IMPACT OF THE INVASION OF UKRAINE

3 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

IMPACT OF THE INVASION OF UKRAINE

IMPACT OF THE INVASION OF UKRAINE

On February 24, 2022, Russian forces attacked Ukraine and its people, and through the issuance date of these interim financial statements, there has been no resolution to this attack. As of March 31, 2024, the Company had $60.8 million of Property and equipment, net in Ukraine consisting of a building classified as construction-in-progress located in Kyiv with a net book value of $51.7 million, laptops with a net book value of $4.5 million, most of which are in the possession of employees, various office furniture, equipment and supplies with a net book value of $3.8 million, and leasehold improvements located throughout Ukraine with a net book value of $0.8 million. Additionally, as of March 31, 2024, the Company had Operating lease right-of-use assets located throughout Ukraine with a net book value of $5.5 million. Through the issuance date of these interim financial statements, the Company is not aware of any damage to its long-lived assets in Ukraine and the Company expects to continue to use these assets as part of its global delivery model.

On March 4, 2022, the Company announced a $100.0 million humanitarian commitment to support its employees and their families in and displaced from Ukraine. This humanitarian commitment is in addition to donations from EPAM's clients and employees and the work of EPAM volunteers on the ground. During the three months ended March 31, 2024 and 2023, the Company expensed $3.3 million and $6.1 million, respectively, related to this commitment, which included special cash payments to support impacted employees, financial and medical support for impacted families, travel, meals and lodging expenses, and donations to third-party humanitarian organizations. Of the expensed amounts for the three months ended March 31, 2024 and 2023, $0.7 million and $2.5 million, respectively, is classified in Cost of revenues (exclusive of depreciation and amortization), and $2.6 million and $3.6 million, respectively, is classified in Selling, general and administrative expenses on the condensed consolidated financial statements. As of March 31, 2024, the Company has $34.5 million remaining to be expensed under this humanitarian commitment.

Following the invasion, the Company executed its business continuity plans to assist relocating employees residing in Ukraine and the surrounding region, who were impacted by the war and geopolitical uncertainty, to other countries and to assign delivery personnel in locations outside of the region to serve in unbilled standby or backup capacities to ensure the continuity of delivery for its clients who have substantial delivery exposure to Ukraine or other delivery concerns resulting from the invasion and ongoing war. In addition to costs incurred as part of EPAM’s humanitarian commitment to Ukraine, during the three months ended March 31, 2024, the Company incurred no expenses related to the standby resources and incurred expenses of $0.7 million related to its geographic repositioning efforts, classified as Selling, general and administrative expenses. During the three months ended March 31, 2023, the Company incurred expenses of $7.4 million related to the standby resources, classified as Cost of revenues (exclusive of depreciation and amortization) and $0.2 million related to its geographic repositioning efforts, classified as Selling, general and administrative expenses.