REGISTRATION | STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL 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 |
SHELL | COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of Registrant as specified in its charter) |
(Translation of |
(Jurisdiction of incorporation or organization) |
(Address of principal executive offices) |
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) |
Title of Each Class | Name of Each Exchange On Which Registered |
American Depositary Shares, each representing one Ordinary Share, par value one New Israeli Shekel per share | NASDAQ Global Select Market |
(Title of Class) |
(Title of Class) |
Large Accelerated Filer ☒ Non-Accelerated Filer ☐ | Accelerated Filer ☐ Emerging Growth Company ☐ |
☒ | U.S. | GAAP |
☐ | International | Financial Reporting Standards as issued by the International Accounting Standards Board |
☐ | Other |
PART I | Page | |
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PART II | ||
Item 16. | [Reserved] | |
PART III | ||
F-1 |
Year Ended December 31, | ||||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | ||||||||||||||||
(U.S. dollars in thousands, except per share data) | ||||||||||||||||||||
OPERATING DATA: | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Products | $ | 276,319 | $ | 280,140 | $ | 289,560 | $ | 317,900 | $ | 306,252 | ||||||||||
Services | 482,552 | 541,375 | 582,435 | 608,967 | 709,290 | |||||||||||||||
Total revenues | 758,871 | 821,515 | 871,995 | 926,867 | 1,015,542 | |||||||||||||||
Cost of revenues | ||||||||||||||||||||
Products | 78,878 | 69,335 | 63,919 | 66,363 | 53,032 | |||||||||||||||
Services | 215,519 | 230,279 | 239,592 | 237,219 | 284,701 | |||||||||||||||
Total cost of revenues | 294,397 | 299,614 | 303,511 | 303,582 | 337,733 | |||||||||||||||
Gross profit | 464,474 | 521,901 | 568,484 | 623,285 | 677,809 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development, net | 103,818 | 115,431 | 123,141 | 128,485 | 141,528 | |||||||||||||||
Selling and marketing | 194,346 | 214,579 | 231,097 | 225,817 | 268,349 | |||||||||||||||
General and administrative | 94,654 | 86,467 | 83,360 | 90,349 | 116,569 | |||||||||||||||
Amortization of acquired intangible assets | 31,455 | 29,438 | 19,157 | 12,528 | 17,187 | |||||||||||||||
Restructuring expenses | 1,870 | 527 | 5,435 | - | - | |||||||||||||||
Total operating expenses | 426,143 | 446,442 | 462,190 | 457,179 | 543,633 | |||||||||||||||
Operating income | 38,331 | 75,459 | 106,294 | 166,106 | 134,176 | |||||||||||||||
Financial income and other net | 8,268 | 3,927 | 3,765 | 5,304 | 10,305 | |||||||||||||||
Income before taxes on income | 46,599 | 79,386 | 110,059 | 171,410 | 144,481 | |||||||||||||||
Taxes on income (tax benefits) | (14,799 | ) | 26,915 | 9,909 | 30,832 | 21,412 | ||||||||||||||
Net income from continuing operations | 61,398 | 52,471 | 100,150 | 140,578 | 123,069 | |||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Gain on disposal and (loss) income from operations | 7,301 | 4,294 | 4,965 | 152,459 | (8,235 | ) | ||||||||||||||
Taxes on income | 805 | 1,490 | 2,040 | 34,206 | (2,086 | ) | ||||||||||||||
Net income on discontinued operations | 6,496 | 2,804 | 2,925 | 118,253 | (6,149 | ) | ||||||||||||||
Net income | 67,894 | 55,275 | 103,075 | 258,831 | 116,920 | |||||||||||||||
Basic earnings per share from continuing operations | $ | 1.01 | $ | 0.87 | $ | 1.69 | $ | 2.36 | $ | 2.06 | ||||||||||
Basic earnings per share from discontinued operations | $ | 0.10 | $ | 0.05 | $ | 0.05 | $ | 1.99 | $ | (0.10 | ) | |||||||||
Basic earnings per share | $ | 1.11 | $ | 0.92 | $ | 1.74 | $ | 4.35 | $ | 1.96 | ||||||||||
Weighted average number of shares used in computing basic earnings per share (in thousands) | 60,905 | 60,388 | 59,362 | 59,552 | 59,667 | |||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.99 | $ | 0.85 | $ | 1.64 | $ | 2.29 | $ | 2.02 | ||||||||||
Diluted earnings per share from discontinued operations | $ | 0.10 | $ | 0.04 | $ | 0.05 | $ | 1.93 | $ | (0.10 | ) | |||||||||
Diluted earnings per share | $ | 1.09 | $ | 0.89 | $ | 1.69 | $ | 4.22 | $ | 1.92 | ||||||||||
Weighted average number of shares used in computing diluted earnings per share (in thousands) | 62,261 | 61,380 | 60,895 | 61,281 | 61,035 |
At December 31, | ||||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | ||||||||||||||||
(U.S. dollars in thousands) | ||||||||||||||||||||
BALANCE SHEET DATA*: | ||||||||||||||||||||
Working capital** | $ | 122,108 | $ | 61,023 | $ | 107,090 | $ | 256,089 | $ | 13,713 | ||||||||||
Total assets | 1,649,676 | 1,646,030 | 1,632,952 | 1,849,613 | 2,631,876 | |||||||||||||||
Shareholders' equity | 1,191,088 | 1,204,796 | 1,213,456 | 1,415,149 | 1,511,332 |
Year Ended December 31, | ||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | ||||||||||||||||
(U.S. dollars in thousands, except per share data) | ||||||||||||||||||||
OPERATING DATA: | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Products | $ | 325,429 | $ | 355,760 | $ | 369,381 | $ | 377,558 | $ | 388,357 | ||||||||||
Services | 364,022 | 438,071 | 509,631 | 571,726 | 623,282 | |||||||||||||||
Total revenues | 689,451 | 793,831 | 879,012 | 949,284 | 1,011,639 | |||||||||||||||
Cost of revenues | ||||||||||||||||||||
Products | 107,190 | 116,256 | 122,917 | 117,833 | 116,741 | |||||||||||||||
Services | 161,885 | 191,049 | 228,306 | 247,115 | 258,842 | |||||||||||||||
Total cost of revenues | 269,075 | 307,305 | 351,223 | 364,948 | 375,583 | |||||||||||||||
Gross profit | 420,376 | 486,526 | 527,789 | 584,336 | 636,056 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development, net | 97,083 | 109,127 | 121,387 | 136,563 | 148,560 | |||||||||||||||
Selling and marketing | 178,407 | 199,044 | 230,162 | 248,618 | 264,207 | |||||||||||||||
General and administrative | 76,345 | 95,650 | 96,134 | 88,304 | 85,602 | |||||||||||||||
Amortization of acquired intangible assets | 19,489 | 23,677 | 32,590 | 30,571 | 20,310 | |||||||||||||||
Restructuring expenses | - | - | 1,884 | 527 | 5,552 | |||||||||||||||
Total operating expenses | 371,324 | 427,498 | 482,157 | 504,583 | 524,231 | |||||||||||||||
Operating income | 49,052 | 59,028 | 45,632 | 79,753 | 111,825 | |||||||||||||||
Financial income, net | 9,339 | 10,783 | 6,738 | 4,037 | 3,768 | |||||||||||||||
Equity in losses of affiliated company | - | - | - | - | (565 | ) | ||||||||||||||
Other income (expenses), net | (154 | ) | (162 | ) | 1,530 | (110 | ) | (3 | ) | |||||||||||
Income before taxes on income | 58,237 | 69,649 | 53,900 | 83,680 | 115,025 | |||||||||||||||
Taxes on income | 9,530 | 12,386 | (13,994 | ) | 28,405 | 11,950 | ||||||||||||||
Net income | 48,707 | 57,263 | 67,894 | 55,275 | 103,075 | |||||||||||||||
Basic earnings per share | $ | 0.78 | $ | 0.91 | $ | 1.11 | $ | 0.92 | $ | 1.74 | ||||||||||
Weighted average number of shares used in computing basic earnings per share (in thousands) | 62,652 | 62,924 | 60,905 | 60,388 | 59,362 | |||||||||||||||
Diluted earnings per share | $ | 0.76 | $ | 0.89 | $ | 1.09 | $ | 0.89 | $ | 1.69 | ||||||||||
Weighted average number of shares used in computing diluted earnings per share (in thousands) | 64,132 | 64,241 | 62,261 | 61,830 | 60,895 |
At December 31, | ||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | ||||||||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Working capital | $ | 173,909 | $ | 173,543 | $ | 137,635 | $ | 76,425 | $ | 128,190 | ||||||||||
Total assets | 1,534,418 | 1,581,836 | 1,660,945 | 1,657,058 | 1,642,091 | |||||||||||||||
Shareholders’ equity | 1,160,760 | 1,158,644 | 1,191,088 | 1,204,796 | 1,213,456 |
· | subject to limited exceptions, the judgment is final and non-appealable; |
· | the judgment was given by a court competent under the laws of the state in which the court is located and is otherwise enforceable in such state; |
· | the judgment was rendered by a court competent under the rules of private international law applicable in Israel; |
· | the laws of the state in which the judgment was given provides for the enforcement of judgments of Israeli courts; |
· | adequate service of process has been effected and the defendant has had a reasonable opportunity to present his arguments and evidence; |
· | the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel; |
· | the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and |
· | an action between the same parties in the same matter was not pending in any Israeli court at |
· | Quarterly variations in our operating results; |
· | Changes in expectations as to our future financial performance, including financial estimates by securities |
· | Perceptions of our company held by analysts and investors; |
· | Additions or departures of key personnel; |
· | Announcements related to dividends; |
· | Development of or disputes concerning our intellectual property rights; |
· | Announcements of technological innovations; |
· | Customer orders or new products by us or our competitors; |
· | Acquisitions or investments by us or by our competitors and partners; |
· | The exchangeability of the Notes for ADSs; |
· | Hedging or arbitrage trading activity involving ADSs by holders of the Notes; |
· | Modification of hedge positions by counterparties to the hedge transactions we entered into simultaneously with the issuance of the Notes, including the possible entry into or unwinding of derivative transactions with respect to the ADSs or the purchase or sale of the ADSs or other NICE securities in secondary market transactions; |
· | Currency exchange rate fluctuations; |
· | Earnings releases by us, our partners or our competitors; |
· | General financial, economic and market conditions; |
· | Political changes and unrest in regions, natural catastrophes; |
· | Market conditions in the industry and the general state of the securities markets, with particular emphasis on the technology and Israeli sectors of the securities markets; and |
· | General stock market volatility. |
· |
· | Cloud adoption is accelerating and demand is expanding across segments. Cloud delivery is becoming increasingly popular in providing flexible and cost-effective deployment models for enterprise systems. These include SaaS, Contact Center as a Service, Infrastructure as a Service, Platform as a Service, and other cloud-based solutions. By using cloud solutions, customers of all sizes can scale quickly and easily in all geographic locations while paying only for the amount of resources they use. There are several market needs driving this trend, including the desire for business agility, the pressure to continually improve operational efficiency and innovate to reduce total cost of ownership (“TCO”), and to ease implementation complexity. |
· | Proliferation of analytics as a main driver for successful customer engagement. Organizations are increasingly implementing a customer-centric strategy to get better visibility to their customers’ multi-channel journey. Organizations are now moving from simple Business Intelligence tools to focused decisioning and real-time action solutions – being proactive instead of reactive and predictive/prescriptive instead of descriptive. Front and back office functions seek to employ analytics to better optimize their operations. In addition, organizations today are exploring cognitive engagement solutions, like interactive computing, predictive analytics and machine learning. |
· | Organizations look at |
· | Automation and Machine Learning are increasingly used to enhance customer experience and efficiency |
· | Preventing financial crime and ensuring stringent compliance and evolving regulatory environments. Financial services regulators are calling for a fundamental change in |
· | An |
· |
· | Introducing the next-generation Customer Engagement platform, the Experience Center: Combining omnichannel routing, self-service, customer journey analytics, adaptive WFO and automation in the cloud. |
· | Creating cloud transformation across the Customer Engagement portfolio for all segments and regions, to enhance flexibility, agility and lower TCO. |
· | Providing a comprehensive suite of customer service essentials, from predictive omnichannel routing and WFO to advanced analytics based applications. |
· | Infusing Analytics into each and every element of customer engagement. |
· | Transforming the workforce through Adaptive Workforce Optimization (Adaptive WFO), by creating and managing agent personas through enhancement of the employee experience and engagement, in order to drive their motivation and reduce attrition. |
· | Leveraging Artificial Intelligence and advanced process automation technologies to dramatically reduce routine employee activities and improve the efficiency of customer engagement solutions |
· | Extending and increasing our offering to the SMB market segment, through cloud offerings. |
· | Analyzing individual customer journeys and operationalizing the insights extracted to create business value in real-time for customer experience stakeholders. |
· | Understanding the voice of the customer, across all touch points, and taking action to address the needs of Customer Experience Officers and other stakeholders in the marketing department. |
· | Offering solutions to all customer touchpoints implemented in the contact center, as well as solutions that benefit back office operations, retail branches, and self-service channels. |
· | Delivering integrated financial crime and compliance solutions that help financial services organizations to identify issues faster and earlier. |
· | Leveraging Big Data, machine learning and other advanced technologies, integrated with our financial crime and compliance platform to help customers reduce cost of operations. |
· | Continuing to cross-sell and up-sell into our existing customer base around the world. |
· | Continuing to focus on tier 1 clients by providing them with solutions to meet their needs via cloud and on-premise models. |
· | Leveraging cloud and SaaS to expand the reach of our solutions to tier 2 customers, thereby providing us an opportunity to significantly enhance our addressable market. |
· | Partnering with world-class consultancy and other firms to identify additional significant opportunities. |
· | Increasingly selling holistic solutions, combining Financial Crime and Compliance offerings with Customer Engagement offerings. |
· | Offering our solutions to verticals outside of the traditional financial services, such as gaming, energy, insurance, healthcare, industry regulators, government agencies, and alternative payments providers. |
Solution | Description |
Automatic Contact Distributor (ACD) and Interactive Voice Response (IVR) | Ensure customer requests are routed to qualified agents or resolved with self-service through a skills-based omnichannel routing engine that provides a universal queue for real-time interaction management, and a consolidated interface with a seamlessly integrated IVR for routing strategies across all supported channels. |
Personal Connection | Provide inside sales an easier way to attain quota by connecting with more prospects every day and customer service the ability to reduce inbound calls through personalized, low cost, and proactive outbound notifications. |
Customer Engagement Channels | Enable contact centers to service customers via any channel, with extensive routing options, consolidated reporting and a state-of-the-art agent interface. Channels include inbound and outbound voice, callback, voicemail, email, chat, text/SMS, Social Media and work items. Other channels, such as video, are implemented using work items. |
Solution | Description |
Network and Voice Connectivity Solutions | Provide Voice as a Service network connectivity suite that delivers flexible and reliable telephony services built specifically for the contact center. Offering a full range of telephony options, with guaranteed voice quality. Through our partnership with a leading, independent 3rd party, proactive diagnostic tools and extensive telephony expertise we ensure 99.99%. |
Solution | Description |
CRM Integrations | Provide pre-built CRM integrations, such as the inContact Agent for Salesforce, empower agents to personalize omnichannel customer service. They provide seamless, bidirectional CRM integrations with your contact center that increase agent efficiency and independence by delivering a real-time 360-degree view of the customer. |
UCaaS Integrations | Provide pre-built or partner-provided integration with Unified Communication tools that enables seamless collaboration between contact center agents and experts in their organization. This easy to deploy integration provides a single solution for formal and informal contact center agents. |
APIs | Empower organizations to customize and integrate their contact center with other business critical solutions to create the optimal customer service environment. |
Solution | Description |
Compliance Omnichannel Recording | Proactively captures and retains all customer interactions across multiple touch points to help ensure compliance with government regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act |
Trading Floor Compliance Solutions | |
Essential Compliance | Enables trading floors to record and store transactions and interactions in any media, as well as |
Communication Surveillance | Monitors trading activity across trading turrets, fixed and mobile phones, email, text and instant messaging, chat and social media. It automatically detects potential risks and enables compliance officers to see emerging trends, so that compliance breaches and fraud can be averted. It also enables firms to meet the requirements of the regulatory environment established with the introduction of the Dodd-Frank Act, and related rules and regulations. |
Complaint Management | Enables organizations to use analytics to identify interactions at risk, and manage the process of handling the complaint. |
Compliance and Script Adherence | Monitors agent interactions, searches for any phrase, at any time, and utilizes the phrases in issue resolution and training exercises. Incorporates real-time monitoring and alerting to guide towards required behaviors. Knows which calls are contained in the audio and helps ensure reading for an audit. |
Solution | Description |
Contact Center Omnichannel Recording | Provides comprehensive call recording technology that adapts easily to the unique operational requirements of any contact center. It supports virtually any telephony environment |
Performance Management | Maps enterprise business objectives to group and individual goals, and tracks and reports performance. It also automates critical managerial activities, including employee coaching, recognition, and performance improvement, allowing front-line managers to become more effective and efficient in developing their teams. Performance Management also includes unique capabilities, such as gamification, to engage and motivate and align employees around common and personalized business goals. |
Workforce Management | Forecasts |
Quality | Automates quality assurance processes and selection of calls for evaluation based on performance data. The solution facilitates root-cause evaluation, with easy drill down to interactions missing their Key Performance Indicator targets. Quality improvement is thus managed across voice, email, chat, and social media |
Nexidia Interaction Analytics | Analyzes large quantities of customer interactions across multiple channels in real time to identify hot topics and root causes quickly, and to produce actionable insights. These insights are then leveraged to improve processes, enhance customer experience, increase sales, optimize marketing campaigns and reduce operational costs. |
Back Office Workforce Optimization | Automates manual processes, integrates data from |
Real-time Authentication | Leverages voice biometrics for authenticating customers in real time. |
Call Volume Optimization | Leverages Big Data infrastructure and advanced predictive analytics to help organizations resolve customer needs in one contact, to predict and |
Real-time | Automatically monitors agent activity in real time, enabling organizations to identify process bottlenecks and implement best practices. With this information, the solution navigates agents through complex processes using on-screen guidance, and automates routine tasks to shorten handle time and eliminate manual processing errors. |
Interactive Voice Response ("IVR") Optimization | The IVR Optimization solution enables customers to reduce customer effort by increasing IVR containment rate, reducing IVR repeat calls, agent transfers, drop-offs and deflections and dramatically improving call center efficiency. |
Robotic Automation | Robotic solution for the automation of routine back office and contact center processes. Operated on virtual machines and monitored centrally, these robots handle end-to-end processes, essentially performing any routine task which the human user would otherwise do manually. |
Solution | Description |
Total Voice of the Customer | Collects and analyzes comprehensive data from multiple interaction touch points and channels; analyzes interactions in real time and provides guidance on the next-best-action; proactively |
Customer Journey Optimization | |
Customer Satisfaction | Understands the business practices and behaviors that drive customer satisfaction. Simplifies the customer experience, through methods such as quicker caller identification. Attracts new customers by offering an easier path to service than the competition. Statistically determines which business processes and agent behaviors have the greatest impact on customer behavior. |
Customer Churn | Analyzes historic defection data to create models for predicting future churn. Understands causes and effects of customer churn and how to design procedures to reduce the defection rate. Prioritizes at-risk customers based on search results combined with customer data. Collects information to refine retention marketing offers that are better tailored to customer types and demographics. |
Solution | Description |
Sales Performance Management | Provides the end-to-end ability to create, manage and distribute all aspects of a commissions program. It automates the process of commission, bonus and incentive administration, in support of any type of variable pay system that rewards employees for achieving targets aligned with the business strategy. |
Uses customer intelligence, predictive models and machine learning to make insightful, real-time personalization decisions during customer interactions over the Web. The solution helps organizations improve customer retention, increase online conversion rates, and deliver better service by taking the next-best-action. | |
Sales Effectiveness | Helps organizations optimize their campaigns. Locates and quantifies specific events by building the right metrics to align with corporate objectives such as offers made versus up-sell opportunities. Correlates data points such as customer spend and purchase history to build predictive models, prioritizing customers with a propensity to buy and create the next-best offer. Identifies high-performing agents, and bases best practices off their behavior. Establishes thresholds and works with agents, measuring performance against sales driven metrics. |
Solution | Description |
NICE Inform | Enables public safety agencies and organizations across various industries to capture, consolidate, synchronize and manage multimedia incident information efficiently and effectively. It captures and processes event information from a variety of media: radio and call audio, video, text, Computer-Aided Dispatch (CAD) systems, Geographic Information Systems, and others. |
NICE Investigate | Automates and expedites the end-to-end collection, analysis and sharing of all digital case evidence – from Records Management Systems, CAD, interview room and emergency call audio, documents, photos, private and public CCTV, body-worn and in-car video, social media and more – to help facilitate building and clearing more cases faster. |
Solution | Description |
NICE Multimedia Recording | Addresses the needs of emergency communications, dispatch and air traffic control operations. The recording platform automatically records, analyzes, stores, quickly retrieves and instantly replays telephony, radio and IP voice calls, operator console screens and SMS Text-to-911. TDM and VoIP recordings can be used to ensure compliance with regulations, provide case or incident evidence, and manage and improve departmental quality and productivity. |
NICE Inform | Helps emergency centers to effectively record, manage and derive valuable insights from today's higher volume and variety of communications. It captures multimedia communications and helps manage, synchronize and put incidents into context – saving time, money and resources, while ensuring quality and compliance. |
Solution | Description |
Enterprise Risk Case Manager | Enables firms to better manage and mitigate organizational risk by providing a single view of risk across the business. It serves as a central platform for managing alerts, cases, investigations, link analysis, regulatory reporting, financial losses, oversight and more, across multiple lines of business, channels, products, and regions, turning them into actionable insights. |
Solution | Description |
Suspicious Activity Monitoring | Leverages transaction analytics to |
Watch List Filtering | Provides enterprise-wide customer and transaction screening against multiple watch |
Customer Due Diligence | Provides integrated risk-based rating and continuous monitoring of accounts throughout the entire customer life-cycle, from initial applicant onboarding to periodic re-screening of existing customers. It is an open, flexible platform that can adapt to unique requirements across business segments, regions, and jurisdictions. |
CTR Processing and Automation | Provides seamless automated Currency Transaction Reporting |
FATCA Compliance | Helps U.S. and non-U.S. |
AML Essentials | Addresses the challenges of financial institutions, with coverage that includes Transaction Monitoring, Customer Due Diligence, and Sanctions Screening. Actimize AML Essentials, a cloud-based offering that uses the same power and experience as our enterprise solutions, AML Essentials offers rapid deployment and reduces overhead to make compliance easier and at a lower total cost of ownership. |
Solution | Description |
Card Fraud | Enables card issuers, acquirers and processors to detect fraudulent transactions, whether ATM, PIN, signature point-of-sale, or without a physical card. Market leading profile based behavioral analytics takes into account all available transaction, reference and location data to provide holistic coverage of card and account takeover. Solution includes: The Actimize Digital & Mobile Wallet Fraud protects customers from digital account takeover, and protects organizations from fraud liability and negative brand reputation. Monitors and protects a full range of wallet activity, including card/account provisioning, card present and not present purchases, person-to-person transfers, bill payments, and account-service events. The Actimize Pre-Paid Card Fraud solution identifies and prevents fraud in the pre-paid sector. From ATM to point-of-sale (POS) and Card-Not-Present (CNP), all transactions can be identified, interdicted on and alerted in real time. |
Remote Banking Fraud | Provides end-to-end protection against account takeover from online, mobile, IVR, and contact center transactions. Unique industry-leading analytic models accurately detect anomalies and patterns in real time and Actimize open analytics offer the flexibility to develop in-house models and strategies. A central "risk hub" enables the sharing of internal and third-party data from multiple channels for fraud and cyber detection, operations, and investigations. By accurately and efficiently coordinating customer lifetime value, transaction amounts and service history, the solution optimizes fraud prevention by offering greater insight into cross-channel |
Commercial Banking Fraud | |
Employee Fraud | |
Deposit Account Fraud | Helps institutions minimize deposit fraud losses by providing comprehensive account activity monitoring. The solution |
Authentication-IQ | Manages multiple authentication methods and risk-based decisions by creating a complete customer profile, based on historical authentication activity, account servicing, and transactional behavior which is then used to identify suspicious behavior at log-in or throughout a session, producing real-time actionable risk scores. Manages the process of step up authentication, choosing the appropriate method, producing alerts and enabling real-time interdiction. Provides alert and case management in a unified context to prioritize investigations and optimize workflow across the enterprise. |
Solution | Description |
Institutional Trade Surveillance | Provides scenario management for identifying market manipulation and abuse, fair dealings with customers, and insider trading across asset classes (such as equities, fixed income, swaps and futures). It includes specific tools for desk supervision, control room surveillance, and trade reporting practices, to ensure comprehensive oversight and sales and trading |
Retail Trade Surveillance | Addresses organization-wide compliance needs across a broad range of retail sales practices relating to Know Your Customer |
Employee Trade Surveillance | Detects Conflicts of Interest and Rogue Trading. It completely automates the submission, review and approval process for |
Enterprise Conflicts Management | Offers a unified approach to maintain controls and detect conflicts of interest before they occur on a global, enterprise-wide scale. Enables organizations to effectively manage employee requests for personal trades by evaluating details of the proposed trade in real time and automatically determining if the request should be approved, rejected, or escalated to a supervisor for approval. The solution includes detection models that compare executions with the employee's trade request history to determine whether the trade was pre-cleared and approved and to reconcile the trade details with the terms and conditions of the approved trade request. |
Sales Practices and Suitability | Provides coverage for a broad range of sales practices and |
· | Proactive |
· | Advanced Services – Technical experts perform system-level audits to ensure ongoing compliance with operational |
· | Network Operations Center – A 24/7 function that proactively monitors NICE-hosted and customer-premises environments with triage, resolution and escalation of system alarms. |
· | Managed Technical Services – NICE offers a suite of managed technical services that enable the customer to fully outsource all necessary responsibilities & functions required in order to manage the NICE solutions. This service includes: dedicated onsite support engineers, system management, updates and upgrades. |
Name of Subsidiary | Country of Incorporation or Residence | |
Nice Systems Australia PTY | Australia | |
NICE Systems Technologies Brasil LTDA | Brazil | |
NICE Systems Canada Ltd. | Canada | |
Nice Systems China Ltd. | China | |
Nice | France | |
NICE Systems GmbH | Germany | |
NICE APAC Ltd. | Hong Kong | |
NICE Systems Kft | Hungary | |
Nice Interactive Solutions India Private Ltd. | India | |
Nice Technologies Ltd. | Ireland | |
Actimize Ltd. | Israel | |
Nice Japan Ltd. | Japan | |
NICE Technologies Mexico S.R.L. | Mexico | |
NICE | Netherlands | |
Nice Systems (Singapore) Pte. Ltd. | Singapore | |
Nice Switzerland AG | Switzerland | |
Actimize UK Limited | United Kingdom | |
NICE Systems Technologies UK Limited | United Kingdom | |
NICE Systems UK Ltd. | United Kingdom | |
Actimize Inc. | United States | |
Nice Systems Inc. | United States | |
Nice Systems Latin America, Inc. | United States | |
Nice Systems Technologies Inc. | United States | |
Nexidia Inc. | United States | |
inContact Inc. | United States | |
CallCopy Inc. | United States | |
inContact Bolivia S.R.L. | Bolivia | |
inContact Limited | United Kingdom | |
inContact Philippines Inc. | Philippines |
· | Our North American headquarters in |
· | Our EMEA headquarters in London, occupies approximately 22,500 square feet, and includes |
· | Our |
· | Our |
· | Our office in |
· | Revenue recognition; |
· | Allowance for doubtful accounts; |
· | Impairment of long-lived assets; |
· | Taxes on income; |
· | Contingencies; |
· | Business combination; |
· | Stock-based |
· | Marketable securities; and |
· |
· | Level 1 |
· | Level 2 |
· | Level 3 |
2014 | 2015 | 2016 | ||||||||||
Revenues | ||||||||||||
Products | 33.2 | % | 34.3 | % | 30.2 | % | ||||||
Services | 66.8 | 65.7 | 69.8 | |||||||||
100.0 | 100.0 | 100.0 | ||||||||||
Cost of revenues | ||||||||||||
Products | 22.1 | 20.9 | 17.3 | |||||||||
Services | 41.1 | 38.9 | 40.1 | |||||||||
34.8 | 32.8 | 33.3 | ||||||||||
Gross profit | 65.2 | 67.2 | 66.7 | |||||||||
Operating expenses | ||||||||||||
Research and development, net | 14.1 | 13.9 | 13.9 | |||||||||
Selling and marketing | 26.5 | 24.4 | 26.4 | |||||||||
General and administrative | 9.6 | 9.8 | 11.5 | |||||||||
Amortization of acquired intangibles | 2.2 | 1.3 | 1.7 | |||||||||
Restructuring expenses | 0.6 | 0.0 | 0.0 | |||||||||
Total operating expenses | 53.0 | 49.3 | 53.5 | |||||||||
Operating income | 12.2 | 17.9 | 13.2 | |||||||||
Financial income, net | 0.5 | 0.7 | 1.1 | |||||||||
Other expenses, net | (0.1 | ) | (0.1 | ) | (0.1 | ) | ||||||
Income before taxes | 12.6 | 18.5 | 14.2 | |||||||||
Taxes on income | 1.1 | 3.3 | 2.1 | |||||||||
Net income from continuing operations | 11.5 | 15.2 | 12.1 |
2012 | 2013 | 2014 | ||||||||||
Revenues | ||||||||||||
Products | 42.0 | % | 39.8 | % | 38.4 | % | ||||||
Services | 58.0 | 60.2 | 61.6 | |||||||||
100.0 | 100.0 | 100.0 | ||||||||||
Cost of revenues | ||||||||||||
Products* | 33.3 | 31.2 | 30.1 | |||||||||
Services* | 44.8 | 43.2 | 41.5 | |||||||||
40.0 | 38.4 | 37.1 | ||||||||||
Gross profit | 60.0 | 61.6 | 62.9 | |||||||||
Operating expenses | ||||||||||||
Research and development, net | 13.8 | 14.4 | 14.7 | |||||||||
Selling and marketing | 26.2 | 26.2 | 26.1 | |||||||||
General and administrative | 10.9 | 9.3 | 8.5 | |||||||||
Amortization of acquired intangibles | 3.7 | 3.2 | 2.0 | |||||||||
Restructuring expenses | 0.2 | 0.1 | 0.5 | |||||||||
Total operating expenses | 54.8 | 53.2 | 51.8 | |||||||||
Operating income | 5.2 | 8.4 | 11.1 | |||||||||
Financial income, net | 0.7 | 0.4 | 0.4 | |||||||||
Equity in losses of affiliated company | - | - | (0.1 | ) | ||||||||
Other income (expenses), net | 0.2 | (0.0 | ) | (0.0 | ) | |||||||
Income before taxes | 6.1 | 8.8 | 11.4 | |||||||||
Taxes on income (Tax benefit) | (1.6 | ) | 3.0 | 1.2 | ||||||||
Net income | 7.7 | 5.8 | 10.2 |
Income (loss) from discontinued operations | 0.6 | 16.4 | (0.8 | ) | ||||||||
Taxes on income (tax benefits) from discontinued operations | 0.2 | 3.7 | (0.2 | ) | ||||||||
Net income (loss) from discontinued operations | 0.4 | 12.7 | (0.6 | ) | ||||||||
Net income | 11.9 | 27.9 | 11.5 |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2015 | 2016 | Dollar Change | Percentage Change | |||||||||||||
Product revenues | $ | 317.9 | $ | 306.2 | $ | (11.7 | ) | (3.7 | )% | |||||||
Service revenues | 609.0 | 709.3 | 100.3 | 16.5 | ||||||||||||
Total revenues | $ | 926.9 | $ | 1,015.5 | $ | 88.6 | 9.6 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2015 | 2016 | Dollar Change | Percentage Change | |||||||||||||
United States, Canada and Central and South America ("Americas") | $ | 630.1 | $ | 720.5 | $ | 90.4 | 14.4 | % | ||||||||
Europe, the Middle East and Africa ("EMEA") | 196.9 | 193.5 | (3.4 | ) | (1.7 | ) | ||||||||||
Asia-Pacific ("APAC") | 99.9 | 101.5 | 1.6 | 1.6 | ||||||||||||
Total revenues | $ | 926.9 | $ | 1,015.5 | $ | 88.6 | 9.6 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2015 | 2016 | Dollar Change | Percentage Change | |||||||||||||
Cost of product revenues | $ | 66.4 | $ | 53.0 | $ | (13.4 | ) | (20.2 | )% | |||||||
Cost of service revenues | 237.2 | 284.7 | 47.5 | 20.0 | ||||||||||||
Total cost of revenues | $ | 303.6 | $ | 337.7 | $ | 34.1 | 11.2 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2015 | 2016 | Dollar Change | Percentage Change | |||||||||||||
Gross profit on product revenues | $ | 251.5 | $ | 253.2 | $ | 1.7 | 0.7 | % | ||||||||
as a percentage of product revenues | 79.1 | % | 82.7 | % | ||||||||||||
Gross profit on service revenues | 371.8 | 424.6 | 52.8 | 14.2 | % | |||||||||||
as a percentage of service revenues | 61.0 | % | 59.9 | % | ||||||||||||
Total gross profit | $ | 623.3 | $ | 677.8 | $ | 54.5 | 8.7 | % | ||||||||
as a percentage of total revenues | 67.2 | % | 66.7 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2015 | 2016 | Dollar Change | Percentage Change | |||||||||||||
Research and development, net | $ | 128.5 | $ | 141.5 | $ | 13.0 | 10.2 | % | ||||||||
Selling and marketing | 225.8 | 268.3 | 42.5 | 18.8 | ||||||||||||
General and administrative | 90.4 | 116.6 | 26.2 | 29.0 | ||||||||||||
Amortization of acquired intangible assets | 12.5 | 17.2 | 4.7 | 37.5 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2015 | 2016 | Dollar Change | Percentage Change | |||||||||||||
Financial income, net | $ | 5.7 | $ | 10.8 | $ | 5.1 | 89.5 | % | ||||||||
Other expenses, net | 0.4 | 0.5 | 0.1 | 25 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2013 | 2014 | Dollar Change | Percentage Change | |||||||||||||
Product Revenues | $ | 377.6 | $ | 388.3 | $ | 10.7 | 2.8 | % | ||||||||
Service Revenues | 571.7 | 623.3 | 51.6 | 9.0 | ||||||||||||
Total Revenues | $ | 949.3 | $ | 1,011.6 | $ | 62.3 | 6.6 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2014 | 2015 | Dollar Change | Percentage Change | |||||||||||||
Product revenues | $ | 289.6 | $ | 317.9 | $ | 28.3 | 9.8 | % | ||||||||
Service revenues | 582.4 | 609.0 | 26.6 | 4.6 | ||||||||||||
Total revenues | $ | 872.0 | $ | 926.9 | $ | 54.9 | 6.3 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2014 | 2015 | Dollar Change | Percentage Change | |||||||||||||
United States, Canada and Central and South America ("Americas") | $ | 591.1 | $ | 630.1 | $ | 39.0 | 6.6 | % | ||||||||
Europe, the Middle East and Africa ("EMEA") | 189.2 | 196.9 | 7.7 | 4.1 | ||||||||||||
Asia-Pacific ("APAC") | 91.7 | 99.9 | 8.2 | 8.9 | ||||||||||||
Total revenues | $ | 872.0 | $ | 926.9 | $ | 54.9 | 6.3 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2013 | 2014 | Dollar Change | Percentage Change | |||||||||||||
United States, Canada and Central and South America (“Americas”) | $ | 596.7 | $ | 665.4 | $ | 68.7 | 11.5 | % | ||||||||
Europe, the Middle East and Africa (“EMEA”) | 223.9 | 239.4 | 15.5 | 6.9 | ||||||||||||
Asia-Pacific (“APAC”) | 128.7 | 106.8 | (21.9 | ) | (17.0 | ) | ||||||||||
Total Revenues | $ | 949.3 | $ | 1,011.6 | $ | 62.3 | 6.6 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2013 | 2014 | Dollar Change | Percentage Change | |||||||||||||
Cost of product revenues | $ | 117.8 | $ | 116.7 | $ | (1.1 | ) | (0.9 | )% | |||||||
Cost of service revenues | 247.1 | 258.9 | 11.8 | 4.8 | ||||||||||||
Total cost of revenues | $ | 364.9 | $ | 375.6 | $ | 10.7 | 2.9 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2014 | 2015 | Dollar Change | Percentage Change | |||||||||||||
Cost of product revenues | $ | 63.9 | $ | 66.4 | $ | 2.5 | 3.9 | % | ||||||||
Cost of service revenues | 239.6 | 237.2 | (2.4 | ) | (1.0 | ) | ||||||||||
Total cost of revenues | $ | 303.5 | $ | 303.6 | $ | 0.1 | 0.0 | % |
Years Ended December 31, (U.S. dollars in millions) | Years Ended December 31, (U.S. dollars in millions) | |||||||||||||||||||||||||||||||
2013 | 2014 | Dollar Change | Percentage Change | 2014 | 2015 | Dollar Change | Percentage Change | |||||||||||||||||||||||||
Gross profit on product revenues | $ | 259.7 | $ | 271.7 | $ | 12.0 | 4.6 | % | $ | 225.7 | $ | 251.5 | $ | 25.8 | 11.4 | % | ||||||||||||||||
as a percentage of product revenues | 68.8 | % | 69.9 | % | 77.9 | % | 79.1 | % | ||||||||||||||||||||||||
Gross profit on service revenues | 324.6 | 364.4 | 39.8 | 12.3 | % | 342.8 | 371.8 | 29.0 | 8.4 | % | ||||||||||||||||||||||
as a percentage of service revenues | 56.8 | % | 58.5 | % | 58.9 | % | 61.0 | % | ||||||||||||||||||||||||
Total gross profit | $ | 584.3 | $ | 636.1 | $ | 51.8 | 8.9 | % | $ | 568.5 | $ | 623.3 | $ | 54.8 | 9.6 | % | ||||||||||||||||
as a percentage of total revenues | 61.6 | % | 62.9 | % | 65.2 | % | 67.2 | % | ||||||||||||||||||||||||
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2014 | 2015 | Dollar Change | Percentage Change | |||||||||||||
Research and development, net | $ | 123.1 | $ | 128.5 | $ | 5.4 | 4.4 | % | ||||||||
Selling and marketing | 231.1 | 225.8 | (5.3 | ) | (2.3 | ) | ||||||||||
General and administrative | 83.4 | 90.4 | 7.0 | 8.4 | ||||||||||||
Amortization of acquired intangible assets | 19.2 | 12.5 | (6.7 | ) | (34.9 | ) | ||||||||||
Restructuring expenses | 5.4 | 0.0 | (5.4 | ) | (100 | ) |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2013 | 2014 | Dollar. Change | Percentage Change | |||||||||||||
Research and development, net | $ | 136.6 | $ | 148.6 | $ | 12.0 | 8.8 | % | ||||||||
Selling and marketing | 248.6 | 264.2 | 15.6 | 6.3 | ||||||||||||
General and administrative | 88.3 | 85.6 | (2.7 | ) | (3.1 | ) | ||||||||||
Amortization of acquired intangible assets | 30.6 | 20.3 | (10.3 | ) | (33.7 | ) | ||||||||||
Restructuring expenses | 0.5 | 5.6 | 5.1 | 1,020 |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2014 | 2015 | Dollar Change | Percentage Change | |||||||||||||
Financial income, net | $ | 3.8 | $ | 5.7 | $ | 1.9 | 50 | % | ||||||||
Other expenses, net | 0.0 | 0.4 | 0.4 | 100 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2013 | 2014 | Dollar Change | Percentage Change | |||||||||||||
Financial income, net | $ | 4.0 | $ | 3.8 | $ | (0.2 | ) | (5.0 | )% | |||||||
Equity in losses of affiliated company | - | (0.6 | ) | (0.6 | ) | - | ||||||||||
Other income (expenses), net | (0.1 | ) | (0.0 | ) | 0.1 | (100 | )% |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2012 | 2013 | Dollar Change | Percentage Change | |||||||||||||
Product Revenues | $ | 369.4 | $ | 377.6 | $ | 8.2 | 2.2 | % | ||||||||
Service Revenues | 509.6 | 571.7 | 62.1 | 12.2 | ||||||||||||
Total Revenues | $ | 879.0 | $ | 949.3 | $ | 70.3 | 8.0 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2012 | 2013 | Dollar Change | Percentage Change | |||||||||||||
United States, Canada andCentral and South America (“Americas”) | $ | 549.6 | $ | 596.7 | $ | 47.1 | 8.6 | % | ||||||||
Europe, the Middle East and Africa (“EMEA”) | 210.4 | 223.9 | 13.5 | 6.4 | ||||||||||||
Asia-Pacific (“APAC”) | 119.0 | 128.7 | 9.7 | 8.2 | ||||||||||||
Total Revenues | $ | 879.0 | $ | 949.3 | $ | 70.3 | 8.0 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2012 | 2013 | Dollar Change | Percentage Change | |||||||||||||
Cost of product revenues | $ | 122.9 | $ | 117.8 | $ | (5.1 | ) | (4.1 | )% | |||||||
Cost of service revenues | 228.3 | 247.1 | 18.8 | 8.2 | ||||||||||||
Total cost of revenues | $ | 351.2 | $ | 364.9 | $ | 13.7 | 3.9 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2012 | 2013 | Dollar Change | Percentage Change | |||||||||||||
Gross profit on product revenues | $ | 246.5 | $ | 259.7 | $ | 13.2 | 5.4 | % | ||||||||
as a percentage of product revenues | 66.7 | % | 68.8 | % | ||||||||||||
Gross profit on service revenues | 281.3 | 324.6 | 43.3 | 15.4 | % | |||||||||||
as a percentage of service revenues | 55.2 | % | 56.8 | % | ||||||||||||
Total gross profit | $ | 527.8 | $ | 584.3 | $ | 56.5 | 10.7 | % | ||||||||
as a percentage of total revenues | 60.0 | % | 61.6 | % |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2012 | 2013 | Dollar Change | Percentage Change | |||||||||||||
Research and development, net | $ | 121.4 | $ | 136.6 | $ | 15.2 | 12.5 | % | ||||||||
Selling and marketing | 230.2 | 248.6 | 18.4 | 8.0 | ||||||||||||
General and administrative | 96.1 | 88.3 | (7.8 | ) | (8.0 | ) | ||||||||||
Amortization of acquired intangible assets | 32.6 | 30.6 | (2.0 | ) | (6.1 | ) | ||||||||||
Restructuring expenses | 1.9 | 0.5 | (1.4 | ) | (73.7 | ) |
Years Ended December 31, (U.S. dollars in millions) | ||||||||||||||||
2012 | 2013 | Dollar Change | Percentage Change | |||||||||||||
Financial income, net | $ | 6.7 | $ | 4.0 | $ | (2.7 | ) | (40.3 | )% | |||||||
Other income (expenses), net | 1.5 | (0.1 | ) | (1.6 | ) | (106.7 | )% |
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1- 3 years | 3-5 years | More than 5 years | |||||||||||||||
Operating Leases | 89,027 | 17,169 | 26,122 | 21,662 | 24,074 | |||||||||||||||
Unconditional Purchase Obligations | 18,590 | 12,779 | 4,955 | 856 | - | |||||||||||||||
Severance Pay* | 24,134 | |||||||||||||||||||
Total Contractual Cash Obligations | 131,751 | 29,948 | 31,077 | 22,518 | 24,074 | |||||||||||||||
Uncertain Income Tax Positions ** | 18,561 |
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1- 3 years | 3-5 years | More than 5 years | |||||||||||||||
Operating Leases | 140,633 | 22,886 | 38,940 | 31,967 | 46,840 | |||||||||||||||
Unconditional Purchase Obligations | 22,700 | 17,318 | 5,382 | - | - | |||||||||||||||
Severance Pay* | 16,885 | |||||||||||||||||||
Total Contractual Cash Obligations | 180,218 | 40,204 | 44,322 | 31,967 | 46,840 | |||||||||||||||
Uncertain Income Tax Positions ** | 26,659 |
* | Severance pay relates to accrued obligations to employees as required under applicable labor laws. These obligations are payable only upon termination, retirement or death of the respective employees. | |||||||
** | Uncertain income tax positions under ASC 740 are due upon settlement and we are unable to reasonably estimate the ultimate amount or timing of settlement. See Note |
Amount of Commitment Expiration Per Period | ||||||||||||||||||||
Other Commercial Commitments | Total Amounts Committed | Less than 1 year | 1- 3 years | 3-5 years | More than 5 years | |||||||||||||||
Guarantees – Continuing operations | 4,377,987 | 3,932,011 | 360,879 | 85,097 | - | |||||||||||||||
Guarantees – Discontinued operations* | 19,910,444 | 78,500 | 19,831,944 | - | - | |||||||||||||||
Total Guarantees | 24,288,431 | 4,010,511 | 20,192,823 | 85,097 | - |
Amount of Commitment Expiration Per Period | ||||||||||||||||||||
Other Commercial Commitments | Total Amounts Committed | Less than 1 year | 1- 3 years | 3-5 years | More than 5 years | |||||||||||||||
Guarantees – continuing operations | 38,008 | 14,283 | 8,646 | 14,147 | 932 |
Name | Age | Audit Committee Member | Internal Audit Committee Member | Mergers and Acquisitions Member | Nominations Committee Member | Outside Director* | ||
David Kostman | 52 | Chairman of the Board of Directors | ||||||
X | X | |||||||
Rimon Ben-Shaoul | 72 | Director | X | |||||
Dan Falk | 72 | Director | X | X | X | X | X | X |
Yocheved Dvir | 64 | Director | X | X | X | |||
Yehoshua Ehrlich | 67 | Director | ||||||
Leo Apotheker | 63 | Director | ||||||
X | ||||||||
Joe Cowan | 68 | Director | ||||||
X | ||||||||
Zehava Simon | 58 | Director | X | X | X |
Name | Age | Position | ||
Barak Eilam | 42 | Chief Executive Officer | ||
Miki Migdal | 56 | President, Enterprise Product Group | ||
Joseph Friscia | 62 | |||
Paul Jarman | 47 | Chief Executive | ||
Beth Gaspich | 51 | |||
Chief Financial Officer | ||||
Yechiam Cohen | 60 | Corporate Vice President, General Counsel and Corporate Secretary | ||
Eran Porat | 54 | Corporate Vice President, Finance | ||
Eran Liron | 49 | Executive Vice President, Marketing and Corporate Development | ||
Barry Cooper | 46 | Chief Operating Officer | ||
Sigal Gill-More - Feferman | 47 | |||
Executive Vice President, Human Resources | ||||
(1) | Salary Costs. Salary Costs include gross salary, benefits and perquisites, including those mandated by applicable law which may include, to the extent applicable to each Covered Executive, payments, contributions and/or allocations for pension, severance, vacation, travel and accommodation, car or car allowance, medical insurances and risk insurances (e.g., life, disability, accidents), phone, convalescence pay, relocation, payments for social security, and other benefits consistent with the Company's guidelines. |
(2) | Bonus Costs. Bonus Costs represent bonuses granted to the Covered Executive with respect to the year ended December 31, |
(3) | Equity Costs. Represents the expense recorded in our financial statements for the year ended December 31, |
i. | Barak Eilam – CEO. Salary Costs - |
ii. |
iii. |
iv. |
Joseph Friscia – President, NICE Actimize. Salary Costs - |
Raghav Sahgal – former President, NICE APAC. Salary Costs - $419; Bonus Costs - $356; Equity Costs - $432 expense recorded in |
· | the majority of shares voted at the meeting shall include at least a majority of the shares of non-controlling shareholders present at the meeting and voting on the matter (without taking into account the votes of the abstaining shareholders); or |
· | the total number of shares of non-controlling shareholders voted against the election of the outside directors does not exceed two percent of the aggregate voting rights in the company. |
At December 31, | ||||||||||||
Category of Activity | 2014* | 2015 | 2016** | |||||||||
Operations | 108 | 86 | 66 | |||||||||
Customer Support | 1,300 | 1,374 | 1,928 | |||||||||
Sales & Marketing | 691 | 682 | 1069 | |||||||||
Research & Development | 687 | 801 | 1,294 | |||||||||
General & Administrative | 378 | 352 | 573 | |||||||||
Total | 3,164 | 3,316 | 4,930 |
At December 31, | ||||||||||||||||||||||||
Category of Activity | 2012 | 2013 | 2014 | |||||||||||||||||||||
Operations | 110 | 110 | 108 | |||||||||||||||||||||
Customer Support | 1,291 | 1,393 | 1,343 | |||||||||||||||||||||
Sales & Marketing | 809 | 840 | 811 | |||||||||||||||||||||
Research & Development | 803 | 865 | 890 | |||||||||||||||||||||
General & Administrative | 387 | 368 | 361 | |||||||||||||||||||||
Total | 3,400 | 3,576 | 3,513 | |||||||||||||||||||||
Geographic Location | ||||||||||||||||||||||||
Israel | 1,206 | 1,285 | 1,256 | 991 | 946 | 944 | ||||||||||||||||||
Americas | 1,298 | 1,365 | 1,344 | 1,298 | 1,263 | 2,544 | ||||||||||||||||||
Europe | 607 | 631 | 607 | 590 | 564 | 530 | ||||||||||||||||||
Asia Pacific | 289 | 295 | 306 | 285 | 543 | 912 | ||||||||||||||||||
Total | 3,400 | 3,576 | 3,513 | 3,164 | 3,316 | 4,930 |
Name and Address | Number of Shares | Percent of Shares Beneficially Owned (1) | ||||||
Psagot Investment House Ltd. 14 Ahad Ha’am Street Tel Aviv 65142, Israel | 4,329,691 | (2) | 7.3 | % | ||||
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199 | 4,162,819 | (3) | 7.0 | % | ||||
Migdal Insurance & Financial Holdings Ltd. 4 Efal Street; P.O. Box 3063 Petach Tikva 49512, Israel | 3,729,783 | (4) | 6.3 | % | ||||
Harel Insurance Investments & Financial Services Ltd. Harel House 3 Abba Hillel Street Ramat Gan 52118, Israel | 3,446,287 | (5) | 5.8 | % |
Name and Address | Number of Shares | Percent of Shares Beneficially Owned (1) | ||||||
Janus Capital Management LLC 151 Detroit Street Denver, Colorado 80206, USA | 4,559,401 | (2) | 7.6 | % | ||||
Massachusetts Financial Services Company 111 Huntington Avenue Boston, Massachusetts 02199 | 4,077,833 | (3) | 6.8 | % | ||||
Psagot Investment House Ltd. 14 Ahad Ha'am Street Tel Aviv 65142, Israel | 3,390,434 | (4) | 5.6 | % | ||||
Migdal Insurance & Financial Holdings Ltd. 4 Efal Street; P.O. Box 3063 Petach Tikva 49512, Israel | 3,143,558 | (5) | 5.2 | % |
ADSs | ||||
High | Low | |||
Annual | ||||
2010 | 35.20 | 25.10 | ||
2011 | 38.49 | 27.17 | ||
2012 | 40.04 | 29.51 | ||
2013 | 42.12 | 33.63 | ||
2014 | 51.75 | 37.08 | ||
Quarterly | ||||
Quarterly 2013 | ||||
First Quarter | $38.28 | $34.02 | ||
Second Quarter | 37.96 | 33.63 | ||
Third Quarter | 42.12 | 36.31 | ||
Fourth Quarter | 42.06 | 37.44 | ||
Quarterly 2014 | ||||
First Quarter | $45.00 | $37.79 | ||
Second Quarter | 46.07 | 37.08 | ||
Third Quarter | 41.55 | 37.84 | ||
Fourth Quarter | 51.75 | 38.60 | ||
Quarterly 2015 | ||||
First Quarter | $61.92 | $47.95 | ||
Monthly | ||||
September 2014 | $41.55 | $38.62 | ||
October 2014 | 41.80 | 38.60 | ||
November 2014 | 50.09 | 40.26 | ||
December 2014 | 51.75 | 47.23 | ||
January 2015 | 51.20 | 47.95 | ||
February 2015 | 59.64 | 48.21 | ||
March 2015 | 61.92 | 57.99 |
ADSs | ||||||||
High | Low | |||||||
Annual | ||||||||
2012 | 40.04 | 29.51 | ||||||
2013 | 42.12 | 33.63 | ||||||
2014 | 51.75 | 37.08 | ||||||
2015 | 68.38 | 47.95 | ||||||
2016 | 69.79 | 54.12 | ||||||
Quarterly | ||||||||
Quarterly 2016 | ||||||||
First Quarter | $ | 66.28 | $ | 54.12 | ||||
Second Quarter | 67.25 | 59.07 | ||||||
Third Quarter | 69.46 | 62.98 | ||||||
Fourth Quarter | 69.79 | 63.72 | ||||||
Quarterly 2017 | ||||||||
First Quarter | 70.84 | 65.59 | ||||||
Second Quarter (through April 20, 2017) | 68.66 | 66.57 | ||||||
Monthly | ||||||||
September 2016 | $ | 68.83 | $ | 64.01 | ||||
October 2016 | 67.67 | 65.92 | ||||||
November 2016 | 69.79 | 64.18 | ||||||
December 2016 | 68.94 | 63.72 | ||||||
January 2017 | 70.49 | 65.59 | ||||||
February 2017 | 70.84 | 67.18 | ||||||
March 2017 | 69.52 | 65.72 | ||||||
April 2017 (through April 20, 2017) | 68.66 | 66.57 |
Ordinary Shares | |||||||||||||||||
High | Low | ||||||||||||||||
NIS | $ | NIS | $ | ||||||||||||||
Annual | |||||||||||||||||
2012 | 150.00 | 38.82 | 117.80 | 30.29 | |||||||||||||
2013 | 149.10 | 42.21 | 122.10 | 33.27 | |||||||||||||
2014 | 203.30 | 51.94 | 130.60 | 36.90 | |||||||||||||
2015 | 262.6 | 68.76 | 189.4 | 47.95 | |||||||||||||
2016 | 268.0 | 69.76 | 207.2 | 53.29 | |||||||||||||
Quarterly 2016 | |||||||||||||||||
First Quarter | 251.9 | 66.33 | 207.2 | 53.29 | |||||||||||||
Second Quarter | 255.9 | 66.33 | 229.2 | 58.77 | |||||||||||||
Third Quarter | 263.6 | 69.26 | 242.3 | 62.65 | |||||||||||||
Fourth Quarter | 268.0 | 69.76 | 244.9 | 64.19 | |||||||||||||
Quarterly 2017 | |||||||||||||||||
First Quarter | 269.50 | 71.19 | 239.30 | 65.58 | |||||||||||||
Second Quarter (through April 20, 2017) | 250.70 | 69.07 | 243.50 | 66.66 | |||||||||||||
Monthly | |||||||||||||||||
September 2016 | 259.4 | 68.95 | 242.3 | 64.00 | |||||||||||||
October 2016 | 259.0 | 67.80 | 249.4 | 65.81 | |||||||||||||
November 2016 | 268.0 | 69.76 | 244.9 | 64.19 | |||||||||||||
December 2016 | 265.6 | 68.90 | 247.5 | 64.83 | |||||||||||||
January 2017 | 269.5 | 71.19 | 252.6 | 65.58 | |||||||||||||
February 2017 | 267.7 | 71.05 | 251.2 | 67.00 | |||||||||||||
March 2017 | 256.9 | 69.67 | 239.3 | 65.89 | |||||||||||||
April 2017 (through April 20, 2017) | 250.7 | 69.07 | 243.5 | 66.66 |
Ordinary Shares | ||||||||||||||||
High | Low | |||||||||||||||
NIS | $ | NIS | $ | |||||||||||||
Annual | ||||||||||||||||
2010 | 129.70 | 34.66 | 97.20 | 25.08 | ||||||||||||
2011 | 139.00 | 37.45 | 97.25 | 27.12 | ||||||||||||
2012 | 150.00 | 38.82 | 117.80 | 30.29 | ||||||||||||
2013 | 149.10 | 42.21 | 122.10 | 33.27 | ||||||||||||
2014 | 203.30 | 51.94 | 130.60 | 36.90 | ||||||||||||
Quarterly 2013 | ||||||||||||||||
First Quarter | 144.00 | 38.69 | 124.20 | 33.27 | ||||||||||||
Second Quarter | 137.90 | 37.20 | 122.10 | 33.74 | ||||||||||||
Third Quarter | 147.80 | 42.05 | 130.50 | 36.76 | ||||||||||||
Fourth Quarter | 149.10 | 42.21 | 132.60 | 37.49 | ||||||||||||
Quarterly 2014 | ||||||||||||||||
First Quarter | 155.00 | 44.45 | 133.70 | 36.90 | ||||||||||||
Second Quarter | 158.70 | 45.71 | 130.60 | 37.73 | ||||||||||||
Third Quarter | 152.30 | 41.74 | 132.70 | 37.70 | ||||||||||||
Fourth Quarter | 203.30 | 51.94 | 145.20 | 38.85 | ||||||||||||
Quarterly 2015 | ||||||||||||||||
First Quarter | 246.70 | 61.58 | 189.40 | 47.95 | ||||||||||||
Monthly | ||||||||||||||||
September 2014 | 152.30 | 41.74 | 139.90 | 38.99 | ||||||||||||
October 2014 | 154.10 | 42.12 | 145.20 | 38.85 | ||||||||||||
November 2014 | 184.90 | 47.84 | 152.90 | 40.35 | ||||||||||||
December 2014 | 203.30 | 51.94 | 183.70 | 46.93 | ||||||||||||
January 2015 | 201.60 | 51.40 | 189.90 | 47.95 | ||||||||||||
February 2015 | 236.10 | 59.74 | 189.40 | 48.11 | ||||||||||||
March 2015 | 246.70 | 61.58 | 228.80 | 58.28 |
· | the securities issued amount to 20% or more of the |
· | some or all of the consideration is other than cash or listed securities or the transaction is not on market terms; and |
· | the transaction will increase the relative holdings of a shareholder that holds five percent or more of the |
· | any amendment to the articles of association; |
· | an increase of the |
· | a merger; or |
· | approval of interested party transactions which require shareholder approval. |
· | a violation of his duty of care to us or to another person, |
· | a breach of his duty of loyalty to us, provided that the office holder acted in good faith and had reasonable grounds to assume that his act would not prejudice our interests, |
· | a financial obligation imposed upon him for the benefit of another person, |
· | a payment which the office holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israeli Securities Law, 5728-1968, as amended (the "Securities Law") and Litigation Expenses (as defined below) that the office holder incurred in connection with a proceeding under Chapters H'3, H'4 or I'1 of the Securities Law, and |
· | any other event, occurrence or circumstance in respect of which we may lawfully insure an office holder. |
· | a monetary liability imposed on or incurred by an office holder pursuant to a judgment in favor of another person, including a judgment imposed on such office holder in a settlement or in an arbitration decision that was approved by a court of law; |
· | reasonable Litigation Expenses, expended by the office holder as a result of an investigation or proceeding instituted against him by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against him and either (A) concluded without the imposition of any financial liability in lieu of criminal proceedings or (B) concluded with the imposition of a financial liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent |
· |
· | reasonable Litigation Expenses, which the office holder incurred or with which the office holder was charged by a court of law, in a proceeding brought against the office holder, by the Company, on its behalf or by another person, or in a criminal prosecution in which the office holder was acquitted, or in a criminal prosecution in which the office holder was convicted of an offense that does not require proof of criminal intent |
· | a payment which the office holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law, and Litigation Expenses that the office holder incurred in connection with a proceeding under Chapters H'3, H'4 or I'1 of the Securities Law; and |
· | any other event, occurrence or circumstance in respect of which we may lawfully indemnify an office holder. |
· | a breach by the office holder of his duty of loyalty unless, with respect to insurance coverage or indemnification, the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
· | a breach by the office holder of his duty of care if the breach was done intentionally or recklessly (other than if solely done in negligence); |
· | any act or omission done with the intent to derive an illegal personal benefit; or |
· | a fine, civil fine or ransom levied on an Office Holder, or a financial sanction imposed upon an Office Holder under Israeli Law. |
· | A reduced corporate tax rate for industrial enterprises, provided that more than 25% of their annual income |
· | The reduced tax rates |
· | A definition of |
· | A reduced dividend withholding tax rate of 15% for the tax year 2013, and 20% for the tax year 2014 and thereafter applies to dividends paid from preferred income to both Israeli and non-Israeli investors, with an exemption from such withholding tax applying to dividends paid to an Israeli company. |
· | Introduction of a benefit regime for "Preferred Technology Enterprises", granting a 12% tax rate on income deriving from Intellectual Property, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual income derived from exports. |
· | A |
· | A withholding tax rate of |
· | deductions over an |
· | deductions over a three-year period of expenses involved with the issuance and listing of shares on a stock market; |
· | the right to elect, under specified conditions, to file a consolidated tax return with other related Israeli Industrial Companies; and |
· | accelerated depreciation rates on equipment and buildings. |
· | dealers or traders in securities, currencies or notional principal contracts; |
· | financial institutions; |
· | insurance companies; |
· | real estate investment trusts; |
· | banks; |
· | investors subject to the alternative minimum tax; |
· | tax-exempt organizations; |
· | regulated investment companies; |
· | investors that actually or constructively own 10 percent or more of our voting shares; |
· | investors that will hold the ADSs as part of a hedging or conversion transaction or as a position in a straddle or a part of a synthetic security or other integrated transaction for U.S. Federal income tax purposes; |
· | investors that are treated as partnerships or other pass through entities for U.S. Federal income tax purposes and persons who hold the ADSs through partnerships or other pass through entities; |
· | investors whose functional currency is not the U.S. dollar; and |
· | expatriates or former long-term residents of the United States. |
· | an individual who is a citizen or a resident of the United States; |
· | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any political subdivision thereof; |
· | an estate whose income is subject to U.S. Federal income tax regardless of its source; or |
· | a trust if: |
(a) | a court within the United States is able to exercise primary supervision over administration of the trust; and |
(b) | one or more United States persons have the authority to control all substantial decisions of the trust. |
Item 11. Quantitative and Qualitative Disclosures About Market Risk. |
Functional currencies | ||||||||||||||||||||||||||||||||
(In U.S. dollars in millions) | ||||||||||||||||||||||||||||||||
USD | GBP | EUR | CAD | MXN | AUD | BRL | Other currencies | |||||||||||||||||||||||||
Foreign currencies | ||||||||||||||||||||||||||||||||
USD | - | 20.1 | (0.3 | ) | 2.8 | 1.7 | 1.4 | (1.8 | ) | - | ||||||||||||||||||||||
GBP | 26.6 | - | (0.0 | ) | - | - | - | - | - | |||||||||||||||||||||||
EUR | 4.5 | 18.6 | - | - | - | - | - | - | ||||||||||||||||||||||||
CAD | 4.1 | 0.2 | - | - | - | - | - | - | ||||||||||||||||||||||||
AUD | 1.9 | 0.1 | - | - | - | - | - | - | ||||||||||||||||||||||||
MXN | 2.1 | 0.0 | - | - | - | - | - | - | ||||||||||||||||||||||||
CHF | 0.0 | 0.3 | - | - | - | - | - | - | ||||||||||||||||||||||||
JPY | (0.2 | ) | (0.0 | ) | - | - | - | - | - | - | ||||||||||||||||||||||
INR | (1.4 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
SGD | (4.8 | ) | 0.2 | - | - | - | (0.0 | ) | - | - | ||||||||||||||||||||||
HKD | (3.3 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
ILS | (2.8 | ) | (0.0 | ) | - | - | - | - | - | - | ||||||||||||||||||||||
Other currencies | (0.1 | ) | 0.1 | - | - | - | 0.0 | - | (2.0 | ) |
Functional currencies | ||||||||||||||||||||||||||||||||
(In U.S. dollars in millions) | ||||||||||||||||||||||||||||||||
USD | GBP | EUR | CAD | MXN | CHF | AUD | Other currencies | |||||||||||||||||||||||||
Foreign currencies | ||||||||||||||||||||||||||||||||
USD | - | 22.02 | 6.94 | 2.30 | 0.55 | 0.81 | 1.84 | (0.87 | ) | |||||||||||||||||||||||
GBP | 8.58 | - | 5.18 | - | - | - | - | - | ||||||||||||||||||||||||
EUR | 1.28 | 14.69 | - | - | - | - | - | - | ||||||||||||||||||||||||
CAD | 5.18 | 0.55 | - | - | - | - | - | - | ||||||||||||||||||||||||
AUD | 0.64 | - | 0.69 | - | - | - | - | - | ||||||||||||||||||||||||
MXN | 1.68 | - | - | - | - | - | - | - | ||||||||||||||||||||||||
CHF | 0.83 | - | - | - | - | - | - | - | ||||||||||||||||||||||||
HKD | (2.70 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
ILS | (18.78 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
Other currencies | - | - | - | - | - | - | - | 0.62 |
New Israeli Shekel | Other currencies | Total | ||||||||||
(In U.S. dollars in millions) | ||||||||||||
Less than 1 year | 7.07 | 0.04 | 7.11 | |||||||||
1-3 years | 13.52 | - | 13.52 | |||||||||
3-5 years | 13.52 | - | 13.52 | |||||||||
Over 5 years | 6.76 | - | 6.76 | |||||||||
Total | 40.87 | 0.04 | 40.91 |
New Israeli Shekel | Other currencies | Total | ||||||||||
(In U.S. dollars in millions) | ||||||||||||
less than 1 year | 7.67 | 0.24 | 7.91 | |||||||||
1-3 years | 12.71 | 0.06 | 12.77 | |||||||||
3-5 years | 12.71 | 0.04 | 12.75 | |||||||||
Over 5 years | 18.01 | - | 18.01 | |||||||||
Total | 51.10 | 0.34 | 51.44 |
Amortized Cost | Estimated fair value | Amortized Cost | Estimated fair value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Up to 1 year | 1-3 years | 4-5 years | 6-10 years | Total | Up to 1 year | 1-3 years | 4-5 years | 6-10 years | Total | Up to 1 year | 1-3 years | 4-5 years | 6-10 years | Total | Up to 1 year | 1-3 years | 4-5 years | 6-10 years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate debentures | 65.3 | 109.7 | 123.1 | 7.0 | 305.1 | 65.8 | 110.2 | 122.6 | 7.1 | 305.7 | 30.3 | 83.0 | 9.0 | - | 122.3 | 30.3 | 83 | 8.9 | - | 122.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S treasuries | - | - | - | 7.0 | 7.0 | - | - | - | 6.8 | 6.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. treasuries | - | - | - | 7.0 | 7.0 | - | - | - | 6.8 | 6.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agencies | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 65.3 | 109.7 | 123.1 | 14.0 | 312.1 | 65.8 | 110.2 | 122.6 | 13.9 | 312.5 | 30.3 | 83.0 | 9.0 | 7.0 | 129.3 | 30.3 | 83 | 8.9 | 6.8 | 129.0 |
a fee of |
a fee of up to $0.05 |
· | a fee of up to $0.05 per ADS per calendar year (or portion thereof) for services performed by the depositary in administering the ADRs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of ADRs as of the record date or record dates set by the depositary during each calendar year and shall be payable in the manner described in the next succeeding provision); |
a fee for the |
· | stock transfer or other taxes and other governmental charges; |
· | cable, telex and facsimile transmission and delivery charges incurred at the request of an ADR holder in connection with the deposit or delivery of shares; |
· | transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities; |
· | in connection with the conversion of foreign currency into U.S. dollars, the fees, expenses and other charges charged by JPMorgan Chase Bank, N.A. or its agent (which may be a division, branch or affiliate) so appointed in connection with such conversion; and |
· | fees of any division, branch or affiliate of the depositary utilized by the depositary to direct, manage or execute any public or private sale of securities under the deposit agreement. |
Services Rendered | 2013 Fees | 2014 Fees | 2015 Fees | 2016 Fees | ||||||||||||
Audit (1) | $ | 675,000 | $ | 691,000 | $ | 676,865 | $ | 799,489 | ||||||||
Audit-related (2) | $ | 79,000 | $ | 72,000 | $ | 76,787 | $ | 560,123 | ||||||||
Tax (3) | $ | 469,000 | $ | 399,000 | $ | 146,645 | $ | 190,761 | ||||||||
Total | $ | 1,223,000 | $ | 1,162,000 | $ | 900,297 | $ | 1,550,373 |
(1) | Audit fees are for audit services for each of the years shown in this table, including fees associated with the annual audit for |
(2) | Audit-related fees relate to assurance and associated services that traditionally are performed by the independent auditor, including: due diligence investigations and audit services provided in connection with other statutory or regulatory |
(3) | Tax fees are for professional services rendered by our auditors for tax compliance, tax advice on actual or contemplated transactions, tax consulting associated with international transfer prices and global mobility of employees. |
Period | (a) Total number of shares purchased | (b) Average price paid per share | (c) Total number of shares purchased as part of publicly announced plans or programs | (d) Maximum number (or approximately dollar value) of shares that may yet be purchased under the plans or programs | ||||||||||||
(In U.S. dollars, except share amounts) | ||||||||||||||||
January 1 – January 31 | 175,541 | 56.95 | 175,541 | 45,206,380 | ||||||||||||
February 1 - February 28 | 68,023 | 60.17 | 68,023 | 41,113,126 | ||||||||||||
March 1 - March 31 | 156,128 | 62.42 | 156,128 | 31,367,278 | ||||||||||||
April 1 - April 30 | 129,646 | 63.61 | 129,646 | 23,120,291 | ||||||||||||
May 1 - May 31 | - | - | - | 23,120,291 | ||||||||||||
June 1 - June 30 | - | - | - | 23,120,291 | ||||||||||||
July 1 - July 31 | - | - | - | 23,120,291 | ||||||||||||
August 1 - August 31 | - | - | - | 23,120,291 | ||||||||||||
September 1 - September 30 | 54,851 | 66.22 | 54,851 | 19,488,236 | ||||||||||||
October 1 - October 31 | 62,964 | 66.78 | 62,964 | 15,283,796 | ||||||||||||
November 1 - November 30 | 20,269 | 66.04 | 20,269 | 13,945,268 | ||||||||||||
December 1 - December 31 | 35,868 | 65.76 | 35,868 | 11,586,653 | ||||||||||||
Total | 703,290 | 62.02 | 703,290 |
Period | (a) Total number of shares purchased | (b) Average price paid per share | (c) Total number of shares purchased as part of publicly announced plans or programs | (d) Maximum number (or approximately dollar value) of shares that may yet be purchased under the plans or programs | ||||||||||||
(In U.S. dollars, except share amounts) | ||||||||||||||||
January 1 – January 31 | 299,312 | 40.07 | 299,312 | 4,313,307 | ||||||||||||
February 1 - February 28 | 219,477 | 39.67 | 219,477 | 95,607,212 | ||||||||||||
March 1 - March 31 | 104,919 | 40.87 | 104,919 | 91,319,477 | ||||||||||||
April 1 - April 30 | - | - | - | 91,319,477 | ||||||||||||
May 1 - May 31 | 230,916 | 38.81 | 230,916 | 82,357,524 | ||||||||||||
June 1 - June 30 | 401,036 | 40.27 | 401,036 | 66,206,014 | ||||||||||||
July 1 - July 31 | 370,898 | 40.35 | 370,898 | 51,241,212 | ||||||||||||
August 1 - August 31 | 299,867 | 38.80 | 299,867 | 39,606,267 | ||||||||||||
September 1 - September 30 | 84,860 | 39.57 | 84,860 | 36,248,537 | ||||||||||||
October 1 - October 31 | 250,810 | 39.85 | 250,810 | 26,253,295 | ||||||||||||
November 1 - November 30 | 40,000 | 47.41 | 40,000 | 24,356,784 | ||||||||||||
December 1 - December 31 | 16,587 | 47.70 | 16,587 | 23,565,528 | ||||||||||||
Total | 2,318,682 | 40.00 | 2,318,682 |
Exhibit No. | Description | ||
1.1 | Amended and Restated Memorandum of Association, as approved on December 21, 2006 (English translation) (filed as Exhibit 1.1 to | ||
1.2 | Amended and Restated Articles of Association, as amended on | ||
2.1 | Form of Share Certificate (filed as Exhibit 4.1 to Amendment No. 1 to | ||
2.2 | Form of Deposit Agreement including Form of ADR Certificate (filed as Exhibit 1 to | ||
4.1 | NICE | ||
4.2 | Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan (filed as Exhibit 4.4 to | ||
4.3 | NICE | ||
4.4 | NICE Ltd. 2008 Share Incentive Plan, as amended (filed as Exhibit 99.1 to NICE's Immediate Report on Form 6-K filed with the SEC on May 28, 2015, and incorporated herein by reference). | ||
4.5 | e-Glue Software Technologies, Inc. 2004 Stock Option Plan, as amended (filed as Exhibit 4.4 to | ||
4.6 | Fizzback Group (Holdings) Limited Employee Share Option Scheme (filed as Exhibit 4.4 to | ||
4.7 | Merced Systems, Inc. 2001 Stock Plan (filed as Exhibit 4.4 to | ||
4.8 | Merced Systems, Inc. 2011 Stock Plan (filed as Exhibit 4.5 to |
4.9 | The Causata Inc. Executive Share Option Scheme (filed as Exhibit 4.4 to | ||
4.10 | Causata Inc. 2010 Stock Plan (filed as Exhibit 4.5 to | ||
4.11 | NICE |
4.12 | InContact, Inc. 2008 Equity Incentive Plan (filed as Exhibit 4.4 to NICE Ltd.'s Registration Statement on Form S-8 (Registration No. 333-191176) filed with the SEC on November 15, 2016, and incorporated herein by reference). | |
4.13 | Nexidia Inc. 2005 Stock Incentive Plan (filed as Exhibit 4.4 to NICE-Systems Ltd.'s Registration Statement on Form S-8 (Registration No. 333-191176) filed with the SEC on March 23, 2016, and incorporated herein by reference). | |
4.14 | Nexidia Agreement and Plan of Merger, dated January 10, 2016. | |
4.15 | Credit Agreement, dated November 14, 2016. | |
4.16 | Indenture, dated January 18, 2017. | |
4.17 | inContact Agreement and Plan of Merger, dated May 17, 2016. | |
8.1 | List of significant subsidiaries. | |
12.1 | Certification by the Chief Executive Officer of | |
12.2 | Certification by the Chief Financial Officer of | |
13.1 | Certification by the Chief Executive Officer of | |
13.2 | Certification by the Chief Financial Officer of | |
15.1 | Consent of Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global. |
101 | The following financial information from |
Page | |
F-2 - F-4 | |
F-5 - F-6 | |
F-7 | |
F-8 | |
F-9 - F-10 | |
F-11 - F-12 | |
F-13 - |
Kost Forer Gabbay & Kasierer 3 Aminadav St. Tel-Aviv 6706703, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
F - 2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of NICE We have audited NICE We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. F - 3
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management has excluded from its assessment of internal control over financial reporting as of December 31, 2016 the internal controls of inContact Inc., because its acquisition closed on November 14, 2016, which constituted approximately 4.2% of the Company’s consolidated total assets as of December 31, 2016, and 1.2% for the period from the date of acquisition out of the Company’s consolidated net income for the year then ended. Accordingly, our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of inContact Inc. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company
F - 4 NICE
U.S. dollars in thousands
The accompanying notes are an integral part of the consolidated financial statements. F - NICE CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands (except share and per share data)
The accompanying notes are an integral part of the consolidated financial statements. F - NICE U.S. dollars in thousands (except share and per share data)
The accompanying notes are an integral part of the consolidated financial statements. F - NICE LTD. AND ITS SUBSIDIARIES U.S. dollars in thousands (except share and per share data)
The accompanying notes are an integral part of the consolidated financial statements. F - 8 NICE U.S. dollars in thousands
The accompanying notes are an integral part of the consolidated financial statements. F - 9 NICE LTD. AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY U.S. dollars in thousands
The accompanying notes are an integral part of the consolidated financial statements. F - 10 NICE U.S. dollars in thousands
The accompanying notes are an integral part of the consolidated financial statements. F - 11 NICE CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands
The accompanying notes are an integral part of the consolidated financial statements. F - 12 NICE U.S. dollars in thousands (except share and per share data)
NICE The Company’s mission is to empower organizations to The Company The Company does this by providing customer engagement platforms, capturing uncover intent. The Company helps its customers improve their service and security by applying machine learning to cross-industry data and offering customers collective insights.The Company’s solutions
On Upon acquisition, inContact became a wholly-owned subsidiary of The following table summarizes the components of the purchase consideration transferred:
(*) Includes cash consideration for the redemption of inContact’s convertible bonds in an amount of $139,438 and (**) Pursuant to the merger agreement, all outstanding unvested inContact RSUs, options and restricted shares were cancelled and replaced with RSUs with ADSs to be received upon settlement, options to acquire ADSs and restricted ADSs, respectively with the same terms and conditions. Of the total estimated fair value of the F - 13 NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The following table summarizes the fair values of the assets acquired and liabilities assumed:
The following table presents details of the identified intangible assets acquired as of the date of the acquisition:
Goodwill generated from this business combination is primarily attributable to synergies between the Company's and inContact's respective products and services. The goodwill is not deductible for income tax purposes. inContact Inc. constituted approximately 4.2% of the Company’s consolidated total assets as of December 31, 2016, and 1.2% attributed to the period from the date of acquisition of the Company’s consolidated net income (excluding amortization of related acquired intangible assets) for the year then ended,. The following table presents the unaudited pro forma financial information for the years ended December 31, 2016 and 2015, as if the acquisition occurred on January 1, 2015:
F - 14 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The unaudited pro forma financial information for the years ended December 31, 2016 and 2015 has been calculated after adjusting the Company’s results and those of inContact to reflect the business combination accounting effects resulting from this acquisition as if the acquisition occurred as of January 1, 2015, including: (i) acquisition related transaction costs; (ii) amortization expense from acquired intangible assets; (iii) post acquisition share-based compensation expense; (iv) debt financing costs incurred for the issuance of a loan received as part of the acquisition financing; and (v) the associated tax effect of these unaudited pro forma adjustments. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2015. The fair value of assets acquired and liabilities assumed from the acquisition of inContact was based on a preliminary valuation and the Company's estimates and assumptions are subject to changes within the measurement period. In accordance with ASU 2015-16, measurement period adjustments determined to be material will be recognized in the period in which the Company determines the amounts, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date.
On March 22, 2016, the Company completed the acquisition of Nexidia Inc. ("Nexidia"), a provider of advanced customer analytics. The Company acquired Nexidia for a total consideration of $135,150. The acquisition of Nexidia will allow the Company to offer a combined offering, featuring analytics capabilities with accuracy, scalability and performance, enabling organizations to expand their analytics usage in critical business use cases. Upon acquisition, Nexidia became a wholly-owned subsidiary of the Company. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired and liabilities assumed in the business combination be recognized at their fair values as of the acquisition date. The following table summarizes the components of the purchase consideration transferred:
F - 15 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The following table summarizes the fair values of the assets acquired and liabilities assumed:
The following table presents details of the identified intangible assets acquired as of the date of the acquisition:
Goodwill generated from this business combination is primarily attributable to synergies between the Company's and Nexidia's respective products and services. The goodwill is not deductible for income tax purposes. The results of Nexidia operations have been included in the consolidated statements of income since March 22, 2016. Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company's consolidated statements of income. F - 16 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
On March 11, 2016, the Company completed the acquisition of Voiceprint International, Inc. ("VPI"), a provider of workforce optimization software and services for enterprises, contact centers, first responders and trading floors. The Company acquired VPI for total consideration of $21,720 in cash. Upon acquisition, VPI became a wholly-owned subsidiary of the Company. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The Company recorded customer relationships and goodwill in amount of $8,500 and $16,873, respectively. The estimated useful life of the customer relationships is 6 years. Goodwill generated from this business combination is attributed to synergies between the Company's and VPI's respective products and services. The goodwill is not deductible for income tax purposes. The results of VPI operations have been included in the consolidated financial statements since March 11, 2016. Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company`s consolidated statement of income.
During 2016 acquisition related costs amounted to $9,348 and were included in general and administrative expenses. During 2015 and 2014, the Company did not record any acquisition related costs.
During 2015, the Company divested its Physical Security as well as its Cyber and Intelligence operations, which were a major part of the Security Solutions segment, to allow it to focus on its core markets as part of the execution of its long-term strategy. In July 2015 the Companycompleted the sale of the Cyber and Intelligence operation to Elbit Systems for a total consideration of $151,583, comprised of $111,583 in cash and $40,000 earn out based on future business performance. The Cyber and Intelligence operation offers solutions which provide law enforcement agencies, intelligence organizations and signal intelligence agencies with tools for generating intelligence from communications. The sale resulted in a capital gain of $101,847, which was presented as part of the net income on discontinued operations in the consolidated statements of income for the year ended December 31, 2015. On September 18, 2015, the Company completed the sale of the Physical Security operation to Battery Ventures for a total consideration of $92,475, comprised of $74,551 in cash, note receivable of $2,924 and up to $15,000 earn out based on future business performance. The Physical Security operation provides video surveillance technologies and capabilities to security-aware organizations. F - 17 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Following the divestiture of one of the discontinued operations, the buyer made certain demands and allegations, claiming indemnification pursuant to the sale agreement with the Company. The Company Following the sale, Physical Security's and Intelligence's results of operations and statement of
(*) Represent the results of the discontinued operations until their disposal. Depreciation expense totaled $0, $724 and $1,058 for the years 2016, 2015 and 2014, respectively. Amortization expense totaled $0, $4,362 and $1,804 for the years 2016, 2015 and 2014, respectively. F - 18 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The major classes of assets and liabilities that were classified as discontinued operations were:
The consolidated financial statements were prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP").
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
The currency of the primary economic environment in which the operations of NICE and certain subsidiaries are conducted is the U.S. dollar ("dollar"); thus, the dollar is the functional currency of NICE and certain subsidiaries. NICE and certain subsidiaries' transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with ASC 830, "Foreign Currency Matters". All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of income as financial income or expenses, as appropriate. For those subsidiaries whose functional currency has been determined to be a non-dollar currency, assets and liabilities are translated at year-end exchange rates and statement of income items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders' equity. F - 19 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Intercompany transactions and balances have been eliminated upon consolidation.
Cash equivalents are short-term unrestricted highly liquid investments that are readily convertible into cash, with original maturities of three months or less at acquisition.
The Company accounts for investments in debt securities in accordance with ASC 320, "Investments - Debt and Equity Securities". Management determines the appropriate classification of its investments in debt securities at the time of purchase and re-evaluates such determinations at each balance sheet date. Marketable securities classified as "available-for-sale" are carried at fair value, based on quoted market prices. Unrealized gains and losses are reported in a separate component of shareholders' equity in accumulated other comprehensive income (loss). Gains and losses are recognized when realized, on a specific identification basis, in the Company's consolidated statements of income. The Company's securities are reviewed for impairment in accordance with ASC
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates:
Leasehold improvements are amortized by the straight-line method over the term of the lease or the estimated useful life of the improvements, whichever is shorter. F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Intangible assets are amortized over their estimated useful lives using the straight-line method, at the following weighted average annual rates:
The Company's long-lived assets and identifiable intangibles that are subject to amortization are reviewed for impairment in accordance with ASC 360, "Property, Plant, and Equipment", whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators include any significant changes in the manner of the Company's use of the assets and significant negative industry or economic trends. Upon determination that the carrying value of a long-lived asset may not be recoverable based upon a comparison of aggregate undiscounted projected future cash flows to the carrying amount of the asset, an impairment charge is recorded for the excess of the carrying amount over fair value. In
Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, "Intangible - Goodwill and Other," ("ASC 350") goodwill is not amortized, but rather is subject to an annual impairment test. ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually or between annual tests in certain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with its carrying value. F - 21 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the two-step impairment test is performed. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test.
The Company generates revenues from sales of software products and services, which include SaaS and network connectivity, hosting, support and maintenance, The basis for the Company's software revenue recognition is substantially governed by the accounting guidance contained in ASC 985-605, "Software-Revenue For multiple element arrangements within the scope of software revenue recognition guidance, revenues are allocated to the different elements in the arrangement under the "residual method" when Vendor Specific Objective Evidence ("VSOE") of fair value exists for all undelivered elements and no VSOE exists for the delivered elements. Under the residual method, the Company defers revenue for the fair value of its undelivered elements and recognizes revenue for the remainder of the arrangement fee attributable to the elements initially delivered in the arrangement when the basic criteria in ASC 985-605 have been met. Any discount in the arrangement is allocated to the delivered element. Revenues from maintenance and professional services are recognized ratably over the contractual period and as services are performed, respectively. For arrangements that contain both software and non-software components that function together to deliver the products' essential functionality, the Company allocates revenue to each element based on its relative selling price. In such circumstances, the accounting principles establish a hierarchy to determine the selling price to be used for allocating revenue to deliverables. The selling price for a deliverable is based on its VSOE, if available, third party evidence ("TPE"), if VSOE is not available, or best estimated selling price ("BESP"), if neither VSOE nor TPE are available. The Company establishes VSOE of fair value using the price charged for a deliverable when sold separately F - 22 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The Company's policy for establishing VSOE of fair value of maintenance services is based on the price charged when the maintenance is renewed separately. Establishment of VSOE of fair value of professional services is based on the price charged when these services are sold separately. Revenues from fixed price contracts that require significant customization, integration and installation are recognized based on ASC 605-35, "Construction-Type and Production-Type Contracts", using the percentage-of-completion method of accounting based on the ratio of costs related to contract performance incurred to date to the total estimated amount of such costs. The amount of revenue recognized is based on the total fees under the arrangement and the percentage of completion achieved. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss on the entire contact. The Revenues for To assess the probability of collection for revenue recognition, the Company has The Company maintains a provision for product returns which is estimated based on the Company's past experience and is deducted from revenues. Deferred revenues and advances from customers include F - 23 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Research and development costs (net of grants) incurred in the process of software production
The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". This topic prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company implements a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement. The Company classifies interest and penalties on income taxes (which includes uncertain tax positions) as taxes on income. The deferred tax assets and liabilities are classified to non-current assets and liabilities, respectively.
Non-royalty bearing grants from the Government of Israel and the European Union for funding research and development projects are recognized at the time the Company is entitled to such grants on the basis of the related costs incurred and recorded as a deduction from research and development expenses.
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, trade receivables, marketable securities and foreign currency derivative contracts. The Company's cash and cash equivalents are invested in deposits mainly in dollars with major international banks. Deposits in the U.S. may be in excess of insured limits and are not insured in other jurisdictions. Generally, these deposits may be redeemed upon demand and therefore bear minimal risk. The Company's trade receivables are derived from sales to customers located primarily in North America, EMEA and APAC. The Company performs ongoing credit evaluations of its customers and F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The Company's marketable securities include investment in corporate debentures and U.S. The Company entered into forward contracts, and option contracts intended to protect cash flows resulting from payroll and facilities related expenses against the volatility in value of forecasted non-dollar
The Company's liability for severance pay for its Israeli employees is calculated pursuant to Israel's Severance Pay Law based on the most recent monthly salary of the employees multiplied by the number of years of employment as of the balance sheet date. Employees are entitled to one month's salary for each year of employment, or a portion thereof. The Company's liability is fully provided by monthly deposits with insurance policies and severance pay funds and by an accrual. The deposited funds include profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies. The Company's agreements with employees in Israel, The Company also has other liabilities for severance pay in other jurisdictions. Severance pay expense for The Company has a 401(K) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to 6%-8% of their eligible compensation, but generally not greater than annual payment of $18 in 2016 and 2015, and $17.5 F - 25 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year plus dilutive potential equivalent ordinary shares considered outstanding during the year, in accordance with ASC 260, "Earnings per Share". The weighted average number of shares related to outstanding anti-dilutive options excluded from the calculations of diluted net earnings per share was
The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" ("ASC 718"), which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees and directors. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of income. The Company recognizes compensation expenses for the value of its awards, which have graded vesting, based on the accelerated attribution method over the requisite service period of each of the awards, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model, which requires a number of assumptions: the expected volatility is based upon actual historical stock price movements; the expected term of options granted is based upon historical experience and represents the period of time that options granted are expected to be outstanding; the risk-free interest rate is based on the yield from U.S. Federal Reserve zero-coupon bonds with an equivalent term; and the expected dividend rate (an annualized dividend yield) is based on the per share dividend declared by the Company's Board of Directors. For information on the Company's dividend payments, see Note The Company measures the fair value of restricted stock based on the market value of the underlying shares at the date of grant. F - 26 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The Company applies ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"). Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows:
The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The Company's marketable securities and foreign currency derivative contracts are classified within Level 2 (see Notes 3 and The carrying amounts of F - 27 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The Company is currently involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss.
Advertising expenses are charged to expense as incurred. Advertising expenses for the years 2016, 2015 and 2014
The Company repurchases its ordinary shares from time to time on the open market or in other transactions and holds such shares as treasury shares. The Company presents the cost to repurchase treasury stock as a reduction of shareholders' equity. The Company reissues treasury shares under the stock purchase plan, upon exercise of options and upon vesting of restricted stock units. Reissuance of treasury shares is accounted for in accordance with ASC No. 505-30 whereby gains are credited to additional paid-in capital and losses are charged to additional paid-in capital to the extent that previous net gains are included therein; otherwise to retained earnings.
The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to future expected cash flows from customer relationships, acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
The Company accounts for comprehensive income in accordance with ASC No. 220, "Comprehensive Income". Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income relate to gains and losses on hedging derivative instruments and unrealized gains and losses on available for sale marketable securities and changes in foreign currency translation adjustments. F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The following tables show the components of accumulated other comprehensive income, net of taxes, as of December 31,
F - 29 NICE LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands (except share and per share data)
In May 2014, the Financial Accounting Standards Board In March 2016, the FASB issued “Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations (Reporting revenue gross versus net)” (ASU 2016-08), which clarifies gross versus net revenue reporting when another party is involved in the transaction. In April 2016, the FASB issued “Identifying Performance Obligations and Licensing” (ASU 2016-10) which amends the revenue guidance on identifying performance obligations and accounting for licenses of intellectual property. The new revenue standard may be applied using either of the The Company will adopt the standard in the first quarter of 2018 and has not yet selected a transition method The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. While the Company is continuing to assess all potential impacts of the new standard, the Company currently believes the impacts relate to arrangements that include term-based software licenses, allocation of transaction price to each performance obligation on a relative standalone selling price and capitalization of costs related to obtaining In January 2016, the FASB issued ASU In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"). The updated standard aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. This update is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods; early adoption is permitted and modified retrospective application is required. The Company is currently evaluating the impact of adopting ASU 2016-02 on its consolidated financial statements. F - 30 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”), which clarifies that a change in the counter party to a derivative instrument designated as a hedging instrument does not require designation of that hedging relationship, provided that all other hedge accounting criteria are met. The guidance in ASU 2016-05 is effective for annual periods beginning after December 15, 2016; early adoption is permitted as of the beginning of an interim period on a modified retrospective basis. The Company expects no material impact on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. ASU 2016-09 will be effective for the Company in the first quarter of 2017. The Company will apply this guidance using a modified retrospective transition method and expect to record a total cumulative-effect adjustment in retained earnings as of January 1, 2017 for the revision of the forfeiture fair value and excess tax benefits that have not previously been recognized in an amount of approximately $6 million. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments." The guidance addresses the classification of cash flow related to (1) debt prepayment or extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, (6) distributions received from equity method investees and (7) beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and is effective for financial statements issued for annual reporting periods beginning after December 15, 2017. Early application is permitted. The Company is currently evaluating the impact of this standard on its consolidated statement of cash flows. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory. ASU 2016-16 will be effective for the Company in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 "Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment" (ASU 2017-04). ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which requires the calculation of the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements. F - 31 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
In January 2017, the FASB issued ASU 2017-01 "Business Combinations (Topic 805): Clarifying the Definition of a Business" (ASU 2017-04), which provides a more robust framework to use in determining when a set of assets and activities is a business. Because the current definition of a business is interpreted broadly and can be difficult to apply, stakeholders indicated that analyzing transactions is inefficient and costly and that the definition does not permit the use of reasonable judgment. ASU 2017-04 provides more consistency in applying the guidance, reduces the costs of application, and makes the definition of a business more operable. This update is effective for annual and interim periods beginning after December 15,
Short-term and long-term investments include marketable securities in the amount of The following table summarizes amortized costs, gross unrealized gains and losses and estimated fair values of available-for-sale marketable securities as of December 31,
The scheduled maturities of available-for-sale marketable securities as of December 31,
F - 32 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values as of December 31,
F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Depreciation expense totaled The Company recorded a reduction of F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
(*) including a goodwill balance of $559,372 related to the acquisition of inContact.
F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The Company's risk management strategy includes the use of derivative financial instruments to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. ASC 815, "Derivatives and Hedging" ("ASC 815"), requires the Company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the line item associated with the hedged transaction in the period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item representing the ineffective portion of the derivative, if any, is recognized in financial income (expense) in the period of change. The Company entered into option and forward contracts to hedge a portion of anticipated New Israeli Shekel ("NIS") and Indian Rupee (INR) payroll and benefit payments as well as facilities related payments. These derivative instruments are designated as cash flow hedges, as defined by ASC 815 and accordingly are measured in fair value. These transactions are effective and, as a result, gain or loss on the derivative instruments are reported as a component of accumulated other comprehensive income (loss) and reclassified as payroll expenses or finance expenses, respectively, at the time that the hedged income/expense is recorded.
F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The Company currently hedges its exposure to the variability in future cash flows for a maximum period of one year. As of December 31, The fair value of the Company's outstanding derivative instruments at December 31,
The effect of derivative instruments in cash flow hedging relationship on income and other comprehensive income for the years ended December 31,
F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Derivatives in foreign exchange cash flow hedging relationships:
The Company leases office space, office equipment and various motor vehicles under operating leases.
Future minimum lease commitments under non-cancelable operating leases for the years ended December 31, were as follows:
Rent expenses for the years On October 30, 2015, the Company entered into an agreement to rent new office space in Hoboken NJ, USA. Consequently, in November 2016, the Company ceased using its offices in Paramus, NJ and Manhattan, NY, USA prior to their original contractual termination date. The Company intends to sub-lease its two former facilities in New Jersey and New York during the remainder of the respective lease terms. As a result, the Company recorded an exit activity liability as of December 31, 2016 and recognized rent expenses in the year then ended in the amount of $6,457, which are included in the disclosed information above. F - 39 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The minimum payment under these operating leases, upon cancellation of these lease agreements was Lease expenses for motor vehicles for the years 2016, 2015 and 2014
The Company is obligated under certain agreements with its suppliers to purchase
Following the divestiture of one of the Company business units, the buyer of such business unit made certain demands and allegations, claiming indemnification pursuant to the sale agreement between the Company and such buyer. The Company has denied all demands and allegations made by the buyer. The parties have reached and executed a settlement agreement on December 25, 2016 in accordance with the mechanism set in the sale agreement regarding such matters, which its outcome is recorded within discontinued operations. This dispute is no longer pending.
In May 2009, inContact was served in a lawsuit titled California College, Inc., et al., v. UCN, Inc., et al. In the lawsuit, California College alleges that (1) inContact made fraudulent and/or negligent misrepresentations in connection with the sale of its services with those of Insidesales.com, Inc., another defendant in the lawsuit, (2) inContact breached its service contract with California College and an alleged oral contract between the parties by failing to deliver contracted services and product and failing to abide by implied covenants of good faith and fair dealing, and (3) inContact’s conduct interfered with prospective economic business relations of California College with respect to enrolling students. California College filed an amended complaint that has been answered by Insidesales.com and inContact. California College originally sought damages in excess of $20.0 million. Insidesales.com and inContact filed cross- claims against one another, which they subsequently agreed to dismiss with prejudice. In October 2011, California College reached a settlement with Insidesales.com, the terms of which have not been disclosed and remain confidential. In June of 2013, California College amended its damages claim to $14.4 million, of which approximately $5.0 million was alleged to be pre- judgment interest. On September 10, 2013, the court issued an order on inContact's Motion for Partial Summary Judgment. The court determined that factual disputes exist as to several of the claims, but dismissed California College's cause of action for intentional interference with prospective economic relations and the claim for prejudgment interest. Dismissing the claim for prejudgment interest effectively reduced the claim for damages to approximately $9.2 million. At this stage we are unable to evaluate the probability of a favorable or unfavorable outcome in this litigation. F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
Income not eligible for Pursuant to a temporary tax relief initiated by the F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
In
Under the
NICE
Non-Israeli subsidiaries are taxed according to the tax laws in their respective country of residence. F - 42 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
As of December 31, Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses increasing taxes before utilization.
Deferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recorded for tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:
F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
The Company has provided valuation allowances in respect of certain deferred tax assets resulting from tax loss carry forwards and other reserves and allowances due to uncertainty concerning
F - NICE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
g. Taxes on income are comprised as follows:
Of which:
F - 45 NICE LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data)
A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
All the Company's unrecognized tax benefits would, if recognized, reduce the Company's annual effective tax rate. The Company has During
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