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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July ~~18, 2019,~~16, 2020, there were ~~41,590,911~~40,055,088 outstanding shares of common stock.

(in thousands, except per share data)	June 30, 2019			December 31, 2018			June 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	136,631		$	128,697		$	129,050		$	127,246
Receivables, net		351,191			347,425
Receivables, net of allowance of $4.2 million and $3.5 million, respectively								383,512			390,147
Prepaid expenses		21,681			23,754			20,891			20,868
Other current assets		20,222			16,761			18,626			20,525
Total current assets		529,725			516,637			552,079			558,786
Property and equipment, net		125,739			135,418			119,412			125,990
Operating lease right-of-use assets		210,836			—			188,676			205,112
Goodwill, net		306,050			302,517			306,712			311,247
Intangibles, net		165,509			174,031			148,573			158,420
Deferred charges and other assets		47,982			43,364			54,381			55,945
	$	1,385,841		$	1,171,967		$	1,369,833		$	1,415,500
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	25,128		$	26,923		$	27,532		$	33,591
Accrued employee compensation and benefits		104,174			95,813			116,726			109,591
Income taxes payable		126			1,433			7,737			3,637
Deferred revenue and customer liabilities		28,557			30,176			24,294			26,621
Operating lease liabilities		48,864			—			54,948			50,863
Other accrued expenses and current liabilities		25,654			31,235			28,770			29,330
Total current liabilities		232,503			185,580			260,007			253,633
Long-term debt		92,000			102,000			49,000			73,000
Long-term income tax liabilities		22,116			23,787			20,469			22,286
Long-term operating lease liabilities		174,189			—			147,312			166,810
Other long-term liabilities		24,504			33,991			30,260			25,296
Total liabilities		545,312			345,358			507,048			541,025

Commitments and loss contingency (Note 13)
Commitments and loss contingencies (Note 12)

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; 42,091 and 42,778 shares issued, respectively		421			428
Preferred stock, $0.01 par value per share, 10,000 shares authorized; 0 shares issued and outstanding								—			—
Common stock, $0.01 par value per share, 200,000 shares authorized; 40,055 and 41,549 shares issued, respectively								401			416
Additional paid-in capital		288,879			286,544			291,814			288,935
Retained earnings		609,791			598,788			634,943			634,668
Accumulated other comprehensive income (loss)		(48,564	)		(56,775	)		(61,680	)		(47,001	)
Treasury stock at cost: 408 and 126 shares, respectively		(9,998	)		(2,376	)
Treasury stock at cost: 133 and 128 shares, respectively								(2,693	)		(2,543	)
Total shareholders' equity		840,529			826,609			862,785			874,475
	$	1,385,841		$	1,171,967		$	1,369,833		$	1,415,500

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2019			2018			2019			2018			2020			2019			2020			2019
Revenues	$	389,006		$	396,785		$	791,931		$	811,156		$	416,833		$	389,006		$	827,999		$	791,931
Operating expenses:
Direct salaries and related costs		252,161			264,924			513,889			539,996			268,433			252,161			535,378			513,889
General and administrative		104,282			102,037			208,962			204,477			102,664			104,282			205,911			208,962
Depreciation, net		13,052			14,560			26,949			29,396			12,630			13,052			25,091			26,949
Amortization of intangibles		4,127			3,629			8,413			7,842			4,093			4,127			8,212			8,413
Impairment of long-lived assets		129			5,175			1,711			8,701			1,800			129			1,800			1,711
Total operating expenses		373,751			390,325			759,924			790,412			389,620			373,751			776,392			759,924
Income from operations		15,255			6,460			32,007			20,744			27,213			15,255			51,607			32,007

Other income (expense):
Interest income		192			175			377			346			165			192			428			377
Interest (expense)		(1,179	)		(1,149	)		(2,357	)		(2,355	)		(560	)		(1,179	)		(1,280	)		(2,357	)
Other income (expense), net		(533	)		(537	)		77			(382	)		1,797			(533	)		(2,996	)		77
Total other income (expense), net		(1,520	)		(1,511	)		(1,903	)		(2,391	)		1,402			(1,520	)		(3,848	)		(1,903	)

Income before income taxes		13,735			4,949			30,104			18,353			28,615			13,735			47,759			30,104
Income taxes		2,466			(2,229	)		7,148			227			6,385			2,466			11,611			7,148
Net income	$	11,269		$	7,178		$	22,956		$	18,126		$	22,230		$	11,269		$	36,148		$	22,956

Net income per common share:
Basic	$	0.27		$	0.17		$	0.55		$	0.43		$	0.55		$	0.27		$	0.89		$	0.55
Diluted	$	0.27		$	0.17		$	0.54		$	0.43		$	0.55		$	0.27		$	0.88		$	0.54

Weighted average common shares outstanding:
Basic		42,038			42,125			42,107			42,035			40,318			42,038			40,726			42,107
Diluted		42,094			42,160			42,200			42,197			40,380			42,094			40,857			42,200

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018			2020			2019			2020			2019
Net income	$	11,269		$	7,178		$	22,956		$	18,126		$	22,230		$	11,269		$	36,148		$	22,956
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments, net of taxes		2,339			(13,597	)		3,701			(13,306	)
Foreign currency translation adjustments														8,311			2,339			(13,039	)		3,701
Unrealized gain (loss) on cash flow hedging instruments, net of taxes		2,828			(481	)		4,500			(3,374	)		(253	)		2,828			(1,595	)		4,500
Unrealized actuarial gain (loss) related to pension liability, net of taxes		35			(46	)		20			(129	)		16			35			(1	)		20
Unrealized gain (loss) on postretirement obligation, net of taxes		(5	)		(10	)		(10	)		(20	)		(22	)		(5	)		(44	)		(10	)
Other comprehensive income (loss), net of taxes		5,197			(14,134	)		8,211			(16,829	)		8,052			5,197			(14,679	)		8,211
Comprehensive income (loss)	$	16,466		$	(6,956	)	$	31,167		$	1,297		$	30,282		$	16,466		$	21,469		$	31,167

																						Common Stock						Additional						Accumulated Other
(in thousands)																						Shares Issued			Amount			Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Treasury Stock			Total
Balance at December 31, 2019																							41,549		$	416		$	288,935		$	634,668		$	(47,001	)	$	(2,543	)	$	874,475
Stock-based compensation expense																							—			—			1,860			—			—			—			1,860
Issuance of common stock under equity award plans, net of forfeitures																							(146	)		(2	)		69			—			—			(67	)		—
Shares repurchased for tax withholding on equity awards																							(39	)		—			(1,009	)		—			—			—			(1,009	)
Repurchase of common stock																							—			—			—			—			—			(22,909	)		(22,909	)
Retirement of treasury stock																							(860	)		(9	)		(26	)		(22,874	)		—			22,909			—
Comprehensive income (loss)																							—			—			—			13,918			(22,731	)		—			(8,813	)
Balance at March 31, 2020																							40,504			405			289,829			625,712			(69,732	)		(2,610	)		843,604
Stock-based compensation expense																							—			—			2,042			—			—			—			2,042
Issuance of common stock under equity award plans, net of forfeitures																							57			1			82			—			—			(83	)		—
Shares repurchased for tax withholding on equity awards																							(6	)		—			(124	)		—			—			—			(124	)
Repurchase of common stock																							—			—			—			—			—			(13,019	)		(13,019	)
Retirement of treasury stock																							(500	)		(5	)		(15	)		(12,999	)		—			13,019			—
Comprehensive income (loss)																							—			—			—			22,230			8,052			—			30,282
Balance at June 30, 2020																							40,055		$	401		$	291,814		$	634,943		$	(61,680	)	$	(2,693	)	$	862,785

	Common Stock						Additional						Accumulated Other									Common Stock						Additional						Accumulated Other
(in thousands)	Shares Issued			Amount			Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Treasury Stock			Total			Shares Issued			Amount			Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Treasury Stock			Total
Balance at December 31, 2018		42,778		$	428		$	286,544		$	598,788		$	(56,775	)	$	(2,376	)	$	826,609			42,778		$	428		$	286,544		$	598,788		$	(56,775	)	$	(2,376	)	$	826,609
Cumulative effect of accounting change – adoption of ASC 842, Leases (Note 3)		—			—			—			110			—			—			110
Cumulative effect of accounting change – adoption of ASC 842, Leases																							—			—			—			110			—			—			110
Stock-based compensation expense		—			—			1,890			—			—			—			1,890			—			—			1,890			—			—			—			1,890
Issuance of common stock under equity award plans, net of forfeitures		(168	)		(2	)		182			—			—			(180	)		—			(168	)		(2	)		182			—			—			(180	)		—
Shares repurchased for tax withholding on equity awards		(45	)		—			(1,269	)		—			—			—			(1,269	)		(45	)		—			(1,269	)		—			—			—			(1,269	)
Comprehensive income (loss)		—			—			—			11,687			3,014			—			14,701			—			—			—			11,687			3,014			—			14,701
Balance at March 31, 2019		42,565			426			287,347			610,585			(53,761	)		(2,556	)		842,041			42,565			426			287,347			610,585			(53,761	)		(2,556	)		842,041
Stock-based compensation expense		—			—			2,200			—			—			—			2,200			—			—			2,200			—			—			—			2,200
Issuance of common stock under equity award plans, net of forfeitures		26			—			123			—			—			(123	)		—			26			—			123			—			—			(123	)		—
Repurchase of common stock		—			—			—			—			—			(20,178	)		(20,178	)		—			—			—			—			—			(20,178	)		(20,178	)
Retirement of treasury stock		(500	)		(5	)		(791	)		(12,063	)		—			12,859			—			(500	)		(5	)		(791	)		(12,063	)		—			12,859			—
Comprehensive income (loss)		—			—			—			11,269			5,197			—			16,466			—			—			—			11,269			5,197			—			16,466
Balance at June 30, 2019		42,091		$	421		$	288,879		$	609,791		$	(48,564	)	$	(9,998	)	$	840,529			42,091		$	421		$	288,879		$	609,791		$	(48,564	)	$	(9,998	)	$	840,529

	Common Stock						Additional						Accumulated Other
(in thousands)	Shares Issued			Amount			Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Treasury Stock			Total
Balance at December 31, 2017		42,899		$	429		$	282,385		$	546,843		$	(31,104	)	$	(2,074	)	$	796,479
Cumulative effect of accounting change – adoption of ASC 606, Revenues (Note 2)		—			—			—			3,019			—			—			3,019
Stock-based compensation expense		—			—			2,077			—			—			—			2,077
Issuance of common stock under equity award plans, net of forfeitures		18			—			59			—			—			(59	)		—
Shares repurchased for tax withholding on equity awards		(118	)		(1	)		(3,681	)		—			—			—			(3,682	)
Comprehensive income (loss)		—			—			—			10,948			(2,695	)		—			8,253
Balance at March 31, 2018		42,799			428			280,840			560,810			(33,799	)		(2,133	)		806,146
Stock-based compensation expense		—			—			1,673			—			—			—			1,673
Issuance of common stock under equity award plans, net of forfeitures		22			—			109			—			—			(109	)		—
Comprehensive income (loss)		—			—			—			7,178			(14,134	)		—			(6,956	)
Balance at June 30, 2018		42,821		$	428		$	282,622		$	567,988		$	(47,933	)	$	(2,242	)	$	800,863

	Six Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2020			2019
Cash flows from operating activities:
Net income							$	36,148		$	22,956
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation								25,206			27,066
Amortization of intangibles								8,212			8,413
Amortization of deferred grants								(170	)		(181	)
Impairment losses								1,800			1,711
Unrealized foreign currency transaction (gains) losses, net								510			(603	)
Stock-based compensation expense								3,902			4,090
Deferred income tax provision (benefit)								564			325
Bad debt expense (reversals)								1,129			68
Unrealized (gains) losses and premiums on financial instruments, net								665			(304	)
(Earnings) losses from equity method investees								547			233
Other								(104	)		256
Changes in assets and liabilities, net of acquisitions:
Receivables, net								294			(1,214	)
Prepaid expenses								(239	)		(1,122	)
Other current assets								(263	)		(896	)
Deferred charges and other assets								238			(3,196	)
Accounts payable								(4,184	)		(2,824	)
Income taxes receivable / payable								2,324			(5,225	)
Accrued employee compensation and benefits								6,998			6,489
Other accrued expenses and current liabilities								(279	)		1,228
Deferred revenue and customer liabilities								(1,666	)		(2,435	)
Other long-term liabilities								6,585			1,086
Operating lease assets and liabilities								(1,575	)		415
Net cash provided by operating activities								86,642			56,336
Cash flows from investing activities:
Capital expenditures								(22,880	)		(16,390	)
Other								592			284
Net cash (used for) investing activities								(22,288	)		(16,106	)
Cash flows from financing activities:
Payments of long-term debt		(18,000	)		(190,000	)		(47,000	)		(18,000	)
Proceeds from issuance of long-term debt		8,000			5,000			23,000			8,000
Cash paid for repurchase of common stock		(20,178	)		—			(35,928	)		(20,178	)
Shares repurchased for tax withholding on equity awards		(1,269	)		(3,682	)		(1,133	)		(1,269	)
Cash paid for loan fees related to long-term debt		(1,098	)		—			—			(1,098	)
Other		(4	)		38			—			(4	)
Net cash (used for) financing activities		(32,549	)		(188,644	)		(61,061	)		(32,549	)
Effects of exchange rates on cash, cash equivalents and restricted cash		655			(6,748	)		(1,795	)		655
Net increase (decrease) in cash, cash equivalents and restricted cash		8,336			(181,362	)		1,498			8,336
Cash, cash equivalents and restricted cash – beginning		130,231			344,805			129,185			130,231
Cash, cash equivalents and restricted cash – ending	$	138,567		$	163,443		$	130,683		$	138,567

Supplemental disclosures of cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities							$	31,484		$	29,119
Cash paid during period for interest	$	1,874		$	1,975		$	1,009		$	1,874
Cash paid during period for income taxes	$	12,567		$	12,084		$	8,947		$	12,567
Non-cash transactions:
Net right-of-use assets arising from new or remeasured operating lease liabilities							$	12,976		$	10,663
Property and equipment additions in accounts payable	$	2,663		$	2,637		$	4,978		$	2,663
Unrealized gain (loss) on postretirement obligation, net of taxes, in accumulated other comprehensive income (loss)	$	(10	)	$	(20	)	$	(44	)	$	(10	)

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

On December 20, 2017, the Tax Cuts and Jobs Act (the “2017 Tax Reform Act”) was approved by Congress and received presidential approval on December 22, 2017. In general, the 2017 Tax Reform Act reduced the U.S. federal corporate tax rate from 35% to 21%, effective in 2018. The 2017 Tax Reform Act moved from a worldwide business taxation approach to a participation exemption regime. The 2017 Tax Reform Act also imposed base-erosion prevention measures on non-U.S. earnings of U.S. entities, as well as a one-time mandatory deemed repatriation tax on accumulated non-U.S. earnings. The impact of the 2017 Tax Reform Act on the Company’s consolidated financial results began with the fourth quarter of 2017, the period of enactment. See Note 11, Income Taxes, for further information.

On October 18, 2018, the Company, as guarantor, and its wholly-owned subsidiary, SEI International Services S.a.r.l, a Luxembourg company, entered into the Symphony Purchase Agreement with Pascal Baker, Ian Barkin, David Brain, David Poole, FIS Nominee Limited, Baronsmead Venture Trust plc and Baronsmead Second Venture Trust plc (together, the “Symphony Sellers”) to acquire all of the outstanding shares of Symphony.

Symphony, headquartered in London, England, provides RPA services, offering RPA consulting, implementation, hosting and managed services for front, middle and back-office processes. Symphony serves numerous industries globally, including financial services, healthcare, business services, manufacturing, consumer products, communications, media and entertainment.

The aggregate purchase price was GBP 52.5 million ($67.6 million), subject to a post-closing working capital adjustment, of which the Company paid GBP 44.6 million ($57.6 million) at the closing of the transaction on November 1, 2018 using cash on hand as well as $31.0 million of additional borrowings under the Company’s credit agreement. The acquisition date present value of the remaining GBP 7.9 million ($10.0 million) of purchase price has been deferred and will be paid in equal installments over three years, on or around November 1, 2019, 2020 and 2021. The Symphony Purchase Agreement also provides for a three-year, retention based earnout payable in restricted stock units (“RSUs”) with a value of GBP 3.0 million.

Subsequent to the finalization of the working capital adjustments during the six months ended June 30, 2019, the purchase price was adjusted to GBP 52.4 million ($67.5 million). The acquisition resulted in $26.1 million of intangible assets, primarily customer relationships and trade names, $2.2 million of fixed assets and $~~36.2~~ ~~million of goodwill.~~

~~The Symphony Purchase Agreement contains customary representations and warranties, indemnification obligations and covenants.~~

~~The Company accounted for the Symphony acquisition in accordance with Accounting Standards Codification (“ASC”) 805,~~ ~~Business Combinations~~ ~~(“ASC 805”)~~, whereby the purchase price paid was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the closing date. Certain amounts are provisional and are subject to change, including the tax analysis of the assets acquired and liabilities assumed and goodwill. The Company expects to complete its analysis of the purchase price allocation during the fourth quarter of 2019 and any resulting adjustments will be recorded in accordance with ASC 805.

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

The aggregate purchase price of AUD 30.2 million ($22.4 million) was paid at the closing of the transaction on July 9, 2018. Subsequent to the finalization of the working capital adjustments during the six months ended June 30, 2019, the purchase price was adjusted to AUD 30.3 million ($22.5 million). The purchase price was funded through $22.0 million of additional borrowings under the Company’s credit agreement. The WhistleOut Sale Agreement provides for a three-year, retention based earnout of AUD 14.0 million.

~~The WhistleOut Sale Agreement contained customary representations and warranties, indemnification obligations and covenants.~~

~~The Company accounted for the WhistleOut acquisition in accordance with ASC 805~~, whereby the purchase price paid was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the closing date. The Company completed its tax analysis of the assets acquired and liabilities assumed during the second quarter of 2019, which resulted in deferred tax assets and liabilities in accordance with ASC 805. The final purchase price allocation resulted in $16.5 million of intangible assets, primarily indefinite-lived domain names, $2.4 million of fixed assets and $3.3 million of goodwill.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, ~~2019~~2020 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, ~~2019.~~2020. 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, ~~2018,~~2019, as filed with the Securities and Exchange Commission (“SEC”) on February ~~26, 2019.~~27, 2020.

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

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with ~~accounting principles generally accepted in the United States of America~~U.S. GAAP 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.

Due to the novel coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets. Other than where noted, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date and time of issuance of the condensed consolidated financial statements. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Subsequent Events — Subsequent events or transactions have been evaluated through the date and time of issuance of the condensed consolidated financial statements. There were no material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements.

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

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

	June 30, 2019		December 31, 2018		June 30, 2018		December 31, 2017		June 30, 2020		December 31, 2019		June 30, 2019		December 31, 2018
Cash and cash equivalents	$	136,631	$	128,697	$	162,422	$	343,734	$	129,050	$	127,246	$	136,631	$	128,697
Restricted cash included in "Other current assets"		566		149		153		154		318		568		566		149
Restricted cash included in "Deferred charges and other assets"		1,370		1,385		868		917		1,315		1,371		1,370		1,385
	$	138,567	$	130,231	$	163,443	$	344,805	$	130,683	$	129,185	$	138,567	$	130,231

~~Investments in Equity Method Investees~~ — In July 2017, the Company made a strategic investment of $10.0 million in XSell for 32.8% of XSell’s preferred stock. The Company is incorporating XSell’s machine learning and AI algorithms into its business. The Company believes this will increase the sales performance of its agents to drive revenue for its clients, improve the experience of the Company’s clients’ end customers and enhance brand loyalty, reduce the cost of customer care and leverage analytics and machine learning to source the best agents and improve their performance.

The Company’s net investment in XSell of $8.9 million and $9.2 million was included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018, respectively. The Company’s investment was paid in two installments of $5.0 million, one in July 2017 and one in August 2018. The Company’s proportionate share of XSell’s net (loss) of $(0.1) million and $(0.1) million for the three months ended June 30, 2019 and 2018, respectively, and $(0.3) million and $(0.3) million for the six months ended June 30, 2019 and 2018, respectively, was included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations.

~~As of June 30, 2019 and December 31, 2018, the Company did not identify any instances where the carrying values of its equity method investments were not recoverable.~~

Customer-Acquisition Advertising Costs — The Company’s advertising costs are expensed as incurred. Total advertising costs included in “Direct salaries and related costs” in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):

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

In ~~August 2018,~~December 2019, the FASB issued ASU 2019-12, ~~Financial~~Income Taxes (Topic 740) – Simplifying the Accounting ~~Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13,~~ ~~Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure~~

~~Requirements~~ for ~~Fair Value Measurement~~Income Taxes (“ASU ~~2018-13”~~2019-12”). These amendments ~~remove, modify or add~~simplify the accounting for income taxes by eliminating certain ~~disclosure requirements for fair value measurements.~~ exceptions and also clarifying and amending certain aspects of existing guidance. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2019. Certain~~2020. Most of the amendments ~~will be applied prospectively in the initial year of adoption while the remainder~~ are required to be applied ~~retrospectively to all periods presented upon their effective date.~~on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. Early adoption is ~~permitted.~~permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company is currently evaluating the amendments in ASU 2019-12 but does not expect ~~its adoption of ASU 2018-13 to have~~ a material impact on its ~~disclosures and~~financial condition, results of operations, cash flows or disclosures. The Company does not ~~expect to~~anticipate early ~~adopt the standard.~~adoption of ASU 2019-12.

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans - General (Subtopic 715-20) – Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”). These amendments remove, modify or add certain disclosure requirements for defined benefit plans. These amendments are effective for fiscal years ending after December 15, 2020, with early adoption permitted. The Company does not expect its adoption of ASU 2018-14 to have a material impact on its financial condition, results of operations, cash flows or disclosures and does not expect to early adopt the standard.

~~In August 2018, the FASB issued~~ ~~ASU 2018-15,~~ ~~Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) – Customer’s~~New Accounting ~~for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract~~ ~~(“ASU 2018-15”). These amendments~~ align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. These amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early application permitted in any interim period after issuance of this update. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company does not expect its adoption of ASU 2018-15 to have a material impact on its financial condition, results of operations, cash flows or disclosures and does not expect to early adopt the standard.Standards Recently Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). These amendments require measurement and recognition of expected versus incurred credit losses for financial assets held. Entities are required to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Subsequently, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses in November 2018 and ASU 2019-05, Financial Instruments – Credit Losses (Topic 326) Targeted Transition Relief in May 2019 (together, “subsequent amendments”). ASU 2016-13 and the subsequent amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted.

The Company adopted ASU 2016-13 on January 1, 2020, using the modified retrospective transition method, which resulted in 0 cumulative-effect adjustment to be recognized to the opening balance of retained earnings. The prior period was not restated. The Company’s ~~implementation team has begun to assess its data and design its financial models to estimate expected credit losses and continues to evaluate the critical factors~~adoption of ASU 2016-13 ~~to determine its impact on the Company’s business processes, systems, and internal controls. The Company expects ASU 2016-13 to apply to its trade receivables but does~~did not ~~expect the adoption of the amendments to~~ have a material impact on its financial condition, results of operations or cash flows ~~because~~as the credit losses associated with the Company’s trade receivables have historically been insignificant. ~~The adoption~~See the description of ~~ASU 2016-13 will require expanded quantitative and qualitative disclosures about~~ the Company’s ~~expected credit losses. Additionally,~~“Allowance for Doubtful Accounts” accounting policy in the ~~Company does not anticipate early adopting ASU 2016-13.~~“Significant Accounting Policies” section below.

Codification Improvements – Financial Instruments – Credit Losses, Derivatives and Hedging, and Financial Instruments

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”). These amendments clarify new standards on credit losses, hedging and recognizing and measuring financial instruments and address implementation issues stakeholders have raised. The credit losses and hedging amendments have the same effective dates as the respective standards, unless an entity has already adopted the standards. The amendments related to recognizing and measuring financial instruments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The ~~Company does not~~

~~expect the~~Company’s adoption of ASU 2019-04 toon January 1, 2020 did not have a material impact on its financial condition, results of operations, cash flows or disclosures.

In August 2018, the Financial Accounting Standards ~~Recently Adopted~~Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). These amendments remove, modify or add certain disclosure requirements for fair value measurements. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain of the amendments will be applied prospectively in the initial year of adoption while the remainder are required to be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The Company’s adoption of ASU 2018-03 on January 1, 2020 did not have a material impact on its disclosures.

In ~~February 2016,~~August 2018, the FASB issued ASU ~~2016-02,~~ 2018-15, ~~Leases (Topic 842)~~Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU ~~2016-02”) and subsequent amendments (together, “ASC 842”~~2018-15”). These amendments ~~require~~align the ~~recognition of lease assets and lease liabilities on~~requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the ~~balance sheet by lessees~~requirements for ~~those leases classified as operating leases under ASC 840,~~capitalizing implementation costs incurred to develop or obtain internal-use software. ~~Leases~~ ~~(“ASC 840”). These amendments also require qualitative disclosures along with specific quantitative disclosures.~~ These amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities have the option to either apply the amendments (1) at the beginning of the earliest period presented using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or (2) at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without the need to restate prior periods. There are also certain optional practical expedients that an entity may elect to apply. The Company adopted ASC 842 as of January 1, 2019, using a modified retrospective transition, with the cumulative-effect adjustment to the opening balance of retained earnings as of the effective date. Periods prior to January 1, 2019 have not been restated.

~~See Note 3, Leases, for further details as well as the Company’s significant accounting policy for leases.~~

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedge Activities (“ASU 2017-12”). These amendments help simplify certain aspects of hedge accounting and better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. For cash flow and net investment hedges as of the adoption date, the guidance requires a modified retrospective approach. The amended presentation and disclosure guidance is required only prospectively. These amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early application permitted in any interim period after issuance of this update. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company’s adoption of ASU ~~2017-12~~2018-15 on January 1, ~~2019~~2020 on a prospective basis did not have a material impact on ~~the~~its financial condition, results of operations, cash flows or ~~disclosures~~disclosures.

With the exception of the ~~Company. No cumulative-effect adjustment was recorded to opening retained earnings on~~change for the ~~date~~accounting of ~~adoption~~credit losses as ~~there was no ineffectiveness previously recorded in retained earnings that would have been included in other comprehensive income if~~a result of the ~~new guidance had been applied since hedge inception. Upon~~ adoption of ASU ~~2017-12,~~2016-13, there have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The Company maintains allowances for doubtful accounts on trade accounts receivables for estimated losses arising from the inability of its clients to make contractual payments, applying a probability of default method. The Company’s estimate is based on qualitative and quantitative analyses, applying credit risk measurement tools and methodologies using publicly available credit and capital market information, a review of the current status of the Company’s trade accounts receivable and its historical experience. It is reasonably possible that the Company’s estimate of the allowance for credit losses will increase if the financial condition of the Company’s clients were to deteriorate, resulting in a reduced ability to make payments.

During the six months ended June 30, 2020, the Company ~~elected~~recorded a $1.1 million increase to the ~~spot method~~allowance for ~~assessing~~credit losses related to its short-term trade receivables primarily as a result of deterioration in certain clients’ credit ratings reflecting current and expected economic conditions, and wrote off $0.4 million of the ~~effectiveness of net investment hedges and will record the amortization of excluded components of net investment hedges in “Other income (expense), net” in its consolidated financial statements.~~ allowance for credit losses related to certain short-term trade receivables deemed to be uncollectible.

~~On January 1, 2018, the Company adopted ASC 606,~~ ~~Revenue from Contracts with Customers~~ (“ASC 606”), which included ASU 2014-09 and all related amendments, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. The Company recorded an increase to opening retained earnings of $3.0 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact, all in the Americas segment, primarily related to the change in timing of revenue recognition associated with certain customer contracts that provide fees upon renewal, as well as changes in estimating variable consideration with respect to penalties and holdback provisions for failure to meet specified minimum service levels and other performance-based contingencies.

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

The Company provides customer engagement solutions and services with an emphasis on inbound multichannel demand generation, customer service and technical support to its clients’ customers. These services are delivered through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. Revenues for customer engagement solutions and services are recognized over time using output methods such as a per minute, per hour, per call, per transaction or per time and materials basis.

~~Other~~ RPA services revenues are primarily recognized over time using output methods such as per time and materials basis.Revenues

In from fulfillment services are recognized upon shipment to the ~~Americas, the Company provides a range~~customer and satisfaction of ~~enterprise support services including technical staffing services and outsourced corporate help desk services, primarily in the U.S.~~ all obligations.Revenues ~~for~~from enterprise support services are recognized over time using output methods such as number of positions filled.

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

In total, other revenues are immaterial, representing 2.6% and 0.6% of the Company’s consolidated total revenues for the three months ended June 30, 2019 and 2018, respectively, and 2.2% and 0.6% for the six months ended June 30, 2019 and 2018, respectively.

The Company disaggregates its revenues from contracts with customers by service type and ~~geographic~~delivery location (see Note ~~16,~~15, Segments and Geographic Information), for each of its reportable segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by economic factors.

The following table represents revenues from contracts with customers disaggregated by service type and by the reportable segment for each category for the periods indicated (in thousands):

									Three Months Ended June 30,
	Three Months Ended June 30,				Six Months Ended June 30,				2020					2019
	2019		2018		2019		2018		Amount		% of Revenue			Amount		% of Revenue
Americas:
Customer engagement solutions and services	$	310,070	$	326,766	$	634,632	$	667,188	$	338,963		81.3	%	$	310,070		79.8	%
Other revenues		237		275		452		574		309		0.1	%		237		0.0	%
Total Americas		310,307		327,041		635,084		667,762		339,272		81.4	%		310,307		79.8	%
EMEA:
Customer engagement solutions and services		68,643		67,772		139,640		139,443		73,285		17.6	%		68,643		17.6	%
Other revenues		10,033		1,948		17,164		3,904		4,276		1.0	%		10,033		2.6	%
Total EMEA		78,676		69,720		156,804		143,347		77,561		18.6	%		78,676		20.2	%
Other:
Other revenues		23		24		43		47		—		0.0	%		23		0.0	%
Total Other		23		24		43		47		—		0.0	%		23		0.0	%
	$	389,006	$	396,785	$	791,931	$	811,156	$	416,833		100.0	%	$	389,006		100.0	%

The following table represents revenues from contracts with customers disaggregated by service type and by the reportable segment for each category for the periods indicated (in thousands):

The Company’s noncurrent trade accounts receivable result from contracts with customers that include renewal provisions, and contracts with customers under multi-year arrangements. The Company’s trade accounts receivable, net, ~~consists~~consisted of the following (in thousands):

	June 30, 2019		December 31, 2018		June 30, 2020		December 31, 2019
Trade accounts receivable, net, current ⁽¹⁾	$	336,755	$	335,377	$	368,693	$	375,136
Trade accounts receivable, net, noncurrent ⁽²⁾		19,185		15,948		26,920		26,496
	$	355,940	$	351,325	$	395,613	$	401,632

(1) Included in “Receivables, net” in the accompanying Condensed Consolidated Balance Sheets.

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

~~The Company’s noncurrent trade accounts receivable result from contracts with customers that include renewal provisions, as well as a contract with a customer under a multi-year arrangement.~~

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

	June 30, 2019		December 31, 2018		June 30, 2020		December 31, 2019
Deferred revenue	$	4,266	$	3,655	$	3,475	$	3,012
Customer arrangements with termination rights		16,497		16,404		14,554		15,024
Estimated refund liabilities		7,794		10,117		6,265		8,585
	$	28,557	$	30,176	$	24,294	$	26,621

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

Revenues of $0.3 million and $0.3 million were recognized during the three months ended June 30, 2019 and 2018, respectively, and revenues of $3.4 million and $4.2 million were recognized during the six months ended June 30, 2019 and 2018, respectively, from amounts included in deferred revenue at December 31, 2018 and January 1, 2018, respectively. The Company expects to recognize the majority of its deferred revenue as of June 30, ~~2019~~2020 over the next 180 days. Revenues of $0.2 million and $0.3 million were recognized during the three months ended June 30, 2020 and 2019, respectively, and revenues of $2.9 million and $3.4 million were recognized during the six months ended June 30, 2020 and 2019, respectively, from amounts included in deferred revenue at December 31, 2019 and 2018, respectively.

The majority of the Company’s contracts include termination for convenience or without cause provisions allowing either party to cancel the contract without substantial cost or penalty within a defined notification period (“termination rights”). Customer arrangements with termination rights represent the amount of up-front fees received for unsatisfied performance obligations for periods that extend beyond the legally enforceable contract period. All customer arrangements with termination rights are classified as current as the customer can terminate the contracts and demand pro-rata refunds of the up-front fees over varying periods, typically up to 180 days. The Company expects to recognize the majority of the customer arrangements with termination rights into revenue as the Company has not historically experienced a high rate of contract terminations.

Estimated refund liabilities represent consideration received under the contract that the Company expects to ultimately refund to the customer and primarily relates to estimated penalties, holdbacks and chargebacks. Penalties and holdbacks result from the failure to meet specified minimum service levels in certain contracts and other performance-based contingencies. Chargebacks reflect the right of certain of the Company’s clients to chargeback accounts that do not meet certain requirements for specified periods after a sale has occurred. Estimated refund liabilities are generally resolved inwithin 180 days, once it is determined whether the requisite service levels and client requirements were achieved to settle the contingency.

On January 1, 2019, the Company adopted ~~ASC 842, which includes~~ ASU 2016-02, Leases (Topic 842) and ~~all related~~subsequent amendments (together, “ASC 842”) using the modified retrospective method and recognized a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption. Results for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting for leases under ASC 840.earnings.

The adoption of ASC 842 on January 1, 2019 ~~had a material impact on~~required the ~~Company’s Condensed Consolidated Balance Sheet, resulting~~gross up of historical deferred rent which resulted in the recognition of $225.3 million of right-of-use ("ROU") assets, $239.3 million of operating lease liabilities, a $0.1 million increase to opening retained earnings, as well as $14.1 million primarily related to the derecognition of net straight-line lease liabilities. The retained earnings adjustment was due to the cumulative impact of adopting ASC 842, primarily resulting from the derecognition of embedded lease derivatives, the difference between deferred rent balances and the net of ROU assets and lease liabilities and the deferred tax impact.

The impact of the adoption of ASC 842 to the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 was not material. The Company’s net cash provided by operating activities for the six months ended June 30, 2019 did not change due to the adoption of ASC 842.

In determining whether a contract contains a lease, the Company assesses whether the arrangement meets all three of the following criteria: 1) there is an identified asset; 2) the Company has the right to obtain substantially all the economic benefits from use of the identified asset; and 3) the Company has the right to direct the use of the identified asset. This involves evaluating whether the Company has the right to operate the asset or to direct others to operate the asset in a manner that it determines without the supplier having the right to change those operating instructions, as well as evaluating the Company’s involvement in the design of the asset.

The Company capitalizes operating lease obligations with terms in excess of twelve months as ROU assets with corresponding lease liabilities on its balance sheet. Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Additionally, the ROU asset is adjusted for lease incentives, prepaid lease payments and initial direct costs. Operating lease expense is recognized on a straight-line basis over the lease term.

~~The Company has lease agreements with lease and non-lease components, such as~~ ~~real estate taxes, insurance, common area maintenance and other operating costs. Lease and non-lease components~~ are generally accounted for as a single component to the extent that the costs are fixed per the arrangement. The Company has applied this accounting policy to all asset classes. To the extent that the non-lease components are not fixed per the arrangement, these costs are treated as variable lease costs and expensed as incurred.

Certain of the Company’s lease agreements include rental payments that adjust periodically based on an index or rate, generally the applicable Consumer Price Index (“CPI”). The operating lease liability is measured using the prevailing index or rate at the measurement date (i.e., the commencement date); however, the most recent CPI in

effect as of January 1, 2019 was used to effectuate the adoption of ASC 842. Incremental payments due to changes to the index- and rate-based lease payments are treated as variable lease costs and expensed as incurred.

For purposes of calculating operating lease liabilities, the lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The primary factors used to estimate whether an option to extend a lease term will be exercised or not generally include the extent of the Company’s capital investment, employee recruitment potential and operational cost and flexibility.

In determining the present value of lease payments, the Company typically uses incremental borrowing rates based on information available at the lease commencement date. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company’s incremental borrowing rate is estimated using a synthetic credit rating model and forward currency exchange rates, as applicable.

~~Payments on leases with an initial term of 12 months or less are recognized in the accompanying Condensed Consolidated Statements of Operations on a straight-line basis over the lease term.~~

~~The ROU asset is evaluated for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable in accordance with ASC 360,~~ ~~Property, Plant and Equipment~~. A loss is recognized when the ROU asset is impaired in connection with the impairment of a site’s assets due to economic or other factors. When the ROU asset is impaired, it is typically amortized on a straight-line basis over the shorter of the remaining lease term or its useful life, and the related operating lease would no longer qualify for straight-line treatment of total lease expense.

The Company ~~primarily~~ leases facilities for its corporate headquarters, many of its customer engagement centers, several regional support offices and data centers. These leases are classified as operating leases and are included in ~~“Operating~~

“Operating lease right-of-use assets,” “Operating lease liabilities” and “Long-term operating lease liabilities” in the accompanying Condensed Consolidated Balance Sheet as of June 30, ~~2019.~~2020. The Company has no0 finance leases.

Lease ~~terms~~costs, net of sublease income, of $15.5 million and $16.2 million for the ~~Company’s leases are generally~~ three to 20 years with renewal options typically ranging from one month to five years and largely require the Company to pay a proportionate share of real estate taxes, insurance, common area maintenance, and other operating costs in addition to a base or fixed rent. The Company's operating leases have remaining lease terms of one month to 13 years as ofmonths ended June 30, ~~2019.~~

~~The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.~~

~~The Company subleases certain of its facilities that have been abandoned before~~2020 and 2019, respectively, and $31.5 million and $32.1 million for the ~~expiration of the lease term. Operating lease costs on abandoned facilities is reduced by sublease income~~six months ended June 30, 2020 and 2019, respectively, were primarily included in “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations. The Company’s sublease arrangements do not contain renewal options or restrictive covenants. The Company’s subleases have varying remaining lease terms extending through 2025, and future contractual sublease income is expected to be $13.9 million over the remaining lease terms.

~~Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense were as follows (in thousands):~~

~~Supplemental cash flow information related to leases was as follows (in thousands):~~

Maturities of operating lease liabilities as of June 30, ~~2019~~2020 were as follows (in thousands):

	Amount		Amount
2019 (remainder of the year)	$	25,012
2020		56,277
2020 (remainder of the year)			$	28,288
2021		49,779		58,340
2022		38,193		44,905
2023		24,721		30,407
2024 and thereafter		54,329
2024				21,307
2025 and thereafter				37,962
Total future lease payments		248,311		221,209
Less: Imputed interest		25,258		18,949
Present value of future lease payments		223,053		202,260
Less: Operating lease liabilities		48,864		54,948
Long-term operating lease liabilities	$	174,189	$	147,312

As of June 30, 2019, the Company had additional operating leases for customer engagement centers that had not yet commenced with future lease payments of $2.9 million. These operating leases will commence during the third quarter of 2019 with lease terms between 2 and 8 years.

Rental expense under operating leases, primarily included in “General and administrative” in the accompanying Condensed Consolidated Statement of Operations, for the three and six months ended June 30, 2018 was $18.6 million and $34.6 million, respectively.

~~The following is a schedule of future minimum rental payments required under operating leases that had noncancelable lease terms as of December 31, 2018 under ASC 840 (in thousands):~~

During the first quarter of 2019, the Company initiated a restructuring plan to simplify and refine its operating model in the U.S. (the “Americas 2019 Exit Plan”), in part to improve agent attrition and absenteeism. The Americas 2019 Exit Plan ~~includes, but is not limited to,~~included closing customer ~~contact management~~engagement centers, consolidating leased space in various locations in the U.S. and management reorganization. The Company ~~anticipates finalizing~~finalized these actions ~~by December 31,~~as of September 30, 2019.

During the second quarter of 2018, the Company initiated a restructuring plan to manage and optimize capacity utilization, which included closing customer ~~contact management~~engagement centers and consolidating leased space in various locations in the U.S. and Canada (the “Americas 2018 Exit Plan”). The Company finalized ~~the remainder of~~ the site closures under the Americas 2018 Exit Plan as of December 2018, resulting in a reduction of 5,000 seats.

The Company’s actions under both the Americas 2018 and 2019 Exit Plans ~~are anticipated to result~~resulted in general and administrative cost savings and lower depreciation expense.

The cumulative costs ~~expected and~~ incurred to date related to cash and non-cash expenditures resulting from the Americas 2018 ~~Exit Plan~~ and ~~the Americas~~ 2019 Exit ~~Plan~~Plans are outlined below as of June 30, ~~2019~~2020 (in thousands):

	Americas 2018 Exit Plan		Americas 2019 Exit Plan		Americas 2018 Exit Plan			Americas 2019 Exit Plan
Lease obligations and facility exit costs ⁽¹⁾	$	7,073	$	54	$	7,073		$	—
Severance and related costs ⁽²⁾		3,426		191		3,426	��		191
Severance and related costs ⁽¹⁾		1,045		2,169		1,037			2,153
Non-cash impairment charges		5,875		1,582		5,875			1,582
Other non-cash charges		—		244		—			244
	$	17,419	$	4,240	$	17,411		$	4,170

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

~~During~~costs” in the ~~three months ended June 30, 2019, the Company incurred an additional $0.5 million above the amount previously expected under the Americas 2019 Exit Plan, primarily due to the refinement~~accompanying Condensed Consolidated Statements of ~~previous estimates.~~ Operations.

The Company has paid a total of ~~$11.0~~$12.8 million in cash through June 30, ~~2019,~~2020, of which ~~$10.2~~$10.5 million related to the Americas 2018 Exit Plan and ~~$0.8~~$2.3 million related to the Americas 2019 Exit Plan.

The Americas 2018 and 2019 Exit Plan activity during the three and six months ended June 30, 2020 consisted of cash payments due under the respective plans.

The following table summarizes the accrued liability and related ~~charges~~activity for the three months ended June 30, 2019 (in thousands):

The following table summarizes the accrued liability and related ~~charges~~activity for the six months ended June 30, 2019 (in thousands):

(1) Consists of the reclassification from the restructuring liability to “Operating lease liabilities” and “Long-term operating lease liabilities” upon adoption of ASC 842 on January 1, 2019.

~~The following table summarizes the accrued liability and related charges for the three and six months ended June 30, 2018 (in thousands):~~

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

The following table summarizes the Company’s short-term and long-term accrued liabilities associated with its Americas 2018 and 2019 Exit Plans (in thousands):

The long-term accrued restructuring liability relates to variable costs associated with future rent obligations to be paid through the remainder of the lease terms, the last of which ends in June 2021.

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value and establishes a framework for measuring fair value. ASC 820 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. Additionally, ASC 820 requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for how 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:

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

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

The following 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, if applicable.

Cash, Short-Term and Other Investments and Accounts Payable — The carrying values for cash, short-term and other investments and accounts payable approximate their fair values.

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

Foreign Currency Contracts — The Company enters into foreign currency forward contracts and options over the counter and values such contracts, including premiums paid on options, at fair value 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~~— ~~Prior to the adoption of ASC 842,~~ the Company had embedded derivatives within certain hybrid lease agreements that were bifurcated from the host contract and valued such contracts at fair value using significant unobservable inputs, which are classified in Level 3 of the fair value hierarchy. These unobservable inputs included expected cash flows associated with the lease, currency exchange rates on the day of commencement, as well as forward currency exchange rates, the results of which were adjusted for credit risk. ~~These items were classified in Level 3 of the fair value hierarchy. See Note 3, Leases, and Note 7, 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 8, Investments Held in Rabbi Trust.

The Company's assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 ~~consist~~consisted of the following (in thousands):

			Fair Value Measurements Using:								Fair Value Measurements Using:
	Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	June 30, 2019		Level 1		Level 2		Level 3		June 30, 2020		Level 1		Level 2		Level 3
Assets:
Foreign currency contracts ⁽¹⁾	$	3,265	$	—	$	3,265	$	—	$	1,833	$	—	$	1,833	$	—
Equity investments held in rabbi trust for the Deferred Compensation Plan ⁽²⁾		9,101		9,101		—		—		8,711		8,711		—		—
Debt investments held in rabbi trust for the Deferred Compensation Plan ⁽²⁾		4,778		4,778		—		—		5,306		5,306		—		—
	$	17,144	$	13,879	$	3,265	$	—	$	15,850	$	14,017	$	1,833	$	—
Liabilities:
Foreign currency contracts ⁽¹⁾	$	172	$	—	$	172	$	—	$	622	$	—	$	622	$	—
	$	172	$	—	$	172	$	—	$	622	$	—	$	622	$	—

			Fair Value Measurements Using:								Fair Value Measurements Using:
	Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Balance at		Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	December 31, 2018		Level 1		Level 2		Level 3		December 31, 2019		Level 1		Level 2		Level 3
Assets:
Foreign currency contracts ⁽¹⁾	$	1,068	$	—	$	1,068	$	—	$	3,607	$	—	$	3,607	$	—
Embedded derivatives ⁽¹⁾		10		—		—		10
Equity investments held in rabbi trust for the Deferred Compensation Plan ⁽²⁾		8,075		8,075		—		—		9,125		9,125		—		—
Debt investments held in rabbi trust for the Deferred Compensation Plan ⁽²⁾		3,367		3,367		—		—		4,802		4,802		—		—
	$	12,520	$	11,442	$	1,068	$	10	$	17,534	$	13,927	$	3,607	$	—
Liabilities:
Foreign currency contracts ⁽¹⁾	$	2,895	$	—	$	2,895	$	—	$	251	$	—	$	251	$	—
Embedded derivatives ⁽¹⁾		369		—		—		369
	$	3,264	$	—	$	2,895	$	369	$	251	$	—	$	251	$	—

(1) See Note 7, 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 8, Investments Held in Rabbi Trust.

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

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

~~(1) Derecognition upon adoption of ASC 842 on January 1, 2019. See Note 3, Leases, for more information.~~

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, other long-lived assets, ROU assets and equity method investments. For these assets, measurement at fair value in periods subsequent to their initial recognition would be applicable if these assets were determined to be impaired. The adjusted carrying

values for assets measured at fair value on a nonrecurring basis (no liabilities) subject to the requirements of ASC 820 were not material at June 30, ~~2019~~2020 and December 31, ~~2018.~~2019.

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

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,				Six Months Ended June 30,
	2019			2018			2019			2018			2020		2019		2020		2019
Americas:
Property and equipment, net	$	—		$	(5,175	)	$	(343	)	$	(8,701	)	$	760	$	—	$	760	$	343
Operating lease right-of-use assets		(129	)		—			(1,368	)		—			1,040		129		1,040		1,368
	$	(129	)	$	(5,175	)	$	(1,711	)	$	(8,701	)	$	1,800	$	129	$	1,800	$	1,711

In connection with the closure of certain under-utilized customer ~~contact management~~engagement centers and the consolidation of leased space in the U.S., the Company recorded impairment charges during the three and six months ended June 30, 2020 related to the exit of leased facilities as well as leasehold improvements, equipment, furniture and fixtures which were not recoverable.

In connection with the closure of certain under-utilized customer engagement centers and the consolidation of leased space in the U.S. and Canada, the Company recorded impairment charges during the three and six months ended June 30, 2019 ~~and 2018~~ related to the exit of leased facilities as well as leasehold improvements, equipment, furniture and fixtures which were not recoverable. See Note 4, Costs Associated with Exit ~~and~~or Disposal Activities, for further information.

The following table presents the Company’s purchased intangible assets as of June 30, ~~2019~~2020 (in thousands):

	Gross Intangibles		Accumulated Amortization			Net Intangibles		Weighted Average Amortization Period (years)		Gross Intangibles		Accumulated Amortization			Net Intangibles		Weighted Average Amortization Period (years)
Intangible assets subject to amortization:
Customer relationships	$	190,290	$	(114,031	)	$	76,259		10	$	188,875	$	(126,829	)	$	62,046		10
Trade names and trademarks		19,219		(11,750	)		7,469		8		19,123		(14,043	)		5,080		8
Non-compete agreements		2,742		(2,022	)		720		3		923		(508	)		415		3
Content library		513		(513	)		—		2		507		(507	)		—		2
Proprietary software		1,040		(795	)		245		4		870		(765	)		105		5
Intangible assets not subject to amortization:
Domain names		80,816		—			80,816	N/A			80,927		—			80,927	N/A
	$	294,620	$	(129,111	)	$	165,509		5	$	291,225	$	(142,652	)	$	148,573		4

The following table presents the Company’s purchased intangible assets as of December 31, ~~2018~~2019 (in thousands):

	Gross Intangibles		Accumulated Amortization			Net Intangibles		Weighted Average Amortization Period (years)		Gross Intangibles		Accumulated Amortization			Net Intangibles			Weighted Average Amortization Period (years)
Intangible assets subject to amortization:																	��
Customer relationships	$	189,697	$	(106,502	)	$	83,195		10	$	191,171	$	(121,074	)	$	70,097			10
Trade names and trademarks		19,236		(10,594	)		8,642		8		19,380		(12,929	)		6,451			8
Non-compete agreements		2,746		(1,724	)		1,022		3		2,769		(2,181	)		588			3
Content library		517		(517	)		—		2		506		(506	)		—			2
Proprietary software		1,040		(725	)		315		4		870		(695	)		175			5
Intangible assets not subject to amortization:
Domain names		80,857		—			80,857	N/A			81,109		—			81,109		N/A
	$	294,093	$	(120,062	)	$	174,031		5	$	295,805	$	(137,385	)	$	158,420			5

The Company’s estimated future amortization expense for the succeeding years relating to the purchased intangible assets resulting from acquisitions completed prior to June 30, ~~2019~~2020 is as follows (in thousands):

Years Ending December 31,	Amount
2019 (remainder of the year)		8,274
2020		14,011
			Amount
2020 (remainder of the year)			$	5,706
2021		9,422		9,341
2022		8,121		8,057
2023		7,273		7,220
2024		7,027		6,975
2025 and thereafter		30,565
2025				6,851
2026 and thereafter				23,496

Changes in goodwill for the six months ended June 30, ~~2019~~2020 consisted of the following (in thousands):

	January 1, 2019		Acquisition- Related ⁽¹⁾			Effect of Foreign Currency			June 30, 2019		January 1, 2020		Acquisition- Related		Effect of Foreign Currency			June 30, 2020
Americas	$	255,436	$	1,202		$	2,554		$	259,192	$	259,953	$	—	$	(2,038	)	$	257,915
EMEA		47,081		(124	)		(99	)		46,858		51,294		—		(2,497	)		48,797
	$	302,517	$	1,078		$	2,455		$	306,050	$	311,247	$	—	$	(4,535	)	$	306,712

Changes in goodwill for the year ended December 31, ~~2018~~2019 consisted of the following (in thousands):

	January 1, 2018		Acquisition- Related ⁽¹⁾		Effect of Foreign Currency			December 31, 2018		January 1, 2019		Acquisition- Related ⁽¹⁾		Effect of Foreign Currency		December 31, 2019
Americas	$	258,496	$	2,175	$	(5,235	)	$	255,436	$	255,436	$	1,202	$	3,315	$	259,953
EMEA		10,769		36,361		(49	)		47,081		47,081		2,421		1,792		51,294
	$	269,265	$	38,536	$	(5,284	)	$	302,517	$	302,517	$	3,623	$	5,107	$	311,247

(1) ~~See Note 1, Overview and Basis of Presentation, for further information.~~ The year ended December 31, ~~2018 includes the goodwill recorded upon acquisition, while the six months ended June 30,~~ 2019 includes the impact of adjustments to acquired goodwill upon finalization of working capital adjustments and the tax analysis of WhistleOut’s and Symphony’s assets acquired and liabilities assumed.

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

For the annual goodwill impairment test, the Company elected to forgo the option to first assess qualitative factors and performed its annual quantitative goodwill impairment test as of July 31, ~~2018.~~2019. Under ASC 350, Intangibles – Goodwill and Other, 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 projected long-term growth rate ~~of growth~~ and determination of the Company’s weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. If the fair value of the reporting unit is less than its carrying value, goodwill is considered impaired and an impairment loss is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

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

As of July 31, ~~2018,~~2019, the Company had 8 reporting units, seven of which have goodwill. The Company concluded that goodwill was not impaired for all ~~six~~7 of its reporting units with goodwill, based on generally accepted valuation techniques and the significant assumptions outlined above. ~~While the~~The fair values of ~~four~~3 of the ~~six~~seven reporting units were substantially in excess of their carrying ~~value,~~ value. T~~the Qelp B.V.~~he Clearlink, Symphony, ~~(“Qelp”)~~ Latin America and ~~Clear Link Holdings, LLC~~Qelp ~~(“Clearlink”)~~ reporting units’ fair values exceeded ~~the~~their respective carrying values, although the fair value cushion was not ~~substantially~~substantial. The decrease in the Clearlink reporting unit’s cushion from the prior year was primarily attributable to a decrease in the projected long-term growth rate of the U.S. Gross Domestic Product as well as a decline in projected revenue growth. The decrease in the cushion from the prior year for the Latin America and Qelp ~~and Clearlink were~~reporting units was primarily attributable to an increase in the country-specific risk premiums which increased the applied weighted average cost of capital. Symphony was acquired by the Company in ~~2015 and 2016, respectively.~~November 2018.

The ~~Qelp~~Clearlink, Symphony, Latin America and ~~Clearlink~~Qelp reporting units are at risk of future impairment if projected operating results are not met or other inputs into the fair value measurement model change. ~~However, as~~Symphony’s on-site consulting model has been negatively impacted by travel and shelter-in-place restrictions imposed by governments and businesses to reduce the spread of COVID-19. There is significant uncertainty regarding the length of time these restrictions will remain in place. An impairment charge may arise in the future if Symphony’s operations experience a prolonged delay in the resumption of its operations or a significant shift in client demand results from the economic downturn. As of June 30, ~~2019,~~2020, the Company believes there was no impairment related to Symphony’s $39.0 million of goodwill.

As of June 30, 2020, the Company believes there were no0 indicators of impairment related to ~~Qelp’s $10.1~~Clearlink’s $74.2 million of goodwill, Latin America’s $18.9 million of goodwill and ~~Clearlink’s $72.3~~Qelp’s $9.8 million of goodwill. ~~Additionally, as of June 30, 2019, the Company noted no indicators of impairment related to Symphony’s $36.7 million of goodwill, recorded as a result of the acquisition on November 1, 2018.~~

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 foreign

currency contracts are entered into to hedge the exposure to variability in the cash flows of a specific asset or liability, or of a forecasted transaction that is attributable to changes in exchange rates.

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

	June 30, 2019			December 31, 2018			June 30, 2020			December 31, 2019
Deferred gains (losses) in AOCI	$	2,733		$	(1,825	)	$	740		$	2,221
Tax on deferred gains (losses) in AOCI		(97	)		(39	)		(45	)		69
Deferred gains (losses) in AOCI, net of taxes	$	2,636		$	(1,864	)	$	695		$	2,290
Deferred gains (losses) expected to be reclassified to "Revenues" from AOCI during the next twelve months	$	2,733					$	690

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

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.

~~Embedded Derivatives~~ – ~~The Company enters into c~~ertain lease agreements which require payments not denominated in the functional currency of any substantial party to the agreements. Prior to the adoption of ASC 842 on January 1, 2019, the foreign currency component of these contracts met the criteria under ASC 815 as embedded derivatives. The Company has determined that the embedded derivatives were 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 did not qualify for hedge accounting under ASC 815. The Company’s embedded derivatives were derecognized on January 1, 2019.

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

	June 30, 2019				December 31, 2018				June 30, 2020			December 31, 2019
Contract Type	Notional Amount in USD		Settle Through Date		Notional Amount in USD		Settle Through Date		Notional Amount in USD		Settle Through Date	Notional Amount in USD		Settle Through Date
Cash flow hedges:
Options:
US Dollars/Philippine Pesos	$	41,250	June 2020		$	26,250	December 2019		$	40,000	December 2020	$	74,000	December 2020
Forwards:
US Dollars/Philippine Pesos		6,000	September 2019			39,000	September 2019
US Dollars/Costa Rican Colones		42,000	June 2020			67,000	December 2019			64,000	August 2021		42,000	December 2020
Euros/Hungarian Forints		1,569	December 2019			—		—		1,751	December 2020		—		—
Euros/Romanian Leis		8,427	December 2019			—		—		7,556	December 2020		—		—
Non-designated hedges:
Forwards		20,031	November 2021			19,261	November 2021			9,405	November 2021		19,295	November 2021
Embedded derivatives		—		—		14,069	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 $~~3.3~~$1.8 million and $~~1.1~~$3.6 million as of June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, 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 $~~3.3~~$1.5 million and $~~1.1~~$3.4 million as of June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, and liability positions of $~~0.2~~$0.3 million and ~~$2.9 million~~ $0 as of June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, 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					Derivative Assets
	Balance Sheet Location	June 30, 2019		December 31, 2018		Balance Sheet Location	June 30, 2020		December 31, 2019
Derivatives designated as cash flow hedging instruments:
Foreign currency contracts	Other current assets	$	3,167	$	1,038	Other current assets	$	1,678	$	3,051
Foreign currency contracts						Deferred charges and other assets		50		—
								1,728		3,051
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets		55		30	Other current assets		53		322
Foreign currency contracts	Deferred charges and other assets		43		—	Deferred charges and other assets		52		234
Embedded derivatives	Other current assets		—		10
Total derivative assets		$	3,265	$	1,078		$	1,833	$	3,607

		Derivative Liabilities					Derivative Liabilities
	Balance Sheet Location	June 30, 2019		December 31, 2018		Balance Sheet Location	June 30, 2020		December 31, 2019
Derivatives designated as cash flow hedging instruments:
Foreign currency contracts	Other accrued expenses and current liabilities	$	7	$	2,604	Other accrued expenses and current liabilities	$	622	$	138
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other accrued expenses and current liabilities		165		247	Other accrued expenses and current liabilities		—		113
Foreign currency contracts	Other long-term liabilities		—		44
Embedded derivatives	Other accrued expenses and current liabilities		—		8
Embedded derivatives	Other long-term liabilities		—		361
Total derivative liabilities		$	172	$	3,264		$	622	$	251

The following table presents the effect of the Company’s derivative instruments included in the accompanying condensed consolidated financial statements (in thousands):

	Location of Gains	Three Months Ended June 30,						Six Months Ended June 30,						Location of Gains	Three Months Ended June 30,						Six Months Ended June 30,
	(Losses) in Net Income	2019			2018			2019			2018			(Losses) in Net Income	2020			2019			2020			2019
Revenues		$	389,006		$	396,785		$	791,931		$	811,156			$	416,833		$	389,006		$	827,999		$	791,931

Derivatives designated as cash flow hedging instruments:
Gains (losses) recognized in AOCI:
Foreign currency contracts			3,586			(305	)		4,769			(3,001	)			1,179			3,586			868			4,769
Gains (losses) reclassified from AOCI:
Foreign currency contracts	Revenues		631			193			130			436		Revenues		1,438			631			2,364			130
Derivatives not designated as hedging instruments:						��
Gains (losses) recognized from foreign currency contracts	Other income (expense), net	$	(432	)	$	(93	)	$	(465	)	$	(1,262	)	Other income (expense), net	$	(164	)	$	(432	)	$	(410	)	$	(465	)
Gains (losses) recognized from embedded derivatives	Other income (expense), net		—			(252	)		—			(165	)
		$	(432	)	$	(345	)	$	(465	)	$	(1,427	)

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):

The mutual funds held in rabbi trust were ~~66%~~62% equity-based and ~~34%~~38% debt-based as of June 30, ~~2019.~~2020. Net investment gains (losses) included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018		2020		2019		2020			2019
Net realized gains (losses) from sale of trading securities	$	5	$	27	$	66	$	32	$	12	$	5	$	62		$	66
Dividend and interest income		53		43		82		68		48		53		81			82
Net unrealized holding gains (losses)		368		72		1,458		17		1,756		368		(384	)		1,458
	$	426	$	142	$	1,606	$	117	$	1,816	$	426	$	(241	)	$	1,606

On February 14, 2019, the Company entered into a $500 million senior revolving credit facility (the “2019 Credit Agreement”) with a group of lenders, KeyBank National Association, as Administrative Agent, Swing Line Lender and Issuing Lender (“KeyBank”), the lenders named therein, and KeyBanc Capital Markets Inc. as Lead Arranger and Sole Book Runner. The 2019 Credit Agreement replaced the Company’s previous $440 million revolving credit facility dated May 12, 2015 (the “2015 Credit Agreement”), which agreement was terminated simultaneous with entering into the 2019 Credit Agreement. The 2019 Credit Agreement is subject to certain borrowing limitations and includes certain customary financial and restrictive covenants.

The 2019 Credit Agreement includes a $200 million alternate-currency sub-facility, a $15 million swingline sub-facility and a $15 million letter of credit sub-facility, and may be used for general corporate purposes including acquisitions, share repurchases, working capital support and letters of credit, subject to certain limitations. The Company is not currently aware of any inability of its lenders to provide access to the full commitment of funds that exist under the revolving credit facility, if necessary. However, there can be no assurance that such facility will be available to the Company, even though it is a binding commitment of the financial institutions.

~~The 2019 Credit Agreement matures on February 14, 2024, and had outstanding borrowings of $92.0~~ ~~million at June 30, 2019 and the 2015 Credit Agreement had outstanding borrowings of $102.0~~ ~~million at December 31, 2018, included in “Long-term debt” in the accompanying Condensed Consolidated Balance Sheets.~~

Borrowings under the 2019 Credit Agreement bear interest at the rates set forth in the 2019 Credit Agreement. In addition, the Company is required to pay certain customary fees, including a commitment fee determined quarterly based on the Company’s leverage ratio and due quarterly in arrears as calculated on the average unused amount of the 2019 Credit Agreement.

The 2019 Credit Agreement is guaranteed by all the Company’s existing and future direct and indirect material U.S. subsidiaries and secured by a pledge of 100% of the non-voting and 65% of the voting capital stock of all the direct foreign subsidiaries of the Company and those of the guarantors.

In February 2019, the Company paid debt issuance costs of $1.1 million for the 2019 Credit Agreement, which is deferred and amortized over the term of the loan, along with the debt issuance costs of $0.3 million related to the 2015 Credit Agreement.

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

~~(1) Excludes the amortization of deferred loan fees and includes the commitment fee.~~

~~In January 2018, the Company repaid $175.0 million of long-term debt outstanding under its 2015 Credit Agreement, primarily using funds repatriated from its foreign subsidiaries.~~

The components of accumulated other comprehensive income (loss) consist of the following (in thousands):

	Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on Net Investment Hedge		Unrealized Gain (Loss) on Cash Flow Hedging Instruments			Unrealized Actuarial Gain (Loss) Related to Pension Liability			Unrealized Gain (Loss) on Postretirement Obligation			Total			Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on Net Investment Hedge		Unrealized Gain (Loss) on Cash Flow Hedging Instruments			Unrealized Actuarial Gain (Loss) Related to Pension Liability			Unrealized Gain (Loss) on Postretirement Obligation			Total
Balance at January 1, 2018	$	(36,315	)	$	1,046	$	2,471		$	1,574		$	120		$	(31,104	)
Balance at January 1, 2019																		$	(58,253	)	$	1,046	$	(1,864	)	$	2,256		$	40		$	(56,775	)
Pre-tax amount		(22,158	)		—		(4,287	)		783			—			(25,662	)		5,462			—		6,978			108			—			12,548
Tax (provision) benefit		—			—		84			47			—			131			—			—		20			(23	)		—			(3	)
Reclassification of (gain) loss to net income		—			—		6			(66	)		(80	)		(140	)		—			—		(2,719	)		(100	)		48			(2,771	)
Foreign currency translation		220			—		(138	)		(82	)		—			—			42			—		(125	)		83			—			—
Balance at December 31, 2018		(58,253	)		1,046		(1,864	)		2,256			40			(56,775	)
Balance at December 31, 2019																			(52,749	)		1,046		2,290			2,324			88			(47,001	)
Pre-tax amount		3,680			—		4,769			—			—			8,449			(12,979	)		—		868			—			—			(12,111	)
Tax (provision) benefit		—			—		(101	)		6			—			(95	)		—			—		(184	)		7			—			(177	)
Reclassification of (gain) loss to net income		—			—		(85	)		(48	)		(10	)		(143	)		—			—		(2,294	)		(53	)		(44	)		(2,391	)
Foreign currency translation		21			—		(83	)		62			—			—			(60	)		—		15			45			—			—
Balance at June 30, 2019	$	(54,552	)	$	1,046	$	2,636		$	2,276		$	30		$	(48,564	)
Balance at June 30, 2020																		$	(65,788	)	$	1,046	$	695		$	2,323		$	44		$	(61,680	)

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

	Three Months Ended June 30,					Six Months Ended June 30,					Statements of Operations	Three Months Ended June 30,						Six Months Ended June 30,						Statements of Operations
	2019			2018		2019			2018		Location	2020			2019			2020			2019			Location
Gain (loss) on cash flow hedging instruments: ⁽¹⁾
Pre-tax amount	$	631		$	193	$	130		$	436	Revenues	$	1,438		$	631		$	2,364		$	130		Revenues
Tax (provision) benefit		(35	)		17		(45	)		24	Income taxes		(42	)		(35	)		(70	)		(45	)	Income taxes
Reclassification to net income		596			210		85			460			1,396			596			2,294			85
Actuarial gain (loss) related to pension liability: ⁽²⁾
Pre-tax amount		21			14		42			29	Other income (expense), net		23			21			46			42		Other income (expense), net
Tax (provision) benefit		3			3		6			6	Income taxes		4			3			7			6		Income taxes
Reclassification to net income		24			17		48			35			27			24			53			48
Gain (loss) on postretirement obligation:^(2),(3)
Gain (loss) on postretirement obligation:⁽²⁾⁽³⁾
Reclassification to net income		5			10		10			20	Other income (expense), net		22			5			44			10		Other income (expense), net
	$	625		$	237	$	143		$	515		$	1,445		$	625		$	2,391		$	143

(2) See Note ~~14,~~13, Defined Benefit Pension Plan and Postretirement Benefits, for further information.

As discussed in Note ~~11,~~10, Income Taxes, for periods prior to December 31, 2017, any remaining reinvested earnings and outside basis differences associated with the Company’s investments in its foreign subsidiaries are considered to be indefinitely reinvested and no provision for income taxes on those earnings or translation adjustments has been provided.

The increase in the effective tax rate for the three months ended June 30, ~~2019~~2020 as compared to ~~2018~~2019 was primarily due to an election made during the three months ended June 30, 2019 to step up tax basis in a ~~$3.2~~foreign subsidiary which resulted in a $0.6 million ~~decrease in benefit associated with the settlement of~~discrete tax ~~audits and ancillary issues recognized in the prior period.~~benefit. The increase was also affected by shifts in earnings among the various jurisdictions in which the Company operates. Several additional factors, none of which were individually material, also impacted the rate. The difference between the Company’s effective tax rate as compared to the U.S. statutory federal tax rate of 21.0% was primarily due to the ~~aforementioned factors as well as~~tax impact of permanent differences, state income and foreign withholding taxes, partially offset by the recognition of net tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions and tax ~~credits, offset by the tax impact of permanent differences, state income and foreign withholding taxes.~~credits.

The increase in the effective tax rate for the six months ended June 30, ~~2019~~2020 as compared to ~~2018~~2019 was primarily due to ~~a $3.4 million decrease in discrete tax benefit from~~ the aforementioned ~~settlement of~~election to step up tax ~~audits and ancillary matters. The increase was also affected~~basis in a foreign subsidiary, partially offset by shifts in earnings among the various jurisdictions in which the Company operates. Several additional factors, none of which were individually material, also impacted the rate. The difference between the Company’s effective tax rate as compared to the U.S. statutory federal tax rate of 21.0% was primarily due to the ~~aforementioned factors as well as~~tax impact of permanent differences, state income and foreign withholding taxes, partially offset by the recognition of net tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions and tax ~~credits, offset by the tax impact of permanent differences, state income and foreign withholding taxes.~~

The 2017 Tax Reform Act made significant changes to the Internal Revenue Code, including, but not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a ~~participation exemption regime~~, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. The Company estimated its provision for income taxes in accordance with the 2017 Tax Reform Act and guidance available upon enactment, and as a result recorded $32.7 million as additional income tax expense in the fourth quarter of 2017, the period in which the

legislation was signed into law. The $32.7 million estimate included the provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings of $32.7 million based on cumulative foreign earnings of $531.8 million and $1.0 million of foreign withholding taxes on certain anticipated distributions. The provisional tax expense was partially offset by a provisional benefit of $1.0 million related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future. The Company finalized the computation during the fourth quarter of 2018 and recorded a $~~0.2~~ ~~million decrease during the year ended December 31, 2018 to the original provisional amount recorded.~~credits.

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

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

~~The Company has no significant tax jurisdictions under audit; however, the Company~~ is currently under audit in several tax jurisdictions. The Company believes it ~~is adequately reserved for~~has adequate reserves related to all matters pertaining to these audits. Should the ~~remaining~~Company experience unfavorable outcomes from these audits, ~~and their resolution is not expected to~~such outcomes could have a ~~material~~significant impact on its financial ~~conditions and~~condition, results of ~~operations.~~operations and cash flows.

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 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Basic:
Weighted average common shares outstanding		42,038		42,125		42,107		42,035		40,318		42,038		40,726		42,107
Diluted:
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust		56		35		93		162		62		56		131		93
Total weighted average diluted shares outstanding		42,094		42,160		42,200		42,197		40,380		42,094		40,857		42,200
Anti-dilutive shares excluded from the diluted earnings per share calculation		207		31		164		6		101		207		51		164

On August 18, 2011, the Company’s Board of Directors (the “Board”) authorized the Company to purchase up to 5.0 million shares of its outstanding common stock (the “2011 Share Repurchase Program”). On March 16, 2016, the Board authorized an increase of 5.0 million shares to the 2011 Share Repurchase Program for a total of 10.0 million shares. A total of ~~6.0~~7.8 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 2011 Share Repurchase Program ~~during the three and six months ended June 30, 2019~~ were as follows ~~(none in 2018)~~ (in thousands, except per share amounts):

	Total Number of Shares		Range of Prices Paid Per Share				Total Cost of Shares		Total Number of						Total Cost of
For the Three and Six Months Ended:	Repurchased		Low		High		Repurchased
									Shares		Range of Prices Paid Per Share				Shares
									Repurchased		Low		High		Repurchased
Three Months Ended:
June 30, 2020										500	$	23.90	$	27.94	$	13,019
June 30, 2019		771	$	24.72	$	27.30	$	20,178		771	$	24.72	$	27.30	$	20,178
Six Months Ended:
June 30, 2020										1,360	$	23.33	$	31.91	$	35,928
June 30, 2019										771	$	24.72	$	27.30	$	20,178

The Company enters into various purchase commitment agreements with third-party vendors in the ordinary course of business whereby the Company commits 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.

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

The Company received a state audit assessment and is currently rebutting the position. The Company has determined that the likelihood of a liability is reasonably possible and developed a range of possible loss up to ~~$1.4~~$1.9 million, net of federal ~~benefit.~~benefit, as of June 30, 2020.

The Company, from time to time, is involved in legal actions arising in the ordinary course of business.

With respect to any such other currently pending matters, management believes that the Company has adequate legal defenses and/or, when possible and appropriate, has provided adequate accruals related to those matters such that the ultimate outcome will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

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

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Service cost	$	100		$	109		$	198		$	223		$	108		$	100		$	213		$	198
Interest cost		62			48			124			98			52			62			103			124
Recognized actuarial (gains)		(21	)		(14	)		(42	)		(29	)		(23	)		(21	)		(46	)		(42	)
	$	141		$	143		$	280		$	292		$	137		$	141		$	270		$	280

The Company’s service cost for its qualified pension plans was included in “Direct salaries and related costs” and “General and administrative” costs in its Condensed Consolidated Statements of Operations for the three and six months ended June 30, ~~3019~~3020 and ~~2018.~~2019. The remaining components of net periodic benefit cost were included in ~~“Other~~

“Other income (expense), net” in the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, ~~2019~~2020 and ~~2018.~~2019.

The Company maintains a 401(k) plan covering defined employees who meet established eligibility ~~requirements.~~requirements, which were last modified on September 30, 2019, effective for contributions made beginning January 1, 2020. Under the current plan provisions, the Company matches 100% of the first 3% and 50% of the next 2% of participant contributions to a maximum matching amount of 4% of participant compensation for most of the Company’s employees. Additionally, participants whose salaries are above a certain threshold are eligible for a Company match of 50% of the first 4% for those participants’ 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):

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):

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

The Company’s Board of Directors adopted the Sykes Enterprises, Incorporated 2019 Equity Incentive Plan (the “2019 Plan”) on March 12, 2019. The 2019 Plan was approved by the shareholders at the May 2019 annual shareholder meeting. The 2019 Plan replaced and superseded the Company’s 2011 Equity Incentive Plan (the “2011 Plan”). The outstanding awards granted under the 2011 Plan will remain in effect until their exercise, expiration or termination. The 2019 Plan permits the grant of restricted stock, stock appreciation rights, stock options and other stock-based awards to certain employees of, 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.

The Company’s stock-based compensation plans include the 2019 Plan for employees and certain non-employees, the Non-Employee Director Fee Plan for non-employee directors and the Deferred Compensation Plan for certain eligible employees. Stock-based awards under these plans may consist of common stock, stock options, cash-settled or stock-settled stock appreciation rights, restricted stock and other stock-based awards. The Company issues stock and uses treasury stock to satisfy stock option exercises or vesting stock awards. The methods and assumptions used in the determination of the fair value of stock-based awards are consistent with those described in the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The following table summarizes the stock-based compensation expense (primarily in the Americas) and income tax benefits related to the stock-based compensation, both plan and non-plan related (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Stock-based compensation (expense) ⁽¹⁾	$	(2,200	)	$	(1,673	)	$	(4,090	)	$	(3,750	)	$	(2,042	)	$	(2,200	)	$	(3,902	)	$	(4,090	)
Income tax benefit ⁽²⁾		528			402			982			900			490			528			936			982

(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.

During the six months ended June 30, ~~2019,~~2020, the Company granted ~~338,732~~0.4 million performance-based restricted ~~shares~~shares/restricted stock units and ~~169,367 employment-based~~ 0.2 million service-based restricted shares/restricted stock units under the Company’s ~~2011~~2019 Plan, all at a weighted average grant-date fair value of ~~$28.43~~$25.60 per share.

The Company operates within ~~two~~2 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~~2 segments to effectively manage the business and support the customer care needs of every client and to respond to the demands of the Company’s global customers.

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

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

	Americas			EMEA			Other ⁽¹⁾			Consolidated			Americas			EMEA			Other ⁽¹⁾			Consolidated
Three Months Ended June 30, 2020:
Revenues													$	339,272		$	77,561		$	—		$	416,833
Percentage of revenues														81.4	%		18.6	%		0.0	%		100.0	%
Depreciation, net													$	10,088		$	1,818		$	724		$	12,630
Amortization of intangibles													$	3,281		$	812		$	—		$	4,093
Income (loss) from operations													$	40,479		$	4,078		$	(17,344	)	$	27,213
Total other income (expense), net																				1,402			1,402
Income taxes																				(6,385	)		(6,385	)
Net income																						$	22,230
Three Months Ended June 30, 2019:
Revenues	$	310,307		$	78,676		$	23		$	389,006		$	310,307		$	78,676		$	23		$	389,006
Percentage of revenues		79.8	%		20.2	%		0.0	%		100.0	%		79.8	%		20.2	%		0.0	%		100.0	%
Depreciation, net	$	10,659		$	1,628		$	765		$	13,052		$	10,659		$	1,628		$	765		$	13,052
Amortization of intangibles	$	3,288		$	839		$	—		$	4,127		$	3,288		$	839		$	—		$	4,127
Income (loss) from operations	$	26,584		$	4,661		$	(15,990	)	$	15,255		$	26,584		$	4,661		$	(15,990	)	$	15,255
Total other income (expense), net								(1,520	)		(1,520	)								(1,520	)		(1,520	)
Income taxes								(2,466	)		(2,466	)								(2,466	)		(2,466	)
Net income										$	11,269											$	11,269
Three Months Ended June 30, 2018:
Six Months Ended June 30, 2020:
Revenues	$	327,041		$	69,720		$	24		$	396,785		$	672,198		$	155,794		$	7		$	827,999
Percentage of revenues		82.4	%		17.6	%		0.0	%		100.0	%		81.2	%		18.8	%		0.0	%		100.0	%
Depreciation, net	$	12,335		$	1,476		$	749		$	14,560		$	20,121		$	3,523		$	1,447		$	25,091
Amortization of intangibles	$	3,415		$	214		$	—		$	3,629		$	6,567		$	1,645		$	—		$	8,212
Income (loss) from operations	$	19,824		$	2,220		$	(15,584	)	$	6,460		$	76,258		$	7,258		$	(31,909	)	$	51,607
Total other income (expense), net								(1,511	)		(1,511	)								(3,848	)		(3,848	)
Income taxes								2,229			2,229									(11,611	)		(11,611	)
Net income										$	7,178											$	36,148
Six Months Ended June 30, 2019:
Revenues	$	635,084		$	156,804		$	43		$	791,931		$	635,084		$	156,804		$	43		$	791,931
Percentage of revenues		80.2	%		19.8	%		0.0	%		100.0	%		80.2	%		19.8	%		0.0	%		100.0	%
Depreciation, net	$	22,166		$	3,254		$	1,529		$	26,949		$	22,166		$	3,254		$	1,529		$	26,949
Amortization of intangibles	$	6,726		$	1,687		$	—		$	8,413		$	6,726		$	1,687		$	—		$	8,413
Income (loss) from operations	$	56,652		$	6,152		$	(30,797	)	$	32,007		$	56,652		$	6,152		$	(30,797	)	$	32,007
Total other income (expense), net								(1,903	)		(1,903	)								(1,903	)		(1,903	)
Income taxes								(7,148	)		(7,148	)								(7,148	)		(7,148	)
Net income										$	22,956											$	22,956
Six Months Ended June 30, 2018:
Revenues	$	667,762		$	143,347		$	47		$	811,156
Percentage of revenues		82.3	%		17.7	%		0.0	%		100.0	%
Depreciation, net	$	25,018		$	2,887		$	1,491		$	29,396
Amortization of intangibles	$	7,407		$	435		$	—		$	7,842
Income (loss) from operations	$	45,688		$	6,859		$	(31,803	)	$	20,744
Total other income (expense), net								(2,391	)		(2,391	)
Income taxes								(227	)		(227	)
Net income										$	18,126

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

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

The following table represents a disaggregation of revenue from contracts with customers by ~~geographic~~delivery location and by the reportable segment ~~for each category~~ (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Americas:
United States	$	144,736	$	165,648	$	306,768	$	337,094	$	164,773	$	144,736	$	322,437	$	306,768
The Philippines		58,793		56,571		114,871		116,657		62,567		58,793		127,006		114,871
Costa Rica		31,579		30,973		62,296		63,048		39,250		31,579		74,131		62,296
Canada		24,506		24,828		50,070		52,017		22,955		24,506		48,196		50,070
El Salvador		20,067		20,584		40,543		40,595		16,902		20,067		35,622		40,543
People's Republic of China		8,905		8,149		17,808		17,497
Australia		7,328		7,700		14,957		15,402
Mexico		7,075		5,632		13,632		11,950
Colombia		4,746		4,636		9,444		8,691
Other		2,572		2,320		4,695		4,811		32,825		30,626		64,806		60,536
Total Americas		310,307		327,041		635,084		667,762		339,272		310,307		672,198		635,084
EMEA:
Germany		22,813		22,404		46,677		46,579		24,116		22,813		48,767		46,677
United Kingdom		17,733		11,960		34,618		25,307
Sweden		13,401		13,674		27,041		27,804
Romania		7,881		8,191		16,393		16,327
Other		16,848		13,491		32,075		27,330		53,445		55,863		107,027		110,127
Total EMEA		78,676		69,720		156,804		143,347		77,561		78,676		155,794		156,804
Total Other		23		24		43		47		—		23		7		43
	$	389,006	$	396,785	$	791,931	$	811,156	$	416,833	$	389,006	$	827,999	$	791,931

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

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Foreign currency transaction gains (losses)	$	(361	)	$	641		$	(537	)	$	2,089		$	48		$	(361	)	$	(1,558	)	$	(537	)
Gains (losses) on derivative instruments not designated as hedges		(432	)		(345	)		(465	)		(1,427	)		(164	)		(432	)		(410	)		(465	)
Net investment gains (losses) on investments held in rabbi trust		426			142			1,606			117			1,816			426			(241	)		1,606
Other miscellaneous income (expense)		(166	)		(975	)		(527	)		(1,161	)		97			(166	)		(787	)		(527	)
	$	(533	)	$	(537	)	$	77		$	(382	)	$	1,797		$	(533	)	$	(2,996	)	$	77

In January 2008, the Company entered into a lease for a customer engagement center located in Kingstree, South Carolina. The landlord, Kingstree Office One, LLC, is an entity controlled by John H. Sykes, the founder, former Chairman and former Chief Executive Officer of the Company and the father of Charles Sykes, President and Chief Executive Officer of the Company. The lease payments on the 20-year lease were negotiated at or below market rates, and the lease is cancellable at the option of the Company. The Company paid $0.1 million to the landlord during both the three months ended June 30, ~~2019~~2020 and ~~2018~~2019, and $0.2 million during both the six months ended June 30, ~~2019~~2020 and ~~2018~~2019, under the terms of the lease.

The Company contracted to receive services from XSell, an equity method investee, for $0.1 million during the three months ended June 30, 2018 (none in 2019), and less than $0.1 million and $0.1 million during the six months ended June 30, 2019 and 2018, respectively. These related party transactions occurred in the normal course of business on terms and conditions that are similar to those of transactions with unrelated parties and, therefore, were measured at the exchange amount.

To the Shareholders and the Board of Directors of Sykes Enterprises, Incorporated

We have reviewed the accompanying condensed consolidated balance sheet of Sykes Enterprises, Incorporated and subsidiaries (the "Company") as of June 30, ~~2019,~~2020, the related condensed consolidated statements of operations, comprehensive income (loss), and changes in shareholders’ equity ~~and cash flows~~ for the ~~three-~~three-month and six-month periods ended June 30, 2020 and 2019, and ~~2018,~~of cash flows for the six-month periods ended June 30, 2020 and 2019, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with 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) (PCAOB), the consolidated balance sheet of the Company as of December 31, ~~2018,~~2019, 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 ~~26, 2019,~~27, 2020, 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, ~~2018,~~2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

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

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

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, ~~2018,~~2019, 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.~~us, including our belief that our operations have not been materially impacted by the April 2020 cyber incident, as discussed in Note 18, Subsequent Event, in our Form 10-Q for the three months ended March 31, 2020, as filed with the SEC. 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. Further, statements about the effects of the novel coronavirus (“COVID-19”) pandemic on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our clients, third parties and us. These statements are not guarantees of future performance and are subject to a number of risks and uncertainties, including those discussed below and elsewhere in this report. Our actual results may differ materially from what is expressed or forecasted in such forward-looking statements, and undue reliance should not be placed on such statements. All forward-looking statements are made as of the date hereof, and we undertake no obligation to update any such forward-looking statements, whether as a result of new information, future events or otherwise.

Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to: (i) the impact of economic recessions in the U.S. and other parts of the world, (ii) fluctuations in global business conditions and the global economy, (iii) currency fluctuations, (iv) the timing of significant orders for our products and services, (v) variations in the terms and the elements of services offered under our standardized contract including those for future bundled service offerings, (vi) changes in applicable accounting principles or interpretations of such principles, (vii) difficulties or delays in implementing our bundled service offerings, (viii) failure to achieve sales, marketing and other objectives, (ix) construction delays of new or expansion of existing customer engagement centers, (x) delays in our ability to develop new products and services and market acceptance of new products and services, (xi) rapid technological change, (xii) loss or addition of significant clients, (xiii) political and country-specific risks inherent in conducting business abroad, (xiv) our ability to attract and retain key management personnel, (xv) our ability to continue the growth of our support service revenues through additional technical and customer engagement centers, (xvi) our ability to further penetrate into vertically integrated markets, (xvii) our ability to expand our global presence through strategic alliances and selective acquisitions, (xviii) our ability to continue to establish a competitive advantage through sophisticated technological capabilities, (xix) the ultimate outcome of any lawsuits, (xx) our ability to recognize deferred revenue through delivery of products or satisfactory performance of services, (xxi) our dependence on the demand for outsourcing, (xxii) risk of interruption of technical and customer engagement center operations due to such factors as fire, earthquakes, inclement weather and other disasters, power failures, telecommunication failures, unauthorized intrusions, computer viruses and other emergencies, (xxiii) the existence of substantial competition, (xxiv) the early termination of contracts by clients, (xxv) the ability to obtain and maintain grants and other incentives (tax or otherwise), (xxvi) the potential of cost savings/synergies associated with acquisitions not being realized, or not being realized within the anticipated time period, (xxvii) risks related to the integration of the acquisitions and the impairment of any related goodwill, and (xxviii) other risk factors that are identified in our most recent Annual Report on Form 10-K for the year ended December 31, 2019, including factors identified under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We are a leading provider of multichannel demand generation and global comprehensive customer engagement services. We provide differentiated full lifecycle customer engagement solutions and services primarily to Global 2000 companies and their end customers, principally in the financial services, communications, technology,

transportation & leisure, healthcare and other industries. Our differentiated full lifecycle management services platform effectively engages customers at every touchpoint within the customer journey, including digital marketing and acquisition, sales expertise, customer service, technical support and retention, many of which can be optimized by a suite of robotic process ~~optimization~~automation (“RPA”) and artificial intelligence (“AI”) solutions. We serve our clients through two geographic operating regions: the Americas (United States, Canada, Latin America, Australia and the Asia Pacific Rim) and EMEA (Europe, the Middle East and Africa). Our Americas and EMEA regions primarily provide customer engagement solutions and services with an emphasis on inbound multichannel demand generation, customer service and technical support to our clients’ customers. These services, which represented ~~97.4%~~98.9% and ~~99.4%~~97.4% of consolidated revenues during the three months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and 98.7% and 97.8% ~~and~~

~~99.4% of consolidated revenues~~ during the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, are delivered through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. We also provide various enterprise support services in the United States (“U.S.”) that include services for our clients’ internal support operations, from technical staffing services to outsourced corporate help desk services. In Europe, we also provide fulfillment services, which include order processing, payment processing, inventory control, product delivery and product returns handling. Additionally, through our acquisition of RPA provider Symphony Ventures Ltd (“Symphony”) coupled with our investment in AI through XSell Technologies, Inc. (“XSell”), we also provide a suite of solutions such as consulting, implementation, hosting and managed services that optimizes our differentiated full lifecycle management services platform. Our complete service offering helps our clients acquire, retain and increase the lifetime value of their customer relationships. We have developed an extensive global reach with customer engagement centers across six continents, including North America, South America, Europe, Asia, Australia and Africa. We deliver cost-effective solutions that generate demand, enhance the customer service experience, promote stronger brand loyalty, and bring about high levels of performance and profitability.

On March 11, 2020, the World Health Organization characterized COVID-19 a pandemic. The global nature, rapid spread and continually evolving response by governments throughout the world to combat the spread has had a negative impact on the global economy. Certain of our customer engagement centers have been impacted by local government actions restricting facility access or are operating at lower capacity utilization levels to achieve social distancing. We are committed to the health and safety of our workforce and ensuring business continuity for the brands we serve. In response, we have shifted as many employees as possible to a work-at-home model. As of the middle of July 2020, approximately 95% of agents assigned to our brick-and-mortar facilities are working at our centers or from home across the world with 70% having transitioned to a work-at-home model. Approximately 5% of our agents lack the technical infrastructure to work from home. Our operations in the Philippines, El Salvador and Mexico have been most impacted by the governmental restrictions.

We continue to closely monitor the prevalence of COVID-19 in the communities where our centers are located as well as guidance from public health authorities, federal and local agencies and municipalities. We will work with employees and clients to transition agents back to our centers based on that guidance, but risk further disruption to our business if COVID-19 returns or governments reimpose restrictions.

During the first quarter of 2019, we initiated a restructuring plan to simplify and refine our operating model in the U.S. (the “Americas 2019 Exit Plan”), in part to improve agent attrition and absenteeism. The Americas 2019 Exit Plan ~~includes, but is not limited to, closing~~included the closure of customer ~~contact management~~engagement centers, ~~consolidating~~the consolidation of leased space in various locations in the U.S. and management reorganization. We ~~expect to finalize~~finalized the actions under the Americas 2019 Exit Plan ~~by December~~as of September 30, 2019. ~~Annualized savings of $7.1 million are expected as a result of these actions, primarily related to reduced general and administrative costs and lower depreciation.~~

During the second quarter of 2018, we initiated a restructuring plan to manage and optimize capacity utilization, which included ~~closing~~the closure of customer ~~contact management~~engagement centers and ~~consolidating~~the consolidation of leased space in various locations in the U.S. and Canada (the “Americas 2018 Exit Plan”). We finalized the site closures under the Americas 2018 Exit Plan as of December 2018, which resulted in a decrease of approximately 5,000 seats.

See Note 4, Costs Associated with Exit ~~and~~or Disposal Activities, in the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.

On December 20, 2017, the Tax Cuts and Jobs Act (the “2017 Tax Reform Act”) was approved by Congress and received presidential approval on December 22, 2017. In general, the 2017 Tax Reform Act reduced the U.S. federal corporate tax rate from 35% to 21%, effective in 2018. The 2017 Tax Reform Act moved from a worldwide business taxation approach to a participation exemption regime. The 2017 Tax Reform Act also imposed base-erosion prevention measures on non-U.S. earnings of U.S. entities, as well as a one-time mandatory deemed repatriation tax on accumulated non-U.S. earnings. The impact of the 2017 Tax Reform Act on our consolidated financial results began with the fourth quarter of 2017, the period of enactment. See Note 11, Income Taxes, in the accompanying “Notes to Condensed Consolidated Financial Statements.”

On November 1, 2018, we completed the acquisition of Symphony. Symphony provides RPA services, offering RPA consulting, implementation, hosting and managed services for front, middle and back-office processes. Of the total purchase price of GBP 52.4 million ($67.5 million), GBP 44.6 million ($57.6 million) was paid upon closing using cash on hand as well as $31.0 million of additional borrowings under our credit agreement, while the acquisition date present value of the remaining GBP 7.9 million ($10.0 million) of the purchase price has been deferred and will be paid in equal installments over three years, on or around November 1, 2019, 2020 and 2021. The results of Symphony’s operations have been reflected in our consolidated financial statements since November 1, 2018.

On July 9, 2018, we completed the acquisition of WhistleOut Pty Ltd and WhistleOut Inc. (together, “WhistleOut”). WhistleOut is a consumer comparison platform focused on mobile, broadband and pay TV services, principally across Australia and the U.S. The acquisition broadens our digital marketing capabilities geographically and extends our home services product portfolio. The total purchase price of AUD 30.3 million ($22.5 million) was funded by borrowings under our credit agreement. The results of WhistleOut’s operations have been reflected in our consolidated financial statements since July 9, 2018.

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

	Three Months Ended June 30,									Six Months Ended June 30,									Three Months Ended June 30,									Six Months Ended June 30,
(in thousands)	2019			2018			$ Change			2019			2018			$ Change			2020			2019			$ Change			2020			2019			$ Change
Revenues	$	389,006		$	396,785		$	(7,779	)	$	791,931		$	811,156		$	(19,225	)	$	416,833		$	389,006		$	27,827		$	827,999		$	791,931		$	36,068
Operating expenses:
Direct salaries and related costs		252,161			264,924			(12,763	)		513,889			539,996			(26,107	)		268,433			252,161			16,272			535,378			513,889			21,489
General and administrative		104,282			102,037			2,245			208,962			204,477			4,485			102,664			104,282			(1,618	)		205,911			208,962			(3,051	)
Depreciation, net		13,052			14,560			(1,508	)		26,949			29,396			(2,447	)		12,630			13,052			(422	)		25,091			26,949			(1,858	)
Amortization of intangibles		4,127			3,629			498			8,413			7,842			571			4,093			4,127			(34	)		8,212			8,413			(201	)
Impairment of long-lived assets		129			5,175			(5,046	)		1,711			8,701			(6,990	)		1,800			129			1,671			1,800			1,711			89
Total operating expenses		373,751			390,325			(16,574	)		759,924			790,412			(30,488	)		389,620			373,751			15,869			776,392			759,924			16,468
Income from operations		15,255			6,460			8,795			32,007			20,744			11,263			27,213			15,255			11,958			51,607			32,007			19,600

Other income (expense):
Interest income		192			175			17			377			346			31			165			192			(27	)		428			377			51
Interest (expense)		(1,179	)		(1,149	)		(30	)		(2,357	)		(2,355	)		(2	)		(560	)		(1,179	)		619			(1,280	)		(2,357	)		1,077
Other income (expense), net		(533	)		(537	)		4			77			(382	)		459			1,797			(533	)		2,330			(2,996	)		77			(3,073	)
Total other income (expense), net		(1,520	)		(1,511	)		(9	)		(1,903	)		(2,391	)		488			1,402			(1,520	)		2,922			(3,848	)		(1,903	)		(1,945	)

Income before income taxes		13,735			4,949			8,786			30,104			18,353			11,751			28,615			13,735			14,880			47,759			30,104			17,655
Income taxes		2,466			(2,229	)		4,695			7,148			227			6,921			6,385			2,466			3,919			11,611			7,148			4,463
Net income	$	11,269		$	7,178		$	4,091		$	22,956		$	18,126		$	4,830		$	22,230		$	11,269		$	10,961		$	36,148		$	22,956		$	13,192

Three Months Ended June 30, ~~2019~~2020 Compared to Three Months Ended June 30, ~~2018~~2019

	Three Months Ended June 30,									Three Months Ended June 30,
	2019			2018						2020			2019
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change			Amount		% of Revenues	Amount		% of Revenues	$ Change
Americas	$	310,307	79.8%	$	327,041	82.4%	$	(16,734	)	$	339,272	81.4%	$	310,307	79.8%	$	28,965
EMEA		78,676	20.2%		69,720	17.6%		8,956			77,561	18.6%		78,676	20.2%		(1,115	)
Other		23	0.0%		24	0.0%		(1	)		-	0.0%		23	0.0%		(23	)
Consolidated	$	389,006	100.0%	$	396,785	100.0%	$	(7,779	)	$	416,833	100.0%	$	389,006	100.0%	$	27,827

Consolidated revenues ~~decreased $7.8~~increased $27.8 million, or ~~2.0%~~7.2%, for the three months ended June 30, ~~2019~~2020 from the comparable period in ~~2018.~~2019.

The increase in Americas’ revenues was due to higher volumes from existing clients of $40.6 million and new clients of $11.4 million, partially offset by end-of-life client programs of $21.5 million primarily in the communications vertical and an unfavorable foreign currency impact of $1.6 million. Revenues from our offshore operations represented 42.6% of Americas’ revenues in 2020, compared to 43.1% for the comparable period in 2019.

The decrease in ~~Americas’~~EMEA’s revenues was due to end-of-life client programs of ~~$17.8~~$2.6 million ~~lower volumes from existing clients of $7.8 million~~primarily in the communications and other verticals and an unfavorable foreign currency impact of ~~$2.6~~$2.4 million, partially offset by new clients of ~~$11.5 million. Revenues from our offshore operations represented 43.1% of Americas’ revenues in 2019, compared to 39.4% for the comparable period in 2018.~~

~~The increase in EMEA’s revenues~~ ~~was due to new clients of $9.0~~$2.5 million and higher volumes from existing clients of ~~$6.3 million, partially offset by end-of-life client programs~~$1.4 million.

On a consolidated basis, we had 48,600 brick-and-mortar seats as of ~~$1.2 million~~June 30, 2020, an increase of 1,200 seats from the comparable period in 2019. Virtually all of this additional capacity was demand driven and was contracted at the start of the year. On a segment basis, 40,400 seats were located in the Americas, an ~~unfavorable foreign currency impact~~increase of ~~$5.1 million.~~700 seats from the comparable period in 2019, and 8,200 seats were located in EMEA, an increase of 500 seats from the comparable period in 2019.

On a consolidated basis, ~~we had 47,400 brick-and-mortar seats as of June 30, 2019, a decrease of 3,800 seats from~~the capacity utilization rate was 73%, compared to 71% in the comparable period in ~~2018,~~2019, primarily ~~due~~driven by higher demand coupled with our ability to rapidly mobilize our brick-and-mortar agents to the ~~capacity rationalization resulting from~~home agent platform globally to service that demand. As of the ~~2018 Americas Exit Plan.~~ middle of July 2020, approximately 70% of agents who typically work in our brick-and-mortar facilities have transitioned to work at home, 25% are working in our facilities and the remaining 5% of agents are at home but idle.

The capacity utilization rate ~~on a combined basis~~for the Americas in 2020 was ~~71%~~73%, compared to 70% in the comparable period in ~~2018.~~

~~On a segment basis, 39,700 seats were located in~~2019, with the ~~Americas, a decrease of 4,200 seats from the comparable period in 2018, and 7,700 seats were located in EMEA, an~~ increase of 400 seats from the comparable period in 2018. The capacity utilization rate for the Americas in 2019 was 70%, compared to 68% in the comparable period in 2018, up primarily due to our capacity rationalization.driven by higher demand. The capacity utilization rate for EMEA in ~~2019~~2020 was ~~74%~~69%, compared to ~~77%~~74% in the comparable period in ~~2018, down primarily~~2019, with the decrease due to ~~expansion and~~ the ~~utilization~~timing of ~~our at-home platform as a complement to our brick-and-mortar facilities.~~the capacity additions contracted at the start of the year. We strive to attain a capacity utilization rate of 85% at each of our locations. Capacity utilization is measured by taking the number of agents and indirect support headcount and dividing it by the number of seats provisioned for utilization. Capacity utilization is a critical metric for us as it is used as an input to the pricing, revenue and margin drivers of our business as well as capital allocation.

	Three Months Ended June 30,										Three Months Ended June 30,
	2019			2018							2020				2019
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues	Amount		% of Revenues		Amount		% of Revenues	$ Change			Change in % of Revenues
Americas	$	197,879	63.8%	$	214,502	65.6%	$	(16,623	)	-1.8%	$	214,606	63.3%	��	$	197,879	63.8%	$	16,727		-0.5%
EMEA		54,282	69.0%		50,422	72.3%		3,860		-3.3%		53,827	69.4%			54,282	69.0%		(455	)	0.4%
Consolidated	$	252,161	64.8%	$	264,924	66.8%	$	(12,763	)	-2.0%	$	268,433	64.4%		$	252,161	64.8%	$	16,272		-0.4%

The ~~decrease~~increase of ~~$12.8~~$16.3 million in direct salaries and related costs included a favorable foreign currency impact of ~~$2.7~~$0.7 million in the Americas and a favorable foreign currency impact of ~~$3.7~~$1.9 million in EMEA.

The decrease in Americas’ direct salaries and related costs, as a percentage of revenues, was primarily attributable to lower ~~compensation~~recruiting costs of ~~1.8% driven by an increase in agent productivity principally within the financial services and communications verticals in the current period,~~0.5%, lower ~~communications~~ auto tow claim costs of 0.4%, lower customer-acquisition advertising costs of ~~0.2%~~0.3%, lower communications costs of 0.3% and lower other costs of 0.2%, partially offset by higher ~~recruiting costs of 0.4%, higher dues and subscription costs of 0.2% and higher~~ travel costs of ~~0.2%~~0.7% and higher compensation costs of 0.5%.

The ~~decrease~~increase in EMEA’s direct salaries and related costs, as a percentage of revenues, was primarily attributable to ~~lower~~higher compensation costs of ~~3.9%~~2.3% driven by ~~an increase~~a decrease in ~~agent~~consultant productivity at Symphony resulting principally ~~within the financial services vertical~~from project delays due to COVID-19 in the current period and higher software and maintenance costs of 0.2%, partially offset by lower ~~recruiting~~software purchased for resale of 1.1% due primarily to the aforementioned project delays, lower travel costs of 0.6%, lower auto and parking costs of 0.2% and lower other costs of ~~0.4%~~0.2%~~, partially offset by higher fulfillment materials costs of 0.9% and higher travel costs of 0.3%~~.

	Three Months Ended June 30,										Three Months Ended June 30,
	2019			2018							2020			2019
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues
Americas	$	71,768	23.1%	$	71,790	22.0%	$	(22	)	1.1%	$	69,018	20.3%	$	71,768	23.1%	$	(2,750	)	-2.8%
EMEA		17,266	21.9%		15,388	22.1%		1,878		-0.2%		17,026	22.0%		17,266	21.9%		(240	)	0.1%
Other		15,248	-		14,859	-		389		-		16,620	-		15,248	-		1,372		-
Consolidated	$	104,282	26.8%	$	102,037	25.7%	$	2,245		1.1%	$	102,664	24.6%	$	104,282	26.8%	$	(1,618	)	-2.2%

The ~~increase~~decrease of ~~$2.2~~$1.6 million in general and administrative expenses included a favorable foreign currency impact of ~~$0.8~~$0.5 million in the Americas and a favorable foreign currency impact of ~~$1.1~~$0.5 million in EMEA.

The ~~increase~~decrease in Americas’ general and administrative expenses, as a percentage of revenues, was primarily attributable to ~~higher~~lower facility-related costs of 1.2% was primarily attributable to COVID-19 restrictions related to the on-site facility occupancy rates as well as fewer sites in operation, lower compensation costs of 0.5%, lower travel costs of 0.4%, lower software and maintenance costs of ~~0.6%, higher compensation costs of 0.6%, higher merger~~0.3% and ~~integration costs of 0.5% and higher~~lower other costs of ~~0.2%, partially offset by lower facility-related costs of 0.8% associated with the Company’s exit plans. See Note 4,~~ ~~Costs Associated with Exit and Disposal Activities, in the accompanying “Notes to Condensed Consolidated Financial Statements”~~ ~~for further information.~~0.4%.

The ~~decrease~~increase in EMEA’s general and administrative expenses, as a percentage of revenues, was primarily attributable to ~~lower~~higher compensation costs of 1.0% and higher software and maintenance costs of 0.4%, partially offset by lower travel costs of 0.7%, lower legal and professional fees of 0.3%, lower ~~communications~~technology equipment and maintenance costs of ~~0.3%~~0.2% and lower other costs of 0.1%, ~~partially offset by higher software and maintenance costs of 0.3% and legal and professional fees of 0.2%~~.

The increase in Other general and administrative expenses, which includes corporate and other costs, was primarily attributable to higher compensation costs of $1.9 million and higher software and maintenance costs of ~~$0.3 million, higher compensation costs of~~ $0.2 ~~million and higher merger and integration costs of $0.1~~ million, partially offset by lower travel costs of ~~$0.1~~$0.4 million and lower other costs of ~~$0.1~~$0.3 million.

	Three Months Ended June 30,										Three Months Ended June 30,
	2019			2018							2020			2019
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues
Depreciation, net:
Americas	$	10,659	3.4%	$	12,335	3.8%	$	(1,676	)	-0.4%	$	10,088	3.0%	$	10,659	3.4%	$	(571	)	-0.4%
EMEA		1,628	2.1%		1,476	2.1%		152		0.0%		1,818	2.3%		1,628	2.1%		190		0.2%
Other		765	-		749	-		16		-		724	-		765	-		(41	)	-
Consolidated	$	13,052	3.4%	$	14,560	3.7%	$	(1,508	)	-0.3%	$	12,630	3.0%	$	13,052	3.4%	$	(422	)	-0.4%

Amortization of intangibles:
Americas	$	3,288	1.1%	$	3,415	1.0%	$	(127	)	0.1%	$	3,281	1.0%	$	3,288	1.1%	$	(7	)	-0.1%
EMEA		839	1.1%		214	0.3%		625		0.8%		812	1.0%		839	1.1%		(27	)	-0.1%
Other		—	-		—	-		—		-		—	-		—	-		—		-
Consolidated	$	4,127	1.1%	$	3,629	0.9%	$	498		0.2%	$	4,093	1.0%	$	4,127	1.1%	$	(34	)	-0.1%

Impairment of long-lived assets:
Americas	$	129	0.0%	$	5,175	1.6%	$	(5,046	)	-1.6%	$	1,800	0.5%	$	129	0.0%	$	1,671		0.5%
EMEA		—	0.0%		—	0.0%		—		0.0%		—	0.0%		—	0.0%		—		0.0%
Other		—	-		—	-		—		-		—	-		—	-		—		-
Consolidated	$	129	0.0%	$	5,175	1.3%	$	(5,046	)	-1.3%	$	1,800	0.4%	$	129	0.0%	$	1,671		0.4%

The decrease in depreciation was primarily due to the impact since the prior period of certain fully depreciated fixed assets, ~~and fixed assets that were impaired and disposed of as part of the Americas 2018 and 2019 Exit Plans,~~ partially offset by new depreciable fixed assets placed into service supporting site expansions ~~acquisitions~~ and infrastructure upgrades.

~~The increase in amortization was primarily due to the addition of intangibles acquired in conjunction~~Amortization remained consistent with the ~~July 2018 WhistleOut acquisition and the November 2018 Symphony acquisition, partially offset by certain fully amortized intangible assets.~~comparable period.

See Note ~~4, Costs Associated with Exit and Disposal Activities, and Note~~ 5, Fair Value, in the accompanying “Notes to Condensed Consolidated Financial Statements” for further information ~~regarding~~on the impairment of long-lived ~~assets.~~assets.

	Three Months Ended June 30,									Three Months Ended June 30,
(in thousands)	2019			2018			$ Change			2020			2019			$ Change
Interest income	$	192		$	175		$	17		$	165		$	192		$	(27	)

Interest (expense)	$	(1,179	)	$	(1,149	)	$	(30	)	$	(560	)	$	(1,179	)	$	619

Other income (expense), net:
Foreign currency transaction gains (losses)	$	(361	)	$	641		$	(1,002	)	$	48		$	(361	)	$	409
Gains (losses) on derivative instruments not designated as hedges		(432	)		(345	)		(87	)		(164	)		(432	)		268
Gains (losses) on investments held in rabbi trust		426			142			284			1,816			426			1,390
Other miscellaneous income (expense)		(166	)		(975	)		809			97			(166	)		263
Total other income (expense), net	$	(533	)	$	(537	)	$	4		$	1,797		$	(533	)	$	2,330

Interest income ~~and interest (expense)~~ remained consistent with the comparable period.

The decrease in interest (expense) was primarily due to lower average outstanding borrowings and lower average interest rates than in the comparable period.

The change in other income (expense), net, was primarily due to an increase in value of investments held in rabbi trust and an increase in foreign exchange gains over the comparable period.

See Note 8, Investments Held in Rabbi Trust, in the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.

~~The change in other miscellaneous income (expense) was primarily due to payroll tax compliance costs in the prior period.~~

	Three Months Ended June 30,									Three Months Ended June 30,
(in thousands)	2019			2018			$ Change			2020			2019			$ Change
Income before income taxes	$	13,735		$	4,949		$	8,786		$	28,615		$	13,735		$	14,880
Income taxes		2,466			(2,229	)		4,695			6,385			2,466			3,919
							% Change									% Change
Effective tax rate		18.0	%		-45.0	%		63.0	%		22.3	%		18.0	%		4.3	%

The increase in the effective tax rate in ~~2019~~2020 compared to ~~2018~~2019 was primarily due to an election made during the three months ended June 30, 2019 to step up tax basis in a ~~$3.2~~foreign subsidiary which resulted in a $0.6 million ~~decrease in benefit related to the settlement of~~discrete tax ~~audits and ancillary issues in the prior year.~~benefit. The increase ~~in the effective tax rate~~ was also affected by shifts in earnings among the various jurisdictions in which we operate. Several additional factors, none of which are individually material, also impacted the rate.

Six Months Ended June 30, ~~2019~~2020 Compared to Six Months Ended June 30, ~~2018~~2019

	Six Months Ended June 30,									Six Months Ended June 30,
	2019			2018						2020			2019
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change			Amount		% of Revenues	Amount		% of Revenues	$ Change
Americas	$	635,084	80.2%	$	667,762	82.3%	$	(32,678	)	$	672,198	81.2%	$	635,084	80.2%	$	37,114
EMEA		156,804	19.8%		143,347	17.7%		13,457			155,794	18.8%		156,804	19.8%		(1,010	)
Other		43	0.0%		47	0.0%		(4	)		7	0.0%		43	0.0%		(36	)
Consolidated	$	791,931	100.0%	$	811,156	100.0%	$	(19,225	)	$	827,999	100.0%	$	791,931	100.0%	$	36,068

Consolidated revenues ~~decreased $19.2~~increased $36.1 million, or ~~2.4%~~4.6%, for the six months ended June 30, ~~2019~~2020 from the comparable period in ~~2018.~~2019.

The ~~decrease~~increase in Americas’ revenues was due to end-of-life client programs of $36.5 million, lower volumes from existing clients of $10.3 million and an unfavorable foreign currency impact of $7.3 million, partially offset by new clients of $21.4 million. Revenues from our offshore operations represented 41.5% of Americas’ revenues in 2019, compared to 39.4% for the comparable period in 2018.

~~The increase in EMEA’s revenues~~ ~~was due to new clients of $15.1 million and~~ higher volumes from existing clients of ~~$13.1~~$66.4 million and new clients of $18.7 million, partially offset by end-of-life client programs of ~~$3.1~~$46.2 million primarily in the communications vertical and an unfavorable foreign currency impact of ~~$11.6~~$1.8 million. Revenues from our offshore operations represented 42.7% of Americas’ revenues in 2020, compared to 41.5% for the comparable period in 2019.

The decrease in EMEA’s revenues was due to end-of-life client programs of $5.4 million primarily in the communications and other verticals and an unfavorable foreign currency impact of $5.0 million, partially offset by higher volumes from existing clients of $5.6 million and new clients of $3.8 million.

	Six Months Ended June 30,										Six Months Ended June 30,
	2019			2018							2020			2019
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues
Americas	$	405,478	63.8%	$	437,655	65.5%	$	(32,177	)	-1.7%	$	427,234	63.6%	$	405,478	63.8%	$	21,756		-0.2%
EMEA		108,411	69.1%		102,341	71.4%		6,070		-2.3%		108,144	69.4%		108,411	69.1%		(267	)	0.3%
Consolidated	$	513,889	64.9%	$	539,996	66.6%	$	(26,107	)	-1.7%	$	535,378	64.7%	$	513,889	64.9%	$	21,489		-0.2%

The ~~decrease~~increase of ~~$26.1~~$21.5 million in direct salaries and related costs included a ~~favorable~~unfavorable foreign currency impact of ~~$6.9~~$0.3 million in the Americas and a favorable foreign currency impact of ~~$8.4~~$3.8 million in EMEA.

The decrease in Americas’ direct salaries and related costs, as a percentage of revenues, was primarily attributable to lower ~~compensation~~customer-acquisition advertising costs of ~~2.5% driven by an increase in agent productivity principally within the financial services, communications and transportation verticals in the current period,~~ 0.5%, lower ~~communications~~auto tow claim costs of ~~0.3%~~0.4%, lower communications

costs of 0.3% and lower other costs of 0.2%, partially offset by was primarily attributable to higher ~~recruiting~~compensation costs of ~~0.4%,~~0.8% and higher ~~customer-acquisition advertising~~travel costs of 0.4%~~, higher auto tow claim costs of 0.3% and higher dues and subscription costs of 0.2%~~.

The ~~decrease~~increase in EMEA’s direct salaries and related costs, as a percentage of revenues, was primarily attributable to ~~lower~~higher compensation costs of ~~2.8%~~1.7% driven by ~~an increase~~a decrease in ~~agent~~consultant productivity at Symphony resulting principally ~~within the financial services vertical~~from project delays due to COVID-19 in the current period ~~lower recruiting costs of 0.2%~~ and ~~lower~~higher other costs of 0.3%, partially offset by ~~higher fulfillment materials~~lower software purchased for resale of 0.8%, lower communications costs of ~~0.8%~~0.3%, lower rebillable costs of 0.3% and ~~higher~~lower travel costs of ~~0.2%~~0.3%.

	Six Months Ended June 30,										Six Months Ended June 30,
	2019			2018							2020			2019
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues
Americas	$	142,351	22.4%	$	143,293	21.5%	$	(942	)	0.9%	$	140,218	20.9%	$	142,351	22.4%	$	(2,133	)	-1.5%
EMEA		37,300	23.8%		30,825	21.5%		6,475		2.3%		35,224	22.6%		37,300	23.8%		(2,076	)	-1.2%
Other		29,311	-		30,359	-		(1,048	)	-		30,469	-		29,311	-		1,158		-
Consolidated	$	208,962	26.4%	$	204,477	25.2%	$	4,485		1.2%	$	205,911	24.9%	$	208,962	26.4%	$	(3,051	)	-1.5%

The ~~increase~~decrease of ~~$4.5~~$3.1 million in general and administrative expenses included a favorable foreign currency impact of ~~$2.0~~$0.3 million in the Americas and a favorable foreign currency impact of ~~$2.5~~$1.1 million in EMEA.

The ~~increase~~decrease in Americas’ general and administrative expenses, as a percentage of revenues, was primarily attributable to ~~higher software and maintenance~~lower facility-related costs of ~~0.5%~~0.7%, ~~higher compensation costs of 0.5% and higher~~lower merger and integration costs of ~~0.4%~~0.3%, ~~partially offset by~~ lower ~~facility-related~~compensation costs of ~~0.4% associated with the Company’s exit plans~~0.3% and lower ~~other~~travel costs of ~~0.1%~~0.2%. ~~See Note 4,~~ ~~Costs Associated with Exit and Disposal Activities, in the accompanying “Notes to Condensed Consolidated Financial Statements”~~ ~~for further information.~~

The ~~increase~~decrease in EMEA’s general and administrative expenses, as a percentage of revenues, was primarily attributable to ~~higher compensation costs of 1.0%~~ ~~driven primarily by Symphony’s operations which has higher general and administrative labor costs relative to our mix of business in the prior period,~~ ~~higher~~lower merger and integration costs of 1.0%, lower travel costs of 0.4%, lower legal and professional fees of 0.3% and lower technology equipment and maintenance costs of 0.2%, partially offset by higher software and maintenance costs of 0.3%, higher compensation costs of 0.2% and higher ~~travel costs of 0.2%, partially offset by lower communications~~other costs of 0.2%.

The ~~decrease~~increase in Other general and administrative expenses, which includes corporate and other costs, was primarily attributable to ~~lower~~higher merger and integration costs of ~~$1.1~~$1.3 million, higher software and maintenance costs of $0.4 million, higher charitable contributions of $0.2 million and higher other costs of $0.1 million, partially offset by ~~other~~lower compensation costs of ~~$0.1~~$0.4 million and lower travel costs of $0.4 million.

	Six Months Ended June 30,										Six Months Ended June 30,
	2019			2018							2020			2019
(in thousands)	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues	Amount		% of Revenues	Amount		% of Revenues	$ Change			Change in % of Revenues
Depreciation, net:
Americas	$	22,166	3.5%	$	25,018	3.7%	$	(2,852	)	-0.2%	$	20,121	3.0%	$	22,166	3.5%	$	(2,045	)	-0.5%
EMEA		3,254	2.1%		2,887	2.0%		367		0.1%		3,523	2.3%		3,254	2.1%		269		0.2%
Other		1,529	-		1,491	-		38		-		1,447	-		1,529	-		(82	)	-
Consolidated	$	26,949	3.4%	$	29,396	3.6%	$	(2,447	)	-0.2%	$	25,091	3.0%	$	26,949	3.4%	$	(1,858	)	-0.4%

Amortization of intangibles:
Americas	$	6,726	1.1%	$	7,407	1.1%	$	(681	)	0.0%	$	6,567	1.0%	$	6,726	1.1%	$	(159	)	-0.1%
EMEA		1,687	1.1%		435	0.3%		1,252		0.8%		1,645	1.1%		1,687	1.1%		(42	)	0.0%
Other		—	-		—	-		—		-		—	-		—	-		—		-
Consolidated	$	8,413	1.1%	$	7,842	1.0%	$	571		0.1%	$	8,212	1.0%	$	8,413	1.1%	$	(201	)	-0.1%

Impairment of long-lived assets:
Americas	$	1,711	0.3%	$	8,701	1.3%	$	(6,990	)	-1.0%	$	1,800	0.3%	$	1,711	0.3%	$	89		0.0%
EMEA		—	0.0%		—	0.0%		—		0.0%		—	0.0%		—	0.0%		—		0.0%
Other		—	-		—	-		—		-		—	-		—	-		—		-
Consolidated	$	1,711	0.2%	$	8,701	1.1%	$	(6,990	)	-0.9%	$	1,800	0.2%	$	1,711	0.2%	$	89		0.0%

The ~~increase~~decrease in amortization was primarily due to ~~intangibles acquired in conjunction with~~ the ~~July 2018 WhistleOut acquisition and~~impact since the ~~November 2018 Symphony acquisition, partially offset by~~prior period of certain fully amortized intangible assets.

	Six Months Ended June 30,									Six Months Ended June 30,
(in thousands)	2019			2018			$ Change			2020			2019			$ Change
Interest income	$	377		$	346		$	31		$	428		$	377		$	51

Interest (expense)	$	(2,357	)	$	(2,355	)	$	(2	)	$	(1,280	)	$	(2,357	)	$	1,077

Other income (expense), net:
Foreign currency transaction gains (losses)	$	(537	)	$	2,089		$	(2,626	)	$	(1,558	)	$	(537	)	$	(1,021	)
Gains (losses) on derivative instruments not designated as hedges		(465	)		(1,427	)		962			(410	)		(465	)		55
Gains (losses) on investments held in rabbi trust		1,606			117			1,489			(241	)		1,606			(1,847	)
Other miscellaneous income (expense)		(527	)		(1,161	)		634			(787	)		(527	)		(260	)
Total other income (expense), net	$	77		$	(382	)	$	459		$	(2,996	)	$	77		$	(3,073	)

Interest income ~~and interest (expense)~~ remained consistent with the comparable period.

The decrease in interest (expense) was primarily due to lower average outstanding borrowings and lower average interest rates than in the comparable period.

The change in other income (expense), net, was primarily due to a decline in value of investments held in rabbi trust and an increase in foreign exchange losses over the comparable period.

See Note 8, Investments Held in Rabbi Trust, in the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.

~~The change in other miscellaneous income (expense) was primarily due to payroll tax compliance costs in the prior period.~~

	Six Months Ended June 30,									Six Months Ended June 30,
(in thousands)	2019			2018			$ Change			2020			2019			$ Change
Income before income taxes	$	30,104		$	18,353		$	11,751		$	47,759		$	30,104		$	17,655
Income taxes		7,148			227			6,921			11,611			7,148			4,463
							% Change									% Change
Effective tax rate		23.7	%		1.2	%		22.5	%		24.3	%		23.7	%		0.6	%

The increase in the effective tax rate in ~~2019~~2020 compared to ~~2018~~2019 was primarily due to an election made during the three months ended June 30, 2019 to step up tax basis in a ~~$3.4~~foreign subsidiary which resulted in a $0.6 million ~~decrease in~~discrete tax benefit, ~~related to the settlement of tax audits and ancillary issues in the prior year. The increase in the effective tax rate was also affected~~partially offset by shifts in earnings among the various jurisdictions in which we operate. Several additional factors, none of which are individually material, also impacted the rate.

Our top ten clients accounted for ~~42.9%~~45.9% and ~~45.8%~~42.9% of our consolidated revenues in the three months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~42.5%~~45.3% and ~~45.9%~~42.5% of our consolidated revenues in the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

Total revenues by segment from ~~AT&T Corporation (“AT&T”), a major provider~~our largest client in each of ~~communication~~the periods, which was in the financial services vertical for ~~which we provide various customer support services over several distinct lines of AT&T businesses,~~the three and six months ended June 30, 2020 and the communications vertical for the three and six months ended June 30, 2019, were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
	Amount		% of Revenues	Amount		% of Revenues	Amount		% of Revenues	Amount		% of Revenues	Amount		% of Revenues	Amount		% of Revenues	Amount		% of Revenues	Amount		% of Revenues
Americas	$	28,238	9.1%	$	40,947	12.5%	$	58,863	9.3%	$	82,935	12.4%	$	32,123	9.5%	$	28,238	9.1%	$	61,726	9.2%	$	58,863	9.3%
EMEA		52	0.1%		—	0.0%		89	0.1%		—	0.0%		—	0.0%		52	0.1%		—	0.0%		89	0.1%
	$	28,290	7.3%	$	40,947	10.3%	$	58,952	7.4%	$	82,935	10.2%	$	32,123	7.7%	$	28,290	7.3%	$	61,726	7.5%	$	58,952	7.4%

We have multiple distinct contracts with AT&T spread across multiple lines of businesses, which expire at varying dates between 2019 and 2021. We have historically renewed most of these contracts. However, there is no assurance that these contracts will be renewed, or if renewed, will be on terms as favorable as the existing contracts. Each line of business is governed by separate business terms, conditions and metrics. Each line of business also has a separate decision maker such that a loss of one line of business would not necessarily impact our relationship with the client and decision makers on other lines of business. The loss of (or the failure to retain a significant amount of business with) any of our key clients, including AT&T, could have a material adverse effect on our performance. Many of our contracts contain penalty provisions for failure to meet minimum service levels and are cancelable by the client at any time or on short notice. Also, clients may unilaterally reduce their use of our services under our contracts without penalty.

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

~~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):

~~For the three months ended September 30, 2019, we anticipate the following financial results:~~

~~For the twelve months ended December 31, 2019, we anticipate the following financial results:~~

On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. The global nature, rapid spread and continually evolving response by governments throughout the world to combat the spread has had a negative impact on the global economy. Certain of our customer engagement centers have been impacted by local government actions restricting facility access or are operating at lower capacity utilization levels. We are committed to the health and safety of our workforce and ensuring business continuity for the brands we serve. In response, we have shifted as many employees as possible to a work-at-home model. As of the middle of July 2020, approximately 95% of agents assigned to our brick-and-mortar facilities are working at our centers or from home across the world with 70% having transitioned to a work-at-home model. Approximately 5% of our agents lack the technical infrastructure to work from home. Our operations in the Philippines, El Salvador and Mexico have been most impacted by the governmental restrictions.

We continue to monitor the progression of the pandemic and may take additional actions in response to government orders or that we believe ~~our sales funnel is markedly stronger than the levels~~are in the ~~second quarter~~best interests of ~~2019. A large part of the strength is from significantly higher win rates with new~~our employees, clients ~~due~~and shareholders. Due to the ~~traction~~unprecedented nature of our differentiated value proposition, coupled with higher demand on existing and new lines of businesses. These wins span the financial services, communications, technology and transportation & leisure verticals.

However, we are reducing our full year revenue and diluted earnings per share outlook by approximately $35.0 million and $0.04, respectively, relative to the mid-point in the outlook provided in May 2019. Of the $35.0 million of revenue reduction, $5.0 million is related to foreign exchange volatility. Close to 80% of the remaining $30.0 million in reduced revenue outlook is concentrated within the communications vertical, the bulk of which is related to the rapid ramp down of a communications client whose recent contract renewal did not align with our forecasted target margins with the residual related to continued demand softness from our largest communications client. The other 20% of the net $30.0 million is related to longer than expected ramps because of wins with clients who are new adopters to outsourcing and whose programs have a higher level of complexity and speed to competency. Accordingly, the underlying strength in our sales funnel and revenue growth opportunity is being masked in the short-term by the timing mismatch between ramp downs that have immediate revenue impact and ramp ups that have more graduated lead times.

Our revenues and earnings per share assumptions for the third quarter and full year 2019 are based on foreign exchange rates as of July 2019. Therefore, the continued volatility in foreign exchange rates between the U.S. Dollar and the functional currencies of the markets we serve could have a further impact, positive or negative, on revenues and earnings per share relative to the business outlook for the third quarter and full-year.

We anticipate total other interest income (expense), net of approximately $(1.2) million for the third quarter and $(4.3) million for the full year 2019. The amounts in the other interest income (expense), net, however, exclude the potential impact of any future foreign exchange gains or losses.

We expect our full year 2019 effective tax rate to be slightly lower than previously forecasted in the outlook provided in May 2019 predominantly due to an increase in discrete tax benefits in the second quarter.

~~Not included in~~ this pandemic, forward-looking guidance ~~is the impact of any future acquisitions, share repurchase activities or a potential sale of previously exited customer engagement centers.~~has been suspended.

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

Our Board of Directors authorized us to purchase up to 10.0 million shares of our outstanding common stock (the “2011 Share Repurchase Program”) on August 18, 2011, as amended on March 16, 2016. A total of ~~6.0~~7.8 million shares have been repurchased under the 2011 Share Repurchase Program ~~as of June 30, 2019. During July 2019, the Company repurchased an additional 0.2 million shares for a cost of $6.2 million.~~since inception. The shares are purchased, from time to time, through open market purchases or in negotiated private transactions, and the purchases are based on factors, including but not limited to, the stock price, management discretion and general market conditions. The 2011 Share Repurchase Program has no expiration date.

During the six months ended June 30, ~~2019,~~ 2020, cash increased ~~$56.3~~$86.6 million from operating activities, ~~$8.0~~$23.0 million of debt proceeds and ~~$0.3~~$0.6 million of other cash inflows, partially offset by ~~$20.2~~$47.0 million used to repay long-term debt, $35.9 million used to repurchase common stock, ~~$18.0 million used to repay long-term debt,~~ $~~16.4~~22.9 million used for capital expenditures and $~~1.3~~1.1 million to repurchase common stock for tax withholding on equity awards, ~~and $1.1 million of loan fees related to the 2019 Credit Agreement,~~ resulting in a ~~$8.3~~$3.3 million increase in available cash, cash equivalents and restricted cash (including the ~~favorable~~unfavorable effects of foreign currency exchange rates on cash, cash equivalents and restricted cash of ~~$0.7~~$1.8 million).

Net cash flows provided by operating activities for the six months ended June 30, ~~2019~~2020 were ~~$56.3~~$86.6 million, compared to ~~$47.4~~$56.3 million for the comparable period in ~~2018.~~2019. The ~~$8.9~~$30.3 million increase in net cash flows from operating activities was due to a ~~$4.8 million increase in net income and a~~ net increase of ~~$14.0~~$15.9 million in cash flows from assets and liabilities, ~~partially offset by~~ a ~~$9.9~~$13.2 million ~~decrease~~increase in net income and a $1.2 million increase in non-cash reconciling items such as ~~depreciation, amortization, impairment and~~net unrealized ~~(gains) losses~~foreign currency transaction gains (losses), bad debt expense, net unrealized gains (losses) and premiums on financial instruments ~~net.~~and depreciation. The ~~$14.0~~$15.9 million increase in ~~2019~~2020 from ~~2018~~2019 in cash flows from assets and liabilities was principally a result of a ~~$7.2~~$7.5 million change in net taxes payable, a $5.0 million decrease in ~~accounts receivable~~other assets and a ~~$6.8~~$3.1 million increase in other liabilities. The ~~$7.2~~$7.5 million ~~decrease~~increase in ~~the change in accounts receivable~~net taxes payable was primarily due to extensions of payment deadlines granted by several jurisdictions. The $5.0 million decrease in other assets was primarily due to a $3.4 million decrease in deferred charges and other assets driven by an increase in the ~~timing of billings~~prior year in long-term accounts receivable and ~~collections.~~deferred finance charges associated with the 2019 Credit Agreement. The ~~$6.8~~$3.1 million increase in the change in other liabilities was primarily due to ~~an $8.8~~a $5.5 million increase ~~principally~~in other long-term liabilities driven by the deferral of our portion of social security taxes as permitted by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, partially offset by a $1.5 million decrease related to the timing of accrued employee compensation and benefits and a $2.7 million increase in in the change accounts payable principally resulting from the timing of invoices and the related payments, partially offset by a $3.9 million decrease in the change in other accrued expenses and current liabilities ~~principally resulting from fluctuations in our derivatives~~ and a $1.4 million decrease related to the ~~impact~~timing of ~~the adoption of ASC 842,~~ ~~Leases, on our deferred rent balance and our lease liability associated with the Americas 2018 Exit Plan. See Note 3, Leases, and Note 4,~~ ~~Costs Associated with Exit and Disposal Activities, in the accompanying “Notes to Condensed Consolidated Financial Statements”~~ ~~for further information.~~accounts payable.

Capital expenditures, which are generally funded by cash generated from operating activities, available cash balances and borrowings available under our credit facilities, were ~~$16.4~~$22.9 million for the six months ended June 30, ~~2019,~~2020, compared to ~~$26.2~~$16.4 million for the comparable period in ~~2018, a decrease~~2019, an increase of ~~$9.8~~$6.5 million. ~~In 2019, we anticipate capital expenditures in the range of $45.0 million to $50.0 million, primarily for maintenance, new seat additions, facility upgrades and systems infrastructure.~~

On February 14, 2019, we entered into a $500 million senior revolving credit facility (the “2019 Credit Agreement”) with a group of lenders, KeyBank National Association, as Administrative Agent, Swing Line Lender and Issuing Lender (“KeyBank”), the lenders named therein, and KeyBanc Capital Markets Inc. as Lead Arranger and Sole Book Runner. The 2019 Credit Agreement replaced our previous $440 million revolving credit facility dated May 12, 2015 (the “2015 Credit Agreement”), which agreement was terminated simultaneous with entering into the 2019 Credit Agreement. The 2019 Credit Agreement is subject to certain borrowing limitations and includes certain customary financial and restrictive covenants. We are not currently aware of any inability of our lenders to provide access to the full commitment of funds that exist under the 2019 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 2019 Credit Agreement will mature on February 14, 2024. AtAs of June 30, ~~2019,~~2020, we were in compliance with all loan requirements of the 2019 Credit Agreement and had ~~$92.0~~$49.0 million of outstanding borrowings under this facility. For additional discussion of our credit agreements, see Note 18, Borrowings in the “Notes to the Consolidated Financial Statements” section of our Annual Report on Form 10-K for the year ended December 31, 2019.

Our credit agreements had an average daily utilization of ~~$90.0~~$71.4 million and ~~$100.1~~$90.0 million during the three months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$92.8~~$67.6 million and ~~$110.7~~$92.8 million during the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. During the three months ended June 30, ~~2019~~2020 and ~~2018,~~2019, the related interest expense, including the commitment fee and excluding the amortization of deferred loan fees, was ~~$0.9~~$0.4 million and $0.9 million, respectively, which represented weighted average interest rates of ~~4.1%~~2.3% and ~~3.7%~~4.1%, respectively. During the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, the related interest expense, including the commitment fee and excluding the amortization of deferred loan fees, was ~~$1.9~~$1.0 million and $1.9 million, respectively, which represented weighted average interest rates of ~~4.1%~~3.0% and ~~3.5%~~4.1%, respectively.

We ~~have no significant tax jurisdictions~~repaid $24.0 million, net, of long-term debt outstanding under ~~audit; however, we~~the 2019 Credit Agreement during the six months ended June 30, 2020. Our future interest expense for the remainder of 2020 will vary based on our usage of the 2019 Credit Agreement and market interest rates.

We are currently under audit in several tax ~~jurisdictions. We~~jurisdictions and believe we ~~are adequately reserved for the remaining~~have adequate reserves related to all matters pertaining to these audits. Should we experience unfavorable outcomes from these audits, ~~and their resolution is not expected to~~such outcomes could have a ~~material~~significant impact on our financial condition, ~~and~~ results of ~~operations.~~

The 2017 Tax Reform Act provides for a one-time transition tax based on our undistributed foreign earnings on which we previously had deferred U.S. income taxes. We recorded a $28.3 million provisional liability in 2017, which was net of $5.0 million of available tax credits, for our one-time transition tax. As of June 30, 2019, $1.9 million of the liability was netted in “Income taxes receivable”operations and $2.0 million of the liability was included in “Income taxes payable” as of December 31, 2018 in the accompanying Condensed Consolidated Balance Sheets. As of June 30, 2019 and December 31, 2018, $18.5 million and $20.4 million, respectively, of the long-term liability was included in “Long-term income tax liabilities” in the accompanying Condensed Consolidated Balance Sheets. This transition tax liability will be paid in yearly installments until 2025. No additional income taxes have been provided for any remaining outside basis difference inherent in our investments in our foreign subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations.cash flows.

As part of the July 1, 2018 WhistleOut acquisition, an AUD 14.0 million three-year retention bonus ~~will be~~is payable in

installments on or around July 1, 2019, 2020 and 2021. We paid the first installment of AUD 6.0 million ($4.2 million) in July 2019. We accelerated the 2021 installment of the retention bonus and paid AUD 8.0 million ($5.6 million) in July 2020, which represented both the 2020 and 2021 installments. No further amounts are due. Also, as part of the Symphony acquisition on November 1, 2018, a portion of the purchase price, with an acquisition date present value of GBP 7.9 million ($10.0 million) ~~has been~~, was deferred and ~~will be paid~~is payable in equal installments over three years, on or around November 1, 2019, 2020 and 2021. We paid the first installment of GBP 2.7 million ($3.3 million) in October 2019.

As of June 30, ~~2019,~~2020, we had ~~$136.6~~$129.1 million in cash and cash equivalents, of which approximately ~~89.0%~~81.9%, or ~~$121.6~~$105.6 million, was held in international operations. ~~As a result of the 2017 Tax Reform Act, most~~Most of these funds will not be subject to additional taxes ~~if repatriated to~~in the United ~~States.~~States if repatriated; however, certain jurisdictions may impose additional withholding taxes. There are circumstances where we may be unable to repatriate some of the cash and cash equivalents held by our international operations due to country restrictions.

We expect our current cash levels and cash flows from operations to be adequate to meet our anticipated working capital needs, including investment activities such as capital expenditures and debt repayment for the next twelve months and the foreseeable future. However, from time to time, we may borrow funds under our 2019 Credit Agreement as a result of the timing of our working capital needs, including capital expenditures.

As of June 30, ~~2019,~~2020, 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.

~~During the six months ended June 30, 2019, we repaid $10.0 million, net, of long-term debt outstanding under our Credit Agreement resulting in a remaining outstanding debt balance of $92.0 million.~~

~~See Note 3, Leases, in the accompanying “Notes to Condensed Consolidated Financial Statements” for information about our operating leases as of June 30, 2019.~~

~~Except for the contractual obligations mentioned above, there~~There have not been any material changes to the outstanding contractual obligations outside of the ordinary course of business ~~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, ~~2018.~~2019.

~~See Note 3, Leases, in~~estimates, including a description of the ~~accompanying “Notes to Condensed Consolidated Financial Statements” for further information on~~methods and key assumptions used and how the ~~adoption of ASC 842,~~ ~~Leases~~key assumptions were determined..

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

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

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

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

In order to hedge a portion of our anticipated revenues denominated in USD and EUR, we had outstanding forward contracts and options as of June 30, 2019 with counterparties through December 2019 with notional amounts totaling $99.2 million. As of June 30, 2019, we had net total derivative assets associated with these contracts with a fair value of $3.2 million. 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 $9.8 million on the underlying exposures of the derivative instruments. However, this loss would be mitigated by corresponding gains on the underlying exposures.

~~We had outstanding forward exchange contracts as of June 30, 2019 with notional amounts~~ ~~totaling $20.0 million~~ ~~that are not designated as hedges. The purpose of these derivative instruments is to protect against FX volatility~~

pertaining to intercompany receivables and payables, and other assets and liabilities that are denominated in currencies other than our subsidiaries’ functional currencies. As of June 30, 2019, the fair value of these derivatives was a net liability of $0.1 million. The potential loss in fair value at June 30, 2019, for these contracts resulting from a hypothetical 10% adverse change in the foreign currency exchange rates is approximately $1.8 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 ent~~er 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.

We have not ~~historically used derivative instruments~~otherwise changed significantly.

For a discussion of current market conditions resulting from the COVID-19 pandemic, refer to ~~manage exposure~~Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and to ~~changes in interest rates.~~Part II, Item 1A, “Risk Factors.”

For the year ended December 31, ~~2018,~~2019, 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 engagement services, non-U.S. currency fluctuations, and the seasonal pattern of customer engagement support and fulfillment services.

As of June 30, ~~2019,~~2020, under the direction of our Chief Executive Officer and Chief Finance 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 Finance Officer, as appropriate to allow timely decisions regarding required disclosure. We concluded that, as of June 30, ~~2019,~~2020, our disclosure controls and procedures were effective at the reasonable assurance level.

There were no changes in our internal controls over financial reporting during the quarter ended June 30, ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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

Health epidemics could disrupt our business and adversely affect our financial results.

Our customer engagement centers typically seat hundreds of employees in one location. Accordingly, an outbreak of a contagious infection, such as COVID-19, in one or more of the markets in which we do business may result in significant worker absenteeism, lower asset utilization rates, voluntary or mandatory closure of our offices and delivery centers, travel restrictions on our employees, and other disruptions to our business. As disclosed elsewhere, as a result of the COVID-19 pandemic, certain of our customer engagement centers have been impacted by local government actions restricting facility access or are operating at lower capacity utilization levels. Certain of our agents lack the technical infrastructure to work from home. As a result, our operations in the Philippines, El Salvador and Mexico have been most impacted by the governmental restrictions. The global nature of the ongoing COVID-19 pandemic has significantly impacted the global economy. If the pandemic is prolonged, it could severely disrupt our business operations and have a material adverse effect on our business, financial condition and results of operations. In particular, the impacts may include reduced demand for our services as a result of economic recession, inability to reduce costs while volumes are temporarily reduced, and delayed payments from clients. As disclosed elsewhere, Symphony’s on-site consulting model has been negatively impacted by travel and shelter-in-place restrictions imposed by governments and businesses to reduce the spread of COVID-19. There is significant uncertainty regarding the length of time these restrictions will remain in place. An impairment charge may arise in the future if Symphony’s operations experience a prolonged delay in the resumption of its operations or a significant shift in client demand results from the economic downturn.

Below is a summary of stock repurchases for the three months ended June 30, ~~2019~~2020 (in thousands, except average price per share). See Note ~~12,~~11, Earnings Per Share, ofin the accompanying “Notes to Condensed Consolidated Financial Statements” for information regarding our stock repurchase program.

(1) The total number of shares approved for repurchase under the 2011 Share Repurchase Program dated August 18, 2011, as amended on March 16, 2016, is 10.0 million. The 2011 Share Repurchase Program has no expiration date.

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.

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	SYKE	NASDAQ Global Select Market

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets – June 30, ~~2019~~2020 and December 31, ~~2018~~2019 (Unaudited)	3
	Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, ~~2019~~2020 and ~~2018~~2019 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) – Three and Six Months Ended June 30, ~~2019~~2020 and ~~2018~~2019 (Unaudited)	5
	Condensed Consolidated Statements of Changes in Shareholders’ Equity – Three and Six Months Ended June 30, ~~2019~~2020 and ~~2018~~2019 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, ~~2019~~2020 and ~~2018~~2019 (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	98
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3829
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5039
Item 4.	Controls and Procedures	5140

Part II. OTHER INFORMATION		5241

Item 1.	Legal Proceedings	5241
Item 1A.	Risk Factors	5241
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5241
Item 3.	Defaults Upon Senior Securities	5241
Item 4.	Mine Safety Disclosures	5241
Item 5.	Other Information	5242
Item 6.	Exhibits	5342
	SIGNATURE	5443

	~~June 30, 2019~~
~~Weighted average remaining lease term of operating leases~~	~~5.5 years~~
~~Weighted average discount rate of operating leases~~		~~3.7~~	%

	Americas 2018 Exit Plan
	Lease Obligations and Facility Exit Costs			Severance and Related Costs			Total
Balance at the beginning of the period	$	—		$	—		$	—
Charges (reversals) included in "Direct salaries and related costs"		—			402			402
Charges (reversals) included in "General and administrative"		3,028			219			3,247
Cash payments		(429	)		(131	)		(560	)
Balance sheet reclassifications ⁽¹⁾		216			—			216
Balance at the end of the period	$	2,815		$	490		$	3,305


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


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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

	Statement of Operations Location	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Operating lease cost	Direct salaries and related costs	$	58		$	133
Operating lease cost	General and administrative		15,008			29,815
Short-term lease cost	General and administrative		390			813
Variable lease cost	Direct salaries and related costs		(3	)		(1	)
Variable lease cost	General and administrative		1,273			2,310
Sublease income	General and administrative		(569	)		(997	)
		$	16,157		$	32,073

	June 30, 2020			December 31, 2019
Weighted average remaining lease term of operating leases	4.8 years			5.1 years
Weighted average discount rate of operating leases		3.5	%		3.7	%

	Amount
2019	$	53,071
2020		48,770
2021		43,324
2022		34,063
2023		22,583
2024 and thereafter		51,456
	$	253,267

	June 30, 2019				December 31, 2018
	Cost		Fair Value		Cost		Fair Value
Mutual funds	$	9,744	$	13,879	$	8,864	$	11,442

	June 30, 2019		December 31, 2018
Postretirement benefit obligation	$	8	$	12
Unrealized gains (losses) in AOCI ⁽¹⁾		30		40

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under Plans or Programs ⁽¹⁾
April 1, 2019 - April 30, 2019		—	$	—		—		4,748
May 1, 2019 - May 31, 2019		265	$	25.46		265		4,483
June 1, 2019 - June 30, 2019		506	$	26.50		506		3,977
Total		771				771		3,977

No.		Description

~~10.1#~~10.1		~~Sykes Enterprises, Incorporated 2019 Equity Incentive Plan. (Incorporated herein by reference from Appendix A to the Proxy Statement filed on April 19, 2019.)~~Form of Restricted Stock Unit Award Agreement dated May 13, 2020.

15*15		Awareness letter.

31.1*31.1		Certification of Chief Executive Officer, pursuant to Rule 13a-14(a).

31.2*31.2		Certification of Chief Finance 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 Finance Officer, pursuant to 18 U.S.C. §1350.

~~101.INS*+~~101.INS+		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

~~101.SCH*+~~101.SCH+		Inline XBRL Taxonomy Extension Schema Document

~~101.CAL*+~~101.CAL+		Inline XBRL Taxonomy Extension Calculation Linkbase Document

~~101.LAB*+~~101.LAB+		Inline XBRL Taxonomy Extension Label Linkbase Document

~~101.PRE*+~~101.PRE+		Inline XBRL Taxonomy Extension Presentation Linkbase Document

~~101.DEF*+~~101.DEF+		Inline XBRL Taxonomy Extension Definition Linkbase Document

#104+		~~Indicates management contract or compensatory plan or agreement.~~The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL (included in Exhibit 101)
*		~~Filed herewith as an Exhibit.~~
**		Furnished herewith as an Exhibit.
+		Submitted electronically with this Quarterly Report.

	SYKES ENTERPRISES, INCORPORATED
	(Registrant)

Date: August 24, ~~2019~~2020	By:	/s/ John Chapman
	John Chapman
	Chief Finance Officer
	(Principal Financial and Accounting Officer)