10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number 0-27512

CSG SYSTEMS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	47-0783182
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9555 Maroon Circle

Englewood, Colorado 80112

(Address of principal executive offices, including zip code)

(303) 200-2000

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨

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

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

Shares of common stock outstanding at November 3, 2011: 33,895,246

CSG SYSTEMS INTERNATIONAL, INC.

FORM 10-Q for the Quarter Ended September 30, 2011

INDEX

		Page No.
Part I     -	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010 (Unaudited)		3
	Condensed Consolidated Statements of Income for the Quarter and Nine Months Ended September 30, 2011 and 2010 (Unaudited)		4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010 (Unaudited)		5
	Notes to Condensed Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		28
Item 4.	Controls and Procedures		29
Part II     -	OTHER INFORMATION
Item 1.	Legal Proceedings		30
Item1A.	Risk Factors		30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		37
Item 6.	Exhibits		37
	Signatures		38
	Index to Exhibits		39

2

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except share amounts)

	September 30,			December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	124,160		$	197,858
Short-term investments		14,439			17,692
Total cash, cash equivalents and short-term investments		138,599			215,550
Trade accounts receivable-
Billed, net of allowance of $2,472 and $1,837		157,276			155,005
Unbilled and other		36,205			30,803
Deferred income taxes		17,752			13,852
Income taxes receivable		12,214			9,043
Other current assets		18,532			17,241
Total current assets		380,578			441,494
Property and equipment, net of depreciation of $109,879 and $94,236		46,098			52,257
Software, net of amortization of $53,726 and $45,579		32,152			31,118
Goodwill		208,987			209,164
Client contracts, net of amortization of $152,931 and $133,218		102,920			116,328
Deferred income taxes		1,329			9,677
Other assets		15,430			19,660
Total assets	$	787,494		$	879,698
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt, net of unamortized original issue discount of zero and $621	$	17,500		$	69,528
Client deposits		31,182			31,897
Trade accounts payable		27,140			25,381
Accrued employee compensation		32,941			53,372
Income taxes payable		2,192			2,028
Deferred revenue		42,447			56,184
Other current liabilities		20,021			32,019
Total current liabilities		173,423			270,409
Non-current liabilities:
Long-term debt, net of unamortized original issue discount of $31,435 and $34,841		293,565			305,159
Deferred revenue		7,942			16,103
Income taxes payable		2,820			954
Deferred income taxes		26,227			33,247
Other non-current liabilities		17,958			16,748
Total non-current liabilities		348,512			372,211
Total liabilities		521,935			642,620
Stockholders’ equity:
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; zero shares issued and outstanding		—			—
Common stock, par value $.01 per share; 100,000,000 shares authorized; 34,079,251 and 34,120,789 shares outstanding		646			641
Additional paid-in capital		446,818			439,712
Treasury stock, at cost, 30,535,019 and 29,956,808 shares		(712,625	)		(704,963	)
Accumulated other comprehensive income (loss):
Unrealized gain on short-term investments, net of tax		2			4
Unrecognized pension plan losses and prior service costs, net of tax		(893	)		(897	)
Unrecognized loss on change in fair value of interest rate swaps, net of tax		(713	)		—
Cumulative translation adjustments		(377	)		868
Accumulated earnings		532,701			501,713
Total stockholders’ equity		265,559			237,078
Total liabilities and stockholders’ equity	$	787,494		$	879,698

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(in thousands, except per share amounts)

	Quarter Ended						Nine Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
Revenues:
Processing and related services	$	131,099		$	124,984		$	391,590		$	368,393
Software, maintenance and services		51,654			8,707			155,567			26,907
Total revenues		182,753			133,691			547,157			395,300
Cost of revenues (exclusive of depreciation, shown separately below):
Processing and related services		62,167			61,675			184,228			197,604
Software, maintenance and services		30,821			6,120			90,400			18,000
Total cost of revenues		92,988			67,795			274,628			215,604
Other operating expenses:
Research and development		27,921			19,113			84,479			56,615
Selling, general and administrative		31,011			19,396			96,876			52,608
Depreciation		6,404			4,865			18,924			16,578
Restructuring charges		1,662			—			3,008			214
Total operating expenses		159,986			111,169			477,915			341,619
Operating income		22,767			22,522			69,242			53,681
Other income (expense):
Interest expense		(4,175	)		(1,562	)		(12,841	)		(4,739	)
Amortization of original issue discount		(1,158	)		(1,462	)		(4,027	)		(5,447	)
Interest and investment income, net		186			157			595			524
Loss on repurchase of convertible debt securities		—			(1,683	)		—			(12,635	)
Other, net		2,151			13			863			17
Total other		(2,996	)		(4,537	)		(15,410	)		(22,280	)
Income before income taxes		19,771			17,985			53,832			31,401
Income tax provision		(9,292	)		(6,295	)		(22,844	)		(7,181	)
Net income	$	10,479		$	11,690		$	30,988		$	24,220
Weighted-average shares outstanding - Basic:
Common stock		32,765			32,365			32,747			32,573
Participating restricted stock		141			464			210			579
Total		32,906			32,829			32,957			33,152
Weighted-average shares outstanding - Diluted:
Common stock		32,887			32,625			32,937			32,834
Participating restricted stock		141			464			210			579
Total		33,028			33,089			33,147			33,413
Earnings per common share:
Basic	$	0.32		$	0.36		$	0.94		$	0.73
Diluted	$	0.32		$	0.35		$	0.93		$	0.72

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)

	Nine Months Ended
	September 30, 2011			September 30, 2010
Cash flows from operating activities:
Net income	$	30,988		$	24,220
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation		18,924			16,578
Amortization		31,599			12,963
Amortization of original issue discount		4,027			5,447
Gain on short-term investments and other		(46	)		(112	)
Loss on repurchase of convertible debt securities		—			12,635
Deferred income taxes		1,637			(160	)
Excess tax benefit of stock-based compensation awards		(824	)		(1,138	)
Stock-based employee compensation		9,684			9,300
Changes in operating assets and liabilities:
Trade accounts and other receivables, net		(9,019	)		(5,470	)
Other current and non-current assets		574			(3,966	)
Income taxes payable/receivable		(949	)		(6,987	)
Trade accounts payable and accrued liabilities		(31,096	)		10,810
Deferred revenue		(26,365	)		115
Net cash provided by operating activities		29,134			74,235
Cash flows from investing activities:
Purchases of property and equipment		(19,615	)		(9,858	)
Purchases of short-term investments		(31,903	)		(61,888	)
Proceeds from sale/maturity of short-term investments		35,200			81,900
Purchase of foreign currency hedge		—			(5,673	)
Acquisition of businesses, net of cash acquired		—			(3,264	)
Acquisition of and investments in client contracts		(6,713	)		(3,610	)
Change in restricted cash for Intec Acquisition		—			(130,000	)
Net cash used in investing activities		(23,031	)		(132,393	)
Cash flows from financing activities:
Proceeds from issuance of common stock		1,158			1,046
Repurchase of common stock		(11,881	)		(33,942	)
Payments on acquired equipment financing		(1,357	)		(837	)
Proceeds from long-term debt		—			150,000
Payments of deferred financing costs		(205	)		(6,541	)
Payments on long-term debt		(67,649	)		(148,846	)
Excess tax benefit of stock-based compensation awards		824			1,138
Net cash used in financing activities		(79,110	)		(37,982	)
Effect of exchange rate fluctuations on cash		(691	)		—
Net decrease in cash and cash equivalents		(73,698	)		(96,140	)
Cash and cash equivalents, beginning of period		197,858			163,489
Cash and cash equivalents, end of period	$	124,160		$	67,349
Supplemental disclosures of cash flow information:
Net cash paid during the period for-
Interest	$	11,739		$	3,781
Income taxes		22,542			14,331

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

CSG SYSTEMS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. GENERAL

We have prepared the accompanying unaudited condensed consolidated financial statements as of September 30, 2011 and December 31, 2010, and for the third quarter and nine months ended September 30, 2011 and 2010, in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position and operating results have been included. The unaudited Condensed Consolidated Financial Statements (the “Financial Statements”) should be read in conjunction with the Consolidated Financial Statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC. The results of operations for the third quarter and nine months ended September 30, 2011 are not necessarily indicative of the expected results for the entire year ending December 31, 2011.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in Preparation of Financial Statements. The preparation of the accompanying Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Postage. We pass through to our clients the cost of postage that is incurred on behalf of those clients, and typically require an advance payment on expected postage costs. These advance payments are included in “client deposits” in the accompanying Condensed Consolidated Balance Sheets (the “Balance Sheet” or “Balance Sheets”) and are classified as current liabilities regardless of the contract period. We net the cost of postage against the postage reimbursements, and include the net amount in processing and related services revenues. The cost of postage that has been shown net of the postage reimbursements from our clients for the third quarter of 2011 and 2010 was $65.9 million and $67.5 million, respectively, and for the nine months ended September 30, 2011 and 2010 was $199.0 million and $202.7 million, respectively.

Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of the purchase to be cash equivalents. As of September 30, 2011, our cash equivalents consist primarily of institutional money market funds, commercial paper and time deposits held at major banks.

As of September 30, 2011, we had $4.8 million of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in Cash and cash equivalents in the accompanying Balance Sheet.

Short-term Investments and Other Financial Instruments. Our financial instruments as of September 30, 2011 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, interest rate swaps, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value.

Certain of our short-term investments and cash equivalents are considered “available-for-sale” and are reported at fair value in our accompanying Balance Sheets, with unrealized gains and losses, net of the related income tax effect, excluded from earnings and reported in a separate component of stockholders’ equity. Realized and unrealized gains and losses were not material in any period presented.

6

All short-term investments held by us as of September 30, 2011, have contractual maturities of less than one year from the time of acquisition. Our short-term investments at September 30, 2011, and December 31, 2010, consisted entirely of commercial paper. Proceeds from the sale/maturity of short-term investments for the nine months ended September 30, 2011 and 2010 were $35.2 million and $81.9 million, respectively.

The following table represents the fair value hierarchy based upon three levels of inputs, of which Levels 1 and 2 are considered observable and Level 3 is unobservable, for financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	September 30, 2011						December 31, 2010
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Money market funds (1)	$	47,132	$	—	$	47,132	$	91,002	$	—	$	91,002
Commercial paper (2)		—		25,917		25,917		—		26,590		26,590
Total	$	47,132	$	25,917	$	73,049	$	91,002	$	26,590	$	117,592
Liabilities:
Interest rate swap contracts (3)		—		1,159		1,159		—		—		—
Total	$	—	$	1,159	$	1,159	$	—	$	—	$	—

(1) As of September 30, 2011 and December 31, 2010, all of the money market funds were classified on our Balance Sheet in cash equivalents.

(2) As of September 30, 2011 and December 31, 2010, of the total commercial paper, $11.5 million and $8.9 million, respectively, were classified on our Balance Sheet in cash equivalents, and $14.4 and $17.7 million, respectively, were classified on our Balance Sheet in short-term investments.

(3) As of September 30, 2011, the fair value of the interest rate swap contracts were classified on our Balance Sheet in other non-current liabilities.

Valuation inputs used to measure the fair values of our money market funds were derived from quoted market prices. The fair values of all other financial instruments are based upon pricing provided by third-party pricing services. These prices were derived from observable market inputs.

We have chosen not to measure our debt at fair value, with changes recognized in earnings each reporting period. As of September 30, 2011, the estimated fair value of our Credit Agreement long-term debt of $192.5 million (carrying value including current maturities) was approximately $206 million, and was estimated using a discounted cash flow methodology. As of September 30, 2011, the estimated fair value of our $150 million (par value) convertible debt, based upon quoted market prices or recent sales activity, was approximately $132 million.

Adoption of New Guidance on Revenue Recognition Related to Multiple-Deliverable Revenue Arrangements. On January 1, 2011, new guidance on revenue recognition related to multiple-deliverable revenue arrangements became effective. The new guidance changed the criteria for separating deliverables in multiple element revenue arrangements that do not fall within the scope of other authoritative accounting literature.

Our processing and related services revenues relate primarily to the outsourced, customer care and billing processing and related services we provide to our North American cable and direct broadcast satellite clients under long-term master processing agreements. Under those agreements, on a monthly basis, we provide multiple services, to include billing and processing services; credit management and collection services; and customer statement invoice printing and mailing services. Since there are essentially no processing and related services elements that are undelivered at the end of each month, other than the future months’ repetition of those same services which will be billed for and recognized as revenues in those future months when the services are provided, the new guidance did not impact the manner in which we are recognizing our processing and related services revenues.

The revenue recognition for our software licenses, software maintenance services (also known as post-contract customer support), and our professional services that involve the implementation of the software licenses, fall within the scope of specific authoritative accounting literature and are not impacted by the new guidance on revenue recognition related to multiple-deliverable revenue arrangements.

7

Accounting Pronouncements Issued But Not Yet Effective. In June 2011, new guidance was issued regarding the presentation of comprehensive income, requiring companies to present the components of net income and other comprehensive income either in one continuous statement or in two separate but consecutive statements and eliminating the option to report other comprehensive income and its components in the statement of stockholders’ equity. The new guidance does not change the items that must be reported in other comprehensive income or when such items must be reclassified to net income. The new guidance is effective for interim and annual periods beginning after December 15, 2011. As this new guidance impacts presentation and disclosure only, it will have no effect on our consolidated financial position or results of operations.

In September 2011, new guidance was issued related to the testing of goodwill for impairment. The new guidance simplifies the assessment of goodwill impairment by giving companies the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount before performing the two step impairment review process. The new guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. This new guidance is not expected to have a material impact on our consolidated financial position or results of operations.

3. PRIOR YEAR ACQUISITION

On November 30, 2010, we acquired U.K.-based Intec Telecom Systems PLC (“Intec”) for $364.1 million, or $255.2 million net of $108.9 million of cash and cash equivalents Intec had on hand at the close of the transaction.

The application of the acquisition method of accounting for business combinations requires the use of significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for Intec (in thousands):

Trade accounts receivable	$	63,276
Other current assets		6,179
Property and equipment		9,968
Acquired software		19,184
Acquired client contracts .		77,979
Acquired other intangible assets		6,395
Goodwill		102,145
Net deferred income tax assets		36,238
Other non-current assets		2,552
Total assets acquired		323,916
Trade accounts payable		3,611
Accrued employee compensation		17,517
Deferred revenue		28,016
Other current liabilities		9,823
Non-current liabilities		9,711
Total liabilities assumed		68,678
Net assets acquired (excluding acquired cash)	$	255,238

The $255.2 million of net assets acquired reflected above has not changed since December 31, 2010. However, we have made certain adjustments to our estimates of the fair value of various assets acquired and liabilities assumed, none of which required the revision of comparative information for periods presented in the accompanying Financial Statements since the effects are not material. In addition, we have made certain adjustments to our estimates of deferred income taxes. As a result of these changes, during 2011, the amount allocated to goodwill has increased by $1.1 million.

8

The above estimated fair values of assets acquired and liabilities assumed are still considered provisional, as we are waiting for additional information, primarily related to certain items within trade accounts receivable and deferred revenue, necessary to finalize those fair values, and to estimate the valuation allowances necessary for certain deferred income tax assets. Thus, the provisional measurements of fair value set forth above are subject to change. Such changes could be significant. We expect to finalize the fair values and valuation allowances and complete the purchase price allocation during the fourth quarter of 2011.

4. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS

Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board of Directors, authorizing us to repurchase our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). During the nine months ended September 30, 2011 and 2010, we repurchased 0.6 million shares and 1.5 million shares of our common stock under the Stock Repurchase Program for $7.7 million (weighted-average price of $13.25 per share) and $29.3 million (weighted-average price of $19.56 per share), respectively. As of September 30, 2011, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 3.6 million shares.

Stock Repurchases for Tax Withholdings. In addition to the above mentioned stock repurchases, during the nine months ended September 30, 2011 and 2010, we repurchased from our employees and then cancelled 0.2 million shares of common stock for $4.2 million and 0.2 million shares of common stock for $4.6 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Equity Compensation Plans. In May 2011, our stockholders approved the amended and restated 2005 Stock Incentive Plan, which included a 3,400,000 share increase in the number of shares that may be issued under the plan, from 12,400,000 shares to 15,800,000 shares. Additionally in May 2011, our stockholders approved the amended and restated 1996 Employee Stock Purchase Plan, which included a 750,000 share increase in the number of shares reserved for sales to our employees, from 958,043 shares to 1,708,043 shares.

Stock-Based Awards. A summary of our unvested restricted common stock activity during the third quarter and nine months ended September 30, 2011 is as follows:

	Quarter Ended September 30, 2011					Nine Months Ended September 30, 2011
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Unvested awards, beginning		1,843,724		$	18.04		1,803,971		$	17.19
Awards granted		44,523			13.20		722,073			18.87
Awards forfeited/cancelled		(23,675	)		17.95		(63,743	)		17.61
Awards vested		(65,652	)		19.93		(663,381	)		17.20
Unvested awards, ending		1,798,920		$	17.85		1,798,920		$	17.85

Included in the awards granted during the nine months ended September 30, 2011, are performance-based awards for 120,000 restricted common stock shares issued to members of executive management, which vest in equal installments over three years upon meeting either pre-established financial performance objectives or pre-established stock price objectives. The performance-based awards become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

All other restricted common stock shares granted during the nine months ended September 30, 2011 are time-based awards, which vest annually over four years with no restrictions other than the passage of time. Certain shares of the restricted common stock become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

We recorded stock-based compensation expense for the third quarter of 2011 and 2010 of $3.2 million and $3.1 million, respectively, and for the nine months ended September 30, 2011 and 2010 of $9.7 million and $9.3 million, respectively.

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5. EARNINGS PER COMMON SHARE

Basic and diluted earnings per common share (“EPS”) amounts are presented on the face of the accompanying Condensed Consolidated Statements of Income (the “Statements of Income”). The amounts attributed to both common stock and participating restricted common stock used as the numerators in both the basic and diluted EPS calculations are as follows (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Net Income attributed to:
Common stock	$	10,434	$	11,525	$	30,791	$	23,797
Participating restricted common stock		45		165		197		423
Total	$	10,479	$	11,690	$	30,988	$	24,220

The weighted-average shares outstanding used in the basic and diluted EPS denominators related to common stock and participating restricted common stock are as follows (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Weighted-average shares outstanding – Basic:
Common stock		32,765		32,365		32,747		32,573
Participating restricted common stock		141		464		210		579
Total		32,906		32,829		32,957		33,152
Weighted-average shares outstanding – Diluted:
Common stock		32,887		32,625		32,937		32,834
Participating restricted common stock		141		464		210		579
Total		33,028		33,089		33,147		33,413

The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Basic weighted-average common shares		32,765		32,365		32,747		32,573
Dilutive effect of common stock options		16		21		20		25
Dilutive effect of non-participating restricted common stock		106		239		170		236
Dilutive effect of 2010 Convertible Notes		—		—		—		—
Diluted weighted-average common shares		32,887		32,625		32,937		32,834

Potentially dilutive common shares related to stock options and non-participating unvested shares of restricted common stock of 0.6 million and 0.1 million, respectively, for the third quarter of 2011 and 2010, and 0.2 million and 0.1 million for the nine months ended September 30, 2011 and 2010, respectively, were excluded from the computation of diluted EPS related to common shares as their effect was antidilutive.

The 2010 Convertible Notes have a dilutive effect only in those quarterly periods in which our average stock price exceeds the current effective conversion price of $24.45 per share. The 2004 Convertible Debt Securities, which we fully extinguished in the third quarter of 2011, never had a dilutive effect on our EPS while they were outstanding.

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6. COMPREHENSIVE INCOME

The components of our comprehensive income were as follows (in thousands):

	Quarter Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011			2010
Net income	$	10,479		$	11,690	$	30,988		$	24,220
Other comprehensive income (loss), net of tax, if any:
Unrealized gain (loss) on short-term investments		(3	)		6		(2	)		(3	)
Change in unrecognized pension plan losses and prior service costs		—			—		4			22
Unrealized loss on change in fair value of interest rate swap		(293	)		—		(713	)		—
Foreign currency translation adjustments		(7,563	)		—		(1,245	)		—
Comprehensive income	$	2,620		$	11,696	$	29,032		$	24,239

7. DEBT

Our long-term debt, as of September 30, 2011 and December 31, 2010, was as follows (in thousands):

	September 30, 2011			December 31, 2010
Credit Agreement:
Term loan, mandatory principal payments during term, with remaining principal balance due December 2015, interest at adjusted LIBOR plus 3.75% (combined rate of 4.10% at September 30, 2011 and 4.06% at December 31, 2010)	$	192,500		$	200,000
$100 million revolving loan facility, due December 2015, interest at adjusted LIBOR plus applicable margin (combined rate of 4.06% at December 31, 2010)		—			35,000
Convertible Debt Securities:
2010 Convertible Notes – senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0%; net of unamortized OID of $31,435 and $34,841, respectively		118,565			115,159
2004 Convertible Debt Securities – senior subordinated convertible contingent debt securities; due June 15, 2024; cash interest at 2.5%; net of unamortized OID of zero and $621, respectively		—			24,528
		311,065			374,687
Current portion of long-term debt, net		(17,500	)		(69,528	)
Total long-term debt, net	$	293,565		$	305,159

Credit Agreement. In January 2011, we repaid the $35 million outstanding balance of our $100 million revolving loan facility (“Revolver”). During the nine months ended September 30, 2011, we made $7.5 million mandatory repayments on the Term Loan.

As of September 30, 2011, we were in compliance with the financial ratios and other covenants related to the Credit Agreement. As of September 30, 2011, we had no borrowings outstanding on our Revolver and had the entire $100 million available to us.

2010 Convertible Notes. As of September 30, 2011, and as it relates to our 2010 Convertible Notes, none of the contingent conversion features have been achieved, and thus, the 2010 Convertible Notes are not convertible by the holders.

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Upon conversion of the 2010 Convertible Notes, we will settle our conversion obligation as follows: (i) we will pay cash for 100% of the par value of the 2010 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we will satisfy the remaining conversion obligation in our common stock, cash or any combination of our common stock and cash. As of September 30, 2011, the value of our conversion obligation did not exceed the par value of the 2010 Convertible Notes.

2004 Convertible Debt Securities. In June 2011, holders of $24.1 million par value of our 2004 Convertible Debt Securities exercised their put option and we paid the par value and accrued interest to extinguish these securities in June 2011. In June 2011, we exercised our option to call the remaining $1.0 million par value of our 2004 Convertible Debt Securities, and extinguished the debt in July 2011. As a result of the extinguishment of the 2004 Convertible Debt Securities in 2011, approximately $6 million of deferred tax liabilities became payable as of June 30, 2011, of which $4.4 million was paid as of September 30, 2011.

8. DERIVATIVES

Interest Rate Swap Contracts. In May 2011, we entered into three interest rate swap contracts with the objective of managing our exposure to fluctuations in interest rate movements, thereby eliminating the variability of cash flows on certain portions of the interest payments related to the Term Loan component of our Credit Agreement.

A summary of the three interest rate swap contracts is as follows (dollars in thousands):

	Beginning of Term		End of Term		Weighted-Average Notional Amount Over Term		Fixed Rate
2011 Swap		May 16, 2011		March 13, 2012	$	118,000		0.451	%
2012 Swap		March 13, 2012		March 13, 2013		78,000		1.085	%
2013 Swap		March 13, 2013		March 13, 2014		51,000		2.181	%

We have designated our interest rate swap contracts as cash flow hedges. Swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty over the lives of the contracts in exchange for us making fixed-rate payments to the counterparty over the lives of the contracts without exchange of the underlying notional amount.

As of September 30, 2011, the fair value of the interest rate swap contracts, reflected in other non-current liabilities in our Balance Sheet, was $1.2 million, with the loss, net of tax, reflected as a reduction in other comprehensive income.

Changes in the fair value of these interest rate swap contracts, designated as hedging instruments of the variability of cash flows associated with floating-rate, long-term debt obligations, are reported in accumulated other comprehensive income (“AOCI”) in the stockholders’ equity section of our Balance Sheet. These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged debt obligation in the same period in which the related interest on the floating-rate debt obligations affects earnings. The amount of losses reclassified from AOCI to income/loss (effective portions) for the nine months ended September 30, 2011 were not material. The estimated net losses on the interest rate swap contracts that will be reclassified into earnings within the next twelve months are not expected to be material. Our interest rate swap contracts qualify as effective relationships, and as a result, hedge ineffectiveness was not material during the quarter and nine months ended September 30, 2011.

We are exposed to credit-related losses in the event of non-performance by the counterparty to the interest rate swap contracts. The counterparty to the interest rate swap contracts is a major institution with investment grade credit ratings. We evaluated the counterparty credit risk before entering into the interest rate swap contracts and will continue to closely monitor the financial markets and the risk that the counterparty will default on its obligations. This credit risk is generally limited to the unrealized gains in such contracts, should the counterparty fail to perform as contracted.

We do not use derivative financial instruments for speculative purposes.

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9. LONG-LIVED ASSETS

Goodwill. The changes in the carrying amount of goodwill for the nine months ended September 30, 2011, were as follows (in thousands):

January 1, 2011 balance	$	209,164
Adjustments related to prior acquisitions		1,005
Effects of changes in foreign currency exchange rates		(1,182	)
September 30, 2011 balance	$	208,987

The adjustments related to prior acquisitions are almost entirely due to the Intec Acquisition discussed in Note 3, and are related to adjustments to our estimates of deferred income taxes and the fair values of various assets and liabilities assumed.

Other Intangible Assets. Our intangible assets subject to ongoing amortization consist primarily of client contracts and software. As of September 30, 2011 and December 31, 2010, the carrying values of these assets were as follows (in thousands):

	September 30, 2011							December 31, 2010
	Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Client contracts	$	255,851	$	(152,931	)	$	102,920	$	249,546	$	(133,218	)	$	116,328
Software		85,878		(53,726	)		32,152		76,697		(45,579	)		31,118
Total	$	341,729	$	(206,657	)	$	135,072	$	326,243	$	(178,797	)	$	147,446

The total amortization expense related to intangible assets for the third quarter of 2011 and 2010 was $9.6 million and $4.5 million, respectively, and $29.3 million and $12.4 million for the nine months ended September 30, 2011 and 2010, respectively. Based on the September 30, 2011 net carrying value of our intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2011 – $38.8 million; 2012 – $37.0 million; 2013 – $27.9 million; 2014 – $18.1 million; and 2015 – $11.5 million.

10. COMMITMENTS, GUARANTEES AND CONTINGENCIES

Warranties. We generally warrant that our solutions and related offerings will conform to published specifications, or to specifications provided in an individual client arrangement, as applicable. The typical warranty period is 90 days from delivery of the solution or offering. For certain service offerings we provide a limited warranty for the duration of the services provided. We generally warrant that services will be performed in a professional and workmanlike manner. The typical remedy for breach of warranty is to correct or replace any defective deliverable, and if not possible or practical, we will accept the return of the defective deliverable and refund the amount paid under the client arrangement that is allocable to the defective deliverable. Our contracts also generally contain limitation of damages provisions in an effort to reduce our exposure to monetary damages arising from breach of warranty claims. Historically, we have incurred minimal warranty costs, and as a result, do not maintain a warranty reserve.

Product and Services Indemnifications. Our arrangements with our clients generally include an indemnification provision that will indemnify and defend a client in actions brought against the client that claim our products and/or services infringe upon a copyright, trade secret, or valid patent. Historically, we have not incurred any significant costs related to such indemnification claims, and as a result, do not maintain a reserve for such exposure.

Claims for Company Non-performance. Our arrangements with our clients typically cap our liability for breach to a specified amount of the direct damages incurred by the client resulting from the breach. From time-to-time, these arrangements may also include provisions for possible liquidated damages or other financial remedies for our non-performance, or in the case of certain of our outsourced customer care and billing solutions, provisions for damages related to service level performance requirements. The service level performance requirements typically relate to system availability and timeliness of service delivery. As of September 30, 2011, we believe we have adequate reserves, based on our historical experience, to cover any reasonably anticipated exposure as a result of our nonperformance for any past or current arrangements with our clients.

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Indemnifications Related to Officers and the Board of Directors. We have agreed to indemnify certain of our officers and members of our Board of Directors if they are named or threatened to be named as a party to any proceeding by reason of the fact that they acted in such capacity. We maintain directors’ and officers’ (D&O) insurance coverage to protect against such losses. We have not historically incurred any losses related to these types of indemnifications, and are not aware of any pending or threatened actions or claims against any officer or member of our Board of Directors. As a result, we have not recorded any liabilities related to such indemnifications as of September 30, 2011. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations.

Legal Proceedings. From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. We are not presently a party to any material pending or threatened legal proceedings.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and Notes thereto (our “Financial Statements”) included in this Form 10-Q and the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2010 (our “2010 10-K”).

Forward-Looking Statements

This report contains a number of forward-looking statements relative to our future plans and our expectations concerning our business and the industries we serve. These forward-looking statements are based on assumptions about a number of important factors, and involve risks and uncertainties that could cause actual results to differ materially from estimates contained in the forward-looking statements. Some of the risks that are foreseen by management are outlined within Part II Item 1A., “Risk Factors”. Item 1A. constitutes an integral part of this report, and readers are strongly encouraged to review this section closely in conjunction with MD&A.

Company Overview

Our Company. We are a leading provider of Business Support Systems (“BSS”) solutions to clients in several complex and highly competitive industries. Our solutions coordinate and manage many aspects of a service provider’s customer interactions, from the initial activation of customer accounts, to the support of various service activities, and through the presentment, collection, and accounts receivables management of monthly customer statements. While our heritage is in serving the North American communications markets, through acquisition and organic growth, we have broadened and enhanced our solutions to extend our business both globally and to a growing number of other industries including communications, financial services, healthcare, utilities, entertainment, and content distribution.

Prior to 2011, our business was focused on the North American market, with approximately 85% of our revenues coming from the cable and direct broadcast satellite (“DBS”) markets and the remaining 15% from a variety of other verticals. However, on November 30, 2010, we completed our acquisition of U.K.-based Intec Telecom Systems PLC (“Intec”) (the “Intec Acquisition”). Intec is a recognized global BSS leader for retail billing, mediation, and wholesale business management, serving the majority of the world's top 100 communications service providers. As a result, we expect the percentage of our revenues coming from the cable and DBS markets to be approximately 60%.

With the Intec Acquisition, we believe we are well-positioned to: (i) evolve our offerings; (ii) expand the markets we serve; and (iii) reach greater economic scale.

We are a S&P SmallCap 600 company.

Management Overview of Quarterly Results

Third Quarter Highlights. A summary of our results of operations for the third quarter of 2011, when compared to the third quarter of 2010, is as follows (in thousands, except per share amounts and percentages):

	Quarter Ended
	September 30, 2011			September 30, 2010
Revenues	$	182,753		$	133,691
Operating Results:
Operating income	$	22,767		$	22,522
Operating income margin		12.5	%		16.8	%
Diluted EPS	$	0.32		$	0.35

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	Quarter Ended
	September 30, 2011		September 30, 2010
Supplemental Data:
Cable and DBS customer accounts (end of period)		48,730		48,750
Data center transition expenses	$	—	$	1,825
Intec Acquisition Costs		—		2,601
Restructuring charges		1,662		—
Stock-based compensation		3,155		3,116
Amortization of acquired intangible assets		5,731		1,159
Amortization of OID		1,158		1,462
Loss on repurchase of convertible debt securities		—		1,683

Revenues. Our revenues for the third quarter of 2011 were $182.8 million. This represents a 37% increase from revenues of $133.7 million for the same period in 2010, with the increase almost entirely attributed to the additional revenues generated as a result of the Intec Acquisition.

Operating Results. Operating income for the third quarter of 2011 was $22.8 million, or a 12.5% operating income margin percentage, compared to $22.5 million, or a 16.8% operating income margin percentage, for the third quarter of 2010. The lower operating income margin reflects the lower margin profile of Intec’s global software and services business, to include $4.8 million, or 2.6 percentage points, of amortization of acquired intangible assets related to the Intec Acquisition.

Diluted EPS. Diluted EPS for the third quarter of 2011 was $0.32 per diluted share, which compares to $0.35 per diluted share for the third quarter of 2010. Diluted EPS for the third quarter of 2011, when compared to diluted EPS for the third quarter of 2010 was impacted by the following items:

• $4.8 million of amortization of acquired intangible assets related to the Intec Acquisition, which negatively impacted diluted EPS by $0.08 per diluted share;

• restructuring charges of $1.7 million, which negatively impacted diluted EPS by $0.03 per diluted share; and

• an effective income tax rate of 47% for the third quarter of 2011, compared to 35% for the third quarter of 2010.

Additionally, diluted EPS for the third quarter of 2010 was impacted by the following items, for which there were no comparable amounts in the third quarter of 2011:

• data center transition expenses of $1.8 million, which negatively impacted diluted EPS by $0.04 per diluted share;

• Intec acquisition-related charges of $2.6 million, which negatively impacted diluted EPS by $0.05 per diluted share; and

• the loss on the repurchase of convertible debt securities of $1.7 million, which negatively impacted GAAP EPS by $0.03 per diluted share.

Cash and Cash Flows. As of September 30, 2011, we had cash, cash equivalents and short-term investments of $138.6 million, as compared to $134.4 million as of June 30, 2011. Our cash flows from operating activities for the third quarter of 2011 were $30.3 million compared to $18.5 million for the third quarter of 2010. See the Liquidity section for further discussion of our cash flows.

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Significant Client Relationships

Client Concentration. A large percentage of our historical revenues have been generated from our four largest clients, which are Comcast Corporation (“Comcast”), DISH Network Corporation (“DISH”), Time Warner, Inc. (“Time Warner”), and Charter Communications, Inc. (“Charter”). Revenues from these clients represented the following percentages of our total revenues for the indicated periods:

	Quarter Ended
	September 30, 2011			June 30, 2011			September 30, 2010
Comcast		20	%		18	%		24	%
DISH		12	%		12	%		19	%
Time Warner		10	%		11	%		13	%
Charter		<10	%		<10	%		11	%

The decrease in revenue percentages generated from these four clients beginning in 2011 is due to the larger global revenue base that we now have as a result of the Intec Acquisition.

The percentages of net billed accounts receivable balances attributable to our largest clients as of the indicated dates were as follows:

	As of
	September 30, 2011			June 30, 2011			December 31, 2010
Comcast		22	%		22	%		20	%
DISH		13	%		12	%		15	%
Time Warner		<10	%		11	%		<10	%
Charter		<10	%		<10	%		<10	%

See our 2010 10-K for additional discussion of our business relationships with the above mentioned significant clients.

DISH. On January 15, 2011, we entered into a contract extension with DISH to extend our relationship for processing and related services, and for print and mail services, through December 31, 2017. As a result of this new agreement, in February 2011 we began invoicing DISH for processing and related services on a per-customer-account basis, to include volume-based tiered pricing, rather than a monthly fixed fee. The expected annual fees that we will generate under the new agreement will decrease in exchange for the extended term of the contract and DISH’s migration to the ACP platform. During the initial years under the new agreement, annual revenues generated could be approximately 10% to 15% less than those generated in 2010, depending on the level of products and services that DISH decides to purchase from us.

Additionally, the terms of the previous DISH agreement required certain advance deposits and allowed for invoicing of monthly fees in advance of such services. Upon execution of the new agreement, DISH was allowed to apply certain of those advance payments to its first quarter of 2011 invoices and the invoicing of monthly services reverted back to our normal practice of invoicing one month in arrears. As a result, our cash flows from operating activities for the nine months ended September 30, 2011 was negatively impacted by approximately $20 million as the advance payments and invoicing terms were brought in-line with the new agreement.

See our 2010 10-K for additional details of the key terms of the DISH agreement. The new DISH agreement, with confidential information redacted, is included in the exhibits to our periodic filings with the SEC.

Risk of Client Concentration. Although the Intec Acquisition has reduced the percentage of our total revenues generated from these clients, we expect to continue to generate a significant percentage of our future revenues from our four largest clients mentioned above. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of clients. Should a significant client: (i) terminate or fail to renew their contracts with us, in whole or in part, for any reason; (ii) significantly reduce the number of customer accounts processed on our solutions, the price paid for our services, or the scope of services that we provide; or (iii) experience significant financial or operating difficulties, it could have a material adverse effect on our financial condition and results of operations.

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Stock-Based Compensation Expense

Stock-based compensation expense is included in the following captions in the accompanying Statements of Income (in thousands):

	Quarter Ended				Nine Months Ended
	September 30, 2011		September 30, 2010		September 30, 2011		September 30, 2010
Cost of processing and related services	$	671	$	791	$	2,040	$	2,340
Cost of software, maintenance and services		102		209		487		622
Research and development		410		378		1,273		1,234
Selling, general and administrative		1,972		1,738		5,884		5,104
Total stock-based compensation expense	$	3,155	$	3,116	$	9,684	$	9,300

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets is included in the following captions in the accompanying Statements of Income (in thousands):

	Quarter Ended				Nine Months Ended
	September 30, 2011		September 30, 2010		September 30, 2011		September 30, 2010
Cost of processing and related services	$	826	$	657	$	2,477	$	1,970
Cost of software, maintenance and services		4,903		498		14,624		1,438
Selling, general and administrative		2		4		9		78
Total amortization of acquired intangible assets	$	5,731	$	1,159	$	17,110	$	3,486

Critical Accounting Policies

The preparation of our Financial Statements in conformity with accounting principles generally accepted in the U.S. requires us to select appropriate accounting policies, and to make judgments and estimates affecting the application of those accounting policies. In applying our accounting policies, different business conditions or the use of different assumptions may result in materially different amounts reported in our Financial Statements.

We have identified the most critical accounting policies that affect our financial position and the results of our operations. Those critical accounting policies were determined by considering the accounting policies that involve the most complex or subjective decisions or assessments. The most critical accounting policies identified relate to: (i) revenue recognition; (ii) allowance for doubtful accounts receivable; (iii) impairment assessments of goodwill and other long-lived assets; (iv) income taxes; and (v) business combinations and asset purchases. These critical accounting policies, as well as our other significant accounting policies, are discussed in our 2010 10-K.

Results of Operations

Total Revenues. Total revenues for the: (i) third quarter of 2011 increased 37% to $182.8 million, from $133.7 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 increased 38% to $547.2 million, from $395.3 million for the nine months ended September 30, 2010. These increases can almost entirely be attributed to the additional revenues generated as a result of the Intec Acquisition.

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We use the location of the client as the basis of attributing revenues to individual countries. Revenues by geographic regions for the third quarter and nine months ended September 30, 2011 and 2010 were as follows (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Americas (principally the U.S.)	$	155,304	$	133,691	$	467,830	$	395,300
Europe, Middle East and Africa (principally Europe)		19,151		—		56,271		—
Asia Pacific		8,298		—		23,056		—
Total revenues	$	182,753	$	133,691	$	547,157	$	395,300

The components of total revenues are discussed in more detail below.

Processing and related services revenues. Processing and related services revenues for the: (i) third quarter of 2011 increased 5% to $131.1 million, from $125.0 million for the third quarter of 2010; and (ii) for the nine months ended September 30, 2011 increased 6% to $391.6 million from $368.4 million for the nine months ended September 30, 2010. The increases in processing and related services revenues between periods can be attributed primarily to the inclusion of Intec’s managed services revenues.

Additional information related to processing and related services revenues is as follows:

• Processing and related services revenues for the third quarter of 2011 includes the full quarter impact of the DISH contract extension, discussed in further detail in the Significant Client Relationships section of this 10-Q and our 2010 10-K.

• Amortization of our client contracts intangible assets related to investments in client contracts (reflected as a reduction of processing and related services revenues) for the: (i) third quarter of 2011 and 2010 was $1.9 million and $1.6 million, respectively; and (ii) nine months ended September 30, 2011 and 2010 was $5.6 million and $4.9 million, respectively.

• Total customer accounts processed on our ACP solution as of September 30, 2011 were 48.7 million, compared to 48.8 million as of September 30, 2010, and 48.9 million as of June 30, 2011.

Software, Maintenance and Services Revenues. Software, maintenance and services revenues for the: (i) third quarter of 2011 were $51.7 million compared to $8.7 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 were $155.6 million compared to $26.9 million for the nine months ended September 30, 2010, with the increases between periods entirely attributed to the revenues from the Intec Acquisition.

Total Expenses. Our operating expenses for the: (i) third quarter of 2011 were $160.0 million, up 44% when compared to $111.2 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 were $477.9 million, up 40% when compared to $341.6 million for the nine months ended September 30, 2010. The increases in total expenses between periods can be attributed to the Intec Acquisition, which was partially offset by $1.8 million quarterly and $20.1 million year-to-date decreases in our data center transition expenses, due to completion of our data center migration in the third quarter of 2010. See the “Data Center Transition” section in our 2010 10-K for a discussion of this project.

The components of total expenses are discussed in more detail below.

Cost of Revenues. See our 2010 10-K for a description of the types of costs that are included in the individual line items for cost of revenues.

Cost of Processing and Related Services. The cost of processing and related services for the: (i) third quarter of 2011 was $62.2 million, a slight increase when compared to $61.7 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 decreased 7% to $184.2 million from $197.6 million for the nine months ended September 30, 2010. Total processing and related services cost as a percentage of our processing and related services revenues for the: (i) third quarter of 2011 and 2010 was 47.4% and 49.3%, respectively; and (ii) nine months ended September 30, 2011 and 2010 was 47.0% and 53.6%, respectively.

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Processing and related services cost, and processing and related services cost as a percentage of our processing and related services revenues were impacted in the third quarter and nine months ended September 30, 2010 by our data center transition expenses, which had the following effect (in thousands, except percentages):

	Quarter Ended September 30,										Nine Months Ended September 30,
	2011					2010					2011					2010
	Amount		% of Revenues			Amount		% of Revenues			Amount		% of Revenues			Amount		% of Revenues
Cost of processing and related services revenues, all other	$	62,167		47.4	%	$	59,850		47.9	%	$	184,228		47.0	%	$	179,476		48.7	%
Data center transition expenses		—		—			1,825		1.4			—		—			18,128		4.9
Cost of processing and related services revenues	$	62,167		47.4	%	$	61,675		49.3	%	$	184,228		47.0	%	$	197,604		53.6	%

Absent the impact of the data center transition expenses, processing and related services cost as a percentage of our processing and related services revenues would have decreased 0.5 percentage points and 1.7 percentage points, respectively, between the quarters and nine months ended September 30, 2011 and September 2010. These decreases are due to the operational and financial benefits that we began to experience during the second quarter of 2010, following the substantial completion of our migration efforts to our new data center location.

Cost of Software, Maintenance and Services. The cost of software, maintenance and services for the: (i) third quarter of 2011 increased to $30.8 million, from $6.1 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 increased to $90.4 million, from $18.0 million for the nine months ended September 30, 2010. These increases can be entirely attributed to the Intec Acquisition, and includes the amortization expense related to the acquired Intec intangible assets, which had the following impact on the cost of software, maintenance and services (in thousands, except percentages):

	Quarter Ended September 30,										Nine Months Ended September 30,
	2011					2010					2011					2010
	Amount		% of Revenues			Amount		% of Revenues			Amount		% of Revenues			Amount		% of Revenues
Cost of software, maintenance and services revenues, all other	$	26,272		50.9	%	$	6,120		70.3	%	$	76,838		49.4	%	$	18,000		66.9	%
Amortization expense related to acquired Intec intangible assets		4,549		8.8			—		—			13,562		8.7			—		—
Cost of software, maintenance and services revenues	$	30,821		59.7	%	$	6,120		70.3	%	$	90,400		58.1	%	$	18,000		66.9	%

Total cost of software, maintenance and services as a percentage of our software, maintenance and services revenues for the: (i) third quarter of 2011 and 2010 was 59.7% and 70.3%, respectively; and (ii) nine months ended September 30, 2011 and 2010 was 58.1% and 66.9%, respectively. Consistent with our results for the three quarters of 2011 and as a result of the Intec Acquisition, we expect revenues from software, maintenance and services to be a larger percentage of our total revenues in 2011 then we have historically experienced. Variability in quarterly revenues and operating results are inherent characteristics of companies that sell software licenses, and perform professional services. Our quarterly revenues for software licenses and professional services may fluctuate, depending on various factors, including the timing of executed contracts and revenue recognition, and the delivery of solutions. However, the costs associated with software and professional services revenues are not subject to the same degree of variability (e.g., these costs are generally fixed in nature within a relatively short period of time), and thus, fluctuations in our cost of software, maintenance and services as a percentage of our software, maintenance and services revenues may occur between periods.

R&D Expense. R&D expense for the: (i) third quarter of 2011 increased 46% to $27.9 million, from $19.1 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 increase 49% to $84.5 million, from $56.6 million for the nine months ended September 30, 2010, with the increases mainly attributed to the addition of Intec R&D activities. As a percentage of total revenues, R&D expense increased to 15.3% for the third quarter of 2011 compared to 14.3% for the third quarter of 2010. We did not capitalize any internal software development costs during the nine months ended September 30, 2011 and 2010.

Our R&D efforts are focused on the continued evolution of our solutions that enable service providers worldwide to provide a more personalized customer experience while turning transactions into revenues. This includes the continued investment in our BSS solutions aimed at improving a providers’ time-to-market, flexibility, scalability, and total cost of ownership. These efforts include the integration of the recently acquired Intec products into the CSG solution suite. We expect that our R&D investment activities in the near-term will be relatively consistent with this past quarter, with the level of R&D spend highly dependent upon the opportunities that we see in our markets.

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Selling, General and Administrative (“SG&A”) Expense. SG&A expense for the: (i) third quarter of 2011 increased 60% to $31.0 million, from $19.4 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 increased 84% to $96.9 million, from $52.6 million for the nine months ended September 30, 2010, with these increases primarily the result of the impact of the Intec SG&A functions. As anticipated, our SG&A costs as a percentage of total revenues increased over our historical levels to 17.0% for the third quarter of 2011, compared to 14.5% for the third quarter of 2010. As is typical with many global software companies, Intec’s SG&A expenses as a percentage of total revenues are greater than CSG’s historical levels as a domestic outsourced processing company.

Depreciation Expense. Depreciation expense for the: (i) third quarter of 2011 increased 32% to $6.4 million, from $4.9 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 increased 14% to $18.9 million, from $16.6 million for the nine months ended September 30, 2010. These increases in depreciation expense are primarily attributed to the additional depreciation expense as a result of the Intec Acquisition, and the additional capital expenditures we have made over the last year.

Restructuring Charges. Beginning in the second quarter of 2011, we implemented various cost reduction and efficiency initiatives that resulted in restructuring charges of $1.7 million for the third quarter of 2011 and $3.0 million for the nine months ended September 30, 2011. These initiatives were primarily in the following three areas:

• We lowered our resources in account services to better leverage our enhanced and expanded professional services talent across the global organization.

• We reduced our resources in certain development areas to ensure we are focusing a greater portion of our efforts on our next generation solutions like ACP, Singleview, and Wholesale Billing and Mediation.

• We consolidated our print facilities from four to three locations as we continue to take advantage of the advancements made in print technologies and the capabilities of our staff. The efficiencies and added speed resulting from our previous investments have allowed us to significantly increase our production throughput.

We anticipate that these actions will result in cost savings of approximately $7 million annually, with approximately one-half of this benefit to be realized during the second half of 2011, and the full year run rate savings to be experienced in early 2012.

Operating Income. Operating income and operating income margin for the: (i) third quarter of 2011 was $22.8 million, or 12.5% of total revenues, compared to $22.5 million, or 16.8% of total revenues for the third quarter of 2010; and (ii) nine months ended September 30, 2011 was $69.2 million, or 12.7% of total revenues, compared to $53.7 million, or 13.6% of total revenues for the nine months ended September 30, 2010. Operating income and operating income margin for the third quarter and nine months ended September 30, 2010 were significantly impacted by the data center transition expenses and Intec Acquisition costs, which had the following effect on our operating income and operating income margins (in thousands, except percentages):

	Quarter Ended September 30,											Nine Months Ended September 30,
	2011					2010						2011					2010
	Amount		% of Revenues			Amount			% of Revenues			Amount		% of Revenues			Amount			% of Revenues
Operating income, all other	$	22,767		12.5	%	$	26,948			20.2	%	$	69,242		12.7	%	$	76,424			19.3	%
Data center transition expenses		—		—			(1,825	)		(1.4	)		—		—			(20,142	)		(5.1	)
Intec Acquisition costs		—		—			(2,601	)		(2.0	)		—		—			(2,601	)		(0.6	)
Operating income	$	22,767		12.5	%	$	22,522			16.8	%	$	69,242		12.7	%	$	53,681			13.6	%

Absent the impact of the data center transition expenses and the Intec Acquisition costs, operating income margin decreased by 7.7 percentage points and 6.6 percentage points, respectively, between the quarters and nine months ended September 30, 2011 and September 30, 2010. These decreases reflect: (i) the full quarterly impact of the lower margin profile of our expanded software and services business from the Intec Acquisition (to include approximately $5 million and $14 million, respectively, for the quarter and nine months ended September 30, 2011, of acquired Intec intangible asset amortization); and (ii) the impact of the seven-year contract extension with DISH.

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Interest Expense. Interest expense for the: (i) third quarter of 2011 increased $2.6 million, to $4.2 million, compared to $1.6 million for the third quarter of 2010; and (ii) nine months ended September 30, 2011 increased $8.1 million to $12.8 million, compared to $4.7 million for the nine months ended September 30, 2010. These increases are due to the interest expense related to the Credit Agreement, which was entered into during the fourth quarter of 2010 in conjunction with the Intec Acquisition.

Loss on Repurchase of Convertible Debt Securities. During the third quarter of 2010, we repurchased $23.2 million (par value) of our 2004 Convertible Debt Securities for a total purchase price of $23.9 million. As a result of this transaction, we recognized a non-cash loss on the repurchase of $1.7 million (pretax impact), or $0.03 per diluted share. During the nine months ended September 30, 2010, we repurchased a total of $143.1 million (par value) of our 2004 Convertible Debt Securities for a total purchase price of $148.9 million. As a result of this transaction, we recognized a non-cash loss on the repurchase of $12.6 million (pretax impact), or $0.24 per diluted share.

Income Tax Provision. The effective income tax rates for the quarter and nine months ended September 30, 2011 and 2010 were as follows:

Quarter Ended September 30,		Nine Months Ended September 30,
2011 (1)	2010 (2)	2011 (1)	2010 (2)
47%	35%	42%	23%

(1) During the first and second quarters of 2011, we recorded effective income tax rates of 37% and 43%, respectively. As a result of our most recent revised revenues and profit level forecasts for 2011, we now anticipate generating greater losses in certain foreign entities for the year. Under current accounting rules, we cannot take a tax benefit for those losses at this time, which has the effect of increasing our effective income tax rate for the year. As a result, we recorded an effective income tax rate of 47% for the third quarter, bringing the effective income tax rate to 42% for the first nine months of 2011. We may continue to see additional volatility in our income tax rate as we transform our company to a global service provider.

(2) The low effective income tax rate for the nine months ended September 30, 2010 is the result of the completion of an IRS examination of our 2006, 2007 and 2008 Federal income tax returns during the second quarter of 2010. Under current accounting rules, we were required to establish a liability for unrecognized income tax benefits (i.e., income tax reserves) related to the uncertainty in the realization of certain tax credits and incentives over the last several years. The realization uncertainty was due to the complexity of the income tax regulations associated with the tax credits and incentives, and the judgments and estimates involved in calculating the tax credits and incentives claimed. The completion of the IRS examination essentially validated our calculation methodology and assumptions utilized in determining our credit and incentive amounts. Therefore, favorable adjustments to our income tax reserves of approximately $4 million, or $0.13 per diluted share for the nine months ended September 30, 2010, were necessary in accordance with our accounting policies.

Liquidity

Cash and Liquidity

As of September 30, 2011, our principal sources of liquidity for operating purposes included cash, cash equivalents and short-term investments of $138.6 million, compared to $134.4 million as of June 30, 2011, and $215.6 million as of December 31, 2010. The $77.0 million year-to-date decrease from December 31, 2010 to September 30, 2011 reflects: (i) our repayment of $42.5 million of borrowings under our Credit Agreement; and (ii) our payment of $25.1 million related to our 2004 convertible debt securities. We generally invest our excess cash balances in low-risk, short-term investments to limit our exposure to market and credit risks.

As part of our Credit Agreement, we have a five-year, $100 million senior secured revolving loan facility (“Revolver”) with a syndicate of financial institutions that expires in December 2015 (See Note 7 to the Financial Statements). As of September 30, 2011, there were no borrowings outstanding on the Revolver. The Credit Agreement contains customary affirmative covenants and financial covenants. As of September 30, 2011, and the date of this filing, we believe that we are in compliance with the provisions of the Credit Agreement.

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Our cash, cash equivalents, and short-term investment balances as of the end of the indicated periods were located in the following geographical regions (in thousands):

	September 30, 2011		December 31, 2010
Americas (principally the U.S.)	$	107,258	$	153,674
Europe, Middle East and Africa (principally Europe )		24,305		58,595
Asia Pacific		7,036		3,281
Total cash, equivalents and short-term investments	$	138,599	$	215,550

We generally have ready access to substantially all of our cash, cash equivalents, and short-term investment balances, but may face limitations on moving cash out of certain foreign jurisdictions due to currency controls. As of September 30, 2011, we had approximately $5 million of cash restricted as to use to collateralize outstanding letters of credit.

Cash Flows From Operating Activities

We calculate our cash flows from operating activities in accordance with GAAP, beginning with net income, adding back the impact of non-cash items (e.g., depreciation, amortization, amortization of OID, deferred income taxes, stock-based compensation, etc.), and then factoring in the impact of changes in operating assets and liabilities. See our 2010 10-K for a description of the primary uses and sources of our cash flows from operating activities.

Our net cash flows from operating activities, broken out between operations and changes in operating assets and liabilities, for the indicated periods are as follows (in thousands):

	Operations		Changes in Operating Assets and Liabilities			Net Cash Provided by (Used in) Operating Activities – Quarter Totals
Cash Flows from Operating Activities:
2010:
March 31	$	27,376	$	3,948		$	31,324
June 30		25,052		(641	)		24,411
September 30		27,305		(8,805	)		18,500
December 31		32,529		14,545			47,074
Total	$	112,262	$	9,047		$	121,309
2011:
March 31 (1)	$	39,687	$	(41,576	)	$	(1,889	)
June 30 (2)		21,753		(21,040	)		713
September 30 (3)		34,549		(4,239	)		30,310
Total	$	95,989	$	(66,855	)	$	29,134

(1) The large decrease in operating assets and liabilities for the first quarter of 2011 relates primarily to: (i) the change of the monthly invoice timing for DISH that had a negative $20 million impact, as discussed above; and (ii) the timing of payments for several items specific to the first quarter, including the approximately $8 million of Intec acquisition-related expenses and the 2010 employee incentive performance bonuses, both of which were accrued expenses as of December 31, 2010.

(2) As a result of the payment of our 2004 Convertible Debt Securities, discussed in Note 7 to the Financial Statements, $6 million of deferred income tax liabilities associated with the debt became payable and were reclassified to current income taxes payable as of June 30, 2011. Although this was neutral to our overall cash flows from operating activities, it provided a negative impact to our operations portion of cash flows from operating activities and a benefit to our changes in operating assets and liabilities. Additionally, the changes in operating assets and liabilities for the second quarter of 2011 were negatively impacted by the increase in accounts receivable in addition to decreases in deferred revenue and accrued liabilities.

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(3) During the third quarter of 2011, we paid $4.4 million of the deferred tax liabilities discussed in Note 2 above, thus negatively impacting the changes in operating assets and liabilities by this amount.

Our cash flows from operating activities for the nine months ended September 30, 2011 of $29.1 million was unusually low for us, and was caused mainly by the $32 million of one-time, nonrecurring items highlighted in Note 1 and 3 in the table above, and fluctuations in quarter-end working capital items. We expect that we will continue to see some quarter end variability in our working capital items in future quarters, however, over longer periods of time, we do not expect this to be a factor in our ability to continue to generate strong cash flows, as illustrated by the table above.

We expect cash flows from operating activities to continue to be a strong metric for us going forward. Based on our current forecasts, we expect to generate approximately $65 million in cash flows from operating activities for 2011, which assumes no significant changes in working capital from now until the end of the year.

Significant fluctuations in the balances of key operating assets and liabilities between September 30, 2011 and December 31, 2010, that impacted our cash flows from operating activities, are as follows:

Billed Trade Accounts Receivable

Management of our billed accounts receivable is one of the primary factors in maintaining strong quarterly cash flows from operating activities. Our billed trade accounts receivable balance includes billings for several non-revenue items (primarily postage, sales tax, and deferred revenue items). As a result, we evaluate our performance in collecting our accounts receivable through our calculation of days billings outstanding (“DBO”) rather than a typical days sales outstanding ("DSO") calculation. DBO is calculated based on the billings for the period (including non-revenue items) divided by the average monthly net trade accounts receivable balance for the period.

Our gross and net billed trade accounts receivable and related allowance for doubtful accounts receivable (“Allowance”) as of the end of the indicated quarterly periods, and the related DBOs for the quarters then ended, are as follows (in thousands, except DBOs):

Quarter Ended	Gross		Allowance			Net Billed			DBOs
2010:
March 31	$	109,456	$	(2,289	)	$	107,167	51
June 30		102,523		(2,130	)		100,393	51
September 30		115,674		(2,355	)		113,319	50
December 31		156,842		(1,837	)		155,005	48
2011:
March 31		150,592		(1,958	)		148,634	53
June 30		168,977		(2,541	)		166,436	59
September 30		159,748		(2,472	)		157,276	61

The increase in gross and net accounts receivable in the fourth quarter of 2010 over historical levels is due to the Intec Acquisition. The other changes in our gross and net billed trade accounts receivable shown in the table above reflect the normal fluctuations in the timing of client payments made at quarter-end.

As a result of the Intec Acquisition, a greater percentage of our accounts receivable balance beginning with the quarter ended December 31, 2010, relates to clients outside the U.S. As expected, this greater diversity in the geographic composition of our client base is impacting our DBO (when compared to our historical experience prior to the Intec Acquisition) as longer billing cycles (i.e., billing terms and cash collection cycles) are an inherent characteristic of international software and professional services transactions. For example, our ability to bill (i.e., send an invoice) and collect arrangement fees may be dependent upon, among other things: (i) the completion of various client administrative matters, local country billing protocols and processes (including local cultural differences), and/or non-client administrative matters; (ii) us meeting certain contractual invoicing milestones; or (iii) the overall project status in certain situations in which we act as a subcontractor to another vendor on a project.

Accrued Employee Compensation

Accrued employee compensation decreased $20.5 million, from $53.4 million as of December 30, 2010, to $32.9 million as of September 30, 2011. This decrease is primarily due to: (i) the payment of the 2010 employee incentive performance bonuses in March 2011 that were accrued as of December 31, 2010, offset to a certain degree by the accrual for the 2011 employee incentive

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performance bonuses, however, at a significantly lower level than in 2010; and (ii) the timing of payment of employee wages and other benefits.

Other Current Liabilities

Other current liabilities decreased $12.0 million, from $32.0 million as of December 31, 2010, to $20.0 million as of September 30, 2011. This decrease can be mainly attributed to the payment of approximately $8 million of various Intec acquisition-related expenses that were accrued as of December 31, 2010.

Deferred Revenue

Total deferred revenue (current and non-current) decreased $21.9 million, from $72.3 million as of December 31, 2010, to $50.4 million as of September 30, 2011. This decrease can be primarily attributed to the change in monthly invoice timing for DISH, to bring the advance payments and invoicing terms in-line with the terms of their contract renewal, which was executed in January 2011. This change in the DISH invoice timing had a negative ($20) million impact to our cash flows from operating activities.

Cash Flows From Investing Activities

Our typical investing activities consist of purchases/sales of short-term investments, purchases of property and equipment, and investments in client contracts, which are discussed below.

Purchases/Sales of Short-term Investments. During the nine months ended September 30, 2011 and 2010, we purchased $31.9 million and $61.9 million, respectively, and sold (or had mature) $35.2 million and $81.9 million, respectively, of short-term investments. We continually evaluate the appropriate mix of our investment of excess cash balances between cash equivalents and short-term investments in order to maximize our investment returns and will likely purchase and sell additional short-term investments in the future.

Property and Equipment/Client Contracts. Our capital expenditures for the nine months ended September 30, 2011 and 2010, for property and equipment, and investments in client contracts were as follows (in thousands):

	Nine Months Ended September 30,
	2011		2010
Property and equipment	$	19,615	$	9,858
Client contracts		6,713		3,610

The property and equipment expenditures during the first nine months 2011 consisted principally of investments in: (i) computer hardware, software, and related equipment; (ii) statement production equipment; and (iii) facilities and internal infrastructure items.

The investments in client contracts for the first nine months 2011 and 2010 relate to client incentive payments ($1.5 million and $1.6 million, respectively) and the deferral of costs related to conversion/set-up services provided under long-term processing contracts ($5.2 million and $2.0 million, respectively).

Cash Flows From Financing Activities

Our financing activities typically consist of activities with our common stock and our long-term debt.

Repurchase of Common Stock. During the first nine months of 2011 and 2010, we repurchased 0.6 million and 1.5 million shares of our common stock under the guidelines of our Stock Repurchase Program for $7.7 million and $29.3 million, respectively. In addition, outside of our Stock Repurchase Program, during the first nine months of 2011 and 2010, we repurchased from our employees and then cancelled approximately 217,000 shares and 228,000 shares of our common stock for $4.2 million and $4.6 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

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Long-term debt. During the first nine months of 2011, we: (i) repaid the $35 million outstanding balance of the Revolver; (ii) paid $25.1 million of 2004 Convertible Debt Securities, primarily as a result of the holders exercising their put option; and (iii) made $7.5 million of mandatory repayments on the Term Loan.

In the first quarter of 2010, we completed an offering of our 2010 Convertible Notes. We used a portion of the $145 million net proceeds from the offering to repurchase $119.9 million (par value) of our 2004 Convertible Debt Securities for $125.0 million. In connection with the issuance of the convertible notes, we paid deferred financing costs of $5.0 million. In the third quarter of 2010, we repurchased an additional $23.2 million (par value) of our 2004 Convertible Debt Securities for $23.9 million.

Capital Resources

The following are the key items to consider in assessing our sources and uses of capital resources:

Current Sources of Capital Resources.

• Cash, Cash Equivalents and Short-term Investments. As of September 30, 2011, we had cash, cash equivalents, and short-term investments of $138.6 million. Of the approximately $124 million of cash and cash equivalents as of September 30, 2011, 79%, 8%, and 4%, respectively, were denominated in U.S Dollars, Euros, and Pounds Sterling, and approximately $5 million was restricted as to use to collateralize outstanding letters of credit.

• Operating Cash Flows. As described in the “Liquidity” section above, we believe we have the ability to consistently generate strong cash flows to fund our operating activities.

• Revolving Loan Facility. We have a five-year, $100 million senior secured revolving loan facility with a syndicate of financial institutions that expires in December 2015. As of the date of this filing, we have $100 million of the revolving loan facility available to us.

Uses of Capital Resources. Below are the key items to consider in assessing our uses of capital resources:

• Common Stock Repurchases. We have made significant repurchases of our common stock in the past under our Stock Repurchase Program. During the third quarter of 2011, we repurchased 0.6 million shares of our common stock for $7.7 million ($13.25 per share). During the first quarter of 2010, and in conjunction with the issuance of our 2010 Convertible Notes, we repurchased 1.5 million shares of our common stock for $29.3 million ($19.56 per share). As of September 30, 2011, we have 3.6 million shares authorized for repurchase remaining under our Stock Repurchase Program. Our Credit Agreement places certain limitations on our ability to repurchase our common stock. We continue to evaluate the best use of our capital going forward, which from time-to-time, may include additional share repurchases as market and business conditions warrant.

• Acquisitions. We have made six acquisitions in the last six years. The most recent acquisition, and the only acquisition in 2010, was the Intec Acquisition on November 30, 2010 where we paid cash related to the transaction of approximately $378 million (or $269 million, net of cash acquired).

• Capital Expenditures. In the nine months ended September 30, 2011, we spent $19.6 million on capital expenditures. At this time, we expect our 2011 capital expenditures to be approximately $25 million, which consist principally of: (i) hardware and software infrastructure to support our clients’ expanding business needs around the world; (ii) statement production equipment to continue to offer enhanced functionalities to our U.S. clients; and (iii) internal use systems to support the integration of Intec.

• Investments in Client Contracts. In the past, we have provided incentives to new or existing U.S. processing clients to convert their customer accounts to, or retain their customer’s accounts on, our customer care and billing solutions. During the nine months ended September 30, 2011, we made client incentive payments of $1.5 million. In addition, during the nine months ended September 30, 2011, we capitalized costs related to the deferral of conversion/set-up

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services revenue of $5.2 million. As of September 30, 2011, we did not have any material commitments for investments in client contracts which are payable by us only upon the successful conversion of certain additional customer accounts to our processing solutions.

• Long-Term Debt. As of September 30, 2011, our long-term debt consisted of: (i) 2010 Convertible Notes with a par value of $150.0 million; and (ii) Credit Agreement term loan borrowings of $192.5 million. In the nine months ended September 30, 2011, we made payments of: (i) $25.1 million to fully extinguish our 2004 Convertible Debt Securities at par value; (ii) $7.5 million related to mandatory amortization payments on the Credit Agreement term loan; and (iii) $35.0 million to pay off the December 31, 2010 balance on the Credit Agreement revolving loan facility.

During 2010 and 2009, we voluntarily repurchased a total of $175.2 million (par value) of our 2004 Convertible Debt Securities for $177.7 million. As a result of these repurchases, beginning in 2014, we will have to pay cash of approximately $30 million ratably over five years related to the deferred income tax liabilities associated with the repurchased securities. As a result of the extinguishment of the remaining 2004 Convertible Debt Securities in 2011, approximately $6 million of deferred tax liabilities became payable, of which $4.4 million was paid as of September 30, 2011.

During the next twelve months, there are no scheduled conversion triggers on our 2010 Convertible Notes. As a result, at this time, we expect our required debt service cash outlay during the next twelve months related to the 2010 Convertible Notes to be limited to interest payments of $4.5 million.

Under the Credit Agreement term loan, we will make mandatory annual amortization payments (payable quarterly) equal to $10 million, $20 million, $30 million, $40 million, and $50 million, respectively, in 2011, 2012, 2013, 2014, and 2015, with the remaining principal balance due at the maturity date. Under certain circumstances, mandatory prepayments are required (e.g., as a result of defined excess cash flow, asset sale or casualty proceeds, or proceeds of debt issuances). We have the right to voluntarily prepay any of the borrowings under the Credit Agreement without significant penalty.

Refer to Note 6 to our 2010 Form 10-K Financial Statements for further details of our long-term debt.

In summary, we expect to continue to make material investments in client contracts, capital equipment, and R&D, and we expect to continue to evaluate the possibility of early debt repayments and equity repurchases in the future. In addition, as part of our growth strategy, we are continually evaluating potential business and/or asset acquisitions and investments in market share expansion with our existing and potential new clients. We believe that our current cash, cash equivalents and short-term investments balances and our revolving loan facility, together with cash expected to be generated in the future from our current operating activities, will be sufficient to meet our anticipated cash requirements for at least the next 12 months. We also believe we could obtain additional capital through other debt sources which may be available to us if deemed appropriate.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices. As of September 30, 2011, we are exposed to various market risks, including changes in interest rates, foreign currency exchange rates, and fluctuations and changes in the market value of our cash equivalents and short-term investments. We have not historically entered into derivatives or other financial instruments for trading or speculative purposes.

Interest Rate Risk.

Market Risk Related to Long-Term Debt. The interest rate on our convertible debt is fixed, and thus, as it relates to our convertible debt borrowings, we are not exposed to changes in interest rates.

The interest rates under the Credit Agreement are based upon an adjusted LIBOR rate plus an applicable margin, or an alternate base rate plus an applicable margin. Refer to Note 6 to our 2010 Form 10-K Financial Statements for further details of our long-term debt.

In May 2011, we entered into three interest rate swap contracts with the objective of managing our exposure to fluctuations in interest rate movements, thereby eliminating the variability of cash flows on certain portions of the interest payments related to the Term Loan component of our Credit Agreement. See Note 8 to our Financial Statements for further details on the interest rate swap contracts.

As a result of entering into the interest rate swaps, as of September 30, 2011, we were exposed to fluctuations in interest rate movements on $75 million of our Term Loan.

A hypothetical adverse change of 10% in the September 30, 2011 adjusted LIBOR rate would not have had a material impact upon our results of operations.

Market Risk Related to Cash Equivalents and Short-term Investments. Our cash and cash equivalents as of September 30, 2011 and December 31, 2010 were $124.2 million and $197.9 million, respectively. Certain of our cash balances are “swept” into overnight money market accounts on a daily basis, and at times, any excess funds are invested in low-risk, somewhat longer term, cash equivalent instruments and short-term investments. Our cash equivalents are invested primarily in institutional money market funds, commercial paper, and time deposits held at major banks. We have minimal market risk for our cash and cash equivalents due to the relatively short maturities of the instruments.

Our short-term investments as of September 30, 2011 and December 31, 2010 were $14.4 million and $17.7 million, respectively. Currently, we utilize short-term investments as a means to invest our excess cash only in the U.S. The day-to-day management of our short-term investments is performed by a large financial institution in the U.S., using strict and formal investment guidelines approved by our Board of Directors. Under these guidelines, short-term investments are limited to certain acceptable investments with: (i) a maximum maturity, (ii) a maximum concentration and diversification; and (iii) a minimum acceptable credit quality. At this time, we believe we have minimal liquidity risk associated with the short-term investments included in our portfolio.

Foreign Currency Exchange Rate Risk.

As the result of the Intec Acquisition on November 30, 2010, we are exposed to the impact of the changes in foreign currency exchange rates.

Due to foreign operations around the world, our balance sheet and income statement are exposed to foreign currency exchange risk due to the fluctuations in the value of currencies in which we conduct business. While we attempt to maximize natural hedges by incurring expenses in the same currency in which we contract revenue, the related expenses for that revenue could be in one or more differing currencies than the revenue stream.

We generate approximately 80% of our revenues in U.S. dollars. We expect that, in the foreseeable future, the percentage of our total revenues denominated in currencies other than the U.S. dollar may grow.

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As of September 30, 2011 and December 31, 2010, the carrying amounts of our monetary assets and monetary liabilities on the books of our non-U.S. subsidiaries in currencies denominated in a currency other than the functional currency of those non-U.S. subsidiaries are as follows (in thousands, in U.S. dollar equivalents):

	September 30, 2011					December 31, 2010
	Monetary Liabilities			Monetary Assets		Monetary Liabilities			Monetary Assets
Pounds sterling	$	—		$	925	$	—		$	481
Euro		(20	)		5,553		(41	)		5,607
U.S. Dollar		(125	)		18,057		(472	)		19,061
New Zealand Dollar		—			40		—			488
Other		(17	)		408		(13	)		345
Totals	$	(162	)	$	24,983	$	(526	)	$	25,982

A hypothetical adverse change of 10% in the September 30, 2011 exchange rates would not have had a material impact upon our results of operations.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures

As required by Rule 13a-15(b), our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), conducted an evaluation as of the end of the period covered by this report of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e). Based on that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Internal Control Over Financial Reporting

As required by Rule 13a-15(d), our management, including the CEO and CFO, also conducted an evaluation of our internal control over financial reporting, as defined by Rule 13a-15(f), to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, the CEO and CFO concluded that there has been no such change during the quarter covered by this report. As we continue to integrate the Intec business, we may make changes that could materially affect our internal control over financial reporting.

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CSG SYSTEMS INTERNATIONAL, INC.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. We are not presently a party to any material pending or threatened legal proceedings.

Item 1A. Risk Factors

We or our representatives from time-to-time may make or may have made certain forward-looking statements, whether orally or in writing, including without limitation, any such statements made or to be made in MD&A contained in our various SEC filings or orally in conferences or teleconferences. We wish to ensure that such statements are accompanied by meaningful cautionary statements, so as to ensure, to the fullest extent possible, the protections of the safe harbor established in the Private Securities Litigation Reform Act of 1995.

Accordingly, the forward-looking statements are qualified in their entirety by reference to and are accompanied by the following meaningful cautionary statements identifying certain important risk factors that could cause actual results to differ materially from those in such forward-looking statements. This list of risk factors is likely not exhaustive. We operate in rapidly changing and evolving markets throughout the world addressing the complex needs of communication service providers, financial institutions, healthcare providers and many others, and new risk factors will likely emerge. Further, as we enter new market sectors such as healthcare and financial services, as well as new geographic markets, we are subject to new regulatory requirements that increase the risk of non-compliance and the potential for economic harm to us and our clients. Management cannot predict all of the important risk factors, nor can it assess the impact, if any, of such risk factors on our business or the extent to which any risk factor, or combination of risk factors, may cause actual results to differ materially from those in any forward-looking statements. Accordingly, there can be no assurance that forward-looking statements will be accurate indicators of future actual results, and it is likely that actual results will differ from results projected in forward-looking statements and that such differences may be material.

We Derive a Significant Portion of Our Revenues From a Limited Number of Clients, and the Loss of the Business of a Significant Client Could Have a Material Adverse Effect on Our Financial Position and Results of Operations.

Over the past decade, the worldwide communications industry has experienced significant consolidation, resulting in a large percentage of the market being served by a limited number of service providers with greater size and scale. Consistent with this market concentration, we historically have had approximately two-thirds of our revenues generated from four clients that each individually accounted for approximately 10% or more of our total revenues. As a result of the additional revenues from the Intec Acquisition, for the current quarter, we had three clients, Comcast, DISH, and Time Warner that individually generated over 10% of our total revenues. This resulted in approximately 40% of our total revenues coming from these three clients. See the Significant Client Relationships section of MD&A in our 2010 10-K for key renewal dates and a brief summary of our business relationship with these clients.

There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of clients. One such risk is that a significant client could: (i) undergo a formalized process to evaluate alternative providers for services we provide; (ii) terminate or fail to renew their contracts with us, in whole or in part for any reason; (iii) significantly reduce the number of customer accounts processed on our solutions, the price paid for our services, or the scope of services that we provide; or (iv) experience significant financial or operating difficulties. Any such development could have a material adverse effect on our financial position and results of operations and/or trading price of our common stock.

Our industry is highly competitive, and while we recently have succeeded in gaining customers at the expense of competitors and entered into a long term renewal with our second largest customer, there is no guarantee that this success will continue. It is possible that a competitor could increase its footprint and share of customers processed at our expense or a provider could develop their own internal solutions. While our clients may incur some costs in switching to our competitors or their own internally-developed solutions, they may do so for a variety of reasons, including: (i) price; (ii) if we do not provide satisfactory solutions; or (iii) if we do not maintain favorable relationships.

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We May Not Be Successful in the Integration of Our Acquisitions.

As part of our growth strategy, we seek to acquire assets, technology, and businesses which will provide the technology and technical personnel to expedite our product development efforts, provide complementary solutions, or provide access to new markets and clients.

Our recent acquisition of Intec provides us with many opportunities and challenges. Intec represents an approximate 40% increase in revenue, adds approximately 1,500 employees, and gives us operations in 24 countries where we did not previously have operations. Integrating this many people, processes, and operations presents new risks to the business that must be managed carefully. If not, it could have a material impact on operations and cause results to differ significantly from expectations.

Acquisitions involve a number of risks and difficulties, including: (i) expansion into new markets and business ventures; (ii) the requirement to understand local business practices; (iii) the diversion of management’s attention to the assimilation of acquired operations and personnel; (iv) being bound by client or vendor contracts with unfavorable terms; and (v) potential adverse effects on a company’s operating results for various reasons, including, but not limited to, the following items: (a) the inability to achieve financial targets; (b) the inability to achieve certain operating goals and synergies; (c) costs incurred to exit current or acquired contracts or activities; (d) costs incurred to service any acquisition debt; and (e) the amortization or impairment of intangible assets.

Due to the multiple risks and difficulties associated with any acquisition, there can be no assurance that we will be successful in achieving our expected strategic, operating, and financial goals for any such acquisition.

Variability of Our Quarterly Revenues and Our Failure to Meet Revenue and Earnings Expectations Would Negatively Affect the Market Price for Our Common Stock.

Variability in quarterly revenues and operating results are inherent characteristics of the software and professional services industries. Common causes of a failure to meet revenue and operating expectations in these industries include, among others:

• The inability to close and/or recognize revenue on one or more material transactions that may have been anticipated by management in any particular period;

• The inability to renew timely one or more material software maintenance agreements, or renewing such agreements at lower rates than anticipated; and

• The inability to complete timely and successfully an implementation project and meet client expectations, due to factors discussed in greater detail below.

We expect software license, software maintenance services, and professional services revenues to become an increasingly larger percentage of our total revenues in the future. As our total revenues grow, so too does the risk associated with meeting financial expectations for revenues derived from our software licenses, software maintenance services, and professional services offerings. As a result, there is a proportionately increased likelihood that we may fail to meet revenue and earnings expectations of the investment community. Should we fail to meet analyst expectations, by even a relatively small amount, it would most likely have a disproportionately negative impact upon the market price of our common stock.

The Delivery of Our Solutions is Dependent on a Variety of Computing Environments and Communications Networks Which May Not Be Available or May Be Subject to Security Attacks.

Our processing services are generally delivered through a variety of computing environments operated by us, which we will collectively refer to herein as “Systems.” We provide such computing environments through both outsourced arrangements, such as our current data processing arrangement with Infocrossing, as well as internally operating numerous distributed servers in geographically dispersed environments. The end users are connected to our Systems through a variety of public and private communications networks, which we will collectively refer to herein as “Networks.” Our solutions are generally considered to be mission critical customer management systems by our clients. As a result, our clients are highly dependent upon the high availability and uncompromised security of our Networks and Systems to conduct their business operations.

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Our Networks and Systems are subject to the risk of an extended interruption or outage due to many factors such as: (i) planned changes to our Systems and Networks for such things as scheduled maintenance and technology upgrades, or migrations to other technologies, service providers, or physical location of hardware; (ii) human and machine error; (iii) acts of nature; and (iv) intentional, unauthorized attacks from computer “hackers.”

In addition, we continue to expand our use of the Internet with our product offerings thereby permitting, for example, our clients’ customers to use the Internet to review account balances, order services or execute similar account management functions. Allowing access to our Networks and Systems via the Internet has the potential to increase their vulnerability to unauthorized access and corruption, as well as increasing the dependency of our Systems’ reliability on the availability and performance of the Internet and end users’ infrastructure they obtain through other third party providers.

The method, manner, cause and timing of an extended interruption or outage in our Networks or Systems are impossible to predict. As a result, there can be no assurances that our Networks and Systems will not fail, or that our business continuity plans will adequately mitigate the negative effects of a disruption to our Networks or Systems. Further, our property and business interruption insurance may not adequately compensate us for losses that we incur as a result of such interruptions. Should our Networks or Systems: (i) experience an extended interruption or outage, (ii) have their security breached, or (iii) have their data lost, corrupted or otherwise compromised, it would impede our ability to meet product and service delivery obligations, and likely have an immediate impact to the business operations of our clients. This would most likely result in an immediate loss to us of revenue or increase in expense, as well as damaging our reputation. An information breach in our Systems or Networks and loss of confidential information such as credit card numbers and related information could have a longer and more significant impact on our business operations than a hardware-related failure. The loss of confidential information could result in losing the customers’ confidence, as well as imposition of fines and damages. Any of these events could have both an immediate, negative impact upon our financial position and our short-term revenue and profit expectations, as well as our long-term ability to attract and retain new clients.

The Occurrence or Perception of a Security Breach or Disclosure of Confidential Personally Identifiable Information Could Harm Our Business.

In providing processing services to our customers, we process, transmit, and store confidential and personally identifiable information, including social security numbers and financial and health information. Our treatment of such information is subject to contractual restrictions and federal, state, and foreign data privacy laws and regulations. We have implemented measures to protect against unauthorized access to such information, and comply with these laws and regulations. These measures include standard industry practices such as periodic security reviews of our systems by independent parties, network firewalls, procedural controls, intrusion detection systems and antivirus applications. Because of the inherent risks and complexities involved in protecting this information, these measures may fail to adequately protect this information. Any failure on our part to protect the privacy of personally identifiable information or comply with data privacy laws and regulations may subject us to contractual liability and damages, loss of business, damages from individual claimants, fines, penalties, criminal prosecution, and unfavorable publicity. Even the mere perception of a security breach or inadvertent disclosure of personally identifiable information could inhibit market acceptance of our solutions. In addition, third party vendors that we engage to perform services for us may unintentionally release personally identifiable information or otherwise fail to comply with applicable laws and regulations. The occurrence of any of these events could have an adverse effect on our business, financial position, and results of operations.

We May Not Be Able to Respond to Rapid Technological Changes.

The market for customer interaction management solutions, such as customer care and billing solutions, is characterized by rapid changes in technology and is highly competitive with respect to the need for timely product innovations and new product introductions. As a result, we believe that our future success in sustaining and growing our revenues depends upon: (i) our ability to continuously adapt, modify, maintain, and operate our solutions to address the increasingly complex and evolving needs of our clients, without sacrificing the reliability or quality of the solutions; (ii) the integration of the Intec assets and its widely distributed, complex worldwide operations; and (iii) the integration of other acquired technologies such as rating, wholesale billing, customer intelligence with ACP, as well as creating an integrated suite of customer care and billing solutions, which are portable to new verticals such as utilities, healthcare, home security, financial services, and

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content distribution. In addition, the market is demanding that our solutions have greater architectural flexibility and interoperability, and that we are able to meet the demands for technological advancements to our solutions at a greater pace. Attempts to meet these demands subjects our R&D efforts to greater risks.

As a result, substantial R&D will be required to maintain the competitiveness of our solutions in the market. Technical problems may arise in developing, maintaining and operating our solutions as the complexities are increased. Development projects can be lengthy and costly, and may be subject to changing requirements, programming difficulties, a shortage of qualified personnel, and/or unforeseen factors which can result in delays. In addition, we may be responsible for the implementation of new solutions and/or the migration of clients to new solutions, and depending upon the specific solution, we may also be responsible for operations of the solution.

There is an inherent risk in the successful development, implementation, migration, and operations of our solutions as the technological complexities, and the pace at which we must deliver these solutions to market, continue to increase. The risk of making an error that causes significant operational disruption to a client, or results in incorrect customer or vendor billing calculations we perform on behalf of our clients, increases proportionately with the frequency and complexity of changes to our solutions and new delivery models. There can be no assurance: (i) of continued market acceptance of our solutions; (ii) that we will be successful in the development of enhancements or new solutions that respond to technological advances or changing client needs at the pace the market demands; or (iii) that we will be successful in supporting the implementation, migration and/or operations of enhancements or new solutions.

Our International Operations Subject Us to Additional Risks.

We currently conduct a portion of our business outside the United States. We are subject to certain risks associated with operating internationally including the following items:

• Difficulties with product development meeting local requirements;

• Fluctuations in foreign currency exchange rates for which a natural or purchased hedge does not exist or is ineffective;

• Difficulties in staffing and managing foreign operations;

• Longer sales cycles for new contracts;

• Longer collection cycles for client billings or accounts receivable, as well as heightened client collection risks, especially in countries with highly inflationary economies and/or with restrictions on the movement of cash out of the country;

• Trade barriers;

• Difficulties in complying with varied legal and regulatory requirements across jurisdictions;

• Reduced protection for intellectual property rights in some countries;

• Inability to recover value added taxes and/or goods and services taxes in foreign jurisdictions;

• Political instability and threats of terrorism; and

• A potential adverse impact to our overall effective income tax rate resulting from, among other things:

• Operations in foreign countries with higher tax rates than the United States;

• The inability to utilize certain foreign tax credits; and

• The inability to utilize some or all of losses generated in one or more foreign countries.

One or more of these factors could have a material adverse effect on our international operations, which could adversely impact our results of operations and financial position.

Our Use of Open Source Software May Subject Us to Certain Intellectual Property-Related Claims or Require Us to Re-Engineer Our Software, Which Could Harm Our Business.

We use open source software in connection with our solutions, processes, and technology. Companies that use or incorporate open source software into their products have, from time to time, faced claims challenging their use, ownership and/or licensing rights associated with that open source software. As a result, we could be subject to suits by parties claiming certain rights to what we believe to be open source software. Some open source software licenses require users who distribute open source software as part of their software to publicly disclose all or part of the source code in their software

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and make any derivative works of the open source code available on unfavorable terms or at no cost. In addition to risks related to license requirements, use of open source software can lead to greater risks than use of third party commercial software, as open source licensors generally do not provide warranties, support, or controls with respect to origin of the software. While we take measures to protect our use of open source software in our solutions, open source license terms may be ambiguous, and many of the risks associated with usage of open source software cannot be eliminated. If we were found to have inappropriately used open source software, we may be required to release our proprietary source code, re-engineer our software, discontinue the sale of certain solutions in the event re-engineering cannot be accomplished on a timely basis, or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business, financial position, and results of operations.

The Current Macroeconomic Environment Could Adversely Impact Our Business.

Over the past few years, major economies where we operate have experienced significant economic stress and difficulties within the financial and credit markets. The timing, duration, and degree of an economic turnaround are uncertain and thus, these adverse economic conditions may continue into the foreseeable future. The possible adverse impacts to companies during these times include a reduction in revenues, decreasing profits and cash flows, distressed or default debt conditions, and/or difficulties in obtaining necessary operating capital. All companies are likely to be impacted by the current economic downturn to a certain degree, including CSG, our clients, and/or key vendors in our supply chain. There can be no assurances regarding the performance of our business, and the potential impact to our clients and key vendors, resulting from the current economic conditions.

A Reduction in Demand for Our Key Customer Care and Billing Solutions Could Have a Material Adverse Effect on Our Financial Position and Results of Operations.

Historically, a substantial percentage of our total revenues have been generated from our core outsourced processing product, ACP, and related solutions. These solutions are expected to continue to provide a large percentage of our total revenues in the foreseeable future. Any significant reduction in demand for ACP and related solutions could have a material adverse effect on our financial position and results of operations. Likewise, a large percentage of revenues derived from the Intec business have been derived from wholesale billing, retail billing and mediation products which are typically associated with large implementation projects. A sudden downward shift in demand for these products or for our professional services engagements for these products could have a material adverse effect on our financial position and results of operations.

We May Not Be Able to Efficiently and Effectively Implement New Solutions or Convert Clients onto Our Solutions.

Our continued growth plans include the implementation of new solutions, as well as converting both new and existing clients to our solutions. Such implementations or conversions, whether they involve new solutions or new customers, have become increasingly more difficult because of the sophistication, complexity, and interdependencies of the various computing and network environments impacted, combined with the increasing complexity of the underlying business processes. In addition, the complexity of the implementation work increases when the arrangement includes additional vendors participating in the overall project, including, but not limited to, prime and subcontractor relationships with our company. For these reasons, there is a risk that we may experience delays or unexpected costs associated with a particular implementation or conversion, and our inability to complete implementation or conversion projects in an efficient and effective manner could have a material adverse effect on our results of operations.

Our Business is Dependent Upon the Economic and Market Condition of the Global Communications Industry.

Since the majority of our clients operate within this industry sector, the economic state of this industry directly impacts our business. The global communications industry has undergone significant fluctuations in growth rates and capital investment cycles in the past decade. Current economic indices suggest a slow stabilization of the industry, but it is impossible to predict whether this stabilization will persist or be subject to future instability. In addition, consolidation amongst providers continues as service providers look for ways to expand their markets and increase their revenues.

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Continued consolidation, a significant retrenchment in investment by communications providers, or even a material slowing in growth (whether caused by economic, competitive or consolidation factors) could cause delays or cancellations of sales and services currently included in our forecasts. This could cause us to either fall short of revenue expectations or have a cost model that is misaligned with revenues, either or both of which could have a material adverse effect on operations and financial results.

More specific, approximately 60% of our future revenues are expected to be generated from our North American cable and DBS operations. These clients operate in a highly competitive environment. Competitors range from traditional wireline and wireless providers to new entrants like new content aggregators such as Hulu, YouTube, and Netflix. Should these competitors be successful in their video strategies, it could threaten our clients’ market share, and thus our source of revenues, as generally speaking these companies do not use our core solutions and there can be no assurance that new entrants will become our clients. In addition, demand for spectrum, network bandwidth and content continues to increase and any changes in the regulatory environment could have a significant impact to not only our clients’ businesses, but in our ability to help our clients be successful.

We Face Significant Competition in Our Industry.

The market for our solutions is highly competitive. We directly compete with both independent providers and in-house solutions developed by existing and potential clients. In addition, some independent providers are entering into strategic alliances with other independent providers, resulting in either new competitors, or competitors with greater resources. Many of our current and potential competitors have significantly greater financial, marketing, technical, and other competitive resources than our company, many with significant and well-established domestic and international operations. There can be no assurance that we will be able to compete successfully with our existing competitors or with new competitors.

Failure to Protect Our Intellectual Property Rights or Claims by Others That We Infringe Their Intellectual Property Rights Could Substantially Harm Our Business, Financial Position and Results of Operations.

We rely on a combination of trade secret, copyright, trademark, and patent laws in the United States and similar laws in other countries, and non-disclosure, confidentiality, and other types of contractual arrangements to establish, maintain, and enforce our intellectual property rights in our solutions. Despite these measures, any of our intellectual property rights could be challenged, invalidated, circumvented, or misappropriated. Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information. Others may independently discover trade secrets and proprietary information, and in such cases we could not assert any trade secret rights against such parties. Costly and time consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. In addition, the laws of certain countries do not protect proprietary rights to the same extent as the laws of the United States. Therefore, in certain jurisdictions, we may be unable to protect our proprietary technology adequately against unauthorized third party copying or use, which could adversely affect our competitive position.

Although we hold a limited number of patents and patent applications on some of our newer solutions, we do not rely upon patents as a primary means of protecting our rights in our intellectual property. In any event, there can be no assurance that our patent applications will be approved, that any issued patents will adequately protect our intellectual property, or that such patents will not be challenged by third parties. Also, much of our business and many of our solutions rely on key technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties at all or on reasonable terms.

Finally, third parties may claim that we, our customers, licensees or other parties indemnified by us are infringing upon their intellectual property rights. Even if we believe that such claims are without merit, they can be time consuming and costly to defend and distract management’s and technical staff’s attention and resources. Claims of intellectual property infringement also might require us to redesign affected solutions, enter into costly settlement or license agreements or pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our solutions. Even if we have an agreement to indemnify us against such costs, the indemnifying party may be unable to uphold its contractual obligations. If we cannot or do not license the infringed technology on reasonable pricing terms or at all, or substitute similar

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technology from another source, our business, financial position, and results of operations could be adversely impacted. Our failure to adequately establish, maintain, and protect our intellectual property rights could have a material adverse impact on our business, financial position, and results of operations.

Client Bankruptcies Could Adversely Affect Our Business.

In the past, certain of our clients have filed for bankruptcy protection. As a result of the current economic conditions and the additional financial stress this may place on companies, the risk of client bankruptcies is significantly heightened. Companies involved in bankruptcy proceedings pose greater financial risks to us, consisting principally of the following: (i) a financial loss related to possible claims of preferential payments for certain amounts paid to us prior to the bankruptcy filing date, as well as increased risk of collection for accounts receivable, particularly those accounts receivable that relate to periods prior to the bankruptcy filing date; and/or (ii) the possibility of a contract being unilaterally rejected as part of the bankruptcy proceedings, or a client in bankruptcy may attempt to renegotiate more favorable terms as a result of their deteriorated financial condition, thus, negatively impacting our rights to future revenues subsequent to the bankruptcy filing. We consider these risks in assessing our revenue recognition and our ability to collect accounts receivable related to our clients that have filed for bankruptcy protection, and for those clients that are seriously threatened with a possible bankruptcy filing. We establish accounting reserves for our estimated exposure on these items which can materially impact the results of our operations in the period such reserves are established. There can be no assurance that our accounting reserves related to this exposure will be adequate. Should any of the factors considered in determining the adequacy of the overall reserves change adversely, an adjustment to the accounting reserves may be necessary. Because of the potential significance of this exposure, such an adjustment could be material.

We May Incur Material Restructuring Charges in the Future.

In the past, we have recorded restructuring charges related to involuntary employee terminations, various facility abandonments, and various other restructuring activities. We continually evaluate ways to reduce our operating expenses through new restructuring opportunities, including more effective utilization of our assets, workforce, and operating facilities. As a result, there is a risk, which is increased during economic downturns and with expanded global operations, that we may incur material restructuring charges in the future.

Substantial Impairment of Goodwill and Other Long-lived Assets in the Future May Be Possible.

As a result of various acquisitions and the growth of our company over the last several years, we have approximately $209 million of goodwill, and $181 million of long-lived assets other than goodwill (principally, property and equipment, software, and client contracts). These long-lived assets are subject to ongoing assessment of possible impairment summarized as follows:

• Goodwill is required to be tested for impairment on an annual basis. We have elected to do our annual test for possible impairment as of July 31 of each year. In addition to this annual requirement, goodwill is required to be evaluated for possible impairment on a periodic basis (e.g., quarterly) if events occur or circumstances change that could indicate a possible impairment may have occurred.

• Long-lived assets other than goodwill are required to be evaluated for possible impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.

We utilize our market capitalization and/or cash flow models as the primary basis to estimate the fair value amounts used in our goodwill and other long-lived asset impairment valuations. If an impairment was to be recorded in the future, it would likely materially impact our results of operations in the period such impairment is recognized, but such an impairment charge would be a non-cash expense, and therefore would have no impact on our cash flows, or on the financial position of our company.

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Failure to Attract and Retain Our Key Management and Other Highly Skilled Personnel Could Have a Material Adverse Effect on Our Business.

Our future success depends in large part on the continued service of our key management, sales, product development, professional services, and operational personnel. We believe that our future success also depends on our ability to attract and retain highly skilled technical, managerial, operational, and marketing personnel, including, in particular, personnel in the areas of R&D, professional services, and technical support. Competition for qualified personnel at times can be intense, particularly in the areas of R&D, conversions, software implementations, and technical support. This risk is heightened with a widely dispersed customer base and employee populations. For these reasons, we may not be successful in attracting and retaining the personnel we require, which could have a material adverse effect on our ability to meet our commitments and new product delivery objectives.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information with respect to purchases of company common stock made during the third quarter of 2011 by CSG Systems International, Inc. or any “affiliated purchaser” of CSG Systems International, Inc., as defined in Rule 10b-18(a)(3) under the Exchange Act.

Period	Total Number of Shares Purchased1		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs
July 1 - July 31		5,116	$	18.60		—		4,204,096
August 1 - August 31		236,561		13.40		231,711		3,972,385
September 1 - September 30		347,329		13.15		346,500		3,625,885
Total		589,006	$	13.30		578,211

¹  The total number of shares purchased that are not part of the Stock Repurchase Program represents shares purchased and cancelled in connection with stock incentive plans.

Item 3. Defaults Upon Senior Securities

None

Item 4. (Removed and Reserved)

None

Item 5. Other Information

None

Item 6. Exhibits

The Exhibits filed or incorporated by reference herewith are as specified in the Exhibit Index.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 8, 2011

CSG SYSTEMS INTERNATIONAL, INC.

/s/ Peter E. Kalan

Peter E. Kalan

Chief Executive Officer and President

(Principal Executive Officer)

/s/ Randy R. Wiese

Randy R. Wiese

Executive Vice President, Chief Financial Officer, and Chief Accounting Officer

(Principal Financial Officer and Principal Accounting Officer)

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CSG SYSTEMS INTERNATIONAL, INC.

INDEX TO EXHIBITS

Exhibit Number	Description
10.21D*	Eighth Amendment to the Restated and Amended CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Comcast Cable Communications Management, LLC
10.21E*	Ninth Amendment to the Restated and Amended CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Comcast Cable Communications Management, LLC
10.23H*	Fifteenth Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Dish Network L.L.C.
31.01	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* Portions of the exhibit have been omitted pursuant to an application for confidential treatment, and the omitted portions have been filed separately with the Commission.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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EX-10.21D

EXHIBIT 10.21D

Pages where confidential treatment has been requested are stamped “Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission,” and places where information has been redacted have been marked with (***).

EIGHTH AMENDMENT

TO THE

RESTATED AND AMENDED

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC

This EIGHTH AMENDMENT (the “Amendment”) is made by and between CSG Systems, Inc. (“CSG”) and Comcast Cable Communications Management, LLC (“Customer”). The Effective Date of this Amendment is the date last signed below. CSG and Customer entered into a certain Restated and Amended CSG Master Subscriber Management System Agreement (CSG document #2296663) dated July 1, 2008 (the “Agreement”) and now desire to amend the Agreement in accordance with the terms and conditions set forth in this Amendment. If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control. Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement. Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment. Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

CSG and Customer agree to the following as of the Effective Date:

1. Intelligent Business Reporting:

(a) Customer desires to use CSG’s Intelligent Business Reporting (“IBR”) service. As a result, Schedule C of the Agreement, entitled “Recurring Services” is amended by adding the following:

“Intelligent Business Reporting”

(b) Schedule C, entitled “Recurring Services” of the Agreement shall be amended by adding Exhibit C-13 which is attached hereto and incorporated by this reference.

(c) The following processes shall be used to deploy IBR, add/change IBR components, and discontinue IBR components.

(i) Initial Implementation. The initial implementation of IBR shall be defined in a statement of work (“SOW”). The SOW shall specify: (i) the scope of the initial deployment including the number of users for Pilot and GA environments if applicable, and the number and description of the InfoCast Web Reports, InfoCast Alerts, Interactive Reports, or InfoCast files to be deployed; and (ii) pricing for implementation, along with mutually agreeable schedule and project milestones.

(ii) Additional IBR Subscriptions. Additional report /alert subscriptions shall be identified and defined in a statement of work consistent with the content defined in 2(a) of this Amendment.

(iii) Additional IBR Users. Customer requests additional IBR Users through an approved Service Request Form (“SRF”).

(iv) Administrative Changes. Customer may from time to time request CSG to delete or otherwise modify IBR Users, or modify execution schedules for InfoCast Reports, Alerts or Files. Such requests are documented through an SRF, allowing three (3) business days for completion. Each such change shall be a “User Administration Change.”

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

(v) Technical Services. Customer may request technical services from CSG for development or enhancement of reports, alerts, or InfoCast Files. Customer may also request other data activities required to meet Customer’s specific requirements pursuant to a letter of authorization (“LOA”) or SOW to commence services. Customer shall have no right or claim to any software, logic, or documentation arising from CSG’s delivery of such technical services.

(vi) Discontinuing IBR Components. Customer may discontinue one or more IBR components through an approved SRF received by CSG no less than ***** (**) **** prior to the requested date for discontinuance.

(vii) As a result of the addition of IBR, Schedule F, “Fees,” section entitled “CSG SERVICES,” Section I entitled “Processing,” by adding a new subsection H entitled “CSG Intelligent Business Reporting (“IBR”)” as follows which shall include the following fees effective for services rendered after ******* *, ****:

H. CSG Intelligent Business Reporting (IBR) (Note 1)

Description of Item/Unit of Measure	Frequency	Fee
1.      InfoCast Web Reports/InfoCast Alerts (******* ****.** *** *****, ***** ** *** ********* **** ******* **** *** ****** *********** ****) (**** *)
a.      User License (per Named User) (**** *)	*******	**.**
b.      Report Maintenance
•    Basic Reports (*** ******/*** ******* ******) (**** *)	*******	***.**
•    Advanced Reports (*** ******/ *** ******* ******) (**** *)	*******	****.**
c.      InfoCast Alerts (*** ********* ********* *** ******* ******) (**** *)	******* *** ********* *********	**.**
d.      Implementation (*** ******* ******)	*** *******	**,***
2.      InfoCast Files
a.      File Maintenance Fee (*** ****/*** ******* ******)	*******	****
b.      File Maintenance Corporate Fee (*** **** *** ********* ******** *** *** ******** ******* *******) (**** *)	*******	****
c.      Implementation (*** ******* ******)	*** *******	*****
d.      Restoration Fee	*** **********	****
3.      Interactive Reports (******* ** **,*** *** *****, ***** ** *** ********* **** ******** *** *********** ****** ****)
a.      User License (*** ***** ****) (**** *)	*******	***.**
b.      Interactive Reports (*** ***** ****)	*******	***
c.      Implementation (*** ******* ******)	*** *******	***,***.**

**** *: *** ******* ****. **** ***** *** **** ******* ******** *** *** *** ******** ***** ** *** ****** ** *** ***** *** ************* ********** ** *** *** ******* ** ** *** ******-***** (****) *** ** **** ******** *****, ** *** ***** ******** ** *** ***** *****. ********’* ******* **** *** *** ******** **** **** ******* ******* **** *** ******** *******, *** **** ** *** ****** ****** ******* ** *** ******-***** (****) *** ** *** ***** ******* *** ******** ********* ********* ** **** * (*****), *** **** *** **** ************** ******* **** *** ******-****** (****) *** ** *** ******** ***** ******* *** ******-***** (****) *** ** *** ******* *****, ** *** ****** *** ****** ** **** ************** ******* ******* *** ******* *********, ******** ** **** * (*****).

**** *: ******-**** (**) ********* ** ******* *** ********. *********** ***** ***** ***** *** ******* ** ****** ** ******-**** (**) *********.

**** *: ******* (**) **** ************** ******* *** ***** (**** *** ******-****** (****) *** ** *** ******** ***** ** *** ******-***** (****) *** ** *** ******* *****) *** ********. **** ************** ******* **** ** ** *** **** ** ***.** *** ********** *** **** ************** ******* ** ****** ** ******* (**) *** *****.

**** *: ***** ** ** *********** *** ** ***.** *** ***** *** ******** *******.

**** *: ** ******* ** *** ******* ********* ********** ** ******** ******: ******** ******* ** **** *** ******** ** ***** ** ***** *** ******* ******** ** * ********* ********* * *** ** ****** * ************. *** ****** ** ********* ********** ***** ** */***. *** ******* ******* ******** ** *** ******** **** ** ***** ** *** ****** ** ********* ****** *** * ***** ******* ******.

**** *: * ****** ** ******* ** * ********** ** ******** ******** ************ * ****** *** ********* ********. ********** ******* ***** ** ******* ********** ** *** ********* ** **** ********* **** ******* ********** **** ** ********* ** * ********* ** ****(*).

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

(d) IBR Bundle. Customer may choose to participate in an ********* ***** (“IBR Bundle”) ** ********* ********’* *** ** *** *** *******.

The IBR Bundle shall include:

• ** ** ** *** ***** *** Vantage Schema

- Includes an aggregation of InfoCast and Interactive Users

• ** ** ** *********** ******* *** Vantage Schema

• ** ** ** ******** ******* *** Vantage Schema

- **** ****** ** ******** ** ** ** ** *** ** ******* *** ******** ******* *** ******* ******

• *** ***** **** ********* ** ** *** ***** ** *** *********** *** **** *** *** ******* ***** (*) ***** *** **** ************* *** ****** (******). ***** *** ***** *** ** ** **** *********** *** *** ****** *********** *** ***** ** ************* ***** *** ****** ** ***** ****** *,*** ****** *** ****** *********** ***** *** *** ********’* ****** **********.

For each participating market, CSG will provide the IBR Bundle for the lesser of the Term of the Agreement or initial ***** (*) ***** of subscription to the IBR Bundle (“*** ********* *********** ******”). **** *** ********** ** *** ******* ************ ******, ******** **** ****** **** ** ******* ******* ** ******** *.

*** *** *** ******, *** ***** ****’* ************ ** ***,*** *** ******* ****** (******); ******** ** * ******* ****** *** ** ***,*** *** ******* ****** (******) *** **** ********* **** **********. ** *** ***** **** *** ****** ****** ** ********* ** ******* ***/** ***** ** ****** ** **** ** ******** ** *** *** ******, *** ********** **** ** ********** ** ******** * ** *** ********* ** ******* **** *****.

2. Change in Report File Delivery for CSG Production Reports Versus CD ROM

Customer has previously provided a Service Request Form to CSG to discontinue the delivery of CD ROM/DVD for report archives for all markets. In exchange, CSG provided a file transfer protocol for all markets’ production reports to the Customer’s third party vendor of choice for report archival. **** ****** *** *** ***** *****.

Pursuant to this Amendment, CSG and Customer formally agree that CSG will no longer create and/or deliver physical CD Rom/DVD for Customer’s production reports, and is no longer obligated to retain and distribute CD Rom/DVDs produced prior to effective date of this Amendment. Instead, CSG will continue to deliver report files to *** ***** ***** on behalf of the Customer. In the event that Customer chooses to direct report files to an alternative third party vendor of its choice, or elects to use a CSG web reporting application for report archiving, Customer will provide CSG with ****** (**) **** notice prior to the desired project implementation via a Service Request Form.

The parties agree that CSG will retain no less than *** (*) and no more than ***** (*) ****** of production report data to support Customer’s business. Should CSG have need to access report data no longer retained by CSG and then make this need known to Customer, Customer shall access applicable reports from Customer’s chosen third party vendor and make such reports available to CSG in a timely manner. If Customer requests CSG to retain data for a longer period of time, Customer agrees that it shall do so via a written request to CSG, CSG will then start the retention of production reporting data beyond the ***** (*) ******, but no more than ***** (*) ***** via CSG’s web reporting application (Vantage Plus). In such an event CSG and Customer agree that access shall be for no more than ******-**** Users and the data shall be provided in a HTML/PDF format. Should Customer desire to access any additional functionality from CSG’s Vantage Plus application, CSG and Comcast shall negotiate in good faith an amendment to the Agreement with fees.

3. As a result of the change in report file delivery as described in Section 2 above, CSG and Customer agree to amend Schedule F of the Agreement by deleting bullet 6 of subsection B entitled “Listing of Products and

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Services included in the BSC,” of the section entitled “CSG Services, Section I, Processing” and replacing with the paragraph below.

For clarification purposes, the following sixth bullet item of subsection B is being added pursuant to this Amendment:

• Direct reports via FTP. CSG shall provide direct reports to Customer’s chosen third party vendor via file transfer protocol (“FTP”). ******** ** *** *** ** *** *** ********* ********* ****** ****** ***** ** **** *** ***** ***** ******. In providing such service, CSG will also retain no less than *** (*) and no more than ***** (*) ****** of production report data to support Customer’s business for internal research purposes.

In the event Customer chooses to use CSG’s Vantage Plus application for archiving instead of a third party vendor, CSG will provide basic archival services to Customer with the parameters defined in Section 2. Refer to Section 2 entitled “Change in Report File Delivery for CSG Production Reports Versus CD ROM” in the 8th Amendment (CSG document number 2303442) for the manner in which fees shall be determined in relation to associated with Direct reports via FTP that will be billed separately

For clarification purposes, the following sixth bullet item of subsection B is being deleted pursuant to this Amendment:

• Original CD or DVD archival for reports. **** *** ******** **** ** *** *** ******** ******** *******, ****** ** ** ***, *** **** ******** ** *** ***. In the event that Customer is utilizing more than one archival medium, CSG will bill Customer CSG’s then current rate for the additional archival medium that are being utilized. Refer to Section I.D.4 under CSG SERVICES for the fees associated with duplicate CD and DVD copies that will be billed separately. CDs and DVDs for reports have search/find capabilities. The Parties acknowledge that such capabilities currently exist for reports as of the Effective Date.

4. Amendment to Statement of Work Templates in Agreement

Customer desires to amend the Statement of Work Templates in the Agreement to remove the Service Type section. Therefore, CSG and Customer hereby agree to amend Exhibits E-5 and E-6 of the Agreement to remove the Service Type section from the Statement of Work templates pursuant to the attached Exhibits E-5 and E-6.

5. Customer desires to use, and CSG agrees to provide Customer, access to CSG’s Customer Value Optional Table in CSG Vantage^®, access to CSG’s UDF Cards 1-143 Vantage Optional Table in CSG Vantage^®, and access to CSG’s Total Service Code Statistics Optional Table in CSG Vantage^®.

(a) As a result, Schedule C of the Agreement, entitled “RECURRING SERVICES,” is amended by adding the following:

Customer Value Optional Table in CSG Vantage^®

CSG’s UDF Cards 1-143 Vantage Optional Table

Total Service Code Statistics Optional Table in CSG Vantage^®

(b) Schedule C, entitled “Recurring Services” of the Agreement, shall be amended by adding Exhibits C-14, C-15 and C-16 which are attached hereto and incorporated by this reference.

(c) Schedule F, “Fees,” section entitled “CSG SERVICES,” Section I entitled “Processing,” is amended by adding a new subsection I entitled “CSG Vantage setup and database modifications and other services,” as follows:

I. CSG Vantage setup and database modifications and other services

Description of Item/Unit of Measure	Frequency	Fee
1.      Customer Value Vantage Optional Table (**** *)
a)      Setup (*** ******* ******)	***-****	***,***.****
b)      Support Fee (*** ***)	*******	***.****
2.      UDF Cards 1-143 Vantage Optional Table
a)      Setup (*** ******* ******)	***-****	***,***.****
3.      Total Service Code Statistics Optional Table Optional Table (**** *)
a)      Setup (*** ******* ******)	***-****	***,***.****
b)      Support Fee (*** ***) (**** *)	*******	***.****

**** *: **** *** ***** ** *** *** ******* ******.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

**** *: ******* **** ** ****** ** ** **** *******. ** ******** ******** ********* ****** ** ****, *** ******* *** **** *****.

(d) *** *** ******** ***** **** *** ******** ***** ******** ***** ** *** ******* ** ******* ** *** **** ******** *** ******** *** *** ******* *********** ********* *** ******** ** *** ***** ** ******** * ** *** *********. ** ******** ******** *** *** ***** **** ** *** ****** ** *** *** *** ******* ******* ** *********** ******** **** ** ******** **** **** *** ****** ********** ** *** ****** ** ***** ******* ******** ** ************

6. If Customer executes this Amendment prior to or on **** **, ****, from the Effective Date of this Amendment through ******** **, ****, for Markets that desire to use the Customer Value Vantage Optional Table, UDF Cards 1-143 Optional Table and Total Service Code Statistics Optional Table, as listed in Section 5 above, *** ***** ******* *** ***** *** **,***.** (*** *****, *** ******* ******). Beginning ******* *, **** and through the remaining Term of the Agreement the setup listed in Sections 5(c) above shall apply.

7. CSG Vantage^® User IDs

(a) CSG’s licensing model with its third party vendor for the sale of ****** ******** has changed so that CSG no longer sublicenses ****** ******** to its customers. This change does not impact the services, fees or functional availability for CSG or Customer. CSG and Customer agree that all ****** ******** sublicensed by CSG to Customer as of the Effective Date of this Amendment shall be ********* for * **** ****** ** Vantage User IDs. A Vantage User ID provides Customer with access to the necessary interfaces, infrastructure and functionality to access Vantage.

(b) Schedule F, “Fees,” section entitled “CSG SERVICES,” Section I.I entitled “CSG Vantage setup and database modifications and other services” is modified by adding the following thereto:

Description of Item/Unit of Measure	Frequency	Fee
4.      CSG Vantage User IDs
a)      Vantage User ID (*** **** **/*** *******) (**** *-*)	*** *******	****.**
b)      Vantage User Maintenance (*** **** **/*** *******)	********	****.**

**** *: ******** ******** ** ***** ***** ******** ******** ** ****** *** ******* ********.

**** *: * ******* **** ** *** ******* *** (*) ** ******** ********. *** *******, * *** (**) ******* ******* **** ** *** ****** ** ** *** (**) ******* ************** ***** * ****** ******* **** **.

8. CSG Vantage^® Support Services. As a result of the addition of the new CSG Vantage^® Services pursuant to this Amendment, Schedule H, entitled “SUPPORT SERVICES FOR THE PRODUCTS,” Subsection III. entitled “CSG Vantage Support Services (which for purposes of this subsection shall include VNRT),” Subsection entitled “Optional Services for Vantage” shall be amended to add the following:

13. Customer Value Optional Table in CSG Vantage^®

14. CSG’s UDF Cards 1-143 Vantage Optional Table

15. Total Service Code Statistics Optional Table in CSG Vantage^®

9. All fees provided in this Amendment are subject to increase as provided in Section 5.4 entitled “Adjustment to Fees.” of the Agreement, unless specifically stated otherwise in this Amendment.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC (“CUSTOMER”)		CSG SYSTEMS, INC. (“CSG”)
By:	/s/    Andrew Barr	By:	/s/    Joseph T. Ruble
Name:	Andrew Barr	Name:	Joe Ruble
Title:	SVP & CIO	Title:	EVP-General Counsel
Date:	8/2/2011	Date:	8-4-11

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Exhibit C-13

Intelligent Business Reporting

(a) IBR Service Description. IBR is a business intelligence service offering that provides Customer with access to information from the CSG Vantage^® data store. The IBR application provides information through (i) Interactive Reports, (ii) InfoCast Web Reports, (iii) InfoCast Alerts, and (iv) InfoCast Files, as defined below.

Interactive Reports

Interactive Reports are pre-defined, web-based reporting templates and/or dashboards hosted by CSG. An Interactive Report allows each Customer-designated user to customize a pre-defined report through such user’s selection of filtering parameters and sorting options. The user also can view the output in HTML or in formats that can be downloaded to the user’s desktop (e.g., Excel or PDF). To the extent that “drill-down” capabilities are available in selected reports, the user has the ability to isolate particular records of interest. Parameter selections made by a user can be stored by the user for subsequent reuse.

InfoCast Web Reports

InfoCast Web Reports are scheduled reports that are delivered to a report library hosted by CSG, and retained in the library on behalf of Customer based on Customer-provided configurable retention parameters. Default storage settings are ***** (*) **** *** *****, ******** (**) **** *** ******, *** ******-*** (**) **** *** ******* *******. Customer-designated users access the InfoCast Web Reports through a web interface. InfoCast Web Reports can be burst for multiple Customer-designated users based on Customer-designated criteria established in the report (e.g., by sales rep) and an email notification can be sent to the report recipient to advise that a selected InfoCast Web Report is available in the library. Customer may be subject to additional charges if the storage space required to retain InfoCast Web Reports on behalf of Customer exceeds the allotted storage defined in Schedule F of the Agreement (as amended by this Amendment).

Two levels of InfoCast Web Reports are available to Customer, based on Customer’s requested level of ongoing support.

• Advanced Reports are developed and maintained by CSG through software release changes.

• Basic Reports are typically less complex than Advanced Reports and may also be developed to meet a Customer-specific need. Customer may provide CSG with the reporting logic (e.g., SQL statements) for a Basic Report or choose to have CSG author the reporting logic. Customer is responsible for engaging CSG through a technical services agreement to enhance or modify an existing Basic Report if/when the underlying Vantage objects change.

Both Basic and Advanced Reports can be scheduled to run intraday, daily, weekly, monthly, or at Customer-specified intervals. The standard lead time for development of Basic Reports is ***** (*) ******** **** *** ****** (**) ******** **** for Advanced Reports. Each format (Excel, HTML, AHTML, PDF) represents an InfoCast Web Report.

InfoCast Alerts

InfoCast Alerts are email alerts created when certain conditions are recognized in the Vantage data (e.g., **** **** *** (**) ******* **** **** created for the same headend on a given day). InfoCast Alerts can be scheduled to run intraday, daily, weekly, monthly, or at Customer-specified intervals. Each execution of the application logic is considered an application execution for the purposes of billing.

InfoCast Files

InfoCast Files are scheduled applications that create data extracts which are compressed, (if necessary) encrypted, and sent to an FTP directory maintained by CSG on behalf of Customer (“InfoCast Pick Up

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Site”). CSG authors the logic to create the report files from Vantage data and enhances or modifies the logic in the event the Vantage data objects change. InfoCast Files applications can be scheduled to run intraday, daily, weekly, monthly, or at specific intervals. Customer accesses the InfoCast Pick Up Site to retrieve the extracted data. CSG maintains the extracted data on the InfoCast Pick Up Site until the earlier of pick up by Customer or *******-*** (**) *****. CSG also maintains a backup copy of each extracted dataset for *** ******* ****** (***) *****. At Customer’s request, CSG will restore a backup copy of an extracted dataset to the InfoCast Pick Up Site. See Schedule F in the Agreement for applicable service fee per restoration.

(b) IBR Users. Customer designates users that will be granted access to IBR as named users (“IBR Users”). “Interactive Users” are IBR Users with access to one or more Interactive Reports. “InfoCast Users” are IBR Users with access to one or more InfoCast Reports or InfoCast Alerts.

(c) Subscriptions. Customer “subscribes” to an Interactive Report, an InfoCast Report (Basic or Advanced), or an InfoCast Alert by requesting that CSG make the selected report or alert accessible to one or more IBR Users, and/or will “subscribe” to an InfoCast File by requesting that CSG develop and schedule delivery of a data extract from a Vantage schema to the InfoCast Pick Up Site. Each such selection is a “Subscription.”

(d) Sensitive Data. Customer and CSG agree that only upon specific instruction from Customer and through Statement Of Works, will CSG distribute reports with fields reserved for sensitive data including Credit Card Number, EFT account information, Social Security Number, and Driver’s License. In the event Customer requests CSG to provide such reports, additional fees may apply.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Exhibit C-14

Customer Value Optional Table in CSG Vantage^®

Customer Value Optional Table in CSG Vantage^®. Customer shall have access to CSG’s Customer Value Optional Table in CSG Vantage. The Customer Value Optional Table in CSG Vantage provides Customer with the ability to query the monthly recurring value associated with its customers, accounts, and services. This feature in CSG Vantage allows Customer to query *** (*) ****** of historical item value records once history has been built, as well as forecasting the monthly recurring value of items up to ******** (**) ****** into the future. Implementation services and lead times will be set forth in a mutually agreeable Statement of Work.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Exhibit C-15

UDF Cards 1-143 Vantage Optional Table in CSG Vantage^®

UDF Cards 1-143 Vantage Optional Table in CSG Vantage^® Customer shall have access to CSG’s current UDF Cards 1-143 Vantage Optional Table in CSG Vantage. The current UDF Cards 1-143 Vantage Optional Table in CSG Vantage provides Customer ad hoc reporting capabilities against User Data File settings defined on cards 1- 143. Implementation services and lead times will be set forth in a mutually agreeable Statement of Work.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Exhibit C-16

Total Service Code Statistics Optional Table in CSG Vantage^®

Total Service Code Statistics Optional Table in CSG Vantage^®. Customer shall have access to CSG’s Total Service Code Statistics Optional Table in CSG Vantage. The Total Service Code Statistics Optional Table in CSG Vantage provides Customer with the ability to query detailed item and order activity that can be queried and summarized to reconcile to the CPPM-504 Total Service Code statistics report. Implementation services and lead times will be set forth in a mutually agreeable Statement of Work.”

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Exhibit E-5

STATEMENT OF WORK

(Template)

THIS STATEMENT OF WORK (“SOW”) is made by and between CSG^® SYSTEMS, INC. (“CSG”) and Comcast CABLE COMMUNICATIoNS Management, LLC, pursuant to, in accordance with Schedule E of the CSG Master Subscriber Management System Agreement (the “Agreement”) that CSG and Customer executed as of             , 200_, and of which this SOW forms an integral part. The Effective Date of this SOW is the date last signed below. Any terms in initial capital letters or all capital letters used as a defined term but not defined in this SOW shall have the meaning set forth in the Agreement.

TITLE: Title [short and sweet]. Sample: Third Party Verification (“TPV”) summary report/CR 229.

DEFINITIONS: [DEFINE ALL CAPITALIZED TERMS AND ACRONYMS USED IN SOW]

OBJECTIVES: Specific Business Needs (refer to a requirements document for details) What Customer has requested.

DESCRIPTION/SCOPE OF SERVICES: Should include what CSG plans to do or what will be done.

SUPPORT PLAN/PROCEDURES: This should be what the vendor will do to meet the requirements (Vendor responsibility, timetable, staffing plan if applicable and performance criteria).

CUSTOMER RESPONSIBILITIES:

Ø What other obligations must Customer complete in order for CSG to meet the Timetable and Deliverables set forth in this SOW?.

LOCATION: Primary location of team. If no field visit is necessary, then N/A.

KEY TARGET MILESTONES:

Spell out: [November 1, 2003, NOT 11/1/03]

Analysis and Design Start Date:

Business Requirements Specification Completion Date:

Functional Design Completion Date:

Functional Design Review Date:

• Customer shall execute this SOW on or before             , 200_ (“Scheduling Date”); should Customer fail to, at CSG’s option, this SOW may be deemed null and void in its entirety.

QUALITY METRICS: to be negotiated between CSG and Customer’s SMS Team – if none, then type N/A.

TESTING DEADLINES: to be negotiated between CSG and Customer’s SMS Team – if none, then type N/A.

PROJECT FEES: Choose Time & Materials OR Fixed Bid…Delete paragraph not used.

Project Fees tied to milestones and user acceptance and payment terms.

Time and Materials: Project Fees are based on Time and Materials basis at the rate of *             per person, per hour, plus Reimbursable Expenses (as defined in Article 5.1 of the Agreement). Reimbursable Expenses are in addition to Project Fees. CSG will invoice Customer for Reimbursable Expenses on a monthly basis, in accordance with the terms and conditions of the Agreement. ***** **** **** *** ****** *** ******* (**%) of the Estimated Total Project Fees.

Estimated Total Project Fees: *         [rate X hours]

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

OR

¨ Fixed Bid: This SOW is fixed baseline pricing based on the Description/Scope of Services, Support Plan / Procedures, Customer Responsibilities and Key Target Milestones listed herein. Customer mandated changes, variances, delays and contingencies shall result in a Change Order. Each Change Order will be scoped and priced accordingly on a Time and Materials basis between CSG and Customer. Change Orders will be billed at *                *** ******, *** ****. Customer is responsible for all Reimbursable Expenses (as defined in Article 5.1 of the Agreement) incurred by CSG or it’s affiliates on behalf of this project.

Total Project Fees: * (excluding Change Orders)

PROJECT BILLING MILESTONES: Select one: double click the gray box then choose ‘Checked’ under Default Value. Delete the one that does not apply. ¨    Billing when complete.

¨ Billing per milestones.

Upon completion of Design:	*0.00
Upon completion of Development:	*0.00
Upon completion of Testing:	*0.00
(if other, describe):	*0.00

ADDITIONAL PROVISIONS: Double click on the gray box, then choose ‘Checked’ under Default Value to select appropriate box and add pertinent details. [CHOOSE ONE INTELLECTUAL PARAGRAPH–Revise according to “strategic” or “non-strategic” and delete other paragraph – remaining 4 points remain in document regardless of which paragraph is chosen]

¨ Intellectual Property Rights: [IF NEITHER “STRATEGIC” OR “NON-STRATEGIC”] CSG and Customer mutually agree that this SOW shall be designated as neither “strategic” nor “non-strategic,” as defined in Schedule E of the Agreement.

[OR]

¨ Intellectual Property Rights: [IF STRATEGIC OR NON-STRATEGIC, ADD FOLLOWING LANGUAGE] CSG and Customer mutually agree that this SOW shall be designated as [“strategic”] or [“non-strategic,”] as defined in Schedule E of the Agreement. CSG shall charge Customer for its development cost for this SOW as set forth in the Project Fees Section herein. As a result, Customer will have exclusive right to the Deliverables or related intellectual property (collectively the “Deliverables”) for a              month period from the date the Deliverables are made available to Customer as set forth above; provided, however, Customer acknowledges and agrees that CSG may at its sole discretion use or make available for use by any other customer or third party the Deliverables created herein, for any purpose, without Customer’s permission; provided that CSG refund to Customer the development fees paid to CSG by Customer under this SOW.

¨ Additional Warranties and Remedies

¨ Performance Criteria

¨ Inspection and Acceptance Criteria

¨ Incentives/Penalties

¨ Additional Insurance—In addition to the insurance coverage required under the Agreement, CSG shall carry Errors and Omissions insurance providing limits of *** **** **** **,***,*** *** ********** with endorsement evidencing coverage for contractual liability.

Termination:

In the event Customer decides to delay commencement or continuation of any services provided by CSG under this SOW, Customer agrees to provide CSG with no less than thirty (30) days’ written notice of its decision. In such case, Customer acknowledges that any such delay will have a direct financial impact to CSG and as a result Customer shall use reasonable efforts to work in good faith with CSG on a mutually agreeable plan addressing how such delay may be limited in duration and scope and how CSG will be compensated for its losses arising from such delay. Notwithstanding the foregoing, CSG reserves the right to terminate this SOW due to Customer’s notice of delay of commencement or continuation of services, in which case Customer agrees to pay CSG for any services rendered through the effective date of termination on a time and materials basis at the hourly rate provided in this

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

SOW or in the Agreement, as applicable, which will include any wind down services leading to the effective date of termination.

Customer Billing Address:	CSG Payment Address:
******* ***** **************, ***.	CSG Systems, Inc.
**** **** ****	*.*. *** ****
**** *******, ** *****	*****, ** *****-****
	(Please do not remit payment until invoiced by CSG.)
Customer Point of Contact	CSG Point of Contact
Business Owner: Submitter’s Name: G/L Code:	Business Owner: Project Owner: Project Number:

IN WITNESS WHEREOF, CSG and Customer cause this Statement of Work to be duly executed below.

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC (“CUSTOMER”)	CSG SYSTEMS, INC. (“CSG”)
By:	By:
Name:	Name:
Title:	Title:
Date:	Date:

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

EXHIBIT E-6

DESIGN STATEMENT OF WORK

This DESIGN Statement of Work (“DSOW”) is made by and between CSG SYSTEMS, INC. (“CSG”) and COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC (“Customer”) pursuant to, in accordance with, and as a part of Schedule E of the CSG Master Subscriber Management System Agreement that CSG and Customer executed as of March 17, 2004 (the “Agreement”) and of which this SOW forms an integral part. The Effective Date of this SOW is the date last signed below. Any terms in initial capital letters or all capital letters used as a defined term but not defined in this SOW shall have the meaning set forth in the Agreement.

TITLE: Title [short and sweet]. Sample: Analysis and Design for Operations Provisioning Activation Link (“OPAL”) system (CR 303).

DEFINITIONS: [Define all capitalized terms and acronyms used in SOW]

OBJECTIVES: Specific Business Needs (refer to a requirements document for details). What is Customer requesting?

DESCRIPTION/SCOPE OF SERVICES:

Should include Comcast Requirements or Scope of Services from BRS or SRF.

SUPPORT PLAN/PROCEDURES:

This should be what the vendor will do to meet the requirements (Vendor responsibility, timetable, staffing plan if applicable and performance criteria).

LOCATION: Primary location of team. If no field visit necessary, then type N/A. If visit is necessary, please list locations that will be visited.

KEY TARGET MILESTONES:

Analysis and Design Start Date:

Business Requirements Specification Completion Date:

Functional Design Completion Date

Functional Design Review Date

• Customer shall execute this DSOW on or before           ; should Customer fail to, at CSG’s option, this DSOW may be deemed null and void in its entirety.

QUALITY METRICS: to be negotiated between CSG & Customer’s SMS Team – if none, then type N/A.

TESTING DEADLINES: to be negotiated between CSG & Customer’s SMS Team – if none, then type N/A.

PROJECT FEES: Choose Time & Materials OR Fixed Bid… Delete paragraph not used.

Project Fees tied to milestones and user acceptance and payment terms.

Time and Materials: Project Fees are based on Time and Materials basis at the rate of *193.71 per person, per hour, plus Reimbursable Expenses (as defined in Article 5.1 of the Agreement). Reimbursable Expenses are in addition to Project Fees. CSG will invoice Customer for Reimbursable Expenses on a monthly basis, in accordance with the terms and conditions of the Agreement. ***** **** **** *** ****** *** ******* (**%) of the Estimated Total Project Fees.

Estimated Total Project Fees: *           [Rate X            hours]

OR

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Fixed Bid: This DSOW is fixed baseline pricing based on the Scope of Services, Support Plan/Procedures, Key Target Milestones and Customer Responsibilities listed herein. Customer mandated changes, variances, delays and contingencies shall result in a Change Order. Each Change Order will be scoped and priced accordingly on a Time and Materials basis between CSG and Customer. Change Orders will be ****** ** ****.** ******, *** ****. Customer is responsible for all Reimbursable Expenses (as defined in Article 5.1 of the Agreement) incurred by CSG or its affiliates on behalf of this project.

Total Project Fees: *           (excluding Change Orders)

PROJECT BILLING MILESTONES: Select one: double click the gray box then choose ‘Checked’ under Default Value. Delete the one that does not apply.

¨ Billing when complete.

¨ Billing per milestones.

Upon completion of Design:	*0.00
Upon completion of Development:	*0.00
Upon completion of Testing:	*0.00
(if other, describe):	*0.00

CUSTOMER RESPONSIBILITIES:

Ø Customer must deliver a final Business Requirements Specification (“BRS”).

What other obligations must Customer complete in order for CSG to meet the Timetable and Deliverables set forth in this SOW?

ADDITIONAL PROVISIONS: Double click the gray box then choose ‘Checked’ under Default Value to select appropriate box and add pertinent details. [CHOOSE ONE INTELLECTUAL PARAGRAPH–Revise according to “strategic” or “non-strategic” and delete other paragraph – remaining 5 points remain in document regardless of which paragraph is chosen]

¨ Intellectual Property Rights: [IF NEITHER “STRATEGIC” OR “NON-STRATEGIC”] CSG and Customer mutually agree that this SOW shall be designated as neither “strategic” nor “non-strategic,” as defined in Schedule E of the Agreement.

[OR]

¨ Intellectual Property Rights: [IF STRATEGIC OR NON-STRATEGIC, ADD FOLLOWING LANGUAGE] CSG and Customer mutually agree that this SOW shall be designated as strategeic or non-strategic? as defined in Schedule E of the Agreement. CSG shall charge Customer for its development cost for this SOW as set forth in the Project Fees Section herein. As a result, Customer will have exclusive right to the Deliverables or related intellectual property (collectively the “Deliverables”) for a            month period from the date the Deliverables are made available to Customer as set forth above; provided, however, Customer acknowledges and agrees that CSG may at its sole discretion use or make available for use by any other customer or third party the Deliverables created herein, for any purpose, without Customer’s permission; provided that CSG refund to Customer the development fees paid to CSG by Customer under this SOW.

¨ Additional Warranties and Remedies

¨ Performance Criteria

¨ Inspection and Acceptance Criteria

¨ Incentives/Penalties

¨ Additional Insurance: In addition to the insurance coverage required under the Agreement, CSG shall carry Errors and Omissions insurance providing limits of *** **** **** **,***,*** *** ********** with endorsement evidencing coverage for contractual liability.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Customer Billing Address:	CSG Payment Address:
******* ***** **************, ***.	CSG Systems, Inc.
**** **** ****	*.*. *** ****
**** *******, ** *****	*****, ** *****-****
	(Please do not remit payment until invoiced by CSG.)
Customer Point of Contact	CSG Point of Contact
Name: Business Owner: G/L Code:	Business Owner: Project Owner: Project Number:

IN WITNESS WHEREOF, CSG and Customer cause this DSOW to be duly executed below.

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC (“CUSTOMER”)	CSG SYSTEMS, INC. (“CSG”)
By:	By:
Name:	Name:
Title:	Title:
Date:	Date:

EX-10.21E

Exhibit 10.21E

Pages where confidential treatment has been requested are stamped “Confidential Treatment Requested and

the Redacted Material has been separately filed with the Commission,” and places where information has

been redacted have been marked with (***).

NINTH AMENDMENT

TO THE

RESTATED AND AMENDED

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC

This NINTH AMENDMENT (the “Amendment”) is made by and between CSG Systems, Inc. (“CSG”) and Comcast Cable Communications Management, LLC (“Customer”). The Effective Date of this Amendment is the date last signed below. CSG and Customer entered into a certain Restated and Amended CSG Master Subscriber Management System Agreement (CSG document #2296663) dated July 1, 2008 (the “Agreement”) and now desire to amend the Agreement in accordance with the terms and conditions set forth in this Amendment. If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control. Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement. Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment. Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

CSG and Customer agree to the following as of the Effective Date:

1. CSG and Customer entered into agreements for the provision of CSG’s Desktop Solution Bundle as provided in the Agreement and for Customer’s internal use and for the provision of OWF for use by its outsourcers to support Customer’s business as identified in the Agreement. *** *** ******** *** ** * ******* ********* *** ********** ** *** ** ***’* ******* ******** ****** *** *** *** ********’* *********** (“******* *******”).

2. *** *** ******** *** ** * ******* ** ** ********’* *********** ** *** *********** **** *** ******** ******** ******** ********, *******, ****** *** ******* ** *** ****** ** ****,***.** (“******* *******”) *** ***** ******** *** ********’* *********** *** ******* *** *********** ** **** ** *** ***********.

3. *** *** ******** *** ** * ******* ** ** *** ********* ** *** ******** ** ** ******** ** ******** *********** ******** ****** ***, ***** *** *********** ** *** ** **** **** * *** ***** *********** ** ********* **** (“*********** *******”).

4. *** ******* **** ** ****** *** ******* *******, ******* ******* *** *********** ******* (“*******, ******* *** *********** **********”) *** ***** ** *******:

a) *** ****** ** ***** *** ****,***.** ********** ** *** ******* ******* ** **** ** *** ********* **** ****, ***** ***** *** ******* ******** ** *** ***** *********** *********** *** ***.

b) *** ******* ***** ** ******* **** ***** **** *** ****** ********* **** *** *********** ******* ** ******** ** ******* * ** **** *********.

c) *** ******* ***** ** ******* **** ***** **** *** ****** ********* **** *** ******* ******* ** ******** ** ******* * ** **** *********.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

d) *** * *** ** **,***,*** CSG agrees to grant Customer an ********** license for OWF, for Customer’s internal use which includes use by Customer’s outsourcers for Customer’s business purposes only.

e) The parties agree to amend Schedule F, Section B. entitled “CSG Desktop Solution Bundle” to add the following:

• ********** License OWF for Customer’s internal business use, which includes use by Customer’s outsourcers. This ********** license is limited to the geographic areas and Connected Subscribers currently supported by CSG’s CCS Services as of the Effective Date of this Amendment, which shall include organic growth, but excludes acquired or converted subscribers subsequent to the Effective Date of this Amendment. In the event Customer experiences growth beyond the parameters identified herein, CSG shall invoice and Customer shall pay the per seat license fee for OWF provided in the Agreement using a ratio of one (1) OWF seat per *,*** ********** ********* *********** in addition to any implementation fees. The maintenance fees related to the OWF ********** license is ******** ** **** ** *** **.**** *** ********* **********/*** ***** ********* ***** **** ** *** ******** *** *** *** ******* ******** ******, ******* ** ****** **********.

f) CSG shall invoice Customer the OWF enterprise license fee upon the Effective Date of this Amendment and Customer shall pay the invoice in accordance with the terms of the Agreement.

g) The parties agree to amend Schedule F, Section B. CSG Desktop Solutions Bundle, by deleting the following references:

• ******** ******** (**,***) **** *****

• ********** **** ** ******** ******* (**,***,***)

h) The parties agree to amend Schedule F, Section B. subsection entitled “Component Fees,” by deleting the following reference for Order Workflow:

Description of Item/Unit of Measure	Frequency	Fee
** *********** (*** ****)	********	***.**

5. *** ******* ***** **** *** *******, ******* *** *********** ********** ***** *** ********* ** ********* ** ***** ** ********** ** ****** ***** ********* *** ******* ********** ** ******* * ******* * ** **** *********. *********, ** ******** *** *** ************* ******** ** **** *********, **** ***** ***** ** ******* ******* *** ***** *****’* **** *** ******* *********, ******, ************, ********, *********, ************, ** ***, ***** ********, ********** *** *******, *****, *********, ************** *** ******** **** *** ******* *** *** *** *****, ****** ** ******, ******, ***********, *** ******* ********** ** ********, *** ** ** ******, ***** ** *** *** ** ** ***** ** *** ********* ****** ******** ** ******* ** *** ***, ******* ** ***, ** ***** ********* ***** ** *** ********* **** **** ***** *** ** *** ******* *******, ******* ******* ** *********** *******. *** ********* ******* ***** *** ***** ** *** ******* ** **** ********** ** ******** *, ****** ************ ********** ** *** *******, ******* *********** ********** *** *** *************** *********** ******** ** *** *********.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC (“CUSTOMER”)		CSG SYSTEMS, INC. (“CSG”)
By:	/s/ Andrew Barr	By:	/s/ Damon O. Barry
Name:	Andrew Barr	Name:	Damon O. Barry
Title:	SVP & CIO	Title:	Vice President, Business Affairs & Assistant General Counsel
Date:	9/30/11	Date:	9/30/11

EX-10.23H

Exhibit 10.23H

Pages where confidential treatment has been requested are stamped “Confidential Treatment Requested and

the Redacted Material has been separately filed with the Commission,” and places where information has

been redacted have been marked with (***).

FIFTEENTH AMENDMENT

TO THE

CSG MaSTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

DISH NETWORK, L.L.C.

THIS FIFTEENTH AMENDMENT (this “Amendment”) is made by and between CSG Systems, Inc., a Delaware corporation (“CSG”), and DISH Network L.L.C., a Colorado limited liability company (“Customer”). This amendment shall be effective as of the date last signed below (the “Effective Date”). CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement (Document #2301656) effective as of January 1, 2010 (the “Agreement”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment. If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control. Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement. Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment. Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

CSG and Customer agree as follows as of the Effective Date:

1. Customer desires to purchase and CSG desires to provide CSG’s Interactivate product (“Interactivate”) for the purpose of assisting and streamlining Customer’s process for the prequalification and provisioning of subscriber data service sold through Customer’s partner channels and, as a result, Exhibit B-1(a) entitled “CSG Product Description” shall be amended to add the following:

Interactivate. Interactivate, utilized in CSG’s managed services environment, provides real-time, bi-directional, transaction processing and event management. Interactivate provides the link between subscribers and services, enabling customers to launch new services and streamline processes.

At the core of the Product are adapters that enable communication with upstream business systems and downstream systems. The work-flow engine with its graphical user interface and drag-and-drop capabilities allows for implementation of specific business rules.

2. Schedule F, Fees, CSG Licensed Products, of the Agreement shall be amended to add a new Section III. entitled “CSG’s Interactivate,” as follows:

CSG Licensed Products

III. CSG’s Interactivate

Description of Item/Unit of Measure	Frequency	Fee
1.    Implementation and Configuration (**** *)	*** *******	*****
2.    Initial Managed Services Support Fees (**** *) (**** *)
a.    Initial Fee	***-****	****,***
b.    ** ** ***,*** ************ *** *****	*******	***,***
3.    Incremental Managed Services Support Fees (**** *) (**** *)
a.    ** ****** ** ***,*** ***     **** **** ** ***** ** ***,*** ************ (*** ***********)	*******	**.****
b.    ** ****** ** ***,*** *** **** **** ** ***** ** ***,*** ************ (***     ***********)	*******	**.****
c.    ***,*** ** *,***,*** ************ (*** ***********)	*******	**.****
d.    ********** ******** (**** *)	*** *******	**** + *** ******
4.     Additional Partner Interfaces (**** *)
a.    ******* (*** ******* *********)	*** *******	***,***.**
b.    *********** *** ******* (*** ******* *********)	*******	**,***.**

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

Note 1: Implementation and Configuration. All implementation and configuration services and the associated fees shall be set forth in a mutually agreed upon statement(s) of work. Reimbursable Expenses are additional.

**** *: ******* ******* ******** ******* ****. *** ***-**** *** ***** ******* ********* ******* ******* ******** ******* **** ***** ** ******** ** ******** **** ***** * ********** ******* ****, ** **** **** ** ********** ** *** ********* ** ****, *** ******** **. *******, ******* *** *** ******** (*** “***”). *** ******** *** ********* *** ** ** ***,*** ************ *** ***** ** ***’* ******* ******** ***********:

• ************* ********, *********** *** *******, *********, ******* **********, * ******* ** *** ************* ** ***’* ******* ******** *********** ****** *** **** *** *** ********** ************* ********** **** **** ******** *** ***** ** *** ******.

• *********** *********** *** ******* (******** *******/******* ******** *** **** *** ****)

• *********** *** ******* *** *** (*) *** ********** *********, *** (*) *** ******** *********, *** (*) ******** ********** ******* ********** **********, *** (*) ******** ********** ******* ******** **********. *** ********-********** ******* ********** ***** ** ******** ******** ** * ********** ********** ******** ****** **** ********* ** **** *** **** ** ******* ** **** ***** **** **** *** ********* *** ***** ***********.

• *** ******* ***** ** * ******-*** (**) ***** ********** *** ************* ** ** **** ** ***** ******* ************ ** ** **** **** ***,*** **** *** ******-*** (**) ***** **** (*** ******** ** **** ********* *** *** *** *** “****”), ******* ** ****** ***** ********** ** ******** ** ******* * ** *** *********. ** *** ***** ******** ********** *** *** ** ************* ***** ** *** *** ** *** ****, *** ******* ***** **** ** ******** ******** ** ******* ** (*), ** (*) ** ** (*) ******** ****** **** ** ******** ** *** ***** ******* *** *** ***** ** *** ***** *** *********, ******** ***** *** *** ******* *********** ****** ** ***,*** ********** ** *** ********* ****** ** *** ******-*** (**) ***** ******* **********. ** ******** ** *** *********, ******** ***, ** *** **** ******, **** ****** ** ***, ****** *** **** *** ** ** *** (*) ********** *** (*) **** ********** ******* (**** ** “********** ************* ********** ****”) **** *** **** ***** ******** ******. ** *** ***** ******** ********** *** *** ** ************* ***** ** *** *** ** ****** ********** ************* ********** ****, *** ******* ***** **** ** ******** ******** ** ******* ** (*), ** (*) ** ** (*) , ******** ****** **** ** ******** ** *** ***** ******* *** *** ***** ** *** ***** *** *********, ******** ***** *** *** ******* *********** ****** ** ***,*** ********** ** *** ********* ****** ** *** **** ******* ********** ************* ********** ****.

**** *: *********** ******* ******** ******* ****. *** *********** ******* ******** ******* **** ***** ** ** ******** ** *** ******* ******* ******** ******* *** *** *** ******** *** ** ********* *********** ******* ***** *** ******** ** *** ******* ******* ******** *********** ** ***,*** ************ *** ***** (*** “******* ******** ***********”). ** ************* ** *** *********** ******* ******** ******* ****, *** ***** ******* *** *********:

• * ******* ** *** ************* ******** ** ***’* ******* ******** *********** ****** *** **** (*********, ******* **********, *** ********** ************* ********** ****), ** **** ** ***’* *********** *** ******* ********.

• *********** *********** *** ******* (******** *** *********** ** ********** ******** *** *** ***** ******** ********* ** ******* *** ***********– *** **** * *****).

• ** * ***** ** *************, *** *********** ***** *** ***** ** *** ***** ***** ***** **** ******* *** ******** ** ** **********. ** ** *******, ** ******** *** ***,*** ************ ** *** ***** *****, *** *** *** *** ***,*** ************ ***** *** ******** ** *** ******* ******* ******** *********** ** ***,*** ************, ***** ** ** *** **** ** **.** *** ***********.

**** *: ************ *** ********* ** ******** ******** **** ********** *******, *** ******** ******* *********** ** ********** ******* ********* *** ******** ********** (******** ************** ********). ** *** ***** *** *********** ****** ******* *,***,*** *** *** *** *********** ******, *** ******* ***** ** ********* ** **** ***** **** *** *** **** ****.

**** *: ********** ********. ******** ****** **** ********** **** *** ** ********* ******** *********** ***** ** ********** ****** ******** ****** *** ******* ******** *********** *** ******** ***** ** *********** *** *** ******* ** ***** **** ** ********** ** **** ********.

**** *: ********** ******* **********. *** ******* ** ********** ** *** ******* ********** ***** ** *** ***** ** ******** ****** **** ************ ** ****.

All fees provided herein are subject to annual adjustment as provided in Section 4 of the Agreement.

3. CSG will provide the necessary environments to migrate CSG’s Interactive to ACP.

4. ******** ******** *** *** ****** **** *** ******* ******* ******** ******* *** ** ****,*** *** *** ******* *** ** ***,*** *** *************, ***** ** *********** ******* *** **,***,*** ****** ******** ** *** ** ******** ***** *** ***** ********* ** *** ********* (*** ******** **. *******) ***** ************.

5. Effective ****** (**) **** ***** the Completion Date of the SOW, Schedule H, entitled “CSG Systems, Inc. Business Continuity/Disaster Recovery Plan” of the Agreement, is hereby amended to include Interactivate as a MARC I product.

*** Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

6. The parties agree that after ****** (**) **** of the completion of the Phase I ********** Release Date (as defined in the SOW), the parties shall meet to discuss performance of Interactivate, as well as identify and come to mutual written agreement for commercially reasonable *********** ******* ** ******* (*.*. ********* ***** **********).

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

DISH NETWORK L.L.C.		CSG SYSTEMS, INC.
By:	/s/ Michael K. McClaskey	By:	/s/ Joe Ruble
Name:	Michael K. McClaskey	Name:	Joe Ruble
Title:	Senior Vice President and Chief Information Officer	Title:	EVP-General Counsel
Date:	9/23/11	Date:	9/23/11

EX-31.01

Exhibit 31.01

CERTIFICATIONS PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Peter E. Kalan, certify that:

1. I have reviewed this report on Form 10-Q of CSG Systems International, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer 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:

(a) 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 report is being prepared;

(b) 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;

(c) 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

(d) 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

5. The registrant’s other certifying officer 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):

(a) 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

(b) 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.

Date:    November 8, 2011	/s/ Peter E. Kalan
	Peter E. Kalan
	Chief Executive Officer and President

EX-31.02

Exhibit 31.02

CERTIFICATIONS PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Randy R. Wiese, certify that:

1. I have reviewed this report on Form 10-Q of CSG Systems International, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer 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:

(a) 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 report is being prepared;

(b) 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;

(c) 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

(d) 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

5. The registrant’s other certifying officer 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):

(a) 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

(b) 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.

Date:    November 8, 2011	/s/ Randy R. Wiese
	Randy R. Wiese
	Executive Vice President and Chief Financial Officer

EX-32.01

EXHIBIT 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Peter E. Kalan, the Chief Executive Officer and Randy R. Wiese, the Chief Financial Officer of CSG Systems International Inc., each certifies that, to the best of his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CSG Systems International, Inc.

November 8, 2011

/s/ Peter E. Kalan

Peter E. Kalan

Chief Executive Officer and President

November 8, 2011

/s/ Randy R. Wiese

Randy R. Wiese

Executive Vice President and Chief Financial Officer

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Sep. 30, 2011	Dec. 31, 2010
Condensed Consolidated Balance Sheets
Trade accounts receivable-billed, allowance	$ 2,472	$ 1,837
Property and equipment, accumulated depreciation	109,879	94,236
Software, accumulated amortization	53,726	45,579
Client contracts, accumulated amortization	152,931	133,218
Current maturities of long-term debt, unamortized original issue discount	0	621
Long-term debt, unamortized original issue discount	$ 31,435	$ 34,841
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	34,079,251	34,120,789
Treasury stock, shares	30,535,019	29,956,808

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Condensed Consolidated Statements Of Income (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Revenues:
Processing and related services	$ 131,099	$ 124,984	$ 391,590	$ 368,393
Software, maintenance and services	51,654	8,707	155,567	26,907
Total revenues	182,753	133,691	547,157	395,300
Cost of revenues (exclusive of depreciation, shown separately below):
Processing and related services	62,167	61,675	184,228	197,604
Software, maintenance and services	30,821	6,120	90,400	18,000
Total cost of revenues	92,988	67,795	274,628	215,604
Other operating expenses:
Research and development	27,921	19,113	84,479	56,615
Selling, general and administrative	31,011	19,396	96,876	52,608
Depreciation	6,404	4,865	18,924	16,578
Restructuring charges	1,662		3,008	214
Total operating expenses	159,986	111,169	477,915	341,619
Operating income	22,767	22,522	69,242	53,681
Other income (expense):
Interest expense	(4,175)	(1,562)	(12,841)	(4,739)
Amortization of original issue discount	(1,158)	(1,462)	(4,027)	(5,447)
Interest and investment income, net	186	157	595	524
Loss on repurchase of convertible debt securities		(1,683)		(12,635)
Other, net	2,151	13	863	17
Total other	(2,996)	(4,537)	(15,410)	(22,280)
Income before income taxes	19,771	17,985	53,832	31,401
Income tax provision	(9,292)	(6,295)	(22,844)	(7,181)
Net income	$ 10,479	$ 11,690	$ 30,988	$ 24,220
Weighted-average shares outstanding-Basic:
Common stock	32,765	32,365	32,747	32,573
Participating restricted stock	141	464	210	579
Total	32,906	32,829	32,957	33,152
Weighted-average shares outstanding-Diluted:
Common stock	32,887	32,625	32,937	32,834
Participating restricted stock	141	464	210	579
Total	33,028	33,089	33,147	33,413
Earnings per common share:
Basic	$ 0.32	$ 0.36	$ 0.94	$ 0.73
Diluted	$ 0.32	$ 0.35	$ 0.93	$ 0.72

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Document And Entity Information	9 Months Ended
	Sep. 30, 2011	Nov. 03, 2011
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Entity Filer Category	Accelerated Filer
Entity Registrant Name	CSG SYSTEMS INTERNATIONAL INC
Entity Central Index Key	0001005757
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		33,895,246

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Debt

9 Months Ended

Sep. 30, 2011

Debt

Debt

7. DEBT

Our long-term debt, as of September 30, 2011 and December 31, 2010, was as follows (in thousands):

	September 30, 2011			December 31, 2010
Credit Agreement:
Term loan, mandatory principal payments during term, with remaining principal balance due December 2015, interest at adjusted LIBOR plus 3.75% (combined rate of 4.10% at September 30, 2011 and 4.06% at December 31, 2010)	$	192,500		$	200,000
$100 million revolving loan facility, due December 2015, interest at adjusted LIBOR plus applicable margin (combined rate of 4.06% at December 31, 2010)		—			35,000
Convertible Debt Securities:
2010 Convertible Notes – senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0%; net of unamortized OID of $31,435 and $34,841, respectively		118,565			115,159
2004 Convertible Debt Securities – senior subordinated convertible contingent debt securities; due June 15, 2024; cash interest at 2.5%; net of unamortized OID of zero and $621, respectively		—			24,528
		311,065			374,687
Current portion of long-term debt, net		(17,500	)		(69,528	)
Total long-term debt, net	$	293,565		$	305,159

Credit Agreement. In January 2011, we repaid the $35 million outstanding balance of our $100 million revolving loan facility ("Revolver"). During the nine months ended September 30, 2011, we made $7.5 million mandatory repayments on the Term Loan.

As of September 30, 2011, we were in compliance with the financial ratios and other covenants related to the Credit Agreement. As of September 30, 2011, we had no borrowings outstanding on our Revolver and had the entire $100 million available to us.

2010 Convertible Notes. As of September 30, 2011, and as it relates to our 2010 Convertible Notes, none of the contingent conversion features have been achieved, and thus, the 2010 Convertible Notes are not convertible by the holders.

Upon conversion of the 2010 Convertible Notes, we will settle our conversion obligation as follows: (i) we will pay cash for 100% of the par value of the 2010 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we will satisfy the remaining conversion obligation in our common stock, cash or any combination of our common stock and cash. As of September 30, 2011, the value of our conversion obligation did not exceed the par value of the 2010 Convertible Notes.

2004 Convertible Debt Securities. In June 2011, holders of $24.1 million par value of our 2004 Convertible Debt Securities exercised their put option and we paid the par value and accrued interest to extinguish these securities in June 2011. In June 2011, we exercised our option to call the remaining $1.0 million par value of our 2004 Convertible Debt Securities, and extinguished the debt in July 2011. As a result of the extinguishment of the 2004 Convertible Debt Securities in 2011, approximately $6 million of deferred tax liabilities became payable as of June 30, 2011, of which $4.4 million was paid as of September 30, 2011.

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Prior Year Acquisition

9 Months Ended

Sep. 30, 2011

Prior Year Acquisition

Prior Year Acquisition

3. PRIOR YEAR ACQUISITION

On November 30, 2010, we acquired U.K.-based Intec Telecom Systems PLC ("Intec") for $364.1 million, or $255.2 million net of $108.9 million of cash and cash equivalents Intec had on hand at the close of the transaction.

The application of the acquisition method of accounting for business combinations requires the use of significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for Intec (in thousands):

Trade accounts receivable	$	63,276
Other current assets		6,179
Property and equipment		9,968
Acquired software		19,184
Acquired client contracts .		77,979
Acquired other intangible assets		6,395
Goodwill		102,145
Net deferred income tax assets		36,238
Other non-current assets		2,552
Total assets acquired		323,916
Trade accounts payable		3,611
Accrued employee compensation		17,517
Deferred revenue		28,016
Other current liabilities		9,823
Non-current liabilities		9,711
Total liabilities assumed		68,678
Net assets acquired (excluding acquired cash)	$	255,238

The $255.2 million of net assets acquired reflected above has not changed since December 31, 2010. However, we have made certain adjustments to our estimates of the fair value of various assets acquired and liabilities assumed, none of which required the revision of comparative information for periods presented in the accompanying Financial Statements since the effects are not material. In addition, we have made certain adjustments to our estimates of deferred income taxes. As a result of these changes, during 2011, the amount allocated to goodwill has increased by $1.1 million.

The above estimated fair values of assets acquired and liabilities assumed are still considered provisional, as we are waiting for additional information, primarily related to certain items within trade accounts receivable and deferred revenue, necessary to finalize those fair values, and to estimate the valuation allowances necessary for certain deferred income tax assets. Thus, the provisional measurements of fair value set forth above are subject to change. Such changes could be significant. We expect to finalize the fair values and valuation allowances and complete the purchase price allocation during the fourth quarter of 2011.

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Long-Lived Assets

9 Months Ended

Sep. 30, 2011

Long-Lived Assets

Long-Lived Assets

9. LONG-LIVED ASSETS

Goodwill. The changes in the carrying amount of goodwill for the nine months ended September 30, 2011, were as follows (in thousands):

January 1, 2011 balance	$	209,164
Adjustments related to prior acquisitions		1,005
Effects of changes in foreign currency exchange rates		(1,182	)
September 30, 2011 balance	$	208,987

The adjustments related to prior acquisitions are almost entirely due to the Intec Acquisition discussed in Note 3, and are related to adjustments to our estimates of deferred income taxes and the fair values of various assets and liabilities assumed.

Other Intangible Assets. Our intangible assets subject to ongoing amortization consist primarily of client contracts and software. As of September 30, 2011 and December 31, 2010, the carrying values of these assets were as follows (in thousands):

	September 30, 2011							December 31, 2010
	Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Client contracts	$	255,851	$	(152,931	)	$	102,920	$	249,546	$	(133,218	)	$	116,328
Software		85,878		(53,726	)		32,152		76,697		(45,579	)		31,118
Total	$	341,729	$	(206,657	)	$	135,072	$	326,243	$	(178,797	)	$	147,446

The total amortization expense related to intangible assets for the third quarter of 2011 and 2010 was $9.6 million and $4.5 million, respectively, and $29.3 million and $12.4 million for the nine months ended September 30, 2011 and 2010, respectively. Based on the September 30, 2011 net carrying value of our intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2011 – $38.8 million; 2012 – $37.0 million; 2013 – $27.9 million; 2014 – $18.1 million; and 2015 – $11.5 million.

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Commitments, Guarantees And Contingencies

9 Months Ended

Sep. 30, 2011

Commitments, Guarantees And Contingencies

Commitments, Guarantees And Contingencies

10. COMMITMENTS, GUARANTEES AND CONTINGENCIES

Warranties. We generally warrant that our solutions and related offerings will conform to published specifications, or to specifications provided in an individual client arrangement, as applicable. The typical warranty period is 90 days from delivery of the solution or offering. For certain service offerings we provide a limited warranty for the duration of the services provided. We generally warrant that services will be performed in a professional and workmanlike manner. The typical remedy for breach of warranty is to correct or replace any defective deliverable, and if not possible or practical, we will accept the return of the defective deliverable and refund the amount paid under the client arrangement that is allocable to the defective deliverable. Our contracts also generally contain limitation of damages provisions in an effort to reduce our exposure to monetary damages arising from breach of warranty claims. Historically, we have incurred minimal warranty costs, and as a result, do not maintain a warranty reserve.

Product and Services Indemnifications. Our arrangements with our clients generally include an indemnification provision that will indemnify and defend a client in actions brought against the client that claim our products and/or services infringe upon a copyright, trade secret, or valid patent. Historically, we have not incurred any significant costs related to such indemnification claims, and as a result, do not maintain a reserve for such exposure.

Claims for Company Non-performance. Our arrangements with our clients typically cap our liability for breach to a specified amount of the direct damages incurred by the client resulting from the breach. From time-to-time, these arrangements may also include provisions for possible liquidated damages or other financial remedies for our non-performance, or in the case of certain of our outsourced customer care and billing solutions, provisions for damages related to service level performance requirements. The service level performance requirements typically relate to system availability and timeliness of service delivery. As of September 30, 2011, we believe we have adequate reserves, based on our historical experience, to cover any reasonably anticipated exposure as a result of our nonperformance for any past or current arrangements with our clients.

Indemnifications Related to Officers and the Board of Directors. We have agreed to indemnify certain of our officers and members of our Board of Directors if they are named or threatened to be named as a party to any proceeding by reason of the fact that they acted in such capacity. We maintain directors' and officers' (D&O) insurance coverage to protect against such losses. We have not historically incurred any losses related to these types of indemnifications, and are not aware of any pending or threatened actions or claims against any officer or member of our Board of Directors. As a result, we have not recorded any liabilities related to such indemnifications as of September 30, 2011. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations.

Legal Proceedings. From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. We are not presently a party to any material pending or threatened legal proceedings.

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Derivatives

9 Months Ended

Sep. 30, 2011

Derivatives

Derivatives

8. DERIVATIVES

Interest Rate Swap Contracts. In May 2011, we entered into three interest rate swap contracts with the objective of managing our exposure to fluctuations in interest rate movements, thereby eliminating the variability of cash flows on certain portions of the interest payments related to the Term Loan component of our Credit Agreement.

A summary of the three interest rate swap contracts is as follows (dollars in thousands):

	Beginning of Term		End of Term		Weighted-Average Notional Amount Over Term		Fixed Rate
2011 Swap		May 16, 2011		March 13, 2012	$	118,000		0.451	%
2012 Swap		March 13, 2012		March 13, 2013		78,000		1.085	%
2013 Swap		March 13, 2013		March 13, 2014		51,000		2.181	%

We have designated our interest rate swap contracts as cash flow hedges. Swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty over the lives of the contracts in exchange for us making fixed-rate payments to the counterparty over the lives of the contracts without exchange of the underlying notional amount.

As of September 30, 2011, the fair value of the interest rate swap contracts, reflected in other non-current liabilities in our Balance Sheet, was $1.2 million, with the loss, net of tax, reflected as a reduction in other comprehensive income.

Changes in the fair value of these interest rate swap contracts, designated as hedging instruments of the variability of cash flows associated with floating-rate, long-term debt obligations, are reported in accumulated other comprehensive income ("AOCI") in the stockholders' equity section of our Balance Sheet. These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged debt obligation in the same period in which the related interest on the floating-rate debt obligations affects earnings. The amount of losses reclassified from AOCI to income/loss (effective portions) for the nine months ended September 30, 2011 were not material. The estimated net losses on the interest rate swap contracts that will be reclassified into earnings within the next twelve months are not expected to be material. Our interest rate swap contracts qualify as effective relationships, and as a result, hedge ineffectiveness was not material during the quarter and nine months ended September 30, 2011.

We are exposed to credit-related losses in the event of non-performance by the counterparty to the interest rate swap contracts. The counterparty to the interest rate swap contracts is a major institution with investment grade credit ratings. We evaluated the counterparty credit risk before entering into the interest rate swap contracts and will continue to closely monitor the financial markets and the risk that the counterparty will default on its obligations. This credit risk is generally limited to the unrealized gains in such contracts, should the counterparty fail to perform as contracted.

We do not use derivative financial instruments for speculative purposes.

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General

9 Months Ended

Sep. 30, 2011

General

General

1. GENERAL

We have prepared the accompanying unaudited condensed consolidated financial statements as of September 30, 2011 and December 31, 2010, and for the third quarter and nine months ended September 30, 2011 and 2010, in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, and pursuant to the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position and operating results have been included. The unaudited Condensed Consolidated Financial Statements (the "Financial Statements") should be read in conjunction with the Consolidated Financial Statements and notes thereto, together with Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC. The results of operations for the third quarter and nine months ended September 30, 2011 are not necessarily indicative of the expected results for the entire year ending December 31, 2011.

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Stockholders' Equity And Equity Compensation Plans

9 Months Ended

Sep. 30, 2011

Stockholders' Equity And Equity Compensation Plans

Stockholders' Equity And Equity Compensation Plans

4. STOCKHOLDERS' EQUITY AND EQUITY COMPENSATION PLANS

Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board of Directors, authorizing us to repurchase our common stock from time-to-time as market and business conditions warrant (the "Stock Repurchase Program"). During the nine months ended September 30, 2011 and 2010, we repurchased 0.6 million shares and 1.5 million shares of our common stock under the Stock Repurchase Program for $7.7 million (weighted-average price of $13.25 per share) and $29.3 million (weighted-average price of $19.56 per share), respectively. As of September 30, 2011, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 3.6 million shares.

Stock Repurchases for Tax Withholdings. In addition to the above mentioned stock repurchases, during the nine months ended September 30, 2011 and 2010, we repurchased from our employees and then cancelled 0.2 million shares of common stock for $4.2 million and 0.2 million shares of common stock for $4.6 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Equity Compensation Plans. In May 2011, our stockholders approved the amended and restated 2005 Stock Incentive Plan, which included a 3,400,000 share increase in the number of shares that may be issued under the plan, from 12,400,000 shares to 15,800,000 shares. Additionally in May 2011, our stockholders approved the amended and restated 1996 Employee Stock Purchase Plan, which included a 750,000 share increase in the number of shares reserved for sales to our employees, from 958,043 shares to 1,708,043 shares.

Stock-Based Awards. A summary of our unvested restricted common stock activity during the third quarter and nine months ended September 30, 2011 is as follows:

	Quarter Ended September 30, 2011					Nine Months Ended September 30, 2011
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Unvested awards, beginning		1,843,724		$	18.04		1,803,971		$	17.19
Awards granted		44,523			13.20		722,073			18.87
Awards forfeited/cancelled		(23,675	)		17.95		(63,743	)		17.61
Awards vested		(65,652	)		19.93		(663,381	)		17.20
Unvested awards, ending		1,798,920		$	17.85		1,798,920		$	17.85

Included in the awards granted during the nine months ended September 30, 2011, are performance-based awards for 120,000 restricted common stock shares issued to members of executive management, which vest in equal installments over three years upon meeting either pre-established financial performance objectives or pre-established stock price objectives. The performance-based awards become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

All other restricted common stock shares granted during the nine months ended September 30, 2011 are time-based awards, which vest annually over four years with no restrictions other than the passage of time. Certain shares of the restricted common stock become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

We recorded stock-based compensation expense for the third quarter of 2011 and 2010 of $3.2 million and $3.1 million, respectively, and for the nine months ended September 30, 2011 and 2010 of $9.7 million and $9.3 million, respectively.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2011

Earnings Per Common Share

Earnings Per Common Share

5. EARNINGS PER COMMON SHARE

Basic and diluted earnings per common share ("EPS") amounts are presented on the face of the accompanying Condensed Consolidated Statements of Income (the "Statements of Income"). The amounts attributed to both common stock and participating restricted common stock used as the numerators in both the basic and diluted EPS calculations are as follows (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Net Income attributed to:
Common stock	$	10,434	$	11,525	$	30,791	$	23,797
Participating restricted common stock		45		165		197		423
Total	$	10,479	$	11,690	$	30,988	$	24,220

The weighted-average shares outstanding used in the basic and diluted EPS denominators related to common stock and participating restricted common stock are as follows (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Weighted-average shares outstanding – Basic:
Common stock		32,765		32,365		32,747		32,573
Participating restricted common stock		141		464		210		579
Total		32,906		32,829		32,957		33,152
Weighted-average shares outstanding – Diluted:
Common stock		32,887		32,625		32,937		32,834
Participating restricted common stock		141		464		210		579
Total		33,028		33,089		33,147		33,413

The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Basic weighted-average common shares		32,765		32,365		32,747		32,573
Dilutive effect of common stock options		16		21		20		25
Dilutive effect of non-participating restricted common stock		106		239		170		236
Dilutive effect of 2010 Convertible Notes		—		—		—		—
Diluted weighted-average common shares		32,887		32,625		32,937		32,834

Potentially dilutive common shares related to stock options and non-participating unvested shares of restricted common stock of 0.6 million and 0.1 million, respectively, for the third quarter of 2011 and 2010, and 0.2 million and 0.1 million for the nine months ended September 30, 2011 and 2010, respectively, were excluded from the computation of diluted EPS related to common shares as their effect was antidilutive.

The 2010 Convertible Notes have a dilutive effect only in those quarterly periods in which our average stock price exceeds the current effective conversion price of $24.45 per share. The 2004 Convertible Debt Securities, which we fully extinguished in the third quarter of 2011, never had a dilutive effect on our EPS while they were outstanding.

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Comprehensive Income

9 Months Ended

Sep. 30, 2011

Comprehensive Income

Comprehensive Income

6. COMPREHENSIVE INCOME

The components of our comprehensive income were as follows (in thousands):

	Quarter Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011			2010
Net income	$	10,479		$	11,690	$	30,988		$	24,220
Other comprehensive income (loss), net of tax, if any:
Unrealized gain (loss) on short-term investments		(3	)		6		(2	)		(3	)
Change in unrecognized pension plan losses and prior service costs		—			—		4			22
Unrealized loss on change in fair value of interest rate swap		(293	)		—		(713	)		—
Foreign currency translation adjustments		(7,563	)		—		(1,245	)		—
Comprehensive income	$	2,620		$	11,696	$	29,032		$	24,239

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash flows from operating activities:
Net income	$ 30,988	$ 24,220
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation	18,924	16,578
Amortization	31,599	12,963
Amortization of original issue discount	4,027	5,447
Gain on short-term investments and other	(46)	(112)
Loss on repurchase of convertible debt securities		12,635
Deferred income taxes	1,637	(160)
Excess tax benefit of stock-based compensation awards	(824)	(1,138)
Stock-based employee compensation	9,684	9,300
Changes in operating assets and liabilities:
Trade accounts and other receivables, net	(9,019)	(5,470)
Other current and non-current assets	574	(3,966)
Income taxes payable/receivable	(949)	(6,987)
Trade accounts payable and accrued liabilities	(31,096)	10,810
Deferred revenue	(26,365)	115
Net cash provided by operating activities	29,134	74,235
Cash flows from investing activities:
Purchases of property and equipment	(19,615)	(9,858)
Purchases of short-term investments	(31,903)	(61,888)
Proceeds from sale/maturity of short-term investments	35,200	81,900
Purchase of foreign currency hedge		(5,673)
Acquisition of businesses, net of cash acquired		(3,264)
Acquisition of and investments in client contracts	(6,713)	(3,610)
Change in restricted cash for Intec Acquisition		(130,000)
Net cash used in investing activities	(23,031)	(132,393)
Cash flows from financing activities:
Proceeds from issuance of common stock	1,158	1,046
Repurchase of common stock	(11,881)	(33,942)
Payments on acquired equipment financing	(1,357)	(837)
Proceeds from long-term debt		150,000
Payments of deferred financing costs	(205)	(6,541)
Payments on long-term debt	(67,649)	(148,846)
Excess tax benefit of stock-based compensation awards	824	1,138
Net cash used in financing activities	(79,110)	(37,982)
Effect of exchange rate fluctuations on cash	(691)
Net decrease in cash and cash equivalents	(73,698)	(96,140)
Cash and cash equivalents, beginning of period	197,858	163,489
Cash and cash equivalents, end of period	124,160	67,349
Supplemental disclosures of cash flow information:
Interest	11,739	3,781
Income taxes	$ 22,542	$ 14,331

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Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2011

Summary Of Significant Accounting Policies

Summary Of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in Preparation of Financial Statements. The preparation of the accompanying Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Postage. We pass through to our clients the cost of postage that is incurred on behalf of those clients, and typically require an advance payment on expected postage costs. These advance payments are included in "client deposits" in the accompanying Condensed Consolidated Balance Sheets (the "Balance Sheet" or "Balance Sheets") and are classified as current liabilities regardless of the contract period. We net the cost of postage against the postage reimbursements, and include the net amount in processing and related services revenues. The cost of postage that has been shown net of the postage reimbursements from our clients for the third quarter of 2011 and 2010 was $65.9 million and $67.5 million, respectively, and for the nine months ended September 30, 2011 and 2010 was $199.0 million and $202.7 million, respectively.

Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of the purchase to be cash equivalents. As of September 30, 2011, our cash equivalents consist primarily of institutional money market funds, commercial paper and time deposits held at major banks.

As of September 30, 2011, we had $4.8 million of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in Cash and cash equivalents in the accompanying Balance Sheet.

Short-term Investments and Other Financial Instruments. Our financial instruments as of September 30, 2011 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, interest rate swaps, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value.

Certain of our short-term investments and cash equivalents are considered "available-for-sale" and are reported at fair value in our accompanying Balance Sheets, with unrealized gains and losses, net of the related income tax effect, excluded from earnings and reported in a separate component of stockholders' equity. Realized and unrealized gains and losses were not material in any period presented.

All short-term investments held by us as of September 30, 2011, have contractual maturities of less than one year from the time of acquisition. Our short-term investments at September 30, 2011, and December 31, 2010, consisted entirely of commercial paper. Proceeds from the sale/maturity of short-term investments for the nine months ended September 30, 2011 and 2010 were $35.2 million and $81.9 million, respectively.

The following table represents the fair value hierarchy based upon three levels of inputs, of which Levels 1 and 2 are considered observable and Level 3 is unobservable, for financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	September 30, 2011						December 31, 2010
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Money market funds (1)	$	47,132	$	—	$	47,132	$	91,002	$	—	$	91,002
Commercial paper (2)		—		25,917		25,917		—		26,590		26,590
Total	$	47,132	$	25,917	$	73,049	$	91,002	$	26,590	$	117,592
Liabilities:
Interest rate swap contracts (3)		—		1,159		1,159		—		—		—
Total	$	—	$	1,159	$	1,159	$	—	$	—	$	—

(1) As of September 30, 2011 and December 31, 2010, all of the money market funds were classified on our Balance Sheet in cash equivalents.

(2) As of September 30, 2011 and December 31, 2010, of the total commercial paper, $11.5 million and $8.9 million, respectively, were classified on our Balance Sheet in cash equivalents, and $14.4 and $17.7 million, respectively, were classified on our Balance Sheet in short-term investments.

(3) As of September 30, 2011, the fair value of the interest rate swap contracts were classified on our Balance Sheet in other non-current liabilities.

Valuation inputs used to measure the fair values of our money market funds were derived from quoted market prices. The fair values of all other financial instruments are based upon pricing provided by third-party pricing services. These prices were derived from observable market inputs.

We have chosen not to measure our debt at fair value, with changes recognized in earnings each reporting period. As of September 30, 2011, the estimated fair value of our Credit Agreement long-term debt of $192.5 million (carrying value including current maturities) was approximately $206 million, and was estimated using a discounted cash flow methodology. As of September 30, 2011, the estimated fair value of our $150 million (par value) convertible debt, based upon quoted market prices or recent sales activity, was approximately $132 million.

Adoption of New Guidance on Revenue Recognition Related to Multiple-Deliverable Revenue Arrangements. On January 1, 2011, new guidance on revenue recognition related to multiple-deliverable revenue arrangements became effective. The new guidance changed the criteria for separating deliverables in multiple element revenue arrangements that do not fall within the scope of other authoritative accounting literature.

Our processing and related services revenues relate primarily to the outsourced, customer care and billing processing and related services we provide to our North American cable and direct broadcast satellite clients under long-term master processing agreements. Under those agreements, on a monthly basis, we provide multiple services, to include billing and processing services; credit management and collection services; and customer statement invoice printing and mailing services. Since there are essentially no processing and related services elements that are undelivered at the end of each month, other than the future months' repetition of those same services which will be billed for and recognized as revenues in those future months when the services are provided, the new guidance did not impact the manner in which we are recognizing our processing and related services revenues.

The revenue recognition for our software licenses, software maintenance services (also known as post-contract customer support), and our professional services that involve the implementation of the software licenses, fall within the scope of specific authoritative accounting literature and are not impacted by the new guidance on revenue recognition related to multiple-deliverable revenue arrangements.

Accounting Pronouncements Issued But Not Yet Effective. In June 2011, new guidance was issued regarding the presentation of comprehensive income, requiring companies to present the components of net income and other comprehensive income either in one continuous statement or in two separate but consecutive statements and eliminating the option to report other comprehensive income and its components in the statement of stockholders' equity. The new guidance does not change the items that must be reported in other comprehensive income or when such items must be reclassified to net income. The new guidance is effective for interim and annual periods beginning after December 15, 2011. As this new guidance impacts presentation and disclosure only, it will have no effect on our consolidated financial position or results of operations.

In September 2011, new guidance was issued related to the testing of goodwill for impairment. The new guidance simplifies the assessment of goodwill impairment by giving companies the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount before performing the two step impairment review process. The new guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. This new guidance is not expected to have a material impact on our consolidated financial position or results of operations.

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Condensed Consolidated Balance Sheets (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 124,160	$ 197,858
Short-term investments	14,439	17,692
Total cash, cash equivalents and short-term investments	138,599	215,550
Trade accounts receivable-
Billed, net of allowance of $2,472 and $1,837	157,276	155,005
Unbilled and other	36,205	30,803
Deferred income taxes	17,752	13,852
Income taxes receivable	12,214	9,043
Other current assets	18,532	17,241
Total current assets	380,578	441,494
Property and equipment, net of depreciation of $109,879 and $94,236	46,098	52,257
Software, net of amortization of $53,726 and $45,579	32,152	31,118
Goodwill	208,987	209,164
Client contracts, net of amortization of $152,931 and $133,218	102,920	116,328
Deferred income taxes	1,329	9,677
Other assets	15,430	19,660
Total assets	787,494	879,698
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt, net of unamortized original issue discount of zero and $621	17,500	69,528
Client deposits	31,182	31,897
Trade accounts payable	27,140	25,381
Accrued employee compensation	32,941	53,372
Income taxes payable	2,192	2,028
Deferred revenue	42,447	56,184
Other current liabilities	20,021	32,019
Total current liabilities	173,423	270,409
Non-current liabilities:
Long-term debt, net of unamortized original issue discount of $31,435 and $34,841	293,565	305,159
Deferred revenue	7,942	16,103
Income taxes payable	2,820	954
Deferred income taxes	26,227	33,247
Other non-current liabilities	17,958	16,748
Total non-current liabilities	348,512	372,211
Total liabilities	521,935	642,620
Stockholders' equity:
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; zero shares issued and outstanding
Common stock, par value $.01 per share; 100,000,000 shares authorized; 34,079,251 and 34,120,789 shares outstanding	646	641
Additional paid-in capital	446,818	439,712
Treasury stock, at cost, 30,535,019 and 29,956,808 shares	(712,625)	(704,963)
Accumulated other comprehensive income (loss):
Unrealized gain on short-term investments, net of tax	2	4
Unrecognized pension plan losses and prior service costs, net of tax	(893)	(897)
Unrecognized loss on change in fair value of interest rate swaps, net of tax	(713)
Cumulative translation adjustments	(377)	868
Accumulated earnings	532,701	501,713
Total stockholders' equity	265,559	237,078
Total liabilities and stockholders' equity	$ 787,494	$ 879,698