TTEC Holdings, Inc. (NASDAQ:TTEC) Q4 2019 Earnings Conference Call March 5, 2020 8:30 AM ET Company Participants Paul Miller - SVP, Treasurer & IR Officer Ken Tuchman - Chairman & CEO Regina Paolillo - Chief Financial & Administrative Officer Conference Call Participants George Sutton - Craig-Hallum Michael Latimore - Northland Capital Markets Maggie Nolan - William Blair Jared Levine - Cowen Joshua Vogel - Sidoti & Company Bill Warmington - Wells Fargo Operator Welcome to TTEC's Fourth Quarter and Full Yea ...

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) TTEC Holdings, Inc. is a global customer experience technology and services company, restructured into TTEC Digital and TTEC Engage in 2019, reporting **$1.644 billion** in total revenue FY 2019 Revenue by Business Segment | Segment | Revenue (USD) | Percentage of Total | | :--- | :--- | :--- | | TTEC Digital | $305 million | 19% | | TTEC Engage | $1.338 billion | 81% | | **Total** | **$1.644 billion** | **100%** | - The company restructured its reporting segments in the second quarter of 2019 from four segments (CSS, CTS, CGS, CMS) to two new segments: TTEC Digital and TTEC Engage[21](index=21&type=chunk) - TTEC's core strategy includes deepening relationships with existing clients, pursuing new industry-leading clients, executing strategic acquisitions, and investing in technology platforms and partnerships[36](index=36&type=chunk) - The company operates globally in **22** countries with **49,500** employees as of fiscal year-end 2019, serving over **300** clients in industries such as automotive, communications, financial services, and healthcare[23](index=23&type=chunk)[27](index=27&type=chunk) - The company's top five and ten clients represented **37%** and **50%** of total revenue in 2019, respectively. Relationships with its top five clients have ranged from **13** to **23** years[46](index=46&type=chunk)[47](index=47&type=chunk) [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including intense competition, rapid technological change, cybersecurity threats, client concentration (top ten clients **50%** of 2019 revenue), labor challenges, international operational risks, and the controlling influence of its CEO who owns **61%** of common stock - The company faces significant competition from large multinational providers, offshore service providers, and niche solution providers. The trend of industry consolidation may create new, larger competitors[59](index=59&type=chunk)[60](index=60&type=chunk) - A large portion of revenue comes from a limited number of clients. In 2019, the top five and ten clients accounted for **37%** and **50%** of revenue, respectively. The loss of a major client could materially impact financial results[69](index=69&type=chunk) - The business is exposed to significant cybersecurity risks, including data breaches, cyber-fraud (such as phishing scams), and DDoS attacks, which could disrupt operations and harm the company's reputation[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - The company's operational delivery is geographically concentrated in locations like the Philippines and Mexico, exposing it to risks from natural disasters, political unrest, and health epidemics[75](index=75&type=chunk) - Chairman and CEO Kenneth D. Tuchman beneficially owns approximately **61%** of the company's common stock, giving him control over all matters requiring stockholder approval, which may create conflicts of interest[116](index=116&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved written comments from the SEC staff as of the 2019 fiscal year-end - There are no unresolved staff comments from the SEC[120](index=120&type=chunk) [Item 2. Properties](index=25&type=section&id=Item%202.%20Properties) As of December 31, 2019, TTEC operated **89** global customer engagement centers, primarily in the United States, Philippines, and Canada, with lease terms up to **13** years Customer Engagement Centers by Country (as of Dec 31, 2019) | Country | Total Centers | | :--- | :--- | | United States of America | 46 | | Philippines | 18 | | Canada | 6 | | Australia | 3 | | Mexico | 3 | | Brazil | 2 | | Bulgaria | 2 | | United Kingdom | 2 | | Other | 7 | | **Total** | **89** | - The company's customer engagement centers are classified into three types: Multi-Client Centers (leased by TTEC for multiple clients), Dedicated Centers (leased by TTEC for a single client), and Managed Centers (owned/leased by clients but managed by TTEC)[127](index=127&type=chunk) [Item 3. Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal actions, but management expects no material adverse effect on its financial position or operations beyond existing reserves - The company accrues for legal exposures when losses are deemed probable and reasonably estimable[124](index=124&type=chunk) - Management does not expect current legal proceedings to have a material adverse effect on the company's financial condition[125](index=125&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[127](index=127&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) TTEC common stock trades on NASDAQ, paid **$0.62** per share in dividends in 2019, and has **$26.6 million** remaining for stock repurchases as of December 31, 2019 Dividends Per Common Share | Year | Dividend per Share (USD) | | :--- | :--- | | 2019 | $0.62 | | 2018 | $0.55 | - On February 27, 2020, the Board of Directors authorized a semi-annual dividend of **$0.34** per common share, payable on April 16, 2020[130](index=130&type=chunk) - No shares were repurchased during 2019. As of December 31, 2019, approximately **$26.6 million** remained authorized for future repurchases under the existing program[131](index=131&type=chunk)[132](index=132&type=chunk) [Item 6. Selected Financial Data](index=30&type=section&id=Item%206.%20Selected%20Financial%20Data) The company's 2019 financial performance showed revenue growth to **$1.64 billion**, income from operations increasing to **$123.7 million**, and diluted EPS rising to **$1.65** Selected Financial Data (Years Ended December 31, in thousands, except per share data) | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Revenue** | $1,643,704 | $1,509,171 | $1,477,365 | | **Income from operations** | $123,709 | $92,054 | $100,489 | | **Net income attributable to TTEC stockholders** | $77,164 | $35,817 | $7,256 | | **Diluted EPS** | $1.65 | $0.77 | $0.16 | | **Dividends per common share** | $0.62 | $0.55 | $0.47 | | **Total assets** | $1,376,788 | $1,054,508 | $1,078,736 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2019, TTEC's revenue grew **8.9%** to **$1.64 billion**, with operating income rising to **$123.7 million**, and strong liquidity supported by **$238.0 million** in cash from operations and a **$530 million** available credit facility [Results of Operations](index=44&type=section&id=Results%20of%20Operations) In FY 2019, TTEC Digital revenue grew **27.9%** to **$305.3 million** with operating income up **17.8%**, while TTEC Engage revenue increased **5.4%** to **$1.34 billion** with operating income up **43.7%** TTEC Digital Segment Performance (FY 2019 vs. FY 2018) | Metric | 2019 | 2018 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $305,346 | $238,799 | $66,547 | 27.9% | | Operating Income | $38,927 | $33,054 | $5,873 | 17.8% | | Operating Margin | 12.7% | 13.8% | - | - | TTEC Engage Segment Performance (FY 2019 vs. FY 2018) | Metric | 2019 | 2018 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,338,358 | $1,270,372 | $67,986 | 5.4% | | Operating Income | $84,782 | $59,000 | $25,782 | 43.7% | | Operating Margin | 6.3% | 4.6% | - | - | - The effective tax rate for 2019 was **23.3%**, a decrease from **29.3%** in 2018. The change was influenced by earnings in jurisdictions with tax holidays and various tax benefits and expenses[211](index=211&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is strong, with **$238.0 million** in cash from operations and **$177.2 million** in free cash flow in 2019, alongside **$530.0 million** in available credit facility capacity Cash Flow Summary (in millions) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $238.0 | $168.3 | | Net cash used in investing activities | ($162.9) | ($47.6) | | Net cash used in financing activities | ($47.4) | ($102.1) | Free Cash Flow Reconciliation (in thousands) | | Year Ended December 31, | | :--- | :--- | | | **2019** | **2018** | | Net cash provided by operating activities | $237,989 | $168,345 | | Less: Purchases of property, plant and equipment | 60,776 | 43,450 | | **Free cash flow** | **$177,213** | **$124,895** | - As of December 31, 2019, the company had **$290.0 million** in borrowings under its credit facility and a remaining borrowing capacity of approximately **$530.0 million**[218](index=218&type=chunk) - Total capital expenditures for 2020 are expected to be between **3.6%** and **3.8%** of revenue, with approximately **65%** allocated to support business growth[233](index=233&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate fluctuations on its variable-rate debt and foreign currency exposure on **22%** of 2019 revenue, mitigated by **$209.2 million** in cash flow hedging instruments - The company is exposed to interest rate risk on its **$290.0 million** of outstanding variable-rate debt. A **1%** (100 basis points) increase in interest rates would increase annual interest expense by **$1.0 million** for every **$100 million** borrowed[254](index=254&type=chunk) - Foreign currency risk is significant, as **22%** of 2019 consolidated revenue was associated with foreign exchange risk, where revenue is collected in U.S. dollars but costs are incurred in local currencies like the Philippine Peso and Mexican Peso[256](index=256&type=chunk) Cash Flow Hedging Instruments (as of Dec 31, 2019) | Currency Pair | Notional Amount (USD) | | :--- | :--- | | Philippine Peso | $147,654,000 | | Mexican Peso | $61,529,000 | | **Total** | **$209,183,000** | [Item 8. Financial Statements and Supplementary Data](index=54&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's consolidated financial statements and supplementary data are included in the report, starting on page F-1 - The financial statements required by this item are located beginning on page F-1 of this report[267](index=267&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=54&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable to the company - Not applicable[268](index=268&type=chunk) [Item 9A. Controls and Procedures](index=54&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2019, excluding the recently acquired FCR - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2019[272](index=272&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019[275](index=275&type=chunk) - The assessment of internal control over financial reporting excluded First Call Resolution, LLC (FCR), which was acquired in 2019[276](index=276&type=chunk) [Item 9B. Other Information](index=55&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - None[280](index=280&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=57&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 Definitive Proxy Statement - Required information is incorporated by reference from the 2020 Proxy Statement[282](index=282&type=chunk)[283](index=283&type=chunk) [Item 11. Executive Compensation](index=57&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2020 Definitive Proxy Statement - Required information is incorporated by reference from the 2020 Proxy Statement[285](index=285&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=57&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the 2020 Definitive Proxy Statement - Required information is incorporated by reference from the 2020 Proxy Statement[286](index=286&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=57&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the 2020 Definitive Proxy Statement - Required information is incorporated by reference from the 2020 Proxy Statement[287](index=287&type=chunk) [Item 14. Principal Accountants Fees and Services](index=57&type=section&id=Item%2014.%20Principal%20Accountants%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2020 Definitive Proxy Statement - Required information is incorporated by reference from the 2020 Proxy Statement[288](index=288&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=57&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K report, including Consolidated Financial Statements and an Exhibit Index - This section contains the index to the Consolidated Financial Statements (located at page F-1) and the Exhibit Index[290](index=290&type=chunk)[291](index=291&type=chunk) [Item 16. Form 10-K Summary](index=60&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided - None[297](index=297&type=chunk)

Financial Data and Key Metrics Changes - Year-to-date revenue increased by 8.5% to nearly $1.2 billion, with over 99% being organic growth [9] - Adjusted EBITDA rose by 17% to $146 million, adjusted operating income increased by 46% to $86 million, and adjusted EPS grew by 44% to $1.24 [10] - On a GAAP basis, organic revenue increased by 8.4% to $395.5 million, with operating income at $26 million or 6.6% of revenue [35] Business Line Data and Key Metrics Changes - TTEC Digital revenue grew by 31.8% and operating income by 43% [29] - TTEC Engage revenue increased by 4.2% and operating income by 48.2% [29] - TTEC Digital's cloud subscription-based offering grew by 197% with a gross margin of 44% [30] Market Data and Key Metrics Changes - The overall addressable market for TTEC's technology and services is estimated at $460 billion, with TTEC Engage at the center of a $360 billion market and TTEC Digital adding an incremental $100 billion opportunity [13] - The company reported a 10% increase in total client engagements over the last 12 months [21] Company Strategy and Development Direction - The company is focused on transitioning from legacy contact centers to digitally enabled customer experience hubs, emphasizing the integration of Digital and Engage solutions [8][11] - TTEC aims to enhance growth through strategic acquisitions and partnerships, including a recent acquisition of FCR [31][45] - The company is leveraging partnerships with Cisco and LivePerson to expand its cloud-based offerings and enhance customer experience [24][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong top and bottom line growth in 2020 and beyond, despite some short-term challenges [26][46] - The company anticipates a reduction in revenue churn from 15.6% to 12.5% in 2020, which is expected to support future revenue growth [34] Other Important Information - Capital expenditures were $16 million in Q3 2019, reflecting investments in facilities and technology [38] - The Board approved a $0.32 annual dividend per share, representing a 14.3% increase over the previous year [39] Q&A Session Summary Question: Capital allocation strategy regarding dividends, debt repayment, and acquisitions - Management emphasized a focus on organic growth, strategic acquisitions, and maintaining dividends, with a strong balance sheet to support these initiatives [51][52] Question: Contribution of FCR acquisition in Q4 and guidance implications - FCR is expected to contribute approximately $12 million in Q4, with a double-digit growth rate anticipated [54][55] Question: Percentage of business from government-related work and margin profile - Government work constitutes about 20% of overall business, with margins in line with other segments [61][88] Question: Improvements in Days Sales Outstanding (DSO) - DSO improvements are attributed to process enhancements rather than changes in payment terms [62] Question: Impact of Cisco and LivePerson partnerships on demand and margins - The partnerships are expected to enhance demand and margins by leveraging existing client bases and expanding service offerings [64][72]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents TTEC Holdings, Inc.'s unaudited consolidated financial statements, including Balance Sheets, Income, Equity, and Cash Flows, with detailed notes [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents TTEC Holdings, Inc.'s unaudited consolidated financial statements, including Balance Sheets, Income, Equity, and Cash Flows, with detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The company's total assets increased to $1.18 billion as of September 30, 2019, from $1.05 billion at year-end 2018, primarily driven by the adoption of the new lease accounting standard | Balance Sheet Items | September 30, 2019 ($ thousands) | December 31, 2018 ($ thousands) | | :--- | :--- | :--- | | **Total current assets** | 515,610 | 526,477 | | **Total long-term assets** | 666,256 | 528,031 | | **Total assets** | **1,181,866** | **1,054,508** | | **Total current liabilities** | 358,306 | 235,418 | | **Total long-term liabilities** | 436,417 | 466,241 | | **Total liabilities** | **794,723** | **701,659** | | **Total stockholders' equity** | 387,143 | 352,849 | - The company adopted the new lease accounting standard (ASC 842) as of January 1, 2019, resulting in the recognition of **$146.1 million** in operating lease assets and **$167.5 million** in operating lease liabilities on the balance sheet[10](index=10&type=chunk)[38](index=38&type=chunk)[136](index=136&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) For Q3 2019, TTEC reported significant profitability growth, with revenue up 8.4% to $395.5 million and net income more than tripling to $18.1 million | Metric | Q3 2019 ($ thousands) | Q3 2018 ($ thousands) | YTD 2019 ($ thousands) | YTD 2018 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 395,507 | 364,936 | 1,182,378 | 1,090,038 | | **Income from operations** | 25,981 | 14,657 | 80,946 | 53,101 | | **Net income attributable to TTEC stockholders** | 18,101 | 5,375 | 48,901 | 15,484 | | **Diluted EPS** | $0.39 | $0.12 | $1.05 | $0.33 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2019, the company generated $184.4 million in cash from operating activities, an increase from $166.1 million in the prior year | Cash Flow Activity | Nine Months Ended Sep 30, 2019 ($ thousands) | Nine Months Ended Sep 30, 2018 ($ thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | 184,397 | 166,109 | | **Net cash used in investing activities** | (44,083) | (35,966) | | **Net cash used in financing activities** | (119,603) | (95,782) | | **Increase in cash, cash equivalents and restricted cash** | 17,560 | 19,442 | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and financial results, highlighting the Q2 2019 strategic shift to two new reporting segments: TTEC Digital and TTEC Engage - Effective Q2 2019, the company realigned its reporting structure from four segments (CSS, CTS, CGS, CMS) into two new segments: TTEC Digital and TTEC Engage[23](index=23&type=chunk)[24](index=24&type=chunk)[28](index=28&type=chunk) - On October 26, 2019, subsequent to the quarter end, the company acquired a 70% interest in First Call Resolution, LLC (FCR) for **$104.2 million** in cash[58](index=58&type=chunk)[59](index=59&type=chunk) Segment Performance (Q3 2019) | Segment Performance (Q3 2019) | Revenue ($ thousands) | Operating Income ($ thousands) | | :--- | :--- | :--- | | **TTEC Digital** | 78,620 | 11,704 | | **TTEC Engage** | 316,887 | 14,277 | | **Total** | **395,507** | **25,981** | - The company utilizes foreign exchange forward and option contracts to hedge against currency fluctuations, primarily for the Philippine Peso and Mexican Peso, with a total notional amount of **$175.4 million** as of September 30, 2019[84](index=84&type=chunk)[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting the strategic shift to two new segments, TTEC Digital and TTEC Engage, and strong Q3 2019 growth - In Q2 2019, the company changed its strategy and market approach, leading to a new two-segment reporting structure: TTEC Digital and TTEC Engage[165](index=165&type=chunk)[171](index=171&type=chunk) Financial Highlights | Financial Highlights | Q3 2019 ($ millions) | Q3 2018 ($ millions) | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $395.5M | $364.9M | 8.4% | | **Income from Operations** | $26.0M | $14.7M | 77.3% | | **Operating Margin** | 6.6% | 4.0% | N/A | - TTEC Digital's Q3 revenue grew **17.9% YoY**, driven by its cloud platform and systems integration practice, with operating margin expanding from **12.7% to 14.9%**[185](index=185&type=chunk)[186](index=186&type=chunk) - TTEC Engage's Q3 revenue grew **6.2% YoY** due to new client programs, with operating income increasing **130.7%** and margin expanding from **2.1% to 4.5%**[187](index=187&type=chunk)[188](index=188&type=chunk) - The company expects total capital expenditures for 2019 to be between **$60 million and $65 million**, with approximately 65% allocated to support business growth[218](index=218&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is primarily exposed to market risks from changes in interest rates on variable-rate debt and foreign currency exchange rates, mitigated by hedging programs - The company's primary market risks are interest rate fluctuations on its variable-rate debt and foreign currency exchange rate volatility[223](index=223&type=chunk) - As of September 30, 2019, the company had **$199.0 million** of outstanding variable-rate borrowings, where a 100 basis point interest rate increase would result in an additional **$1.0 million** of annualized interest expense per **$100 million** borrowed[224](index=224&type=chunk) - To mitigate foreign currency risk, particularly for the Philippine peso and Mexican peso, the company uses a cash flow hedging program with a notional value of **$175.4 million** as of September 30, 2019[227](index=227&type=chunk)[230](index=230&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2019, with no material changes in internal control over financial reporting - Based on an evaluation as of September 30, 2019, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[239](index=239&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[241](index=241&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers other information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions in the ordinary course of business, with management expecting no material adverse effect on its financial position - The company accrues for legal exposures that are probable and reasonably estimable, and management does not expect current proceedings to have a material adverse effect on its financial statements[128](index=128&type=chunk)[129](index=129&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section outlines key risks including intense market competition, challenges in adapting to technological changes, cybersecurity threats, client concentration, and operational risks from geographic concentration - **Competition:** The market is highly competitive, with pressure from large multinationals, offshore providers, and niche players, where consolidation could create stronger competitors[246](index=246&type=chunk)[247](index=247&type=chunk) - **Technology Adaptation:** Failure to adapt to new technologies like automation, AI, and chatbots could reduce business volumes and make service offerings obsolete[249](index=249&type=chunk)[250](index=250&type=chunk) - **Cybersecurity:** The business faces risks from cyber-attacks, fraud, and data breaches, which could harm its reputation, cause liability, and result in service outages[251](index=251&type=chunk)[252](index=252&type=chunk) - **Client Concentration:** A large portion of revenue comes from a limited number of clients, with the top five clients accounting for **37% of revenue** in the first nine months of 2019, making the loss of a major client materially adverse[256](index=256&type=chunk)[257](index=257&type=chunk) - **Geographic Concentration:** The business model is dependent on customer engagement centers in a few key locations, with significant concentration in the Philippines, exposing the company to natural disasters, political instability, and other operational risks[261](index=261&type=chunk)[262](index=262&type=chunk) - **Controlling Shareholder:** The Chairman and CEO, Kenneth D. Tuchman, beneficially owns approximately **68%** of the company's common stock, giving him significant control over all matters requiring stockholder action[307](index=307&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2019, the company did not repurchase any equity securities, with approximately $26.6 million remaining authorized for future repurchases - No shares were repurchased by the company during the three months ended September 30, 2019[311](index=311&type=chunk) - As of September 30, 2019, the remaining authorized amount for stock repurchases under the company's program was approximately **$26.6 million**[311](index=311&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) There is no other information to report for this item [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files

TTEC Holdings, Inc. (NASDAQ:TTEC) Q2 2019 Earnings Conference Call August 8, 2019 8:30 AM ET Company Participants Paul Miller - SVP, Treasurer & IR Officer Ken Tuchman - Chairman & CEO Regina Paolillo - Chief Financial & Administrative Officer Conference Call Participants George Sutton - Craig-Hallum Bill Warmington - Wells Fargo Operator Welcome to TTEC's Second Quarter 2019 Earnings Conference Call. [Operator Instructions] This call is being recorded at the request of TTEC. I would now like to turn the ca ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-11919 TTEC Holdings, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. E ...

TTEC Holdings, Inc. (NASDAQ:TTEC) Q1 2019 Earnings Conference Call May 8, 2019 8:30 AM ET Company Participants Paul Miller - SVP, Treasurer, and IR Officer Ken Tuchman - Chairman and CEO Regina Paolillo - Chief Financial and Administrative Officer Conference Call Participants George Sutton - Craig-Hallum Bill Warmington - Wells Fargo Operator Welcome to TTEC's First Quarter 2019 Earnings Conference Call. [Operator instructions] This call is being recorded at the request of TTEC. I would now like to turn the ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR TTEC Holdings, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Delaware 84-1291044 9197 South Peoria Street Englewood, Colorado 80112 (Address of principal execu ...

Financial Data and Key Metrics Changes - In 2018, TTEC achieved new business signings of $600 million, a 36% increase from the previous year [6] - The company reported revenue of $1.51 billion for the full year 2018, a 2.2% increase year-over-year [52] - Operating income for 2018 was $92.1 million, representing 6.1% of revenue, down from 6.8% in the prior year [52] - In Q4 2018, revenue was $419.1 million, down 1.8% year-over-year, but adjusted revenue increased 3.8% excluding disaster relief services from the previous year [36][39] Business Line Data and Key Metrics Changes - Customer Management Services (CMS) revenue decreased 8.7% in Q4 2018, while Customer Technology Services (CTS) revenue increased by 52.8% [50][48] - Customer Growth Services (CGS) revenue increased by 22% in Q4 2018 [49] - Operating income margins improved in CTS (up 121.6% to 18.9%) and CGS (up 102% to 11.4%), while CMS margins declined [50][49] Market Data and Key Metrics Changes - The addressable market for TTEC is now over $400 billion annually, providing significant growth opportunities [16] - The company experienced strong demand in various sectors, including healthcare (up 61%), government (up 35%), financial services (up 41%), and travel (up 53%) [81] Company Strategy and Development Direction - TTEC is focused on expanding its digital transformation offerings and enhancing customer experience through innovation [8][12] - The company aims to improve profit margins in its CMS segment and expand market share in Europe and disruptive hyper-growth categories [23] - TTEC plans to leverage its reputation as a customer experience innovator to sustain growth beyond 2019 [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving significant organic growth in 2019, with an estimated growth rate between 7.5% and 8.6% [26] - The company anticipates that the strong bookings in 2018 will drive profitable growth in 2019 [22] - Management highlighted the importance of digital transformation and the growing demand for personalized customer experiences [63] Other Important Information - TTEC's cash flow from operations improved significantly, increasing from negative $36.5 million to $2.2 million in Q4 2018 [43] - The company declared a semiannual dividend of $0.30 per share, representing an 11% increase over the prior year [45] Q&A Session Summary Question: Can you provide insights on the margin dynamics within the mix of bookings and the opportunity size with hyper-growth disruptors? - Management noted that the bookings reflect a growing part of the business, with many clients being major players in the on-demand marketplace [70] Question: What areas of growth are being seen in CMS, and how does the onshore versus offshore mix look? - Management indicated strong demand across various sectors, with a notable increase in offshore and nearshore demand due to labor shortages and cost increases in North America [80] Question: Can you discuss the average deal size and how it has changed? - The average deal size increased significantly, with CMS up 81%, CTS up 67%, and CSS up 43% [95] Question: How is the revenue mix changing across different channels? - Management observed a significant uptick in digital business, with digital channels now comprising 40% to 60% of interactions for clients targeting millennials [101]

Part I [Business](index=6&type=section&id=Item%201.%20Business) TTEC Holdings, Inc. is a global customer experience technology and services company operating through TTEC Digital and TTEC Engage centers of excellence - TTEC is a global customer experience technology and services company organized into two centers of excellence, TTEC Digital and TTEC Engage, which encompass four business segments[17](index=17&type=chunk)[18](index=18&type=chunk) Center of Excellence Revenue (2018) | Center of Excellence | 2018 Revenue | % of Total | | :--- | :--- | :--- | | TTEC Engage | $1.270 billion | 84% | | TTEC Digital | $239 million | 16% | - The company's strategy includes building deeper client relationships, pursuing new industry-leading clients, investing in sales leadership, executing strategic acquisitions, and innovating with technology-enabled platforms[31](index=31&type=chunk) - As of December 31, 2018, the company had **52,400 employees** in 23 countries, with approximately **66% located outside the U.S.** and **10% covered by collective bargaining agreements**[55](index=55&type=chunk) - In 2018, the top five and ten clients represented **35% and 49% of total revenue**, respectively, with one healthcare client accounting for **10.2% of total annual revenue**[50](index=50&type=chunk) - The company competes with a range of firms, from large multinational corporations like Teleperformance and Accenture to smaller, specialized companies, as well as in-house operations[54](index=54&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks including intense competition, cybersecurity threats, client concentration, and regulatory compliance - The company faces high competition from large multinational providers, offshore firms, and niche solution providers, where failure to compete effectively could lead to loss of market share[61](index=61&type=chunk)[62](index=62&type=chunk) - The business is vulnerable to cyber-attacks, cyber-fraud, and unauthorized information disclosure, which could harm its reputation, cause liability, and result in service outages[66](index=66&type=chunk)[67](index=67&type=chunk) - A significant portion of revenue comes from a few clients, with the top five clients accounting for **35% of revenue** in 2018 and the largest single client representing **10.2%**, making the business vulnerable to the loss of a major client[71](index=71&type=chunk) - Operations are geographically concentrated in locations like the Philippines, Mexico, and India, exposing the company to risks from natural disasters, political unrest, and other regional disruptions[76](index=76&type=chunk)[77](index=77&type=chunk) - The business is subject to extensive and sometimes conflicting regulations across jurisdictions, including data privacy laws like GDPR, which could increase compliance costs and legal risks[78](index=78&type=chunk)[83](index=83&type=chunk) - The Chairman and CEO, Kenneth D. Tuchman, beneficially owns approximately **68% of the company's common stock**, giving him significant control over all matters requiring stockholder action, including board elections[120](index=120&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved written comments from the SEC staff issued 180 days or more before the 2018 fiscal year-end - There are no unresolved written comments from the SEC staff regarding the company's periodic or current reports[122](index=122&type=chunk) [Properties](index=24&type=section&id=Item%202.%20Properties) TTEC's corporate headquarters are in Englewood, Colorado, and it operates 85 customer engagement centers globally, primarily leased facilities - The company's corporate headquarters are in Englewood, Colorado[124](index=124&type=chunk) Customer Engagement Centers by Country (as of Dec 31, 2018) | Country | Total Centers | | :--- | :--- | | United States of America | 38 | | Philippines | 19 | | Canada | 8 | | Australia | 3 | | Mexico | 3 | | Brazil | 2 | | Bulgaria | 2 | | India | 2 | | United Kingdom | 2 | | Other (6 countries) | 6 | | **Total** | **85** | [Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal actions and accrues for probable losses, not expecting a material adverse effect on its financials - The company is involved in legal actions from the ordinary course of business and accrues for probable and estimable losses[129](index=129&type=chunk) - Management does not expect current legal proceedings to have a material adverse effect on the company's financial condition or results[130](index=130&type=chunk) [Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[132](index=132&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) TTEC's common stock trades on NASDAQ, the company maintains a semi-annual dividend policy, and had $26.6 million remaining for stock repurchases at year-end 2018 Common Stock Price Range | Quarter | High ($) | Low ($) | | :--- | :--- | :--- | | **2018** | | | | Q4 | 29.66 | 23.79 | | Q3 | 36.20 | 23.95 | | Q2 | 37.40 | 30.20 | | Q1 | 41.80 | 30.70 | | **2017** | | | | Q4 | 43.35 | 37.85 | | Q3 | 42.15 | 38.60 | | Q2 | 42.60 | 28.85 | | Q1 | 31.30 | 29.10 | - The company maintains a semi-annual dividend policy, with a **$0.30 dividend per common share** authorized on February 21, 2019, payable on April 18, 2019[136](index=136&type=chunk) - As of December 31, 2018, the remaining authorized amount for the stock repurchase program was **$26.6 million**, with no shares repurchased during the fourth quarter of 2018[137](index=137&type=chunk)[138](index=138&type=chunk) [Selected Financial Data](index=29&type=section&id=Item%206.%20Selected%20Financial%20Data) For 2018, TTEC reported $1.509 billion in revenue, $35.8 million in net income attributable to stockholders, and $1.055 billion in total assets Selected Financial Data (In thousands, except per share data) | (In thousands, except per share data) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Statement of Operations Data** | | | | | | | Revenue | $1,509,171 | $1,477,365 | $1,275,258 | $1,286,755 | $1,241,781 | | Income from operations | $92,054 | $100,489 | $52,752 | $90,180 | $96,475 | | Net income attributable to TTEC stockholders | $35,817 | $7,256 | $33,678 | $61,666 | $72,293 | | Diluted net income per share | $0.77 | $0.16 | $0.71 | $1.26 | $1.44 | | Dividends issued per common share | $0.55 | $0.47 | $0.385 | $0.36 | $— | | **Balance Sheet Data** | | | | | | | Total assets | $1,054,508 | $1,078,736 | $846,304 | $843,327 | $852,475 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2018, TTEC's revenue grew to $1.509 billion, while operating income declined due to increased labor and launch costs, with liquidity supported by operating cash flow and a credit facility - In 2018, revenue increased **2.2% to $1.509 billion**, but income from operations decreased by **$8.4 million to $92.1 million**, mainly due to a decline in the CMS segment's profitability[163](index=163&type=chunk)[164](index=164&type=chunk) - The company adopted the new revenue recognition standard, ASC 606, on January 1, 2018, using the modified retrospective method, resulting in a net reduction to opening retained earnings of **$10.0 million**[399](index=399&type=chunk) - Cash flows from operating activities increased to **$168.3 million** in 2018 from **$113.2 million** in 2017, primarily due to improved accounts receivable collections[247](index=247&type=chunk) - The company amended its credit facility in February 2019, extending the maturity to 2024 and setting the maximum commitment at **$900.0 million** with a **$1.2 billion accordion feature**[259](index=259&type=chunk)[261](index=261&type=chunk) - Capital expenditures for 2019 are expected to be between **$60 million and $65 million**, with **65% for growth** and **35% for maintenance**[255](index=255&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies involve significant judgment in revenue recognition (ASC 606 adoption), income taxes (2017 Tax Act), impairment testing, restructuring liabilities, and derivative valuation - Effective January 1, 2018, the company adopted ASC 606, which requires deferring revenue from certain training services and amortizing it over the period of economic benefit[171](index=171&type=chunk)[172](index=172&type=chunk) - The company capitalizes direct and incremental costs to obtain a contract, such as sales commissions, and amortizes them over the corresponding period of benefit[177](index=177&type=chunk) - The company completed its accounting for the 2017 Tax Act, which reduced the U.S. federal corporate tax rate to **21%** and imposed a one-time repatriation tax, with GILTI and BEAT taxes computed in the period they are incurred[188](index=188&type=chunk)[190](index=190&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment at least annually using a qualitative assessment (Step 0) and, if necessary, a quantitative discounted cash flow analysis (Step 1)[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) In 2018, TTEC Digital segments (CTS and CSS) showed strong operating income growth, while the larger TTEC Engage segment (CMS) experienced margin compression due to increased costs Segment Performance (2018 vs 2017, in millions) | Segment | 2018 Revenue (M) | 2017 Revenue (M) | % Change | 2018 Op. Income (M) | 2017 Op. Income (M) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | CMS | $1,129.0 | $1,141.8 | (1.1)% | $49.2 | $78.2 | (37.1)% | | CGS | $141.3 | $128.7 | 9.8% | $9.8 | $7.8 | 26.1% | | CTS | $170.2 | $138.6 | 22.8% | $26.6 | $12.0 | 121.1% | | CSS | $68.6 | $68.3 | 0.4% | $6.4 | $2.4 | 163.9% | - The CMS segment's operating margin decreased from **6.8% in 2017 to 4.4% in 2018**, primarily due to increased U.S. labor costs and higher launch costs for new business[211](index=211&type=chunk) - The CTS segment's operating margin increased significantly from **8.7% in 2017 to 15.6% in 2018**, driven by growth in its higher-margin recurring cloud and systems integration businesses[215](index=215&type=chunk) - In 2017, CMS revenue grew **23.5% over 2016**, largely due to the Atelka, Connextions, and Motif acquisitions[224](index=224&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) TTEC's liquidity is primarily driven by cash from operations, which generated $168.3 million in 2018, and its credit facility, with future capital expenditures projected at $60-$65 million for 2019 Cash Flow Summary (In millions) | (In millions) | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $168.3 | $113.2 | $111.8 | | Net cash used in investing activities | $(47.6) | $(169.0) | $(100.4) | | Net cash (used in) from financing activities | $(102.1) | $71.6 | $(1.6) | Free Cash Flow (In millions) | (In millions) | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $168.3 | $113.2 | $111.8 | | Less: Purchases of property, plant and equipment | $43.5 | $52.0 | $50.8 | | **Free cash flow** | **$124.9** | **$61.2** | **$61.0** | - As of December 31, 2018, the company had **$282.0 million** in borrowings under its Credit Facility and a remaining borrowing capacity of approximately **$360.0 million**[242](index=242&type=chunk) - In October and December 2018, the company paid dividends from its foreign operations to its U.S. parent totaling **$310 million**, which were used to pay down the Credit Facility[240](index=240&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk on variable-rate debt and significant foreign currency risk, primarily from the Philippine and Mexican pesos, mitigated by a cash flow hedging program - The company is exposed to interest rate risk on its variable-rate debt, where a **100 basis point increase** in the Prime Rate or LIBOR would increase annual interest expense by **$1.0 million for every $100.0 million** of outstanding borrowing[273](index=273&type=chunk) - Foreign currency risk is a key exposure, with **23% of consolidated revenue in 2018** associated with this risk, primarily involving the U.S. dollar/Philippine peso, U.S. dollar/Mexican peso, and Australian dollar/Philippine peso[272](index=272&type=chunk)[275](index=275&type=chunk) Foreign Currency Hedges (As of Dec 31, 2018, in thousands) | As of Dec 31, 2018 (in thousands) | Local Currency Notional Amount | U.S. Dollar Notional Amount | | :--- | :--- | :--- | | Philippine Peso Hedges | 6,710,000 | $130,957 | | Mexican Peso Hedges | 1,091,500 | $57,708 | | **Total** | | **$188,665** | - The fair value of the company's cash flow hedges was a net liability of **$11.3 million** as of December 31, 2018[282](index=282&type=chunk) [Financial Statements and Supplementary Data](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2018, including balance sheets, income statements, and cash flow statements, along with the independent auditor's report - The Report of Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP, provides an opinion that the financial statements are presented fairly and that the company maintained effective internal control over financial reporting[325](index=325&type=chunk) Consolidated Balance Sheets (In thousands) | (In thousands) | Dec 31, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $526,477 | $541,409 | | Total long-term assets | $528,031 | $537,327 | | **Total assets** | **$1,054,508** | **$1,078,736** | | **Liabilities & Equity** | | | | Total current liabilities | $235,418 | $201,778 | | Total long-term liabilities | $466,241 | $514,113 | | Total stockholders' equity | $352,849 | $362,845 | | **Total liabilities and stockholders' equity** | **$1,054,508** | **$1,078,736** | Consolidated Statements of Operations (In thousands) | (In thousands) | Year Ended Dec 31, 2018 | Year Ended Dec 31, 2017 | | :--- | :--- | :--- | | Revenue | $1,509,171 | $1,477,365 | | Income from operations | $92,054 | $100,489 | | Net income attributable to TTEC stockholders | $35,817 | $7,256 | | Diluted EPS | $0.77 | $0.16 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=57&type=section&id=Item%209.%20Changes%20in%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable to the company - Not applicable[287](index=287&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2018 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2018[291](index=291&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2018, based on the COSO framework[295](index=295&type=chunk) - The effectiveness of internal control over financial reporting has been audited by PricewaterhouseCoopers LLP[296](index=296&type=chunk) - There were no changes in internal control over financial reporting during the most recent quarter that materially affected, or are reasonably likely to materially affect, these controls[297](index=297&type=chunk) [Other Information](index=58&type=section&id=Item%209B.%20Other%20Information) There is no information to report for this item - None[299](index=299&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=58&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding the company's directors, executive officers, and corporate governance practices is incorporated by reference from its 2019 Definitive Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2019 Definitive Proxy Statement[301](index=301&type=chunk)[303](index=303&type=chunk) [Executive Compensation](index=60&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2019 Definitive Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2019 Proxy Statement[305](index=305&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=60&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference from the company's 2019 Definitive Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2019 Proxy Statement[306](index=306&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=60&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's 2019 Definitive Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2019 Proxy Statement[307](index=307&type=chunk) [Principal Accountants Fees and Services](index=60&type=section&id=Item%2014.%20Principal%20Accountants%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2019 Definitive Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2019 Proxy Statement[308](index=308&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=60&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K report, including consolidated financial statements and an index of all exhibits - This section contains the index to the Consolidated Financial Statements and a list of all exhibits filed with the Form 10-K[310](index=310&type=chunk)[311](index=311&type=chunk) - All financial statement schedules have been omitted because the required information is not present, not in sufficient amounts, or is included in the Consolidated Financial Statements or notes[310](index=310&type=chunk) [Form 10-K Summary](index=63&type=section&id=Item%2016.%20Form%2010-K%20Summary) No summary is provided for this item - None[318](index=318&type=chunk)