|
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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223536104
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.001 per share
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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¨
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|||
Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Year Ended December 31,
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|||||||||||||||||||
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2016
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2015
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2014
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|||||||||||||||
Financial Services
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$
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291,845
|
|
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25.2
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%
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|
$
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248,526
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|
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27.2
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%
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$
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215,425
|
|
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29.5
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%
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Travel and Consumer
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259,420
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|
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22.4
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|
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215,303
|
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23.6
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157,756
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21.6
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|||
Software & Hi-Tech
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237,437
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20.5
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192,989
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21.1
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157,944
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21.6
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|||
Media & Entertainment
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174,017
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|
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15.0
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|
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120,616
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13.2
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91,726
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12.6
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|||
Life Sciences and Healthcare
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105,072
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9.1
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73,327
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8.0
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42,428
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5.8
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|||
Emerging Verticals
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79,820
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6.7
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53,856
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5.9
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56,338
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|
|
7.7
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|
|||
Reimbursable expenses and other revenues
|
12,521
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|
|
1.1
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|
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9,511
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|
|
1.0
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|
|
8,410
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|
|
1.2
|
|
|||
Revenues
|
$
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1,160,132
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|
|
100.0
|
%
|
|
$
|
914,128
|
|
|
100.0
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%
|
|
$
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730,027
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|
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100.0
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%
|
|
% of Revenues for Year Ended December 31,
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|||||||
Client location
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2016
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2015
|
|
2014
|
|||
North America
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57.3
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%
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|
53.1
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%
|
|
50.4
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%
|
Europe
|
35.5
|
|
|
38.6
|
|
|
39.0
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CIS
|
4.0
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|
|
4.7
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|
|
7.6
|
|
APAC
|
2.1
|
|
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2.6
|
|
|
1.8
|
|
Reimbursable expenses and other revenues
|
1.1
|
|
|
1.0
|
|
|
1.2
|
|
Revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Year Ended December 31,
|
||||
Revenues Greater Than or Equal To
|
2016
|
|
2015
|
|
2014
|
$0.1 million
|
431
|
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365
|
|
306
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$0.5 million
|
266
|
|
211
|
|
181
|
$1 million
|
182
|
|
136
|
|
116
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$5 million
|
45
|
|
33
|
|
24
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$10 million
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19
|
|
14
|
|
12
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$20 million
|
7
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|
7
|
|
6
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•
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objective valuation of the performed process, work products and services against the client’s process descriptions, standards and procedures;
|
•
|
identification, documentation and timely resolution of noncompliance issues;
|
•
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feedback to the client’s project staff and managers on the results of quality assurance activities;
|
•
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monitoring and improvement of the software development process to ensure adopted standards and procedures are implemented and flaws are detected and resolved in a timely manner; and
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•
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execution of planned and systematic problem prevention activities.
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•
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multi-site, multi-project capabilities;
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•
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activity-based software development lifecycle, which fully tracks the software development activities through the project documentation;
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•
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project, role-based access control, which can be available to us, clients and third parties;
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•
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fully configurable workflow engine with built-in notification and messaging;
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•
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extensive reporting capabilities and tracking of key performance indicators; and
|
•
|
integration with Microsoft Project and Outlook.
|
•
|
India-based technology outsourcing IT services providers, such as Cognizant Technology Solutions (NASDAQ:CTSH), GlobalLogic, HCL Technologies, Infosys Technologies (NASDAQ:INFY), Mindtree, Tata Consultancy Services and Wipro (NASDAQ:WIT);
|
•
|
U.S.-based technology outsourcing IT services providers, such as Syntel, Inc. (NASDAQ: SYNT), and Virtusa Corporation (NASDAQ: VRTU);
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•
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CEE-based technology outsourcing IT services providers such as Luxoft Holding, Inc. (NYSE:LXFT);
|
•
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China-based technology outsourcing IT services providers such as Camelot Information Services, and Pactera;
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•
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Other IT and Software Development services providers located elsewhere, such as Globant S.A. (NASDAQ: GLOB);
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•
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Large global consulting and outsourcing firms, such as Accenture, Atos Origin, Capgemini, CSC and IBM; and
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•
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In-house IT departments of our clients and potential clients.
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•
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recruiting, training and retaining sufficiently skilled IT professionals and management personnel;
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•
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adhering to and further improving our high-quality and process execution standards and maintaining high levels of client satisfaction;
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•
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managing a larger number of clients in a greater number of industries and locations;
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•
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maintaining effective oversight of personnel and delivery centers;
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•
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coordinating effectively across geographies and business units to execute our strategic plan; and
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•
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developing and improving our internal administrative infrastructure, particularly our financial, operational, communications and other internal systems.
|
•
|
foreign exchange fluctuations;
|
•
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application and imposition of protective legislation and regulations relating to import or export, including tariffs, quotas and other trade protection measures;
|
•
|
difficulties in enforcing intellectual property and/or contractual rights;
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•
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complying with a wide variety of foreign laws;
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•
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potentially adverse tax consequences;
|
•
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competition from companies with more experience in a particular country or with international operations; and
|
•
|
overall foreign policy and variability of foreign economic conditions.
|
•
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financial difficulties;
|
•
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corporate restructuring, or mergers and acquisitions activity;
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•
|
change in strategic priorities, resulting in elimination of the impetus for the project or a reduced level of technology spending;
|
•
|
change in outsourcing strategy resulting in moving more work to the client’s in-house technology departments or to our competitors; and
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•
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replacement of existing software with packaged software supported by licensors.
|
•
|
maintaining high-quality control and process execution standards;
|
•
|
maintaining planned resource utilization rates on a consistent basis and using an efficient mix of onsite and offshore staffing;
|
•
|
maintaining productivity levels and implementing necessary process improvements; and
|
•
|
controlling costs.
|
•
|
we may find it difficult or costly to update our services, applications, tools and software and to develop new services quickly enough to meet our clients’ needs;
|
•
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we may find it difficult or costly to make some features of our software work effectively and securely over the Internet or with new or changed operating systems;
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•
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we may find it difficult or costly to update our software and services to keep pace with business, evolving industry standards, methodologies, regulatory and other developments in the industries where our clients operate; and
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•
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we may find it difficult to maintain a high level of quality in implementing new technologies and methodologies.
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Location
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Square Meters
Leased
|
|
Square Meters
Owned
|
|
Total Square
Meters
|
|||
Delivery Centers and Client Management Locations:
|
|
|
|
|
|
|
|||
Belarus
|
|
63,059
|
|
|
21,669
|
|
|
84,728
|
|
Ukraine
|
|
38,855
|
|
|
|
|
38,855
|
|
|
Russia
|
|
36,576
|
|
|
|
|
36,576
|
|
|
Hungary
|
|
26,297
|
|
|
|
|
26,297
|
|
|
Poland
|
|
16,894
|
|
|
|
|
16,894
|
|
|
India
|
|
14,802
|
|
|
|
|
14,802
|
|
|
China
|
|
10,044
|
|
|
|
|
10,044
|
|
|
United States
|
|
7,331
|
|
|
|
|
7,331
|
|
|
Bulgaria
|
|
3,244
|
|
|
|
|
3,244
|
|
|
Czech Republic
|
|
2,851
|
|
|
|
|
2,851
|
|
|
Kazakhstan
|
|
2,681
|
|
|
|
|
2,681
|
|
|
Mexico
|
|
2,007
|
|
|
|
|
2,007
|
|
|
United Kingdom
|
|
1,090
|
|
|
|
|
1,090
|
|
|
Canada
|
|
978
|
|
|
|
|
978
|
|
|
Switzerland
|
|
662
|
|
|
|
|
662
|
|
|
Armenia
|
|
540
|
|
|
|
|
540
|
|
|
Sweden
|
|
322
|
|
|
|
|
322
|
|
|
United Arab Emirates
|
|
73
|
|
|
|
|
73
|
|
|
Germany
|
|
28
|
|
|
|
|
28
|
|
|
Philippines
|
|
11
|
|
|
|
|
11
|
|
|
Total
|
|
228,345
|
|
|
21,669
|
|
|
250,014
|
|
Executive Office:
|
|
|
|
|
|
|
|||
Newtown, PA, United States
|
|
1,212
|
|
|
—
|
|
|
1,212
|
|
2016
|
|
|
|
|
||||
Quarter Ended
|
|
High
|
|
Low
|
||||
December 31
|
|
$
|
69.20
|
|
|
$
|
54.53
|
|
September 30
|
|
$
|
71.79
|
|
|
$
|
61.47
|
|
June 30
|
|
$
|
78.40
|
|
|
$
|
61.32
|
|
March 31
|
|
$
|
78.04
|
|
|
$
|
54.88
|
|
2015
|
|
|
|
|
||||
Quarter Ended
|
|
High
|
|
Low
|
||||
December 31
|
|
$
|
84.41
|
|
|
$
|
67.29
|
|
September 30
|
|
$
|
76.69
|
|
|
$
|
63.37
|
|
June 30
|
|
$
|
74.49
|
|
|
$
|
57.58
|
|
March 31
|
|
$
|
63.50
|
|
|
$
|
45.27
|
|
|
|
Company / Index
|
||||||||||
Base Period
|
|
EPAM Systems,
Inc.
|
|
S&P 500
Index
|
|
Peer Group
Index
|
||||||
12/31/2016
|
|
$
|
459.36
|
|
|
$
|
165.84
|
|
|
$
|
121.34
|
|
9/30/2016
|
|
$
|
495.07
|
|
|
$
|
160.62
|
|
|
$
|
120.39
|
|
6/30/2016
|
|
$
|
459.36
|
|
|
$
|
155.48
|
|
|
$
|
142.02
|
|
3/31/2016
|
|
$
|
533.36
|
|
|
$
|
152.58
|
|
|
$
|
150.74
|
|
12/31/2015
|
|
$
|
561.57
|
|
|
$
|
151.41
|
|
|
$
|
139.88
|
|
9/30/2015
|
|
$
|
532.29
|
|
|
$
|
142.23
|
|
|
$
|
149.62
|
|
6/30/2015
|
|
$
|
508.79
|
|
|
$
|
152.83
|
|
|
$
|
140.50
|
|
3/31/2015
|
|
$
|
437.79
|
|
|
$
|
153.18
|
|
|
$
|
149.56
|
|
12/31/2014
|
|
$
|
341.07
|
|
|
$
|
152.52
|
|
|
$
|
127.74
|
|
9/30/2014
|
|
$
|
312.79
|
|
|
$
|
146.10
|
|
|
$
|
120.55
|
|
6/30/2014
|
|
$
|
312.50
|
|
|
$
|
145.21
|
|
|
$
|
118.41
|
|
3/31/2014
|
|
$
|
235.00
|
|
|
$
|
138.70
|
|
|
$
|
124.76
|
|
12/31/2013
|
|
$
|
249.57
|
|
|
$
|
136.92
|
|
|
$
|
124.18
|
|
9/30/2013
|
|
$
|
246.43
|
|
|
$
|
124.56
|
|
|
$
|
103.03
|
|
6/30/2013
|
|
$
|
194.14
|
|
|
$
|
118.99
|
|
|
$
|
80.39
|
|
3/31/2013
|
|
$
|
165.93
|
|
|
$
|
116.24
|
|
|
$
|
99.89
|
|
12/31/2012
|
|
$
|
129.29
|
|
|
$
|
105.65
|
|
|
$
|
85.86
|
|
9/30/2012
|
|
$
|
135.29
|
|
|
$
|
106.72
|
|
|
$
|
89.48
|
|
6/30/2012
|
|
$
|
121.36
|
|
|
$
|
100.90
|
|
|
$
|
83.91
|
|
3/31/2012
|
|
$
|
146.57
|
|
|
$
|
104.33
|
|
|
$
|
102.94
|
|
2/8/2012
|
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
100
|
|
|
|
(1)
|
Graph assumes $100 invested on February 8, 2012, in our common stock, the S&P 500 Index, and the Peer Group Index (capitalization weighted).
|
(2)
|
Cumulative total return assumes reinvestment of dividends.
|
(3)
|
We have constructed a Peer Group Index of other information technology consulting firms consisting of Virtusa Corporation (NASDAQ:VRTU), Cognizant Technology Solutions Corp. (NASDAQ:CTSH), Globant S.A. (NASDAQ:GLOB), Infosys Ltd ADR (NYSE:INFY), Luxoft Holding, Inc (NASDAQ:LXFT), Syntel, Inc. (NASDAQ:SYNT), and Wipro Ltd. (ADR) (NYSE:WIT).
|
|
Year Ended December 31
,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(in
thousands, except per share data)
|
||||||||||||||||||
Consolidated Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,160,132
|
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
|
$
|
555,117
|
|
|
$
|
433,799
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
737,186
|
|
|
566,913
|
|
|
456,530
|
|
|
347,650
|
|
|
270,361
|
|
|||||
Selling, general and administrative expenses
|
264,658
|
|
|
222,759
|
|
|
163,666
|
|
|
116,497
|
|
|
85,868
|
|
|||||
Depreciation and amortization expense
|
23,387
|
|
|
17,395
|
|
|
17,483
|
|
|
15,120
|
|
|
10,882
|
|
|||||
Goodwill impairment loss
|
—
|
|
|
—
|
|
|
2,241
|
|
|
—
|
|
|
—
|
|
|||||
Other operating expenses/(income), net
|
1,205
|
|
|
1,094
|
|
|
3,924
|
|
|
(643
|
)
|
|
682
|
|
|||||
Income from operations
|
133,696
|
|
|
105,967
|
|
|
86,183
|
|
|
76,493
|
|
|
66,006
|
|
|||||
Interest and other income, net
|
4,848
|
|
|
4,731
|
|
|
4,769
|
|
|
3,077
|
|
|
1,941
|
|
|||||
Change in fair value of contingent consideration
|
—
|
|
|
—
|
|
|
(1,924
|
)
|
|
—
|
|
|
—
|
|
|||||
Foreign exchange loss
|
(12,078
|
)
|
|
(4,628
|
)
|
|
(2,075
|
)
|
|
(2,800
|
)
|
|
(2,084
|
)
|
|||||
Income before provision for income taxes
|
126,466
|
|
|
106,070
|
|
|
86,953
|
|
|
76,770
|
|
|
65,863
|
|
|||||
Provision for income taxes
|
27,200
|
|
|
21,614
|
|
|
17,312
|
|
|
14,776
|
|
|
11,379
|
|
|||||
Net income
|
$
|
99,266
|
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
|
$
|
61,994
|
|
|
$
|
54,484
|
|
Net income per share of common stock
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
1.97
|
|
|
$
|
1.73
|
|
|
$
|
1.48
|
|
|
$
|
1.35
|
|
|
$
|
1.27
|
|
Diluted
|
$
|
1.87
|
|
|
$
|
1.62
|
|
|
$
|
1.40
|
|
|
$
|
1.28
|
|
|
$
|
1.17
|
|
Shares used in calculation of net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
50,309
|
|
|
48,721
|
|
|
47,189
|
|
|
45,754
|
|
|
40,190
|
|
|||||
Diluted
|
53,215
|
|
|
51,986
|
|
|
49,734
|
|
|
48,358
|
|
|
43,821
|
|
|
|
(1)
|
In connection with the completion of our initial public offering, we effected an 8-for-1 common stock split as of January 19, 2012. All historical common stock and per share information has been changed to reflect the common stock split.
|
|
|
As of December 31
,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(in
thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
362,025
|
|
|
$
|
199,449
|
|
|
$
|
220,534
|
|
|
$
|
169,207
|
|
|
$
|
118,112
|
|
Time deposits
|
|
403
|
|
|
30,181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Accounts receivable, net
|
|
199,982
|
|
|
174,617
|
|
|
124,483
|
|
|
95,431
|
|
|
78,906
|
|
|||||
Unbilled revenues
|
|
63,325
|
|
|
95,808
|
|
|
55,851
|
|
|
43,108
|
|
|
33,414
|
|
|||||
Property and equipment, net
|
|
73,616
|
|
|
60,499
|
|
|
55,134
|
|
|
53,315
|
|
|
53,135
|
|
|||||
Total assets
|
|
925,811
|
|
|
778,536
|
|
|
594,026
|
|
|
432,877
|
|
|
350,814
|
|
|||||
Long-term debt
|
|
25,048
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total liabilities
|
|
144,399
|
|
|
165,313
|
|
|
129,976
|
|
|
56,776
|
|
|
64,534
|
|
|||||
Total stockholders’ equity
|
|
781,412
|
|
|
613,223
|
|
|
464,050
|
|
|
376,101
|
|
|
286,280
|
|
•
|
We recorded revenues of
$1.16 billion
, or a
26.9%
increase from
$914.1 million
reported last year, making fiscal
2016
a milestone year, having crossed the $1 billion revenue mark. Revenue growth excluding acquisitions, which accounted for 5.4% of total growth, was
21.5%
despite significant currency headwinds.
|
•
|
Income from operations grew
26.2%
to
$133.7 million
from
$106.0 million
reported in the corresponding period of last year. Expressed as a percentage of revenues, income from operations was
11.5%
compared to
11.6%
last year. A slight decrease was primarily driven by fluctuations in utilization.
|
•
|
Our effective tax rate was
21.5%
compared to
20.4%
last year.
|
•
|
Net income grew
17.5%
to
$99.3 million
compared to
$84.5 million
reported in
2015
. Expressed as a percentage of revenues, net income decreased
0.6%
compared to last year, which was largely driven by higher foreign exchange losses reported in
2016
.
|
•
|
Diluted earnings per share increased
15.4%
to
$1.87
for the year ended
December 31, 2016
from
$1.62
reported in
2015
.
|
•
|
Cash provided by operations increased
$88.4 million
, or
115.7%
, to
$164.8 million
during fiscal
2016
.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
(in thousands, except percentages and per share data)
|
|||||||||||||||||||
Revenues
|
$
|
1,160,132
|
|
|
100.0
|
%
|
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
(1)
|
737,186
|
|
|
63.6
|
|
|
566,913
|
|
|
62.0
|
|
|
456,530
|
|
|
62.5
|
|
|||
Selling, general and administrative expenses
(2)
|
264,658
|
|
|
22.8
|
|
|
222,759
|
|
|
24.4
|
|
|
163,666
|
|
|
22.4
|
|
|||
Depreciation and amortization expense
|
23,387
|
|
|
2.0
|
|
|
17,395
|
|
|
1.9
|
|
|
17,483
|
|
|
2.4
|
|
|||
Goodwill impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,241
|
|
|
0.3
|
|
|||
Other operating expenses, net
|
1,205
|
|
|
0.1
|
|
|
1,094
|
|
|
0.1
|
|
|
3,924
|
|
|
0.6
|
|
|||
Income from operations
|
133,696
|
|
|
11.5
|
|
|
105,967
|
|
|
11.6
|
|
|
86,183
|
|
|
11.8
|
|
|||
Interest and other income, net
|
4,848
|
|
|
0.4
|
|
|
4,731
|
|
|
0.5
|
|
|
4,769
|
|
|
0.7
|
|
|||
Change in fair value of contingent consideration
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,924
|
)
|
|
(0.3
|
)
|
|||
Foreign exchange loss
|
(12,078
|
)
|
|
(1.0
|
)
|
|
(4,628
|
)
|
|
(0.5
|
)
|
|
(2,075
|
)
|
|
(0.3
|
)
|
|||
Income before provision for income taxes
|
126,466
|
|
|
10.9
|
|
|
106,070
|
|
|
11.6
|
|
|
86,953
|
|
|
11.9
|
|
|||
Provision for income taxes
|
27,200
|
|
|
2.3
|
|
|
21,614
|
|
|
2.4
|
|
|
17,312
|
|
|
2.4
|
|
|||
Net income
|
$
|
99,266
|
|
|
8.6
|
%
|
|
$
|
84,456
|
|
|
9.2
|
%
|
|
$
|
69,641
|
|
|
9.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate
|
21.5
|
%
|
|
|
|
20.4
|
%
|
|
|
|
19.9
|
%
|
|
|
||||||
Diluted earnings per share
|
$
|
1.87
|
|
|
|
|
$
|
1.62
|
|
|
|
|
$
|
1.40
|
|
|
|
|
|
(1)
|
Included
$16,619
,
$13,695
and
$8,648
of stock-based compensation expense for the years ended
December 31, 2016
,
2015
and
2014
, respectively;
|
(2)
|
Included
$32,625
,
$32,138
and
$15,972
of stock-based compensation expense for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
North America
|
$
|
664,598
|
|
|
57.3
|
%
|
|
$
|
485,075
|
|
|
53.1
|
%
|
|
$
|
367,498
|
|
|
50.4
|
%
|
Europe
|
412,075
|
|
|
35.5
|
|
|
352,489
|
|
|
38.6
|
|
|
284,853
|
|
|
39.0
|
|
|||
CIS
|
46,033
|
|
|
4.0
|
|
|
43,043
|
|
|
4.7
|
|
|
55,807
|
|
|
7.6
|
|
|||
APAC
|
24,905
|
|
|
2.1
|
|
|
24,010
|
|
|
2.6
|
|
|
13,459
|
|
|
1.8
|
|
|||
Reimbursable expenses and other revenues
|
12,521
|
|
|
1.1
|
|
|
9,511
|
|
|
1.0
|
|
|
8,410
|
|
|
1.2
|
|
|||
Revenues
|
$
|
1,160,132
|
|
|
100.0
|
%
|
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Software development
|
$
|
841,916
|
|
|
72.6
|
%
|
|
$
|
644,732
|
|
|
70.6
|
%
|
|
$
|
504,590
|
|
|
69.1
|
%
|
Application testing services
|
223,010
|
|
|
19.2
|
|
|
174,259
|
|
|
19.1
|
|
|
140,363
|
|
|
19.2
|
|
|||
Application maintenance and support
|
74,475
|
|
|
6.4
|
|
|
70,551
|
|
|
7.7
|
|
|
58,840
|
|
|
8.1
|
|
|||
Infrastructure services
|
5,069
|
|
|
0.4
|
|
|
11,311
|
|
|
1.2
|
|
|
14,198
|
|
|
1.9
|
|
|||
Licensing
|
3,141
|
|
|
0.3
|
|
|
3,764
|
|
|
0.4
|
|
|
3,626
|
|
|
0.5
|
|
|||
Reimbursable expenses and other revenues
|
12,521
|
|
|
1.1
|
|
|
9,511
|
|
|
1.0
|
|
|
8,410
|
|
|
1.2
|
|
|||
Revenues
|
$
|
1,160,132
|
|
|
100.0
|
%
|
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Financial Services
|
$
|
291,845
|
|
|
25.2
|
%
|
|
$
|
248,526
|
|
|
27.2
|
%
|
|
$
|
215,425
|
|
|
29.5
|
%
|
Travel and Consumer
|
259,420
|
|
|
22.4
|
|
|
215,303
|
|
|
23.6
|
|
|
157,756
|
|
|
21.6
|
|
|||
Software & Hi-Tech
|
237,437
|
|
|
20.5
|
|
|
192,989
|
|
|
21.1
|
|
|
157,944
|
|
|
21.6
|
|
|||
Media & Entertainment
|
174,017
|
|
|
15.0
|
|
|
120,616
|
|
|
13.2
|
|
|
91,726
|
|
|
12.6
|
|
|||
Life Sciences and Healthcare
|
105,072
|
|
|
9.1
|
|
|
73,327
|
|
|
8.0
|
|
|
42,428
|
|
|
5.8
|
|
|||
Emerging Verticals
|
79,820
|
|
|
6.7
|
|
|
53,856
|
|
|
5.9
|
|
|
56,338
|
|
|
7.7
|
|
|||
Reimbursable expenses and other revenues
|
12,521
|
|
|
1.1
|
|
|
9,511
|
|
|
1.0
|
|
|
8,410
|
|
|
1.2
|
|
|||
Revenues
|
$
|
1,160,132
|
|
|
100.0
|
%
|
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Time-and-material
|
$
|
1,023,781
|
|
|
88.2
|
%
|
|
$
|
784,153
|
|
|
85.8
|
%
|
|
$
|
618,725
|
|
|
84.7
|
%
|
Fixed-price
|
120,689
|
|
|
10.4
|
|
|
116,700
|
|
|
12.8
|
|
|
99,266
|
|
|
13.6
|
|
|||
Licensing
|
3,141
|
|
|
0.3
|
|
|
3,764
|
|
|
0.4
|
|
|
3,626
|
|
|
0.5
|
|
|||
Reimbursable expenses and other revenues
|
12,521
|
|
|
1.1
|
|
|
9,511
|
|
|
1.0
|
|
|
8,410
|
|
|
1.2
|
|
|||
Revenues
|
$
|
1,160,132
|
|
|
100.0
|
%
|
|
$
|
914,128
|
|
|
100.0
|
%
|
|
$
|
730,027
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Top client
|
$
|
136,522
|
|
|
11.8
|
%
|
|
$
|
129,818
|
|
|
14.2
|
%
|
|
$
|
97,639
|
|
|
13.4
|
%
|
Top five clients
|
$
|
327,092
|
|
|
28.2
|
%
|
|
$
|
298,063
|
|
|
32.6
|
%
|
|
$
|
239,396
|
|
|
32.8
|
%
|
Top ten clients
|
$
|
442,253
|
|
|
38.1
|
%
|
|
$
|
400,250
|
|
|
43.8
|
%
|
|
$
|
320,126
|
|
|
43.9
|
%
|
•
|
higher earnings attributable to our U.S. operations in 2016 driven by the growth in onsite presence in the U.S. and lower earnings attributable to foreign jurisdictions due to currency headwinds, among other factors;
|
•
|
changes in the geographic mix of our earnings attributable to foreign operations toward jurisdictions with higher statutory income tax rates;
|
•
|
full-year impact of inclusion of operating results of AGS, a 2015 acquisition with its primary delivery centers in India, which has a significantly higher tax rate.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Total segment revenues:
|
|
|
|
|
|
||||||
North America
|
$
|
642,216
|
|
|
$
|
471,603
|
|
|
$
|
374,509
|
|
Europe
|
474,988
|
|
|
400,460
|
|
|
299,279
|
|
|||
Russia
|
43,611
|
|
|
37,992
|
|
|
50,663
|
|
|||
Other
|
—
|
|
|
4,911
|
|
|
5,552
|
|
|||
Total segment revenues
|
$
|
1,160,815
|
|
|
$
|
914,966
|
|
|
$
|
730,003
|
|
Segment operating profit:
|
|
|
|
|
|
|
|
||||
North America
|
$
|
143,021
|
|
|
$
|
112,312
|
|
|
$
|
90,616
|
|
Europe
|
67,545
|
|
|
68,717
|
|
|
50,189
|
|
|||
Russia
|
7,555
|
|
|
5,198
|
|
|
7,034
|
|
|||
Other
|
—
|
|
|
(94
|
)
|
|
(3,220
|
)
|
|||
Total segment operating profit
|
$
|
218,121
|
|
|
$
|
186,133
|
|
|
$
|
144,619
|
|
|
Year Ended
December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Consolidated Statements of Cash Flow Data:
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
164,817
|
|
|
$
|
76,393
|
|
|
$
|
104,874
|
|
Net cash used in investing activities
|
(9,322
|
)
|
|
(125,494
|
)
|
|
(52,929
|
)
|
|||
Net cash provided by financing activities
|
10,467
|
|
|
33,764
|
|
|
10,347
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(3,386
|
)
|
|
(5,748
|
)
|
|
(10,965
|
)
|
|||
Net increase/(decrease) in cash and cash equivalents
|
$
|
162,576
|
|
|
$
|
(21,085
|
)
|
|
$
|
51,327
|
|
Cash and cash equivalents, beginning of period
|
199,449
|
|
|
220,534
|
|
|
169,207
|
|
|||
Cash and cash equivalents, end of period
|
$
|
362,025
|
|
|
$
|
199,449
|
|
|
$
|
220,534
|
|
|
Total
|
|
Less than 1
Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5
Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating lease obligations
|
$
|
100,080
|
|
|
$
|
30,791
|
|
|
$
|
40,750
|
|
|
$
|
17,441
|
|
|
$
|
11,098
|
|
Long-term debt obligation
(1)
|
26,133
|
|
|
424
|
|
|
25,709
|
|
|
—
|
|
|
—
|
|
|||||
Long-term incentive plan payouts
(2)
|
13,152
|
|
|
3,288
|
|
|
6,576
|
|
|
3,288
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
139,365
|
|
|
$
|
34,503
|
|
|
$
|
73,035
|
|
|
$
|
20,729
|
|
|
$
|
11,098
|
|
|
|
(1)
|
We estimate our future obligations for interest on our floating rate 2014 Credit Facility by assuming the weighted average interest rates in effect on each floating rate debt obligation at December 31, 2016 remain constant into the future. This is an estimate, as actual rates will vary over time. In addition, for the Revolving Credit Facility, we assume that the balance outstanding as of December 31, 2016 remains the same for the remaining term of the agreement. The actual balance outstanding under our Revolving Credit Facility may fluctuate significantly in future periods, depending on the availability of cash flow from operations and future investing and financing considerations.
|
(2)
|
We estimate our future obligations for long-term incentive plan payouts by assuming the price per share of our common stock in effect at December 31, 2016 remains constant into the future. This is an estimate, as actual prices will vary over time.
|
Plan Category
|
|
Number of securities
to be issued upon
exercise of outstanding options, warrants
and rights
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
|
||||||||||
Equity compensation plans approved by security holders:
(1)
|
|
|
|
|
|
|
|
|
|
6,750,537
|
|
|
(4)
|
|||
Stock options
|
|
6,637,239
|
|
|
(2)
|
|
$
|
37.20
|
|
|
(3)
|
|
—
|
|
|
(5)
|
Restricted stock unit and restricted stock awards
|
|
489,855
|
|
|
|
|
$
|
—
|
|
|
(5)
|
|
—
|
|
|
(5)
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
—
|
|
|
|
Total
|
|
7,127,094
|
|
|
|
|
$
|
37.20
|
|
|
|
|
6,750,537
|
|
|
|
|
|
(1)
|
This table includes the following stockholder approved plans: the 2015 Plan, 2012 Plan, the 2006 Plan and the 2012 Directors Plan.
|
(2)
|
Represents the number of underlying shares of common stock associated with outstanding options under our stockholder approved plans and is comprised of 414,235 shares underlying options granted under our 2015 Plan; 5,539,460 shares underlying options granted under our 2012 Plan; and 683,544 shares underlying options granted under our 2006 Plan.
|
(3)
|
Represents the weighted-average exercise price of stock options outstanding under the 2015 Plan, the 2012 Plan and the 2006 Plan.
|
(4)
|
Represents the number of shares available for future issuances under our stockholder approved equity compensation plans and is comprised of 6,202,977 shares available for future issuance under the 2015 Plan and 547,560 shares available for future issuances under the 2012 Directors Plan.
|
(5)
|
Not applicable.
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
F-4
|
Consolidated Statements of Income and Comprehensive Income for Years Ended December 31, 2016, 2015 and 2014
|
F-5
|
Consolidated Statements of Changes in Stockholders’ Equity for Years Ended December 31, 2016, 2015 and 2014
|
F-6
|
Consolidated Statements of Cash Flows for Years Ended December 31, 2016, 2015 and 2014
|
F-8
|
Notes to Consolidated Financial Statements for Years Ended December 31, 2016, 2015 and 2014
|
F-10
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Certificate of incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 10-K for the fiscal year ended December 31, 2011, SEC File No. 001-35418, filed March 30, 2012 (the “2011 Form 10-K”))
|
3.2
|
|
Bylaws (incorporated herein by reference to Exhibit 3.2 to the 2011 Form 10-K)
|
4.1
|
|
Form of Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to Amendment No. 6 to Form S-1, SEC File No. 333-174827, filed January 23, 2012 (“Amendment No. 6”))
|
4.2
|
|
Amended and Restated Registration Rights Agreement dated February 19, 2008 (incorporated herein by reference to Exhibit 4.2 to Form S-1, SEC File No. 333-174827, filed June 10, 2011 (the “Registration Statement”))
|
4.3
|
|
Registration Rights Agreement dated April 26, 2010 (incorporated herein by reference to Exhibit 4.3 to the Registration Statement)
|
10.1†
|
|
EPAM Systems, Inc. Amended and Restated 2006 Stock Option Plan (incorporated herein by reference to Exhibit 10.6 to Amendment No. 6)
|
10.2†
|
|
Form of EPAM Systems, Inc. 2006 Stock Option Plan Award Agreement (under the EPAM Systems, Inc. Amended and Restated 2006 Stock Option Plan) (incorporated herein by reference to Exhibit 10.7 to Amendment No. 6)
|
10.3†
|
|
EPAM Systems, Inc. 2012 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.12 to Amendment No. 6)
|
10.4†
|
|
Form of Senior Management Non-Qualified Stock Option Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated herein by reference to Exhibit 10.13 to Amendment No. 6)
|
10.5†
|
|
Restricted Stock Award Agreement by and between Karl Robb and EPAM Systems, Inc. dated January 16, 2012 (incorporated herein by reference to Exhibit 10.14 to Amendment No. 6)
|
10.6†
|
|
Form of Chief Executive Officer Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, SEC File No. 001-35418, filed May 7, 2014 (the “Q1 2014 Form 10-Q”)
|
10.7†
|
|
Form of Senior Management Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.2 to the Q1 2014 Form 10-Q)
|
10.8†
|
|
Form of Chief Executive Officer Non-Qualified Stock Option Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.3 to the Q1 2014 Form 10-Q)
|
10.9†
|
|
Form of Chief Executive Officer Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, SEC File No. 001-35418, filed May 7, 2015 (the “Q1 2015 Form 10-Q”)
|
10.10†
|
|
Form of Senior Management Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2012 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.2 to the Q1 2015 Form 10-Q)
|
10.11†
|
|
EPAM Systems, Inc. 2015 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, SEC File No. 001-35418, filed June 15, 2015)
|
10.12†*
|
|
Form of Chief Executive Officer Non-Qualified Stock Option Award Agreement (under the EPAM Systems, Inc. 2015 Long-Term Incentive Plan)
|
10.13†*
|
|
Form of Chief Executive Officer Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2015 Long-Term Incentive Plan)
|
10.14†*
|
|
Form of Senior Management Non-Qualified Stock Option Award Agreement (under the EPAM Systems, Inc. 2015 Long-Term Incentive Plan)
|
10.15†*
|
|
Form of Senior Management Restricted Stock Unit Award Agreement (under the EPAM Systems, Inc. 2015 Long-Term Incentive Plan)
|
10.16†
|
|
Amended and Restated EPAM Systems, Inc. Non-Employee Directors Compensation Plan (incorporated herein by reference to Exhibit 10.3 to the Q1 2015 Form 10-Q)
|
10.17†
|
|
Form of Non-Employee Director Restricted Stock Award Agreement (under the EPAM Systems, Inc. 2012 Non-Employee Directors Compensation Plan) (incorporated herein by reference to Exhibit 10.16 to Amendment No. 6)
|
10.18†
|
|
Amended and Restated Non-Employee Director Compensation Policy (incorporated herein by reference to Exhibit 10.4 to the Q1 2015 Form 10-Q)
|
|
EPAM SYSTEMS, INC.
|
|
|
|
|
|
By:
|
/s/ Arkadiy Dobkin
|
|
|
Name: Arkadiy Dobkin
|
|
|
Title: Chairman, Chief Executive Officer and President
(principal executive officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Arkadiy Dobkin
|
|
Chairman, Chief Executive Officer and President
(principal executive officer)
|
|
February 28, 2017
|
Arkadiy Dobkin
|
||||
|
|
|
|
|
/s/ Anthony J. Conte
|
|
Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer and principal accounting officer)
|
|
February 28, 2017
|
Anthony J. Conte
|
||||
|
|
|
|
|
/s/ Jill B. Smart
|
|
Director
|
|
February 28, 2017
|
Jill B. Smart
|
||||
|
|
|||
|
|
|
|
|
/s/ Karl Robb
|
|
Director
|
|
February 28, 2017
|
Karl Robb
|
||||
|
|
|||
|
|
|
|
|
/s/ Peter Kuerpick
|
|
Director
|
|
February 28, 2017
|
Peter Kuerpick
|
||||
|
|
|||
|
|
|
|
|
/s/ Richard Michael Mayoras
|
|
Director
|
|
February 28, 2017
|
Richard Michael Mayoras
|
||||
|
|
|||
|
|
|
|
|
/s/ Robert E. Segert
|
|
Director
|
|
February 28, 2017
|
Robert E. Segert
|
||||
|
|
|||
|
|
|
|
|
/s/ Ronald P. Vargo
|
|
Director
|
|
February 28, 2017
|
Ronald P. Vargo
|
||||
|
|
|
Page
|
Audited Consolidated Financial Statements
|
|
|
|
Financial Statements Schedule:
|
|
|
As of
December 31, 2016 |
|
As of
December 31, 2015 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
362,025
|
|
|
$
|
199,449
|
|
Restricted cash
|
2,400
|
|
|
—
|
|
||
Time deposits
|
403
|
|
|
30,181
|
|
||
Accounts receivable, net of allowance of $1,434 and $1,729, respectively
|
199,982
|
|
|
174,617
|
|
||
Unbilled revenues
|
63,325
|
|
|
95,808
|
|
||
Prepaid and other assets, net of allowance of $644 and $0, respectively
|
15,690
|
|
|
14,344
|
|
||
Employee loans, net of allowance of $0 and $0, respectively
|
2,726
|
|
|
2,689
|
|
||
Deferred tax assets
|
—
|
|
|
11,847
|
|
||
Total current assets
|
646,551
|
|
|
528,935
|
|
||
Property and equipment, net
|
73,616
|
|
|
60,499
|
|
||
Restricted cash
|
239
|
|
|
238
|
|
||
Employee loans, net of allowance of $0 and $0, respectively
|
3,252
|
|
|
3,649
|
|
||
Intangible assets, net
|
51,260
|
|
|
46,860
|
|
||
Goodwill
|
109,289
|
|
|
115,930
|
|
||
Deferred tax assets
|
31,005
|
|
|
18,312
|
|
||
Other long-term assets, net of allowance of $132 and $0, respectively
|
10,599
|
|
|
4,113
|
|
||
Total assets
|
$
|
925,811
|
|
|
$
|
778,536
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
3,213
|
|
|
$
|
2,576
|
|
Accrued expenses and other liabilities
|
49,895
|
|
|
63,796
|
|
||
Due to employees
|
32,203
|
|
|
26,703
|
|
||
Deferred compensation due to employees
|
5,900
|
|
|
5,364
|
|
||
Taxes payable
|
25,008
|
|
|
29,472
|
|
||
Total current liabilities
|
116,219
|
|
|
127,911
|
|
||
Long-term debt
|
25,048
|
|
|
35,000
|
|
||
Other long-term liabilities
|
3,132
|
|
|
2,402
|
|
||
Total liabilities
|
144,399
|
|
|
165,313
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Common stock, $0.001 par value; 160,000,000 authorized; 51,117,422 and 50,177,044 shares issued, 51,097,687 and 50,166,537 shares outstanding at December 31, 2016 and December 31, 2015, respectively
|
50
|
|
|
49
|
|
||
Additional paid-in capital
|
374,907
|
|
|
303,363
|
|
||
Retained earnings
|
444,320
|
|
|
345,054
|
|
||
Treasury stock
|
(177
|
)
|
|
(93
|
)
|
||
Accumulated other comprehensive loss
|
(37,688
|
)
|
|
(35,150
|
)
|
||
Total stockholders’ equity
|
781,412
|
|
|
613,223
|
|
||
Total liabilities and stockholders’ equity
|
$
|
925,811
|
|
|
$
|
778,536
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues
|
$
|
1,160,132
|
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
Operating expenses:
|
|
|
|
|
|
|
|||||
Cost of revenues (exclusive of depreciation and amortization)
|
737,186
|
|
|
566,913
|
|
|
456,530
|
|
|||
Selling, general and administrative expenses
|
264,658
|
|
|
222,759
|
|
|
163,666
|
|
|||
Depreciation and amortization expense
|
23,387
|
|
|
17,395
|
|
|
17,483
|
|
|||
Goodwill impairment loss
|
—
|
|
|
—
|
|
|
2,241
|
|
|||
Other operating expenses, net
|
1,205
|
|
|
1,094
|
|
|
3,924
|
|
|||
Income from operations
|
133,696
|
|
|
105,967
|
|
|
86,183
|
|
|||
Interest and other income, net
|
4,848
|
|
|
4,731
|
|
|
4,769
|
|
|||
Change in fair value of contingent consideration
|
—
|
|
|
—
|
|
|
(1,924
|
)
|
|||
Foreign exchange loss
|
(12,078
|
)
|
|
(4,628
|
)
|
|
(2,075
|
)
|
|||
Income before provision for income taxes
|
126,466
|
|
|
106,070
|
|
|
86,953
|
|
|||
Provision for income taxes
|
27,200
|
|
|
21,614
|
|
|
17,312
|
|
|||
Net income
|
$
|
99,266
|
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
Foreign currency translation adjustments
|
(2,538
|
)
|
|
(13,096
|
)
|
|
(20,251
|
)
|
|||
Comprehensive income
|
$
|
96,728
|
|
|
$
|
71,360
|
|
|
$
|
49,390
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
|
|||||
Basic
|
$
|
1.97
|
|
|
$
|
1.73
|
|
|
$
|
1.48
|
|
Diluted
|
$
|
1.87
|
|
|
$
|
1.62
|
|
|
$
|
1.40
|
|
Shares used in calculation of net income per share:
|
|
|
|
|
|
|
|||||
Basic
|
50,309
|
|
|
48,721
|
|
|
47,189
|
|
|||
Diluted
|
53,215
|
|
|
51,986
|
|
|
49,734
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive (Loss)/ Income
|
|
Total Stockholders’ Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, December 31, 2013
|
46,614,916
|
|
|
$
|
46
|
|
|
$
|
195,585
|
|
|
$
|
190,986
|
|
|
$
|
(8,684
|
)
|
|
$
|
(1,832
|
)
|
|
$
|
376,101
|
|
Stock issued in connection with acquisitions (Note 3)
|
534,534
|
|
|
—
|
|
|
(2,076
|
)
|
|
—
|
|
|
4,864
|
|
|
—
|
|
|
2,788
|
|
||||||
Forfeiture of stock issued in connection with acquisitions
|
(24,474
|
)
|
|
—
|
|
|
223
|
|
|
—
|
|
|
(223
|
)
|
|
—
|
|
|
—
|
|
||||||
Stock issued under the 2012 Non-Employee Directors Compensation Plan (Note 14)
|
7,738
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
21,397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,397
|
|
||||||
Proceeds from stock option exercises
|
1,171,097
|
|
|
2
|
|
|
10,596
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,598
|
|
||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
3,776
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,776
|
|
||||||
Prior periods retained earnings adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
29
|
|
|
—
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,251
|
)
|
|
(20,251
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
69,641
|
|
|
—
|
|
|
—
|
|
|
69,641
|
|
||||||
Balance, December 31, 2014
|
48,303,811
|
|
|
$
|
48
|
|
|
$
|
229,501
|
|
|
$
|
260,598
|
|
|
$
|
(4,043
|
)
|
|
$
|
(22,054
|
)
|
|
$
|
464,050
|
|
Stock issued in connection with acquisitions (Note 3)
|
435,462
|
|
|
—
|
|
|
1,118
|
|
|
—
|
|
|
3,963
|
|
|
—
|
|
|
5,081
|
|
||||||
Forfeiture of stock issued in connection with acquisitions
|
(1,482
|
)
|
|
—
|
|
|
13
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
||||||
Stock issued under the 2012 Non-Employee Directors Compensation Plan (Note 14)
|
5,295
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock units vested
|
17,625
|
|
|
—
|
|
|
574
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
574
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
43,120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,120
|
|
||||||
Proceeds from stock option exercises
|
1,405,826
|
|
|
1
|
|
|
20,674
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,675
|
|
||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
8,363
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,363
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,096
|
)
|
|
(13,096
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
84,456
|
|
|
—
|
|
|
—
|
|
|
84,456
|
|
||||||
Balance, December 31, 2015
|
50,166,537
|
|
|
$
|
49
|
|
|
$
|
303,363
|
|
|
$
|
345,054
|
|
|
$
|
(93
|
)
|
|
$
|
(35,150
|
)
|
|
$
|
613,223
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive (Loss)/ Income
|
|
Total Stockholders’ Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, December 31, 2015
|
50,166,537
|
|
|
$
|
49
|
|
|
$
|
303,363
|
|
|
$
|
345,054
|
|
|
$
|
(93
|
)
|
|
$
|
(35,150
|
)
|
|
$
|
613,223
|
|
Forfeiture of stock issued in connection with acquisitions
|
(9,228
|
)
|
|
—
|
|
|
84
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
||||||
Stock issued under the 2012 Non-Employee Directors Compensation Plan (Note 14)
|
6,510
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock units vested, net of shares withheld for taxes
|
38,064
|
|
|
—
|
|
|
2,069
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,069
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
46,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,100
|
|
||||||
Proceeds from stock option exercises
|
895,804
|
|
|
1
|
|
|
18,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,028
|
|
||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
5,264
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,264
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,538
|
)
|
|
(2,538
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
99,266
|
|
|
—
|
|
|
—
|
|
|
99,266
|
|
||||||
Balance, December 31, 2016
|
51,097,687
|
|
|
$
|
50
|
|
|
$
|
374,907
|
|
|
$
|
444,320
|
|
|
$
|
(177
|
)
|
|
$
|
(37,688
|
)
|
|
$
|
781,412
|
|
(US Dollars in thousands)
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
99,266
|
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
23,387
|
|
|
17,395
|
|
|
17,483
|
|
|||
Bad debt expense
|
|
1,539
|
|
|
1,407
|
|
|
817
|
|
|||
Deferred taxes
|
|
(3,304
|
)
|
|
(15,328
|
)
|
|
(3,270
|
)
|
|||
Stock-based compensation expense
|
|
49,244
|
|
|
45,833
|
|
|
24,620
|
|
|||
Impairment charges and acquisition related adjustments
|
|
—
|
|
|
(1,183
|
)
|
|
7,907
|
|
|||
Excess tax benefit on stock-based compensation plans
|
|
(5,264
|
)
|
|
(8,363
|
)
|
|
(3,776
|
)
|
|||
Other
|
|
6,228
|
|
|
3,883
|
|
|
735
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||||
(Increase)/decrease in operating assets:
|
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
|
(30,612
|
)
|
|
(47,694
|
)
|
|
(30,410
|
)
|
|||
Unbilled revenues
|
|
34,777
|
|
|
(38,076
|
)
|
|
(11,134
|
)
|
|||
Prepaid expenses and other assets
|
|
(4,791
|
)
|
|
(574
|
)
|
|
565
|
|
|||
Increase/(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
741
|
|
|
(2,781
|
)
|
|
(2,603
|
)
|
|||
Accrued expenses and other liabilities
|
|
(13,926
|
)
|
|
25,694
|
|
|
9,978
|
|
|||
Due to employees
|
|
5,261
|
|
|
2,752
|
|
|
7,453
|
|
|||
Taxes payable
|
|
2,271
|
|
|
8,972
|
|
|
16,868
|
|
|||
Net cash provided by operating activities
|
|
164,817
|
|
|
76,393
|
|
|
104,874
|
|
|||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(29,317
|
)
|
|
(13,272
|
)
|
|
(11,916
|
)
|
|||
Payment for construction of corporate facilities
|
|
—
|
|
|
(4,692
|
)
|
|
(3,924
|
)
|
|||
Employee housing loans issued
|
|
(2,006
|
)
|
|
(2,054
|
)
|
|
(1,740
|
)
|
|||
Proceeds from repayments of employee housing loans
|
|
2,177
|
|
|
2,249
|
|
|
1,793
|
|
|||
(Increase)/decrease in restricted cash and time deposits, net
|
|
29,595
|
|
|
(29,944
|
)
|
|
1,430
|
|
|||
Increase in other long-term assets, net
|
|
(4,327
|
)
|
|
(708
|
)
|
|
(1,479
|
)
|
|||
Acquisition of businesses, net of cash acquired (Note 3)
|
|
(5,500
|
)
|
|
(76,908
|
)
|
|
(37,093
|
)
|
|||
Other investing activities, net
|
|
56
|
|
|
(165
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
|
(9,322
|
)
|
|
(125,494
|
)
|
|
(52,929
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds related to stock option exercises
|
|
17,996
|
|
|
20,675
|
|
|
10,571
|
|
|||
Excess tax benefit on stock-based compensation plans
|
|
5,264
|
|
|
8,363
|
|
|
3,776
|
|
|||
Payments of withholding taxes
related to
net share settlements of restricted stock units
|
|
(539
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from debt (Note 13)
|
|
20,000
|
|
|
35,000
|
|
|
—
|
|
|||
Repayment of debt (Note 13)
|
|
(30,129
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from government grants
|
|
135
|
|
|
—
|
|
|
—
|
|
|||
Acquisition of businesses, deferred consideration (Note 3)
|
|
(2,260
|
)
|
|
(30,274
|
)
|
|
(4,000
|
)
|
|||
Net cash provided by financing activities
|
|
10,467
|
|
|
33,764
|
|
|
10,347
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(3,386
|
)
|
|
(5,748
|
)
|
|
(10,965
|
)
|
|||
Net increase/(decrease) in cash and cash equivalents
|
|
162,576
|
|
|
(21,085
|
)
|
|
51,327
|
|
|||
Cash and cash equivalents, beginning of period
|
|
199,449
|
|
|
220,534
|
|
|
169,207
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
362,025
|
|
|
$
|
199,449
|
|
|
$
|
220,534
|
|
(US Dollars in thousands)
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
|
||||||
Income taxes
|
|
$
|
37,488
|
|
|
$
|
25,071
|
|
|
$
|
11,756
|
|
Bank interest
|
|
$
|
566
|
|
|
$
|
124
|
|
|
$
|
7
|
|
Supplemental disclosure of non-cash operating activities
|
|
|
|
|
|
|
||||||
Goodwill impairment loss
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,241
|
|
Contingent consideration fair value adjustment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,924
|
|
Write off related to the construction of a building in Minsk, Belarus
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,742
|
|
Prepaid and other current assets write-off related to vendor advance
|
|
$
|
—
|
|
|
$
|
741
|
|
|
$
|
—
|
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
|
|
|
||||||
Deferred consideration payable
|
|
$
|
—
|
|
|
$
|
603
|
|
|
$
|
1,022
|
|
Contingent consideration payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,322
|
|
1.
|
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
3.
|
ACQUISITIONS
|
|
|
NavigationArts
|
|
AGS
|
|
Total
|
||||||||||||||||||
|
|
As
Originally Reported
|
|
Final as of September 30, 2016
|
|
As
Originally Reported
|
|
Final as of December 31, 2016
|
|
As
Originally Reported
|
|
Final as of
December 31, 2016 |
||||||||||||
Cash and cash equivalents
|
|
$
|
1,317
|
|
|
$
|
1,317
|
|
|
$
|
1,727
|
|
|
$
|
1,727
|
|
|
$
|
3,044
|
|
|
$
|
3,044
|
|
Accounts receivable and other current assets
|
|
3,920
|
|
|
3,920
|
|
|
10,600
|
|
|
9,934
|
|
|
14,520
|
|
|
13,854
|
|
||||||
Property and equipment and other long-term assets
|
|
230
|
|
|
230
|
|
|
1,665
|
|
|
1,600
|
|
|
1,895
|
|
|
1,830
|
|
||||||
Deferred tax assets
|
|
—
|
|
|
—
|
|
|
4,996
|
|
|
5,722
|
|
|
4,996
|
|
|
5,722
|
|
||||||
Acquired intangible assets
|
|
1,500
|
|
|
2,800
|
|
|
10,000
|
|
|
22,700
|
|
|
11,500
|
|
|
25,500
|
|
||||||
Goodwill
|
|
23,822
|
|
|
23,794
|
|
|
33,815
|
|
|
24,454
|
|
|
57,637
|
|
|
48,248
|
|
||||||
Total assets acquired
|
|
30,789
|
|
|
32,061
|
|
|
62,803
|
|
|
66,137
|
|
|
93,592
|
|
|
98,198
|
|
||||||
Accounts payable and accrued expenses
|
|
871
|
|
|
871
|
|
|
3,087
|
|
|
2,760
|
|
|
3,958
|
|
|
3,631
|
|
||||||
Bank loans and other long-term liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
295
|
|
|
—
|
|
|
295
|
|
||||||
Deferred revenue
|
|
50
|
|
|
50
|
|
|
1,049
|
|
|
1,049
|
|
|
1,099
|
|
|
1,099
|
|
||||||
Due to employees
|
|
596
|
|
|
596
|
|
|
3,010
|
|
|
2,342
|
|
|
3,606
|
|
|
2,938
|
|
||||||
Deferred tax liabilities
|
|
525
|
|
|
—
|
|
|
3,800
|
|
|
7,974
|
|
|
4,325
|
|
|
7,974
|
|
||||||
Total liabilities assumed
|
|
2,042
|
|
|
1,517
|
|
|
10,946
|
|
|
14,420
|
|
|
12,988
|
|
|
15,937
|
|
||||||
Net assets acquired
|
|
$
|
28,747
|
|
|
$
|
30,544
|
|
|
$
|
51,857
|
|
|
$
|
51,717
|
|
|
$
|
80,604
|
|
|
$
|
82,261
|
|
|
NavigationArts
|
|
AGS
|
||||||||
|
Weighted Average Useful Life (in years)
|
|
Amount
|
|
Weighted Average Useful Life (in years)
|
|
Amount
|
||||
Customer relationships
|
10
|
|
$
|
2,800
|
|
|
10
|
|
$
|
22,700
|
|
Total
|
|
|
$
|
2,800
|
|
|
|
|
$
|
22,700
|
|
Name of Acquisition
|
|
Effective Date of Acquisition
|
|
Common Shares
|
|
Fair Value of Common
Shares
|
|
Cash, Net of Working Capital and Other Adjustments
|
|
Recorded Earnout
Payable
|
|
Total Recorded Purchase Price
|
|
Maximum Potential Earnout Payable
|
||||||||||||||||||||||||||
|
|
Issued
|
|
Deferred
|
|
Issued
|
|
Deferred
|
|
Paid
|
|
Deferred
|
|
Cash
|
|
Stock
|
|
|
||||||||||||||||||||||
|
|
|
|
(in shares)
|
|
(in thousands)
|
||||||||||||||||||||||||||||||||||
Netsoft
|
|
March 5, 2014
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,403
|
|
|
$
|
1,022
|
|
|
$
|
1,825
|
|
|
$
|
—
|
|
|
$
|
5,250
|
|
|
$
|
1,825
|
|
Jointech
|
|
April 30, 2014
|
|
—
|
|
|
89,552
|
|
|
—
|
|
|
2,788
|
|
|
10,000
|
|
|
4,000
|
|
|
15,000
|
|
|
5,000
|
|
|
36,788
|
|
|
20,000
|
|
||||||||
GGA*
|
|
June 6, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,892
|
|
|
—
|
|
|
11,400
|
|
|
—
|
|
|
26,292
|
|
|
|
|||||||||
Great Fridays
|
|
October 31, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,777
|
|
|
—
|
|
|
1,173
|
|
|
—
|
|
|
11,950
|
|
|
1,173
|
|
||||||||
|
|
|
|
—
|
|
|
89,552
|
|
|
$
|
—
|
|
|
$
|
2,788
|
|
|
$
|
38,072
|
|
|
$
|
5,022
|
|
|
$
|
29,398
|
|
|
$
|
5,000
|
|
|
$
|
80,280
|
|
|
|
|
Netsoft
|
|
Jointech
|
|
GGA
|
|
Great Fridays
|
|
Total
|
||||||||||||||||||||||||||||||
|
As Originally Reported
|
|
Final as of March 31, 2015
|
|
As Originally Reported
|
|
Final as of June 30, 2015
|
|
As Originally Reported
|
|
Final as of June 30, 2015
|
|
As Originally Reported
|
|
Final as of December 31, 2015
|
|
As Originally Reported
|
|
Final as of December 31, 2015
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
871
|
|
|
$
|
871
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
259
|
|
|
$
|
259
|
|
|
$
|
1,130
|
|
|
$
|
1,130
|
|
Trade receivables and other current assets
|
788
|
|
|
788
|
|
|
784
|
|
|
784
|
|
|
5,157
|
|
|
5,377
|
|
|
1,825
|
|
|
1,825
|
|
|
8,554
|
|
|
8,774
|
|
||||||||||
Property and equipment and other long-term assets
|
52
|
|
|
52
|
|
|
338
|
|
|
338
|
|
|
444
|
|
|
306
|
|
|
262
|
|
|
262
|
|
|
1,096
|
|
|
958
|
|
||||||||||
Deferred tax assets
|
351
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,463
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,814
|
|
|
—
|
|
||||||||||
Acquired intangible assets
|
1,700
|
|
|
1,700
|
|
|
25,744
|
|
|
15,312
|
|
|
10,959
|
|
|
16,000
|
|
|
5,747
|
|
|
200
|
|
|
44,150
|
|
|
33,212
|
|
||||||||||
Goodwill
|
2,776
|
|
|
2,779
|
|
|
11,033
|
|
|
23,758
|
|
|
6,496
|
|
|
7,306
|
|
|
6,947
|
|
|
11,262
|
|
|
27,252
|
|
|
45,105
|
|
||||||||||
Total assets acquired
|
5,667
|
|
|
5,319
|
|
|
38,770
|
|
|
41,063
|
|
|
27,519
|
|
|
28,989
|
|
|
15,040
|
|
|
13,808
|
|
|
86,996
|
|
|
89,179
|
|
||||||||||
Accounts payable and accrued expenses
|
69
|
|
|
69
|
|
|
728
|
|
|
728
|
|
|
2,593
|
|
|
2,593
|
|
|
872
|
|
|
807
|
|
|
4,262
|
|
|
4,197
|
|
||||||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
317
|
|
|
317
|
|
|
317
|
|
|
421
|
|
||||||||||
Due to employees
|
—
|
|
|
—
|
|
|
1,254
|
|
|
1,254
|
|
|
—
|
|
|
—
|
|
|
624
|
|
|
624
|
|
|
1,878
|
|
|
1,878
|
|
||||||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
2,293
|
|
|
—
|
|
|
—
|
|
|
1,200
|
|
|
110
|
|
|
1,200
|
|
|
2,403
|
|
||||||||||
Total liabilities assumed
|
69
|
|
|
69
|
|
|
1,982
|
|
|
4,275
|
|
|
2,593
|
|
|
2,697
|
|
|
3,013
|
|
|
1,858
|
|
|
7,657
|
|
|
8,899
|
|
||||||||||
Net assets acquired
|
$
|
5,598
|
|
|
$
|
5,250
|
|
|
$
|
36,788
|
|
|
$
|
36,788
|
|
|
$
|
24,926
|
|
|
$
|
26,292
|
|
|
$
|
12,027
|
|
|
$
|
11,950
|
|
|
$
|
79,339
|
|
|
$
|
80,280
|
|
|
Netsoft
|
|
Jointech
|
|
GGA
|
|
Great Fridays
|
||||||||||||||||
|
Weighted Average
Useful Life (in years) |
|
Amount
|
|
Weighted Average
Useful Life (in years) |
|
Amount
|
|
Weighted Average
Useful Life (in years) |
|
Amount
|
|
Weighted Average
Useful Life (in years) |
|
Amount
|
||||||||
Customer relationships
|
10
|
|
$
|
1,700
|
|
|
10
|
|
$
|
15,000
|
|
|
10
|
|
$
|
16,000
|
|
|
3
|
|
$
|
200
|
|
Trade names
|
—
|
|
—
|
|
|
2
|
|
312
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Total
|
|
|
$
|
1,700
|
|
|
|
|
$
|
15,312
|
|
|
|
|
$
|
16,000
|
|
|
|
|
$
|
200
|
|
|
North America
|
|
Europe
|
|
Total
|
||||||
Balance as of January 1, 2015
|
$
|
31,078
|
|
|
$
|
26,339
|
|
|
$
|
57,417
|
|
Acquisition of NavigationArts (Note 3)
|
23,822
|
|
|
—
|
|
|
23,822
|
|
|||
Acquisition of AGS (Note 3)
|
33,815
|
|
|
—
|
|
|
33,815
|
|
|||
Netsoft purchase accounting adjustment (Note 3)
|
30
|
|
|
—
|
|
|
30
|
|
|||
Jointech purchase accounting adjustment (Note 3)
|
—
|
|
|
6,181
|
|
|
6,181
|
|
|||
GGA purchase accounting adjustment (Note 3)
|
(4,807
|
)
|
|
—
|
|
|
(4,807
|
)
|
|||
Great Fridays purchase accounting adjustment (Note 3)
|
—
|
|
|
4,315
|
|
|
4,315
|
|
|||
NavigationArts purchase accounting adjustment (Note 3)
|
(2,058
|
)
|
|
—
|
|
|
(2,058
|
)
|
|||
Effect of net foreign currency exchange rate changes
|
(416
|
)
|
|
(2,369
|
)
|
|
(2,785
|
)
|
|||
Balance as of December 31, 2015
|
81,464
|
|
|
34,466
|
|
|
115,930
|
|
|||
NavigationArts purchase accounting adjustment (Note 3)
|
2,030
|
|
|
—
|
|
|
2,030
|
|
|||
AGS purchase accounting adjustment (Note 3)
|
(9,361
|
)
|
|
—
|
|
|
(9,361
|
)
|
|||
Other acquisitions
|
2,404
|
|
|
177
|
|
|
2,581
|
|
|||
Other acquisitions purchase accounting adjustment
|
395
|
|
|
87
|
|
|
482
|
|
|||
Effect of net foreign currency exchange rate changes
|
(120
|
)
|
|
(2,253
|
)
|
|
(2,373
|
)
|
|||
Balance as of December 31, 2016
|
$
|
76,812
|
|
|
$
|
32,477
|
|
|
$
|
109,289
|
|
|
As of December 31, 2016
|
||||||||||||
|
Weighted average life at acquisition (in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net
carrying amount
|
||||||
Customer relationships
|
10
|
|
$
|
65,409
|
|
|
$
|
(15,133
|
)
|
|
$
|
50,276
|
|
Trade names
|
5
|
|
5,622
|
|
|
(4,661
|
)
|
|
961
|
|
|||
Non-competition agreements
|
4
|
|
756
|
|
|
(733
|
)
|
|
23
|
|
|||
Total
|
|
|
$
|
71,787
|
|
|
$
|
(20,527
|
)
|
|
$
|
51,260
|
|
|
As of December 31, 2015
|
||||||||||||
|
Weighted average life at acquisition (in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net
carrying amount
|
||||||
Customer relationships
|
10
|
|
$
|
52,974
|
|
|
$
|
(8,387
|
)
|
|
$
|
44,587
|
|
Trade names
|
5
|
|
5,853
|
|
|
(3,772
|
)
|
|
2,081
|
|
|||
Non-competition agreements
|
4
|
|
746
|
|
|
(554
|
)
|
|
192
|
|
|||
Total
|
|
|
$
|
59,573
|
|
|
$
|
(12,713
|
)
|
|
$
|
46,860
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Customer relationships
|
|
$
|
6,858
|
|
|
$
|
3,961
|
|
|
$
|
3,843
|
|
Trade names
|
|
1,139
|
|
|
1,280
|
|
|
1,319
|
|
|||
Non-competition agreements
|
|
173
|
|
|
175
|
|
|
187
|
|
|||
Total
|
|
$
|
8,170
|
|
|
$
|
5,416
|
|
|
$
|
5,349
|
|
|
|
Amount
|
||
2017
|
|
$
|
7,482
|
|
2018
|
|
6,539
|
|
|
2019
|
|
6,539
|
|
|
2020
|
|
6,539
|
|
|
2021
|
|
6,539
|
|
|
Thereafter
|
|
17,622
|
|
|
Total
|
|
$
|
51,260
|
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Taxes receivable
|
|
$
|
6,054
|
|
|
$
|
7,954
|
|
Prepaid expenses
|
|
5,462
|
|
|
4,693
|
|
||
Unamortized software licenses and subscriptions
|
|
1,550
|
|
|
699
|
|
||
Security deposits under operating leases
|
|
1,323
|
|
|
575
|
|
||
Notes receivable, net of allowance of $580 and $0, respectively
|
|
710
|
|
|
—
|
|
||
Other, net of allowance of $64 and $0, respectively
|
|
591
|
|
|
423
|
|
||
Total
|
|
$
|
15,690
|
|
|
$
|
14,344
|
|
6.
|
EMPLOYEE LOANS AND ALLOWANCE FOR LOAN LOSSES
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Housing loans
|
$
|
5,448
|
|
|
$
|
5,654
|
|
Relocation and other loans
|
530
|
|
|
684
|
|
||
Total employee loans
|
5,978
|
|
|
6,338
|
|
||
Less:
|
|
|
|
|
|
||
Allowance for loan losses
|
—
|
|
|
—
|
|
||
Total loans, net of allowance for loan losses
|
$
|
5,978
|
|
|
$
|
6,338
|
|
7.
|
RESTRICTED CASH AND TIME DEPOSITS
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Restricted cash, short-term
|
$
|
2,400
|
|
|
$
|
—
|
|
Time deposits
|
403
|
|
|
30,181
|
|
||
Other long-term security deposits
|
239
|
|
|
238
|
|
||
Total
|
$
|
3,042
|
|
|
$
|
30,419
|
|
8.
|
PROPERTY AND EQUIPMENT — NET
|
|
|
Weighted Average Useful Life
(in years)
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Computer hardware
|
|
3
|
|
$
|
49,599
|
|
|
$
|
36,612
|
|
Building
|
|
49
|
|
34,012
|
|
|
34,002
|
|
||
Furniture and fixtures
|
|
7
|
|
13,178
|
|
|
8,990
|
|
||
Office equipment
|
|
7
|
|
9,416
|
|
|
8,307
|
|
||
Leasehold improvements
|
|
4
|
|
7,944
|
|
|
6,801
|
|
||
Purchased computer software
|
|
5
|
|
4,601
|
|
|
4,099
|
|
||
Land improvements
|
|
20
|
|
1,467
|
|
|
1,464
|
|
||
|
|
|
|
120,217
|
|
|
100,275
|
|
||
Less accumulated depreciation and amortization
|
|
|
|
(46,601
|
)
|
|
(39,776
|
)
|
||
Total
|
|
|
|
$
|
73,616
|
|
|
$
|
60,499
|
|
9.
|
ACCRUED EXPENSES AND OTHER LIABILITIES
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Compensation
|
|
$
|
33,404
|
|
|
$
|
47,285
|
|
Deferred revenue
|
|
3,319
|
|
|
3,047
|
|
||
Subcontractor costs
|
|
3,317
|
|
|
4,360
|
|
||
Professional fees
|
|
2,348
|
|
|
2,251
|
|
||
Business trips
|
|
2,324
|
|
|
939
|
|
||
Facilities costs
|
|
1,534
|
|
|
1,538
|
|
||
Insurance costs
|
|
1,091
|
|
|
810
|
|
||
Acquisition related deferred consideration
|
|
—
|
|
|
603
|
|
||
Deferred tax liabilities
|
|
—
|
|
|
365
|
|
||
Other
|
|
2,558
|
|
|
2,598
|
|
||
Total
|
|
$
|
49,895
|
|
|
$
|
63,796
|
|
10.
|
TAXES PAYABLE
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Corporate profit tax
|
|
$
|
4,000
|
|
|
$
|
15,057
|
|
Value added taxes
|
|
10,644
|
|
|
8,553
|
|
||
Payroll, social security, and other taxes
|
|
10,364
|
|
|
5,862
|
|
||
Total
|
|
$
|
25,008
|
|
|
$
|
29,472
|
|
11.
|
INCOME TAXES
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income/ (loss) before income tax expense:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
(9,300
|
)
|
|
$
|
(7,687
|
)
|
|
$
|
(7,229
|
)
|
Foreign
|
|
135,766
|
|
|
113,757
|
|
|
94,182
|
|
|||
Total
|
|
$
|
126,466
|
|
|
$
|
106,070
|
|
|
$
|
86,953
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income tax expense (benefit) consists of:
|
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
13,324
|
|
|
$
|
19,851
|
|
|
$
|
7,741
|
|
State
|
|
(63
|
)
|
|
2,563
|
|
|
338
|
|
|||
Foreign
|
|
17,243
|
|
|
14,528
|
|
|
12,504
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
Federal
|
|
(3,581
|
)
|
|
(13,361
|
)
|
|
(3,979
|
)
|
|||
State
|
|
312
|
|
|
(1,891
|
)
|
|
(43
|
)
|
|||
Foreign
|
|
(35
|
)
|
|
(76
|
)
|
|
751
|
|
|||
Total
|
|
$
|
27,200
|
|
|
$
|
21,614
|
|
|
$
|
17,312
|
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Deferred tax assets:
|
|
|
|
|
||||
Property and equipment
|
|
$
|
203
|
|
|
$
|
681
|
|
Intangible assets
|
|
1,525
|
|
|
1,428
|
|
||
Accrued expenses
|
|
9,172
|
|
|
10,729
|
|
||
Net operating loss carryforward
|
|
5,368
|
|
|
5,233
|
|
||
Deferred revenue
|
|
1,165
|
|
|
2,162
|
|
||
Stock-based compensation
|
|
19,701
|
|
|
12,484
|
|
||
Other assets
|
|
17
|
|
|
14
|
|
||
Deferred tax assets
|
|
37,151
|
|
|
32,731
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Property and equipment
|
|
1,735
|
|
|
646
|
|
||
Intangible assets
|
|
4,969
|
|
|
1,598
|
|
||
Accrued revenue and expenses
|
|
500
|
|
|
511
|
|
||
Stock-based compensation
|
|
1,606
|
|
|
1,672
|
|
||
Other liabilities
|
|
314
|
|
|
912
|
|
||
Deferred tax liabilities
|
|
9,124
|
|
|
5,339
|
|
||
Net deferred tax assets
|
|
$
|
28,027
|
|
|
$
|
27,392
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Statutory federal tax
|
|
$
|
44,263
|
|
|
$
|
37,125
|
|
|
$
|
29,564
|
|
Increase/ (decrease) in taxes resulting from:
|
|
|
|
|
|
|
||||||
State taxes, net of federal benefit
|
|
1,192
|
|
|
341
|
|
|
311
|
|
|||
Provision adjustment for current year uncertain tax position
|
|
—
|
|
|
—
|
|
|
(1,220
|
)
|
|||
Effect of permanent differences
|
|
5,042
|
|
|
7,314
|
|
|
8,589
|
|
|||
Stock-based compensation
expense
|
|
9,535
|
|
|
7,591
|
|
|
3,782
|
|
|||
Foreign tax expense and tax rate differential
|
|
(33,477
|
)
|
|
(31,094
|
)
|
|
(24,772
|
)
|
|||
Change in foreign tax rate
|
|
—
|
|
|
9
|
|
|
754
|
|
|||
Change in valuation allowance
|
|
—
|
|
|
—
|
|
|
149
|
|
|||
Other
|
|
645
|
|
|
328
|
|
|
155
|
|
|||
Provision for income taxes
|
|
$
|
27,200
|
|
|
$
|
21,614
|
|
|
$
|
17,312
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at January 1
|
|
$
|
62
|
|
|
$
|
200
|
|
|
$
|
1,271
|
|
Increases in tax positions in current year
|
|
4
|
|
|
—
|
|
|
—
|
|
|||
Increases in tax positions in prior year
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Decreases due to settlement
|
|
—
|
|
|
(138
|
)
|
|
(1,071
|
)
|
|||
Balance at December 31
|
|
$
|
66
|
|
|
$
|
62
|
|
|
$
|
200
|
|
12.
|
EMPLOYEE BENEFITS
|
13.
|
DEBT
|
14.
|
STOCK-BASED COMPENSATION
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of revenues
|
|
$
|
16,619
|
|
|
$
|
13,695
|
|
|
$
|
8,648
|
|
Selling, general and administrative expenses
— Acquisition related
|
|
12,884
|
|
|
18,690
|
|
|
8,829
|
|
|||
Selling, general and administrative expenses
— All other
|
|
19,741
|
|
|
13,448
|
|
|
7,143
|
|
|||
Total
|
|
$
|
49,244
|
|
|
$
|
45,833
|
|
|
$
|
24,620
|
|
|
Number of
Options
|
|
Weighted Average
Exercise Price
|
|
Aggregate
Intrinsic Value
|
|||||
Options outstanding at January 1, 2014
|
5,823,536
|
|
|
$
|
13.99
|
|
|
$
|
122,003
|
|
Options granted
|
2,400,500
|
|
|
32.51
|
|
|
36,584
|
|
||
Options exercised
|
(1,171,097
|
)
|
|
9.05
|
|
|
(45,321
|
)
|
||
Options forfeited/cancelled
|
(214,193
|
)
|
|
25.33
|
|
|
(4,802
|
)
|
||
Options outstanding at December 31, 2014
|
6,838,746
|
|
|
$
|
20.98
|
|
|
$
|
183,073
|
|
Options granted
|
2,219,725
|
|
|
62.18
|
|
|
36,492
|
|
||
Options exercised
|
(1,405,826
|
)
|
|
14.70
|
|
|
(89,860
|
)
|
||
Options forfeited/cancelled
|
(201,731
|
)
|
|
34.48
|
|
|
(8,904
|
)
|
||
Options outstanding at December 31, 2015
|
7,450,914
|
|
|
$
|
34.07
|
|
|
$
|
331,938
|
|
Options granted
|
313,088
|
|
|
70.27
|
|
|
(1,866
|
)
|
||
Options exercised
|
(895,804
|
)
|
|
20.13
|
|
|
(39,577
|
)
|
||
Options forfeited/cancelled
|
(227,759
|
)
|
|
47.89
|
|
|
(3,740
|
)
|
||
Options expired
|
(3,200
|
)
|
|
1.52
|
|
|
(201
|
)
|
||
Options outstanding at December 31, 2016
|
6,637,239
|
|
|
$
|
37.20
|
|
|
$
|
179,936
|
|
|
|
|
|
|
|
|||||
Options vested and exercisable at December 31, 2016
|
3,350,682
|
|
|
$
|
25.96
|
|
|
$
|
128,499
|
|
Options expected to vest
|
3,127,635
|
|
|
$
|
48.28
|
|
|
$
|
50,136
|
|
|
Equity-Classified Equity-Settled
Restricted Stock
|
|
Equity-Classified
Equity-Settled
Restricted Stock Units
|
|
Liability-Classified
Cash-Settled
Restricted Stock Units
|
|||||||||||||||
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|||||||||
Unvested service-based awards outstanding at January 1, 2014
|
344,928
|
|
|
$
|
18.74
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Awards granted
|
452,720
|
|
|
41.63
|
|
|
70,500
|
|
|
32.55
|
|
|
—
|
|
|
—
|
|
|||
Awards vested
|
(217,668
|
)
|
|
17.84
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Awards forfeited/cancelled
|
(17,038
|
)
|
|
21.14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Unvested service-based awards outstanding at December 31, 2014
|
562,942
|
|
|
$
|
37.42
|
|
|
70,500
|
|
|
$
|
32.55
|
|
|
—
|
|
|
$
|
—
|
|
Awards granted
|
5,295
|
|
|
70.79
|
|
|
108,319
|
|
|
67.21
|
|
|
—
|
|
|
—
|
|
|||
Awards vested
|
(261,504
|
)
|
|
33.74
|
|
|
(17,625
|
)
|
|
32.55
|
|
|
—
|
|
|
—
|
|
|||
Awards forfeited/cancelled
|
106
|
|
|
36.57
|
|
|
(11,922
|
)
|
|
34.49
|
|
|
—
|
|
|
—
|
|
|||
Unvested service-based awards outstanding at December 31, 2015
|
306,839
|
|
|
$
|
41.14
|
|
|
149,272
|
|
|
$
|
57.55
|
|
|
—
|
|
|
$
|
—
|
|
Awards granted
|
6,510
|
|
|
73.00
|
|
|
408,629
|
|
|
70.39
|
|
|
207,586
|
|
|
70.53
|
|
|||
Awards vested
|
(156,535
|
)
|
|
42.64
|
|
|
(41,015
|
)
|
|
55.60
|
|
|
—
|
|
|
—
|
|
|||
Awards forfeited/cancelled
|
(2,689
|
)
|
|
45.32
|
|
|
(31,698
|
)
|
|
70.44
|
|
|
(3,085
|
)
|
|
70.52
|
|
|||
Unvested service-based awards outstanding at December 31, 2016
|
154,125
|
|
|
$
|
40.89
|
|
|
485,188
|
|
|
$
|
67.69
|
|
|
204,501
|
|
|
$
|
70.53
|
|
|
Equity-Classified
Equity-Settled Restricted Stock |
|
Liability-Classified
Equity-Settled Restricted Stock |
|
Equity-Classified
Equity-Settled Restricted Stock Units |
|||||||||||||||
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|
Number of
Shares
|
|
Weighted Average Grant Date
Fair Value Per Share
|
|||||||||
Unvested performance-based awards outstanding at January 1, 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Awards granted
|
26,441
|
|
|
38.91
|
|
|
360,617
|
|
|
38.13
|
|
|
—
|
|
|
—
|
|
|||
Awards vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Awards forfeited/cancelled
|
(2,550
|
)
|
|
36.57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Changes in the number of awards expected to be delivered
|
9,154
|
|
|
36.57
|
|
|
(22,152
|
)
|
|
18.32
|
|
|
—
|
|
|
—
|
|
|||
Unvested performance-based awards outstanding at December 31, 2014
|
33,045
|
|
|
$
|
38.44
|
|
|
338,465
|
|
|
$
|
39.43
|
|
|
—
|
|
|
$
|
—
|
|
Awards granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,000
|
|
|
70.22
|
|
|||
Awards vested
|
(12,145
|
)
|
|
39.92
|
|
|
(105,604
|
)
|
|
40.44
|
|
|
—
|
|
|
—
|
|
|||
Awards forfeited/cancelled
|
(1,360
|
)
|
|
36.57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Changes in the number of awards expected to be delivered
|
2,550
|
|
|
36.57
|
|
|
(21,655
|
)
|
|
32.27
|
|
|
—
|
|
|
—
|
|
|||
Unvested performance-based awards outstanding at December 31, 2015
|
22,090
|
|
|
$
|
37.52
|
|
|
211,206
|
|
|
$
|
39.65
|
|
|
14,000
|
|
|
$
|
70.22
|
|
Awards granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Awards vested
|
(9,978
|
)
|
|
40.15
|
|
|
(105,604
|
)
|
|
40.44
|
|
|
(4,666
|
)
|
|
70.22
|
|
|||
Awards forfeited/cancelled
|
(6,539
|
)
|
|
36.97
|
|
|
—
|
|
|
—
|
|
|
(4,667
|
)
|
|
70.22
|
|
|||
Unvested performance-based awards outstanding at December 31, 2016
|
5,573
|
|
|
$
|
33.47
|
|
|
105,602
|
|
|
$
|
38.86
|
|
|
4,667
|
|
|
$
|
70.22
|
|
15.
|
EARNINGS PER SHARE
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator for common earnings per share:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
99,266
|
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
Numerator for basic and diluted earnings per share
|
|
$
|
99,266
|
|
|
$
|
84,456
|
|
|
$
|
69,641
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding
|
|
50,309
|
|
|
48,721
|
|
|
47,189
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Stock options, RSUs and performance-based awards
|
|
2,906
|
|
|
3,265
|
|
|
2,545
|
|
|||
Denominator for diluted earnings per share
|
|
53,215
|
|
|
51,986
|
|
|
49,734
|
|
|||
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
1.97
|
|
|
$
|
1.73
|
|
|
$
|
1.48
|
|
Diluted
|
|
$
|
1.87
|
|
|
$
|
1.62
|
|
|
$
|
1.40
|
|
16.
|
COMMITMENTS AND CONTINGENCIES
|
Year Ending December 31,
|
|
Operating Leases
|
||
2017
|
|
$
|
30,791
|
|
2018
|
|
24,706
|
|
|
2019
|
|
16,044
|
|
|
2020
|
|
10,271
|
|
|
2021
|
|
7,170
|
|
|
Thereafter
|
|
11,098
|
|
|
Total minimum lease payments
|
|
$
|
100,080
|
|
17.
|
FAIR VALUE MEASUREMENTS
|
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Performance-based equity awards
|
|
$
|
3,789
|
|
|
$
|
3,789
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash-settled restricted stock units
|
|
2,111
|
|
|
2,111
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities measured at fair value on a recurring basis
|
|
$
|
5,900
|
|
|
$
|
5,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
As of December 31, 2015
|
||||||||||||||
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Performance-based equity awards
|
|
$
|
5,364
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,364
|
|
Total liabilities measured at fair value on a recurring basis
|
|
$
|
5,364
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,364
|
|
|
|
Amount
|
||
Contractual contingent liabilities at January 1, 2014
|
|
$
|
—
|
|
Acquisition date fair value of contractual contingent liabilities — Netsoft
|
|
1,825
|
|
|
Acquisition date fair value of contractual contingent liabilities — Jointech
|
|
20,000
|
|
|
Acquisition date fair value of contractual contingent liabilities — GGA
|
|
11,400
|
|
|
Acquisition date fair value of contractual contingent liabilities — Great Fridays
|
|
1,173
|
|
|
Liability-classified stock-based awards
|
|
3,088
|
|
|
Changes in fair value of contractual contingent liabilities included in earnings
|
|
2,059
|
|
|
Changes in fair value of contractual contingent liabilities recorded against goodwill
|
|
1,366
|
|
|
Effect of net foreign currency exchange rate changes
|
|
(288
|
)
|
|
Contractual contingent liabilities at December 31, 2014
|
|
40,623
|
|
|
Liability-classified stock-based awards
|
|
5,148
|
|
|
Changes in fair value of contractual contingent liabilities included in earnings
|
|
4,355
|
|
|
Effect of net foreign currency exchange rate changes
|
|
246
|
|
|
Settlements of contractual contingent liabilities
|
|
(45,008
|
)
|
|
Contractual contingent liabilities at December 31, 2015
|
|
5,364
|
|
|
Acquisition date fair value of contractual contingent liabilities — other acquisitions
|
|
800
|
|
|
Liability-classified stock-based awards
|
|
5,148
|
|
|
Changes in fair value of contractual contingent liabilities included in earnings
|
|
1,232
|
|
|
Changes in fair value of contractual contingent liabilities recorded against goodwill
|
|
200
|
|
|
Settlements of contractual contingent liabilities
|
|
(8,955
|
)
|
|
Reclassification of contractual contingent liabilities out of Level 3
|
|
(3,789
|
)
|
|
Contractual contingent liabilities at December 31, 2016
|
|
$
|
—
|
|
•
|
for financial instruments that have quoted market prices, those quoted prices are used to estimate fair value;
|
•
|
for financial instruments for which no quoted market prices are available, fair value is estimated using information obtained from independent third parties, or by discounting the expected cash flows using an estimated current market interest rate for the financial instrument.
|
•
|
for financial instruments for which no quoted market prices are available and that have no defined maturity, have a remaining maturity of 360 days or less, or reprice frequently to a market rate, the Company assumes that the fair value of these instruments approximates their reported value, after taking into consideration any applicable credit risk;
|
•
|
cash and cash equivalents;
|
•
|
time deposits and restricted cash;
|
•
|
employee loans and notes receivable;
|
•
|
borrowings under the 2014 Credit Facility (Note
13
)
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
|
|
Balance
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
362,025
|
|
|
$
|
362,025
|
|
|
$
|
362,025
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits and restricted cash
|
|
$
|
3,042
|
|
|
$
|
3,042
|
|
|
$
|
—
|
|
|
$
|
3,042
|
|
|
$
|
—
|
|
Employee loans
|
|
$
|
5,978
|
|
|
$
|
5,978
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,978
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowing under 2014 Credit Facility
|
|
$
|
25,019
|
|
|
$
|
25,019
|
|
|
$
|
—
|
|
|
$
|
25,019
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
|
|
Balance
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
199,449
|
|
|
$
|
199,449
|
|
|
$
|
199,449
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits and restricted cash
|
|
$
|
30,419
|
|
|
$
|
30,419
|
|
|
$
|
—
|
|
|
$
|
30,419
|
|
|
$
|
—
|
|
Employee loans
|
|
$
|
6,338
|
|
|
$
|
6,338
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,338
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowing under 2014 Credit Facility
|
|
$
|
35,000
|
|
|
$
|
35,000
|
|
|
$
|
—
|
|
|
$
|
35,000
|
|
|
$
|
—
|
|
18.
|
SEGMENT INFORMATION
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Total segment revenues:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
642,216
|
|
|
$
|
471,603
|
|
|
$
|
374,509
|
|
Europe
|
|
474,988
|
|
|
400,460
|
|
|
299,279
|
|
|||
Russia
|
|
43,611
|
|
|
37,992
|
|
|
50,663
|
|
|||
Other
|
|
—
|
|
|
4,911
|
|
|
5,552
|
|
|||
Total segment revenues
|
|
$
|
1,160,815
|
|
|
$
|
914,966
|
|
|
$
|
730,003
|
|
Segment operating profit:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
143,021
|
|
|
$
|
112,312
|
|
|
$
|
90,616
|
|
Europe
|
|
67,545
|
|
|
68,717
|
|
|
50,189
|
|
|||
Russia
|
|
7,555
|
|
|
5,198
|
|
|
7,034
|
|
|||
Other
|
|
—
|
|
|
(94
|
)
|
|
(3,220
|
)
|
|||
Total segment operating profit
|
|
$
|
218,121
|
|
|
$
|
186,133
|
|
|
$
|
144,619
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Total segment revenues
|
|
$
|
1,160,815
|
|
|
$
|
914,966
|
|
|
$
|
730,003
|
|
Unallocated (revenue)/loss
|
|
(683
|
)
|
|
(838
|
)
|
|
24
|
|
|||
Revenues
|
|
$
|
1,160,132
|
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
|
|
|
|
|
|
|
||||||
Total segment operating profit:
|
|
$
|
218,121
|
|
|
$
|
186,133
|
|
|
$
|
144,619
|
|
Unallocated amounts:
|
|
|
|
|
|
|
||||||
Other (revenues)/loss
|
|
(683
|
)
|
|
(838
|
)
|
|
24
|
|
|||
Stock-based compensation expense
|
|
(49,244
|
)
|
|
(45,833
|
)
|
|
(24,620
|
)
|
|||
Non-corporate taxes
|
|
(5,909
|
)
|
|
(4,274
|
)
|
|
(6,882
|
)
|
|||
Professional fees
|
|
(8,265
|
)
|
|
(7,104
|
)
|
|
(5,312
|
)
|
|||
Depreciation and amortization
|
|
(8,290
|
)
|
|
(5,581
|
)
|
|
(7,988
|
)
|
|||
Bank charges
|
|
(1,515
|
)
|
|
(1,352
|
)
|
|
(1,049
|
)
|
|||
One-time charges
|
|
(706
|
)
|
|
(747
|
)
|
|
(5,983
|
)
|
|||
Other corporate expenses
|
|
(9,813
|
)
|
|
(14,437
|
)
|
|
(6,626
|
)
|
|||
Income from operations
|
|
133,696
|
|
|
105,967
|
|
|
86,183
|
|
|||
Interest and other income, net
|
|
4,848
|
|
|
4,731
|
|
|
4,769
|
|
|||
Change in fair value of contingent consideration
|
|
—
|
|
|
—
|
|
|
(1,924
|
)
|
|||
Foreign exchange loss
|
|
(12,078
|
)
|
|
(4,628
|
)
|
|
(2,075
|
)
|
|||
Income before provision for income taxes
|
|
$
|
126,466
|
|
|
$
|
106,070
|
|
|
$
|
86,953
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Belarus
|
$
|
46,011
|
|
|
$
|
44,879
|
|
Russia
|
7,203
|
|
|
2,084
|
|
||
Ukraine
|
5,610
|
|
|
4,487
|
|
||
Hungary
|
3,485
|
|
|
2,485
|
|
||
United States
|
2,618
|
|
|
1,969
|
|
||
Poland
|
2,213
|
|
|
1,088
|
|
||
China
|
1,887
|
|
|
514
|
|
||
India
|
1,650
|
|
|
1,099
|
|
||
Other
|
2,939
|
|
|
1,894
|
|
||
Total
|
$
|
73,616
|
|
|
$
|
60,499
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
|
$
|
605,856
|
|
|
$
|
427,433
|
|
|
$
|
318,304
|
|
United Kingdom
|
|
174,719
|
|
|
164,301
|
|
|
141,366
|
|
|||
Switzerland
|
|
122,399
|
|
|
111,353
|
|
|
87,111
|
|
|||
Canada
|
|
58,742
|
|
|
57,643
|
|
|
49,193
|
|
|||
Germany
|
|
43,216
|
|
|
36,089
|
|
|
25,740
|
|
|||
Russia
|
|
40,866
|
|
|
36,506
|
|
|
48,945
|
|
|||
Sweden
|
|
22,945
|
|
|
10,589
|
|
|
7,892
|
|
|||
Hong Kong
|
|
20,333
|
|
|
23,117
|
|
|
13,445
|
|
|||
Netherlands
|
|
16,762
|
|
|
9,989
|
|
|
8,838
|
|
|||
Belgium
|
|
8,505
|
|
|
7,916
|
|
|
4,198
|
|
|||
Ireland
|
|
5,152
|
|
|
5,437
|
|
|
3,667
|
|
|||
China
|
|
4,445
|
|
|
817
|
|
|
—
|
|
|||
Italy
|
|
3,970
|
|
|
2,318
|
|
|
1,746
|
|
|||
Spain
|
|
3,406
|
|
|
1,028
|
|
|
106
|
|
|||
Other locations
|
|
16,295
|
|
|
10,081
|
|
|
11,066
|
|
|||
Reimbursable expenses and other revenues
|
|
12,521
|
|
|
9,511
|
|
|
8,410
|
|
|||
Revenues
|
|
$
|
1,160,132
|
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Software development
|
|
$
|
841,916
|
|
|
$
|
644,732
|
|
|
$
|
504,590
|
|
Application testing services
|
|
223,010
|
|
|
174,259
|
|
|
140,363
|
|
|||
Application maintenance and support
|
|
74,475
|
|
|
70,551
|
|
|
58,840
|
|
|||
Infrastructure services
|
|
5,069
|
|
|
11,311
|
|
|
14,198
|
|
|||
Licensing
|
|
3,141
|
|
|
3,764
|
|
|
3,626
|
|
|||
Reimbursable expenses and other revenues
|
|
12,521
|
|
|
9,511
|
|
|
8,410
|
|
|||
Revenues
|
|
$
|
1,160,132
|
|
|
$
|
914,128
|
|
|
$
|
730,027
|
|
19.
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
|
Three Months Ended
|
|
|
||||||||||||||||
2016
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Full Year
|
||||||||||
Revenues
|
|
$
|
264,482
|
|
|
$
|
283,832
|
|
|
$
|
298,293
|
|
|
$
|
313,525
|
|
|
$
|
1,160,132
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
|
167,381
|
|
|
180,782
|
|
|
190,797
|
|
|
198,226
|
|
|
737,186
|
|
|||||
Selling, general and administrative expenses
|
|
61,494
|
|
|
64,241
|
|
|
67,491
|
|
|
71,432
|
|
|
264,658
|
|
|||||
Depreciation and amortization expense
|
|
5,102
|
|
|
6,123
|
|
|
5,925
|
|
|
6,237
|
|
|
23,387
|
|
|||||
Other operating expenses, net
|
|
174
|
|
|
606
|
|
|
178
|
|
|
247
|
|
|
1,205
|
|
|||||
Income from operations
|
|
30,331
|
|
|
32,080
|
|
|
33,902
|
|
|
37,383
|
|
|
133,696
|
|
|||||
Interest and other income, net
|
|
1,211
|
|
|
1,138
|
|
|
1,067
|
|
|
1,432
|
|
|
4,848
|
|
|||||
Foreign exchange loss
|
|
(1,290
|
)
|
|
(2,295
|
)
|
|
(1,728
|
)
|
|
(6,765
|
)
|
|
(12,078
|
)
|
|||||
Income before provision for income taxes
|
|
30,252
|
|
|
30,923
|
|
|
33,241
|
|
|
32,050
|
|
|
126,466
|
|
|||||
Provision for income taxes
|
|
6,353
|
|
|
6,493
|
|
|
7,067
|
|
|
7,287
|
|
|
27,200
|
|
|||||
Net income
|
|
$
|
23,899
|
|
|
$
|
24,430
|
|
|
$
|
26,174
|
|
|
$
|
24,763
|
|
|
$
|
99,266
|
|
Comprehensive income
|
|
$
|
28,598
|
|
|
$
|
22,044
|
|
|
$
|
26,532
|
|
|
$
|
19,554
|
|
|
$
|
96,728
|
|
Basic net income per share
(1)
|
|
$
|
0.48
|
|
|
$
|
0.49
|
|
|
$
|
0.51
|
|
|
$
|
0.49
|
|
|
$
|
1.97
|
|
Diluted net income per share
(1)
|
|
$
|
0.45
|
|
|
$
|
0.46
|
|
|
$
|
0.49
|
|
|
$
|
0.46
|
|
|
$
|
1.87
|
|
(1)
|
Earnings per share amounts for each quarter may not necessarily total to the yearly earnings per share due to the weighting of shares outstanding on a quarterly and year to date basis.
|
|
|
Three Months Ended
|
|
|
||||||||||||||||
2015
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Full Year
|
||||||||||
Revenues
|
|
$
|
200,045
|
|
|
$
|
217,781
|
|
|
$
|
236,049
|
|
|
$
|
260,253
|
|
|
$
|
914,128
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation and amortization)
|
|
125,887
|
|
|
134,256
|
|
|
148,479
|
|
|
158,291
|
|
|
566,913
|
|
|||||
Selling, general and administrative expenses
|
|
46,938
|
|
|
55,976
|
|
|
55,431
|
|
|
64,414
|
|
|
222,759
|
|
|||||
Depreciation and amortization expense
|
|
4,200
|
|
|
3,903
|
|
|
4,393
|
|
|
4,899
|
|
|
17,395
|
|
|||||
Other operating expenses/(income), net
|
|
200
|
|
|
40
|
|
|
(30
|
)
|
|
884
|
|
|
1,094
|
|
|||||
Income from operations
|
|
22,820
|
|
|
23,606
|
|
|
27,776
|
|
|
31,765
|
|
|
105,967
|
|
|||||
Interest and other income, net
|
|
1,158
|
|
|
1,299
|
|
|
865
|
|
|
1,409
|
|
|
4,731
|
|
|||||
Foreign exchange (loss)/income
|
|
(5,754
|
)
|
|
(465
|
)
|
|
32
|
|
|
1,559
|
|
|
(4,628
|
)
|
|||||
Income before provision for income taxes
|
|
18,224
|
|
|
24,440
|
|
|
28,673
|
|
|
34,733
|
|
|
106,070
|
|
|||||
Provision for income taxes
|
|
3,510
|
|
|
5,209
|
|
|
5,800
|
|
|
7,095
|
|
|
21,614
|
|
|||||
Net income
|
|
$
|
14,714
|
|
|
$
|
19,231
|
|
|
$
|
22,873
|
|
|
$
|
27,638
|
|
|
$
|
84,456
|
|
Comprehensive income
|
|
$
|
11,984
|
|
|
$
|
22,905
|
|
|
$
|
14,532
|
|
|
$
|
21,939
|
|
|
$
|
71,360
|
|
Basic net income per share
(1)
|
|
$
|
0.31
|
|
|
$
|
0.40
|
|
|
$
|
0.47
|
|
|
$
|
0.56
|
|
|
$
|
1.73
|
|
Diluted net income per share
(1)
|
|
$
|
0.29
|
|
|
$
|
0.37
|
|
|
$
|
0.44
|
|
|
$
|
0.52
|
|
|
$
|
1.62
|
|
(1)
|
Earnings per share amounts for each quarter may not necessarily total to the yearly earnings per share due to the weighting of shares outstanding on a quarterly and year to date basis.
|
|
|
Balance at
Beginning of
Year
|
|
Charged to Expenses
|
|
Deductions/
Write offs
|
|
Balance at End of Year
|
||||||||
Fiscal Year 2014
|
|
$
|
1,800
|
|
|
$
|
1,325
|
|
|
$
|
(944
|
)
|
|
$
|
2,181
|
|
Fiscal Year 2015
|
|
2,181
|
|
|
1,704
|
|
|
(2,156
|
)
|
|
1,729
|
|
||||
Fiscal Year 2016
|
|
1,729
|
|
|
3,500
|
|
|
(3,215
|
)
|
|
2,014
|
|
•
|
Signing of the EPAM’s
Confidential Assignment, Non-Compete and Non-Solicitation Agreement
to be returned with the signed offer letter
|
•
|
Providing legal proof of your identity and authorization to work in the United States.
|
•
|
Completion of EPAM’s Code of Conduct Certification.
|
EMPLOYEE:
Boris Shnayder
|
By: /s/ Boris Shnayder
Date: June 20, 2015
|
|
February 23, 2017
Anthony Conte
c/o EPAM Systems, Inc.
41
University Drive - Suite 202
Newtown, PA 18940
|
1.
|
Chief Financial Officer Transition and Separation
.
As of the date hereof, we hereby acknowledge your intent to resign in the third quarter of 2017 or the earlier date of the successful transition of a successor being appointed as Chief Financial Officer (“
CFO
”), with great thanks for your valuable contributions to the Company to date. We appreciate your willingness to continue to work with the Company during a transitional period and cooperate with and participate in the Company’s search to appoint your successor. You and the Company agree that you intend to continue to be employed and provide services to the Company and its Subsidiaries (the “
Company Group
”) through the close of business on the earlier of August 10, 2017 or a date as determined by the Board of Directors of the Company (the “
Board
”) (either such date, the “
Separation Date
”). Your employment will terminate in all capacities on the Separation Date. You will cease to serve as CFO on the Separation Date, or an earlier date determined by the Board in connection with the appointment of your successor (such earlier date, to the extent applicable, the “
Transition Date
”). You agree to provide services as an employee or consultant, with duties and hours as determined by the Board (which will be no less than eight hours per week), during the period between the Transition Date and the Separation Date in support of your successor. Notwithstanding the foregoing, in no case will the Separation Date be before April 1, 2017, and you agree to provide services through such date. Failure to do so (other than for death or disability) will cause you to forfeit the options and restricted stock units that would otherwise become vested pursuant to Section 5(b).
|
2.
|
Base Salary and Benefits through August 10, 2017
.
From the date hereof until August 10, 2017, or your earlier voluntary termination of employment, you will be entitled to receive (a) continued base salary at your current annual salary rate, subject to any adjustments that are generally applicable to other executive officers of the Company, paid in accordance with the Company’s payroll practices in the ordinary course and (b) employee benefits at the level and of the type that you and your dependents currently receive or as consistent with the benefits provided to executive officers at the same cost to you as other executives. Following August 10, 2017, or your earlier voluntary termination of employment, you will be eligible to continue medical coverage through COBRA at your own cost. For the purposes of this Section 2, the termination of your employment due to death or disability will not be considered your voluntary termination of employment.
|
3.
|
2016 Bonus
. You will be entitled to receive your annual cash incentive bonus for the performance year ending December 31, 2016, based on actual performance, paid in cash when bonuses for 2016 are paid to other senior executives of the Company (the “
2016 Bonus Payment Date
”), but in no event later than March 31, 2017;
provided
that (a) you are employed as of the 2016 Bonus Payment Date, or (b) your employment was terminated (i) by the Board (other than for “Cause,” as defined below) prior to the 2016 Bonus Payment Date or (ii) due to death or disability, prior to the 2016 Bonus Payment Date, in which case you or you legal beneficiaries will
|
4.
|
2017 Bonus
. Subject to your continued employment, consistent with the terms of this Agreement, through the Separation Date or the earlier termination of your employment due to death or disability, you will be eligible to receive a cash bonus of $125,000 for the performance period ending June 30, 2017. If you voluntarily terminate your employment after January 1, 2017 but before August 10, 2017, you will receive a bonus for the performance period described above prorated according to the number of days you were employed by the Company between January 1, 2017 and June 30, 2017.
|
5.
|
Treatment of Equity
.
|
a.
|
You acknowledge that you will not be eligible to receive Company equity grants in 2017.
|
b.
|
Provided that (x) (i) you remain an employee or a consultant of the Company through the Separation Date, (ii) you execute the General Release Agreement set forth as
Appendix A
hereto (the “General Release”) within 21 days hereof, and you not revoking the General Release within 7 days of execution, (iii) you execute the Reaffirmation Page set forth as
Appendix B
hereto (the “Reaffirmation Page”) on or after the Separation Date, and (iv) you continue to comply with Sections 7, 9 and 10 of this Agreement or (y) prior to the Separation Date, your employment is terminated due to death or disability, any outstanding options that would have become exercisable and any restricted stock units that would have been settled, each by March 31, 2018, will become exercisable or settled, as applicable, effective as of Separation Date, in accordance with the terms set forth in the applicable award agreements. For any options that become exercisable according to this Section 5, according to the terms set forth in the applicable award agreements, you shall have 90 days from the termination of your employment to exercise such options.
|
6.
|
Additional Benefits; Release; Reaffirmation Page
. You acknowledge and agree that certain payments and benefits described herein are in excess of the total payments and benefits that you would otherwise be eligible to receive upon your termination of employment, absent this Agreement. In order to induce the Company to enter into this Agreement to provide you these additional benefits, you will (a) sign the General Release as set forth as
Appendix A
hereto, within 21 days of receipt, (b) not revoke such General Release within the 7-day period as set forth in the General Release and (c) on the Separation Date or your earlier termination of employment, or as soon as practicable thereafter, sign the Reaffirmation Page as set forth as
Appendix B
hereto and not timely revoke the Reaffirmation Page within the 7-day period as set forth in the General Release. In addition to your execution and non-revocation of the General Release and Reaffirmation Page, as applicable, your continuing entitlement to the payments and benefits described in this Agreement is subject to your continuing compliance with the provisions of Sections 7, 9 and 10 of this Agreement. You hereby acknowledge that, except as otherwise specifically provided in this Agreement, you will not be entitled to any cash or non-cash consideration or other benefits of any kind from the Company, including any payments or benefits to which you may have been entitled under any of the Company’s equity compensation plans and related award agreements or any other agreement with the Company.
|
7.
|
Confidential Information; Assignment of Inventions
.
|
a.
|
Subject to Section 8, you hereby confirm and acknowledge that certain assets of the Company, including, without limitation, information regarding their methods of operation, financial information, strategic planning, operational budgets and strategies, payroll data, management systems, programs, computer systems, marketing plans and strategies, merger and acquisition strategies and customer lists (collectively, the “Confidential Information”) are valuable, special, and unique assets of the Company. You will not, during or after your employment with the Company, disclose any or any part
|
b.
|
You hereby acknowledge that all rights to discoveries, inventions, improvements and innovations, copyright and copyrightable materials (including all data and records pertaining thereto) related to the business of the Company, whether or not patentable, copyrightable, registrable as a trademark or reduced to writing, that you discovered, invented or originated during your employment with the Company or any predecessor entity, either alone or with others and whether or not during working hours or by the use of the facilities of the Company (collectively, “Inventions”), is the exclusive property of the Company, and you hereby irrevocably assign all right, title and interest in and to all Inventions to the Company. You hereby agree to execute at the request of the Company any assignments or other documents that the Company may deem necessary to protect or perfect the rights of the Company therein, and you will assist the Company, at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. You hereby appoint the Company as your attorney in fact to execute on your behalf any assignments or other documents deemed necessary by the Company to protect or perfect its rights to any Inventions, reproductions (in whole or in part) or extracts of any items relating to the Confidential Information prior to the date of the termination of your employment.
|
8.
|
Employee Protections
.
|
a.
|
Notwithstanding anything to the contrary contained herein or in any other confidentiality provision or agreement to which you may become subject to as a result of your employment with the Company, nothing in this Agreement or otherwise limits your ability to communicate directly with and provide information, including documents, not otherwise protected from disclosure by any applicable law or privilege to the Securities and Exchange Commission (the “SEC”) or any other federal, state or local governmental agency or commission (each, a “Government Agency”) regarding possible legal violations, without disclosure to the Company. The Company may not retaliate against you for any of the foregoing activities, and nothing in this Agreement requires you to waive any monetary award or other payment that you might become entitled to from the SEC or any other Government Agency. Nothing in this agreement precludes you from filing a charge of discrimination with the Equal Employment Opportunity Commission or a like charge or complaint with a state or local fair employment practice agency;
provided
,
however
, once this agreement becomes effective, you will not be entitled to receive a monetary award or any other form of personal relief from the Company in connection with any such charge or complaint that you file or is filed on your behalf. Notwithstanding anything to the contrary herein, the Company nonetheless asserts and does not waive its attorney-client privilege over any information appropriately protected by the privilege.
|
b.
|
Pursuant to the Defend Trade Secrets Act of 2016, you will not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition and without limiting the preceding sentence, if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the trade secret to your attorney and may use the trade secret information in the court proceeding, if you (x) file any document containing the trade secret under seal and (y) do not disclose the trade secret, except pursuant to court order. Further, in the event that disclosure of Confidential Information was not done in good faith pursuant
|
9.
|
Non-Disparagement
. Subject to Section 8, you agree that you will not now or at any time in the future make any disparaging statements concerning the Company Group or its activities, or concerning its shareholders, officers, directors, employees, representatives, products or services, in a public forum, to the press, to present or former employees of the Company Group, or to any individual or entity with whom or which the Company Group has a working or business relationship, including, but not limited to, its customers, clients, suppliers and distributors, or to any other person or entity, where such comment or statement could affect adversely the conduct of the Company Group’s business or its reputation. The Company agrees that it will instruct its directors and executive officers not to now or at any time in the future make any disparaging statements concerning your activities or reputation in a public forum.
|
10.
|
Non-Competition
. You agree that, during the period between the date of this Agreement and twelve (12) months following the termination of your employment (the “
Restricted Period
”), you will not, without the prior written consent of the Board, directly or indirectly, and whether as a principal, investor, employee, officer, director, manager, partner, consultant, agent or otherwise, alone or in association with any other person, firm, corporation or other business organization, carry on, own, manage, operate, participate in or be employed or engaged by, a Competing Business (as defined below) in any jurisdiction in which the Company Group is then engaged, or at any time during such period becomes or became engaged;
provided, however
, that nothing herein will limit your right to (x) own not more than 1% of the debt or equity securities of any business organization that is then filing reports with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, (y) look for employment or other engagement or (z) enter into any employment or similar agreement;
provided
that your employment or other engagement does not commence during the Restricted Period. For purposes of this Agreement, “
Competing Business
” means any business that is engaging in or, as of the Separation Date or your earlier termination of employment, is actively planning to engage in, providing customers with software product engineering, software product development, application development, application testing services, technology consulting or software solutions.
|
11.
|
Non-Solicit and No-Hire
. You agree that, during the Restricted Period, you will not (i) solicit or encourage any employee, consultant or other service provider of the Company Group to terminate his or her employment, consulting or other provision of services to the Company Group, (ii) hire any employee of the Company Group prior to the date on which such person has not been employed by the Company Group for a period of at least twelve (12) months, or (iii) induce or attempt to induce any customer, client, supplier, licensee or other business relationship of the Company Group to cease doing or reduce their business with the Company Group, or in any way interfere with the relationship between the Company Group and any customer, client, supplier, licensee or other business relationship of the Company Group.
|
12.
|
Governing Law
. This Agreement will be governed by the laws of the Commonwealth of Pennsylvania (regardless of conflict of laws principles) as to all matters including, without limitation, validity, construction, effect, performance and remedies.
|
13.
|
Notices
. All notices, requests and other communications under this Agreement, the First Release and the Second Release will be in writing (including facsimile or similar writing) to the applicable address (or to such other address as to which notice is given in accordance with this Section 13).
|
14.
|
Transferability
.
|
a.
|
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in your case) and assigns.
|
b.
|
No rights or obligations of the Company under this Agreement may be assigned or transferred by it except that such rights and obligations shall be automatically assigned or transferred pursuant to a merger, amalgamation, consolidation or other combination in which the Company is not the continuing or resulting entity, or a sale or liquidation of all or substantially all of the Company’s business and assets;
provided
that the assignee or transferee is the successor to all or substantially all of the business and assets of the Company.
|
c.
|
None of your rights or obligations under this Agreement may be assigned or transferred by you other than your rights to compensation and benefits, which may be transferred only by will or by operation of law.
|
d.
|
You shall be entitled, to the extent permitted under applicable law and applicable plans or programs of the Company or of any other member of the Company Group, to select and change a beneficiary or beneficiaries to receive any compensation or benefit hereunder following your death by giving written notice thereof to the Company. In the event of your death or a judicial determination of your incompetence, references in this Agreement to you shall be deemed, where appropriate, to refer to your beneficiary, estate, executor or other legal representative.
|
15.
|
Counterparts
. This Agreement may be executed in counterparts. Signatures delivered by facsimile (including, without limitation, by “pdf”) shall be effective for all purposes.
|
16.
|
Entire Agreement
. This Agreement sets forth the entire agreement and understanding relating to your employment relationship with the Company; this Agreement supersedes all prior discussions, negotiations, term sheets, illustrative calculations, proposed arrangements and agreements concerning your employment with the Company and your separation therefrom and may not be amended except by mutual written agreement, executed by the Parties, that specifically identifies the provisions being amended.
|
17.
|
Representations
.
|
a.
|
The Company represents and warrants that (i) it is fully authorized by action of its Board (and of any other person or body whose action is required) to enter into this Agreement and to perform its obligations under it, (ii) to the best of its knowledge and belief, the execution, delivery and performance of this Agreement by it does not violate any applicable law, regulation, order, judgment or decree or any agreement, arrangement, plan or corporate governance document to which it is a party or by which it is bound and (iii) upon the execution and delivery of this Agreement by the Parties, this Agreement shall be its valid and binding obligation, enforceable against it in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally. In the event that the foregoing representation is in any respect false, the Company will promptly and fully indemnify you against any liability, loss, expense or obligation that you incur as a result.
|
b.
|
You represent and warrant that (i) to the best of your knowledge and belief, the execution, delivery and performance of this Agreement by you does not violate any applicable law, regulation, order, judgment or decree and (ii) upon the execution and delivery of this Agreement by the Parties, this Agreement shall be your valid and binding obligation, enforceable against you in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally. In the event that the foregoing representation is false in any respect, you will promptly and fully indemnify the Company against any liability, loss, expense or obligation that the Company, or any member of the Company Group, incurs as a result.
|
18.
|
Miscellaneous
|
a.
|
No waiver by any person or entity of any breach of any condition or provision contained in this Agreement shall be deemed a waiver of any similar or dissimilar condition or provision at the same or any prior or subsequent time. To be effective, any waiver must be set forth in a writing signed by the waiving person or entity and must specifically refer to the condition(s) or provision(s) of this Agreement being waived.
|
b.
|
The headings of the Sections and subsections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.
|
c.
|
In the event of any inconsistency between the terms of this Separation Agreement and the terms of any other plan, program, agreement, award document or other arrangement of the Company or any member of the Company Group, the terms of this Agreement shall control.
|
d.
|
Payments under this Agreement will be subject to applicable withholding taxes, deductions and required employee tax contributions.
|
1.
|
|
1.
|
I understand that any payments or benefits paid to me under the Agreement represent, in part, consideration for signing this General Release and is not salary, wages or benefits to which I was already entitled. Such payment or benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company. I also acknowledge and represent that I have received all payments and benefits that I am entitled to receive (as of the date hereof) by virtue of any employment by the Company.
|
2.
|
Except as provided in paragraph 4 below and except for the provisions of the Agreement which expressly survive the termination of my employment with the Company, I knowingly and voluntarily (for myself, my spouse, and my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns may have, which arise out of or are connected with my employment with, or my separation or termination from the Company (including any allegation, claim or violation arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act) (the “
ADEA
”); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress or defamation; or any claim for costs, fees or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “
Claims
”).
|
3.
|
I represent that I have made no assignment or transfer of any right, claim, demand, cause of action or other matter covered by paragraph 2 above.
|
4.
|
I agree that this General Release does not waive or release any rights or claims that I may have under the ADEA which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the
|
5.
|
I agree that I am waiving all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever, including reinstatement, back pay, front pay, attorneys’ fees and any form of injunctive relief. Notwithstanding the foregoing, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding.
|
6.
|
In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, this General Release shall serve as a complete defense to such Claims to the maximum extent permitted by law. I further agree that I am not aware of any pending claim of the type described in paragraph 2 above as of the execution of this General Release. I also agree to hold each of the Released Parties harmless from and to indemnify each of the Released Parties against, any and all damages, including attorneys’ fees and expenses that any of them may suffer on account of any breach of any representation or warranty I make hereunder.
|
7.
|
I represent that I am not aware of any claim by me other than the claims that are released by this General Release. I acknowledge that I may hereafter discover claims or facts in addition to or different than those which I now know or believe to exist with respect to the subject matter of this General Release and which, if known or suspected at the time of entering into this General Release, may have materially affected this General Release and my decision to enter into it. Nevertheless, I hereby waive any right, claim or cause of action that might arise as a result of such different or additional claims or facts.
|
8.
|
I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.
|
9.
|
I agree that I will forfeit all amounts payable by the Company pursuant to the Agreement if I challenge the validity of this General Release. I also agree that if I violate this General Release by suing the Company or the other Released Parties, I will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees, and return all payments received by me pursuant to the Agreement. For the avoidance of doubt, nothing in this paragraph 9 will prohibit me from enforcing my rights under the Agreement.
|
10.
|
Subject to Section 8 of the Agreement, I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or the Agreement, except to my immediate family members, my accountants, financial advisors, tax advisors, any legal or other counsel I have consulted regarding the meaning or effect hereof, to my banks and financial institutions, to any government agency which requests a copy of this Agreement, or as otherwise required by law, and I will instruct each of the foregoing not to disclose the same to anyone.
|
11.
|
I agree to reasonably cooperate with the Company upon the written request of the Chief Executive Officer
|
12.
|
Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof.
|
13.
|
Whenever possible, each provision of this General Release shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, and this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
|
(a)
|
I HAVE READ IT CAREFULLY;
|
(b)
|
I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING RIGHTS UNDER THE ADEA; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963; THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (NOT INCLUDING SUCH RIGHTS AS MAY BE ENFORCEABLE PURSUANT TO MY PARTICIPATION IN A 401(K) PLAN SPONSORED BY THE COMPANY OR THE COMPANY);
|
(c)
|
I VOLUNTARILY CONSENT TO EVERYTHING IN IT;
|
(d)
|
I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT, AND I HAVE DONE SO, OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;
|
(e)
|
I HAVE BEEN GIVEN ALL TIME PERIODS REQUIRED BY LAW TO CONSIDER THIS GENERAL RELEASE, INCLUDING THE 21-DAY PERIOD REQUIRED BY THE ADEA. I UNDERSTAND THAT I MAY EXECUTE THIS GENERAL RELEASE LESS THAN 21 DAYS FROM ITS RECEIPT FROM THE COMPANY, BUT AGREE THAT SUCH EXECUTION WILL REPRESENT MY KNOWING WAIVER OF SUCH 21-DAY CONSIDERATION PERIOD;
|
(f)
|
I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS GENERAL RELEASE TO REVOKE IT AND THAT THIS GENERAL RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;
|
(g)
|
I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND
|
(h)
|
I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN
|
Entity
|
Type
|
Danika Limited
|
Cyprus
|
EPAM Corporate Information Systems
|
Belarus
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EPAM Solutions (Novaya Vest Moscow), Ltd.
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Russia
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EPAM Solutions, LLC
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Ukraine
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EPAM Systems ApS
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Denmark
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EPAM Systems Canada, Ltd.
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Canada
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EPAM Systems (Cyprus) Limited
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Cyprus
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EPAM Systems GmbH
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Germany
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EPAM Systems GmbH
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Switzerland
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EPAM Systems Kft
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Hungary
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EPAM Systems, LLC
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New Jersey LLC USA
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EPAM Systems Ltd.
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U.K.
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EPAM Systems Nordic AB
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Sweden
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EPAM Systems OOO
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Russia
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EPAM Systems OOO
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Ukraine
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EPAM Systems PLLC
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Belarus
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EPAM Systems (Poland) sp. z o.o.
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Poland
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EPAM Systems PTE Ltd.
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Singapore
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EPAM Systems SARL
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Luxembourg
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EPAM Systems SRL
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Moldova
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TOO EPAM Kazakhstan
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Kazakhstan
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TOO Plus Micro
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Kazakhstan
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Vested Development, Inc.
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Delaware Corp. USA
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EPAM Systems (Hong Kong) Limited
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Hong Kong
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EPAM Systems Netherlands B.V.
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Netherlands
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EPAM Systems (Australia) Pty. Ltd.
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Australia
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EPAM Systems Bulgaria EOOD
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Bulgaria
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EPAM Sistemos
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Lithuania
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EPAM Systems (Czech Republic) s.r.o.
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Czech Republic
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EPAM Systems
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Romania
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EPAM Systems (Asia) Limited
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Hong Kong
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EPAM Systems (Shenzhen) Co. Ltd.
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China
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J8 Corp
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British Virgin Islanda
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Jointech Software Pte. Ltd.
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Singapore
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EPAM Systems
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Armenia
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EPAM Systems (Ireland) Limited
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Ireland
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Great Fridays Limited
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UK
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Great Fridays Inc.
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Delaware Corp USA
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Design Advocates Limited
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UK
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Dekode Limited
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UK
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EPAM Systems (Malaysia) S.D.N.B.H.D.
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Malaysia
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EPAM Systems (Mexico) SrL
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Mexico
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EPAM Systems Austria GmbH
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Austria
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Navigation Arts, Inc.
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Delaware Corp USA
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Navigation Arts LLC
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Delaware LLC USA
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EPAM Systems Spain SL
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Spain
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Alliance Consulting Global Holdings, Inc.
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Delaware Corp USA
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Alliance Global Services, Inc.
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Delaware Corp USA
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Alliance Global Services, LLC
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Delaware LLC USA
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EPAM Systems India Private Limited
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India
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EPAM Systems (Suzhou) Co., Ltd.
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China
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Shanghai Tang Rui Software Co., Ltd.
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China
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Guangzhou Dextrys Software Co., Ltd.
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China
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Infomatix Poland SP Zo.O
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Poland
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EPAM Systems Philippines
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Philippines
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EPAM Systems FZ-LLC
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UAE
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1.
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I have reviewed this annual report on Form 10-K of EPAM Systems, Inc.;
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2.
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Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 28, 2017
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/s/ Arkadiy Dobkin
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Arkadiy Dobkin
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Chief Executive Officer and President (principal executive officer)
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1.
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I have reviewed this annual report on Form 10-K of EPAM Systems, Inc.;
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2.
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Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Anthony J. Conte
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Anthony J. Conte
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Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer and principal accounting officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EPAM Systems, Inc.
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/s/ Arkadiy Dobkin
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Arkadiy Dobkin
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Chairman, Chief Executive Officer and President
(principal executive officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EPAM Systems, Inc.
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/s/ Anthony J. Conte
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Anthony J. Conte
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Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer and principal accounting officer)
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