14,554
2018		8,282
2019		7,679
2020		5,169
2021		784
2022 and thereafter		361

Changes in Goodwill

Changes in goodwill for the three months ended March 31, 2016 consist of the following (in thousands):

					Effect of Foreign
	January 1, 2016		Acquisition		Currency		March 31, 2016
Americas	$	186,049	$	-	$	2,797	$	188,846
EMEA		9,684		-		508		10,192
	$	195,733	$	-	$	3,305	$	199,038

Changes in goodwill for the year ended December 31, 2015 consist of the following (in thousands):

					Effect of Foreign
	January 1, 2015		Acquisition (1)		Currency		December 31, 2015
Americas	$	193,831	$	-	$	(7,782)	$	186,049
EMEA		-		10,054		(370)		9,684
	$	193,831	$	10,054	$	(8,152)	$	195,733
(1)  See Note 2, Acquisition of Qelp, for further information.

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Financial Derivatives (Tables)

3 Months Ended

Mar. 31, 2016

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):

	March 31, 2016		December 31, 2015
Deferred gains (losses) in AOCI	$	2,008	$	(558)
Tax on deferred gains (losses) in AOCI		(105)		31
Deferred gains (losses) in AOCI, net of taxes	$	1,903	$	(527)
Deferred gains (losses) expected to be reclassified to “Revenues” from AOCI during the next twelve months	$	2,008

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):

	As of March 31, 2016			As of December 31, 2015
Contract Type	Notional     Amount in     USD		Settle Through     Date	Notional      Amount in      USD		Settle Through      Date
Cash flow hedges:
Options:
Philippine Pesos	$	71,500	March 2017	$	71,750	December 2016
Forwards:
Costa Rican Colones		23,000	December 2016		34,500	November 2016
Hungarian Forints		2,050	December 2016		-	-
Romanian Leis		5,060	December 2016		-	-
Net investment hedges:
Forwards:
Euros		65,229	September 2017		63,470	March 2016
Non-designated hedges:
Forwards		61,262	June 2016		50,603	March 2016
Embedded derivatives		12,210	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
	March 31, 2016		December 31, 2015
	Fair Value		Fair Value
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (1)	$	2,748	$	544
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts (1)		-		10,161
		2,748		10,705
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (1)		69		257
Embedded derivatives (1)		10		-
Embedded derivatives (2)		129		-
Total derivative assets	$	2,956	$	10,962
	Derivative Liabilities
	March 31, 2016		December 31, 2015
	Fair Value		Fair Value
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts (3)	$	14	$	396
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts (4)		3,290		-
		3,304		396
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts (3)		388		439
Embedded derivatives (3)		3		-
Embedded derivatives (4)		78		-
Total derivative liabilities	$	3,773	$	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 tables present the effect of the Company’s derivative instruments included in the accompanying Condensed Consolidated Financial Statements for the three months ended March 31, 2016 and 2015 (in thousands):

	Gain (Loss) Recognized in     AOCI on Derivatives     (Effective Portion)				Gain (Loss) Reclassified From Accumulated AOCI   Into “Revenues” (Effective    Portion)				Gain (Loss) Recognized in  “Revenues” on Derivatives  (Ineffective Portion and Amount  Excluded from Effectiveness Testing)
	March 31,				March 31,				March 31,
	2016		2015		2016		2015		2016		2015
Derivatives designated as cash flow hedging instruments under ASC 815:
Foreign currency forward and option contracts	$	2,503	$	2,055	$	(54)	$	589	$	-	$	1
Derivatives designated as net investment hedging instruments under ASC 815:
Foreign currency forward contracts		(3,112)		6,358		-		-		-		-
	$	(609)	$	8,413	$	(54)	$	589	$	-	$	1

	Gain (Loss) Recognized   in “Other income (expense)” on Derivatives
	March 31,
	2016		2015
Derivatives not designated as hedging instruments under ASC 815:
Foreign currency forward contracts	$	795	$	(164)
Embedded derivatives		(56)		-
	$	739	$	(164)

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Investments Held in Rabbi Trust (Tables)

3 Months Ended

Mar. 31, 2016

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):

	March 31, 2016				December 31, 2015
	Cost		Fair Value		Cost		Fair Value
Mutual funds	$	6,109	$	8,128	$	6,217	$	7,851

Components of Investment Income (Losses), Included in Other Income (Expense) in Accompanying Consolidated Statements of Operations

The mutual funds held in rabbi trust were 78% equity-based and 22% debt-based as of March 31, 2016. Net investment income (losses), included in “Other income (expense)” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):

	Three Months Ended March 31,
	2016		2015
Gross realized gains from sale of trading securities	$	-	$	3
Gross realized (losses) from sale of trading securities		-		(1)
Dividend and interest income		9		5
Net unrealized holding gains (losses)		20		123
Net investment income (losses)	$	29	$	130

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Deferred Revenue (Tables)

3 Months Ended

Mar. 31, 2016

Deferred Revenue Disclosure [Abstract]

Components of Deferred Revenue

Deferred revenue consists of the following (in thousands):

	March 31, 2016		December 31, 2015
Future service	$	23,880	$	22,112
Estimated potential penalties and holdbacks		6,684		6,007
	$	30,564	$	28,119

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Deferred Grants (Tables)

3 Months Ended

Mar. 31, 2016

Text Block [Abstract]

Schedule of Deferred Grants, Net of Accumulated Amortization

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

	March 31, 2016		December 31, 2015
Property grants	$	4,207	$	4,377
Lease grants		494		513
Employment grants		143		149
Total deferred grants		4,844		5,039
Less: Property grants - short-term (1)		-		-
Less: Lease grants - short-term (1)		(81)		(80)
Less: Employment grants - short-term (1)		(143)		(149)
Total long-term deferred grants	$	4,620	$	4,810
(1)	Included in “Other accrued expenses and current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

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Borrowings (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Components of Borrowings

Borrowings consist of the following (in thousands):

	March 31, 2016		December 31, 2015
Revolving credit facility	$	70,000	$	70,000
Less: Current portion		-		-
Total long-term debt	$	70,000	$	70,000

Information Related to Credit Agreements

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

	Three Months Ended March 31,
	2016		2015
Average daily utilization	$	70,000	$	74,322
Interest expense, including commitment fee (1)	$	375	$	319
Weighted average interest rate		2.1%		1.7%
(1)  Excludes the amortization of deferred loan fees.

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2016

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     Gain (Loss)		Unrealized   Gain (Loss) on   Net Investment Hedge		Unrealized   Actuarial Gain   (Loss) Related to Pension Liability		Unrealized   Gain (Loss) on   Cash Flow Hedging Instruments		Unrealized   Gain (Loss) on   Post Retirement Obligation		Total
Balance at January 1, 2015	$	(22,076)	$	276	$	1,008	$	(111)	$	342	$	(20,561)
Pre-tax amount		(37,178)		6,101		121		1,708		(12)		(29,260)
Tax (provision) benefit		-		(2,207)		(2)		32		-		(2,177)
Reclassification of (gain) loss to net income		647		-		(53)		(2,195)		(63)		(1,664)
Foreign currency translation		6		-		(45)		39		-		-
Balance at December 31, 2015		(58,601)		4,170		1,029		(527)		267		(53,662)
Pre-tax amount		13,929		(3,112)		-		2,503		-		13,320
Tax (provision) benefit		-		1,182		-		(117)		-		1,065
Reclassification of (gain) loss to net income		-		-		(12)		35		(13)		10
Foreign currency translation		(30)		-		21		9		-		-
Balance at March 31, 2016	$	(44,702)	$	2,240	$	1,038	$	1,903	$	254	$	(39,267)

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 March 31,				Statements of Operations
	2016		2015		Location
Actuarial Gain (Loss) Related to Pension Liability: (1)
Pre-tax amount	$	12	$	11	Direct salaries and related costs
Tax (provision) benefit		-		-	Income taxes
Reclassification to net income		12		11
Gain (Loss) on Cash Flow Hedging Instruments: (2)
Pre-tax amount		(54)		590	Revenues
Tax (provision) benefit		19		6	Income taxes
Reclassification to net income		(35)		596
Gain (Loss) on Post Retirement Obligation: (1)
Pre-tax amount		13		14	General and administrative
Tax (provision) benefit		-		-	Income taxes
Reclassification to net income		13		14
Total reclassification of gain (loss) to net
income	$	(10)	$	621
(1)	See Note 15, Defined Benefit Pension Plan and Postretirement Benefits, for further information.
(2)	See Note 6, Financial Derivatives, for further information.

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Summary of Significant Tax Jurisdictions Currently under Audit

The significant tax jurisdictions currently under audit are as follows:

Tax Jurisdiction	Tax Years Ended
Canada	2003 to 2009

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31,
	2016		2015
Basic:
Weighted average common shares outstanding		41,704		42,181
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust		319		259
Total weighted average diluted shares outstanding		42,023		42,440
Anti-dilutive shares excluded from the diluted earnings per share calculation		20		21

Shares Repurchased

The shares repurchased under the Company’s share repurchase programs were as follows (in thousands, except per share amounts) (none in 2016):

	Total Number						Total Cost of
	of Shares		Range of Prices Paid Per Share				Shares
	Repurchased		Low		High		Repurchased
Three Months Ended:
March 31, 2015		221	$	22.81	$	23.46	$	5,136

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Commitments and Loss Contingency (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31, 2016 (in thousands):

	Amount
2016 (remaining nine months)	$	1,973
2017		4,125
2018		3,978
2019		3,994
2020		3,524
2021		1,642
2022 and thereafter		54
Total minimum payments required	$	19,290

Schedule of Future Minimum Purchases Remaining under Agreements

The following is a schedule of the future minimum purchases remaining under the agreements as of March 31, 2016 (in thousands):

	Amount
2016 (remaining nine months)	$	6,542
2017		865
2018		402
2019		-
2020		-
2021		-
2022 and thereafter		-
Total minimum payments required	$	7,809

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Defined Benefit Pension Plan and Postretirement Benefits (Tables)

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [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 March 31,
	2016		2015
Service cost	$	118	$	115
Interest cost		44		36
Recognized actuarial (gains)		(12)		(11)
Net periodic benefit cost	$	150	$	140

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 March 31,
	2016		2015
401(k) plan contributions	$	285	$	283

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):

	March 31, 2016		December 31, 2015
Postretirement benefit obligation	$	35	$	37
Unrealized gains (losses) in AOCI (1)	$	254	$	267
(1)  Unrealized gains (losses) are impacted by changes in discount rates related to the postretirement obligation.

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2016

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), income tax benefits related to the stock-based compensation and excess tax benefits (deficiencies) (in thousands):

	Three Months Ended March 31,
	2016		2015
Stock-based compensation (expense) (1)	$	(2,182)	$	(1,996)
Income tax benefit (2)		829		729
Excess tax benefit (deficiency) from stock-based compensation (3)		1,911		169

⁽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.

⁽³⁾  Included in “Additional paid-in capital” in the accompanying Condensed Consolidated Statements of Changes in Shareholders’ Equity.

Summary of Stock Appreciation Rights Activity

The following table summarizes SARs activity as of March 31, 2016 and for the three months then ended:

					Weighted
					Average
			Weighted		Remaining		Aggregate
			Average Exercise		Contractual		Intrinsic Value
Stock Appreciation Rights	Shares (000s)		Price		Term (in years)		(000s)
Outstanding at January 1, 2016		481	$	-
Granted		-	$	-
Exercised		(34)	$	-
Forfeited or expired		-	$	-
Outstanding at March 31, 2016		447	$	-		7.9	$	3,646
Vested or expected to vest at March 31, 2016		447	$	-		7.9	$	3,646
Exercisable at March 31, 2016		236	$	-		7.2	$	2,212

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):

	Three Months Ended March 31,
	2016		2015
Number of SARs granted		-		-
Weighted average grant-date fair value per SAR	$	-	$	-
Intrinsic value of SARs exercised	$	413	$	402
Fair value of SARs vested	$	1,520	$	1,302

Summary of Nonvested Stock Appreciation Rights

The following table summarizes nonvested SARs activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Stock Appreciation Rights	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		424	$	7.50
Granted		-	$	-
Vested		(213)	$	7.14
Forfeited or expired		-	$	-
Nonvested at March 31, 2016		211	$	7.86

Summary of Nonvested Restricted Shares and Restricted Stock Units

The following table summarizes nonvested restricted shares/RSUs activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Restricted Shares and RSUs	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		1,246	$	20.03
Granted		-	$	-
Vested		(421)	$	16.10
Forfeited or expired		(65)	$	15.25
Nonvested at March 31, 2016		760	$	22.62

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):

	Three Months Ended March 31,
	2016		2015
Number of restricted shares/RSUs granted		-		-
Weighted average grant-date fair value per restricted share/RSU	$	-	$	-
Fair value of restricted shares/RSUs vested	$	6,785	$	2,019

Summary of Nonvested Common Stock Units and Share Awards

The following table summarizes nonvested common stock share award activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Common Stock Share Awards	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		11	$	23.74
Granted		2	$	28.97
Vested		(8)	$	24.53
Forfeited or expired		(1)	$	24.70
Nonvested at March 31, 2016		4	$	24.70

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):

	Three Months Ended March 31,
	2016		2015
Number of share awards granted		2		-
Weighted average grant-date fair value per share award	$	28.97	$	-
Fair value of share awards vested	$	190	$	160

Summary of Nonvested Common Stock

The following table summarizes nonvested common stock activity as of March 31, 2016 and for the three months then ended:

			Weighted
			Average Grant-
Nonvested Common Stock	Shares (000s)		Date Fair Value
Nonvested at January 1, 2016		3	$	19.53
Granted		4	$	30.18
Vested		(5)	$	27.96
Forfeited or expired		-	$	-
Nonvested at March 31, 2016		2	$	22.12

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):

	Three Months Ended March 31,
	2016		2015
Number of shares of common stock granted		4		5
Weighted average grant-date fair value per common stock	$	30.18	$	24.85
Fair value of common stock vested	$	122	$	129
Cash used to settle the obligation	$	359	$	65

XML

Segments and Geographic Information (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31, 2016:
Revenues	$	262,076	$	58,625	$	45	$	320,746
Percentage of revenues		81.7%		18.3%		0.0%		100.0%
Depreciation, net	$	9,176	$	1,164	$	444	$	10,784
Amortization of intangibles	$	3,368	$	259	$	-	$	3,627
Income (loss) from operations	$	32,987	$	3,410	$	(16,127)	$	20,270
Other (expense), net								(102)
Income taxes								(6,214)
Net income							$	13,954
Total assets as of March 31, 2016	$	1,080,628	$	1,490,462	$	(1,583,810)	$	987,280
Three Months Ended March 31, 2015:
Revenues	$	264,173	$	59,495	$	17	$	323,685
Percentage of revenues		81.6%		18.4%		0.0%		100.0%
Depreciation, net	$	9,580	$	1,143	$	336	$	11,059
Amortization of intangibles	$	3,431	$	-	$	-	$	3,431
Income (loss) from operations	$	32,541	$	3,788	$	(13,788)	$	22,541
Other (expense), net								(1,102)
Income taxes								(5,800)
Net income							$	15,639
Total assets as of March 31, 2015	$	1,069,686	$	1,370,912	$	(1,521,514)	$	919,084

⁽¹⁾  Other items (including corporate and other costs, impairment costs, other income and expense, and income taxes) are shown for purposes of reconciling to the Company’s consolidated totals as shown in the tables above for the three months ended March 31, 2016 and 2015. Inter-segment revenues are not material to the Americas and EMEA segment results. The Company evaluates the performance of its geographic segments based on revenues and income (loss) from operations, and does not include segment assets or other income and expense items for management reporting purposes.

XML

Other Income (Expense) (Tables)

3 Months Ended

Mar. 31, 2016

Other Income and Expenses [Abstract]

Schedule of Other Income (Expense)

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

	Three Months Ended March 31,
	2016		2015
Foreign currency transaction gains (losses)	$	1,346	$	(935)
Gains (losses) on foreign currency derivative instruments not designated as hedges		(739)		(164)
Other miscellaneous income (expense)		(54)		270
	$	553	$	(829)

XML

Overview and Basis of Presentation - Additional Information (Detail) $ in Thousands		3 Months Ended
	Apr. 01, 2016 USD ($)	Mar. 31, 2016 Segment	Jan. 01, 2016 USD ($)	Dec. 31, 2015 USD ($)
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of reportable segments | Segment		2
Current deferred income tax liabilities reclassified to noncurrent upon adoption of ASU 2015-17				$ 1,120
Accounting Standards Update 2015-17 [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Current deferred income tax assets reclassified to noncurrent upon adoption of ASU 2015-17			$ 12,000
Current deferred income tax liabilities reclassified to noncurrent upon adoption of ASU 2015-17			$ 1,100
Qelp [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Acquisition date		Jul. 02, 2015
Subsequent Event [Member] | Clearlink [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Percentage of outstanding membership units	100.00%
Subsequent Event [Member] | Clearlink [Member] | 2015 Credit Agreement [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Amount borrowed	$ 216,000

XML

Acquisition of Qelp - Additional Information (Detail) - Qelp [Member] $ in Millions		3 Months Ended
	Jul. 02, 2015 USD ($)	Mar. 31, 2016 EUR (€)
Business Acquisition [Line Items]
Consideration by cash, net of post-closing adjustments | $	$ 9.8
Maximum amount of contingent consideration | €		€ 10,000,000
Contingent consideration expected payment period		3 years
Contingent consideration description		The contingent purchase price to be paid over a three year period is based on achieving targets tied to revenues and earnings before interest, income taxes, depreciation and amortization ("EBITDA") for the years ended December 31, 2016, 2017 and 2018, not to exceed EUR 10.0 million.

XML

Acquisition of Qelp - Summary of Consideration Paid (Detail) - Qelp [Member] - USD ($) $ in Thousands	Jul. 02, 2015	Mar. 31, 2016	Dec. 31, 2015	Jul. 31, 2015
Business Acquisition [Line Items]
Cash	$ 9,885
Fair value of contingent consideration	6,000	$ 6,806	$ 6,280	$ 6,000
Working capital adjustment	(65)
Total Consideration paid	$ 15,820

XML

Acquisition of Qelp - Summary of Estimated Acquisition Date Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Jul. 31, 2015	Jul. 02, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Goodwill	$ 199,038	$ 195,733			$ 193,831
EMEA [Member]
Business Acquisition [Line Items]
Goodwill	$ 10,192	$ 9,684
Qelp [Member]
Business Acquisition [Line Items]
Goodwill			$ 9,900
Purchase price, total			$ 15,600
Qelp [Member] | EMEA [Member]
Business Acquisition [Line Items]
Cash and cash equivalents				$ 450
Receivables				1,471
Prepaid expenses				24
Total current assets				1,945
Property and equipment				2,168
Goodwill				10,054
Intangibles				6,000
Deferred charges and other assets				55
Short-term debt				(323)
Accrued employee compensation and benefits				(207)
Income taxes payable				(94)
Deferred revenue				(967)
Other accrued expenses and current liabilities				(1,030)
Total current liabilities				(2,621)
Other long-term liabilities				(1,781)
Purchase price, total				$ 15,820

XML

Acquisition of Qelp - Summary of Purchased Intangible Assets (Detail) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
	Jul. 02, 2015	Mar. 31, 2016	Dec. 31, 2015
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (years)		8 years	8 years
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (years)		8 years	8 years
Trade Name and Trademarks [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (years)		8 years	8 years
Content Library [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (years)		2 years	2 years
Qelp [Member] | EMEA [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 6,000
Weighted Average Amortization Period (years)	7 years
Qelp [Member] | Customer Relationships [Member] | EMEA [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 5,400
Weighted Average Amortization Period (years)	7 years
Qelp [Member] | Trade Name and Trademarks [Member] | EMEA [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 100
Weighted Average Amortization Period (years)	3 years
Qelp [Member] | Content Library [Member] | EMEA [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 500
Weighted Average Amortization Period (years)	2 years

XML

Costs Associated with Exit or Disposal Activities - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Restructuring and Related Activities [Abstract]
Cash payment related to restructuring plan	$ 7.6
Lease termination date	Feb. 28, 2017

XML

Costs Associated with Exit or Disposal Activities - Cumulative Costs Expected and Incurred as a Result of Exit Plans (Detail) $ in Thousands	Mar. 31, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	$ 12,421
Fourth Quarter 2011 Exit Plan [Member] | Americas [Member]
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	1,845
Third Quarter 2010 Exit Plan [Member] | Americas [Member]
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	10,576
Lease Obligations and Facility Exit Costs [Member]
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	8,094
Lease Obligations and Facility Exit Costs [Member] | Fourth Quarter 2011 Exit Plan [Member] | Americas [Member]
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	1,365
Lease Obligations and Facility Exit Costs [Member] | Third Quarter 2010 Exit Plan [Member] | Americas [Member]
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	6,729
Non-cash Impairment Charges [Member]
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	4,327
Non-cash Impairment Charges [Member] | Fourth Quarter 2011 Exit Plan [Member] | Americas [Member]
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	480
Non-cash Impairment Charges [Member] | Third Quarter 2010 Exit Plan [Member] | Americas [Member]
Restructuring Cost and Reserve [Line Items]
Estimated total costs, some of which may have already been incurred, under the restructuring plan	$ 3,847

XML

Costs Associated with Exit or Disposal Activities - Summary of Accrued Liability Associated with Exit Plans' Exit or Disposal Activities and Related Charges (Reversals) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restructuring Cost and Reserve [Line Items]
Beginning accrual	$ 733	$ 1,558
Cash payments	(206)	(212)
Ending accrual	527	1,346
Lease Obligations and Facility Exit Costs [Member]
Restructuring Cost and Reserve [Line Items]
Charges (reversals) of exit or disposal activities and related charges	$ 0	$ 0

XML

Costs Associated with Exit or Disposal Activities - Summary of Accrued Liability Associated with Company's Exit Plans (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Restructuring Cost and Reserve [Line Items]
Ending accrual	$ 527	$ 733	$ 1,346	$ 1,558
Other Accrued Expenses and Current Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Short-term accrued restructuring liability	527	631
Other Long-Term Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Long-term accrued restructuring liability		102
Fourth Quarter 2011 Exit Plan [Member] | Americas [Member]
Restructuring Cost and Reserve [Line Items]
Ending accrual	121	166
Fourth Quarter 2011 Exit Plan [Member] | Americas [Member] | Other Accrued Expenses and Current Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Short-term accrued restructuring liability	121	144
Fourth Quarter 2011 Exit Plan [Member] | Americas [Member] | Other Long-Term Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Long-term accrued restructuring liability		22
Third Quarter 2010 Exit Plan [Member] | Americas [Member]
Restructuring Cost and Reserve [Line Items]
Ending accrual	406	567
Third Quarter 2010 Exit Plan [Member] | Americas [Member] | Other Accrued Expenses and Current Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Short-term accrued restructuring liability	$ 406	487
Third Quarter 2010 Exit Plan [Member] | Americas [Member] | Other Long-Term Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Long-term accrued restructuring liability		$ 80

XML

Fair Value - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value discount rate	14.00%
Qelp [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Expected future value of contingent consideration	$ 9.1

XML

Fair Value - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets:
Derivative Assets	$ 2,956	$ 10,962
Total assets	11,170	18,899
Liabilities:
Long-term debt	70,000	70,000
Derivative Liabilities	3,773	835
Total liabilities	80,579	77,115
Other Long-Term Liabilities [Member]
Liabilities:
Contingent consideration included in "Other long-term liabilities"	6,806	6,280
Foreign Currency Forward and Option Contracts [Member] | Other Current Assets [Member]
Assets:
Derivative Assets	2,817	10,962
Foreign Currency Forward and Option Contracts [Member] | Other Long-Term Liabilities and Other Accrued Expenses and Current Liabilities [Member]
Liabilities:
Derivative Liabilities	3,692	835
Embedded Derivatives [Member] | Other Current Assets, Deferred Charges and Other Assets [Member]
Assets:
Derivative Assets	139
Embedded Derivatives [Member] | Other Long-Term Liabilities and Other Accrued Expenses and Current Liabilities [Member]
Liabilities:
Derivative Liabilities	81
Equity Investments Held in a Rabbi Trust for the Deferred Compensation Plan [Member] | Other Current Assets [Member]
Assets:
Investments held in a rabbi trust for the Deferred Compensation Plan	6,325	6,229
Debt Investments Held in a Rabbi Trust for the Deferred Compensation Plan [Member] | Other Current Assets [Member]
Assets:
Investments held in a rabbi trust for the Deferred Compensation Plan	1,803	1,622
Guaranteed Investment Certificates [Member] | Deferred Charges and Other Assets [Member]
Assets:
Money market funds, open-end mutual funds and guaranteed investment certificates included in "Deferred charges and other assets"	86	86
Quoted Prices in Active Markets For Identical Assets Level 1 [Member]
Assets:
Total assets	8,128	7,851
Quoted Prices in Active Markets For Identical Assets Level 1 [Member] | Equity Investments Held in a Rabbi Trust for the Deferred Compensation Plan [Member] | Other Current Assets [Member]
Assets:
Investments held in a rabbi trust for the Deferred Compensation Plan	6,325	6,229
Quoted Prices in Active Markets For Identical Assets Level 1 [Member] | Debt Investments Held in a Rabbi Trust for the Deferred Compensation Plan [Member] | Other Current Assets [Member]
Assets:
Investments held in a rabbi trust for the Deferred Compensation Plan	1,803	1,622
Significant Other Observable Inputs Level 2 [Member]
Assets:
Total assets	2,903	11,048
Liabilities:
Long-term debt	70,000	70,000
Total liabilities	73,692	70,835
Significant Other Observable Inputs Level 2 [Member] | Foreign Currency Forward and Option Contracts [Member] | Other Current Assets [Member]
Assets:
Derivative Assets	2,817	10,962
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	3,692	835
Significant Other Observable Inputs Level 2 [Member] | Guaranteed Investment Certificates [Member] | Deferred Charges and Other Assets [Member]
Assets:
Money market funds, open-end mutual funds and guaranteed investment certificates included in "Deferred charges and other assets"	86	86
Significant Unobservable Inputs Level 3 [Member]
Assets:
Total assets	139
Liabilities:
Total liabilities	6,887	6,280
Significant Unobservable Inputs Level 3 [Member] | Other Long-Term Liabilities [Member]
Liabilities:
Contingent consideration included in "Other long-term liabilities"	6,806	$ 6,280
Significant Unobservable Inputs Level 3 [Member] | Embedded Derivatives [Member] | Other Current Assets, Deferred Charges and Other Assets [Member]
Assets:
Derivative Assets	139
Significant Unobservable Inputs Level 3 [Member] | Embedded Derivatives [Member] | Other Long-Term Liabilities and Other Accrued Expenses and Current Liabilities [Member]
Liabilities:
Derivative Liabilities	$ 81

XML

Fair Value - Rollforward of Net Asset (Liability) Activity of Fair Value of Embedded Derivatives (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Unrealized gain (loss)	$ (349)	$ 70
Embedded Derivatives [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Gain (loss) recognized in "Other income (expense)"	56
Effect of foreign currency	2
Ending balance	58
Unrealized gain (loss)	$ 55

XML

Fair Value - Rollforward of Fair Value of Contingent Consideration (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Business Acquisition, Contingent Consideration [Line Items]
Imputed interest/adjustments	$ (213)
Qelp [Member]
Business Acquisition, Contingent Consideration [Line Items]
Contingent consideration, Beginning Balance	6,280
Acquisition		$ 6,000
Cash payments	0	0
Imputed interest/adjustments	213	408
Effect of foreign currency	313	(128)
Contingent Consideration, Ending Balance	$ 6,806	$ 6,280

XML

Goodwill and Intangible Assets - Company's Purchased Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 118,711	$ 117,272
Accumulated Amortization	(70,826)	(66,376)
Net Intangibles	$ 47,885	$ 50,896
Weighted Average Amortization Period (years)	8 years	8 years
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 103,999	$ 102,594
Accumulated Amortization	(62,328)	(58,294)
Net Intangibles	$ 41,671	$ 44,300
Weighted Average Amortization Period (years)	8 years	8 years
Trade Name and Trademarks [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 11,703	$ 11,698
Accumulated Amortization	(5,810)	(5,470)
Net Intangibles	$ 5,893	$ 6,228
Weighted Average Amortization Period (years)	8 years	8 years
Content Library [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 514	$ 491
Accumulated Amortization	(193)	(123)
Net Intangibles	$ 321	$ 368
Weighted Average Amortization Period (years)	2 years	2 years
Non-Compete Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 1,196	$ 1,190
Accumulated Amortization	$ (1,196)	$ (1,190)
Weighted Average Amortization Period (years)	2 years	2 years
Proprietary Software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 850	$ 850
Accumulated Amortization	$ (850)	$ (850)
Weighted Average Amortization Period (years)	2 years	2 years
Favorable Lease Agreement [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Intangibles	$ 449	$ 449
Accumulated Amortization	$ (449)	$ (449)
Weighted Average Amortization Period (years)	2 years	2 years

XML

Goodwill and Intangible Assets - Estimated Future Amortization Expense (Detail) $ in Thousands	Mar. 31, 2016 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2016 (remaining nine months)	$ 11,056
2017	14,554
2018	8,282
2019	7,679
2020	5,169
2021	784
2022 and thereafter	$ 361

XML

Goodwill and Intangible Assets - Changes in Goodwill (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Goodwill [Line Items]
Beginning Balance, Goodwill Net	$ 195,733	$ 193,831
Acquisition		10,054
Effect of Foreign Currency	3,305	(8,152)
Ending Balance, Goodwill Net	199,038	195,733
Americas [Member]
Goodwill [Line Items]
Beginning Balance, Goodwill Net	186,049	193,831
Effect of Foreign Currency	2,797	(7,782)
Ending Balance, Goodwill Net	188,846	186,049
EMEA [Member]
Goodwill [Line Items]
Beginning Balance, Goodwill Net	9,684
Acquisition		10,054
Effect of Foreign Currency	508	(370)
Ending Balance, Goodwill Net	$ 10,192	$ 9,684

XML

Goodwill and Intangible Assets - Additional Information (Detail) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016 USD ($) Reporting_Unit	Dec. 31, 2015 USD ($)	Jul. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Goodwill [Line Items]
Number of reporting units | Reporting_Unit	5
Number of reporting units, fair value in excess of carrying value | Reporting_Unit	4
Goodwill	$ 199,038	$ 195,733		$ 193,831
Qelp [Member]
Goodwill [Line Items]
Acquisition date	Jul. 02, 2015
Purchase price of acquisition, carrying value			$ 15,600
Goodwill			$ 9,900
Goodwill Impairment Loss	$ 0	$ 0

XML

Financial Derivatives - Deferred Gains (Losses) and Related Taxes on Cash Flow Hedges (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Deferred gains (losses) in AOCI	$ 2,008	$ (558)
Tax on deferred gains (losses) in AOCI	(105)	31
Deferred gains (losses) in AOCI, net of taxes	1,903	$ (527)
Deferred gains (losses) expected to be reclassified to "Revenues" from AOCI during the next twelve months	$ 2,008

XML

Financial Derivatives - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Maximum period of foreign currency hedge contracts	180 days
Maximum amount of loss due to credit risk	$ 3,000,000	$ 11,000,000
Total net settlement amount asset positions	2,500,000	10,200,000
Total net settlement amount liability positions	$ 3,300,000	$ 100,000

XML

Financial Derivatives - Outstanding Foreign Currency Forward Contracts, Options and Embedded Derivatives (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Option Contracts [Member] | Philippine Pesos [Member]
Derivative [Line Items]
Notional Amount	$ 71,500	$ 71,750
Settle Through Date	Mar. 31, 2017	Dec. 31, 2016
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Forwards [Member] | Costa Rican Colones [Member]
Derivative [Line Items]
Notional Amount	$ 23,000	$ 34,500
Settle Through Date	Dec. 31, 2016	Nov. 30, 2016
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Forwards [Member] | Hungarian Forints [Member]
Derivative [Line Items]
Notional Amount	$ 2,050
Settle Through Date	Dec. 31, 2016
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Forwards [Member] | Romanian Leis [Member]
Derivative [Line Items]
Notional Amount	$ 5,060
Settle Through Date	Dec. 31, 2016
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Net Investment Hedges [Member] | Forwards [Member] | Euros [Member]
Derivative [Line Items]
Notional Amount	$ 65,229	$ 63,470
Settle Through Date	Sep. 30, 2017	Mar. 31, 2016
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Forwards [Member]
Derivative [Line Items]
Notional Amount	$ 61,262	$ 50,603
Settle Through Date	Jun. 30, 2016	Mar. 31, 2016
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member]
Derivative [Line Items]
Notional Amount	$ 12,210
Settle Through Date	Apr. 30, 2030

XML

Financial Derivatives - Derivative Instruments Fair Value (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Derivative Assets	$ 2,956	$ 10,962
Derivative Liabilities	3,773	835
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Option Contracts [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	2,748	10,705
Derivative Liabilities	3,304	396
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	69	257
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	388	439
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	10
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	129
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	3
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	78
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	2,748	544
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	14	396
Net Investment Hedges [Member] | Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets		$ 10,161
Net Investment Hedges [Member] | Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Foreign Currency Forward Contracts [Member] | Other Long-Term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	$ 3,290

XML

Financial Derivatives - Effect of Company's Derivative Instruments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)	$ (609)	$ 8,413
Gain (Loss) Reclassified From Accumulated AOCI Into "Revenues" (Effective Portion)	(54)	589
Gain (Loss) Recognized in "Revenues" on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)		1
Gain (Loss) Recognized on Derivatives	739	(164)
Derivatives Not Designated as Hedging Instruments under ASC 815 [Member] | Embedded Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized on Derivatives	(56)
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)	2,503	2,055
Gain (Loss) Reclassified From Accumulated AOCI Into "Revenues" (Effective Portion)	(54)	589
Gain (Loss) Recognized in "Revenues" on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)		1
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)	(3,112)	6,358
Other Income (Expense) [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 on Derivatives	$ 795	$ (164)

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Investments Held in Rabbi Trust - Investments Held in Rabbi Trust, Classified as Trading (Detail) - Mutual Funds [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Mutual funds, Cost	$ 6,109	$ 6,217
Other Current Assets [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Mutual funds, Fair Value	$ 8,128	$ 7,851

XML

Investments Held in Rabbi Trust - Additional Information (Detail)	Mar. 31, 2016
Equity-Based Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Mutual funds held in rabbi trust	78.00%
Debt-Based Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Mutual funds held in rabbi trust	22.00%

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Investments Held in Rabbi Trust - Components of Investment Income (Losses), Included in Other Income (Expense) in Accompanying Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Gross realized gains from sale of trading securities		$ 3
Gross realized (losses) from sale of trading securities		(1)
Dividend and interest income	$ 9	5
Net unrealized holding gains (losses)	20	123
Other Income (Expense) [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net investment income (losses)	$ 29	$ 130

XML

Deferred Revenue - Components of Deferred Revenue (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Deferred Revenue Disclosure [Abstract]
Future service	$ 23,880	$ 22,112
Estimated potential penalties and holdbacks	6,684	6,007
Deferred revenue	$ 30,564	$ 28,119

XML

Deferred Grants - Schedule of Deferred Grants, Net of Accumulated Amortization (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Deferred Revenue Arrangement [Line Items]
Total deferred grants	$ 4,844	$ 5,039
Less: Property grants - short-term	0	0
Less: Lease grants - short-term	(81)	(80)
Less: Employment grants - short-term	(143)	(149)
Total long-term deferred grants	4,620	4,810
Total deferred grants	4,844	5,039
Other Long-Term Liabilities [Member]
Deferred Revenue Arrangement [Line Items]
Property grants	4,207	4,377
Lease grants	494	513
Other Accrued Expenses and Current Liabilities [Member]
Deferred Revenue Arrangement [Line Items]
Employment grants	$ 143	$ 149

XML

Borrowings - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2016	May. 31, 2015	May. 12, 2015
2015 Credit Agreement [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity			$ 440,000,000
Line of credit facility, expiration date	May 12, 2020
Varying installments due	$ 0
Commitment fee	0.125%
Credit agreement customary fees description	The Company is required to pay certain customary fees, including a commitment fee of 0.125%, which is due quarterly in arrears and calculated on the average unused amount of the 2015 Credit Agreement.
Underwriting fee for credit agreement		$ 900,000
2015 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%
2015 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%
2012 Credit Agreement [Member]
Line of Credit Facility [Line Items]
Underwriting fee for credit agreement	$ 400,000
2015 Credit Agreement Alternate-Currency Sub-Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity			200,000,000
2015 Credit Agreement Swingline Sub-Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity			10,000,000
2015 Credit Agreement Letter of Credit Sub-Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity			$ 35,000,000

XML

Borrowings - Components of Borrowings (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Total long-term debt	$ 70,000	$ 70,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving credit facility	70,000	70,000
Less: Current portion	0	0
Total long-term debt	$ 70,000	$ 70,000

XML

Borrowings - Information Related to Credit Agreements (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Line of Credit Facility [Abstract]
Average daily utilization of borrowings	$ 70,000	$ 74,322
Interest expense including commitment fees, excluding amortization of deferred loan fees	$ 375	$ 319
Weighted average interest rate	2.10%	1.70%

XML

Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	$ (53,662)	$ (20,561)
Pre-tax amount	13,320	(29,260)
Tax (provision) benefit	1,065	(2,177)
Reclassification of (gain) loss to net income	10	(1,664)
Ending balance, accumulated other comprehensive income (loss)	(39,267)	(53,662)
Foreign Currency Translation Gain (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	(58,601)	(22,076)
Pre-tax amount	13,929	(37,178)
Reclassification of (gain) loss to net income		647
Foreign currency translation	(30)	6
Ending balance, accumulated other comprehensive income (loss)	(44,702)	(58,601)
Unrealized Gain (Loss) on Net Investment Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	4,170	276
Pre-tax amount	(3,112)	6,101
Tax (provision) benefit	1,182	(2,207)
Ending balance, accumulated other comprehensive income (loss)	2,240	4,170
Unrealized Actuarial Gain (Loss) Related to Pension Liability [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	1,029	1,008
Pre-tax amount		121
Tax (provision) benefit		(2)
Reclassification of (gain) loss to net income	(12)	(53)
Foreign currency translation	21	(45)
Ending balance, accumulated other comprehensive income (loss)	1,038	1,029
Unrealized Gain (Loss) on Cash Flow Hedging Instruments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	(527)	(111)
Pre-tax amount	2,503	1,708
Tax (provision) benefit	(117)	32
Reclassification of (gain) loss to net income	35	(2,195)
Foreign currency translation	9	39
Ending balance, accumulated other comprehensive income (loss)	1,903	(527)
Unrealized Gain (Loss) on Post Retirement Obligation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, accumulated other comprehensive income (loss)	267	342
Pre-tax amount		(12)
Reclassification of (gain) loss to net income	(13)	(63)
Ending balance, accumulated other comprehensive income (loss)	$ 254	$ 267

XML

Accumulated Other Comprehensive Income (Loss) - Amounts Reclassified to Net Income from Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pre-tax amount	$ 20,168	$ 21,439
Tax (provision) benefit	6,214	5,800
Reclassification of gain (loss) to net income	13,954	15,639
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	(10)	621
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]
Reclassification of gain (loss) to net income	12	11
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	19	6
Reclassification of gain (loss) to net income	(35)	596
Reclassification out of Accumulated Other Comprehensive Income [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	13	14
Reclassification out of Accumulated Other Comprehensive Income [Member] | Direct Salaries and Related Costs [Member] | Actuarial Gain (Loss) Related to Pension Liability [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pre-tax amount	12	11
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	(54)	590
Reclassification out of Accumulated Other Comprehensive Income [Member] | General and Administrative [Member] | Gain (Loss) on Post Retirement Obligation [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pre-tax amount	$ 13	$ 14

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Effective rate of tax	30.80%	27.10%
Statutory federal income tax rate	35.00%
Amount of mandatory security deposit paid related to Notice of Objection	$ 14.3		$ 13.4

XML

Income Taxes - Summary of Significant Tax Jurisdictions Currently under Audit (Detail)	3 Months Ended
	Mar. 31, 2016
Canada [Member]
Income Tax Examination [Line Items]
Significant tax jurisdictions currently under audit	2003 to 2009

XML

Earnings Per Share - Numbers of Shares Used in Earnings Per Share Computation (Detail) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Basic:
Weighted average common shares outstanding	41,704	42,181
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust	319	259
Total weighted average diluted shares outstanding	42,023	42,440
Anti-dilutive shares excluded from the diluted earnings per share calculation	20	21

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 16, 2016	Aug. 18, 2011
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Repurchased		221,000
2011 Share Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Maximum amount of shares authorized for repurchase				5,000,000
Total Number of Shares Repurchased	4,900,000
Increase in shares authorized for repurchase			5,000,000

XML

Earnings Per Share - Shares Repurchased (Detail) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2015 USD ($) $ / shares shares
Schedule Of Shares Repurchased [Line Items]
Total Number of Shares Repurchased | shares	221
Total Cost of Shares Repurchased | $	$ 5,136
Minimum [Member]
Schedule Of Shares Repurchased [Line Items]
Range of Prices Paid Per Share	$ 22.81
Maximum [Member]
Schedule Of Shares Repurchased [Line Items]
Range of Prices Paid Per Share	$ 23.46

XML

Commitments and Loss Contingency - Schedule of Future Minimum Rental Payments under Operating Leases (Detail) $ in Thousands	Mar. 31, 2016 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2016 (remaining nine months)	$ 1,973
2017	4,125
2018	3,978
2019	3,994
2020	3,524
2021	1,642
2022 and thereafter	54
Total minimum payments required	$ 19,290

XML

Commitments and Loss Contingency - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Jul. 31, 2015	Jul. 02, 2015
Qelp [Member]
Long-term Purchase Commitment [Line Items]
Expected future value of contingent consideration	$ 9,100
Contingent consideration expected payment period	3 years
Fair value of contingent consideration	$ 6,806	$ 6,280	$ 6,000	$ 6,000
Minimum [Member]
Long-term Purchase Commitment [Line Items]
Term of agreements with third party vendors	1 year
Maximum [Member]
Long-term Purchase Commitment [Line Items]
Term of agreements with third party vendors	5 years

XML

Commitments and Loss Contingency - Schedule of Future Minimum Purchases Remaining under Agreements (Detail) $ in Thousands	Mar. 31, 2016 USD ($)
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
2016 (remaining nine months)	$ 6,542
2017	865
2018	402
2019	0
2020	0
2021	0
2022 and thereafter	0
Total minimum payments required	$ 7,809

XML

Defined Benefit Pension Plan and Postretirement Benefits - Net Periodic Benefit Cost for Pension Plans (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), before Tax [Abstract]
Service cost	$ 118	$ 115
Interest cost	44	36
Recognized actuarial (gains)	(12)	(11)
Net periodic benefit cost	$ 150	$ 140

XML

Defined Benefit Pension Plan and Postretirement Benefits - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016
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%

XML

Defined Benefit Pension Plan and Postretirement Benefits - Company's Contributions to Employee Retirement Savings Plans (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Compensation and Retirement Disclosure [Abstract]
401(k) plan contributions	$ 285	$ 283

XML

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	Mar. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Postretirement benefit obligation	$ 35	$ 37
Unrealized gains (losses) in AOCI	$ 254	$ 267

XML

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
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Excess tax benefit (deficiency) from stock-based compensation	$ 1,911
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation (expense)	(2,182)	$ (1,996)
Income Taxes [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax benefit	829	729
Additional Paid-in Capital [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Excess tax benefit (deficiency) from stock-based compensation	$ 1,911	$ 169

XML

Stock-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended	36 Months Ended
	Mar. 31, 2016	May. 16, 2012	May. 18, 2015	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Capitalized stock-based compensation costs	$ 0			$ 0
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 3 months 18 days
Total unrecognized compensation cost	$ 1,600,000
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 7 months 6 days
Total unrecognized compensation cost	$ 12,000,000
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
Weighted average period	1 year 1 month 6 days
Total unrecognized compensation cost	$ 100,000
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		$ 95,000	$ 125,000
Annual Retainer payable in cash to Non Employee Director	$ 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		2 years	1 year
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 Chairperson of the Compensation Committee	15,000
Annual cash awards for the Chairperson of the Finance Committee	12,500
Annual cash awards for the Chairperson of the Nominating and Corporate Governance Committee	12,500
Annual cash awards for the members of the Compensation Committee, Finance Committee and Nominating and Corporate Governance Committee	7,500
Annual Retainer payable in stock to Non Employee Director	100,000
Increased cash component of annual retainer	$ 5,000
Deferred Compensation Plan [Member] | Common Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period	2 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] | 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	$ 1,700,000			1,600,000
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
Deferred Compensation Plan [Member] | Accrued employee compensation and benefits
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accrued employee compensation and benefits	$ 8,100,000			$ 7,900,000
2001 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Plan expiration date	Mar. 14, 2011

XML

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	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Shares, beginning balance	481
Granted, Shares	0	0
Exercised, Shares	(34)
Forfeited or expired, Shares	0
Outstanding Shares, ending balance	447
Vested or expected to vest, Shares	447
Exercisable, Shares	236
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	7 years 10 months 24 days
Vested or expected to vest, Weighted Average Remaining Contractual Term	7 years 10 months 24 days
Exercisable, Weighted Average Remaining Contractual Term	7 years 2 months 12 days
Outstanding, Aggregate Intrinsic Value	$ 3,646
Vested or expected to vest, Aggregate Intrinsic Value	3,646
Exercisable, Aggregate Intrinsic Value	$ 2,212

XML

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	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares	0	0
Weighted average grant-date fair value per SAR	$ 0	$ 0
Intrinsic value of SARs exercised	$ 413	$ 402
Fair value of vested	$ 1,520	$ 1,302

XML

Stock-Based Compensation - Summary of Nonvested Stock Appreciation Rights (Detail) - Stock Appreciation Rights (SARs) [Member] - 2011 Equity Incentive Plan [Member] - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested Shares, beginning balance	424
Granted, Shares	0	0
Vested, Shares	(213)
Forfeited, Shares	0
Nonvested Shares, ending balance	211
Nonvested, Weighted Average Grant-Date Fair Value, beginning balance	$ 7.50
Granted, Weighted Average Grant-Date Fair Value	0	$ 0
Vested, Weighted Average Grant-Date Fair Value	7.14
Forfeited or expired, Weighted Average Grant-Date Fair Value	0
Nonvested, Weighted Average Grant-Date Fair Value, ending balance	$ 7.86

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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	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested Shares, beginning balance	1,246
Granted, Shares	0	0
Vested, Shares	(421)
Forfeited, Shares	(65)
Nonvested Shares, ending balance	760
Nonvested, Weighted Average Grant-Date Fair Value, beginning balance	$ 20.03
Granted, Weighted Average Grant-Date Fair Value	0	$ 0
Vested, Weighted Average Grant-Date Fair Value	16.10
Forfeited or expired, Weighted Average Grant-Date Fair Value	15.25
Nonvested, Weighted Average Grant-Date Fair Value, ending balance	$ 22.62

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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	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares	0	0
Weighted average grant-date fair value	$ 0	$ 0
Fair value of vested	$ 6,785	$ 2,019

XML

Stock-Based Compensation - Summary of Nonvested Common Stock Units and Share Awards (Detail) - Common Stock Awards [Member] - Non-Employee Director Fee Plan [Member] shares in Thousands	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested Shares, beginning balance | shares	11
Granted, Shares | shares	2
Vested, Shares | shares	(8)
Forfeited, Shares | shares	(1)
Nonvested Shares, ending balance | shares	4
Nonvested, Weighted Average Grant-Date Fair Value, beginning balance | $ / shares	$ 23.74
Granted, Weighted Average Grant-Date Fair Value | $ / shares	28.97
Vested, Weighted Average Grant-Date Fair Value | $ / shares	24.53
Forfeited or expired, Weighted Average Grant-Date Fair Value | $ / shares	24.70
Nonvested, Weighted Average Grant-Date Fair Value, ending balance | $ / shares	$ 24.70

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	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares	2
Weighted average grant-date fair value	$ 28.97
Fair value of vested	$ 190	$ 160

XML

Stock-Based Compensation - Summary of Nonvested Common Stock (Detail) - Common Stock Awards [Member] - Deferred Compensation Plan [Member] - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested Shares, beginning balance	3
Granted, Shares	4	5
Vested, Shares	(5)
Forfeited, Shares	0
Nonvested Shares, ending balance	2
Nonvested, Weighted Average Grant-Date Fair Value, beginning balance	$ 19.53
Granted, Weighted Average Grant-Date Fair Value	30.18	$ 24.85
Vested, Weighted Average Grant-Date Fair Value	27.96
Forfeited or expired, Weighted Average Grant-Date Fair Value	0
Nonvested, Weighted Average Grant-Date Fair Value, ending balance	$ 22.12

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	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Shares	4	5
Weighted average grant-date fair value	$ 30.18	$ 24.85
Fair value of vested	$ 122	$ 129
Cash used to settle the obligation	$ 359	$ 65

XML

Segments and Geographic Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016 Region Segment
Segment Reporting [Abstract]
Number of operating regions | Region	2
Number of reportable segments | Segment	2

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Segments and Geographic Information - Company's Reportable Segments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Revenues	$ 320,746	$ 323,685
Percentage of revenues	100.00%	100.00%
Depreciation, net	$ 10,784	$ 11,059
Amortization of intangibles	3,627	3,431
Income (loss) from operations	20,270	22,541
Other (expense), net	(102)	(1,102)
Income taxes	(6,214)	(5,800)
Net income	13,954	15,639
Total assets	987,280	919,084	$ 947,772
Operating Segments [Member] | Americas [Member]
Segment Reporting Information [Line Items]
Revenues	$ 262,076	$ 264,173
Percentage of revenues	81.70%	81.60%
Depreciation, net	$ 9,176	$ 9,580
Amortization of intangibles	3,368	3,431
Income (loss) from operations	32,987	32,541
Total assets	1,080,628	1,069,686
Operating Segments [Member] | EMEA [Member]
Segment Reporting Information [Line Items]
Revenues	$ 58,625	$ 59,495
Percentage of revenues	18.30%	18.40%
Depreciation, net	$ 1,164	$ 1,143
Amortization of intangibles	259
Income (loss) from operations	3,410	3,788
Total assets	1,490,462	1,370,912
Other Items [Member]
Segment Reporting Information [Line Items]
Revenues	$ 45	$ 17
Percentage of revenues	0.00%	0.00%
Depreciation, net	$ 444	$ 336
Income (loss) from operations	(16,127)	(13,788)
Total assets	$ (1,583,810)	$ (1,521,514)

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Other Income (Expense) - Schedule of Other Income (Expense) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Other Income (Expense) [Abstract]
Foreign currency transaction gains (losses)	$ 1,346	$ (935)
Gains (losses) on foreign currency derivative instruments not designated as hedges	(739)	(164)
Other miscellaneous income (expense)	(54)	270
Other income (expense)	$ 553	$ (829)

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Jan. 31, 2008	Mar. 31, 2016	Mar. 31, 2015
Related Party Transactions [Abstract]
Duration of lease	20 years
Payment to landlord under the lease terms		$ 0.1	$ 0.1

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Subsequent Event - Additional Information (Detail) - Clearlink [Member] - USD ($) $ in Millions		3 Months Ended
	Apr. 01, 2016	Mar. 31, 2016
General and Administrative [Member]
Subsequent Event [Line Items]
Total merger and integration costs		$ 1.4
Subsequent Event [Member]
Subsequent Event [Line Items]
Consideration by cash	$ 209.5
Cash and cash equivalents	3.1
Funds placed in escrow as security for indemnifications	2.6
Insurance coverage for breaches of representations and warranties	20.7
Subsequent Event [Member] | 2015 Credit Agreement [Member]
Subsequent Event [Line Items]
Amount borrowed	216.0
Short-term loan to acquiree	$ 4.0