10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2017

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   ☒           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   ☒           NO   ☐

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐  (Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES  ☐            NO   ☒

Shares of common stock outstanding at April 30, 2017: 33,785,587

CSG SYSTEMS INTERNATIONAL, INC.

FORM 10-Q for the Quarter Ended March 31, 2017

INDEX

		Page No.
Part I -FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016 (Unaudited)	3
	Condensed Consolidated Statements of Income for the Quarters ended March 31, 2017 and 2016 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income for the Quarters ended March 31, 2017 and 2016 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Quarters Ended March 31, 2017 and 2016 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	24
Part II -OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 6.	Exhibits	25
	Signatures	26
	Index to Exhibits	27

2

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except per share amounts)

	March 31,			December 31,
	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	107,422		$	126,351
Short-term investments		130,450			150,147
Total cash, cash equivalents and short-term investments		237,872			276,498
Trade accounts receivable:
Billed, net of allowance of $2,824 and $3,080		195,311			208,930
Unbilled		40,191			30,828
Income taxes receivable		17,874			11,931
Other current assets		29,270			31,751
Total current assets		520,518			559,938
Non-current assets:
Property and equipment, net of depreciation of $126,230 and $122,866		36,418			33,116
Software, net of amortization of $101,689 and $99,316		29,451			30,427
Goodwill		202,750			201,094
Client contracts, net of amortization of $89,935 and $96,723		38,566			40,675
Deferred income taxes		12,328			14,218
Other assets		12,371			12,411
Total non-current assets		331,884			331,941
Total assets	$	852,402		$	891,879
LIABILITIES, CURRENT PORTION OF LONG-TERM DEBT CONVERSION OBLIGATION AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt, net of unamortized discounts of zero and $296	$	16,875		$	49,426
Client deposits		33,006			33,916
Trade accounts payable		31,803			35,118
Accrued employee compensation		48,716			65,341
Deferred revenue		50,435			45,064
Income taxes payable		547			822
Other current liabilities		18,897			22,342
Total current liabilities		200,279			252,029
Non-current liabilities:
Long-term debt, net of unamortized discounts of $21,834 and $23,007		322,541			326,993
Deferred revenue		7,595			6,694
Income taxes payable		2,405			2,245
Deferred income taxes		3,643			99
Other non-current liabilities		12,208			12,618
Total non-current liabilities		348,392			348,649
Total liabilities		548,671			600,678
Current portion of long-term debt conversion obligation		-			39,841
Stockholders' equity:
Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding		-			-
Common stock, par value $.01 per share; 100,000 shares authorized; 33,825 and 32,261 shares outstanding		689			672
Common stock warrants; zero and 1,426 warrants vested; 1,425 and 2,851 issued		-			16,007
Additional paid-in capital		415,450			391,209
Treasury stock, at cost; 33,702 and 34,919 shares		(799,605	)		(826,002	)
Accumulated other comprehensive income (loss):
Unrealized loss on short-term investments, net of tax		(115	)		(159	)
Cumulative foreign currency translation adjustments		(40,874	)		(45,213	)
Accumulated earnings		728,186			714,846
Total stockholders' equity		303,731			251,360
Total liabilities, current portion of long-term debt conversion obligation and stockholders' equity	$	852,402		$	891,879

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

3

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(in thousands, except per share amounts)

	Quarter Ended
	March 31, 2017			March 31, 2016
Revenues:
Cloud and related solutions	$	158,777		$	149,814
Software and services		15,058			19,178
Maintenance		18,635			17,234
Total revenues		192,470			186,226
Cost of revenues (exclusive of depreciation, shown separately below):
Cloud and related solutions		76,052			66,233
Software and services		11,274			13,366
Maintenance		10,382			9,884
Total cost of revenues		97,708			89,483
Other operating expenses:
Research and development		26,840			23,626
Selling, general and administrative		37,346			34,051
Depreciation		3,315			3,516
Restructuring and reorganization charges		248			(5,741	)
Total operating expenses		165,457			144,935
Operating income		27,013			41,291
Other income (expense):
Interest expense		(4,306	)		(3,005	)
Amortization of original issue discount		(888	)		(1,658	)
Interest and investment income, net		806			468
Loss on repurchase of convertible notes		-			(3,211	)
Other, net		(275	)		(791	)
Total other		(4,663	)		(8,197	)
Income before income taxes		22,350			33,094
Income tax provision		(2,113	)		(11,590	)
Net income	$	20,237		$	21,504
Weighted-average shares outstanding:
Basic		32,016			30,762
Diluted		32,594			33,672
Earnings per common share:
Basic	$	0.63		$	0.70
Diluted		0.62			0.64

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

4

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED

(in thousands)

	Quarter Ended
	March 31, 2017		March 31, 2016
Net income	$	20,237	$	21,504
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		4,339		(1,102	)
Unrealized holding gains on short-term investments arising during period		44		911
Other comprehensive income (loss), net of tax		4,383		(191	)
Total comprehensive income, net of tax	$	24,620	$	21,313

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

5

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)

	March 31, 2017			March 31, 2016
Cash flows from operating activities:
Net income	$	20,237		$	21,504
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation		3,315			3,516
Amortization		7,471			6,415
Amortization of original issue discount		888			1,658
(Gain) loss on short-term investments and other		(57	)		11
Loss on repurchase of convertible notes		-			3,211
Gain on disposition of business operations		-			(6,614	)
Deferred income taxes		5,971			3,923
Excess tax benefit of stock-based compensation awards		-			(3,375	)
Stock-based compensation		5,670			6,506
Changes in operating assets and liabilities, net of acquired amounts:
Trade accounts receivable, net		5,650			35
Other current and non-current assets		2,793			1,597
Income taxes payable/receivable		(5,692	)		992
Trade accounts payable and accrued liabilities		(21,943	)		(32,490	)
Deferred revenue		5,661			3,785
Net cash provided by operating activities		29,964			10,674
Cash flows from investing activities:
Purchases of property and equipment		(9,557	)		(5,262	)
Purchases of short-term investments		(17,983	)		(14,100	)
Proceeds from sale/maturity of short-term investments		37,782			30,067
Acquisition of and investments in client contracts		(4,363	)		(1,520	)
Proceeds from the disposition of business operations		-			8,850
Net cash provided by investing activities		5,879			18,035
Cash flows from financing activities:
Proceeds from issuance of common stock		385			356
Payment of cash dividends		(7,033	)		(6,529	)
Repurchase of common stock		(11,224	)		(18,990	)
Proceeds from long-term debt		-			230,000
Payments on long-term debt		(3,750	)		(1,875	)
Repurchase of convertible notes		-			(72,619	)
Settlement of convertible notes		(34,771	)		-
Payments of deferred financing costs		-			(6,655	)
Excess tax benefit of stock-based compensation awards		-			3,375
Net cash provided by (used in) financing activities		(56,393	)		127,063
Effect of exchange rate fluctuations on cash		1,621			1,330
Net increase (decrease) in cash and cash equivalents		(18,929	)		157,102
Cash and cash equivalents, beginning of period		126,351			132,631
Cash and cash equivalents, end of period	$	107,422		$	289,733
Supplemental disclosures of cash flow information:
Cash paid during the period for-
Interest	$	6,539		$	3,339
Income taxes		1,835			6,680

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

6

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 March 31, 2017 and December 31, 2016, and for the quarters ended March 31, 2017 and 2016, in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“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 (“MD&A”), contained in our Annual Report on Form 10-K for the year ended December 31, 2016 (our “2016 10-K”), filed with the SEC. The results of operations for the quarter ended March 31, 2017 are not necessarily indicative of the expected results for the entire year ending December 31, 2017.

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 our Financial Statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

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 March 31, 2017 and December 31, 2016, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks.

As of March 31, 2017 and December 31, 2016, we had $4.8 million and $4.3 million, respectively, of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in cash and cash equivalents in our Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”).

Short-term Investments and Other Financial Instruments. Our financial instruments as of March 31, 2017 and December 31, 2016 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value.

Our short-term investments and certain of our cash equivalents are considered “available-for-sale” and are reported at fair value in our 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.

Primarily all short-term investments held by us as of March 31, 2017 and December 31, 2016 have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of March 31, 2017 and December 31, 2016 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments for the first quarters of 2017 and 2016 were $37.8 million and $30.1 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 our financial assets and liabilities measured at fair value (in thousands):

	March 31, 2017						December 31, 2016
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Cash equivalents:
Money market funds	$	8,548	$	—	$	8,548	$	6,531	$	—	$	6,531
Commercial paper	—			12,890	12,890		—			24,826		24,826
Short-term investments:
Corporate debt securities	—			106,448		106,448	—			109,140		109,140
U.S. government agency bonds	—			11,998		11,998	—			26,513		26,513
Asset-backed securities	—			12,004		12,004	—			14,494		14,494
Total	$	8,548	$	143,340	$	151,888	$	6,531	$	174,973	$	181,504

7

Valuation inputs used to measure the fair values of our money market funds and corporate equity securities 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.  The following table indicates the carrying value (par value for convertible debt) and estimated fair value of our debt as of the indicated periods (in thousands):

	March 31, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Credit agreement (carrying value including current maturities)	$	131,250	$	131,250	$	135,000	$	135,000
2010 Convertible debt (par value)		—		—		34,722		74,795
2016 Convertible debt (par value)		230,000		239,200		230,000		258,175

The fair value for our credit agreement was estimated using a discounted cash flow methodology, while the fair value for our convertible debt was estimated based upon quoted market prices or recent sales activity, both of which are considered Level 2 inputs.  See Note 4 for additional discussion regarding our convertible debt.

Accounting Pronouncements Adopted.  In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718).  This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  This ASU is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The methods of adoption for this ASU vary by amendment.  We adopted this ASU in the first quarter of 2017, prospectively applying the guidance related to the recognition of excess tax benefits and tax deficiencies in the income statement and the presentation of excess tax benefits on the statement of cash flows. See Note 5 for further discussion of the impact of adopting this ASU.  

Accounting Pronouncement Issued But Not Yet Effective. The FASB has issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  In August 2015, the FASB issued ASU 2015-14 Revenue from Contracts with Customers (Topic 606):  Deferral of the Effective Date which deferred the effective date of ASU 2014-09 for one year. In December 2016, the FASB issued ASU 2016-20 Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. Collectively, this ASU is a single comprehensive model which supersedes nearly all existing revenue recognition guidance under U.S. GAAP.  Under the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.  The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  The accounting guidance is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2017.  Early adoption is permitted.  An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard.

We are currently evaluating the impact this ASU will have to our accounting policies, business processes and potential differences in the timing and/or method of revenue recognition for our customer contracts. In conjunction with this evaluation, we are updating our policies to align with the new accounting guidance as well as evaluating our significant customer contracts to determine if the guidance will materially impact our existing portfolio of customer contracts. In addition, we will review new contracts entered into up until the adoption of the ASU. Based upon our initial evaluations, the adoption of this guidance is not expected to have a material impact on our consolidated financial statements. We currently intend to adopt the ASU in the first quarter of 2018, utilizing the cumulative effect approach.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  This ASU requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months on its balance sheet.  This ASU is effective in annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method.  We are currently in the process of evaluating the impact this ASU will have on our Financial Statements.  Currently, we plan to early adopt this ASU in the first quarter of 2018.  Based on our initial evaluations, we believe the adoption of this standard will have a material impact on our consolidated balance sheet.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory. This ASU requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers. This ASU is effective in annual and interim periods in fiscal years beginning after December 15, 2017, with early adoption permitted, and requires a modified retrospective transition method. We are currently in the process of evaluating the impact that this new guidance will have on our Financial Statements.

8

3. LONG-LIVED ASSETS

Goodwill. The changes in the carrying amount of goodwill for the quarter ended March 31, 2017, were as follows (in thousands):  

January 1, 2017 balance	$	201,094
Adjustments related to prior acquisitions		(15	)
Effects of changes in foreign currency exchange rates		1,671
March 31, 2017 balance	$	202,750

Other Intangible Assets. Our intangible assets subject to ongoing amortization consist primarily of client contracts and software. As of March 31, 2017 and December 31, 2016, the carrying values of these assets were as follows (in thousands):

	March 31, 2017							December 31, 2016
	Gross							Gross
	Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount
Client contracts	$	128,501	$	(89,935	)	$	38,566	$	137,398	$	(96,723	)	$	40,675
Software		131,140		(101,689	)		29,451		129,743		(99,316	)		30,427
Total	$	259,641	$	(191,624	)	$	68,017	$	267,141	$	(196,039	)	$	71,102

The total amortization expense related to intangible assets for the first quarters of 2017 and 2016 were $6.9 million and $5.9 million, respectively. Based on the March 31, 2017 net carrying value of our intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2017– $25.6 million;  2018 – $19.9 million; 2019 – $13.4 million; 2020– $6.9 million; and 2021 – $3.0 million.

4. DEBT

Our long-term debt, as of March 31, 2017 and December 31, 2016, was as follows (in thousands):

	March 31,			December 31,
	2017			2016
Credit Agreement:
2015 Term loan, due February 2020, interest at adjusted LIBOR plus 1.75% (combined rate of 2.90% at March 31, 2017)	$	131,250		$	135,000
Less - deferred financing costs		(3,180	)		(3,489	)
Term loan, net of unamortized discounts		128,070			131,511
$200 million revolving loan facility, due February 2020, interest at adjusted LIBOR plus applicable margin	—			—
Convertible Notes:
2016 Convertible Notes – Senior convertible notes; due March 15, 2036; cash interest at 4.25%		230,000			230,000
Less – unamortized original issue discount		(13,389	)		(14,005	)
Less – deferred financing costs		(5,265	)		(5,513	)
2016 Convertible Notes, net of unamortized discounts		211,346			210,482
2010 Convertible Notes – Senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0%		—			34,722
Less – unamortized original issue discount		—			(272	)
Less – deferred financing costs		—			(24	)
2010 Convertible Notes, net of unamortized discounts		—			34,426
Total debt, net of unamortized discounts		339,416			376,419
Current portion of long-term debt, net of unamortized discounts		(16,875	)		(49,426	)
Long-term debt, net of unamortized discounts	$	322,541		$	326,993

9

Credit Agreement

During the first quarter of 2017, we made $3.8 million of principal repayments on our $150 million aggregate principal five-year term loan (the “2015 Term Loan”). As of March 31, 2017, our interest rate on the 2015 Term Loan is 2.90% (adjusted LIBOR plus 1.75% per annum), effective through June 30, 2017, and our commitment fee on the unused $200 million aggregate principal five-year revolving loan facility (the “2015 Revolver”) is 0.25%.  As of March 31, 2017, we had no borrowing outstanding on our 2015 Revolver and had the entire $200.0 million available to us.    

Convertible Notes

2016 Convertible Notes.  Upon conversion of the 2016 Convertible Notes, we will settle our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock, or a combination thereof, at our election. It is our current intent and policy to settle our conversion obligations as follows: (i) pay cash for 100% of the par value of the 2016 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we can satisfy the remaining conversion obligation in our common stock, cash or a combination thereof.

The 2016 Convertible Notes will be convertible at the option of the note holders upon the satisfaction of specified conditions and during certain periods. During the period from, and including, December 15, 2021 to the close of business on the business day immediately preceding March 15, 2022 and on or after December 15, 2035, holders may convert all or any portion of their 2016 Convertible Notes at the conversion rate then in effect at any time regardless of these conditions.

As a result of us increasing our dividend in March 2017 (see Note 7), the previous conversion rate for the 2016 Convertible Notes of 17.4642 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of approximately $57.26 per share of our common stock, has been adjusted to 17.4699 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of approximately $57.24 per share of our common stock.

Holders may require CSG to repurchase the 2016 Convertible Notes for cash on each of March 15, 2022, March 15, 2026, and March 15, 2031, or upon the occurrence of a fundamental change (as defined in the 2016 Convertible Notes Indenture) in each case at a purchase price equal to the principal amount thereof plus accrued and unpaid interest.

We may not redeem the 2016 Convertible Notes prior to March 20, 2020. On or after March 20, 2020, we may redeem for cash all or part of the 2016 Convertible Notes if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which CSG provides notice of redemption. On or after March 15, 2022, we may redeem for cash all or part of the 2016 Convertible Notes regardless of the sales price condition described in the preceding sentence. In each case, the redemption price will equal the principal amount of the 2016 Convertible Notes to be redeemed, plus accrued and unpaid interest.

As of March 31, 2017, none of the conversion features have been achieved, and thus, the 2016 Convertible Notes are not convertible by the holders.

2010 Convertible Notes.   In March 2017, we settled our conversion obligation for the 2010 Convertible Notes as follows: (i) we paid cash of $34.8 million for the remaining par value of the 2010 Convertible Notes; and (ii) delivered 694,240 shares of our common shares from treasury stock, to settle the $28.8 million value of the conversion obligation in excess of the par value. See Note 8 for discussion of our equity transactions.

5. INCOME TAXES

The effective income tax rates for the first quarters of 2017 and 2016 were as follows:

Quarter Ended March 31,
2017			2016
	9	%		35	%

The lower first quarter 2017 effective income tax rate reflects an approximately $5 million net benefit resulting from Comcast’s exercise of 1.4 million vested stock warrants in January 2017, discussed below in Note 8.  The stock warrants have appreciated in value since their vesting resulting in an income tax benefit to us when exercised.  Additionally, as discussed in Note 2, we adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718) in the first quarter of 2017.  This ASU requires a change in the recognition of excess tax benefits and tax deficiencies, related to share-based payment transactions, which were recorded in equity,

10

and now are recorded discrete to the quarter incurred as a component of income tax expense in the income statement.  The adoption of this ASU provided an approximately $1 million benefit to our first quarter effective income tax rate and is expected to provide an approximately $2 million benefit for the full year.  For the full-year 2017 we are currently estimating an effective income tax rate of approximately 31%.

6. 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 the date of acceptance 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 March 31, 2017, 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 members of our Board of Directors (the “Board”) and certain of our officers 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. As a result, we have not recorded any liabilities related to such indemnifications as of March 31, 2017. 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.

7. EARNINGS PER COMMON SHARE

Basic and diluted earnings per common share (“EPS”) amounts are presented on the face of the accompanying Income Statements.

No reconciliation of the basic and diluted EPS numerators is necessary as net income is used as the numerators for all periods presented.  The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands):  

	Quarter Ended March 31,
	2017		2016
Basic weighted-average common shares		32,016		30,762
Dilutive effect of restricted common stock		578	732
Dilutive effect of 2010 Convertible Notes		-		1,900
Dilutive effect of Stock Warrants		-	278
Diluted weighted-average common shares		32,594		33,672

The Convertible Notes have a dilutive effect only in those quarterly periods in which our average stock price exceeds the current effective conversion price.  The 2010 Convertible Notes were settled in March 2017 (see Note 4).

11

The Stock Warrants have a dilutive effect only in those quarterly periods in which our average stock price exceeds the exercise price of $26.68 per warrant (under the treasury stock method), and are not subject to performance vesting conditions.  All the vested Stock Warrants were exercised in January 2017 (see Note 8).

Potentially dilutive common shares related to non-participating unvested restricted stock excluded from the computation of diluted EPS, as the effect was antidilutive, were not material in any period presented.    

8. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS

Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). During the first quarters of 2017 and 2016 we repurchased 0.1 million shares of our common stock for $5.4 million (weighted-average price of $42.85 per share) and 0.3 million shares of our common stock for $9.5 million (weighted-average price of $36.07 per share), respectively, under a SEC Rule 10b5-1 Plan.  

As of March 31, 2017, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 6.6 million shares.

Stock Repurchases for Tax Withholdings. In addition to the above mentioned stock repurchases, during the first quarters of 2017 and 2016, we repurchased and then cancelled 0.2 million shares of common stock for $6.1 million and 0.2 million shares of common stock for $9.5 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

CashDividends.  During the first quarter of 2017, the Board approved a quarterly cash dividend of $0.1975 per share of common stock, totaling $6.7 million. During the first quarter of 2016, the Board approved a quarterly cash dividend of $0.185 per share of common stock, totaling $6.0 million.

Warrants.  In 2014, in conjunction with the execution of an amendment to our current agreement with Comcast Corporation (“Comcast”), we issued stock warrants (the “Warrant Agreement”) for the right to purchase up to approximately 2.9 million shares of our common stock (the “Stock Warrants”) as an additional incentive for Comcast to convert customer accounts onto our Advanced Convergent Platform based on various milestones. The Stock Warrants have a 10-year term and an exercise price of $26.68 per warrant.        

Upon vesting, the Stock Warrants are recorded as a client incentive asset with the corresponding offset to stockholders’ equity.  The client incentive asset related to the Stock Warrants is amortized as a reduction in cloud and related solutions revenues over the remaining term of the Comcast amended agreement.  As of March 31, 2017, we recorded a client incentive asset related to these Stock Warrants of $16.0 million and have amortized $5.5 million as a reduction in cloud and related solutions revenues.  The remaining unvested Stock Warrants will be accounted for as client incentive assets in the period the performance conditions necessary for vesting have been met.  

As of December 31, 2016, approximately 1.4 million Stock Warrants had vested.  In January 2017, Comcast exercised approximately 1.4 million vested Stock Warrants, which we net share settled under the provisions of the Warrant Agreement (discussed further in Treasury Shares below).  As of March 31, 2017, approximately 1.5 million Stock Warrants were outstanding, none of which were vested.

Treasury Stock.  In January 2017, we net share settled the exercise of 1.4 million vested Stock Warrants noted above by delivering 649,221 of our common shares from treasury stock, which had a fair value of $31.5 million. The carrying value of the shares of treasury stock delivered was $15.4 million (weighted-average price of $23.66 per share).  The difference between the carrying amount of the treasury shares and the $16.0 million carrying amount of the common stock warrants was recorded as an adjustment to additional paid-in capital.

In March 2017, we net share settled the portion of the conversion obligation in excess of the par value related to our 2010 Convertible Notes by delivering 694,240 of our common shares from treasury stock.  The carrying value of the shares of treasury stock delivered was $16.5 million (weighted average price of $23.71 per share).  The difference between the carrying amount of the treasury shares and the $28.8 million carrying amount of the conversion obligation on the settlement date was recorded as an adjustment to additional paid-in capital.

12

Stock-Based Awards. A summary of our unvested restricted common stock activity during the first quarteris as follows (shares in thousands):

	Quarter Ended March 31, 2017
	Shares			Weighted- Average Grant Date Fair Value
Unvested awards, beginning		1,394		$	31.26
Awards granted		473			39.48
Awards forfeited/cancelled		(9	)		31.49
Awards vested		(439	)		28.35
Unvested awards, ending		1,419		$	34.90

Included in the awards granted during the first quarter of 2017 are performance-based awards for 0.1 million restricted common stock shares issued to members of executive management and certain key employees, which vest in equal installments over three years upon meeting either pre-established financial performance objectives or pre-established total shareholder return 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 first quarter of 2017 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 first quarters of 2017 and 2016 of $5.7 million and $6.5 million, respectively.

13

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

The information contained in this MD&A should be read in conjunction with the Financial Statements and Notes thereto included in this Form 10-Q and the audited consolidated financial statements and notes thereto in our 2016 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 of this report and in Part I Item 1A. Risk Factors of our 2016 10-K.  Readers are strongly encouraged to review those sections closely in conjunction with MD&A.

Company Overview

We are one of the world’s largest and most established providers of business support solutions, primarily serving the global communications industry. We have over thirty years of expertise supporting communications service providers as their businesses have evolved from a single product offering to highly complex and competitive multi-product offerings, while also requiring increasingly differentiated, real-time, and personalized experiences for their customers.

Our proven experience and world-class solutions support the mission critical management of our clients’ revenue, customer interactions, and digital ecosystem as they advance their video, voice, data, content, and digital services to consumers. Over the years, we have focused our research and development (“R&D”) and acquisition investments on expanding our solution set to address the complex, transformative needs of service providers. Our broad and deep solutions help our clients be competitive in a dynamically evolving global business environment, respond to changing consumer demands, quickly launch new compelling product offerings, provide enhanced customer experiences through relevant and targeted interactions, and cost-effectively streamline and scale operations.

We generate approximately 70% of our revenues from the North American cable and satellite markets, approximately 20% of our revenues from wireline and wireless communication providers, and the remainder from a variety of other verticals, such as financial services, logistics, and transportation. Additionally, during the quarter ended March 31, 2017 we generated approximately 86% of our revenues from the Americas region, approximately 9% of our revenues from the Europe, Middle East and Africa region, and approximately 5% of our revenues from the Asia Pacific region.

We are a S&P Small Cap 600 company.

Management Overview of Quarterly Results

First Quarter Highlights.  A summary of our results of operations for the first quarter of 2017, when compared to the first quarter of 2016, is as follows (in thousands, except per share amounts and percentages):

	Quarter Ended March 31,
	2017			2016
Revenues	$	192,470		$	186,226
Operating Results:
Operating income		27,013			41,291
Operating income margin		14.0	%		22.2	%
Diluted EPS	$	0.62		$	0.64
Supplemental Data:
Restructuring and reorganization charges	$	248		$	(5,741	)
Stock-based compensation (1)		5,670			6,527
Amortization of acquired intangible assets		1,714			2,195
Amortization of OID		888			1,658
Loss on repurchase of convertible notes		-			3,211

(1) Stock-based compensation included in the table above excludes amounts that have been recorded in restructuring and reorganization charges.

14

Revenues.  Our revenues for the first quarterof 2017 were $192.5 million, a 3%increase when compared to revenues of $186.2 million for the first quarter of 2016. The year-over-year increase in revenues is primarily attributed to the growth of our cloud and related solutions revenues, resulting primarily from the higher revenues from our recurring managed services arrangements and the conversion of customer accounts onto our Advanced Convergent Platform (“ACP”) over the past year, which more than offset the lower software and services revenues generated during the quarter.

Operating Results.  Operating income for the first quarter of 2017 was $27.0 million, or a 14.0% operating income margin percentage, compared to $41.3 million, or a 22.2% operating income margin percentage for the first quarter of 2016, with the decreases in operating income and operating income margin percentage reflective of the increase in planned investments aimed at generating future long-term growth in our business.  These increased expenditures are primarily within the following areas of our business: (i) our R&D efforts; (ii) our go-to-market programs;and (iii) the operating environments for our cloud solutions (e.g., resiliency, security, and capacity).

Diluted EPS.  Diluted EPS for the first quarter of 2017 was $0.62 compared to $0.64 for the first quarter of 2016.  The decrease in diluted EPS can be mainly attributed to the lower operating income margin, discussed above, however, the impact of this decrease is offset by a lower effective income tax rate of 9% for the current quarter, compared to 35% for the same period in 2016.  The lower first quarter 2017 effective income tax rate is primarily the result of an approximate $5 million net income tax benefit resulting from Comcast’s exercise of 1.4 million vested stock warrants in January 2017.  The stock warrants, issued as an incentive for Comcast to convert new customer accounts on to our ACP could solution, have appreciated in value since their vesting, resulting in an income tax benefit to us when exercised.  

Cash and Cash Flows.  As of March 31, 2017, we had cash, cash equivalents and short-term investments of $237.9 million, as compared to $276.5 million as of as of December 31, 2016.  The quarterly decrease can be mainly attributed to the cash payment of approximately $35 million for the remaining par value of our 2010 Convertible Notes, which were settled in full in March 2017.  Our cash flows from operating activities for the quarter ended March 31, 2017 were $30.0 million. See the Liquidity section below for further discussion of our cash flows.

Significant Client Relationships

Charter/Time Warner. In connection with Charter Corporation Inc.’s (“Charter”) acquisition of Time Warner Cable, Inc. (“Time Warner”) in May 2016, the Time Warner Master Subscriber Management Agreement (the “Time Warner Agreement”) was assigned to Charter.Our current agreement with Charter runs through December 31, 2019.  The Time Warner Agreement, which covers the Time Warner customer accounts serviced by CSG and now owned by Charter, was originally set to expire on March 31, 2017, but was extended on March 30, 2017 for one month through April 30, 2017.  On April 28, 2017, the Time Warner Agreement was amended to provide for an additional one-month extension through May 31, 2017, while the parties continue to finalize terms relating to a new long-term Charter Consolidated Master Subscriber Management System Agreement that will provide our products and services covering both Time Warner and Charter customer accounts under one master agreement.  

Client Concentration.  A large percentage of our historical revenues have been generated from our largest clients, which are Comcast, DISH Network Corporation (“DISH”), and now the combined Charter/Time Warner entity. To provide a consistent basis of comparison, the Charter and Time Warner revenues and accounts receivable balances are combined in the following tables for all periods prior to the acquisition without adjustment.

Revenues from these clients represented the following percentages of our total revenues for the indicated periods:

	Quarter Ended
	March 31,			December 31,			March 31,
	2017			2016			2016
Comcast		27	%		26	%		25	%
Charter/Time Warner (combined for all periods)		21	%		20	%		21	%
DISH		12	%		12	%		14	%

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

	As of
	March 31,			December 31,			March 31,
	2017			2016			2016
Comcast		26	%		25	%		25	%
Charter/Time Warner (combined for all periods)		23	%		24	%		18	%
DISH		10	%		10	%		13	%

15

See our 2016 10-K for additional discussion of our business relationships and contractual terms with Comcast, Charter/Time Warner, and DISH.

Risk of Client Concentration.  We expect to continue to generate a significant percentage of our future revenues from our 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.  

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 the following items: (i) revenue recognition; (ii) impairment assessments of goodwill and other long-lived assets; (iii) income taxes; and (iv) loss contingencies.  These critical accounting policies, as well as our other significant accounting policies, are discussed in our 2016 10-K.

Results of Operations

Total Revenues.  Total revenues for the first quarter of 2017 were $192.5 million, a 3% increase when compared to $186.2 million for the first quarter of 2016.  The year-over-year increase in revenues is primarily attributed to the growth of our cloud and related solutions revenues, resulting primarily from the higher revenues from our recurring managed services arrangements and the conversion of customer accounts onto ACP over the past year, which more than offset the lower software and services revenues generated during the quarter.

The components of total revenues, discussed in more detail below, are as follows (in thousands):

	Quarter Ended March 31,
	2017		2016
Revenues:
Cloud and related solutions	$	158,777	$	149,814
Software and services		15,058		19,178
Maintenance		18,635		17,234
Total revenues	$	192,470	$	186,226

We use the location of the client as the basis of attributing revenues to individual countries.  Revenues by geographic regions for the first quarters of 2017 and 2016 were as follows (in thousands):

	Quarter Ended March 31,
	2017		2016
Americas (principally the U.S.)	$	165,137	$	161,824
Europe, Middle East, and Africa		17,214		15,503
Asia Pacific		10,119		8,899
Total revenues	$	192,470	$	186,226

Cloud and Related Solutions Revenues.  Cloud and related solutions revenues for the first quarter of 2017 were $158.8 million, a 6% increase when compared to $149.8 million for the first quarter of 2016.  The increase in cloud and related solutions revenues higher revenues from our recurring managed services arrangements and the conversion of approximately three million customer accounts onto ACP over the past twelve months.  

Software and Services Revenues.  Software and services revenues for the first quarter of 2017 were $15.1 million, a 21% decrease when compared to $19.2 million for the first quarter of 2016.  The decrease in software and services revenues can be attributed mainly to continued low market demand for large transformational software and service deals and the shift in our focus towards more

16

recurring revenue arrangements.  We continue to transition this part of our business into a more predictable recurring revenue model, with our managed services arrangements and delivery of our cloud-based solutions.

Maintenance Revenues.  Maintenance revenues for the first quarter of 2017 were $18.6 million, an 8% increase when compared to $17.2 million for the first quarter of 2016.  These variances are due mainly to the timing of maintenance renewals and related revenue recognition.

Total Expenses.  Our operating expenses for the first quarter of 2017 were $165.5 million, a 14% increase when compared to $144.9 million for the first quarter of 2016.  The year-over-year increase in total expenses is mainly due to the planned investments, discussed above, and the $6.6 million gain on disposition of business operations recorded in our restructuring and reorganization charges in the first quarter of 2016, with no comparable transaction in the current quarter.  

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

Cost of Revenues.  See our 2016 10-K for a description of the types of costs that are included in the individual line items for cost of revenues.

Cost of Cloud and Related Solutions (Exclusive of Depreciation).  The cost of cloud and related solutions for the first quarter of 2017 increased 15% to $76.1 million, from $66.2 million for the first quarter of 2016. These cost increases relate primarily to higher costs associated with the increase in revenues and use of our ACP and related solutions, and growth in our managed services arrangements since last year.  Total cloud and related solutions cost as a percentage of cloud and related solutions revenues for the first quarters of 2017 and 2016 were 47.9% and 44.2%, respectively.  

Cost of Software and Services (Exclusive of Depreciation).  The cost of software and services for the first quarter of 2017 decreased 16% to $11.3 million, from $13.4 million for the first quarter of 2016.  This decrease is reflective of the decrease in revenues as personnel and the related costs previously allocated to professional services projects were reassigned to other areas of the business. Total software and services cost as a percentage of our software and services revenues for the first quarters of 2017 and 2016 were 74.9% and 69.7%, respectively.

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 contracted 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 and services as a percentage of our software and services revenues will likely occur between periods.  

Cost of Maintenance (Exclusive of Depreciation).  The cost of maintenance for the first quarter of 2017 was $10.4 million, a slight increase when compared to $9.9 million for the first quarter of 2016.  Total cost of maintenance as a percentage of our maintenance revenues for the first quarters of 2017 and 2016 were 55.7% and 57.4%, respectively.

R&D Expense.  R&D expense for the first quarter of 2017 increased 14% to $26.8 million, from $23.6 million for the first quarter of 2016, with the increase reflective of our heightened level of investment in 2017.As a percentage of total revenues, R&D expense for the first quarters of 2017 and 2016 was 13.9% and 12.7%, respectively.

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 introducing new digital products and services. This includes the continued investment in our cloud-based solutions aimed at improving a providers’ time-to-market for new offerings, flexibility, scalability, and total cost of ownership. 

SG&A Expense.  SG&A expense for the first quarter of 2017 was $37.3 million, a 10% increase when compared to $34.1 million for the first quarter of 2016.  These increases reflect an increased investment in our sales and marketing activities, system security, and employee programs.  Our SG&A costs as a percentage of total revenues for the first quarters of 2017 and 2016 were 19.4% and 18.3%, respectively.

Restructuring and Reorganization Charges.  Restructuring and reorganization charges for the first quarters of 2017 and 2016 were $0.2 million and ($5.7) million, respectively.  The negative restructuring and reorganization costs for the first quarter of 2016 reflect the $6.6 million gain on the sale of our cyber-security business marketed under the Invotas brand.  

Operating Income. Operating income for the first quarter of 2017 was $27.0 million, or 14.0% of total revenues, compared to $41.3 million, or 22.2% of total revenues for the first quarter of 2016.  The decreases in operating income and operating income margin percentage are reflective of the increase in planned investments aimed at generating future long-term growth in our business, as we

17

increase ourR&D efforts, our go-to-market programs, and the operating environments for our cloud solutions (e.g., resiliency, security, and capacity).

Interest Expense.  Interest expense for the first quarter of 2017 was $4.3 million, a 43% increase from $3.0 million for the first quarter of 2016.  The overall increase in interest expense is mainly the result of the refinancing of our 2010 Convertible Debt in March 2016.  The refinancing included the issuance of the 2016 Convertible Debt, resulting in an increase to interest expense, and the utilization of those proceeds to reduce the 2010 Convertible Debt outstanding throughout 2016 until the final settlement in March 2017, resulting in an offsetting decrease to interest expense.

Loss on Repurchase of Convertible Notes.  In March 2016, following completion of the sale of the 2016 Convertible Notes, we purchased $40 million aggregate principal amount of the 2010 Convertible Notes for a total purchase price of approximately $73 million and recognized a loss on the repurchase of $3.2 million in the first quarter of 2016.  

Income Tax Provision.  The effective income tax rates for the first quarters of 2017 and 2016 were as follows:

Quarter Ended March 31,
2017			2016
	9	%		35	%

 
The lower first quarter 2017 effective income tax rate reflects an approximately $5 million net benefit resulting from Comcast’s exercise of 1.4 million vested stock warrants in January 2017 (see Note 8 to our Financial Statements for further discussion).  The stock warrants have appreciated in value since their vesting resulting in an income tax benefit to us when exercised.  Additionally, as discussed in Note 2 to our Financial Statements, we adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718) in the first quarter of 2017.  This ASU requires a change in the recognition of excess tax benefits and tax deficiencies, related to share-based payment transactions, which were recorded in equity, and now are recorded discrete to the quarter incurred as a component of income tax expense in the income statement.  The adoption of this ASU provided an approximately $1 million benefit to our first quarter effective income tax rate and is expected to provide an approximately $2 million benefit for the full year.  For the full-year 2017 we are currently estimating an effective income tax rate of approximately 31%.

Liquidity

Cash and Liquidity

As of March 31, 2017, our principal sources of liquidity included cash, cash equivalents, and short-term investments of $237.9 million as compared to $276.5 million as of as of December 31, 2016.  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 2015 Credit Agreement, we have a $200 million senior secured revolving loan facility with a syndicate of financial institutions that expires in February 2020.  As of March 31, 2017, there were no borrowings outstanding on the 2015 Revolver.  The 2015 Credit Agreement contains customary affirmative covenants and financial covenants.  As of March 31, 2017, and the date of this filing, we believe that we are in compliance with the provisions of the 2015 Credit Agreement.  

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):

	March 31,		December 31,
	2017		2016
Americas (principally the U.S.)	$	188,142	$	220,269
Europe, Middle East and Africa		42,690		46,941
Asia Pacific		7,040		9,288
Total cash, equivalents and short-term investments	$	237,872	$	276,498

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 March 31, 2017, we had $4.8 million of cash restricted as to use primarily 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 or non-operating activity (e.g., depreciation, amortization, amortization of OID, impairments, deferred income

18

taxes, stock-based compensation, etc.), and then factoring in the impact of changes in operating assets and liabilities.  See our 2016 10-K for a description of the primary uses and sources of our cash flows from operating activities.  

Our 2017 and 2016 net cash flows from operating activities, broken out between operations and changes in operating assets and liabilities, for the indicated quarterly periods are as follows (in thousands):

						Net Cash
			Changes in			Provided by
			Operating			(Used In) Operating
			Assets and			Activities –
	Operations		Liabilities			Totals
Cash Flows from Operating Activities:
2017:
March 31	$	43,495	$	(13,531	)	$	29,964
2016:
March 31	$	36,755	$	(26,081	)	$	10,674

Cash flows from operating activities for the first quarters of 2017 and 2016 reflect the negative impacts of the payment of the 2016 and 2015 year-end accrued employee incentive compensation in the first quarter subsequent to the year-end accrual for these items. In addition, cash flows from operations for the first quarter of 2016 were negatively impacted by a prospective change in the timing of payment terms for a key vendor related to postage costs.

We believe the above table illustrates our ability to generate recurring quarterly cash flows from our operations, and the importance of managing our working capital items.  The variations in our net cash provided by operating activities are related mostly to the changes in our operating assets and liabilities (related mostly to fluctuations in timing at quarter-end of client payments and changes in accrued expenses), and generally over longer periods of time, do not significantly impact our cash flows from operations.

Significant fluctuations in key operating assets and liabilities between 2017 and 2016 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 consistently strong quarterly cash flows from operating activities.  Our billed trade accounts receivable balance includes significant 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 by taking the average monthly net trade accounts receivable balance for the period divided by the billings for the period (including non-revenue items).

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
2017:
March 31	$	198,135	$	(2,824	)	$	195,311		70
2016:
March 31	$	185,297	$	(3,647	)	$	181,650		61

The increase in DBOs between quarters is due to an increase in the average monthly net trade accounts receivable balances between quarters due primarily to the timing around certain recurring customer payments and do not reflect a material deterioration in the overall quality of our outstanding accounts receivable.

As a global provider of software and professional services, a portion of our accounts receivable balance relates to clients outside the U.S.  As a result, this diversity in the geographic composition of our client base may adversely impact our DBOs 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

19

invoicing milestones; or (iii) the overall project status in certain situations in which we act as a subcontractor to another vendor on a project.

Unbilled Trade Accounts Receivable

Revenue earned and recognized prior to the scheduled billing date of an item is reflected as unbilled accounts receivable.  Our unbilled accounts receivable as of the end of the indicated periods are as follows (in thousands):

	2017		2016
March 31	$	40,191	$	39,236

The unbilled accounts receivable balances above are primarily the result of several transactions with various milestone and contractual billing dates which have not yet been reached.  Unbilled accounts receivable are an inherent characteristic of certain software and professional services transactions and may fluctuate between quarters, as these type of transactions typically have scheduled invoicing terms over several quarters, as well as certain milestone billing events.  

Income Taxes Receivable

Income taxes receivable increased $6.0 million in the first quarter of 2017 to $17.9 million as of March 31, 2017, from $11.9 million as of December 31, 2016, due primarily to a net income tax benefit resulting from Comcast’s exercise of 1.4 million vested stock warrants in January 2017 (see Note 5 to our Financial Statements for further discussion).

Accrued Employee Compensation

Accrued employee compensation decreased $16.6 million in the first quarter of 2017 to $48.7 million as of March 31, 2017, from $65.3 million as of December 31, 2016, due primarily to the payment of the 2016 employee incentive compensation that was fully accrued at December 31, 2016, offset to a certain degree by the accrual for the 2017 employee incentive compensation.

Deferred Revenue

Deferred revenue (current and non-current) increased $6.3 million in the first quarter of 2017 to $58.0 million as of March 31, 2017, from $51.7 million as of December 31, 2016, primarily as a result of annual recurring services that are typically billed in the first quarter of the year.

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.  For the first quarters of 2017 and 2016, we purchased $18.0 million and $14.1 million, respectively, and sold (or had mature) $37.8 million and $30.1 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 first quarters of 2017 and 2016, for property and equipment, and investments in client contracts were as follows (in thousands):

	Quarter Ended March 31,
	2017		2016
Property and equipment	$	9,557	$	5,262
Client contracts		4,363		1,520

Our property and equipment expenditures for these periods consisted principally of investments in: (i) computer hardware, software, and related equipment; and (ii) statement production equipment.

Our investments in client contracts for the first quarters of 2017 and 2016 relate primarily to:  (i) cash incentives provided to clients to convert their customer accounts to, or retain their customer’s accounts on, our managed services solutions; and (ii) direct and incremental costs incurred for conversion/set-up services related to long-term cloud solution arrangements where we are required to deferred conversion/set-up services fees and recognize those fees as the related services are performed.  For the first quarters of 2017 and 2016 our: (i) investments in client contracts related to cash incentives were $2.1 million and zero, respectively; and (ii) the deferral of costs related to conversion/set-up services provided under long-term cloud solution contracts were $2.3 million and $1.5 million, respectively. 

20

Proceeds from the Disposition of Business Operations.  During the first quarter of 2016, we received additional cash proceeds totaling $8.9 million related to the sale of our cyber-security business marketed under the Invotas brand.  The proceeds were contingent on a liquidation event, as defined in the sale agreement.  

Cash Flows From Financing Activities

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

Cash Dividends Paid on Common Stock.  During the first quarters of 2017 and 2016, the Board approved dividend payments totaling $6.7 million and $6.0 million, respectively.  During the first quarters of 2017 and 2016, we paid dividends of $7.0 million and $6.5 million, respectively (with the additional amounts attributed to dividends for incentive shares paid upon vesting).

Repurchase of Common Stock.  During the first quarters of 2017 and 2016, we repurchased 0.1 million shares and 0.3 million shares of our common stock under the guidelines of our Stock Repurchase Program for $5.4 million and $9.5 million, respectively.

Outside of our Stock Repurchase Program, during the first quarters of 2017 and 2016, we repurchased from our employees and then cancelled 0.2 million shares of our common stock in each period for $6.1 million and $9.4 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Long-term Debt.   During the first quarter of 2017, we settled our conversion obligation for the 2010 Convertible Notes as follows: (i) we paid cash of $34.8 million for the remaining par value of the 2010 Convertible Notes; and (ii) delivered 694,240 of our common shares from treasury stock to settle the $28.8 million conversion obligation in excess of par value.

During the first quarter of 2016, we completed an offering of $230 million of 4.25% senior subordinated convertible notes due March 15, 2036 (the “2016 Convertible Notes”), paid $6.7 million of deferred financing costs, and repurchased $40 million aggregate principal amount of the 2010 Convertible Notes for a total purchase price of $73 million.  

Additionally, during the first quarters of 2017 and 2016, we made principal repayments of $3.8 million and $1.9 million, respectively.

See Note 4 to our Financial Statements for additional discussion of our long-term debt.

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 March 31, 2017, we had cash, cash equivalents, and short-term investments of $237.9 million, of which approximately 75% is in U.S. Dollars and held in the U.S. We have $4.8 million of restricted cash, used primarily to collateralize outstanding letters of credit. For the remainder of the monies denominated in foreign currencies and/or located outside the U.S., we do not anticipate any material amounts being unavailable for use in running our business.

• Operating Cash Flows. As described in the Liquidity section above, we believe we have the ability to generate strong cash flows to fund our operating activities and act as a source of funds for our capital resource needs.

• Revolving Loan Facility. As of March 31, 2017, we had a $200 million revolving loan facility, the 2015 Revolver, with a syndicate of financial institutions.  As of March 31, 2017, we had no borrowing outstanding on our 2015 Revolver and had the entire $200 million available to us.  Our long-term debt obligations are discussed in more detail in Note 4 to our Financial Statements.

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

• Common Stock Repurchases. We have made repurchases of our common stock in the past under our Stock Repurchase Program. As of March 31, 2017, we had 6.6 million shares authorized for repurchase remaining under our Stock Repurchase Program.  Our 2015 Credit Agreement places certain limitations on our ability to repurchase our common stock.  

During the first quarter 2017, we repurchased 0.1 million shares of our common stock for $5.4 million (weighted-average price of $42.85 per share).  

21

Under our Stock Repurchase Program, we may repurchase shares in the open market or a privately negotiated transaction, including through an ASR plan or under a SEC Rule 10b5-1 plan.  The actual timing and amount of the share repurchases will be dependent on the then current market conditions and other business-related factors.  

Outside of our Stock Repurchase Program, during the first quarter of 2017, we repurchased from our employees and then cancelled 0.2 million shares of our common stock for $6.1 million in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Our common stock repurchases are discussed in more detail in Note 8 to our Financial Statements.

• Cash Dividends. During the first quarter of 2017, the Board declared dividends totaling $6.7 million. Going forward, we expect to pay cash dividends each year in March, June, September, and December, with the amount and timing subject to the Boards’ approval.

• Acquisitions. 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.

• Capital Expenditures. During the first quarter of 2017, we spent $9.6 million on capital expenditures.   As of March 31, 2017, we have made no significant capital expenditure commitments.

• Investments in Client Contracts. In the past, we have provided incentives to new or existing clients to convert their customer accounts to, or retain their customer’s accounts on, our customer care and billing solutions. During the first quarter of 2017, we made investments in client contracts of $4.4 million.  

We have issued Stock Warrants with an exercise price of $26.68 per warrant to Comcast for the right to purchase up to approximately 2.9 million shares of our common stock as an additional incentive for Comcast to convert new customer accounts to ACP.  Once vested, Comcast may exercise the Stock Warrants and elect either physical delivery of common shares or net share settlement (cashless exercise).  Alternatively, the exercise of the Stock Warrants may be settled with cash based solely on our approval, or if Comcast were to beneficially own or control in excess of 19.99% of the common stock or voting of the Company.  

In January 2017, Comcast exercised 1.4 million vested Stock Warrants.  We net share settled the exercise of the Stock Warrants by delivering 649,221 of our common shares from treasury stock, which had a fair value of $31.5 million.  After this exercise, approximately 1.5 million Stock Warrants are outstanding, none of which are vested as of the date of this filing.

 The Stock Warrants are discussed in more detail in Note 8 to our Financial Statements.  

• Long-Term Debt. In March 2017, we settled our conversion obligation for the 2010 Convertible Notes as follows: (i) we paid cash of $34.8 million for the remaining par value of the 2010 Convertible Notes; and (ii) delivered 694,240 of our common shares from treasury stock to settle the $28.8 million conversion obligation in excess of par value. As of March 31, 2017, our long-term debt consisted of the following: (i) 2016 Convertible Notes with a par value of $230 million; and (ii) 2015 Term Loan borrowings of $131.3 million.  

2016 Convertible Notes

During the next twelve months, there are no scheduled conversion triggers on our 2016 Convertible Notes.  As a result, we expect our required debt service cash outlay during the next twelve months for the 2016 Convertible Notes to be limited to interest payments of $9.8 million.

2015 Credit Agreement

Our 2015 Credit Agreement mandatory repayments and the cash interest expense (based upon current interest rates) for the next twelve months is $16.9 million, and $4.2 million, respectively. We have the ability to make prepayments on our 2015 Credit Agreement without penalty.  

Our long-term debt obligations are discussed in more detail in Note 4 to our Financial Statements.  

In summary, we expect to continue to have material needs for capital resources going forward, as noted above. We believe that our current cash, cash equivalents and short-term investments balances and our 2015 Revolver, together with cash expected to be generated in the future from our current operating activities, will be sufficient to meet our anticipated capital resource 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.

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 March 31, 2017, we are exposed to various market risks, including changes in interest rates, fluctuations and changes in the market value of our cash equivalents and

22

short-term investments, and changes in foreign currency exchange rates. We have not historically entered into derivatives or other financial instruments for trading or speculative purposes.

Interest Rate Risk

Long-Term Debt. The interest rate on our 2016 Convertible Notes 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 our 2015 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 4 to our Financial Statements for further details of our long-term debt.

A hypothetical adverse change of 10% in the March 31, 2017 adjusted LIBOR rate would not have had a material impact upon our results of operations.

Market Risk

Cash Equivalents and Short-term Investments. Our cash and cash equivalents as of March 31, 2017 and December 31, 2016 were $107.4 million and $126.4 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 March 31, 2017 and December 31, 2016 were $130.5 million and $150.1 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. 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.

Long-Term Debt.  The fair value of our convertible debt is exposed to market risk.  We do not carry our convertible debt at fair value but present the fair value for disclosure purposes (see Note 2 to our Financial Statements).  Generally, the fair value of our convertible debt is impacted by changes in interest rates and changes in the price and volatility of our common stock.  As of March 31, 2017, the fair value of the 2016 Convertible Notes was estimated at $239.2 million, using quoted market prices.  

Foreign Currency Exchange Rate Risk

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.

During the first quarter of 2017, we generated approximately 88% of our revenues in U.S. dollars. We expect that, in the foreseeable future, we will continue to generate a very large percentage of our revenues in U.S. dollars.

As of March 31, 2017 and December 31, 2016, 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):

	March 31, 2017					December 31, 2016
	Monetary			Monetary		Monetary			Monetary
	Liabilities			Assets		Liabilities			Assets
Pounds sterling	$	(7	)	$	1,729	$	(18	)	$	3,753
Euro		(116	)		13,798		(135	)		12,402
U.S. Dollar		(139	)		18,051		(197	)		20,248
Other		(34	)		2,087		-			2,419
Totals	$	(296	)	$	35,665	$	(350	)	$	38,822

A hypothetical adverse change of 10% in the March 31, 2017 exchange rates would not have had a material impact upon our results of operations based on the monetary assets and liabilities as of March 31, 2017.

23

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.

24

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

A discussion of our risk factors can be found in Item 1A.  Risk Factors in our 2016 Form 10-K.  There were no material changes to the risk factors disclosed in our 2016 Form 10-K during the first quarter of 2017.

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 first quarter of 2017 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 Purchased (1) (2)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs (2)
January 1 - January 31		47,123	$	49.66		46,000		6,696,267
February 1 - February 28		161,801		40.24		34,500		6,661,767
March 1 - March 31		69,940		38.13		46,000		6,615,767
Total		278,864	$	41.31		126,500

(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.

(2) See Note 8 to our Financial Statements for additional information regarding our share repurchases.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Item 6. Exhibits

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

25

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: May 5, 2017

CSG SYSTEMS INTERNATIONAL, INC.

/s/ Bret C. Griess 

Bret C. Griess

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Randy R. Wiese

Randy R. Wiese

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

/s/ Rolland B. Johns

Rolland B. Johns

Chief Accounting Officer

(Principal Accounting Officer)

26

CSG SYSTEMS INTERNATIONAL, INC.

INDEX TO EXHIBITS

Exhibit Number	Description
10.22Z*	Twenty-Sixth Amendment to the CSG Master Subscriber Master Management System Agreement between CSG Systems, Inc. and Comcast Cable Communications Management, LLC
10.24BJ*	One Hundred Eleventh Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Charter Communications Holding Company, LLC
10.24BK*	One Hundred Fourteenth Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Charter Communications Holding Company, LLC
10.24BL*	One Hundred Fifteenth Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Charter Communications Holding Company, LLC.
10.24BM*	One Hundred Sixteenth Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Charter Communications Holding Company, LLC.
10.24BN	One Hundred Seventeenth Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Charter Communications Holding Company, LLC.
10.25CI*	Ninety-Fourth Amendment to the Amended and Restated CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Charter Communications Holding Company, LLC
10.25CJ*	Ninety-Seventh Amendment to the Amended and Restated CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Charter Communications Holding Company, LLC
10.25CK*	Ninety-Eighth Amendment to the Amended and Restated CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Charter Communications Holding Company, LLC
10.25CL*	Ninety-Ninth Amendment to the Amended and Restated CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Charter Communications Holding Company, LLC
10.25CM*	One Hundred First Amendment to the Amended and Restated CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Charter Communications Holding Company, LLC
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.DEF	XBRL Taxonomy Extension Definition 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.

27

EX-10.22Z

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 (***).

Exhibit 10.22Z

TWENTY-SIXTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

csg SYSTEMS, INC.

AND

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC

This TWENTY-SIXTH 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 CSG Master Subscriber Management System Agreement (CSG document #2501940) with an effective date of March 1, 2013 (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. Upon the Effective Date, Schedule P to the Agreement shall be deleted in its entirety and replaced with the new Schedule P attached to this Amendment at Attachment 1, and incorporated herein by this reference.

THIS AMENDMENT is executed on the day and year last signed below (“Effective Date”).

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC (“CUSTOMER”)	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Peter Kiriacoulacos	By:  /s/ Gregory L. Cannon
Name: Peter Kiriacoulacos	Name:  Gregory Cannon
Title:  Executive Vice President &            Chief Procurement Officer	Title:  SVP, General Counsel & Secretary
Date:  2/24/17	Date:  Feb 21, 2017

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

ATTACHMENT 1

Schedule P

Customer Authorization Schedule

CSG Document	Comcast Personnel	Title	Comment
Master Agreement & Amendments (and all categories listed below)	***** *************	EVP and Chief Procurement Officer
	**** *****	SVP Procurement
	****** *******	SVP Financial Operations, Technology and Engineering
SOW/DSOW	**** *****	Senior Vice President, Procurement
	***** *******	Senior Director of Procurement (up to $*******)
LOA	***** ******	Director of Billing Governance
	******* ****	Sr. Director, Software Development & Engineering
	*** ********	Director, Software Development & Engineering
SRF	***** ******	Director of Billing Governance	(or her designee)
	*** ********	Director, Software Development & Engineering
	******* ****	Sr. Director, Software Development & Engineering
IPA	*** ********	Director, Software Development & Engineering
	******* ****	Sr. Director, Software Development & Engineering
BRD	*** ********	Director, Software Development & Engineering
	******* ****	Sr. Director, Software Development & Engineering
Billing Disputes	******* ****	Sr. Director, Software Development & Engineering
	********* *****	Director of Business Operations

EX-10.24BJ

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 (***).

Exhibit 10.24BJ

ONE HUNDRED ELEVENTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

csg SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This One Hundred Eleventh Amendment (the “Amendment”) is made by and between CSG Systems, Inc. (“CSG”), and Charter Communications Holding Company, LLC (“Customer”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003 (CSG document no. 1926320), and effective as of April 1, 2003, as amended (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.

WHEREAS, Customer has previously purchased and CSG has provided the ACP Voice for Customer’s use, pursuant to the Agreement; and

WHEREAS, Customer desires to use and CSG agrees to provide Direct Inward Dialing (“DID”) additional functionality to ACP Voice such that ACP Voice will have the capability to support Customer’s ********* ****** ********* ********** (the “DID Enhancement”); and

WHEREAS, Customer desires and CSG agrees to provide DID Enhancement to Customer’s Connected Subscribers, pursuant to the Agreement and this Amendment.

NOW, THEREFORE, CSG and Customer agree as follows, as of the Effective Date (defined below):

1.    Customer hereby requests and CSG agrees to configure and implement the DID Enhancement for Customer’s access.  CSG agrees to provide and support the DID Enhancement for Customer’s DID capability.  

CSG shall configure and implement the functionality of the DID Enhancement of Customer’s ********* ****** ********* ********** for Customer’s access to the DID Enhancement pursuant to that certain Statement of Work to be executed by CSG and Customer (CSG document no. 4113333) (the "SOW").   

CSG will support Customer’s DID capability via ACP Voice in conjunction with Customer’s ********* ****** ********* held by CSG by automating Customer’s CSRs’ capture of assigned numbers to create a block of number (the “DID Block”)

The DID Enhancement available to Customer will include functionality for the:

• Ability to assign a block of Customer’s telephone numbers from Customer’s ********* ****** ********* held by CSG for Customer’s Connected Subscribers’ accounts at the time of ordering

• Ability to assign multiple DID Blocks to a single service to Customer’s Subscribers’ account(s)

• Ability to downgrade a DID Block without having to downgrade the Customer’s service to which the DID Block was assigned

• Ability to port in/port out a DID Block to accommodate Customer’s change of telco provider(s)

• Ability to transfer a DID Block to another Connected Subscriber account

• Ability to restart a DID Block in a Connected Subscriber account

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

• Ability to provide DID Block details to Customer’s provisioning partner via Service Order Distribution Interface (“SODI”)

• Ability to print the DID Block of telephone numbers, with the DID Connected Subscriber call detail records, on Connected Subscribers’ statements treated as a single service

The DID Enhancement is dependent upon Customer’s use of CSG’s ACP Commercial Services.

2.    Customer’s ability to access the DID Enhancement is dependent upon Customer’s compliance with the payment obligations described in that certain Ninety-fourth Amendment (CSG document no. 4114132) to the Amended and Restated CSG Master Subscriber Management System Agreement by and between CSG and Customer dated February 9, 2009 (CSG document no. 2298875), as amended.

THIS AMENDMENT is executed as of the day and year last signed below (the “Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  Mike Ciszek	Name:  Gregory Cannon
Title:  SVP, Billing Strat & Opns	Title:  SVP, General Counsel & Secretary
Date:  3-10-17	Date:  Mar 13, 2017

EX-10.24BK

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 (***).

Exhibit10.24BK

ONE HUNDRED FOURTEENTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

csg SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This One Hundred Fourteenth Amendment (the “Amendment”) is made by and between CSG Systems, Inc. (“CSG”), and Charter Communications Holding Company, LLC, as successor in interest to Time Warner Cable Inc. (“Customer”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003 (CSG document no. 1926320), and effective as of April 1, 2003, as amended (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.

Whereas, pursuant to the Agreement, as more particularly described in that certain One Hundred Eighth Amendment to the Agreement, effective as of July 19, 2016 (CSG document no. 4111838) (the “108th Amendment”), CSG and Customer agreed that the Connected Subscribers in the Charter Agreement (as defined in the 108th Amendment) will be used for the purpose of determining the total number of Connected Subscribers, combined, under this Agreement and the Charter Agreement, for the limited purposes described therein for the period from ****** *, ****, through December 31, 2016 (the “******** ********* ********** Period”); and

Whereas, as a result of discussions between the parties, the parties agree to amend the terms of the ******** ********* ********** Period.

Now, therefore,in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficient of which is hereby acknowledged, CSG and Customer agree to the following as of the Effective Date.

1.    Upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, which includes the 108th Amendment, CSG and Customer agree that the ******** ********* ********** Period shall be amended such that the ******** ********* ********** Period shall commence as of ****** *, ****, and shall continue through January 31, 2017 (the “Amended ******** ********* ********** Period”).

THIS AMENDMENT is executed as of the day and year last signed below (the “Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  Mike Ciszek	Name:  Gregory L. Cannon
Title:  SVP, Billing Strat & Ops	Title:  SVP, Secretary & General Counsel
Date:  1/13/17	Date:  1-17-17

EX-10.24BL

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 (***).

Exhibit10.24BL

ONE HUNDRED FIFTEENTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

csg SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This One Hundred Fifteenth Amendment (the “Amendment”) is made by and between CSG Systems, Inc. (“CSG”), and Charter Communications Holding Company, LLC, as successor in interest to Time Warner Cable Inc. (“Customer”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003 (CSG document no. 1926320), and effective as of April 1, 2003, as amended (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.

Whereas, pursuant to the Agreement, as more particularly described in that certain One Hundred Eighth Amendment to the Agreement, effective as of July 19, 2016 (CSG document no. 4111838) (the “108th Amendment”), and extended pursuant to that certain One Hundred-fourteenth Amendment effective as of January 17, 2017 (CSG document no. 4114078) (the “114th Amendment” and, together with the 108th Amendment, the “Amendments”), CSG and Customer agreed that the Connected Subscribers in the Charter Agreement (as defined in the Amendments) will be used for the purpose of determining the total number of Connected Subscribers, combined, under this Agreement and the Charter Agreement, for the limited purposes described therein for the period from ****** *, ****, through January 31, 2017 (the “******** ********* ********** Period”); and

Whereas, as a result of discussions between the parties, the parties agree to amend the terms of the ******** ********* ********** Period.

Now, therefore,in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficient of which is hereby acknowledged, CSG and Customer agree to the following as of the Effective Date.

1.    Upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, which includes the Amendments, CSG and Customer agree that the ******** ********* ********** Period shall be amended such that the ******** ********* ********** Period shall commence as of ****** *, ****, and shall continue through February 28, 2017 (the “Amended ******** ********* ********** Period”).

THIS AMENDMENT is executed as of the day and year last signed below (the “Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:	Name:  Gregory L. Cannon
Title:	Title:  SVP, Secretary & General Counsel
Date:	Date:  2/13/17

EX-10.24BM

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 (***).

Exhibit 10.24BM

ONE HUNDRED SIXTEENTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

csg SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This One Hundred Sixteenth Amendment (the “Amendment”) is made by and between CSG Systems, Inc. (“CSG”), and Charter Communications Holding Company, LLC, as successor in interest to Time Warner Cable Inc. (“Customer”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003 (CSG document no. 1926320), and effective as of April 1, 2003, as amended (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.

Whereas, pursuant to the Agreement, as more particularly described in that certain One Hundred Eighth Amendment to the Agreement, effective as of July 19, 2016 (CSG document no. 4111838) (the “108th Amendment”), and extended pursuant to that certain One Hundred Fourteenth Amendment effective as of January 17, 2017 (CSG document no. 4114078) (the “114th Amendment”) and further extended pursuant to that certain One Hundred Fifteenth Amendment effective as of February 14, 2017 (CSG document no. 4114929), (the “115th Amendment” and, together with the 108th Amendment and the 114th Amendment, the “Amendments”), CSG and Customer agreed that the Connected Subscribers in the Charter Agreement (as defined in the Amendments) will be used for the purpose of determining the total number of Connected Subscribers, combined, under this Agreement and the Charter Agreement, for the limited purposes described therein for the period from ****** *, ****, through February 28, 2017 (the “******** ********* ********** Period”); and

Whereas, as a result of discussions between the parties, the parties agree to amend the terms of the ******** ********* ********** Period.

Now, therefore,in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficient of which is hereby acknowledged, CSG and Customer agree to the following as of the Effective Date.

1.    Upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, which includes the Amendments, CSG and Customer agree that the ******** ********* ********** Period shall be amended such that the ******** ********* ********** Period shall commence as of ****** *, ****, and shall continue through March 31, 2017 (the “Amended ******** ********* ********** Period”).

[Signature Page Follows]

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

THIS AMENDMENT is executed as of the day and year last signed below (the “Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  Mike Ciszek	Name:  Gregory L. Cannon
Title:  SVP, Billing Strat & Opns	Title:  SVP, Secretary & General Counsel
Date:  3-7-17	Date:  3/8/17

EX-10.24BN

Exhibit10.24BN

ONE HUNDRED SEVENTEENTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

csg SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This One Hundred Seventeenth Amendment (the “Amendment”) is made by and between CSG Systems, Inc. (“CSG”), and Charter Communications Holding Company, LLC, as successor in interest to Time Warner Cable Inc. (“Customer”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003 (CSG document no. 1926320), and effective as of April 1, 2003, as amended (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 to the following as of the Effective Date:

1.    The parties wish to extend the Agreement through April 30, 2017, in order to finalize terms of an agreement between the parties for the provision by CSG and consumption by Customer of the Products and Services currently made available under this agreement.  Such agreement is identified as that certain “Charter Consolidated Master Subscriber Management System Agreement” to be agreed upon and executed by and between CSG and Customer (CSG document no. 4114281).  Therefore, until such time the aforementioned agreement is executed, Section 1.2 of the Agreement entitled “Term” shall be deleted in its entirety and replaced with the following:

“1.2 Term.  Unless earlier terminated pursuant to Section 6, this Agreement shall remain in effect through 11:59 p.m. Mountain Time of April 30, 2017 (“Initial Term”). Unless terminated earlier pursuant to Section 6 or pursuant to any other termination rights set forth in this Agreement or a relevant Statement of Work, the term of any specific license for the Products and the term for any specific Services to be provided shall be coterminous with this Agreement unless stated otherwise in the applicable Schedule, Addendum, prior or future amendment to this Agreement or relevant Statement of Work; subject, however, to the parties’ respective termination rights with respect thereto under this Agreement and/or any applicable Statement of Work executed pursuant to this Agreement.”

THIS AMENDMENT is executed as of the day and year last signed below (the “Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  Mike Ciszek	Name:  Gregory L. Cannon
Title:  SVP Billing	Title:  SVP, Secretary & General Counsel
Date:  3/30/17	Date:  3.30.17

EX-10.25CI

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 (***).

Exhibit 10.25CI

NINETY- FOURTH AMENDMENT

TO

AMENDED AND RESTATED

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This Ninety-fourth Amendment (the “Amendment”) is made by and between CSG Systems, Inc., a Delaware corporation (“CSG”), and Charter Communications Holding Company, LLC, a Delaware limited liability company (“Customer”).  CSG and Customer entered into that certain Amended and Restated CSG Master Subscriber Management System Agreement dated February 9, 2009 (CSG document no. 2298875), as amended (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.

WHEREAS, Customer has previously purchased and CSG has provided ACPV (as defined in the Agreement) for Customer’s use, pursuant to the Agreement; and

WHEREAS, Customer desires to use and CSG agrees to provide additional functionality to ACPV in support of Customer’s Direct Inward Dialing (“DID”) such that ACPV will have the capability to support Customer’s ********* ****** ********* (the “DID Enhancement”); and

WHEREAS, Customer desires and CSG agrees to provide DID Enhancement for Customer’s Connected Subscribers, as defined in the Agreement.

NOW, THEREFORE, CSG and Customer agree as follows, as of the Effective Date (defined below):

1.    Customer hereby requests and CSG agrees to configure and implement the DID Enhancement for Customer’s access. CSG shall provide and support the DID Enhancement for Customer’s DID capability for the fees provided in Schedule F of the Agreement.

CSG shall configure and implement the functionality of the DID Enhancement of Customer’s ********* ****** ********* for Connected Subscribers pursuant to that certain Statement of Work to be executed by CSG and Customer (CSG document no. 4113331) (the "SOW").   

CSG will support Customer’s DID capability via ACPV in conjunction with Customer’s ********* ****** ********* held by CSG by automating Customer’s CSRs’ capture of assigned numbers to create a block of numbers (the “DID Block”).

The DID Enhancement available to Customer will include functionality for the:

• Ability to assign a block of Customer’s telephone numbers from Customer’s ********* ****** ********* held by CSG for Customer’s Subscribers’ accounts at the time of ordering

• Ability to assign multiple DID Blocks to a single service to Customer’s Subscribers’ account(s)

• Ability to downgrade a DID Block without having to downgrade the Customer’s service to which the DID Block was assigned

• Ability to port in/port out a DID Block to accommodate Customer’s change of telco provider(s)

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

• Ability to transfer a DID Block to another Subscriber account

• Ability to restart a DID Block in a Subscriber account

• Ability to provide DID Block details to Customer’s provisioning partner via Service Order Distribution Interface (“SODI”)

• Ability to print the DID Block of telephone numbers, with the DID Subscriber call detail records, on Subscribers’ statements treated as a single block.

The DID Enhancement is dependent upon Customer’s use of CSG’s ACP Commercial Services.

2.    Further, upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, Schedule F, "Fees," "CSG SERVICES," Section I, "Processing," subsection c), “Ancillary Voice Services,” shall be amended to add a new subsection L, titled "Direct Inward Dialing Enhancement (DID Enhancement)," to include the following fees:

Description of Item/Unit of Measure	Frequency	Fees
L.  Direct Inward Dialing Enhancement (DID Enhancement)
1.DID Enhancement Access Fee(Note 1) (Note 2) (Note 3)	********	$**********
2.DID Enhancement Maintenance Fee (Note 4) (Note 5) (Note 6)
a.***** * through **	*******	$*********
b.***** ** and ******	*******	$********

Note 1: As part of the DID Enhancement Access Fee, CSG shall make available *** ******** **** ******* (*****) ***** of technical services for configuration and implementation of the DID Enhancement.  In the event ***** in excess of *** ******** **** ******* (*****) are deemed necessary by Customer to complete the configuration and implementation of the DID Enhancement, Customer may authorize additional ***** and such ***** in excess of *** ******** **** ******* (*****) ***** will be invoiced by CSG to Customer for actual excess ***** used at the ****-******* ********* ******** ****** ****.  

Note 2: Configuration and implementation of the DID Enhancement for the Connected Subscribers will be pursuant to that certain Statement of Work (CSG document no. 4113331) (the “SOW”) to be executed by the parties.

Note 3: Upon the Effective Date of the Ninety-fourth Amendment, CSG shall invoice Customer and Customer shall pay the DID Enhancement Access Fee in accordance with the terms and conditions of the Agreement.

Note 4: Upon the actual Completion Date, as defined in the SOW, CSG shall begin invoicing Customer and Customer shall pay the DID Enhancement Maintenance Fee pursuant to section L.2 of the table above. For purposes of clarification, the DID Enhancement Maintenance Fees are applicable to support the DID Enhancement under this Agreement and the DID Enhancement provided under the CSG Master Subscriber Management System Agreement executed as of March 13, 2003 (CSG document no. 1926320) (The “Charter [TWC} Agreement”).

Note 5: In the event Customer desires to discontinue use of the DID Enhancement, Customer shall provide CSG with prior written notice no less than ***** (**) **** prior to the date of such discontinuance (email is sufficient).

Note 6: For clarification purposes, the DID Enhancement Maintenance Fee is subject to increase pursuant to Section 5.3 of the Agreement.

3.    Additionally, CSG and Customer acknowledge and agree that it is the intent of the parties that, in addition to Customer’s use of the DID Enhancement for Connected Subscribers under the Agreement, Customer will participate in the DID Enhancement under the Charter [TWC] Agreement without incurring any additional fees as such rights will be set forth in that certain One Hundred Eleventh Amendment to the Charter [TWC] Agreement.  Customer acknowledges and agrees the payment of fees in this Amendment is a condition of Customer’s receipt of the DID Enhancement under the Charter [TWC] Agreement.

[Signature Page Follows]

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

THIS AMENDMENT is executed on the days and year last signed below to be effective as of the date last signed below (the "Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  Mike Ciszek	Name:  SVP, General Counsel & Secretary
Title:  SVP, Billing Strat & Opns	Title:  Gregory Cannon
Date:  3-10-17	Date:  Mar 13, 2017

EX-10.25CJ

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 (***).

Exhibit10.25CJ

NINETY-SEVENTH AMENDMENT

TO

AMENDED AND RESTATED

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This Ninety-seventh Amendment (the “Amendment”) is made by and between CSG Systems, Inc., a Delaware corporation (“CSG”), and Charter Communications Holding Company, LLC, a Delaware limited liability company (“Customer”).  CSG and Customer entered into that certain Amended and Restated CSG Master Subscriber Management System Agreement dated February 9, 2009, as amended (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.

Whereas, pursuant to the Agreement, as more particularly described in that certain Eighty-ninth Amendment to the Agreement, effective as of July 19, 2016 (CSG document no. 4111836) (the “89th Amendment”), CSG and Customer agreed that the Connected Subscribers in the TWC Agreement (as defined in the 89th Amendment) will be used for the purpose of determining the total number of Connected Subscribers, combined, under this Agreement and the TWC Agreement, for the limited purposes described therein for the period from ****** *, ****, through December 31, 2016 (the “******** ********* ********** Period”); and

Whereas, as a result of discussions between the parties, the parties agree to amend the terms of the ******** ********* ********** Period.

Now, therefore,in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficient of which is hereby acknowledged, CSG and Customer agree to the following as of the Effective Date.

1. Upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, which includes the 89th Amendment, CSG and Customer agree that the ******** ********* ********** Period shall be amended such that the ******** ********* ********** Period shall commence as of ****** *, ****, and shall continue through January 31, 2017 (the “Amended ******** ********* ********** Period”).

THIS AMENDMENT is executed on the days and year last signed below to be effective as of the date last signed below (the "Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  Mike Ciszek	Name:  Gregory L. Cannon
Title:  SVP, Billing Strat & Opns	Title:  SVP, Secretary & General Counsel
Date:  1/13/17	Date:  1-17-17

EX-10.25CK

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 (***).

Exhibit10.25CK

NINETY-EIGHTH AMENDMENT

TO THE

AMENDED AND RESTATED

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

csg SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This NINETY-EIGHTH AMENDMENT (the “Amendment”) is made by and between CSG Systems, Inc. (“CSG”) and Charter Communications Holding Company, LLC (“Customer”). The effective date of this Amendment is the date last signed below (the "Effective Date").  CSG and Customer entered into that certain Amended and Restated CSG Master Subscriber Management System Agreement (CSG document no. 2298875) dated February 9, 2009, as amended (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.

1.    Customer desires to use and CSG agrees to provide Customer with an additional *** ******* *********** (***) Web Enabled Advanced Customer Service Representative® (Web Enabled ACSR®) licenses pursuant to the terms and conditions of the Agreement.  As a result, for the fees set forth in Schedule F to the Agreement, the number of Customer’s Web Enabled ACSR® licenses shall increase such that the total of Customer’s Web Enabled ACSR® licenses is **** ******* *********** (***).  

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

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  Mike Ciszek	Name:  Gregory L. Cannon
Title:  SVP, Billing Strat & Opns	Title:  SVP, General Counsel & Secretary
Date:  1-20-17	Date:  1/23/17

EX-10.25CL

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 (***).

Exhibit10.25CL

NINETY-NINTH AMENDMENT

TO AMENDED AND RESTATED

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This Ninety-ninth Amendment (the “Amendment”) is made by and between CSG Systems, Inc., a Delaware corporation (“CSG”), and Charter Communications Holding Company, LLC, a Delaware limited liability company (“Customer”).  CSG and Customer entered into that certain Amended and Restated CSG Master Subscriber Management System Agreement dated February 9, 2009, as amended (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.

Whereas, pursuant to the Agreement, as more particularly described in that certain Eighty-ninth Amendment to the Agreement, effective as of July 19, 2016 (CSG document no. 4111836) (the “89th Amendment”), and extended pursuant to that certain Ninety-seventh Amendment to the Agreement, effective as of January 17, 2017 (CSG document no. 4114077) (the “97th Amendment” and, together with the 89th Amendment, the “Amendments”) CSG and Customer agreed that the Connected Subscribers in the TWC Agreement (as defined in the Amendments) will be used for the purpose of determining the total number of Connected Subscribers, combined, under this Agreement and the TWC Agreement, for the limited purposes described therein for the period from ****** *, ****, through January 31, 2017 (the “******** ********* ********** Period”); and

Whereas, as a result of discussions between the parties, the parties agree to amend the terms of the ******** ********* ********** Period.

Now, therefore,in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficient of which is hereby acknowledged, CSG and Customer agree to the following as of the Effective Date.

1. Upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, which includes the Amendments, CSG and Customer agree that the ******** ********* ********** Period shall be amended such that the ******** ********* ********** Period shall commence as of ****** *, ****, and shall continue through February 28, 2017 (the “Amended ******** ********* ********** Period”).

THIS AMENDMENT is executed on the days and year last signed below to be effective as of the date last signed below (the "Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  SVP	Name:  Gregory L. Cannon
Title:  Mike Ciszek	Title:  SVP, Secretary & General Counsel
Date:  2/10/17	Date:  2/13/17

EX-10.25CM

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 (***).

Exhibit 10.25CM

ONE HUNDRED FIRST AMENDMENT

TO AMENDED AND RESTATED

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC

This One Hundred First Amendment (the “Amendment”) is made by and between CSG Systems, Inc., a Delaware corporation (“CSG”), and Charter Communications Holding Company, LLC, a Delaware limited liability company (“Customer”).  CSG and Customer entered into that certain Amended and Restated CSG Master Subscriber Management System Agreement dated February 9, 2009, as amended (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.

Whereas, pursuant to the Agreement, as more particularly described in that certain Eighty-ninth Amendment to the Agreement, effective as of July 19, 2016 (CSG document no. 4111836) (the “89th Amendment”), and extended pursuant to that certain Ninety-seventh Amendment to the Agreement, effective as of January 17, 2017 (CSG document no. 4114077) (the “97th Amendment”) and further extended pursuant to that certain Ninety-ninth Amendment to the Agreement effective as of February 14, 2017 (CSG document no. 4114930) (the “99th Amendment” and, together with the 89th Amendment and the 97th Amendment, the “Amendments”), CSG and Customer agreed that the Connected Subscribers in the TWC Agreement (as defined in the Amendments) will be used for the purpose of determining the total number of Connected Subscribers, combined, under this Agreement and the TWC Agreement, for the limited purposes described therein for the period from ****** *, ****, through February 28, 2017 (the “******** ********* ********** Period”); and

Whereas, as a result of discussions between the parties, the parties agree to amend the terms of the ******** ********* ********** Period.

Now, therefore,in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficient of which is hereby acknowledged, CSG and Customer agree to the following as of the Effective Date.

1. Upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, which includes the Amendments, CSG and Customer agree that the ******** ********* ********** Period shall be amended such that the ******** ********* ********** Period shall commence as of ****** *, ****, and shall continue through March 31, 2017 (the “Amended ******** ********* ********** Period”).

[Signature Page Follows]

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

THIS AMENDMENT is executed on the days and year last signed below to be effective as of the date last signed below (the "Effective Date").

CHARTER COMMUNICATIONS HOLDING COMPANY, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager	CSG SYSTEMS, INC.(“CSG”)
By: /s/ Mike Ciszek	By:  /s/ Gregory L. Cannon
Name:  Mike Ciszek	Name:  Gregory L. Cannon
Title:  SVP, Billing Strat & Opns	Title:  SVP, Secretary & General Counsel
Date:  3-7-17	Date:  3/8/17

EX-31.01

EXHIBIT 31.01

CERTIFICATIONS PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Bret C. Griess, 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: May 5, 2017	/s/ Bret C. Griess
	Bret C. Griess
	President and Chief Executive Officer

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: May 5, 2017	/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.

Bret C. Griess, 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.

May 5, 2017

/s/ Bret C. Griess

Bret C. Griess

President and Chief Executive Officer

May 5, 2017

/s/ Randy R. Wiese

Randy R. Wiese

Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 30, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	CSG SYSTEMS INTERNATIONAL INC
Entity Central Index Key	0001005757
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	CSGS
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		33,785,587

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 107,422	$ 126,351
Short-term investments	130,450	150,147
Total cash, cash equivalents and short-term investments	237,872	276,498
Trade accounts receivable:
Billed, net of allowance of $2,824 and $3,080	195,311	208,930
Unbilled	40,191	30,828
Income taxes receivable	17,874	11,931
Other current assets	29,270	31,751
Total current assets	520,518	559,938
Non-current assets:
Property and equipment, net of depreciation of $126,230 and $122,866	36,418	33,116
Intangible assets	68,017	71,102
Goodwill	202,750	201,094
Deferred income taxes	12,328	14,218
Other assets	12,371	12,411
Total non-current assets	331,884	331,941
Total assets	852,402	891,879
Current liabilities:
Current portion of long-term debt, net of unamortized discounts of zero and $296	16,875	49,426
Client deposits	33,006	33,916
Trade accounts payable	31,803	35,118
Accrued employee compensation	48,716	65,341
Deferred revenue	50,435	45,064
Income taxes payable	547	822
Other current liabilities	18,897	22,342
Total current liabilities	200,279	252,029
Non-current liabilities:
Long-term debt, net of unamortized discounts of $21,834 and $23,007	322,541	326,993
Deferred revenue	7,595	6,694
Income taxes payable	2,405	2,245
Deferred income taxes	3,643	99
Other non-current liabilities	12,208	12,618
Total non-current liabilities	348,392	348,649
Total liabilities	548,671	600,678
Current portion of long-term debt conversion obligation		39,841
Stockholders' equity:
Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding
Common stock, par value $.01 per share; 100,000 shares authorized; 33,825 and 32,261 shares outstanding	689	672
Common stock warrants; zero and 1,426 warrants vested; 1,425 and 2,851 issued		16,007
Additional paid-in capital	415,450	391,209
Treasury stock, at cost; 33,702 and 34,919 shares	(799,605)	(826,002)
Accumulated other comprehensive income (loss):
Unrealized loss on short-term investments, net of tax	(115)	(159)
Cumulative foreign currency translation adjustments	(40,874)	(45,213)
Accumulated earnings	728,186	714,846
Total stockholders' equity	303,731	251,360
Total liabilities, current portion of long-term debt conversion obligation and stockholders' equity	852,402	891,879
Software
Non-current assets:
Intangible assets	29,451	30,427
Client contracts
Non-current assets:
Intangible assets	$ 38,566	$ 40,675

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Trade accounts receivable-billed, allowance	$ 2,824	$ 3,080
Property and equipment, accumulated depreciation	126,230	122,866
Accumulated amortization	191,624	196,039
Current portion of long-term debt, unamortized discounts	0	296
Long-term debt, unamortized discounts	$ 21,834	$ 23,007
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	33,825,000	32,261,000
Common stock warrants, vested	0	1,426,000
Common stock warrants, issued	1,425,000	2,851,000
Treasury stock, shares	33,702,000	34,919,000
Software
Accumulated amortization	$ 101,689	$ 99,316
Client contracts
Accumulated amortization	$ 89,935	$ 96,723

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Cloud and related solutions	$ 158,777	$ 149,814
Software and services	15,058	19,178
Maintenance	18,635	17,234
Total revenues	192,470	186,226
Cost of revenues (exclusive of depreciation, shown separately below):
Cloud and related solutions	76,052	66,233
Software and services	11,274	13,366
Maintenance	10,382	9,884
Total cost of revenues	97,708	89,483
Other operating expenses:
Research and development	26,840	23,626
Selling, general and administrative	37,346	34,051
Depreciation	3,315	3,516
Restructuring and reorganization charges	248	(5,741)
Total operating expenses	165,457	144,935
Operating income	27,013	41,291
Other income (expense):
Interest expense	(4,306)	(3,005)
Amortization of original issue discount	(888)	(1,658)
Interest and investment income, net	806	468
Loss on repurchase of convertible notes		(3,211)
Other, net	(275)	(791)
Total other	(4,663)	(8,197)
Income before income taxes	22,350	33,094
Income tax provision	(2,113)	(11,590)
Net income	$ 20,237	$ 21,504
Weighted-average shares outstanding:
Basic	32,016	30,762
Diluted	32,594	33,672
Earnings per common share:
Basic	$ 0.63	$ 0.70
Diluted	$ 0.62	$ 0.64

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 20,237	$ 21,504
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	4,339	(1,102)
Unrealized holding gains on short-term investments arising during period	44	911
Other comprehensive income (loss), net of tax	4,383	(191)
Total comprehensive income, net of tax	$ 24,620	$ 21,313

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income	$ 20,237	$ 21,504
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation	3,315	3,516
Amortization	7,471	6,415
Amortization of original issue discount	888	1,658
(Gain) loss on short-term investments and other	(57)	11
Loss on repurchase of convertible notes		3,211
Gain on disposition of business operations		(6,614)
Deferred income taxes	5,971	3,923
Excess tax benefit of stock-based compensation awards		(3,375)
Stock-based compensation	5,670	6,506
Changes in operating assets and liabilities, net of acquired amounts:
Trade accounts receivable, net	5,650	35
Other current and non-current assets	2,793	1,597
Income taxes payable/receivable	(5,692)	992
Trade accounts payable and accrued liabilities	(21,943)	(32,490)
Deferred revenue	5,661	3,785
Net cash provided by operating activities	29,964	10,674
Cash flows from investing activities:
Purchases of property and equipment	(9,557)	(5,262)
Purchases of short-term investments	(17,983)	(14,100)
Proceeds from sale/maturity of short-term investments	37,782	30,067
Acquisition of and investments in client contracts	(4,363)	(1,520)
Proceeds from the disposition of business operations		8,850
Net cash provided by investing activities	5,879	18,035
Cash flows from financing activities:
Proceeds from issuance of common stock	385	356
Payment of cash dividends	(7,033)	(6,529)
Repurchase of common stock	(11,224)	(18,990)
Proceeds from long-term debt		230,000
Payments on long-term debt	(3,750)	(1,875)
Repurchase of convertible notes		(72,619)
Settlement of convertible notes	(34,771)
Payments of deferred financing costs		(6,655)
Excess tax benefit of stock-based compensation awards		3,375
Net cash provided by (used in) financing activities	(56,393)	127,063
Effect of exchange rate fluctuations on cash	1,621	1,330
Net increase (decrease) in cash and cash equivalents	(18,929)	157,102
Cash and cash equivalents, beginning of period	126,351	132,631
Cash and cash equivalents, end of period	107,422	289,733
Cash paid during the period for-
Interest	6,539	3,339
Income taxes	$ 1,835	$ 6,680

XML

General

3 Months Ended

Mar. 31, 2017

Organization Consolidation And Presentation Of Financial Statements [Abstract]

General

1. GENERAL

We have prepared the accompanying unaudited condensed consolidated financial statements as of March 31, 2017 and December 31, 2016, and for the quarters ended March 31, 2017 and 2016, in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“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 (“MD&A”), contained in our Annual Report on Form 10-K for the year ended December 31, 2016 (our “2016 10-K”), filed with the SEC. The results of operations for the quarter ended March 31, 2017 are not necessarily indicative of the expected results for the entire year ending December 31, 2017.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

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 our Financial Statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

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 March 31, 2017 and December 31, 2016, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks.

As of March 31, 2017 and December 31, 2016, we had $4.8 million and $4.3 million, respectively, of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in cash and cash equivalents in our Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”).

Short-term Investments and Other Financial Instruments. Our financial instruments as of March 31, 2017 and December 31, 2016 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value.

Our short-term investments and certain of our cash equivalents are considered “available-for-sale” and are reported at fair value in our 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.

Primarily all short-term investments held by us as of March 31, 2017 and December 31, 2016 have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of March 31, 2017 and December 31, 2016 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments for the first quarters of 2017 and 2016 were $37.8 million and $30.1 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 our financial assets and liabilities measured at fair value (in thousands):

	March 31, 2017						December 31, 2016
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Cash equivalents:
Money market funds	$	8,548	$	—	$	8,548	$	6,531	$	—	$	6,531
Commercial paper	—			12,890	12,890		—			24,826		24,826
Short-term investments:
Corporate debt securities	—			106,448		106,448	—			109,140		109,140
U.S. government agency bonds	—			11,998		11,998	—			26,513		26,513
Asset-backed securities	—			12,004		12,004	—			14,494		14,494
Total	$	8,548	$	143,340	$	151,888	$	6,531	$	174,973	$	181,504

Valuation inputs used to measure the fair values of our money market funds and corporate equity securities 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.  The following table indicates the carrying value (par value for convertible debt) and estimated fair value of our debt as of the indicated periods (in thousands):

	March 31, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Credit agreement (carrying value including current maturities)	$	131,250	$	131,250	$	135,000	$	135,000
2010 Convertible debt (par value)		—		—		34,722		74,795
2016 Convertible debt (par value)		230,000		239,200		230,000		258,175

The fair value for our credit agreement was estimated using a discounted cash flow methodology, while the fair value for our convertible debt was estimated based upon quoted market prices or recent sales activity, both of which are considered Level 2 inputs.  See Note 4 for additional discussion regarding our convertible debt.

Accounting Pronouncements Adopted.  In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718).  This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  This ASU is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The methods of adoption for this ASU vary by amendment.  We adopted this ASU in the first quarter of 2017, prospectively applying the guidance related to the recognition of excess tax benefits and tax deficiencies in the income statement and the presentation of excess tax benefits on the statement of cash flows. See Note 5 for further discussion of the impact of adopting this ASU.  

Accounting Pronouncement Issued But Not Yet Effective. The FASB has issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  In August 2015, the FASB issued ASU 2015-14 Revenue from Contracts with Customers (Topic 606):  Deferral of the Effective Date which deferred the effective date of ASU 2014-09 for one year. In December 2016, the FASB issued ASU 2016-20 Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. Collectively, this ASU is a single comprehensive model which supersedes nearly all existing revenue recognition guidance under U.S. GAAP.  Under the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.  The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  The accounting guidance is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2017.  Early adoption is permitted.  An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard.

We are currently evaluating the impact this ASU will have to our accounting policies, business processes and potential differences in the timing and/or method of revenue recognition for our customer contracts. In conjunction with this evaluation, we are updating our policies to align with the new accounting guidance as well as evaluating our significant customer contracts to determine if the guidance will materially impact our existing portfolio of customer contracts. In addition, we will review new contracts entered into up until the adoption of the ASU. Based upon our initial evaluations, the adoption of this guidance is not expected to have a material impact on our consolidated financial statements. We currently intend to adopt the ASU in the first quarter of 2018, utilizing the cumulative effect approach.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  This ASU requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months on its balance sheet.  This ASU is effective in annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method.  We are currently in the process of evaluating the impact this ASU will have on our Financial Statements.  Currently, we plan to early adopt this ASU in the first quarter of 2018.  Based on our initial evaluations, we believe the adoption of this standard will have a material impact on our consolidated balance sheet.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory. This ASU requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers. This ASU is effective in annual and interim periods in fiscal years beginning after December 15, 2017, with early adoption permitted, and requires a modified retrospective transition method. We are currently in the process of evaluating the impact that this new guidance will have on our Financial Statements.

XML

Long-Lived Assets

3 Months Ended

Mar. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Long-Lived Assets

3. LONG-LIVED ASSETS

Goodwill. The changes in the carrying amount of goodwill for the quarter ended March 31, 2017, were as follows (in thousands):  

January 1, 2017 balance	$	201,094
Adjustments related to prior acquisitions		(15	)
Effects of changes in foreign currency exchange rates		1,671
March 31, 2017 balance	$	202,750

Other Intangible Assets. Our intangible assets subject to ongoing amortization consist primarily of client contracts and software. As of March 31, 2017 and December 31, 2016, the carrying values of these assets were as follows (in thousands):

	March 31, 2017							December 31, 2016
	Gross							Gross
	Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount
Client contracts	$	128,501	$	(89,935	)	$	38,566	$	137,398	$	(96,723	)	$	40,675
Software		131,140		(101,689	)		29,451		129,743		(99,316	)		30,427
Total	$	259,641	$	(191,624	)	$	68,017	$	267,141	$	(196,039	)	$	71,102

The total amortization expense related to intangible assets for the first quarters of 2017 and 2016 were $6.9 million and $5.9 million, respectively. Based on the March 31, 2017 net carrying value of our intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2017– $25.6 million;  2018 – $19.9 million; 2019 – $13.4 million; 2020– $6.9 million; and 2021 – $3.0 million.

XML

Debt

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Debt

4. DEBT

Our long-term debt, as of March 31, 2017 and December 31, 2016, was as follows (in thousands):

	March 31,			December 31,
	2017			2016
Credit Agreement:
2015 Term loan, due February 2020, interest at adjusted LIBOR plus 1.75% (combined rate of 2.90% at March 31, 2017)	$	131,250		$	135,000
Less - deferred financing costs		(3,180	)		(3,489	)
Term loan, net of unamortized discounts		128,070			131,511
$200 million revolving loan facility, due February 2020, interest at adjusted LIBOR plus applicable margin	—			—
Convertible Notes:
2016 Convertible Notes – Senior convertible notes; due March 15, 2036; cash interest at 4.25%		230,000			230,000
Less – unamortized original issue discount		(13,389	)		(14,005	)
Less – deferred financing costs		(5,265	)		(5,513	)
2016 Convertible Notes, net of unamortized discounts		211,346			210,482
2010 Convertible Notes – Senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0%		—			34,722
Less – unamortized original issue discount		—			(272	)
Less – deferred financing costs		—			(24	)
2010 Convertible Notes, net of unamortized discounts		—			34,426
Total debt, net of unamortized discounts		339,416			376,419
Current portion of long-term debt, net of unamortized discounts		(16,875	)		(49,426	)
Long-term debt, net of unamortized discounts	$	322,541		$	326,993

Credit Agreement

During the first quarter of 2017, we made $3.8 million of principal repayments on our $150 million aggregate principal five-year term loan (the “2015 Term Loan”). As of March 31, 2017, our interest rate on the 2015 Term Loan is 2.90% (adjusted LIBOR plus 1.75% per annum), effective through June 30, 2017, and our commitment fee on the unused $200 million aggregate principal five-year revolving loan facility (the “2015 Revolver”) is 0.25%.  As of March 31, 2017, we had no borrowing outstanding on our 2015 Revolver and had the entire $200.0 million available to us.    

Convertible Notes

2016 Convertible Notes.  Upon conversion of the 2016 Convertible Notes, we will settle our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock, or a combination thereof, at our election. It is our current intent and policy to settle our conversion obligations as follows: (i) pay cash for 100% of the par value of the 2016 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we can satisfy the remaining conversion obligation in our common stock, cash or a combination thereof.

The 2016 Convertible Notes will be convertible at the option of the note holders upon the satisfaction of specified conditions and during certain periods. During the period from, and including, December 15, 2021 to the close of business on the business day immediately preceding March 15, 2022 and on or after December 15, 2035, holders may convert all or any portion of their 2016 Convertible Notes at the conversion rate then in effect at any time regardless of these conditions.

As a result of us increasing our dividend in March 2017 (see Note 7), the previous conversion rate for the 2016 Convertible Notes of 17.4642 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of approximately $57.26 per share of our common stock, has been adjusted to 17.4699 shares of our common stock per $1,000 principal amount of the 2016 Convertible Notes, which is equivalent to an initial conversion price of approximately $57.24 per share of our common stock.

Holders may require CSG to repurchase the 2016 Convertible Notes for cash on each of March 15, 2022, March 15, 2026, and March 15, 2031, or upon the occurrence of a fundamental change (as defined in the 2016 Convertible Notes Indenture) in each case at a purchase price equal to the principal amount thereof plus accrued and unpaid interest.

We may not redeem the 2016 Convertible Notes prior to March 20, 2020. On or after March 20, 2020, we may redeem for cash all or part of the 2016 Convertible Notes if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which CSG provides notice of redemption. On or after March 15, 2022, we may redeem for cash all or part of the 2016 Convertible Notes regardless of the sales price condition described in the preceding sentence. In each case, the redemption price will equal the principal amount of the 2016 Convertible Notes to be redeemed, plus accrued and unpaid interest.

As of March 31, 2017, none of the conversion features have been achieved, and thus, the 2016 Convertible Notes are not convertible by the holders.

2010 Convertible Notes.   In March 2017, we settled our conversion obligation for the 2010 Convertible Notes as follows: (i) we paid cash of $34.8 million for the remaining par value of the 2010 Convertible Notes; and (ii) delivered 694,240 shares of our common shares from treasury stock, to settle the $28.8 million value of the conversion obligation in excess of the par value. See Note 8 for discussion of our equity transactions.

XML

Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

5. INCOME TAXES

The effective income tax rates for the first quarters of 2017 and 2016 were as follows:

Quarter Ended March 31,
2017			2016
	9	%		35	%

The lower first quarter 2017 effective income tax rate reflects an approximately $5 million net benefit resulting from Comcast’s exercise of 1.4 million vested stock warrants in January 2017, discussed below in Note 8.  The stock warrants have appreciated in value since their vesting resulting in an income tax benefit to us when exercised.  Additionally, as discussed in Note 2, we adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718) in the first quarter of 2017.  This ASU requires a change in the recognition of excess tax benefits and tax deficiencies, related to share-based payment transactions, which were recorded in equity, and now are recorded discrete to the quarter incurred as a component of income tax expense in the income statement.  The adoption of this ASU provided an approximately $1 million benefit to our first quarter effective income tax rate and is expected to provide an approximately $2 million benefit for the full year.  For the full-year 2017 we are currently estimating an effective income tax rate of approximately 31%.

XML

Commitments, Guarantees and Contingencies

3 Months Ended

Mar. 31, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments, Guarantees and Contingencies

6. 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 the date of acceptance 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 March 31, 2017, 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 members of our Board of Directors (the “Board”) and certain of our officers 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. As a result, we have not recorded any liabilities related to such indemnifications as of March 31, 2017. 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.

XML

Earnings Per Common Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Common Share

7. EARNINGS PER COMMON SHARE

Basic and diluted earnings per common share (“EPS”) amounts are presented on the face of the accompanying Income Statements.

No reconciliation of the basic and diluted EPS numerators is necessary as net income is used as the numerators for all periods presented. The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands):  

	Quarter Ended March 31,
	2017		2016
Basic weighted-average common shares		32,016		30,762
Dilutive effect of restricted common stock		578	732
Dilutive effect of 2010 Convertible Notes		-		1,900
Dilutive effect of Stock Warrants		-	278
Diluted weighted-average common shares		32,594		33,672

The Convertible Notes have a dilutive effect only in those quarterly periods in which our average stock price exceeds the current effective conversion price.  The 2010 Convertible Notes were settled in March 2017 (see Note 4).

The Stock Warrants have a dilutive effect only in those quarterly periods in which our average stock price exceeds the exercise price of $26.68 per warrant (under the treasury stock method), and are not subject to performance vesting conditions.  All the vested Stock Warrants were exercised in January 2017 (see Note 8).  

Potentially dilutive common shares related to non-participating unvested restricted stock excluded from the computation of diluted EPS, as the effect was antidilutive, were not material in any period presented.    

XML

Stockholders' Equity and Equity Compensation Plans

3 Months Ended

Mar. 31, 2017

Stockholders Equity Note [Abstract]

Stockholders' Equity and Equity Compensation Plans

8. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS

Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). During the first quarters of 2017 and 2016 we repurchased 0.1 million shares of our common stock for $5.4 million (weighted-average price of $42.85 per share) and 0.3 million shares of our common stock for $9.5 million (weighted-average price of $36.07 per share), respectively, under a SEC Rule 10b5-1 Plan.  

As of March 31, 2017, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 6.6 million shares.

Stock Repurchases for Tax Withholdings. In addition to the above mentioned stock repurchases, during the first quarters of 2017 and 2016, we repurchased and then cancelled 0.2 million shares of common stock for $6.1 million and 0.2 million shares of common stock for $9.5 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

CashDividends.  During the first quarter of 2017, the Board approved a quarterly cash dividend of $0.1975 per share of common stock, totaling $6.7 million. During the first quarter of 2016, the Board approved a quarterly cash dividend of $0.185 per share of common stock, totaling $6.0 million.

Warrants.  In 2014, in conjunction with the execution of an amendment to our current agreement with Comcast Corporation (“Comcast”), we issued stock warrants (the “Warrant Agreement”) for the right to purchase up to approximately 2.9 million shares of our common stock (the “Stock Warrants”) as an additional incentive for Comcast to convert customer accounts onto our Advanced Convergent Platform based on various milestones. The Stock Warrants have a 10-year term and an exercise price of $26.68 per warrant.        

Upon vesting, the Stock Warrants are recorded as a client incentive asset with the corresponding offset to stockholders’ equity.  The client incentive asset related to the Stock Warrants is amortized as a reduction in cloud and related solutions revenues over the remaining term of the Comcast amended agreement.  As of March 31, 2017, we recorded a client incentive asset related to these Stock Warrants of $16.0 million and have amortized $5.5 million as a reduction in cloud and related solutions revenues.  The remaining unvested Stock Warrants will be accounted for as client incentive assets in the period the performance conditions necessary for vesting have been met.  

As of December 31, 2016, approximately 1.4 million Stock Warrants had vested.  In January 2017, Comcast exercised approximately 1.4 million vested Stock Warrants, which we net share settled under the provisions of the Warrant Agreement (discussed further in Treasury Shares below).  As of March 31, 2017, approximately 1.5 million Stock Warrants were outstanding, none of which were vested.

Treasury Stock.  In January 2017, we net share settled the exercise of 1.4 million vested Stock Warrants noted above by delivering 649,221 of our common shares from treasury stock, which had a fair value of $31.5 million. The carrying value of the shares of treasury stock delivered was $15.4 million (weighted-average price of $23.66 per share).  The difference between the carrying amount of the treasury shares and the $16.0 million carrying amount of the common stock warrants was recorded as an adjustment to additional paid-in capital.

In March 2017, we net share settled the portion of the conversion obligation in excess of the par value related to our 2010 Convertible Notes by delivering 694,240 of our common shares from treasury stock.  The carrying value of the shares of treasury stock delivered was $16.5 million (weighted average price of $23.71 per share).  The difference between the carrying amount of the treasury shares and the $28.8 million carrying amount of the conversion obligation on the settlement date was recorded as an adjustment to additional paid-in capital.

Stock-Based Awards. A summary of our unvested restricted common stock activity during the first quarter is as follows (shares in thousands):

	Quarter Ended March 31, 2017
	Shares			Weighted- Average Grant Date Fair Value
Unvested awards, beginning		1,394		$	31.26
Awards granted		473			39.48
Awards forfeited/cancelled		(9	)		31.49
Awards vested		(439	)		28.35
Unvested awards, ending		1,419		$	34.90

Included in the awards granted during the first quarter of 2017 are performance-based awards for 0.1 million restricted common stock shares issued to members of executive management and certain key employees, which vest in equal installments over three years upon meeting either pre-established financial performance objectives or pre-established total shareholder return 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 first quarter of 2017 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 first quarters of 2017 and 2016 of $5.7 million and $6.5 million, respectively.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Use of Estimates in Preparation of Financial Statements

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 our Financial Statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

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 March 31, 2017 and December 31, 2016, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks.

As of March 31, 2017 and December 31, 2016, we had $4.8 million and $4.3 million, respectively, of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in cash and cash equivalents in our Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”).

Short-term Investments and Other Financial Instruments

Short-term Investments and Other Financial Instruments. Our financial instruments as of March 31, 2017 and December 31, 2016 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value.

Our short-term investments and certain of our cash equivalents are considered “available-for-sale” and are reported at fair value in our 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.

Primarily all short-term investments held by us as of March 31, 2017 and December 31, 2016 have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of March 31, 2017 and December 31, 2016 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments for the first quarters of 2017 and 2016 were $37.8 million and $30.1 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 our financial assets and liabilities measured at fair value (in thousands):

	March 31, 2017						December 31, 2016
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Cash equivalents:
Money market funds	$	8,548	$	—	$	8,548	$	6,531	$	—	$	6,531
Commercial paper	—			12,890	12,890		—			24,826		24,826
Short-term investments:
Corporate debt securities	—			106,448		106,448	—			109,140		109,140
U.S. government agency bonds	—			11,998		11,998	—			26,513		26,513
Asset-backed securities	—			12,004		12,004	—			14,494		14,494
Total	$	8,548	$	143,340	$	151,888	$	6,531	$	174,973	$	181,504

Valuation inputs used to measure the fair values of our money market funds and corporate equity securities 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.  The following table indicates the carrying value (par value for convertible debt) and estimated fair value of our debt as of the indicated periods (in thousands):

	March 31, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Credit agreement (carrying value including current maturities)	$	131,250	$	131,250	$	135,000	$	135,000
2010 Convertible debt (par value)		—		—		34,722		74,795
2016 Convertible debt (par value)		230,000		239,200		230,000		258,175

The fair value for our credit agreement was estimated using a discounted cash flow methodology, while the fair value for our convertible debt was estimated based upon quoted market prices or recent sales activity, both of which are considered Level 2 inputs.  See Note 4 for additional discussion regarding our convertible debt.

Accounting Pronouncements Adopted

Accounting Pronouncements

Accounting Pronouncements Adopted.  In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718).  This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  This ASU is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The methods of adoption for this ASU vary by amendment.  We adopted this ASU in the first quarter of 2017, prospectively applying the guidance related to the recognition of excess tax benefits and tax deficiencies in the income statement and the presentation of excess tax benefits on the statement of cash flows. See Note 5 for further discussion of the impact of adopting this ASU.  

Accounting Pronouncements Issued But Not Yet Effective

Accounting Pronouncements

Accounting Pronouncement Issued But Not Yet Effective. The FASB has issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  In August 2015, the FASB issued ASU 2015-14 Revenue from Contracts with Customers (Topic 606):  Deferral of the Effective Date which deferred the effective date of ASU 2014-09 for one year. In December 2016, the FASB issued ASU 2016-20 Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. Collectively, this ASU is a single comprehensive model which supersedes nearly all existing revenue recognition guidance under U.S. GAAP.  Under the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.  The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  The accounting guidance is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2017.  Early adoption is permitted.  An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard.

We are currently evaluating the impact this ASU will have to our accounting policies, business processes and potential differences in the timing and/or method of revenue recognition for our customer contracts. In conjunction with this evaluation, we are updating our policies to align with the new accounting guidance as well as evaluating our significant customer contracts to determine if the guidance will materially impact our existing portfolio of customer contracts. In addition, we will review new contracts entered into up until the adoption of the ASU. Based upon our initial evaluations, the adoption of this guidance is not expected to have a material impact on our consolidated financial statements. We currently intend to adopt the ASU in the first quarter of 2018, utilizing the cumulative effect approach.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  This ASU requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months on its balance sheet.  This ASU is effective in annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method.  We are currently in the process of evaluating the impact this ASU will have on our Financial Statements.  Currently, we plan to early adopt this ASU in the first quarter of 2018.  Based on our initial evaluations, we believe the adoption of this standard will have a material impact on our consolidated balance sheet.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory. This ASU requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers. This ASU is effective in annual and interim periods in fiscal years beginning after December 15, 2017, with early adoption permitted, and requires a modified retrospective transition method. We are currently in the process of evaluating the impact that this new guidance will have on our Financial Statements.

XML

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Fair Value Measurements

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 our financial assets and liabilities measured at fair value (in thousands):

	March 31, 2017						December 31, 2016
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Cash equivalents:
Money market funds	$	8,548	$	—	$	8,548	$	6,531	$	—	$	6,531
Commercial paper	—			12,890	12,890		—			24,826		24,826
Short-term investments:
Corporate debt securities	—			106,448		106,448	—			109,140		109,140
U.S. government agency bonds	—			11,998		11,998	—			26,513		26,513
Asset-backed securities	—			12,004		12,004	—			14,494		14,494
Total	$	8,548	$	143,340	$	151,888	$	6,531	$	174,973	$	181,504

Carrying Value (Par Value for Convertible Debt) and Estimated Fair Value of Debt

We have chosen not to measure our debt at fair value, with changes recognized in earnings each reporting period.  The following table indicates the carrying value (par value for convertible debt) and estimated fair value of our debt as of the indicated periods (in thousands):

	March 31, 2017				December 31, 2016
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Credit agreement (carrying value including current maturities)	$	131,250	$	131,250	$	135,000	$	135,000
2010 Convertible debt (par value)		—		—		34,722		74,795
2016 Convertible debt (par value)		230,000		239,200		230,000		258,175

XML

Long-Lived Assets (Tables)

3 Months Ended

Mar. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes In Carrying Amount of Goodwill

Goodwill. The changes in the carrying amount of goodwill for the quarter ended March 31, 2017, were as follows (in thousands):  

January 1, 2017 balance	$	201,094
Adjustments related to prior acquisitions		(15	)
Effects of changes in foreign currency exchange rates		1,671
March 31, 2017 balance	$	202,750

Summary of Carrying Value of Assets

Other Intangible Assets. Our intangible assets subject to ongoing amortization consist primarily of client contracts and software. As of March 31, 2017 and December 31, 2016, the carrying values of these assets were as follows (in thousands):

	March 31, 2017							December 31, 2016
	Gross							Gross
	Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount
Client contracts	$	128,501	$	(89,935	)	$	38,566	$	137,398	$	(96,723	)	$	40,675
Software		131,140		(101,689	)		29,451		129,743		(99,316	)		30,427
Total	$	259,641	$	(191,624	)	$	68,017	$	267,141	$	(196,039	)	$	71,102

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Long-Term Debt

Our long-term debt, as of March 31, 2017 and December 31, 2016, was as follows (in thousands):

	March 31,			December 31,
	2017			2016
Credit Agreement:
2015 Term loan, due February 2020, interest at adjusted LIBOR plus 1.75% (combined rate of 2.90% at March 31, 2017)	$	131,250		$	135,000
Less - deferred financing costs		(3,180	)		(3,489	)
Term loan, net of unamortized discounts		128,070			131,511
$200 million revolving loan facility, due February 2020, interest at adjusted LIBOR plus applicable margin	—			—
Convertible Notes:
2016 Convertible Notes – Senior convertible notes; due March 15, 2036; cash interest at 4.25%		230,000			230,000
Less – unamortized original issue discount		(13,389	)		(14,005	)
Less – deferred financing costs		(5,265	)		(5,513	)
2016 Convertible Notes, net of unamortized discounts		211,346			210,482
2010 Convertible Notes – Senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0%		—			34,722
Less – unamortized original issue discount		—			(272	)
Less – deferred financing costs		—			(24	)
2010 Convertible Notes, net of unamortized discounts		—			34,426
Total debt, net of unamortized discounts		339,416			376,419
Current portion of long-term debt, net of unamortized discounts		(16,875	)		(49,426	)
Long-term debt, net of unamortized discounts	$	322,541		$	326,993

XML

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Effective Income Tax Rates

The effective income tax rates for the first quarters of 2017 and 2016 were as follows:

Quarter Ended March 31,
2017			2016
	9	%		35	%

XML

Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Reconciliation of the Basic and Diluted EPS Denominators

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

	Quarter Ended March 31,
	2017		2016
Basic weighted-average common shares		32,016		30,762
Dilutive effect of restricted common stock		578	732
Dilutive effect of 2010 Convertible Notes		-		1,900
Dilutive effect of Stock Warrants		-	278
Diluted weighted-average common shares		32,594		33,672

XML

Stockholders' Equity and Equity Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2017

Stockholders Equity Note [Abstract]

Summary of Unvested Restricted Common Stock Activity

Stock-Based Awards. A summary of our unvested restricted common stock activity during the first quarter is as follows (shares in thousands):

	Quarter Ended March 31, 2017
	Shares			Weighted- Average Grant Date Fair Value
Unvested awards, beginning		1,394		$	31.26
Awards granted		473			39.48
Awards forfeited/cancelled		(9	)		31.49
Awards vested		(439	)		28.35
Unvested awards, ending		1,419		$	34.90

XML

Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	$ 4,800		$ 4,300
Proceeds from sale/maturity of short-term investments	$ 37,782	$ 30,067
Maximum
Summary Of Significant Accounting Policies [Line Items]
Short-term investment contractual maturities	2 years		2 years

XML

Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets:
Assets fair value	$ 151,888	$ 181,504
Cash equivalents | Money Market Funds
Assets:
Assets fair value	8,548	6,531
Cash equivalents | Commercial Paper
Assets:
Assets fair value	12,890	24,826
Short-term Investments | Corporate Debt Securities
Assets:
Assets fair value	106,448	109,140
Short-term Investments | U.S. Government Agency Bonds
Assets:
Assets fair value	11,998	26,513
Short-term Investments | Asset-backed securities
Assets:
Assets fair value	12,004	14,494
Level 1
Assets:
Assets fair value	8,548	6,531
Level 1 | Cash equivalents | Money Market Funds
Assets:
Assets fair value	8,548	6,531
Level 2
Assets:
Assets fair value	143,340	174,973
Level 2 | Cash equivalents | Commercial Paper
Assets:
Assets fair value	12,890	24,826
Level 2 | Short-term Investments | Corporate Debt Securities
Assets:
Assets fair value	106,448	109,140
Level 2 | Short-term Investments | U.S. Government Agency Bonds
Assets:
Assets fair value	11,998	26,513
Level 2 | Short-term Investments | Asset-backed securities
Assets:
Assets fair value	$ 12,004	$ 14,494

XML

Summary of Significant Accounting Policies - Carrying Value (Par Value for Convertible Debt) and Estimated Fair Value of Debt (Details 1) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Credit Agreement | Term Loan
Carrying value (par value for convertible debt) and estimated fair value of debt
Carrying Value	$ 131,250	$ 135,000
Fair Value	131,250	135,000
Senior Subordinated Convertible Notes 2010
Carrying value (par value for convertible debt) and estimated fair value of debt
Carrying Value		34,722
Fair Value		74,795
Senior Convertible Notes 2016
Carrying value (par value for convertible debt) and estimated fair value of debt
Carrying Value	230,000	230,000
Fair Value	$ 239,200	$ 258,175

XML

Long-Lived Assets - Summary of Changes In Carrying Amount of Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)
Goodwill RollForward
Beginning balance	$ 201,094
Adjustments related to prior acquisitions	(15)
Effects of changes in foreign currency exchange rates	1,671
Ending balance	$ 202,750

XML

Long-Lived Assets - Summary of Carrying Value of Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 259,641	$ 267,141
Accumulated Amortization	(191,624)	(196,039)
Net Amount	68,017	71,102
Client contracts
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	128,501	137,398
Accumulated Amortization	(89,935)	(96,723)
Net Amount	38,566	40,675
Software
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	131,140	129,743
Accumulated Amortization	(101,689)	(99,316)
Net Amount	$ 29,451	$ 30,427

XML

Long-Lived Assets (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Goodwill And Intangible Assets Disclosure [Abstract]
Total amortization expense	$ 6.9	$ 5.9
Estimated total amortization expense 2017	25.6
Estimated total amortization expense 2018	19.9
Estimated total amortization expense 2019	13.4
Estimated total amortization expense 2020	6.9
Estimated total amortization expense 2021	$ 3.0

XML

Debt - Long-Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Less – unamortized original issue discount	$ (21,834)	$ (23,007)
Less – unamortized original issue discount	0	(296)
Total debt, net of unamortized discounts	339,416	376,419
Current portion of long-term debt, net of unamortized discounts	(16,875)	(49,426)
Long-term debt, net of unamortized discounts	322,541	326,993
Credit Agreement | 2015 Term Loan
Debt Instrument [Line Items]
Total long-term debt, gross	131,250	135,000
Less – deferred financing costs	(3,180)	(3,489)
Total debt, net of unamortized discounts	128,070	131,511
Senior Convertible Notes 2016
Debt Instrument [Line Items]
Total long-term debt, gross	230,000	230,000
Less – unamortized original issue discount	(13,389)	(14,005)
Less – deferred financing costs	(5,265)	(5,513)
Total debt, net of unamortized discounts	$ 211,346	210,482
Senior Subordinated Convertible Notes 2010
Debt Instrument [Line Items]
Total long-term debt, gross		34,722
Less – unamortized original issue discount		(272)
Less – deferred financing costs		(24)
Total debt, net of unamortized discounts		$ 34,426

XML

Debt - Long-Term Debt (Parenthetical) (Details)	3 Months Ended
	Mar. 31, 2017 USD ($)
Credit Agreement | 2015 Term Loan
Debt Instrument [Line Items]
Basis spread on term loan	1.75%
Term loan combined interest rate	2.90%
Maturity period	Feb. 29, 2020
Credit Agreement | Revolving Loan
Debt Instrument [Line Items]
Amount available under credit facility	$ 200,000,000
Maturity period	Feb. 29, 2020
Senior Subordinated Convertible Notes 2010
Debt Instrument [Line Items]
Maturity period	Mar. 01, 2017
Interest rate on senior subordinated convertible notes	3.00%
Senior Convertible Notes 2016
Debt Instrument [Line Items]
Maturity period	Mar. 15, 2036
Interest rate on senior subordinated convertible notes	4.25%

XML

Debt - Credit Agreement (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Debt Instrument [Line Items]
Principal repayments	$ 3,750,000	$ 1,875,000
Carrying value of debt	$ 339,416,000		$ 376,419,000
2015 Credit Agreement | Revolving Loan
Debt Instrument [Line Items]
Line of credit facility, unused capacity, commitment fee percentage	0.25%
Credit facility, outstanding barrowings	$ 0
Credit facility, current borrowing capacity	200,000,000
Credit Agreement	$ 200,000,000
Credit facility term	5 years
2015 Credit Agreement | Term Loan
Debt Instrument [Line Items]
Principal repayments	$ 3,800,000
Term loan combined interest rate	2.90%
Basis spread on term loan	1.75%
Carrying value of debt	$ 150,000,000
Term loan period	5 years

XML

Debt - 2016 Convertible Notes (Details Textual) - Senior Convertible Notes 2016 $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) Tradingday $ / shares	Mar. 31, 2016 USD ($) $ / shares
Debt Instrument [Line Items]
Percentage of par value of convertible notes to be settled in cash	100.00%
Conversion rate of common stock	17.4699	17.4642
Convertible Notes, conversion of Par Value Convertible Notes to common stock | $	$ 1	$ 1
Initial conversion price | $ / shares	$ 57.24	$ 57.26
Rate of conversion price	130.00%
Debt instrument, convertible, threshold consecutive trading days	20 days
Debt instrument, convertible, threshold trading days | Tradingday	30

XML

Debt - 2010 Convertible Notes (Details Textual) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2017
Debt Instrument [Line Items]
Convertible notes cash paid		$ 34,771
Senior Subordinated Convertible Notes 2010
Debt Instrument [Line Items]
Convertible notes cash paid	$ 34,800
Settlement of conversion obligation by common shares delivered from treasury stock		694,240
Settlement of conversion obligation in excess of par value		$ 28,800

XML

Income Taxes - Effective Income Tax Rates (Details)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract]
Effective income tax rates	9.00%	35.00%

XML

Income Taxes (Details Textual) - USD ($) $ in Thousands, shares in Millions	1 Months Ended	3 Months Ended		12 Months Ended
	Jan. 31, 2017	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2017
Income Taxes [Line Items]
Income tax (expense) benefit		$ (2,113)	$ (11,590)
Estimated full year 2017 effective income tax rate		9.00%	35.00%
Warrant Exercise
Income Taxes [Line Items]
Income tax (expense) benefit		$ 5,000
Scenario, Forecast
Income Taxes [Line Items]
Estimated full year 2017 effective income tax rate				31.00%
ASU 2016-09
Income Taxes [Line Items]
Income tax (expense) benefit		$ 1,000
ASU 2016-09 | Scenario, Forecast
Income Taxes [Line Items]
Income tax (expense) benefit				$ 2,000
Comcast Corporation
Income Taxes [Line Items]
Stock warrants exercised	1.4

XML

Commitments, Guarantees and Contingencies (Details Textual)	3 Months Ended
	Mar. 31, 2017
Commitments And Contingencies Disclosure [Abstract]
Warranty Period	90 days

XML

Earnings Per Common Share - Reconciliation of the Basic and Diluted EPS Denominators (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Reconciliation of the basic and diluted EPS denominators
Basic weighted-average common shares	32,016	30,762
Dilutive effect of restricted common stock	578	732
Dilutive effect of 2010 Convertible Notes		1,900
Dilutive effect of Stock Warrants		278
Diluted weighted-average common shares	32,594	33,672

XML

Earnings Per Common Share (Details Textual)	Mar. 31, 2017 $ / shares
Common stock Warrants
Earnings Per Common Share [Line Items]
Common stock warrants issued, per warrant	$ 26.68

XML

Stockholders' Equity and Equity Compensation Plans (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		12 Months Ended
	Mar. 31, 2017	Jan. 31, 2017	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2014
Stockholders Equity And Equity Compensation Plans [Line Items]
Remaining number of shares available for repurchase	6,600,000		6,600,000
Repurchase of common stock for employee tax withholdings, shares			200,000	200,000
Repurchase of common stock for tax withholdings, value			$ 6,100	$ 9,500
Cash dividends declared per common share			$ 0.1975	$ 0.185
Cash dividend			$ 6,700	$ 6,000
Stock warrants term						10 years
Stock warrants, exercise price						$ 26.68
Number of stock warrants vested					1,400,000
Stock warrants outstanding	1,500,000		1,500,000
Remaining number of stock warrants vested			0
Carrying amount of common stock warrants					$ 16,007
Stock-based compensation expense			$ 5,670	$ 6,506
Performance Shares
Stockholders Equity And Equity Compensation Plans [Line Items]
Performance based awards granted to executive management and certain key employees shares			100,000
Vesting period			3 years
Restricted common stock
Stockholders Equity And Equity Compensation Plans [Line Items]
Vesting period			4 years
Senior Subordinated Convertible Notes 2010
Stockholders Equity And Equity Compensation Plans [Line Items]
Common shares from treasury stock delivered to settle conversion obligation in excess of par value	694,240
Carrying value of shares of treasury stock delivered	$ 16,500		$ 16,500
Carrying value of treasury stock delivered, per share	$ 23.71
Conversion obligation in excess of par value	$ 28,800
Common stock Warrants
Stockholders Equity And Equity Compensation Plans [Line Items]
Stock warrants exercised		1,400,000
Common shares from treasury stock delivered to settle conversion obligation in excess of par value		649,221
Fair value of shares of treasury stock delivered		$ 31,500
Carrying value of shares of treasury stock delivered		$ 15,400
Carrying value of treasury stock delivered, per share		$ 23.66
Carrying amount of common stock warrants		$ 16,000
Comcast Corporation
Stockholders Equity And Equity Compensation Plans [Line Items]
Issuance of stock warrants						2,900,000
Stock warrants exercised		1,400,000
Comcast Corporation | Stock Warrants
Stockholders Equity And Equity Compensation Plans [Line Items]
Client contract incentive related to stock warrants			16,000
Amortization expense of client contract incentive related to stock warrants			$ 5,500
SEC Rule 10b5-1 Plan
Stockholders Equity And Equity Compensation Plans [Line Items]
Repurchase of common stock, shares			100,000	300,000
Total amount paid			$ 5,400	$ 9,500
Weighted-average price per share			$ 42.85	$ 36.07

XML

Stockholders' Equity and Equity Compensation Plans - Summary of Unvested Restricted Common Stock Activity (Details) - Restricted common stock shares in Thousands	3 Months Ended
	Mar. 31, 2017 $ / shares shares
Shares
Shares, Unvested awards, beginning balance | shares	1,394
Shares, Awards granted | shares	473
Shares, Awards forfeited/cancelled | shares	(9)
Shares, Awards vested | shares	(439)
Shares, Unvested awards, ending balance | shares	1,419
Weighted average grant date fair value
Weighted-Average Grant Date Fair Value, Unvested awards, beginning balance | $ / shares	$ 31.26
Weighted-Average Grant Date Fair Value, Awards granted | $ / shares	39.48
Weighted-Average Grant Date Fair Value, Awards forfeited/cancelled | $ / shares	31.49
Weighted-Average Grant Date Fair Value, Awards vested | $ / shares	28.35
Weighted-Average Grant Date Fair Value, Unvested awards, ending balance | $ / shares	$ 34.90