10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended June 30, 2012

OR

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

For the transition period from            to

Commission File Number 001-11919

TeleTech Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	84-1291044
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

9197 South Peoria Street

Englewood, Colorado 80112

(Address of principal executive offices)

Registrant’s telephone number, including area code: (303) 397-8100

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 R   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 R   No o

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o   No R

As of July 26, 2012, there were 54,535,438 shares of the registrant’s common stock outstanding.

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

JUNE 30, 2012 FORM 10-Q

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011	1
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011 (unaudited)	2
	Consolidated Statement of Equity as of and for the six months ended June 30, 2012 (unaudited)	3
	Consolidated Statements of Cash Flows for the three and six months ended June 30, 2012 and 2011 (unaudited)	4
	Notes to the Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	43
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 6.	Exhibits	46
SIGNATURES		47
EXHIBIT INDEX		48

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Amounts in thousands, except share amounts)

		June 30, 2012			December 31, 2011
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	170,578		$	156,371
Accounts receivable, net	243,360			243,636
Prepaids and other current assets	51,737			37,434
Deferred tax assets, net	23,692			22,994
Income tax receivable	12,328			17,847
Total current assets	501,695			478,282
Long-term assets
Property, plant and equipment, net	105,055			100,321
Goodwill	72,057			70,844
Contract acquisition costs, net	2,358			2,866
Deferred tax assets, net	31,642			32,512
Other long-term assets	72,145			62,153
Total long-term assets	283,257			268,696
Total assets	$	784,952		$	746,978
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	29,960		$	27,555
Accrued employee compensation and benefits	71,000			71,500
Other accrued expenses	43,941			33,816
Income taxes payable	12,222			10,051
Deferred tax liabilities, net	1,745			912
Deferred revenue	16,603			15,895
Other current liabilities	8,530			10,282
Total current liabilities	184,001			170,011
Long-term liabilities
Line of credit	78,000			64,000
Negative investment in deconsolidated subsidiary	76			76
Deferred tax liabilities, net	3,226			3,020
Deferred rent	7,528			6,729
Other long-term liabilities	43,459			32,895
Total long-term liabilities	132,289			106,720
Total liabilities	316,290			276,731
Commitments and contingencies (Note 10)
Stockholders’ equity
Preferred stock - $0.01 par value: 10,000,000 shares authorized; zero shares outstanding as of June 30, 2012 and December 31, 2011	-			-
Common stock - $0.01 par value; 150,000,000 shares authorized; 54,555,105 and 56,635,319 shares outstanding as of June 30, 2012 and December 31, 2011, respectively	546			566
Additional paid-in capital	346,018			350,386
Treasury stock at cost: 27,497,148 and 25,416,934 shares as of June 30, 2012 and December 31, 2011, respectively	(390,468		)	(357,267		)
Accumulated other comprehensive income (loss)	7,197			(5,474		)
Retained earnings	491,980			470,776
Noncontrolling interest	13,389			11,260
Total stockholders’ equity	468,662			470,247
Total liabilities and stockholders’ equity	$	784,952		$	746,978

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

1

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Amounts in thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenue	$	288,798		$	293,636		$	581,452		$	574,615
Operating expenses
Cost of services (exclusive of depreciation and amortization presented separately below)	209,121			210,358			421,016			409,479
Selling, general and administrative	45,709			47,283			93,844			95,084
Depreciation and amortization	10,229			11,423			20,345			23,021
Restructuring charges, net	16,296			(57		)	18,254			682
Impairment losses	997			-			2,797			230
Total operating expenses	282,352			269,007			556,256			528,496
Income from operations	6,446			24,629			25,196			46,119
Other income (expense)
Interest income	695			720			1,455			1,386
Interest expense	(1,583		)	(1,291		)	(2,681		)	(2,671		)
Other expense, net	(582		)	(705		)	(324		)	(261		)
Total other income (expense)	(1,470		)	(1,276		)	(1,550		)	(1,546		)
Income before income taxes	4,976			23,353			23,646			44,573
Benefit (Provision) for income taxes	1,272			(129		)	(581		)	(9,978		)
Net income	6,248			23,224			23,065			34,595
Net income attributable to noncontrolling interest	(925		)	(1,007		)	(1,861		)	(1,905		)
Net income attributable to TeleTech stockholders	$	5,323		$	22,217		$	21,204		$	32,690
Other comprehensive income (loss)
Net income	$	6,248		$	23,224		$	23,065		$	34,595
Foreign currency translation adjustment	(5,530		)	1,835			3,252			6,881
Derivative valuation, gross	2,719			(8,193		)	14,390			(10,480		)
Derivative valuation, tax effect	(1,000		)	3,070			(5,574		)	3,900
Other	262			111			650			221
Total other comprehensive income	(3,549		)	(3,177		)	12,718			522
Total comprehensive income	2,699			20,047			35,783			35,117
Comprehensive income attributable to noncontrolling interest	(960		)	(956		)	(1,908		)	(1,907		)
Comprehensive income attributable to TeleTech stockholders	$	1,739		$	19,091		$	33,875		$	33,210
Weighted average shares outstanding
Basic	55,125			56,713			55,809			56,949
Diluted	55,712			57,974			56,558			58,376
Net income per share attributable to TeleTech stockholders
Basic	$	0.10		$	0.39		$	0.38		$	0.57
Diluted	$	0.10		$	0.38		$	0.37		$	0.56

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

2

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

(Amounts in thousands)

(Unaudited)

	Stockholders’ Equity of the Company
	Preferred Stock				Common Stock					Treasury Stock				Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)				Retained Earnings			Noncontrolling interest			Total Equity
	Shares		Amount		Shares		Amount
Balance as of December 31, 2011	-	$		-	56,635	$		566	$		(357,267	)	$		350,386	$		(5,474	)	$		470,776	$		11,260	$		470,247
Net income	-		-		-		-			-				-			-				21,204			1,861			23,065
Acquisition of noncontrolling interest	-		-		-		-			-				-			-				-			941			941
Dividends distributed to noncontrolling interest	-		-		-		-			-				-			-				-			(720		)	(720		)
Foreign currency translation adjustments	-		-		-		-			-				-			3,205				-			47			3,252
Derivatives valuation, net of tax	-		-		-		-			-				-			8,816				-			-			8,816
Vesting of restricted stock units	-		-		475		5			6,626				(10,455		)	-				-			-			(3,824		)
Exercise of stock options	-		-		63		1			879				(110		)	-				-			-			770
Excess tax benefit from equity-based awards	-		-		-		-			-				(648		)	-				-			-			(648		)
Equity-based compensation expense	-		-		-		-			-				6,845			-				-			-			6,845
Purchases of common stock	-		-		(2,618	)	(26		)	(40,706		)		-			-				-			-			(40,732		)
Other	-		-		-		-			-				-			650				-			-			650
Balance as of June 30, 2012	-	$		-	54,555	$		546	$		(390,468	)	$		346,018	$		7,197	$			491,980	$		13,389	$		468,662

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

3

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

	Six Months Ended June 30,
	2012			2011
Cash flows from operating activities
Net income	$	23,065		$	34,595
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,345			23,021
Amortization of contract acquisition costs	508			1,009
Amortization of debt issuance costs	347			290
Imputed interest expense	373			531
Provision for doubtful accounts	48			-
Loss (gain) on disposal of assets	137			(696		)
Impairment losses	2,797			230
Deferred income taxes	(8,097		)	8,076
Excess tax benefit from equity-based awards	(1,136		)	(3,099		)
Equity-based compensation expense	6,845			7,715
(Gain) loss on foreign currency derivatives	(963		)	531
Changes in assets and liabilities, net of acquisitions:
Accounts receivable	1,095			5,908
Prepaids and other assets	(11,979		)	(6,317		)
Accounts payable and accrued expenses	13,453			(17,950		)
Deferred revenue and other liabilities	1,819			(5,863		)
Net cash provided by operating activities	48,657			47,981
Cash flows from investing activities
Proceeds from grant for property, plant and equipment	110			-
Proceeds from sale of long-lived assets	225			2,328
Purchases of property, plant and equipment, net of acquisitions	(17,478		)	(12,362		)
Acquisitions, net of cash acquired of $1,373 and $14, respectively	(4,809		)	(43,884		)
Net cash used in investing activities	(21,952		)	(53,918		)
Cash flows from financing activities
Proceeds from line of credit	515,950			406,100
Payments on line of credit	(501,950		)	(288,100		)
Proceeds from other debt	6,821			-
Payments on other debt	(1,390		)	(1,088		)
Dividends distributed to noncontrolling interest	(720		)	(1,859		)
Proceeds from exercise of stock options	770			3,673
Excess tax benefit from equity-based awards	1,136			3,099
Purchase of treasury stock	(40,732		)	(43,748		)
Payments of debt issuance costs	(432		)	(22		)
Net cash (used in) provided by financing activities	(20,547		)	78,055
Effect of exchange rate changes on cash and cash equivalents	8,049			2,783
Increase in cash and cash equivalents	14,207			74,901
Cash and cash equivalents, beginning of period	156,371			119,385
Cash and cash equivalents, end of period	$	170,578		$	194,286
Supplemental disclosures
Cash paid for interest	$	1,706		$	2,026
Cash paid for income taxes	$	8,546		$	14,875
Non-cash investing and financing activities
Purchases of equipment through financing agreements	$	6,100		$	-
Grant income credited to property, plant and equipment	$	110		$	-
Landlord incentives credited to deferred rent	$	604		$	-

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

4

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1)        OVERVIEW AND BASIS OF PRESENTATION

Overview

TeleTech Holdings, Inc. and its subsidiaries (“TeleTech” or the “Company”) serve their clients through the primary businesses of Business Process Outsourcing (“BPO”), which includes data-driven strategic consulting and marketing services, customer management, and hosted and managed technologies, for a variety of industries via operations in the U.S., Argentina, Australia, Belgium, Brazil, Canada, China, Costa Rica, England, France, Germany, Ghana, Italy, Kuwait, Lebanon, Mexico, New Zealand, Northern Ireland, the Philippines, Scotland, South Africa, Spain, Turkey and the United Arab Emirates.

Basis of Presentation

The Consolidated Financial Statements are comprised of the accounts of TeleTech, its wholly owned subsidiaries, its 55% equity owned subsidiary Percepta, LLC, its 80% interest in Peppers & Rogers Group (“PRG”) and its 80% interest in iKnowtion, LLC which was acquired on February 27, 2012 (see Note 2 for additional information). All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited Consolidated Financial Statements do not include all of the disclosures required by accounting principles generally accepted in the U.S. (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company as of June 30, 2012, and the consolidated results of operations and comprehensive income and cash flows of the Company for the three and six months ended June 30, 2012 and 2011. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

These unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Certain amounts for 2011 have been reclassified in the Consolidated Financial Statements to conform to the 2012 presentation.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to derivatives and hedging activities, income taxes including the valuation allowance for deferred tax assets, self-insurance reserves, litigation reserves, restructuring reserves, allowance for doubtful accounts and valuation of goodwill, long-lived and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. In the three months ended June 30, 2012, the Company recorded a change in estimate which resulted in a decrease of $4.6 million to employee related expenses in connection with an authoritative ruling in Spain related to the legally required cost of living adjustment for our employees’ salaries for the years 2010, 2011 and 2012.

5

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Recently Issued Accounting Pronouncements

In May 2011, the FASB amended its guidance, to converge fair value measurement and disclosure guidance in U.S. GAAP with International Financial Reporting Standards (“IFRS”). IFRS is a comprehensive series of accounting standards published by the International Accounting Standards Board. The amendment changes the wording used to describe the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The FASB does not intend for the amendment to result in a change in the application of the requirements in the current authoritative guidance. The amendment became effective prospectively for the Company’s interim period ended March 31, 2012. The adoption of this guidance did not have a material impact on its financial position, results of operations or cash flows.

In June 2011, the FASB amended its guidance on the presentation of comprehensive income. Under the amended guidance, an entity has the option to present comprehensive income in either one or two consecutive financial statements. The Company decided to present a single statement setting the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income. The amendment became effective retrospectively for the Company’s interim period ended March 31, 2012.

In December 2011, the FASB issued additional guidance related to the presentation of other comprehensive income. This guidance is intended to allow the FASB time to re-deliberate whether it is necessary to require entities to present the effects of reclassifications out of accumulated other comprehensive income in both the statement in which net income is presented and the statement in which other comprehensive income is presented. This guidance defers the effective date of only those provisions in the other comprehensive income guidance that relate to the presentation of reclassification adjustments out of other comprehensive income and reinstates the previous requirements to present reclassification adjustments either on the face of the statement in which other comprehensive income is reported or to disclose them in a note to the financial statements. The amendments in this new guidance became effective at the same time as the amendments in the other comprehensive income guidance explained above. The Company’s adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.

(2)        ACQUISITIONS

OnState

On January 1, 2012, the Company entered into an asset purchase agreement with OnState Communications Corporation (“OnState”) to acquire 100% of its assets and assume certain of its liabilities for total cash consideration of $3.3 million. OnState provides hosted business process outsourcing solutions to a variety of small businesses. OnState was headquartered in Boston, MA with a minimal employee base.

As of the six months ended June 30, 2012, the Company has paid $3.1 million of the purchase price. The remaining purchase price will be paid out once the potential for covered losses has expired per the purchase agreement. The Company paid $0.1 million of acquisition related expenses as part of the OnState purchase. These costs were recorded in Selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income during the six months ended June 30, 2012.

6

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):

	Acquisition Date Fair Value
Cash	$	36
Accounts Receivable	68
Property, plant and equipment	33
Software	2,100
Goodwill	1,132
	3,369
Accounts payable	93
	93
Total purchase price	$	3,276

The software acquired will be amortized over four years once it is placed into service. The goodwill recognized from the OnState acquisition is primarily attributable to the synergies resulting from incorporating the acquired software into the Company’s current technology platforms in addition to the acquisition of the employees who developed the acquired software. Since this acquisition is an asset acquisition for tax purposes, the goodwill of $1.1 million and software are deductible over their respective tax lives.

iKnowtion

On February 27, 2012, the Company acquired an 80% interest in iKnowtion, LLC (“iKnowtion”).  iKnowtion integrates proven marketing analytics methodologies and business consulting capabilities to help clients improve their return on marketing expenditures in such areas as demand generation, share of wallet, and channel mix optimization. iKnowtion is located in Boston, MA and has approximately 40 employees.

The up-front cash consideration paid was $1.0 million. The Company was also obligated to pay a working capital adjustment equivalent to any acquired working capital from iKnowtion in excess of a working capital floor as defined in the purchase and sale agreement. The working capital adjustment was $0.2 million and was paid during the second quarter of 2012.

The Company is also obligated to make earn-out payments over the next four years if iKnowtion achieves specified earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets, as defined by the purchase and sale agreement. The fair value of the contingent payments was measured based on significant inputs not observable in the market (Level 3 inputs). Key assumptions included in the fair value calculation include a discount rate of 21% and expected future value of payments of $4.3 million. The $4.3 million of expected future payments was estimated using a probability weighted EBITDA assessment with higher probability associated with iKnowtion achieving the maximum EBITDA targets. As of the acquisition date, the fair value of the contingent payments was approximately $2.9 million. As of June 30, 2012, the fair value of the contingent consideration was $3.3 million, of which $1.0 million and $2.3 million were included in Other accrued expenses and Other long-term liabilities in the accompanying Consolidated Balance Sheets, respectively.

The preliminary estimated fair value of the 20% noncontrolling interest in iKnowtion is $0.9 million and was estimated based on a 20% interest of the fair value of 100% interest in iKnowtion and was discounted for a lack of control at a rate of 23.1%.

7

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In the event iKnowtion meets certain EBITDA targets for calendar year 2015, the purchase and sale agreement requires TeleTech to purchase the remaining 20% interest in iKnowtion in 2016 for an amount equal to a multiple of iKnowtions’s 2015 EBITDA as defined in the purchase and sale agreement. These terms represent a contingent redemption feature. The preliminary fair value of the redemption feature is based on a comparison of EBITDA multiples and the EBITDA multiple to purchase the remaining 20% of iKnowtion approximates EBITDA multiples in the market for similar acquisitions.

The Company paid $0.1 million of acquisition related expenses as part of the iKnowtion purchase. These costs were recorded in Selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income during the six months ended June 30, 2012.

The following summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities and noncontrolling interest assumed as of the acquisition date (in thousands). The estimates of fair value of identifiable assets acquired and liabilities assumed, are preliminary, pending completion of the valuation, and thus are subject to revisions that will result in adjustments to the values presented below:

	Preliminary Estimates of Acquisition Date Fair Value
Cash	$	1,337
Accounts Receivable	1,792
Property, plant and equipment	161
Other assets	90
Customer relationships	1,400
Goodwill	447
	5,227
Accounts payable	18
Accrued expenses	19
Other	164
	201
Noncontrolling interest	941
Total purchase price	$	4,085

The iKnowtion customer relationships have an estimated useful life of 5 years. The goodwill recognized from the iKnowtion acquisition was attributable primarily to the acquired workforce of iKnowtion, expected synergies, and other factors. It is anticipated that any tax basis of the acquired intangibles and goodwill will be deductible for income tax purposes. The acquired goodwill and the operating results of iKnowtion are reported within the Customer Strategy Services segment from the date of acquisition.

8

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

eLoyalty

On May 28, 2011, the Company acquired certain assets and assumed certain liabilities of eLoyalty Corporation (“eLoyalty”) related to the Integrated Contract Solutions (“ICS”) business unit, and the eLoyalty trade name. The ICS business unit focuses on helping clients improve customer service business performance through the implementation of a variety of service centers. The ICS business unit generates revenue in three ways: (i) managed services that support and maintain clients’ customer service center environment over the long-term; (ii) consulting services that assist the customer in implementation and integration of a customer service center solution; and (iii) product resale through the sale of third party software and hardware. eLoyalty operates out of an office in Austin, TX with an additional administrative location in Chicago, IL and has approximately 160 employees.

The up-front cash consideration in the eLoyalty transaction was $40.9 million, subject to certain balance sheet adjustments of ($2.9) million as defined in the purchase and sale agreement, for a total purchase price of $38.0 million, all of which was paid by December 31, 2011.

The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):

	Acquisition Date Fair Value
Cash	$	14
Accounts Receivable	7,702
Prepaid assets - cost deferrals	14,726
Property, plant and equipment	897
Other assets	869
Deferred tax asset	3,735
Customer relationships	11,700
Software	1,200
Noncompete agreements	900
Trade name	3,300
Consulting services backlog	500
Goodwill	18,516
	64,059
Accounts payable	2,156
Accrued expenses	1,211
Deferred revenue	22,525
Other	192
	26,084
Total purchase price	$	37,975

The customer relationship intangible asset is being amortized over 11 years. The goodwill recognized from the eLoyalty acquisition was attributable primarily to the assembled workforce of eLoyalty and significant opportunity for Company growth and marketing based on additional service offerings and capabilities. Since this acquisition has been treated as an asset acquisition for tax purposes, the goodwill of $18.5 million and associated intangible assets will be deductible for income tax purposes. The operating results of eLoyalty are reported within the Customer Technology Services segment from the date of acquisition.

9

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The three acquired businesses described above contributed revenues of $22.1 million and $43.2 million and income from operations of $1.7 million and $4.1 million to the Company for the three and six months ended June 30, 2012.

(3)        SEGMENT INFORMATION

Effective January 1, 2012, the Company completed certain changes focused on streamlining the organization to more closely align the Company’s reporting structure with its products and services and to increase management accountability. Beginning in the first quarter of 2012, the Company will now report the following four segments:

·the Customer Management Services segment includes the customer experience delivery solutions which integrate innovative technology with highly-trained customer experience professionals to optimize the customer experience across all channels and all stages of the customer lifecycle from an onshore, offshore or work-from-home environment;

·the Customer Growth Services segment includes the technology-enabled sales and marketing business;

·the Customer Technology Services segment includes the hosted and managed technology offerings, including certain acquired assets of eLoyalty; and

·the Customer Strategy Services segment includes the customer experience strategy and data analytics offerings.

TeleTech revised previously reported segment information to conform to its new segments in effect as of January 1, 2012.

All intercompany transactions between the reported segments for the periods presented have been eliminated.

The following tables present certain financial data by segment (amounts in thousands):

Three Months Ended June 30, 2012
	Gross Revenue		Intersegment Sales			Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services	$	229,401	$	-		$	229,401	$	5,890	$	28,563
Customer Growth Services	24,409		-			24,409		631		4,212
Customer Technology Services	25,578		(622		)	24,956		678		4,103
Customer Strategy Services	10,347		(315		)	10,032		341		316
Total segments	289,735		(937		)	288,798		7,540		37,194
Corporate	-		-			-		2,689		(30,748		)
Total	$	289,735	$	(937	)	$	288,798	$	10,229	$	6,446

10

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Three Months Ended June 30, 2011
	Gross Revenue		Intersegment Sales			Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services	$	248,207	$	-		$	248,207	$	7,305	$	49,588
Customer Growth Services	23,483		-			23,483		766		4,594
Customer Technology Services	11,660		-			11,660		448		3,156
Customer Strategy Services	10,286		-			10,286		309		1,309
Total segments	293,636		-			293,636		8,828		58,647
Corporate	-		-			-		2,595		(34,018		)
Total	$	293,636	$	-		$	293,636	$	11,423	$	24,629
Six Months Ended June 30, 2012
	Gross Revenue		Intersegment Sales			Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services	$	464,277	$	-		$	464,277	$	12,030	$	74,269
Customer Growth Services	47,173		-			47,173		1,196		5,291
Customer Technology Services	52,062		(1,553		)	50,509		1,465		7,808
Customer Strategy Services	20,709		(1,216		)	19,493		690		847
Total segments	584,221		(2,769		)	581,452		15,381		88,215
Corporate	-		-			-		4,964		(63,019		)
Total	$	584,221	$	(2,769	)	$	581,452	$	20,345	$	25,196
Six Months Ended June 30, 2011
	Gross Revenue		Intersegment Sales			Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services	$	494,280	$	-		$	494,280	$	15,736	$	97,839
Customer Growth Services	45,626		-			45,626		1,552		7,576
Customer Technology Services	16,317		-			16,317		517		5,868
Customer Strategy Services	18,392		-			18,392		607		1,773
Total segments	574,615		-			574,615		18,412		113,056
Corporate	-		-			-		4,609		(66,937		)
Total	$	574,615	$	-		$	574,615	$	23,021	$	46,119

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Capital Expenditures
Customer Management Services	$	7,336	$	4,958	$	12,982	$	7,079
Customer Growth Services	524		94		893		200
Customer Technology Services	375		45		701		115
Customer Strategy Services	18		—		84		138
Corporate	2,741		3,395		2,818		4,830
Total	$	10,994	$	8,492	$	17,478	$	12,362

11

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	June 30, 2012		December 31, 2011
Total Assets
Customer Management Services	$	496,401	$	479,818
Customer Growth Services	46,241		50,950
Customer Technology Services	77,865		70,745
Customer Strategy Services	50,339		42,882
Corporate	114,106		102,583
Total	$	784,952	$	746,978
	June 30, 2012		December 31, 2011
Goodwill
Customer Management Services	$	20,228	$	20,594
Customer Growth Services	24,439		24,439
Customer Technology Services	19,648		18,516
Customer Strategy Services	7,742		7,295
Total	$	72,057	$	70,844

The following table presents revenue based upon the geographic location where the services are provided (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Revenue
United States	$	111,857	$	94,184	$	222,433	$	178,813
Philippines	83,336		85,519		162,002		169,026
Latin America	46,259		53,066		94,155		108,664
Europe / Middle East / Africa	33,085		44,013		71,450		83,771
Canada	10,288		13,047		23,241		25,845
Asia Pacific	3,973		3,807		8,171		8,496
Total	$	288,798	$	293,636	$	581,452	$	574,615

(4)        SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS

The Company did not have any clients that contributed in excess of 10% of total revenue for the three or six months ended June 30, 2012 or 2011.

The loss of one or more of its significant clients could have a material adverse effect on the Company’s business, operating results, or financial condition. The Company does not require collateral from its clients. To limit the Company’s credit risk, management performs periodic credit evaluations of its clients and maintains allowances for uncollectible accounts and may require pre-payment for services. Although the Company is impacted by economic conditions in various industry segments, management does not believe significant credit risk existed as of June 30, 2012.

12

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(5)        GOODWILL

Goodwill consisted of the following (amounts in thousands):

	December 31, 2011		Acquisitions		Impairments		Effect of Foreign Currency			June 30,2012
Customer Management Services	$	20,594	$	—	$	—	$	(366	)	$	20,228
Customer Growth Services	24,439		—		—		—			24,439
Customer Technology Services	18,516		1,132		—		—			19,648
Customer Strategy Services	7,295		447		—		—			7,742
Total	$	70,844	$	1,579	$	—	$	(366	)	$	72,057

The Company performs a goodwill impairment test on at least an annual basis. The Company conducts its annual goodwill impairment test during the fourth quarter, or more frequently, if indicators of impairment exist. During the quarter ended June 30, 2012, the Company assessed whether any such indicators of impairment existed and concluded that there were none.

(6)        DERIVATIVES

Cash Flow Hedges

The Company enters into foreign exchange and interest rate related derivatives. Foreign exchange derivatives entered into consist of forward and option contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. Interest rate derivatives consist of interest rate swaps to reduce the Company’s exposure to interest rate fluctuations associated with its variable rate debt. Upon proper qualification, these contracts are designated as cash flow hedges. It is the Company’s policy to only enter into derivative contracts with investment grade counterparty financial institutions, and correspondingly, the fair value of derivative assets consider, among other factors, the creditworthiness of these counterparties. Conversely, the fair value of derivative liabilities reflects the Company’s creditworthiness. As of June 30, 2012, the Company has not experienced, nor does it anticipate, any issues related to derivative counterparty defaults. The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the three and six months ended June 30, 2012 and 2011 (amounts in thousands and net of tax):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Aggregate unrealized net gain (loss) at beginning of period	$	1,245	$	5,634	$	(5,852)	$	7,091
Add: Net gain/(loss) from change in fair value of cash flow hedges	2,024		(3,189)		9,095		(2,431)
Less: Net (gain)/loss reclassified to earnings from effective hedges	(305)		(1,934)		(279)		(4,149)
Aggregate unrealized net gain (loss) at end of period	$	2,964	$	511	$	2,964	$	511

13

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The Company’s foreign exchange cash flow hedging instruments as of June 30, 2012 and December 31, 2011 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts unless noted otherwise.

As of June 30, 2012	Local Currency Notional Amount	U.S. Dollar Notional Amount			% Maturing in the Next 12 Months	Contracts Maturing Through
Canadian Dollar	15,250	$	14,740		78.7 %	March 2014
Costa Rican Colon	500,000	963			100.0 %	August 2012
Philippine Peso	11,270,000	255,746		(1)	56.9 %	December 2015
Mexican Peso (Forwards)	1,322,500	95,791			50.5 %	December 2015
Mexican Peso (Collars)	70,149	6,000		(3)	100.0 %	December 2012
British Pound Sterling	6,162	9,628		(2)	66.6 %	June 2014
New Zealand Dollars	726	550			100.0 %	June 2013
		$	383,418
As of December 31, 2011	Local Currency Notional Amount	U.S. Dollar Notional Amount
Canadian Dollar	25,750	$	25,137
Costa Rican Colon	2,000,000	3,874
Philippine Peso	13,304,000	301,361		(1)
Mexican Peso (Forwards)	1,081,000	80,735
Mexican Peso (Collars)	140,298	12,000		(4)
British Pound Sterling	8,808	13,822		(2)
		$	436,929

(1)Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.

(2)Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.

(3)The Mexican peso collars include call options with a floor total of MXN 70.1 million and put options with a cap total of MXN (81.8 million) as of June 30, 2012.

(4)The Mexican peso collars include call options with a floor total of MXN 140.3 million and put options with a cap total of MXN (157.0 million) as of December 31, 2011.

The Company’s interest rate swap arrangements as of June 30, 2012 and December 31, 2011 were as follows:

	Notional Amount (millions)		Variable Rate Received	Fixed Rate Paid	Contract Commencement Date	Contract Maturity Date
As of June 30, 2012	$	25.0	1 - month LIBOR	2.55    %	April 2012	April 2016
		15.0	1 - month LIBOR	3.14    %	May 2012	May 2017
	$	40.0
As of December 31, 2011	$	25.0	1 - month LIBOR	2.55    %	April 2012	April 2016
		15.0	1 - month LIBOR	3.14    %	May 2012	May 2017
	$	40.0

14

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Fair Value Hedges

The Company enters into foreign exchange forward contracts to economically hedge against foreign currency exchange gains and losses on certain receivables and payables of the Company’s foreign operations. Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings in Other income (expense), net. As of June 30, 2012 and December 31, 2011 the total notional amount of the Company’s forward contracts used as fair value hedges were $111.3 million and $49.8 million, respectively.

Embedded Derivatives

In addition to hedging activities, the Company’s foreign subsidiary in Argentina was party to U.S. dollar denominated lease contracts which the Company determined contain embedded derivatives. As such, the Company bifurcated the embedded derivative features of the lease contracts and valued these features as foreign currency derivatives. As of June 30, 2012, the fair value of the embedded derivatives was $0.3 million and was included in Other current liabilities and Other long-term liabilities in the accompanying Consolidated Balance Sheets as shown in the table below.

Derivative Valuation and Settlements

The Company’s derivatives as of June 30, 2012 and December 31, 2011 were as follows (amounts in thousands):

	June 30, 2012
	Designated as Hedging Instruments				Not Designated as Hedging Instruments
Derivative contracts:	Foreign Exchange		Interest Rate		Foreign Exchange		Leases
Derivative classification:	Cash Flow		Cash Flow		Fair Value		Embedded Derivative
Fair value and location of derivative in the Consolidated Balance Sheet:
Prepaids and other current assets	$	6,288	$	-	$	900	$	-
Other long-term assets	4,140		-		-		-
Other current liabilities	(2,047)		(997)		-		(101)
Other long-term liabilities	(552)		(1,877)		-		(165)
Total fair value of derivatives, net	$	7,829	$	(2,874)	$	900	$	(266)
	December 31, 2011
	Designated as Hedging Instruments				Not Designated as Hedging Instruments
Derivative contracts:	Foreign Exchange		Interest Rate		Foreign Exchange		Leases
Derivative classification:	Cash Flow		Cash Flow		Fair Value		Embedded Derivative
Fair value and location of derivative in the Consolidated Balance Sheet:
Prepaids and other current assets	$	2,325	$	-	$	12	$	-
Other long-term assets	1,119		-		-		-
Other current liabilities	(7,828)		-		(341)		-
Other long-term liabilities	(2,786)		(2,263)		-		-
Total fair value of derivatives, net	$	(7,170)	$	(2,263)	$	(329)	$	-

15

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The effects of derivative instruments on the Consolidated Statements of Comprehensive Income for the three months ended June 30, 2012 and 2011 were as follows (amounts in thousands):

	Three Months Ended June 30,
	2012				2011
	Designated as Hedging Instruments				Designated as Hedging Instruments
Derivative contracts:	Foreign Exchange		Interest Rate		Foreign Exchange		Interest Rate
Derivative classification:	Cash Flow		Cash Flow		Cash Flow		Cash Flow
Amount of gain or (loss) recognized in other comprehensive income - effective portion, net of tax:	$	2,337	$	(313)	$	(2,673)	$	(516)
Amount and location of net gain or (loss) reclassified from accumulated OCI to income - effective portion:
Revenue	$	692	$	-	$	3,224	$	-
Interest expense	-		(183)		-		-

	Three Months Ended June 30,
	2012						2011
	Not Designated as Hedging Instruments						Not Designated as Hedging Instruments
Derivative contracts:	Foreign Exchange				Leases		Foreign Exchange				Leases
Derivative classification:	Option and Forward Contracts		Fair Value		Embedded Derivative		Option and Forward Contracts		Fair Value		Embedded Derivative
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income
Costs of services	$	-	$	-	$	(266)	$	-	$	-	$	78
Other income (expense), net	$	-	$	1,686	$	-	$	-	$	(207)	$	-

The effects of derivative instruments on the Consolidated Statements of Comprehensive Income for the six months ended June 30, 2012 and 2011 were as follows (amounts in thousands):

	Six Months Ended June 30,
	2012				2011
	Designated as Hedging Instruments				Designated as Hedging Instruments
Derivative contracts:	Foreign Exchange		Interest Rate		Foreign Exchange		Interest Rate
Derivative classification:	Cash Flow		Cash Flow		Cash Flow		Cash Flow
Amount of gain or (loss) recognized in other comprehensive income - effective portion, net of tax:	$	9,571	$	(476)	$	(2,104)	$	(327)
Amount and location of net gain or (loss) reclassified from accumulated OCI to income - effective portion:
Revenue	$	649	$	-	$	6,915	$	-
Interest expense	$	-	$	(183)	$	-	$	-

	Six Months Ended June 30,
	2012						2011
	Not Designated as Hedging Instruments						Not Designated as Hedging Instruments
Derivative contracts:	Foreign Exchange				Leases		Foreign Exchange				Leases
Derivative classification:	Option and Forward Contracts		Fair Value		Embedded Derivative		Option and Forward Contracts		Fair Value		Embedded Derivative
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income
Costs of services	$	-	$	-	$	(266)	$	-	$	-	$	122
Other income (expense), net	$	-	$	3,855	$	-	$	-	$	503	$	-

16

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(7)        FAIR VALUE

The authoritative guidance for fair value measurements establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The following presents information as of June 30, 2012 and December 31, 2011 for the Company’s assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value.

Accounts Receivable and Payable - The amounts recorded in the accompanying balance sheets approximate fair value because of their short-term nature.

Debt - The Company’s debt consists primarily of the Company’s Credit Agreement, which permits floating-rate borrowings based upon the current Prime Rate or LIBOR plus a credit spread as determined by the Company’s leverage ratio calculation (as defined in the Credit Agreement). As of June 30, 2012 and December 31, 2011, the Company had $78.0 million and $64.0 million, respectively, of borrowings outstanding under the Credit Agreement. During the three and six months ended June 30, 2012 outstanding borrowings accrued interest at an average rate of 1.6% and 1.6% per annum, respectively, excluding unused commitment fees. The amounts recorded in the accompanying balance sheets approximate fair value due to the variable nature of the debt.

Derivatives -Net derivative assets (liabilities) are measured at fair value on a recurring basis. The portfolio is valued using models based on market observable inputs, including both forward and spot foreign exchange rates, interest rates, implied volatility, and counterparty credit risk, including the ability of each party to execute its obligations under the contract. As of June 30, 2012, credit risk did not materially change the fair value of the Company’s derivative contracts.

The following is a summary of the Company’s fair value measurements for its net derivative assets (liabilities) as of June 30, 2012 and December 31, 2011 (amounts in thousands):

As of June 30, 2012
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		At Fair Value
Cash flow hedges	$	-	$	7,829	$	-	$	7,829
Interest rate swaps	-		(2,874)		-		(2,874)
Embedded derivatives	-		(266)		-		(266)
Fair value hedges	-		900		-		900
Total net derivative asset (liability)	$	-	$	5,589	$	-	$	5,589

17

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of December 31, 2011
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		At Fair Value
Cash flow hedges	$	-	$	(7,170)	$	-	$	(7,170)
Interest rate swaps	-		(2,263)		-		(2,263)
Fair value hedges	-		(329)		-		(329)
Total net derivative asset (liability)	$	-	$	(9,762)	$	-	$	(9,762)

The following is a summary of the Company’s fair value measurements as of June 30, 2012 and December 31, 2011 (amounts in thousands):

As of June 30, 2012
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Assets
Money market investments	$	-	$	400	$	-
Derivative instruments, net	-		5,589		-
Total assets	$	-	$	5,989	$	-
Liabilities
Deferred compensation plan liability	$	-	$	(4,808)	$	-
Derivative instruments, net	-		-		-
Purchase price payable	-		-		(3,234)
Total liabilities	$	-	$	(4,808)	$	(3,234)

As of December 31, 2011
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Assets
Money market investments	$	-	$	507	$	-
Derivative instruments, net	-		-		-
Total assets	$	-	$	507	$	-
Liabilities
Deferred compensation plan liability	$	-	$	(3,990)	$	-
Derivative instruments, net	-		(9,762)		-
Purchase price payable	-		-		(4,985)
Total liabilities	$	-	$	(13,752)	$	(4,985)

18

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Money Market Investments — The Company invests in various well-diversified money market funds which are managed by financial institutions. These money market funds are not publicly traded, but have historically been highly liquid. The value of the money market funds are determined by the banks based upon the funds’ net asset values (“NAV”). All of the money market funds currently permit daily investments and redemptions at a $1.00 NAV.

Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan structured as a Rabbi trust for certain eligible employees. Participants in the deferred compensation plan select from a menu of phantom investment options for their deferral dollars offered by the Company each year, which are based upon changes in value of complementary, defined market investments. The deferred compensation liability represents the combined values of market investments against which participant accounts are tracked.

Purchase Price Payable — The Company recorded a purchase price payable related to the acquisition of iKnowtion. The purchase price payable was recognized at fair value using a discounted cash flow approach and a discount rate of 21.0%. This measurement was based on significant inputs not observable in the market. The Company will record interest expense each period using the effective interest method until the future value of this purchase price payable reaches its expected future value of $4.3 million in 2016. Interest expense related to all recorded purchase price payables is included in Interest expense in the Consolidated Statements of Comprehensive Income.

The Company also had a future payable related to the purchase of PRG. As part of the PRG acquisition, the Company paid the previously recognized purchase price payable of $5.0 million on March 1, 2012. The Company recorded interest expense each period using the effective interest rate method until the payable reached the $5.0 million payment.

(8)        INCOME TAXES

The Company accounts for income taxes in accordance with the accounting literature for income taxes, which requires recognition of deferred tax assets and liabilities for the expected future income tax consequences of transactions that have been included in the Consolidated Financial Statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. Quarterly, the Company assesses the likelihood that its net deferred tax assets will be recovered. Based on the weight of all available evidence, both positive and negative, the Company records a valuation allowance against deferred tax assets when it is more-likely-than-not that a future tax benefit will not be realized.

On February 20, 2011, the Company received notice of an adverse decision by the Canadian Revenue Agency (“CRA”) in regards to the Company’s attempt to recover taxes paid to Canada with respect to the years 2001 and 2002. In 2005, through the Competent Authority process, the Company sought relief under the United States-Canada Income Tax Convention for avoidance of double taxation arising from adjustments to the taxable income originally reported to these jurisdictions. Consistent with accounting for tax positions that no longer meet the recognition criteria, the Company derecognized income tax positions totaling $8.6 million through income tax expense in the first quarter of 2011. The Company continues to believe in the merits of its claim for which it sought relief from double taxation through the Competent Authority process. In response to the February 2011 notice, the Company has filed for Judicial Review in the Federal Court of Canada seeking a writ of mandamus to compel the CRA to accept the Company’s application for Competent Authority consideration.

19

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On July 25, 2012 the Company entered into a unilateral Advance Pricing Agreement (“APA”) with the Australian Tax Office (“ATO”) that covers the intercompany transfer price TeleTech Australia will pay affiliates operating in other tax jurisdictions for subcontracted services. The agreement will preclude the ATO from making a transfer pricing adjustment to transactions within the scope of this agreement. This agreement is effective for five years beginning January 1, 2011. During the period January 1, 2011 through June 30, 2012 TeleTech Australia recorded payments for services performed by affiliates outside Australia according to intercompany service agreements in effect at the time and subsequently measured the tax benefit related to these tax positions in accordance with accounting for uncertain tax positions. Based on the APA, the Company now has certainty as to the amount of tax benefit related to these intercompany transactions and will record a tax benefit of $3.9 million in the third quarter of 2012. Approximately $1.9 million of this benefit had been previously accounted for as an uncertain tax position based on the most probable outcome. In addition, the Company is also in the final stages of negotiating a unilateral APA with the New Zealand Inland Revenue office covering similar transactions and time periods. Although there can be no guarantee that such negotiations will result in an agreement, should such an agreement be signed, the Company would recognize an additional $1.3 million in tax benefit.

As of June 30, 2012, the Company had $67.9 million of gross deferred tax assets. After a $12.6 million valuation allowance and deferred tax liabilities of $4.9 million, the Company has $50.4 million of net deferred tax assets related to the U.S. and international tax jurisdictions whose recoverability is dependent upon future profitability.

The effective tax rate for the three and six months ended June 30, 2012 was (25.6)% and 2.5%, respectively. The effective tax rate during these periods was influenced by the distribution of earnings in international jurisdictions currently under an income tax holiday and the $17.3 million and $21.1 million in restructuring and impairment expenses and the income tax benefit related to these incremental expenses. The effective tax rate for the three and six months ended June 30, 2011 was 0.6% and 22.4%, respectively. The effective tax during these periods was influenced by the additional expense related to the adverse decision by the Canada Revenue Agency regarding the Company’s request from relief from double taxation and the additional benefit related to the Company’s mediated settlement with the IRS related to U.S. tax refund claims.

The Company is currently under audit of income taxes in the Philippines for 2008. Although the outcome of examinations by taxing authorities are always uncertain, it is the opinion of management that the resolution of these audits will not have a material effect on the Company’s Consolidated Financial Statements.

(9)        RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

Restructuring Charges

During the three and six months ended June 30, 2012 and 2011, the Company undertook a number of restructuring activities primarily associated with reductions in the Company’s capacity and workforce in both the Customer Management Services and Customer Growth Services segments to better align the capacity and workforce with current business needs.

During the second quarter of 2012, the Company made the decision to cease operations in Spain as a result of the termination of contracts with its clients. The Company has notified the employees and has commenced severance procedures as required under Spanish law. In connection with this decision, a severance liability was established as of June 30, 2012 for $13.9 million and was included in Other accrued expenses in the Consolidated Balance Sheets.

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TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

A summary of the expenses recorded in Restructuring, net in the accompanying Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011, respectively, is as follows (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Reduction in force
Customer Management Services	$	15,909	$	(57)	$	17,453	$	565
Customer Growth Services	32		-		135		110
Customer Technology Services	56		-		56		-
Customer Strategy Services	-		-		-		-
Corporate	200		-		511		-
Total	$	16,197	$	(57)	$	18,155	$	675

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Facility exit charges
Customer Management Services	$	99	$	-	$	99	$	7
Customer Growth Services	-		-		-		-
Customer Technology Services	-		-		-		-
Customer Strategy Services	-		-		-		-
Corporate	-		-		-		-
Total	$	99	$	-	$	99	$	7

A rollforward of the activity in the Company’s restructuring accruals is as follows (amounts in thousands):

	Closure of Delivery Centers		Reduction in Force		Total
Balance as of December 31, 2011	$	415	$	1,652	$	2,067
Expense	99		18,155		18,254
Payments	(139)		(3,269)		(3,408)
Reversals	-		-		-
Balance as of June 30, 2012	$	375	$	16,538	$	16,913

The remaining restructuring accruals are expected to be paid or extinguished during the next twelve months and are all classified as current liabilities within Other accrued expenses in the Consolidated Balance Sheet.

Impairment Losses

During each of the periods presented, the Company evaluated the recoverability of its leasehold improvement assets at certain delivery centers. An asset is considered to be impaired when the anticipated undiscounted future cash flows of an asset group are estimated to be less than the asset group’s carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. To determine fair value, the Company used Level 3 inputs in its discounted cash flows analysis. Assumptions included the amount and timing of estimated future cash flows and assumed discount rates. During the three and six months ended June 30, 2012, the Company recognized $1.0 million of losses related to leasehold improvement assets in the Customer Management Services segment. During the three and six months ended June 30, 2011, the Company recognized zero and $0.2 million, respectively, of losses related to leasehold improvement assets in the Customer Management Services segment.

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TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

During the first quarter of 2012, the Company elected to rebrand the Direct Alliance Corporation (“DAC”) subsidiary to Revana™. Based on this decision and management’s intention not to use the DAC name on a go-forward basis, the future cash flows associated with the trade name indefinite-lived intangible asset that was established as part of the purchase price accounting of DAC in 2006 is less than the asset’s carrying value. Thus the $1.8 million asset was impaired as of March 31, 2012. This expense was included in the Impairment losses in the Consolidated Statements of Comprehensive Income.

(10)       COMMITMENTS AND CONTINGENCIES

Credit Facility

On October 1, 2010, the Company entered into a five-year, $350.0 million revolving line of credit agreement (the “Credit Agreement”) with a syndicate of lenders led by KeyBank National Association, Wells Fargo Bank, National Association, Bank of America, N.A., BBVA Compass, and JPMorgan Chase Bank, N.A. On March 27, 2012, the Company amended the Credit Agreement by increasing the aggregate commitment by $150.0 million to $500.0 million and revising certain definitions.

The Company primarily utilizes its Credit Agreement to fund working capital, general operations, stock repurchases and other strategic activities, such as the acquisitions described in Note 2. As of June 30, 2012 and December 31, 2011, the Company had borrowings of $78.0 million and $64.0 million, respectively, under our Credit Agreement, and our average daily utilization was $137.4 million and $83.9 million for the six months ended June 30, 2012 and 2011, respectively. After consideration for issued letters of credit under the Credit Agreement, totaling $4.4 million, our remaining borrowing capacity was $417.6 million as of June 30, 2012. As of June 30, 2012, the Company was in compliance with all covenants and conditions under its Credit Agreement.

Letters of Credit

As of June 30, 2012, outstanding letters of credit under the Credit Agreement totaled $4.4 million and primarily guaranteed workers’ compensation and other insurance related obligations. As of June 30, 2012, letters of credit and contract performance guarantees issued outside of the Credit Agreement totaled $1.1 million.

Guarantees

Indebtedness under the Credit Agreement is guaranteed by certain of the Company’s present and future domestic subsidiaries.

Legal Proceedings

From time to time, the Company has been involved in claims and lawsuits, both as plaintiff and defendant, which arise in the ordinary course of business. Accruals for claims or lawsuits have been provided for to the extent that losses are deemed both probable and estimable. Although the ultimate outcome of these claims or lawsuits cannot be ascertained, on the basis of present information and advice received from counsel, the Company believes that the disposition or ultimate resolution of such claims or lawsuits will not have a material adverse effect on its financial position, cash flows or results of operations.

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TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In 2009, the municipality of Sao Paolo, Brazil assessed the Company’s Brazilian subsidiary a services tax on certain equipment rental income earned in 2004 and 2005.  In March 2011, the Company’s Brazilian subsidiary filed a tax annulment action in the Sao Paolo municipal court to challenge the assessment of services taxes on rental income. Further, in order to halt the possibility of any further interest being charged against the alleged due tax assessments, the Company’s Brazilian subsidiary posted a judicial deposit of 6.9 million Brazilian reais (approximately $4.1 million USD) in the first quarter of 2012.  In the second quarter of 2012, the Sao Paolo municipal court issued a ruling in favor of Sao Paolo on this tax annulment action, which ruling the Company’s Brazilian subsidiary has challenged. The Company’s Brazilian subsidiary filed this challenge in the state court of Sao Paolo which is not bound by the decision of the Sao Paolo municipal court and where a ruling is not expected for the next one to two years.  Based on an opinion received from legal counsel in Brazil, the Company believes that (i) the ruling issued by the Sao Paolo municipal court was incorrect and in contravention of a Brazil Supreme Court ruling concerning the invalidity of services taxes on rental income, (ii) the Brazilian subsidiary has valid defenses against the assessed services taxes and (iii) that payment of these services taxes is not probable. Accordingly, the Company has not recorded an expense in the three months ended June 30, 2012 for the Sao Paolo services tax assessment.

(11)       NONCONTROLLING INTEREST

The following table reconciles equity attributable to noncontrolling interest (amounts in thousands):

	Six Months Ended June 30,
	2012		2011
Noncontrolling interest, January 1	$	11,260	$	11,092
Acquisition of noncontrolling interest	941		-
Net income attributable to noncontrolling interest	1,861		1,905
Dividends distributed to noncontrolling interest	(720)		(1,859)
Foreign currency translation adjustments	47		2
Noncontrolling interest, June 30	$	13,389	$	11,140

(12)       NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted shares for the periods indicated (amounts in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2012	2011	2012	2011
Shares used in basic earnings per share calculation	55,125	56,713	55,809	56,949
Effect of dilutive securities:
Stock options	359	832	379	891
Restricted stock units	228	429	370	536
Performance-based restricted stock units	-	-	-	-
Total effects of dilutive securities	587	1,261	749	1,427
Shares used in dilutive earnings per share calculation	55,712	57,974	56,558	58,376

For the three months ended June 30, 2012 and 2011, options to purchase 0.1 million and 0.1 million shares of common stock, respectively, were outstanding, but not included in the computation of diluted net income per share because the exercise price exceeded the value of the shares and the effect would have been anti–dilutive. For the six months ended June 30, 2012 and 2011, options to purchase 0.1 million and 0.1 million shares of common stock, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive. For the three months ended June 30, 2012 and 2011, restricted stock units (“RSUs”) of 1.3 million and 0.6 million, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive. For the six months ended June 30, 2012 and 2011, RSUs of 1.0 million and 0.6 million, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

23

TELETECH HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(13)       EQUITY-BASED COMPENSATION PLANS

All equity–based awards to employees are recognized in the Consolidated Statements of Comprehensive Income at the fair value of the award on the grant date. During the three and six months ended June 30, 2012 and 2011, the Company recognized total compensation expense of $3.5 million and $6.8 million and $4.0 million and $7.7 million, respectively. Of the total compensation expense, $0.5 million and $1.0 million was recognized in Cost of services and $3.0 million and $5.9 million was recognized in Selling, general and administrative during the three and six months ended June 30, 2012. During the three and six months ended June 30, 2011, the Company recognized total compensation expense of $4.0 million and $7.7 million, respectively, in Selling, general and administrative.

Stock Options

As of June 30, 2012, there was approximately $0.9 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to unvested option arrangements granted under the Company’s equity plans. The Company recognizes compensation expense straight–line over the vesting term of the option grant. The Company recognized compensation expense related to stock options of approximately $132,000 and $5,000 for the three months ended June 30, 2012 and 2011, respectively. The Company recognized compensation expense related to stock options of approximately $264,000 and $19,000 for the six months ended June 30, 2012 and 2011, respectively.

Restricted Stock Unit Grants

During the six months ended June 30, 2012 and 2011, the Company granted 505,887 and 568,580 restricted stock units (“RSUs”), respectively, to new and existing employees, which vest in equal installments over four or five years. The Company recognized compensation expense related to RSUs of $3.3 million and $6.6 million for the three and six months ended June 30, 2012, respectively. The Company recognized compensation expense related to RSUs of $4.0 million and $7.7 million for the three and six months ended June 30, 2011, respectively. As of June 30, 2012, there was approximately $32.1 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to RSUs granted under the Company’s equity plans.

As of June 30, 2012 and 2011, the Company had performance-based RSUs outstanding that vest based on the Company achieving specified revenue and operating income performance targets. The Company determined that it was not probable these performance targets would be met; therefore no expense was recognized for the three and six months ended June 30, 2012 or 2011.

Cash Based Awards

During the six months ended June 30, 2012, the Company granted 30,000 cash based awards that vest over a period of five years. These awards will be settled in cash equal to the Company’s stock price on each vesting date. Since these awards are settled in cash, the Company accounts for these as liability awards and marks to market the fair value of the award until final settlement.

As of the June 30, 2012 Company stock price, there was approximately $0.4 million of total unrecognized compensation cost related to unvested cash based awards. The Company recognized approximately $22,000 and $30,000 of compensation expense related to these cash based awards for the three and six months ended June 30, 2012, respectively.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

The following discussion and analysis should be read in conjunction with our Annual Report on Form 10–K for the year ended December 31, 2011. Except for historical information, the discussion below contains certain forward–looking statements that involve risks and uncertainties. The projections and statements contained in these forward–looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward–looking statements.

All statements not based on historical fact are forward–looking statements that involve substantial risks and uncertainties. In accordance with the Private Securities Litigation Reform Act of 1995, the following are important factors that could cause our actual results to differ materially from those expressed or implied by such forward–looking statements, including but not limited to the following: achieving estimated revenue from new, renewed and expanded client business as volumes may not materialize as forecasted, especially due to the global economic slowdown; the ability to close and ramp new business opportunities that are currently being pursued or that are in the final stages with existing and/or potential clients; our ability to execute our growth plans, including the successful integration of acquired companies and the sales of new products; the possibility of lower revenue or price pressure from our clients experiencing a business downturn or merger in their business; greater than anticipated competition in the customer management industry, causing adverse pricing and more stringent contractual terms; risks associated with losing or not renewing client relationships, particularly large client agreements, or early termination of a client agreement; the risk of losing clients due to consolidation in the industries we serve; consumers’ concerns or adverse publicity regarding our clients’ products; our ability to find cost effective locations, obtain favorable lease terms and build or retrofit facilities in a timely and economic manner; risks associated with business interruption due to weather, fires, pandemic, or terrorist–related events; risks associated with attracting and retaining cost–effective labor at our delivery centers; the possibility of asset impairments and restructuring charges; risks associated with changes in foreign currency exchange rates; economic or political changes affecting the countries in which we operate; changes in accounting policies and practices promulgated by standard setting bodies; and new legislation or government regulation that adversely impacts our tax obligations, health care costs or the customer management industry.

This list is intended to identify some of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere in this report. These factors are not intended to represent a complete list of all risks and uncertainties inherent in our business and should be read in conjunction with the more detailed cautionary statements included in our 2011 Annual Report on Form 10-K under the caption Item 1A. “Risk Factors,” in our other Securities and Exchange Commission filings and in our press releases.

Executive Summary

TeleTech is one of the largest and most geographically diverse global providers of customer experience strategy, technology and business process outsourcing solutions. We have a 30-year history of designing, building, implementing and managing superior customer experiences across the customer lifecycle in order to maximize revenue, increase brand loyalty and optimize business processes. By delivering a high-quality customer experience through the effective integration of customer-facing, front-office processes with internal back-office processes, we enable our clients to better serve, grow and retain their customer base. We support more than 425 unique programs for approximately 180 global clients, many of whom are included in the Global 1000, which are the world’s largest companies based on market capitalization, in the automotive, broadband, cable, financial services, government, healthcare, logistics, media and entertainment, retail, technology, travel, and wireline and wireless communication industries.

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Our fully integrated suite of technology-enabled customer-centric services span:

·Professional Services. Leveraging our proprietary, data-driven methodology, our team of management consultants partner with clients to build the business case and design the roadmap for implementing a customer-centric business strategy. We utilize highly sophisticated customer analytics to create technology-enabled, multi-channel interaction strategies to optimize and personalize the customer experience, increase brand loyalty and help clients achieve their business and financial objectives.

·Revenue Generation. Through our data-driven sales and marketing capabilities we help our clients improve revenue and profitability by targeting new or underpenetrated markets and maximizing the revenue potential of each customer. We deliver more than $1 billion in annual revenue for our clients via more than 700 TeleTech-designed and managed client-branded e-commerce websites. We also process more than three terabytes of customer data daily to create and implement sophisticated customer targeting and segmentation strategies to maximize customer acquisition, retention and growth.

·Customer Innovation Solutions. We redesign and manage clients’ front-office processes to deliver just-in-time, personalized, multi-channel customer experiences. Leveraging our highly trained customer experience professionals within our onshore and offshore delivery centers as well as our TeleTech@Home work-from-home associates, our solutions integrate voice, chat, e-mail, ecommerce and social media to optimize the customer experience for our clients.

·Enterprise Innovation Solutions. We redesign and manage clients’ back-office processes, such as administration, finance, accounting, logistics and distribution, to significantly advance clients’ abilities to obtain a customer-centric view of their relationships, and maximize operating efficiencies. Our delivery of integrated business processes via on our onshore, offshore or work-from-home customer experience professionals reduces operating costs and allows customer needs to be met more quickly and efficiently, resulting in higher customer satisfaction and brand loyalty and an improved competitive position.

·Managed Technology Solutions. We offer software and infrastructure as a service on a fully hosted basis. In addition, we provide the design, implementation and ongoing management of clients’ premise-based delivery center environments to enable companies to deliver a superior customer experience across all touch points on a global scale with higher quality, lower costs and reduced risk.

·Learning Innovation Training Solutions. We offer workforce training services via a blended methodology which includes virtual job-simulation environments, eLearning courses, interactive social media networking and collaboration, as well as intuitive 3D and game-based learning courses to increase speed to proficiency, improve employee engagement and retention while also lowering training expenses.

·Data Analytics. We offer and underpin all of the above solutions with a robust data analytics capability to provide real time and actionable customer insight regarding how to grow revenue, reduce customer churn, and maximize operating efficiencies.

In 2012, our second quarter revenue decreased 1.6% to $288.8 million over the second quarter of 2011, which included an $9.7 million or 3.3% decrease due to fluctuations in foreign currency rates. This revenue decrease was partially offset by the addition of 33 new clients and revenue from acquisitions. Our second quarter 2012 income from operations decreased 73.8% to $6.4 million, or 2.2% of revenue, from $24.6 million, or 8.4% of revenue, in the second quarter of 2011. Income from operations for the second quarter 2012 and 2011 included an aggregate $17.3 million and $(0.1) million of expenses related to restructuring charges and asset impairments, respectively.

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Our offshore delivery centers serve clients based both in North America and in other countries. Our offshore delivery capacity spans five countries with 20,500 workstations and currently represents 66% of our global delivery capabilities. Revenue from services provided in these offshore locations was $123 million and represented 48% of our revenue for the second quarter of 2012, as compared to $131 million and 47% of total revenue for 2011, with both years excluding revenue from the four acquisitions.

Our cash flow from operations and available credit allowed us to finance a significant portion of our capital needs and stock repurchases through internally generated cash flows. At June 30, 2012, we had $170.6 million of cash and cash equivalents and a total debt to total capitalization ratio of 16.3%.

Our Future Growth Goals and Strategy

Our objective is to become the world’s largest, most technologically advanced and innovative provider of customer-centric customer experience solutions. Companies within the Global 1000 are our primary client targets due to their size, global reach, and desire for a partner who can quickly and efficiently offer an end-to-end suite of fully-integrated, globally scalable solutions. We have developed, and continue to invest in, a broad set of technological and geographical capabilities designed to serve this growing client need. These investments include our 2010 acquisition of a majority interest in Peppers & Rogers Group to further enhance our professional services capabilities, our 2011 acquisition of eLoyalty to enhance our systems integration and telephony and technology offerings, our 2012 acquisition of OnState to enhance our technology hosting solutions, and our 2012 acquisition of iKnowtion to enhance our marketing and data analytics consulting capabilities. In addition, we have begun to offer cloud-based ‘hosted services’ where clients can license any aspect of our global network and proprietary applications. While the revenue from these offerings is small relative to our consolidated revenue, we believe it will continue to grow as these services become more widely adopted by our clients. We aim to further improve our competitive position by investing in a growing suite of new and innovative business process services across our targeted industries.

We believe that our revenue will grow over the long-term as global demand for our services is fueled by the following trends:

·Increased focus on the customer experience. Given the strong correlation between customer satisfaction and improved profitability, we believe that more companies are increasingly focused on selecting outsourcing partners, such as TeleTech, that can deliver strategic solutions across a continuum of capabilities that are designed to grow revenue and optimize the customer experience versus merely reduce costs.

·Focus on partners who can offer multi-channel, technology-rich customer experience solutions. The rapidly changing profile of the customer and rising customer expectations are driving increased demand for personalized and seamlessly integrated multi-channel solutions that incorporate mobile devices, self-service and human-assisted channels while embedding data-driven customer insights.

·Focus on partners who can offer fully integrated revenue generation solutions. A focus on partners who can offer fully integrated revenue generation solutions to maximize the revenue and profitability potential of each customer, improve customer acquisition, retention and growth and target new or underpenetrated markets.

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·Integration of front- and back-office business processes to provide increased operating efficiencies and an enhanced customer experience especially in light of the weakening global economic environment. Companies have realized that integrated business processes reduce operating costs and allow customer needs to be met more quickly and efficiently resulting in higher customer satisfaction and brand loyalty thereby improving their competitive position. A majority of our historic revenue has been derived from providing customer-facing front-office solutions to our clients. Given that our global delivery centers are also fully capable of providing back-office solutions, we are uniquely positioned to grow our revenue by winning more back-office opportunities and providing the services during non-peak hours with minimal incremental investment. Furthermore, by spreading our fixed costs across a larger revenue base and increasing our asset utilization, we expect our profitability to improve over time.

·Increasing percentage of company operations being outsourced to most capable third-party partners. Having experienced success with outsourcing a portion of their business processes, companies are increasingly inclined to outsource a larger percentage of this work. We believe companies will continue to consolidate their business processes with third-party partners, such as TeleTech, who are financially stable and able to invest in their business while also demonstrating an extensive global operating history and an ability to cost effectively scale to meet their evolving needs.

·Increasing adoption of outsourcing across broader groups of industries. Early adopters of the business process outsourcing trend, such as the media and communications industries, are being joined by companies in other industries, including healthcare, retail and financial services. These companies are beginning to adopt outsourcing to improve their business processes and competitiveness. For example, we see increasing interest in our services from companies in the healthcare, retail and financial services industries. We believe the number of other industries that will adopt or increase their level of outsourcing will continue to grow, further enabling us to increase and diversify our revenue and client base.

·Focus on speed-to-market by companies launching new products or entering new geographic locations. As companies broaden their product offerings and seek to enter new emerging markets, they are looking for outsourcing partners that can provide speed-to-market while reducing their capital and operating risk. To achieve these benefits, companies are seeking BPO partners with an extensive operating history, an established global footprint, the financial strength to invest in innovation to deliver more strategic capabilities and the ability to scale and meet customer demands quickly. Given our financial stability, geographic presence in 24 countries and our significant investment in standardized technology and processes, we believe that clients select TeleTech because we can quickly ramp large, complex business processes around the globe in a short period of time while assuring a high-quality experience for their customers.

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Our business strategy to grow and diversify our revenue, increase profitability and strengthen our industry position includes the following elements:

·Capitalize on the favorable trends in the global outsourcing environment, which we believe will include more companies that want to:

-Modify their approach to outsourcing based on total value delivered versus the lowest priced provider;

-Seek a partner that can deliver strategic consulting and operational execution around customer-centric strategies;

-Focus on partners who can offer fully integrated revenue generation solutions;

-Address the growing complexity of managing multiple customer communication channels, including voice, self service, email, chat and text;

-Take advantage of cost efficiencies through the adoption of cloud-based or managed technology solutions; and

-Consolidate outsourcing partners with those that have a solid financial position, adequate capital resources to sustain a long-term relationship and globally diverse delivery capabilities across a broad range of solutions.

·Deepen and broaden existing client relationships;

·Continue to diversify revenue into higher-margin offerings such as professional services, data analytics, revenue generation, talent acquisition, learning innovation services and our managed technology offerings;

·Win business with new clients and focus on end-to-end offerings in targeted industries, such as healthcare, retail and financial services, where we expect accelerating adoption of customer experience management;

·Continue to invest in innovative proprietary technology and new business offerings;

·Improve our operating margins through select profit improvement initiatives;

·Increase asset utilization of our globally diverse delivery centers by providing services during non-peak hours with minimal incremental investment;

·Scale our work-from-home offering to increase operational flexibility; and

·Selectively pursue acquisitions that extend our capabilities, geographic reach and/or industry expertise.

As we further develop and continue to scale our strategic business units, we are continually evaluating ways to maximize stockholder value, which may include the disposition of business units, in whole or in part, that could take the form of asset sales, mergers, sales of equity interests in our subsidiaries (privately or through a public offering) or the spin-off of equity interests of our subsidiaries to our stockholders.

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Business Overview

Our business provides customer experience strategy, technology and business process outsourcing solutions for a variety of industries through our global delivery centers. Effective January 1, 2012, we completed certain changes focused on streamlining our organization to more closely align our reporting structure with our products and services and increase management accountability. Beginning in the first quarter of 2012, the Customer Management Services segment includes our customer experience delivery solutions which integrate innovative technology with highly-trained customer experience professionals to optimize the customer experience across all channels and all stages of the customer lifecycle from an onshore, offshore or work-from-home environment; the Customer Growth Services segment includes our technology-enabled sales and marketing business; the Customer Technology Services segment includes our hosted and managed technology offerings, including certain acquired assets of eLoyalty; and our Customer Strategy Services segment includes our customer experience strategy and data analytics offerings.

See Note 3 to the Notes to Consolidated Financial Statements for additional discussion regarding the preparation of our segment information.

Our Company generates revenue based primarily on the amount of time our associates or consultants devote to a client’s program. We primarily focus on large global corporations in the following industries: automotive, broadband, cable, financial services, government, healthcare, logistics, media and entertainment, retail, technology, travel, and wireline and wireless telecommunications. Revenue is recognized as services are provided. The majority of our revenue is from multi-year contracts and we expect this trend to continue. However, we do provide certain client programs on a short-term basis.

We have historically experienced annual attrition of existing client programs of approximately 5% to 12% of our revenue. Attrition of existing client programs during the first six months of 2012 was 7%.

The customer management services industry is highly competitive. We compete primarily with the in-house business processing operations of our current and potential clients. We also compete with certain third-party providers. Our ability to sell our existing services or gain acceptance for new products or services is challenged by the competitive nature of the industry. There can be no assurance that we will be able to sell services to new clients, renew relationships with existing clients, or gain client acceptance of our new products.

Our ability to renew or enter into new multi-year contracts, particularly large complex opportunities, is dependent upon the macroeconomic environment in general and the specific industry environments in which our clients operate. A continued weakening of the U.S. or the global economy could lengthen sales cycles or cause delays in closing new business opportunities.

Our potential clients typically obtain bids from multiple vendors and evaluate many factors in selecting a service provider, including, among others, the scope of services offered, the service record of the vendor and price. We generally price our bids with a long-term view of profitability and, accordingly, we consider all of our fixed and variable costs in developing our bids. We believe that our competitors, at times, may bid business based upon a short-term view, as opposed to our longer-term view, resulting in a lower price bid. While we believe our clients’ perceptions of the value we provide results in our being successful in certain competitive bid situations, there are often situations where a potential client may prefer a lower cost.

Our industry is labor-intensive and the majority of our operating costs relate to wages, employee benefits and employment taxes. An improvement in the local or global economies where our delivery centers are located could lead to increased labor-related costs. In addition, our industry experiences high personnel turnover, and the length of training time required to implement new programs continues to increase due to increased complexities of our clients’ businesses. This may create challenges if we obtain several significant new clients or implement several new, large scale programs and need to recruit, hire and train qualified personnel at an accelerated rate.

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We may have difficulties managing the timeliness of launching new or expanded client programs and the associated internal allocation of personnel and resources. This could cause slower than anticipated revenue growth and/or higher than expected costs primarily related to hiring, training and retaining the required workforce, either of which could adversely affect our operating results.

Quarterly, we review our capacity utilization and projected demand for future capacity. In conjunction with these reviews, we may decide to consolidate or close under-performing delivery centers, including those impacted by the loss of a client program, in order to maintain or improve targeted utilization and margins. In addition, because clients may request that we serve their customers from international delivery centers with lower prevailing labor rates, in the future we may decide to close one or more of our delivery centers, even though it is generating positive cash flow, because we believe the future profits from conducting such work outside the current delivery center may more than compensate for the one-time charges related to closing the facility.

Our profitability is influenced by our ability to increase capacity utilization in our delivery centers. We attempt to minimize the financial impact resulting from idle capacity when planning the development and opening of new delivery centers or the expansion of existing delivery centers. As such, management considers numerous factors that affect capacity utilization, including anticipated expirations, reductions, terminations, or expansions of existing programs and the potential size and timing of new client contracts that we expect to obtain.

We continue to win new business with both new and existing clients. To respond more rapidly to changing market demands, to implement new programs and to expand existing programs, we may be required to commit to additional capacity prior to the contracting of additional business, which may result in idle capacity. This is largely due to the significant time required to negotiate and execute large, complex BPO client contracts and the difficulty of predicting specifically when new programs will launch.

We internally target capacity utilization in our delivery centers at 80% to 90% of our available workstations. As of June 30, 2012, the overall capacity utilization in our multi–client centers was 72%. The table below presents workstation data for our multi–client centers as of June 30, 2012 and 2011. Dedicated and managed centers (2,652 and 2,540 workstations as of June 30, 2012 and 2011, respectively) are excluded from the workstation data as unused workstations in these facilities are not available for sale. Our utilization percentage is defined as the total number of utilized production workstations compared to the total number of available production workstations. We may change the designation of shared or dedicated centers based on the normal changes in our business environment and client needs.

	June 30, 2012			June 30, 2011
	Total Production Workstations	In Use	% In Use	Total Production Workstations	In Use	% In Use
Multi-client centers
Sites open <1 year	1,842	559	30%	653	359	55%
Sites open >1 year	26,528	19,991	75%	26,784	20,238	76%
Total multi-client centers	28,370	20,550	72%	27,437	20,597	75%

We continue to see demand from all geographic regions to utilize our offshore delivery capabilities and expect this trend to continue with our clients. In light of this trend, we plan to continue to selectively retain capacity and expand into new offshore markets. As we grow our offshore delivery capabilities and our exposure to foreign currency fluctuations increases, we continue to actively manage this risk via a multi-currency hedging program designed to minimize operating margin volatility.

Recently Issued Accounting Pronouncements

Refer to Note 1 to the Notes to Consolidated Financial Statements for a discussion of recently issued accounting pronouncements.

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Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of its financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities. We regularly review our estimates and assumptions. These estimates and assumptions, which are based upon historical experience and on various other factors believed to be reasonable under the circumstances, form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Reported amounts and disclosures may have been different had management used different estimates and assumptions or if different conditions had occurred in the periods presented. For further information, please refer to the discussion of all critical accounting policies in Note 1 of the Notes to the Consolidated Financial Statement in our 2011 Annual Report on Form 10-K.

Explanation of Key Metrics and Other Items

Cost of Services

Cost of services principally include costs incurred in connection with our customer management services, including direct labor, telecommunications, technology costs, printing, postage, sales and use tax and certain fixed costs associated with the delivery centers. In addition, cost of services includes income related to grants we may receive from local or state governments as an incentive to locate delivery centers in their jurisdictions which reduce the cost of services for those facilities.

Selling, General and Administrative

Selling, general and administrative expenses primarily include costs associated with administrative services such as sales, marketing, product development, legal settlements, legal, information systems (including core technology and telephony infrastructure) and accounting and finance. It also includes equity–based compensation expense, outside professional fees (i.e. legal and accounting services), building expense for non–delivery center facilities and other items associated with general business administration.

Restructuring Charges, Net

Restructuring charges, net primarily include costs incurred in conjunction with reductions in force or decisions to exit facilities, including termination benefits and lease liabilities, net of expected sublease rentals.

Interest Expense

Interest expense includes interest expense and amortization of debt issuance costs associated with our debts and capitalized lease obligations.

Other Income

The main components of other income are miscellaneous income not directly related to our operating activities, such as foreign exchange transaction gains.

Other Expense

The main components of other expense are expenditures not directly related to our operating activities, such as foreign exchange transaction losses.

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Presentation of Non–GAAP Measurements

Free Cash Flow

Free cash flow is a non–GAAP liquidity measurement. We believe that free cash flow is useful to our investors because it measures, during a given period, the amount of cash generated that is available for debt obligations and investments other than purchases of property, plant and equipment. Free cash flow is not a measure determined by GAAP and should not be considered a substitute for “income from operations,” “net income,” “net cash provided by operating activities,” or any other measure determined in accordance with GAAP. We believe this non–GAAP liquidity measure is useful, in addition to the most directly comparable GAAP measure of “net cash provided by operating activities,” because free cash flow includes investments in operational assets. Free cash flow does not represent residual cash available for discretionary expenditures, since it includes cash required for debt service. Free cash flow also includes cash that may be necessary for acquisitions, investments and other needs that may arise.

The following table reconciles net cash provided by operating activities to free cash flow for our consolidated results (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Net cash provided by operating activities	$	33,993	$	23,373	$	48,657	$	47,981
Less: Purchases of property, plant and equipment	10,994		8,492		17,368		12,362
Free cash flow	$	22,999	$	14,881	$	31,289	$	35,619

We discuss factors affecting free cash flow between periods in the “Liquidity and Capital Resources” section below.

Results of Operations

Three months ended June 30, 2012 compared to three months ended June 30, 2011

The tables included in the following sections are presented to facilitate an understanding of Management’s Discussion and Analysis of Financial Condition and Results of Operations and present certain information by segment for the three months ended June 30, 2012 and 2011 (amounts in thousands). All inter–company transactions between the reported segments for the periods presented have been eliminated.

Customer Management Services

	Three Months Ended June 30,
	2012		2011		$ Change		% Change
Revenue	$	229,401	$	248,207	$	(18,806)	-7.6%
Operating Income	28,563		49,588		(21,025)		-42.4%

The decrease in revenue for the Customer Management Services segment was due to program completions of $18.3 million and an $8.6 million decrease in realized gains on cash flow hedges and negative changes in foreign exchange translation, partially offset by a $8.1 million net increase in client programs.

The operating income as a percentage of revenue decreased to 12.5% in the second quarter of 2012 as compared to 20.0% in the prior period. During 2012, we recorded $13.9 million in restructuring charges as a result of our decision to exit Spain, an additional $2.1 million in restructuring charges in other locations to better align our capacity and workforce with the current business needs, and $1.0 million in impairment charges. The decline in revenue discussed above contributed to an underutilization of delivery center capacity which led to a lower gross margin percentage. These items were offset in part by a $4.6 million accrual release for salaries expense due to an authoritative ruling in Spain related to the legally required cost of living adjustments for our employees’ salaries and a $1.4 million decrease in depreciation expense related to assets which are now fully depreciated.

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Customer Growth Services

	Three Months Ended June 30,
	2012		2011		$ Change		% Change
Revenue	$	24,409	$	23,483	$	926	3.9%
Operating Income	4,212		4,594		(382)		-8.3%

The increase in revenue for the Customer Growth Services segment was due to a net increase in client programs of $4.6 million offset by program completions of $3.7 million.

The operating income as a percentage of revenue decreased to 17.3% in the second quarter of 2012 as compared to 19.6% in the prior period. This decline was due to increases in employee related expenses including salaries and benefits and expenses in connection with the rebranding of the Direct Alliance subsidiary to Revana™ during the first quarter of 2012.

Customer Technology Services

	Three Months Ended June 30,
	2012		2011		$ Change		% Change
Revenue	$	24,956	$	11,660	$	13,296	114.0%
Operating Income	4,103		3,156		947		30.0%

The increase in revenue for the Customer Technology Services segment was related to the acquisition of eLoyalty on May 28, 2011.

The operating income as a percentage of revenue decreased to 16.4% in the second quarter of 2012 as compared to 27.1% in the prior period. This decrease was related to the acquisition of eLoyalty as discussed above which results in a mix shift of revenue from purely hosted solutions to both hosted and managed solutions. There were also additional investment in sales and marketing and additional amortization expense for the customer relationship asset related to the acquisition of eLoyalty.

Customer Strategy Services

	Three Months Ended June 30,
	2012		2011		$ Change		% Change
Revenue	$	10,032	$	10,286	$	(254)	-2.5%
Operating Income	316		1,309		(993)		-75.9%

The decrease in revenue for the Customer Strategy Services segment was due to a $1.5 million net decrease in consulting revenue and a $0.9 million decrease due to negative changes in foreign exchange translation, offset by a $2.1 million increase due to the acquisition of iKnowtion.

The operating income as a percentage of revenue decreased to 3.1% in the second quarter of 2012 as compared to 12.7% in the prior period. This decrease was related to the reduction in consulting revenue resulting in underutilization of resources and an increased investment in geographic expansion.

Corporate

The Corporate expenses decreased by 9.6% in the second quarter of 2012 as compared to the prior period. This decrease was primarily due to decreases in employee related expenses including salaries, incentives and equity compensation.

Other Income (Expense)

For the three months ended June 30, 2012 and 2011, interest income remained consistent at $0.7 million. Interest expense increased to $1.6 million during 2012 from $1.3 million during 2011, due to additional expense related to the interest rate swap arrangements.

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Income Taxes

The reported effective tax rate for the three months ended June 30, 2012 was (25.6)%. The effective tax rate for the three months ended June 30, 2012 was influenced by earnings in international jurisdictions currently under an income tax holiday and the $17.3 million in restructuring and impairment charges which influenced the distribution of pre-tax income between the U.S. and international tax jurisdictions. Without the $6.5 million tax benefit related to the restructuring and impairment charges, $0.7 million in additional tax expense related to changes in the deferred tax asset valuation allowance, and $0.4 million in additional expense related to other discrete items recorded during the quarter, the Company’s effective tax rate for the second quarter would have been 18.7%. This compares to a reported effective tax rate of 0.6% in the same period of 2011.  In the second quarter of 2011, the Company’s effective tax rate would have been 24.9% without the $5.8 million tax benefit related to the Company’s mediated settlement with the IRS related to U.S. tax refund claims offset by a $0.1 million in additional tax expense for other discrete items.

Results of Operations

Six months ended June 30, 2012 compared to six months ended June 30, 2011

The tables included in the following sections are presented to facilitate an understanding of Management’s Discussion and Analysis of Financial Condition and Results of Operations and present certain information by segment for the six months ended June 30, 2012 and 2011 (amounts in thousands). All inter–company transactions between the reported segments for the periods presented have been eliminated.

Customer Management Services

	Six Months Ended June 30,
	2012		2011		$ Change		% Change
Revenue	$	464,277	$	494,280	$	(30,003)	-6.1%
Operating Income	74,269		97,839		(23,570)		-24.1%

The decrease in revenue for the Customer Management Services segment was due to program completions of $37.5 million and a $12.1 million decrease in realized gains on cash flow hedges and negative changes in foreign exchange translation, offset by a $19.6 million net increase in client programs.

The operating income as a percentage of revenue decreased to 16.0% for the six months ended June 30, 2012 as compared to 19.8% in the same period of 2011. During 2012, we recorded $13.9 million in restructuring charges as a result of our decision to exit Spain, an additional $3.6 million in restructuring charges in other locations to better align our capacity and workforce with the current business needs, and $1.0 million in impairment charges. The decline in revenue discussed above contributed to an underutilization of delivery center capacity which led to a lower gross margin percentage. These items were offset in part by a $4.6 million accrual release for salaries expense due to an authoritative ruling in Spain related to the legally required cost of living adjustments for our employees’ salaries and a $3.7 million decrease in depreciation expense related to assets which are now fully depreciated.

Customer Growth Services

	Six Months Ended June 30,
	2012		2011		$ Change		% Change
Revenue	$	47,173	$	45,626	$	1,547	3.4%
Operating Income	5,291		7,576		(2,285)		-30.2%

The increase in revenue for the Customer Growth Services segment was due to a net increase in client programs of $7.1 million offset by program completions of $5.6 million.

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The operating income as a percentage of revenue decreased to 11.2% for the six months ended June 30, 2012 as compared to 16.6% in the same period of 2011. This decline was primarily due to a $1.8 million charge related to the impairment of the trade-name intangible asset due to the rebranding of the Direct Alliance subsidiary to Revana™ during the first quarter of 2012 and other expenses in connection with this rebranding.

Customer Technology Services

	Six Months Ended June 30,
	2012		2011		$ Change		% Change
Revenue	$	50,509	$	16,317	$	34,192	209.5%
Operating Income	7,808		5,868		1,940		33.1%

The increase in revenue for the Customer Technology Services segment was related to the acquisition of eLoyalty on May 28, 2011.

The operating income as a percentage of revenue decreased to 15.5% for the six months ended June 30, 2012 as compared to 36.0% in the same period of 2011. This decrease was related to the acquisition of eLoyalty as discussed above which results in a mix shift of revenue from purely hosted solutions to both hosted and managed solutions. There were also additional investment in sales and marketing and additional amortization expense for the customer relationship asset related to the acquisition of eLoyalty.

Customer Strategy Services

	Six Months Ended June 30,
	2012		2011		$ Change		% Change
Revenue	$	19,493	$	18,392	$	1,101	6.0%
Operating Income	847		1,773		(926)		-52.2%

The increase in revenue for the Customer Strategy Services segment was due to a $2.7 million increase due to the acquisition of iKnowtion partially offset by a $0.4 million net decrease in consulting revenue and a $1.2 million decrease due to negative changes in foreign exchange translations.

The operating income as a percentage of revenue decreased to 4.3% for the six months ended June 30, 2012 as compared to 9.6% in the same period of 2011. This decrease was related to the reduction in consulting revenue resulting in underutilization of resources and an increased investment in geographic expansion.

Corporate

The Corporate expenses decreased by 5.9% for the six months ended June 30, 2012 as compared to the same period of 2011. This decrease was primarily due to decreases in employee related expenses including salaries, incentives and equity compensation.

Other Income (Expense)

For the six months ended June 30, 2012, interest income increased slightly to $1.5 million from $1.4 million in the same period in 2011 primarily due to higher cash and cash equivalent balances. Interest expense remained consistent at $2.7 million, due to a reduction in accretion expense related to the PRG purchase price payable offset by additional expense related to the interest rate swap arrangements.

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Income Taxes

The reported effective tax rate for the six months ended June 30, 2012 was 2.5%. The effective tax rate for the six months ended June 30, 2012 was influenced by earnings in international jurisdictions currently under an income tax holiday and the $21.1 million in restructuring and impairment charges which influenced the distribution of pre-tax income between the U.S. and international tax jurisdictions. Without the $7.8 million tax benefit related to the restructuring and impairment charges, a $0.9 million tax benefit related to changes in the deferred tax asset valuation allowance, and $0.4 million in additional expense related to other discrete items recorded during the year, our effective tax rate for the six months would have been 19.9%. This compares to a reported effective tax rate of 22.4% in the same period of 2011. In the six months ended June 30, 2011, the Company’s effective tax rate would have been 22.1% without the (i) $9.1 million expense related to the adverse decision by the Canada Revenue Agency regarding the Company’s request for relief from double taxation, (ii) $8.7 million benefit related to the Company’s mediated settlement with the IRS related to U.S. tax refund claims, and (iii) $0.3 million benefit for other discrete items recognized during the period.

Liquidity and Capital Resources

Our principal sources of liquidity are our cash generated from operations, our cash and cash equivalents, and borrowings under our Credit Agreement, dated October 1, 2010 as amended March 27, 2012 (the “Credit Agreement”). During the six months ended June 30, 2012, we generated positive operating cash flows of $48.7 million. We believe that our cash generated from operations, existing cash and cash equivalents, and available credit will be sufficient to meet expected operating and capital expenditure requirements for the next 12 months.

We manage a centralized global treasury function in the United States with a focus on concentrating and safeguarding our global cash and cash equivalents. While the majority of our cash is held offshore, we prefer to hold U.S. Dollars in addition to the local currencies of our foreign subsidiaries. We expect to use our offshore cash to support working capital and growth of our foreign operations. While there are no assurances, we believe our global cash is protected given our cash management practices, banking partners and utilization of diversified, high quality investments.

We have global operations that expose us to foreign currency exchange rate fluctuations that may positively or negatively impact our liquidity. We are also exposed to higher interest rates associated with our variable-rate debt. To mitigate these risks, we enter into foreign exchange forward and option contracts and interest rate swaps through our cash flow hedging program. Please refer to Item 3. Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Risk, for further discussion.

We primarily utilize our Credit Agreement to fund working capital, general operations, stock repurchases and other strategic activities, such as the acquisitions described in Note 2 of the Notes to Consolidated Financial Statements. As of June 30, 2012 and December 31, 2011, we had borrowings of $78.0 million and $64.0 million, respectively, under our Credit Agreement, and our average daily utilization was $137.4 million and $83.9 million for the six months ended June 30, 2012 and 2011, respectively. After consideration for issued letters of credit under the Credit Agreement, totaling $4.4 million, our remaining borrowing capacity was $417.6 million as of June 30, 2012. As of June 30, 2012, we were in compliance with all covenants and conditions under our Credit Agreement.

The amount of capital required over the next 12 months will depend on our levels of investment in infrastructure necessary to maintain, upgrade or replace existing assets. Our working capital and capital expenditure requirements could also increase materially in the event of acquisitions or joint ventures, among other factors. These factors could require that we raise additional capital through future debt or equity financing. There can be no assurance that additional financing will be available at all, or on terms favorable to us.

The following discussion highlights our cash flow activities during the six months ended June 30, 2012 and 2011.

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Cash and Cash Equivalents

We consider all liquid investments purchased within 90 days of their original maturity to be cash equivalents. Our cash and cash equivalents totaled $170.6 million and $156.4 million as of June 30, 2012 and December 31, 2011, respectively. We diversify the holdings of such cash and cash equivalents considering the financial condition and stability of the counterparty institutions.

Cash Flows from Operating Activities

We reinvest our cash flows from operating activities in our business for strategic acquisitions and for the purchase of our outstanding stock. For the six months ended June 30, 2012 and 2011, net cash flows provided by operating activities were $48.7 million and $48.0 million, respectively. The slight increase was primarily due to timing of cash received on accounts receivable and cash paid for accounts payable.

Cash Flows from Investing Activities

We reinvest cash in our business primarily to grow our client base and to expand our infrastructure. For the six months ended June 30, 2012 and 2011, we reported net cash flows used in investing activities of $22.0 million and $53.9 million, respectively. The decrease was due to the large acquisition of eLoyalty in 2011 noted in the accompanying consolidated financial statements offset with a net $5.1 million increase in capital expenditures during the first six months of 2012.

Cash Flows from Financing Activities

For the six months ended June 30, 2012 and 2011, we reported net cash flows used in financing activities of $20.5 million and net cash flows provided by financing activities of $78.1 million, respectively. The decrease in net cash flows from 2011 to 2012 was primarily due to a $104.0 million decrease in net borrowings from our line of credit offset by a decrease of $3.0 million in purchases of our outstanding common stock.

Free Cash Flow

Free cash flow, a non-GAAP measurement (see “Presentation of Non–GAAP Measurements” for definition of free cash flow) decreased for the six months ended June 30, 2012 compared to the six months ended June 30, 2011 due to the increase in capital expenditures. Free cash flow was $31.3 million and $35.6 million for the six months ended June 30, 2012 and 2011, respectively.

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Obligations and Future Capital Requirements

Future maturities of our outstanding debt and contractual obligations as of June 30, 2012 are summarized as follows (amounts in thousands):

	Less than 1 Year		1 to 3 Years		3 to 5 Years		Over 5 Years		Total
Credit Facility(1)	$	3,381	$	6,762	$	79,386	$	-	$	89,529
Other debt obligations	1,807		3,614		1,054		-		6,475
Equipment financing arrangements	3,339		3,195		-		-		6,534
Purchase obligations	9,486		7,124		1,431		600		18,641
Operating lease commitments	26,032		32,975		13,854		3,060		75,921
Total	$	44,045	$	53,670	$	95,725	$	3,660	$	197,100

(1)	Includes estimated interest payments based on the weighted-average interest rate, unused commitment fees, current interest rate swap arrangements, and outstanding debt as of June 30, 2012.
	·	Contractual obligations to be paid in a foreign currency are translated at the period end exchange rate.
	·	Purchase obligations primarily consist of outstanding purchase orders for goods or services not yet received, which are not recognized as liabilities in our Consolidated Balance Sheets until such goods and/or services are received.
	·	The contractual obligation table excludes our liabilities of $3.6 million related to uncertain tax positions because we cannot reliably estimate the timing of cash payments.

The increase in our outstanding debt is primarily associated with the use of funds under our Credit Agreement to fund working capital, repurchase our common stock, and other cash flow needs across our global operations.

Future Capital Requirements

We expect total capital expenditures in 2012 to be consistent with the prior year. Approximately 75% of these expected capital expenditures are to support growth in our business and 25% relates to the maintenance for existing assets. The anticipated level of 2012 capital expenditures is primarily dependent upon new client contracts and the corresponding requirements for additional delivery center capacity as well as enhancements to our technological infrastructure.

We may consider restructurings, dispositions, mergers, acquisitions and other similar transactions. Such transactions could include the transfer, sale or acquisition of significant assets, businesses or interests, including joint ventures, or the incurrence, assumption, or refinancing of indebtedness and could be material to the consolidated financial condition and consolidated results of our operations. Our capital expenditures requirements could also increase materially in the event of acquisitions or joint ventures. In May 2011 we acquired certain assets and assumed certain liabilities of a business unit of eLoyalty Corporation that provides consulting, systems integration and the ongoing management and support of telephony, data and converged Voice over Internet Protocol customer management environments for $38.0 million net of certain closing adjustments. In addition, as of June 30, 2012, we were authorized to purchase an additional $15.9 million of common stock under our stock repurchase program (see Part II Item 2 of this Form 10-Q). The stock repurchase program does not have an expiration date.

The launch of large client contracts may result in short-term negative working capital because of the time period between incurring the costs for training and launching the program and the beginning of the accounts receivable collection process. As a result, periodically we may generate negative cash flows from operating activities.

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Debt Instruments and Related Covenants

We discuss debt instruments and related covenants in Note 13 of the Notes to the Consolidated Financial Statements in our 2011 Annual Report on Form 10–K. As of June 30, 2012, we were in compliance with all covenants under the Credit Agreement and had approximately $417.6 million in available borrowing capacity. We had $78.0 million of outstanding borrowings and $4.4 million of letters of credit outstanding under our Credit Agreement as of June 30, 2012. Based upon average outstanding borrowings during the three and six months ended June 30, 2012, interest accrued at a rate of approximately 1.6% and 1.6% per annum, respectively.

Client Concentration

Our five largest clients accounted for 38.0% and 37.8% of our consolidated revenue for the three months ended June 30, 2012 and 2011, respectively. Our five largest clients accounted for 37.2% and 38.4% of our consolidated revenue for the six months ended June 30, 2012 and 2011, respectively. We have experienced long-term relationships with our top five clients, ranging from five to 16 years, with the majority of these clients having completed multiple contract renewals with TeleTech. The relative contribution of any single client to consolidated earnings is not always proportional to the relative revenue contribution on a consolidated basis and varies greatly based upon specific contract terms. In addition, clients may adjust business volumes served by us based on their business requirements. We believe the risk of this concentration is mitigated, in part, by the long–term contracts we have with our largest clients. Although certain client contracts may be terminated for convenience by either party, we believe this risk is mitigated, in part, by the service level disruptions and transition/migration costs that would arise for our clients.

The contracts with our five largest clients expire between 2012 and 2016. Additionally, a particular client may have multiple contracts with different expiration dates. We have historically renewed most of our contracts with our largest clients. However, there is no assurance that future contracts will be renewed, or if renewed, will be on terms as favorable as the existing contracts.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our consolidated financial position, consolidated results of operations, or consolidated cash flows due to adverse changes in financial and commodity market prices and rates. Market risk also includes credit and non-performance risk by counterparties to our various financial instruments. We are exposed to market risk due to changes in interest rates and foreign currency exchange rates (as measured against the U.S. dollar); as well as credit risk associated with potential non-performance of our counterparty banks. These exposures are directly related to our normal operating and funding activities. We enter into derivative instruments to manage and reduce the impact of currency exchange rate changes, primarily between the U.S. dollar/Canadian dollar, the U.S. dollar/Philippine peso, the U.S. dollar/Mexican peso, and the Australian dollar/Philippine peso. We enter into interest rate derivative instruments to reduce our exposure to interest rate fluctuations associated with our variable-rate debt. To mitigate against credit and non-performance risk, it is our policy to only enter into derivative contracts and other financial instruments with investment grade counterparty financial institutions and, correspondingly, our derivative valuations reflect the creditworthiness of our counterparties. As of the date of this report, we have not experienced, nor do we anticipate, any issues related to derivative counterparty defaults.

Interest Rate Risk

We entered into interest rate derivative instruments to reduce our exposure to interest rate fluctuations associated with our variable rate debt. The interest rate on our Credit Agreement is variable based upon the Prime Rate and LIBOR and, therefore, is affected by changes in market interest rates. As of June 30, 2012, we had $78.0 million of outstanding borrowings under the Credit Agreement. Based upon average outstanding borrowings during the three and six months ended June 30, 2012, interest accrued at a rate of approximately 1.6% and 1.6% per annum, respectively. If the Prime Rate or LIBOR increased by 100 basis points during the quarter, there would not have been a material impact to our consolidated financial position or results of operations.

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The Company’s interest rate swap arrangements as of June 30, 2012 and December 31, 2011 were as follows:

	Notional Amount			Variable Rate Received	Fixed Rate Paid		Contract Commencement Date	Contract Maturity Date
As of June 30, 2012	$	25 million		1 - month LIBOR	2.55	%	April 2012	April 2016
			15 million	1 - month LIBOR	3.14	%	May 2012	May 2017
	$		40 million
As of December 31, 2011	$		25 million	1 - month LIBOR	2.55	%	April 2012	April 2016
			15 million	1 - month LIBOR	3.14	%	May 2012	May 2017
	$	40 million

Foreign Currency Risk

Our subsidiaries in Argentina, Canada, Costa Rica, Mexico, and the Philippines use the local currency as their functional currency for paying labor and other operating costs. Conversely, revenue for these foreign subsidiaries is derived principally from client contracts that are invoiced and collected in U.S. dollars or other foreign currencies. As a result, we may experience foreign currency gains or losses, which may positively or negatively affect our results of operations attributed to these subsidiaries. For the six months ended June 30, 2012 and 2011, revenue associated with this foreign exchange risk was 35% and 33% of our consolidated revenue, respectively.

In order to mitigate the risk of these non-functional foreign currencies from weakening against the functional currency of the servicing subsidiaries, which thereby decreases the economic benefit of performing work in these countries, we may hedge a portion, though not 100%, of the projected foreign currency exposure related to client programs served from these foreign countries through our cash flow hedging program. While our hedging strategy can protect us from adverse changes in foreign currency rates in the short term, an overall weakening of the non-functional foreign currencies would adversely impact margins in the segments of these client programs over the long term.

Cash Flow Hedging Program

To reduce our exposure to foreign currency exchange rate fluctuations associated with forecasted revenue in non-functional currencies, we purchase forward and/or option contracts to acquire the functional currency of the foreign subsidiary at a fixed exchange rate at specific dates in the future. We have designated and account for these derivative instruments as cash flow hedges for forecasted revenue in non-functional currencies.

While we have implemented certain strategies to mitigate risks related to the impact of fluctuations in currency exchange rates, we cannot ensure that we will not recognize gains or losses from international transactions, as this is part of transacting business in an international environment. Not every exposure is or can be hedged and, where hedges are put in place based on expected foreign exchange exposure, they are based on forecasts for which actual results may differ from the original estimate. Failure to successfully hedge or anticipate currency risks properly could adversely affect our consolidated operating results.

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Our cash flow hedging instruments as of June 30, 2012 and December 31, 2011 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts, except as noted.

As of June 30, 2012	Local Currency Notional Amount	U.S. Dollar Notional Amount			% Maturing in the Next 12 Months		Contracts Maturing Through
Canadian Dollar	15,250	$	14,740		78.7	%	March 2014
Costa Rican Colon	500,000	963			100.0	%	August 2012
Philippine Peso	11,270,000	255,746		(1)	56.9	%	December 2015
Mexican Peso (Forwards)	1,322,500	95,791			50.5	%	December 2015
Mexican Peso (Collars)	70,149	6,000		(3)	100.0	%	December 2012
British Pound Sterling	6,162	9,628		(2)	66.6	%	June 2014
New Zealand Dollars	726	550			100.0	%	June 2013
		$	383,418
As of December 31, 2011	Local Currency Notional Amount	U.S. Dollar Notional Amount
Canadian Dollar	25,750	$	25,137
Costa Rican Colon	2,000,000	3,874
Philippine Peso	13,304,000	301,361		(1)
Mexican Peso (Forwards)	1,081,000	80,735
Mexican Peso (Collars)	140,298	12,000		(4)
British Pound Sterling	8,808	13,822		(2)
		$	436,929

(1)	Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.
(2)	Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.
(3)	The Mexican peso collars include call options with a floor total of MXN 70.1 million and put options with a cap total of MXN (81.8 million) as of June 30, 2012.
(4)	The Mexican peso collars include call options with a floor total of MXN 140.3 million and put options with a cap total of MXN (157.0 million) as of December 31, 2011.

The fair value of our cash flow hedges at June 30, 2012 was (assets/(liabilities)) (amounts in thousands):

	June 30, 2012			Maturing in the Next 12 Months
Canadian Dollar	$	190		$	120
Costa Rican Colon	14			14
Philippine Peso	7,863			4,887
Mexican Peso	(293		)	(847		)
British Pound Sterling	30			41
New Zealand Dollar	25			25
	$	7,829		$	4,240

Our cash flow hedges are valued using models based on market observable inputs, including both forward and spot foreign exchange rates, implied volatility, and counterparty credit risk. The decrease in fair value largely reflects the recent global economic conditions which resulted in high foreign exchange volatility and a broad strengthening in the U.S. dollar.

42

We recorded a net gain of approximately $0.7 million and $6.9 million for settled cash flow hedge contracts and the related premiums for the six months ended June 30, 2012 and 2011, respectively. These gains were reflected in Revenue in the accompanying Consolidated Statements of Comprehensive Income. If the exchange rates between our various currency pairs were to increase or decrease by 10% from current period-end levels, we would incur a material gain or loss on the contracts. However, any gain or loss would be mitigated by corresponding increases or decreases in our underlying exposures.

Other than the transactions hedged as discussed above and in Note 6 of the Notes to Consolidated Financial Statements, the majority of the transactions of our U.S. and foreign operations are denominated in their respective local currency. However, transactions are denominated in other currencies from time-to-time. We do not currently engage in hedging activities related to these types of foreign currency risks because we believe them to be insignificant as we endeavor to settle these accounts on a timely basis. For the six months ended June 30, 2012 and 2011, approximately 30% and 34%, respectively, of revenue was derived from contracts denominated in currencies other than the U.S. dollar. Our results from operations and revenue could be adversely affected if the U.S. dollar strengthens significantly against foreign currencies.

Fair Value of Debt and Equity Securities

We did not have any investments in debt or equity securities as of June 30, 2012.

ITEM 4. CONTROLS AND PROCEDURES

This Report includes the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 of the Securities Exchange Act of 1934 (the “Exchange Act”). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to reasonably assure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

In connection with the preparation of this Quarterly Report on Form 10-Q, our management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2012. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2012 to provide such reasonable assurance.

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. While the design of any system of controls is to provide reasonable assurance of the effectiveness of disclosure controls, such design is also based in part upon certain assumptions about the likelihood of future events, and such assumptions, while reasonable, may not take into account all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and may not be prevented or detected.

43

Changes in Internal Control over Financial Reporting

In the first quarter of 2012, the Company completed a version upgrade to its Enterprise Resource Planning system. During the implementation period, the Company has reassessed, tested and updated, as necessary, the various processes or accounting procedures, which may be affected by the upgrade. Based on Management’s assessment and testing of the upgrade, the upgrade did not materially affect the Company’s internal controls.

There was no change in our internal control over financial reporting during the quarter ended June 30, 2012 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we have been involved in claims and lawsuits, both as plaintiff and defendant, which arise in the ordinary course of business. Accruals for claims or lawsuits have been provided for to the extent that losses are deemed both probable and estimable. Although the ultimate outcome of these claims or lawsuits cannot be ascertained, on the basis of present information and advice received from counsel, we believe that the disposition or ultimate resolution of such claims or lawsuits will not have a material adverse effect on our financial position, cash flows or results of operations.

In 2009, the municipality of Sao Paolo, Brazil assessed our Brazilian subsidiary a services tax on certain equipment rental income earned in 2004 and 2005.  In March 2011, our Brazilian subsidiary filed a tax annulment action in the Sao Paolo municipal court to challenge the assessment of services taxes on rental income.  Further, in order to halt the possibility of any further interest being charged against the alleged due tax assessments, our Brazilian subsidiary posted a judicial deposit of 6.9 million Brazilian reais (approximately $4.1 million USD) in the first quarter of 2012.  In the second quarter of 2012, the Sao Paolo municipal court issued a ruling in favor of Sao Paolo on this tax annulment action, which ruling our Brazilian subsidiary has challenged. Our Brazilian subsidiary filed this challenge in the state court of Sao Paolo which is not bound by the decision of the Sao Paolo municipal court and where a ruling is not expected for the next one to two years.  Based on an opinion received from legal counsel in Brazil, the Company believes that (i) the ruling issued by the Sao Paolo municipal court was incorrect and in contravention of a Brazil Supreme Court ruling concerning the invalidity of services taxes on rental income, (ii) the Brazilian subsidiary has valid defenses against the assessed services taxes and (iii) that payment of these services taxes is not probable. Accordingly, we have not recorded an expense in the three months ended June 30, 2012 for the Sao Paolo services tax assessment.

ITEM 1A. RISK FACTORS

There were no material changes to the risk factors as previously reported in our 2011 Annual Report on Form 10-K for the year ended December 31, 2011.

44

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

Following is the detail of the issuer purchases made during the quarter ended June 30, 2012:

Period	Total Number of Shares Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands)1
March 31, 2012					$	34,007
April 1, 2012 - April 30, 2012	287,534	$	15.59	287,534	$	29,524
May 1, 2012 - May 31, 2012	581,012	$	14.90	581,012	$	20,870
June 1, 2012 - June 30, 2012	328,500	$	15.04	328,500	$	15,931
Total	1,197,046			1,197,046

(1) In November 2001, our Board of Directors (“Board”) authorized a stock repurchase program with the objective of increasing stockholder returns. The Board periodically authorizes additional increases to the program. The most recent Board authorization to purchase additional common stock occurred in February 2012, whereby the Board increased the program allowance by $25.0 million. Since inception of the program through June 30, 2012, the Board has authorized the repurchase of shares up to a total value of $487.3 million, of which we have purchased 34.8 million shares on the open market for $471.4 million. As of June 30, 2012 the remaining amount authorized for repurchases under the program is approximately $15.9 million. The stock repurchase program does not have an expiration date.

45

ITEM 6. EXHIBITS

Exhibit No.		Exhibit Description
31.	1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
31.	2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
32.	1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
32.	2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
101.	INS*	XBRL Instance Document
101.	SCH*	XBRL Taxonomy Extension Schema Document
101.	CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.	LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.	PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.	DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Notes to the Consolidated Financial Statements, (ii) Consolidated Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011, (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011 (unaudited), (iv) Consolidated Statements of Stockholders’ Equity as of and for the six months ended June 30, 2012 (unaudited), and (v) Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011 (unaudited). Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

46

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.

		TELETECH HOLDINGS, INC.
		(Registrant)
Date: August 1, 2012	By:	/s/ Kenneth D. Tuchman
		Kenneth D. Tuchman
		Chairman and Chief Executive Officer
Date: August 1, 2012	By:	/s/ Regina M. Paolillo
		Regina M. Paolillo
		Chief Financial Officer

47

EXHIBIT INDEX

Exhibit No.		Exhibit Description
31.	1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
31.	2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
32.	1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
32.	2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
101.	INS*	XBRL Instance Document
101.	SCH*	XBRL Taxonomy Extension Schema Document
101.	CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.	LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.	PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.	DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Notes to the Consolidated Financial Statements, (ii) Consolidated Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011, (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011 (unaudited), (iv) Consolidated Statements of Stockholders’ Equity as of and for the six months ended June 30, 2012 (unaudited), and (v) Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011 (unaudited). Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

48

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Kenneth D. Tuchman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of TeleTech Holdings, 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

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: August 1, 2012

By:	/s/ KENNETH D. TUCHMAN
	Kenneth D. Tuchman
	Chairman and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Regina M. Paolillo, certify that:

1.I have reviewed this quarterly report on Form 10-Q of TeleTech Holdings, 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

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: August 1, 2012

By:	/s/ REGINA M. PAOLILLO
	Regina M. Paolillo
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Executive Officer of TeleTech Holdings, Inc. (the “Company”), hereby certifies that, to his knowledge on the date hereof:

(a)the Form 10-Q of the Company for the quarter ended June 30, 2012 filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

(b)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ KENNETH D. TUCHMAN
		Kenneth D. Tuchman
		Chairman and Chief Executive Officer
Date: August 1, 2012

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002

The undersigned, the Chief Financial Officer of TeleTech Holdings, Inc. (the “Company”), hereby certifies that, to her knowledge on the date hereof:

(a)the Form 10–Q of the Company for the quarter ended June 30, 2012 filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

(b)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ Regina M. Paolillo
		Regina M. Paolillo
		Chief Financial Officer
Date: August 1, 2012

XML

DERIVATIVES (INCOME STATEMENT CLASSIFICATION) (DETAILS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Designated as Hedging Instruments [Member] | Option and Forward Contracts [Member] | Cash Flow [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain or (loss) recognized in other comprehensive income - effective portion, net of tax:	$ 2,337	$ (2,673)	$ 9,571	$ (2,104)
Amount and location of net gain or (loss) reclassified from accumulated OCI to income - effective portion: Revenue	692	3,224	649	6,915
Amount and location of net gain or (loss) reclassified from accumulated OCI to income - effective portion: Interest expense	0	0	0	0
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain or (loss) recognized in other comprehensive income - effective portion, net of tax:	(313)	(516)	(476)	(327)
Amount and location of net gain or (loss) reclassified from accumulated OCI to income - effective portion: Revenue	0	0	0	0
Amount and location of net gain or (loss) reclassified from accumulated OCI to income - effective portion: Interest expense	(183)	0	(183)	0
Not Designated as Hedging Instruments [Member] | Option and Forward Contracts [Member] | Cash Flow [Member] | Cost of Services [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income	0	0	0	0
Not Designated as Hedging Instruments [Member] | Option and Forward Contracts [Member] | Cash Flow [Member] | Other income (expense), net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income	0	0	0	0
Not Designated as Hedging Instruments [Member] | Option and Forward Contracts [Member] | Fair Value [Member] | Cost of Services [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income	0	0	0	0
Not Designated as Hedging Instruments [Member] | Option and Forward Contracts [Member] | Fair Value [Member] | Other income (expense), net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income	1,686	(207)	3,855	503
Not Designated as Hedging Instruments [Member] | Leases | Embedded Derivative [Member] | Cost of Services [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income	(266)	78	(266)	122
Not Designated as Hedging Instruments [Member] | Leases | Embedded Derivative [Member] | Other income (expense), net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount and location of net gain or (loss) recognized in the Consolidated Statement of Comprehensive Income	$ 0	$ 0	$ 0	$ 0

XML

COMMITMENTS AND CONTINGENCIES (NARRATIVE) (DETAILS)	6 Months Ended		9 Months Ended
	Jun. 30, 2012 USD ($)	Jun. 30, 2011 USD ($)	Oct. 01, 2010 USD ($)	Mar. 31, 2012 USD ($)	Mar. 31, 2012 BRL	Mar. 27, 2012 USD ($)	Dec. 31, 2011 USD ($)
COMMITMENTS AND CONTINGENCIES [Abstract]
Initiation date of current line of credit agreement			Oct. 01, 2010
Line of Credit Facility, Rationale for Classification as Long-term Debt			5 Year Term
Initial borrowing capacity			$ 350,000,000
Amended date of current line of credit agreement						Mar. 27, 2012
Increase in borrowing capacity						150,000,000
Maximum borrowing capacity						500,000,000
Borrowings outstanding on credit facility	78,000,000						64,000,000
Average daily utilization under credit facility	137,400,000	83,900,000
Letters of credit issued under credit facility	4,400,000
Remaining borrowing capacity under credit facility	417,600,000
Letters of credit issued outside credit facility	1,100,000
Loss Contingency, Actions Taken by Plaintiff	In 2009, the municipality of Sao Paolo, Brazil assessed the Company’s Brazilian subsidiary a services tax on certain equipment rental income earned in 2004 and 2005.  In March 2011, the Company’s Brazilian subsidiary filed a tax annulment action in the Sao Paolo municipal court to challenge the assessment of services taxes on rental income. Further, in order to halt the possibility of any further interest being charged against the alleged due tax assessments
Loss Contingency, Management's Assessment and Process	Based on an opinion received from legal counsel in Brazil, the Company believes that (i) the ruling issued by the Sao Paolo municipal court was incorrect and in contravention of a Brazil Supreme Court ruling concerning the invalidity of services taxes on rental income, (ii) the Brazilian subsidiary has valid defenses against the assessed services taxes and (iii) that payment of these services taxes is not probable. Accordingly, the Company has not recorded an expense in the three months ended June 30, 2012 for the Sao Paolo services tax assessment.
Loss Contingency, Judicial Deposit Made				$ 4,100,000	6,900,000

XML

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES (LIABLITY ROLLFORWARD TABLE) (DETAILS) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Restructuring Cost and Reserve [Line Items]
Balance as of December 31, 2011	$ 2,067
Expense	18,254
Payments	(3,408)
Reversals	0
Balance as of June 30, 2012	16,913
Closure of Delivery Centers [Member]
Restructuring Cost and Reserve [Line Items]
Balance as of December 31, 2011	415
Expense	99
Payments	(139)
Reversals	0
Balance as of June 30, 2012	375
Reduction in Force [Member]
Restructuring Cost and Reserve [Line Items]
Balance as of December 31, 2011	1,652
Expense	18,155
Payments	(3,269)
Reversals	0
Balance as of June 30, 2012	$ 16,538

XML

SEGMENT INFORMATION (REVENUE GEOGRAPHY) (DETAILS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues from External Customers by Geography [Line Items]
Revenue	$ 288,798	$ 293,636	$ 581,452	$ 574,615
United States
Revenues from External Customers by Geography [Line Items]
Revenue	111,857	94,184	222,433	178,813
Philippines
Revenues from External Customers by Geography [Line Items]
Revenue	83,336	85,519	162,002	169,026
Latin America
Revenues from External Customers by Geography [Line Items]
Revenue	46,259	53,066	94,155	108,664
Europe / Middle East / Africa
Revenues from External Customers by Geography [Line Items]
Revenue	33,085	44,013	71,450	83,771
Canada
Revenues from External Customers by Geography [Line Items]
Revenue	10,288	13,047	23,241	25,845
Asia Pacific
Revenues from External Customers by Geography [Line Items]
Revenue	$ 3,973	$ 3,807	$ 8,171	$ 8,496

XML

DERIVATIVES (TABLES)

6 Months Ended

Jun. 30, 2012

DERIVATIVES [ABSTRACT]

Schedule of Cash Flow Hedges OCI Rollforward

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Aggregate unrealized net gain (loss) at beginning of period	$	1,245	$	5,634	$	(5,852)	$	7,091
Add: Net gain/(loss) from change in fair value of cash flow hedges		2,024		(3,189)		9,095		(2,431)
Less: Net (gain)/loss reclassified to earnings from effective hedges		(305)		(1,934)		(279)		(4,149)
Aggregate unrealized net gain (loss) at end of period	$	2,964	$	511	$	2,964	$	511

Schedule of Notional Amounts of Outstanding Cash Flow Hedges

As of June 30, 2012	Local Currency Notional Amount	U.S. Dollar Notional Amount			% Maturing in the Next 12 Months			Contracts Maturing Through
Canadian Dollar	15,250	$	14,740			78.7	%	March 2014
Costa Rican Colon	500,000		963			100.0	%	August 2012
Philippine Peso	11,270,000		255,746	(1)		56.9	%	December 2015
Mexican Peso (Forwards)	1,322,500		95,791			50.5	%	December 2015
Mexican Peso (Collars)	70,149		6,000	(3)		100.0	%	December 2012
British Pound Sterling	6,162		9,628	(2)		66.6	%	June 2014
New Zealand Dollars	726		550			100.0	%	June 2013
		$	383,418

As of December 31, 2011	Local Currency Notional Amount	U.S. Dollar Notional Amount
Canadian Dollar	25,750	$	25,137
Costa Rican Colon	2,000,000		3,874
Philippine Peso	13,304,000		301,361	(1)
Mexican Peso (Forwards)	1,081,000		80,735
Mexican Peso (Collars)	140,298		12,000	(4)
British Pound Sterling	8,808		13,822	(2)
		$	436,929

(1)Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.

(2)Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.

(3)The Mexican peso collars include call options with a floor total of MXN 70.1 million and put options with a cap total of MXN (81.8 million) as of June 30, 2012.

(4)The Mexican peso collars include call options with a floor total of MXN 140.3 million and put options with a cap total of MXN (157.0 million) as of December 31, 2011.

Schedule of Interest Rate Swaps

	Notional Amount (millions)		Variable Rate Received	Fixed Rate Paid			Contract Commencement Date	Contract Maturity Date
As of June 30, 2012	$	25.0	1 - month LIBOR		2.55	%	April 2012	April 2016
		15.0	1 - month LIBOR		3.14	%	May 2012	May 2017
	$	40.0
As of December 31, 2011	$	25.0	1 - month LIBOR		2.55	%	April 2012	April 2016
		15.0	1 - month LIBOR		3.14	%	May 2012	May 2017
	$	40.0

Schedule of Derivatives Instruments on Balance Sheet

		June 30, 2012
		Designated as Hedging Instruments				Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Leases
Derivative classification:		Cash Flow		Cash Flow		Fair Value		Embedded Derivative
Fair value and location of derivative in the
	Consolidated Balance Sheet:
Prepaids and other current assets		$	6,288	$	-	$	900	$	-
Other long-term assets			4,140		-		-		-
Other current liabilities			(2,047)		(997)		-		(101)
Other long-term liabilities			(552)		(1,877)		-		(165)
	Total fair value of derivatives, net	$	7,829	$	(2,874)	$	900	$	(266)
		December 31, 2011
		Designated as Hedging Instruments				Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Leases
Derivative classification:		Cash Flow		Cash Flow		Fair Value		Embedded Derivative
Fair value and location of derivative in
	the Consolidated Balance Sheet:
Prepaids and other current assets		$	2,325	$	-	$	12	$	-
Other long-term assets			1,119		-		-		-
Other current liabilities			(7,828)		-		(341)		-
Other long-term liabilities			(2,786)		(2,263)		-		-
	Total fair value of derivatives, net	$	(7,170)	$	(2,263)	$	(329)	$	-

Schedule of Derivative Impact on Statement of Comprehensive Income

		Three Months Ended June 30,
		2012				2011
		Designated as Hedging Instruments				Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Interest Rate
Derivative classification:		Cash Flow		Cash Flow		Cash Flow		Cash Flow
Amount of gain or (loss) recognized in other
	comprehensive income - effective portion, net of tax:	$	2,337	$	(313)	$	(2,673)	$	(516)
Amount and location of net gain or (loss) reclassified
	from accumulated OCI to income - effective portion:
Revenue		$	692	$	-	$	3,224	$	-
Interest expense			-		(183)		-		-

		Three Months Ended June 30,
		2012						2011
		Not Designated as Hedging Instruments						Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange				Leases		Foreign Exchange				Leases
Derivative classification:		Option and Forward Contracts		Fair Value		Embedded Derivative		Option and Forward Contracts		Fair Value		Embedded Derivative
Amount and location of net gain or (loss) recognized in the
	Consolidated Statement of Comprehensive Income:
Costs of services		$	-	$	-	$	(266)	$	-	$	-	$	78
Other income (expense), net		$	-	$	1,686	$	-	$	-	$	(207)	$	-

		Six Months Ended June 30,
		2012				2011
		Designated as Hedging Instruments				Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Interest Rate
Derivative classification:		Cash Flow		Cash Flow		Cash Flow		Cash Flow
Amount of gain or (loss) recognized in other
	comprehensive income - effective portion, net of tax:	$	9,571	$	(476)	$	(2,104)	$	(327)
Amount and location of net gain or (loss) reclassified
	from accumulated OCI to income - effective portion:
Revenue		$	649	$	-	$	6,915	$	-
Interest expense		$	-	$	(183)	$	-	$	-

		Six Months Ended June 30,
		2012						2011
		Not Designated as Hedging Instruments						Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange				Leases		Foreign Exchange				Leases
Derivative classification:		Option and Forward Contracts		Fair Value		Embedded Derivative		Option and Forward Contracts		Fair Value		Embedded Derivative
Amount and location of net gain or (loss) recognized in the
	Consolidated Statement of Comprehensive Income:
Costs of services		$	-	$	-	$	(266)	$	-	$	-	$	122
Other income (expense), net		$	-	$	3,855	$	-	$	-	$	503	$	-

XML

NET INCOME PER SHARE (DILUTED SHARES TABLE) (DETAILS) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Shares used in basic earnings per share calculation	55,125	56,713	55,809	56,949
Effect of dilutive securities:
Stock options	359	832	379	891
Restricted stock units	228	429	370	536
Performance-based restricted stock units	0	0	0	0
Total effects of dilutive securities	587	1,261	749	1,427
Shares used in dilutive earnings per share calculation	55,712	57,974	56,558	58,376

XML

FAIR VALUE (FAIR VALUE ASSETS AND LIABILITIES) (DETAILS) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Money market investments	$ 0	$ 0
Derivative assets, net	0	0
Total assets	0	0
Liabilities [Abstract]
Deferred compensation plan liability	0	0
Derivative instruments, net	0	0
Purchase price payable	0	0
Total liabilities	0	0
Significant Other Observable Inputs (Level 2) [Member]
Assets [Abstract]
Money market investments	400	507
Derivative assets, net	5,589	0
Total assets	5,989	507
Liabilities [Abstract]
Deferred compensation plan liability	(4,808)	(3,990)
Derivative instruments, net	0	(9,762)
Purchase price payable	0	0
Total liabilities	(4,808)	(13,752)
Significant Unobservable Inputs (Level 3) [Member]
Assets [Abstract]
Money market investments	0	0
Derivative assets, net	0	0
Total assets	0	0
Liabilities [Abstract]
Deferred compensation plan liability	0	0
Derivative instruments, net	0	0
Purchase price payable	(3,234)	(4,985)
Total liabilities	$ (3,234)	$ (4,985)

XML

DERIVATIVES (INTEREST RATE SWAPS) (DETAILS) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Derivative [Line Items]
Notional Amount	$ 40.0	$ 40.0
Interest Rate Swap One
Derivative [Line Items]
Notional Amount	25.0	25.0
Variable Rate Received	1 - month LIBOR	1 - month LIBOR
Fixed Rate Paid	2.55%	2.55%
Contract Commencement Date	Apr. 01, 2012	Apr. 01, 2012
Contract Maturity Date	Apr. 01, 2016	Apr. 01, 2016
Interest Rate Swap Two
Derivative [Line Items]
Notional Amount	$ 15.0	$ 15.0
Variable Rate Received	1 - month LIBOR	1 - month LIBOR
Fixed Rate Paid	3.14%	3.14%
Contract Commencement Date	May 01, 2012	May 01, 2012
Contract Maturity Date	May 01, 2017	May 01, 2017

XML

EQUITY-BASED COMPENSATION PLANS (NARRATIVE) (DETAILS) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	$ 3,500,000	$ 4,000,000	$ 6,845,000	$ 7,715,000
Stock Options [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	132,000	5,000	264,000	19,000
Unrecognized Compensation Expense	900,000		900,000
Restricted Stock Units (RSUs) [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	3,300,000	4,000,000	6,600,000	7,700,000
Unrecognized Compensation Expense	32,100,000		32,100,000
Non-option Equity Awards Granted			505,887	568,580
Requisite Service Period			four or five
Cash Based Awards [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	22,000	0	30,000	0
Unrecognized Compensation Expense	400,000		400,000
Non-option Equity Awards Granted			30,000	0
Requisite Service Period			five
Performance Based Restricted Stock Units (PUs) [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	0	0	0	0
Cost of Services [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	500,000		1,000,000
Selling General And Administrative Expenses [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Equity-based compensation expense	$ 3,000,000	$ 4,000,000	$ 5,900,000	$ 7,700,000

XML

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES (NARRATIVE) (DETAILS) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 Customer Management Services	Jun. 30, 2011 Customer Management Services	Jun. 30, 2012 Customer Growth Services
Asset Impairment [Line Items]
Impairment of leasehold improvements	$ 1,000,000	$ 0	$ 1,000,000	$ 200,000
Impairment of trade name					$ 1,800,000

XML

ACQUISITIONS

6 Months Ended

Jun. 30, 2012

ACQUISITIONS [ABSTRACT]

ACQUISITIONS

(2)       ACQUISITIONS

OnState

On January 1, 2012, the Company entered into an asset purchase agreement with OnState Communications Corporation (“OnState”) to acquire 100% of its assets and assume certain of its liabilities for total cash consideration of $3.3 million. OnState provides hosted business process outsourcing solutions to a variety of small businesses. OnState was headquartered in Boston, MA with a minimal employee base.

As of the six months ended June 30, 2012, the Company has paid $3.1 million of the purchase price.The remaining purchase price will be paid out once the potential for covered losses has expired per the purchase agreement. The Company paid $0.1 million of acquisition related expenses as part of the OnState purchase. These costs were recorded in Selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income during the six months ended June 30, 2012.

The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):

		Acquisition Date Fair Value
Cash		$	36
Accounts Receivable			68
Property, plant and equipment			33
Software			2,100
Goodwill			1,132
			3,369
Accounts payable			93
			93
	Total purchase price	$	3,276

The software acquired will be amortized over four years onceit is placed into service. The goodwill recognized from the OnState acquisition is primarily attributable to the synergies resulting from incorporating the acquired software into the Company's current technology platforms in addition to the acquisition of the employees who developed the acquired software. Since this acquisition is an asset acquisition for tax purposes, the goodwill of $1.1 million and software are deductible over their respective tax lives.

iKnowtion

On February 27, 2012, the Company acquired an 80% interest in iKnowtion, LLC (“iKnowtion”). iKnowtion integrates proven marketing analytics methodologies and business consulting capabilities to help clients improve their return on marketing expenditures in such areas as demand generation, share of wallet, and channel mix optimization.iKnowtion is located in Boston, MA and has approximately 40 employees.

The up-front cash consideration paid was $1.0 million. The Company was also obligated to pay a working capital adjustment equivalent to any acquired working capital from iKnowtion in excess of a working capital floor as defined in the purchase and sale agreement. The working capital adjustment was $0.2 million andwas paid during the second quarter of 2012.

The Company is also obligated to make earn-out payments over the next four years if iKnowtion achieves specified earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets,as defined by the purchase and sale agreement. The fair value of the contingent payments was measured based on significant inputs not observable in the market (Level 3 inputs). Key assumptions included in the fair value calculation include a discount rate of 21% and expected future value of payments of $4.3 million.The $4.3 million of expected future payments was estimated using a probability weighted EBITDA assessment with higher probability associated with iKnowtion achieving the maximum EBITDA targets. As of the acquisition date, the fair value of the contingent payments was approximately $2.9 million. As of June 30, 2012, the fair value of the contingent consideration was $3.3 million, of which $1.0 million and $2.3 million were included in Other accrued expenses and Other long-term liabilities in the accompanying Consolidated Balance Sheets, respectively.

The preliminary estimated fair value of the 20% noncontrolling interest in iKnowtion is $0.9 million and was estimated based on a 20% interest of the fair value of 100% interest in iKnowtion and was discounted for a lack of control at a rate of 23.1%.

In the event iKnowtion meets certain EBITDA targets for calendar year 2015, the purchase and sale agreement requires TeleTech to purchase the remaining 20% interest in iKnowtion in 2016 for an amount equal to a multiple of iKnowtions's 2015 EBITDA as defined in the purchase and sale agreement. These terms represent a contingent redemption feature. The preliminary fair value of the redemption feature is based on a comparison of EBITDA multiples and the EBITDA multiple to purchase the remaining 20% of iKnowtionapproximates EBITDA multiples in the market for similar acquisitions.

The Company paid $0.1 million of acquisition related expenses as part of the iKnowtion purchase. These costs were recorded in Selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income during the six months ended June 30, 2012.

The following summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities and noncontrolling interest assumed as of the acquisition date (in thousands). The estimates of fair value of identifiable assets acquired and liabilities assumed, are preliminary, pending completion of the valuation, and thus are subject to revisions thatwill result in adjustments to the values presented below:

		Preliminary Estimates of Acquisition Date Fair Value
Cash		$	1,337
Accounts Receivable			1,792
Property, plant and equipment			161
Other assets			90
Customer relationships			1,400
Goodwill			447
			5,227
Accounts payable			18
Accrued expenses			19
Other			164
			201
Noncontrolling interest			941
	Total purchase price	$	4,085

The iKnowtion customer relationships have an estimated useful life of 5 years. The goodwill recognized from the iKnowtion acquisition was attributable primarily to the acquired workforce of iKnowtion, expected synergies, and other factors. It is anticipated that any tax basis of the acquired intangibles and goodwill will be deductible for income tax purposes. The acquired goodwill and the operating results of iKnowtion are reported within the Customer Strategy Services segment from the date of acquisition.

eLoyalty

On May 28, 2011, the Company acquired certain assets and assumed certain liabilities of eLoyalty Corporation (“eLoyalty”) related to the Integrated Contract Solutions (“ICS”) business unit, and the eLoyalty trade name. The ICS business unit focuses on helping clients improve customer service business performance through the implementation of a variety of service centers. The ICS business unit generates revenue in three ways: (i) managed services that support and maintain clients' customer service center environment over the long-term; (ii) consulting services that assist the customer in implementation and integration of a customer service center solution; and (iii) product resale through the sale of third party software and hardware. eLoyalty operates out of an office in Austin, TX with an additional administrative location in Chicago, IL and has approximately 160 employees.

The up-front cash consideration in the eLoyalty transaction was $40.9 million, subject to certain balance sheet adjustments of ($2.9) million as defined in the purchase and sale agreement, for a total purchase price of $38.0 million, all of which was paid by December 31, 2011.

The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):

		Acquisition Date Fair Value
Cash		$	14
Accounts Receivable			7,702
Prepaid assets - cost deferrals			14,726
Property, plant and equipment			897
Other assets			869
Deferred tax asset			3,735
Customer relationships			11,700
Software			1,200
Noncompete agreements			900
Trade name			3,300
Consulting services backlog			500
Goodwill			18,516
			64,059
Accounts payable			2,156
Accrued expenses			1,211
Deferred revenue			22,525
Other			192
			26,084
	Total purchase price	$	37,975

The customer relationship intangible asset is being amortized over 11 years. The goodwill recognized from the eLoyalty acquisition was attributable primarily to the assembled workforce of eLoyalty and significant opportunity for Company growth and marketing based on additional service offerings and capabilities. Since this acquisition has been treated as an asset acquisition for tax purposes, the goodwill of $18.5 million and associated intangible assets will be deductible for income tax purposes. The operating results of eLoyalty are reported within the Customer Technology Services segment from the date of acquisition.

The three acquired businesses described above contributed revenues of $22.1 million and $43.2 million and income from operations of $1.7 million and $4.1 million to the Company for the three and six months ended June 30, 2012.

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FAIR VALUE (NARRATIVE) (DETAILS) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Mar. 01, 2012
FAIR VALUE [Abstract]
Average interest rate on annual borrowings	1.60%	1.60%
Contingent Consideration Cash Payment			$ 5.0

XML

NET INCOME PER SHARE (TABLES)

6 Months Ended

Jun. 30, 2012

Net income per share attributable to TeleTech stockholders

Schedule of Diluted Shares Calculation

				Three Months Ended June 30,		Six Months Ended June 30,
				2012	2011	2012	2011
Shares used in basic earnings per share calculation				55,125	56,713	55,809	56,949
	Effect of dilutive securities:
		Stock options		359	832	379	891
		Restricted stock units		228	429	370	536
		Performance-based restricted stock units		-	-	-	-
			Total effects of dilutive securities	587	1,261	749	1,427
Shares used in dilutive earnings per share calculation				55,712	57,974	56,558	58,376

XML

NONCONTROLLING INTEREST (TABLES)

6 Months Ended

Jun. 30, 2012

NONCONTROLLING INTEREST [Abstract]

Noncontrolling Interest Rollforward

		Six Months Ended June 30,
		2012		2011
Noncontrolling interest, January 1		$	11,260	$	11,092
Acquisition of noncontrolling interest			941		-
Net income attributable to noncontrolling interest			1,861		1,905
Dividends distributed to noncontrolling interest			(720)		(1,859)
Foreign currency translation adjustments			47		2
	Noncontrolling interest, June 30	$	13,389	$	11,140

XML

INCOME TAXES (NARRATIVE) (DETAILS) (USD $) In Millions, unless otherwise specified	2 Months Ended	3 Months Ended		6 Months Ended			2 Months Ended	3 Months Ended	6 Months Ended	7 Months Ended	6 Months Ended
	Feb. 20, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 Philippines [Member]	Feb. 20, 2011 Canada [Member]	Mar. 31, 2011 Canada [Member]	Jun. 30, 2012 Australia [Member]	Jul. 25, 2012 Australia [Member]	Jun. 30, 2012 New Zealand [Member]
Income Tax Disclosure [Abstract]
Gross deferred tax assets		$ 67.9		$ 67.9
Deferred tax liabilities		4.9		4.9
Deferred tax asset valuation allowance		12.6		12.6
Net deferred tax assets (after deferred tax liabilities)		50.4		50.4
Effective income tax rate		(25.60%)	0.60%	2.50%	22.40%
Income Tax Examination [Line Items]
Year income taxes under audit	2002					2008	2001
Restructuring and impairment expense		17.3		21.1
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Income Tax Examination, Description							In 2005, through the Competent Authority process, the Company sought relief under the United States-Canada Income Tax Convention for avoidance of double taxation arising from adjustments to the taxable income originally reported to these jurisdictions. Consistent with accounting for tax positions that no longer meet the recognition criteria, the Company derecognized income tax positions totaling $8.6 million through income tax expense in the first quarter of 2011. The Company continues to believe in the merits of its claim for which it sought relief from double taxation through the Competent Authority process. In response to the February 2011 notice, the Company has filed for Judicial Review in the Federal Court of Canada seeking a writ of mandamus to compel the CRA to accept the Company’s application for Competent Authority consideration.
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit									3.9		1.3
Significant Change in Unrecognized Tax Benefits, Nature of Event										On July 25, 2012 the Company entered into a unilateral Advance Pricing Agreement (“APA”) with the Australian Tax Office (“ATO”) that covers the intercompany transfer price TeleTech Australia will pay affiliates operating in other tax jurisdictions for subcontracted services. The agreement will preclude the ATO from making a transfer pricing adjustment to transactions within the scope of this agreement. This agreement is effective for five years beginning January 1, 2011. During the period January 1, 2011 through June 30, 2012 TeleTech Australia recorded payments for services performed by affiliates outside Australia according to intercompany service agreements in effect at the time and subsequently measured the tax benefit related to these tax positions in accordance with accounting for uncertain tax positions.	In addition, the Company is also in the final stages of negotiating a unilateral APA with the New Zealand Inland Revenue office covering similar transactions and time periods. Although there can be no guarantee that such negotiations will result in an agreement, should such an agreement be signed, the Company would recognize an additional $1.3 million in tax benefit.
Tax Adjustments, Settlements, and Unusual Provisions								$ (8.6)	$ 1.9

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ACQUISITIONS (ASSETS ACQUIRED TABLE) (DETAILS) (USD $) In Thousands, unless otherwise specified	Jan. 02, 2012 OnState [Member]	Feb. 27, 2012 iKnowtion [Member]	May 28, 2011 eLoyalty [Member]
Business Acquisition [Line Items]
Cash	$ 36	$ 1,337	$ 14
Accounts receivable	68	1,792	7,702
Prepaid assets - cost deferrals			14,726
Property, plant and equipment	33	161	897
Other assets		90	869
Deferred tax asset			3,735
Customer relationships		1,400	11,700
Software	2,100		1,200
Noncompete agreements			900
Trade name			3,300
Consulting services backlog			500
Goodwill	1,132	447	18,516
Total assets acquired	3,369	5,227	64,059
Accounts payable	93	18	2,156
Accrued expenses		19	1,211
Deferred revenue			22,525
Other		164	192
Total liabilities assumed	93	201	26,084
Noncontrolling interest		941
Total purcahse price	$ 3,276	$ 4,085	$ 37,975

XML

ACQUISITIONS (NARRATIVE) (DETAILS) (USD $)	3 Months Ended	6 Months Ended	0 Months Ended		2 Months Ended		2 Months Ended	5 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jan. 02, 2012 Onstate [Member]	Jan. 02, 2012 Onstate [Member] Computer Software, Intangible Asset [Member] years	Feb. 27, 2012 Iknowtion [Member] employees	Jun. 30, 2012 Iknowtion [Member]	Feb. 27, 2012 Iknowtion [Member] Customer Relationships [Member] years	May 28, 2011 Eloyalty [Member] employees	May 28, 2011 Eloyalty [Member] Customer Relationships [Member] years
Business Acquisition [Line Items]
Date of Acquisition			January 1, 2012		February 27, 2012			May 28, 2011
Percentage of Voting Interests Acquired			100.00%		80.00%
Description of Acquired Entity			OnState provides hosted business process outsourcing solutions to a variety of small businesses. OnState was headquartered in Boston, MA with a minimal employee base.		iKnowtion integrates proven marketing analytics methodologies and business consulting capabilities to help clients improve their return on marketing expenditures in such areas as demand generation, share of wallet, and channel mix optimization. iKnowtion is located in Boston, MA and has approximately 40 employees.			The ICS business unit focuses on helping clients improve customer service business performance through the implementation of a variety of service centers. The ICS business unit generates revenue in three ways: (i) managed services that support and maintain clients’ customer service center environment over the long-term; (ii) consulting services that assist the customer in implementation and integration of a customer service center solution; and (iii) product resale through the sale of third party software and hardware. eLoyalty operates out of an office in Austin, TX with an additional administrative location in Chicago, IL and has approximately 160 employees.
Entity Number of Employees					40			160
Purchase Price of Acquired Entity			$ 3,300,000					$ 38,000,000
Cost of Acquired Entity, Other Noncash Consideration								(2,900,000)
Cost of Acquired Entity, Cash Paid			3,100,000
Cost of Acquired Entity, Up Front Cash Consideration					1,000,000			40,900,000
Cost of Acquired Entity, Working Capital Adjustment Paid					200,000
Cost of Acquired Entity, Transaction Costs			100,000		100,000
Weighted Average Useful Life of Acquired Intangible Assets				4			5		11
Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount			1,100,000					18,500,000
Future Value of Liabilities Incurred From Business Acquisitions					4,300,000
Valuation Technique on Contingent Consideration					The purchase price payable was recognized at fair value using a discounted cash flow approach and a discount rate of 21.0%. This measurement was based on significant inputs not observable in the market. The Company will record interest expense each period using the effective interest method until the future value of this purchase price payable reaches its expected future value of $4.3 million in 2016.
Contingent Consideration Arrangements, Basis for Amount					The Company is also obligated to make earn-out payments over the next four years if iKnowtion achieves specified earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets, as defined by the purchase and sale agreement.
Contingent Consideration, at fair value					2,900,000	3,300,000
Contingent consideration, fair value, current portion						1,000,000
Contingent consideration, fair value, noncurrent portion						2,300,000
Acquisition of Less than 100 Percent, Noncontrolling Interest, Valuation Technique					The preliminary estimated fair value of the 20% noncontrolling interest in iKnowtion is $0.9 million and was estimated based on a 20% interest of the fair value of 100% interest in iKnowtion and was discounted for a lack of control at a rate of 23.1%.
Revenue of Acquirees since Acquisition Date, Actual	22,100,000	43,200,000
Income (loss) from operations of Acquirees since Acquisition Date, Actual	$ 1,700,000	$ 4,100,000

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OVERVIEW AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2012

OVERVIEW AND BASIS OF PRESENTATION [Abstract]

OVERVIEW AND BASIS OF PRESENTATION

(1)       OVERVIEW AND BASIS OF PRESENTATION

Overview

TeleTech Holdings, Inc. and its subsidiaries (“TeleTech” or the “Company”) serve their clients through the primary businesses of Business Process Outsourcing (“BPO”), which includes data-driven strategic consulting and marketing services, customer management, and hosted and managed technologies, for a variety of industries via operations in the U.S., Argentina, Australia, Belgium, Brazil, Canada, China, Costa Rica, England, France, Germany, Ghana, Italy, Kuwait, Lebanon, Mexico, New Zealand, Northern Ireland, the Philippines, Scotland, South Africa, Spain, Turkey and the United Arab Emirates.

Basis of Presentation

The Consolidated Financial Statements are comprised of the accounts of TeleTech, its wholly owned subsidiaries, its 55% equity owned subsidiary Percepta, LLC, its 80% interest inPeppers & Rogers Group (“PRG”) and its 80% interest in iKnowtion, LLC which was acquired on February 27, 2012 (see Note 2 for additional information). All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited Consolidated Financial Statements do not include all of the disclosures required by accounting principles generally accepted in the U.S. (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company as of June 30, 2012, and the consolidated results of operations and comprehensive income and cash flows of the Company for the three and six months ended June 30, 2012 and 2011. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

These unaudited Consolidated Financial Statements should be read in conjunction with the Company's audited Consolidated Financial Statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

Certain amounts for 2011 have been reclassified in the Consolidated Financial Statements to conform to the 2012 presentation.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to derivatives and hedging activities, income taxes including the valuation allowance for deferred tax assets, self-insurance reserves, litigation reserves, restructuring reserves, allowance for doubtful accounts and valuation of goodwill, long-lived and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. In the three months ended June 30, 2012, the Company recorded a change in estimate which resulted in a decrease of $4.6 million to employee related expenses in connection with an authoritative ruling in Spain related to the legally required cost of living adjustment for our employees' salaries for the years 2010, 2011 and 2012.

Recently Issued Accounting Pronouncements

In May 2011, the FASB amended its guidance, to converge fair value measurement and disclosure guidance in U.S. GAAP with International Financial Reporting Standards (“IFRS”). IFRS is a comprehensive series of accounting standards published by the International Accounting Standards Board. The amendment changes the wording used to describe the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The FASB does not intend for the amendment to result in a change in the application of the requirements in the current authoritative guidance. The amendment became effective prospectively for the Company's interim period ended March 31, 2012. The adoption of this guidance did not have a material impact on its financial position, results of operations or cash flows.

In June 2011, the FASB amended its guidance on the presentation of comprehensive income. Under the amended guidance, an entity has the option to present comprehensive income in either one or two consecutive financial statements. The Company decided to present a single statement setting the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income. The amendment became effective retrospectively for the Company's interim period ended March 31, 2012.

In December 2011, the FASB issued additional guidance related to the presentation of other comprehensive income. This guidance is intended to allow the FASB time to re-deliberate whether it is necessary to require entities to present the effects of reclassifications out of accumulated other comprehensive income in both the statement in which net income is presented and the statement in which other comprehensive income is presented. This guidance defers the effective date of only those provisions in the other comprehensive income guidance that relate to the presentation of reclassification adjustments out of other comprehensive income and reinstates the previous requirements to present reclassification adjustments either on the face of the statement in which other comprehensive income is reported or to disclose them in a note to the financial statements. The amendments in this new guidance became effective at the same time as the amendments in the other comprehensive income guidance explained above. TheCompany's adoption of this standard did not have a material impact on the Company's financial position, results of operations or cash flows.

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SEGMENT INFORMATION (SEGMENT FINANCIALS) (DETAILS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Segment Reporting Information [Line Items]
Gross Revenue	$ 289,735	$ 293,636	$ 584,221	$ 574,615
Intersegment Sales	(937)	0	(2,769)	0
Net Revenue	288,798	293,636	581,452	574,615
Depreciation & Amortization	10,229	11,423	20,345	23,021
Income (Loss) from Operations	6,446	24,629	25,196	46,119
Capital Expenditures	10,994	8,492	17,478	12,362
Total Assets	784,952		784,952		746,978
Goodwill	72,057		72,057		70,844
Customer Management Services
Segment Reporting Information [Line Items]
Gross Revenue	229,401	248,207	464,277	494,280
Intersegment Sales	0	0	0	0
Net Revenue	229,401	248,207	464,277	494,280
Depreciation & Amortization	5,890	7,305	12,030	15,736
Income (Loss) from Operations	28,563	49,588	74,269	97,839
Capital Expenditures	7,336	4,958	12,982	7,079
Total Assets	496,401		496,401		479,818
Goodwill	20,228		20,228		20,594
Customer Growth Services
Segment Reporting Information [Line Items]
Gross Revenue	24,409	23,483	47,173	45,626
Intersegment Sales	0	0	0	0
Net Revenue	24,409	23,483	47,173	45,626
Depreciation & Amortization	631	766	1,196	1,552
Income (Loss) from Operations	4,212	4,594	5,291	7,576
Capital Expenditures	524	94	893	200
Total Assets	46,241		46,241		50,950
Goodwill	24,439		24,439		24,439
Customer Technology Services
Segment Reporting Information [Line Items]
Gross Revenue	25,578	11,660	52,062	16,317
Intersegment Sales	(622)	0	(1,553)	0
Net Revenue	24,956	11,660	50,509	16,317
Depreciation & Amortization	678	448	1,465	517
Income (Loss) from Operations	4,103	3,156	7,808	5,868
Capital Expenditures	375	45	701	115
Total Assets	77,865		77,865		70,745
Goodwill	19,648		19,648		18,516
Customer Strategy Services
Segment Reporting Information [Line Items]
Gross Revenue	10,347	10,286	20,709	18,392
Intersegment Sales	(315)	0	(1,216)	0
Net Revenue	10,032	10,286	19,493	18,392
Depreciation & Amortization	341	309	690	607
Income (Loss) from Operations	316	1,309	847	1,773
Capital Expenditures	18	0	84	138
Total Assets	50,339		50,339		42,882
Goodwill	7,742		7,742		7,295
Reportable Segments
Segment Reporting Information [Line Items]
Gross Revenue	289,735	293,636	584,221	574,615
Intersegment Sales	(937)	0	(2,769)	0
Net Revenue	288,798	293,636	581,452	574,615
Depreciation & Amortization	7,540	8,828	15,381	18,412
Income (Loss) from Operations	37,194	58,647	88,215	113,056
Corporate
Segment Reporting Information [Line Items]
Gross Revenue	0	0	0	0
Intersegment Sales	0	0	0	0
Net Revenue	0	0	0	0
Depreciation & Amortization	2,689	2,595	4,964	4,609
Income (Loss) from Operations	(30,748)	(34,018)	(63,019)	(66,937)
Capital Expenditures	2,741	3,395	2,818	4,830
Total Assets	$ 114,106		$ 114,106		$ 102,583

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DERIVATIVES (NARRATIVE) (DETAILS) In Millions, unless otherwise specified	Jun. 30, 2012 USD ($)	Jun. 30, 2012 MXN	Dec. 31, 2011 USD ($)	Dec. 31, 2011 MXN
DERIVATIVES [ABSTRACT]
Mexico Peso Collars - Call Options Floor Total		70.1		140.3
Mexico Peso Collars - Put Options Cap Total		(81.8)		(157.0)
Notional amount of fair value hedges	$ 111.3		$ 49.8

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets
Cash and cash equivalents	$ 170,578	$ 156,371
Accounts receivable, net	243,360	243,636
Prepaids and other current assets	51,737	37,434
Deferred tax assets, net	23,692	22,994
Income tax receivable	12,328	17,847
Total current assets	501,695	478,282
Long-term assets
Property, plant and equipment, net	105,055	100,321
Goodwill	72,057	70,844
Contract acquisition costs, net	2,358	2,866
Deferred tax assets, net	31,642	32,512
Other long-term assets	72,145	62,153
Total long-term assets	283,257	268,696
Total assets	784,952	746,978
Current liabilities
Accounts payable	29,960	27,555
Accrued employee compensation and benefits	71,000	71,500
Other accrued expenses	43,941	33,816
Income taxes payable	12,222	10,051
Deferred tax liabilities, net	1,745	912
Deferred revenue	16,603	15,895
Other current liabilities	8,530	10,282
Total current liabilities	184,001	170,011
Long-term liabilities
Line of credit	78,000	64,000
Negative investment in deconsolidated subsidiary	76	76
Deferred tax liabilities, net	3,226	3,020
Deferred rent	7,528	6,729
Other long-term liabilities	43,459	32,895
Total long-term liabilities	132,289	106,720
Total liabilities	316,290	276,731
Commitments and contingencies (Note 10)	0	0
Stockholders' equity
Preferred stock - $0.01 par value: 10,000,000 shares authorized; zero shares outstanding as of June 30, 2012 and December 31, 2011	0	0
Common stock - $0.01 par value; 150,000,000 shares authorized; 54,555,105 and 56,635,319 shares outstanding as of June 30, 2012 and December 31, 2011, respectively	546	566
Additional paid-in capital	346,018	350,386
Treasury stock at cost: 27,497,148 and 25,416,934 shares as of June 30, 2012 and December 31, 2011, respectively	(390,468)	(357,267)
Accumulated other comprehensive income (loss)	7,197	(5,474)
Retained earnings	491,980	470,776
Noncontrolling interest	13,389	11,260
Total stockholders' equity	468,662	470,247
Total liabilities and stockholders' equity	$ 784,952	$ 746,978

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RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES (LIABILITY CLASSIFICATION TABLE) (DETAILS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Restructuring Cost and Reserve [Line Items]
Reduction in force	$ 16,197	$ (57)	$ 18,155	$ 675
Facility exit charges	99	0	99	7
Total	16,296	(57)	18,254	682
Customer Management Services
Restructuring Cost and Reserve [Line Items]
Reduction in force	15,909	(57)	17,453	565
Facility exit charges	99	0	99	7
Customer Growth Services
Restructuring Cost and Reserve [Line Items]
Reduction in force	32	0	135	110
Facility exit charges	0	0	0	0
Customer Technology Services
Restructuring Cost and Reserve [Line Items]
Reduction in force	56	0	56	0
Facility exit charges	0	0	0	0
Customer Strategy Services
Restructuring Cost and Reserve [Line Items]
Reduction in force	0	0	0	0
Facility exit charges	0	0	0	0
Corporate
Restructuring Cost and Reserve [Line Items]
Reduction in force	200	0	511	0
Facility exit charges	$ 0	$ 0	$ 0	$ 0

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities
Net income	$ 23,065	$ 34,595
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation & Amortization	20,345	23,021
Amortization of contract acquisition costs	508	1,009
Amortization of debt issuance costs	347	290
Imputed interest expense	373	531
Provision for doubtful accounts	48	0
Loss (gain) on disposal of assets	137	(696)
Impairment losses	2,797	230
Deferred income taxes	(8,097)	8,076
Excess tax benefit from equity-based awards	(1,136)	(3,099)
Equity-based compensation expense	6,845	7,715
(Gain) loss on foreign currency derivatives	(963)	531
Changes in assets and liabilities, net of acquisitions:
Accounts receivable	1,095	5,908
Prepaids and other assets	(11,979)	(6,317)
Accounts payable and accrued expenses	13,453	(17,950)
Deferred revenue and other liabilities	1,819	(5,863)
Net cash provided by operating activities	48,657	47,981
Cash flows from investing activities
Proceeds from grant for property, plant and equipment	110	0
Proceeds from sale of long-lived assets	225	2,328
Purchases of property, plant and equipment, net of acquisitions	(17,478)	(12,362)
Acquisitions, net of cash acquired of $1,373 and $14, respectively	(4,809)	(43,884)
Net cash used in investing activities	(21,952)	(53,918)
Cash flows from financing activities
Proceeds from line of credit	515,950	406,100
Payments on line of credit	(501,950)	(288,100)
Proceeds from other debt	6,821	0
Payments on other debt	(1,390)	(1,088)
Dividends distributed to noncontrolling interest	(720)	(1,859)
Proceeds from exercise of stock options	770	3,673
Excess tax benefit from equity-based awards	1,136	3,099
Purchase of treasury stock	(40,732)	(43,748)
Payments of debt issuance costs	(432)	(22)
Net cash (used in) provided by financing activities	(20,547)	78,055
Effect of exchange rate changes on cash and cash equivalents	8,049	2,783
Increase in cash and cash equivalents	14,207	74,901
Cash and cash equivalents, beginning of period	156,371	119,385
Cash and cash equivalents, end of period	170,578	194,286
Supplemental disclosures
Cash paid for interest	1,706	2,026
Cash paid for income taxes	8,546	14,875
Non-cash investing and financing activities
Purchases of equipment through financing arrangements	6,100	0
Grant income credited to property plant and equipment	110	0
Landlord incentives credited to deferred rent	$ 604	$ 0

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DERIVATIVES (OCI ROLLFORWARD) (DETAILS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
DERIVATIVES [ABSTRACT]
Aggregate unrealized net gain/(loss) at beginning of year	$ 1,245	$ 5,634	$ (5,852)	$ 7,091
Add: Net gain/(loss) from change in fair value of cash flow hedges	2,024	(3,189)	9,095	(2,431)
Less: Net (gain)/loss reclassified to earnings from effective hedges	(305)	(1,934)	(279)	(4,149)
Aggregate unrealized net gain/(loss) at end of period	$ 2,964	$ 511	$ 2,964	$ 511

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ACQUISITIONS (TABLES)

0 Months Ended

2 Months Ended

5 Months Ended

Jan. 02, 2012

Onstate [Member]

Feb. 27, 2012

Iknowtion [Member]

May 28, 2011

Eloyalty [Member]

Business Acquisition [Line Items]

Schedule of Assets Acquired and Liabilities Assumed

		Acquisition Date Fair Value
Cash		$	36
Accounts Receivable			68
Property, plant and equipment			33
Software			2,100
Goodwill			1,132
			3,369
Accounts payable			93
			93
	Total purchase price	$	3,276

		Preliminary Estimates of Acquisition Date Fair Value
Cash		$	1,337
Accounts Receivable			1,792
Property, plant and equipment			161
Other assets			90
Customer relationships			1,400
Goodwill			447
			5,227
Accounts payable			18
Accrued expenses			19
Other			164
			201
Noncontrolling interest			941
	Total purchase price	$	4,085

		Acquisition Date Fair Value
Cash		$	14
Accounts Receivable			7,702
Prepaid assets - cost deferrals			14,726
Property, plant and equipment			897
Other assets			869
Deferred tax asset			3,735
Customer relationships			11,700
Software			1,200
Noncompete agreements			900
Trade name			3,300
Consulting services backlog			500
Goodwill			18,516
			64,059
Accounts payable			2,156
Accrued expenses			1,211
Deferred revenue			22,525
Other			192
			26,084
	Total purchase price	$	37,975

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DERIVATIVES (NOTIONAL TABLE) (DETAILS) In Thousands, unless otherwise specified			6 Months Ended				6 Months Ended				6 Months Ended						6 Months Ended				6 Months Ended						6 Months Ended
	Jun. 30, 2012 USD ($)	Dec. 31, 2011 USD ($)	Jun. 30, 2012 Forwards Canadian Dollar USD ($)	Jun. 30, 2012 Forwards Canadian Dollar CAD	Dec. 31, 2011 Forwards Canadian Dollar USD ($)	Dec. 31, 2011 Forwards Canadian Dollar CAD	Jun. 30, 2012 Forwards Costa Rican Colon USD ($)	Jun. 30, 2012 Forwards Costa Rican Colon CRC	Dec. 31, 2011 Forwards Costa Rican Colon USD ($)	Dec. 31, 2011 Forwards Costa Rican Colon CRC	Jun. 30, 2012 Forwards Philippine Peso USD ($)		Jun. 30, 2012 Forwards Philippine Peso PHP	Dec. 31, 2011 Forwards Philippine Peso USD ($)		Dec. 31, 2011 Forwards Philippine Peso PHP	Jun. 30, 2012 Forwards Mexican Peso USD ($)	Jun. 30, 2012 Forwards Mexican Peso MXN	Dec. 31, 2011 Forwards Mexican Peso USD ($)	Dec. 31, 2011 Forwards Mexican Peso MXN	Jun. 30, 2012 Forwards British Pound Sterling USD ($)		Jun. 30, 2012 Forwards British Pound Sterling GBP (£)	Dec. 31, 2011 Forwards British Pound Sterling USD ($)		Dec. 31, 2011 Forwards British Pound Sterling GBP (£)	Jun. 30, 2012 Forwards New Zealand Dollars USD ($)	Jun. 30, 2012 Forwards New Zealand Dollars NZD	Jun. 30, 2012 Collars Mexican Peso USD ($)		Jun. 30, 2012 Collars Mexican Peso MXN	Dec. 31, 2011 Collars Mexican Peso USD ($)		Dec. 31, 2011 Collars Mexican Peso MXN
Derivative [Line Items]
Local Currency Notional Amount				15,250		25,750		500,000		2,000,000			11,270,000			13,304,000		1,322,500		1,081,000			£ 6,162			£ 8,808		726			70,149			140,298
U.S. Dollar Notional Amount	$ 383,418	$ 436,929	$ 14,740		$ 25,137		$ 963		$ 3,874		$ 255,746	[1]		$ 301,361	[1]		$ 95,791		$ 80,735		$ 9,628	[2]		$ 13,822	[2]		$ 550		$ 6,000	[3]		$ 12,000	[4]
% Maturing in the Next 12 Months			78.70%	78.70%			100.00%	100.00%			56.90%		56.90%				50.50%	50.50%			66.60%		66.60%				100.00%	100.00%	100.00%		100.00%
Contracts Maturing Through			March 2014	March 2014			August 2012	August 2012			December 2015		December 2015				December 2015	December 2015			June 2014		June 2014				June 2013	June 2013	December 2012		December 2012

[1] Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.

[2] Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.

[3] The Mexican peso collars include call options with a floor total of MXN 70.1 million and put options with a cap total of MXN (81.8 million) as of June 30, 2012.

[4] The Mexican peso collars include call options with a floor total of MXN 140.3 million and put options with a cap total of MXN (157.0 million) as of December 31, 2011.

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GOODWILL (TABLES)

6 Months Ended

Jun. 30, 2012

GOODWILL [ABSTRACT]

Schedule of Goodwill Rollforward

		December 31, 2011		Acquisitions		Impairments		Effect of Foreign Currency		June 30,2012
Customer Management Services		$	20,594	$	-	$	-	$	(366)	$	20,228
Customer Growth Services			24,439		-		-		-		24,439
Customer Technology Services			18,516		1,132		-		-		19,648
Customer Strategy Services			7,295		447		-		-		7,742
	Total	$	70,844	$	1,579	$	-	$	(366)	$	72,057

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Consolidated Statements of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from investing activities
Acquisitions, net of cash acquired of $1,373 and $14, respectively	$ 1,373	$ 14

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Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Stockholders' equity
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares outstanding	54,555,105	56,635,319
Treasury stock, shares	27,497,148	25,416,934

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2012

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

(10)       COMMITMENTS AND CONTINGENCIES

Credit Facility

On October 1, 2010, the Company entered into a five-year, $350.0 million revolving line of credit agreement (the “Credit Agreement”) with a syndicate of lenders led by KeyBank National Association, Wells Fargo Bank, National Association, Bank of America, N.A., BBVA Compass, and JPMorgan Chase Bank, N.A. On March 27, 2012, the Company amended the Credit Agreement by increasing the aggregate commitment by $150.0 million to $500.0 million and revising certain definitions.

The Company primarily utilizesits Credit Agreement to fund working capital, general operations, stock repurchasesand other strategic activities, such as the acquisitions described in Note2. As of June 30, 2012 and December 31, 2011, the Company had borrowings of $78.0million and $64.0 million, respectively, under our Credit Agreement, and our average daily utilization was $137.4 million and $83.9 million for the six months ended June 30, 2012 and 2011, respectively. After consideration for issued letters of credit under the Credit Agreement, totaling $4.4 million, our remaining borrowing capacity was $417.6 million as of June 30, 2012. As of June 30, 2012, the Companywas in compliance with all covenants and conditions under its Credit Agreement.

Letters of Credit

As of June 30, 2012, outstanding letters of credit under the Credit Agreement totaled $4.4 million and primarily guaranteed workers' compensation and other insurance related obligations. As of June 30, 2012, letters of credit and contract performance guarantees issued outside of the Credit Agreement totaled $1.1 million.

Guarantees

Indebtedness under the Credit Agreement is guaranteed by certain of the Company's present and future domestic subsidiaries.

Legal Proceedings

From time to time, the Company has been involved in claims and lawsuits, both as plaintiff and defendant, which arise in the ordinary course of business. Accruals for claims or lawsuits have been provided for to the extent that losses are deemed both probable and estimable. Although the ultimate outcome of these claims or lawsuits cannot be ascertained, on the basis of present information and advice received from counsel, the Company believes that the disposition or ultimate resolution of such claims or lawsuits will not have a material adverse effect on its financial position, cash flows or results of operations.

In 2009, the municipality of Sao Paolo, Brazil assessed the Company's Brazilian subsidiary a services tax on certain equipment rental income earned in 2004 and 2005.  In March 2011, the Company's Brazilian subsidiary filed a tax annulment action in the Sao Paolo municipal court to challenge the assessment of services taxes on rental income. Further, in order to halt the possibility of any further interest being charged against the alleged due tax assessments, the Company's Brazilian subsidiary posted a judicial deposit of 6.9 million Brazilian reais (approximately $4.1 million USD) in the first quarter of 2012.  In the second quarter of 2012, the Sao Paolo municipal court issued a ruling in favor of Sao Paolo on this tax annulment action, which ruling the Company's Brazilian subsidiary has challenged. The Company's Brazilian subsidiary filed this challenge in the state court of Sao Paolo which is not bound by the decision of the Sao Paolo municipal court and where a ruling is not expected for the next one to two years. Based on an opinion received from legal counsel in Brazil, the Company believes that (i) the ruling issued by the Sao Paolo municipal court was incorrect and in contravention of a Brazil Supreme Court ruling concerning the invalidity of services taxes on rental income, (ii) the Brazilian subsidiary has valid defenses against the assessed services taxes and (iii) that payment of these services taxes is not probable. Accordingly, the Company has not recorded an expense in the three months ended June 30, 2012 for the Sao Paolo services tax assessment.

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Document and Entity Information (USD $)	6 Months Ended
	Jun. 30, 2012	Jul. 26, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	TELETECH HOLDINGS INC
Entity Central Index Key	0001013880
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float	$ 352,854,512
Entity Common Stock, Shares Outstanding		54,535,438

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NONCONTROLLING INTEREST

6 Months Ended

Jun. 30, 2012

NONCONTROLLING INTEREST [Abstract]

NONCONTROLLING INTEREST

(11)       NONCONTROLLING INTEREST

The following table reconciles equity attributable to noncontrolling interest (amounts in thousands):

		Six Months Ended June 30,
		2012		2011
Noncontrolling interest, January 1		$	11,260	$	11,092
Acquisition of noncontrolling interest			941		-
Net income attributable to noncontrolling interest			1,861		1,905
Dividends distributed to noncontrolling interest			(720)		(1,859)
Foreign currency translation adjustments			47		2
	Noncontrolling interest, June 30	$	13,389	$	11,140

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Statements of Comprehensive Income
Revenue	$ 288,798	$ 293,636	$ 581,452	$ 574,615
Operating expenses
Cost of services (exclusive of depreciation and amortization presented separately below)	209,121	210,358	421,016	409,479
Selling, general and administrative	45,709	47,283	93,844	95,084
Depreciation & Amortization	10,229	11,423	20,345	23,021
Restructuring charges, net	16,296	(57)	18,254	682
Impairment losses	997	0	2,797	230
Total operating expenses	282,352	269,007	556,256	528,496
Income from operations	6,446	24,629	25,196	46,119
Other income (expense)
Interest income	695	720	1,455	1,386
Interest expense	(1,583)	(1,291)	(2,681)	(2,671)
Other income, net	(582)	(705)	(324)	(261)
Total other income (expense)	(1,470)	(1,276)	(1,550)	(1,546)
Income before income taxes	4,976	23,353	23,646	44,573
Benefit (Provision) for income taxes	1,272	(129)	(581)	(9,978)
Net income	6,248	23,224	23,065	34,595
Net income attributable to noncontrolling interest	(925)	(1,007)	(1,861)	(1,905)
Net income attributable to TeleTech stockholders	5,323	22,217	21,204	32,690
Other comprehensive income (loss)
Foreign currency translation adjustments	(5,530)	1,835	3,252	6,881
Derivative valuation, gross	2,719	(8,193)	14,390	(10,480)
Derivative valuation, tax effect	(1,000)	3,070	(5,574)	3,900
Other	262	111	650	221
Total other comprehensive income	(3,549)	(3,177)	12,718	522
Total comprehensive income	2,699	20,047	35,783	35,117
Comprehensive income attributable to noncontrolling interest	(960)	(956)	(1,908)	(1,907)
Comprehensive income attributable to TeleTech stockholders	$ 1,739	$ 19,091	$ 33,875	$ 33,210
Weighted average shares outstanding
Basic	55,125	56,713	55,809	56,949
Diluted	55,712	57,974	56,558	58,376
Net income per share attributable to TeleTech stockholders
Basic	$ 0.10	$ 0.39	$ 0.38	$ 0.57
Diluted	$ 0.10	$ 0.38	$ 0.37	$ 0.56

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GOODWILL

6 Months Ended

Jun. 30, 2012

GOODWILL [ABSTRACT]

GOODWILL

(5)       GOODWILL

Goodwill consisted of the following (amounts in thousands):

		December 31, 2011		Acquisitions		Impairments		Effect of Foreign Currency		June 30,2012
Customer Management Services		$	20,594	$	-	$	-	$	(366)	$	20,228
Customer Growth Services			24,439		-		-		-		24,439
Customer Technology Services			18,516		1,132		-		-		19,648
Customer Strategy Services			7,295		447		-		-		7,742
	Total	$	70,844	$	1,579	$	-	$	(366)	$	72,057

The Company performs a goodwill impairment test on at least an annual basis. The Company conducts its annual goodwill impairment test during the fourth quarter, or more frequently, if indicators of impairment exist. During the quarter ended June 30, 2012, the Company assessed whether any such indicators of impairment existedand concludedthat there were none.

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SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS

6 Months Ended

Jun. 30, 2012

SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS [Abstract]

SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS

(4)       SIGNIFICANT CLIENTS and other concentrations

The Company did not have any clients that contributed in excess of 10% of total revenue for thethree or six months ended June 30, 2012 or 2011.

The loss of one or more of its significant clients could have a material adverse effect on the Company's business, operating results, or financial condition. The Company does not require collateral from its clients. To limit the Company's credit risk, management performs periodic credit evaluations of its clients and maintains allowances for uncollectible accounts and may require pre-payment for services. Although the Company is impacted by economic conditions in various industry segments, management does not believe significant credit risk existed as of June 30, 2012.

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SEGMENT INFORMATION (TABLES)

6 Months Ended

Jun. 30, 2012

SEGMENT INFORMATION [ABSTRACT]

Schedule of Segment Selected Financial Data

Three Months Ended June 30, 2012
			Gross Revenue		Intersegment Sales		Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services		$	229,401	$	-	$	229,401	$	5,890	$	28,563
Customer Growth Services			24,409		-		24,409		631		4,212
Customer Technology Services			25,578		(622)		24,956		678		4,103
Customer Strategy Services			10,347		(315)		10,032		341		316
	Total segments		289,735		(937)		288,798		7,540		37,194
Corporate			-		-		-		2,689		(30,748)
	Total	$	289,735	$	(937)	$	288,798	$	10,229	$	6,446
Three Months Ended June 30, 2011
			Gross Revenue		Intersegment Sales		Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services		$	248,207	$	-	$	248,207	$	7,305	$	49,588
Customer Growth Services			23,483		-		23,483		766		4,594
Customer Technology Services			11,660		-		11,660		448		3,156
Customer Strategy Services			10,286		-		10,286		309		1,309
	Total segments		293,636		-		293,636		8,828		58,647
Corporate			-		-		-		2,595		(34,018)
	Total	$	293,636	$	-	$	293,636	$	11,423	$	24,629
Six Months Ended June 30, 2012
			Gross Revenue		Intersegment Sales		Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services		$	464,277	$	-	$	464,277	$	12,030	$	74,269
Customer Growth Services			47,173		-		47,173		1,196		5,291
Customer Technology Services			52,062		(1,553)		50,509		1,465		7,808
Customer Strategy Services			20,709		(1,216)		19,493		690		847
	Total segments		584,221		(2,769)		581,452		15,381		88,215
Corporate			-		-		-		4,964		(63,019)
	Total	$	584,221	$	(2,769)	$	581,452	$	20,345	$	25,196
Six Months Ended June 30, 2011
			Gross Revenue		Intersegment Sales		Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services		$	494,280	$	-	$	494,280	$	15,736	$	97,839
Customer Growth Services			45,626		-		45,626		1,552		7,576
Customer Technology Services			16,317		-		16,317		517		5,868
Customer Strategy Services			18,392		-		18,392		607		1,773
	Total segments		574,615		-		574,615		18,412		113,056
Corporate			-		-		-		4,609		(66,937)
	Total	$	574,615	$	-	$	574,615	$	23,021	$	46,119

			Three Months Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Capital Expenditures
	Customer Management Services		$	7,336	$	4,958	$	12,982	$	7,079
	Customer Growth Services			524		94		893		200
	Customer Technology Services			375		45		701		115
	Customer Strategy Services			18		-		84		138
	Corporate			2,741		3,395		2,818		4,830
		Total	$	10,994	$	8,492	$	17,478	$	12,362
			June 30, 2012		December 31, 2011
Total Assets
	Customer Management Services		$	496,401	$	479,818
	Customer Growth Services			46,241		50,950
	Customer Technology Services			77,865		70,745
	Customer Strategy Services			50,339		42,882
	Corporate			114,106		102,583
		Total	$	784,952	$	746,978
			June 30, 2012		December 31, 2011
Goodwill
	Customer Management Services		$	20,228	$	20,594
	Customer Growth Services			24,439		24,439
	Customer Technology Services			19,648		18,516
	Customer Strategy Services			7,742		7,295
		Total	$	72,057	$	70,844

Schedule of Revenue by Geographic Area

			Three Months Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Revenue
	United States		$	111,857	$	94,184	$	222,433	$	178,813
	Philippines			83,336		85,519		162,002		169,026
	Latin America			46,259		53,066		94,155		108,664
	Europe / Middle East / Africa			33,085		44,013		71,450		83,771
	Canada			10,288		13,047		23,241		25,845
	Asia Pacific			3,973		3,807		8,171		8,496
		Total	$	288,798	$	293,636	$	581,452	$	574,615

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NET INCOME PER SHARE

6 Months Ended

Jun. 30, 2012

Net income per share attributable to TeleTech stockholders

NET INCOME PER SHARE

(12)       NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted shares for the periods indicated (amounts in thousands):

				Three Months Ended June 30,		Six Months Ended June 30,
				2012	2011	2012	2011
Shares used in basic earnings per share calculation				55,125	56,713	55,809	56,949
	Effect of dilutive securities:
		Stock options		359	832	379	891
		Restricted stock units		228	429	370	536
		Performance-based restricted stock units		-	-	-	-
			Total effects of dilutive securities	587	1,261	749	1,427
Shares used in dilutive earnings per share calculation				55,712	57,974	56,558	58,376

For the three months ended June 30, 2012 and 2011, options to purchase 0.1 million and 0.1 million shares of common stock, respectively, were outstanding, but not included in the computation of diluted net income per share because the exercise price exceeded the value of the shares and the effect would have been anti–dilutive. For the six months ended June 30, 2012 and 2011, options to purchase 0.1 million and 0.1 million shares of common stock, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive. For the three months ended June 30, 2012 and 2011, restricted stock units (“RSUs”) of 1.3 million and 0.6 million, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive.For the six months ended June 30, 2012 and 2011, RSUs of 1.0 million and 0.6 million, respectively, were outstanding, but not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

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INCOME TAXES

6 Months Ended

Jun. 30, 2012

INCOME TAXES [Abstract]

INCOME TAXES

(8)       INCOME TAXES

The Company accounts for income taxes in accordance with the accounting literature forincome taxes, which requires recognition of deferred tax assets and liabilities for the expected future income tax consequences of transactions that have been included in the Consolidated Financial Statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. Quarterly, the Company assesses the likelihood that its net deferred tax assets will be recovered. Based on the weight of all available evidence, both positive and negative, the Company records a valuation allowance against deferred tax assets when it is more-likely-than-not that a future tax benefit will not be realized.

On February 20, 2011, the Company received notice of an adverse decision by the Canadian Revenue Agency (“CRA”) in regards to the Company's attempt to recover taxes paid to Canada with respect to the years 2001 and 2002. In 2005, through the Competent Authority process, the Company sought relief under the United States-Canada Income Tax Convention for avoidance of double taxation arising from adjustments to the taxable income originally reported to these jurisdictions. Consistent with accounting for tax positions that no longer meet the recognition criteria, the Company derecognized income tax positions totaling $8.6 million through income tax expense in the first quarter of 2011. The Company continues to believe in the merits of its claim for which it sought relief from double taxation through the Competent Authority process. In response to the February 2011 notice, the Company has filed for Judicial Review in the Federal Court of Canada seeking a writ of mandamus to compel the CRA to accept the Company's application for Competent Authority consideration.

On July 25, 2012 the Company entered into a unilateral Advance Pricing Agreement (“APA”) with the Australian Tax Office (“ATO”) that covers the intercompany transfer price TeleTech Australia will pay affiliates operating in other tax jurisdictions for subcontracted services. The agreement will preclude the ATO from making a transfer pricingadjustment to transactions within the scope of this agreement. This agreement is effective for five years beginningJanuary 1, 2011. During the period January 1, 2011 through June 30, 2012 TeleTech Australia recordedpayments for services performed by affiliates outside Australia according to intercompany service agreements in effect atthe time and subsequently measured the tax benefit related to these tax positions in accordance with accounting for uncertain tax positions. Based on the APA, the Company nowhas certainty as to the amount of tax benefit related to these intercompany transactions and willrecord a tax benefit of $3.9 million in the third quarter of 2012. Approximately $1.9 million of this benefit had beenpreviously accounted for as an uncertain tax position based on the most probable outcome. In addition, the Company is also in the final stages ofnegotiating a unilateral APA with the New Zealand Inland Revenue office covering similartransactions and time periods. Although there can be no guarantee that such negotiations will result in anagreement, should such an agreement be signed, the Company would recognize an additional $1.3 million in taxbenefit.

As of June 30, 2012, the Company had $67.9 million of gross deferred tax assets.After a $12.6 million valuation allowance and deferred tax liabilities of $4.9 million, the Company has $50.4 million of net deferred tax assets related to the U.S. and international tax jurisdictions whose recoverability is dependent upon future profitability.

The effective tax rate for the three and six months ended June 30, 2012 was (25.6)% and 2.5%, respectively. The effective tax rate during these periods was influenced by the distribution of earnings in international jurisdictions currently under an income tax holiday and the $17.3 million and $21.1 million in restructuring and impairment expenses and the income tax benefit related to these incremental expenses. The effective tax rate for the three and six months ended June 30, 2011 was 0.6% and 22.4%, respectively. The effective tax during these periods was influenced by the additional expense related to the adverse decision by the Canada Revenue Agency regarding the Company's request from relief from double taxation and the additional benefit related to the Company's mediated settlement with the IRS related to U.S. tax refund claims.

The Company is currently under audit of income taxes in the Philippines for 2008. Although the outcome of examinations by taxing authorities are always uncertain, it is the opinion of management that the resolution of these audits will not have a material effect on the Company's Consolidated Financial Statements.

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DERIVATIVES

6 Months Ended

Jun. 30, 2012

DERIVATIVES [ABSTRACT]

DERIVATIVES

(6)       DERIVATIVES

Cash Flow Hedges

The Company enters into foreign exchange and interest rate related derivatives. Foreign exchange derivatives entered into consist of forward and option contracts to reduce the Company's exposure to foreign currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. Interest rate derivatives consist of interest rate swaps to reduce the Company's exposure to interest rate fluctuations associated with its variable rate debt. Upon proper qualification, these contracts are designated as cash flow hedges. It is the Company's policy to only enter into derivative contracts with investment grade counterparty financial institutions, and correspondingly, the fair value of derivative assets consider, among other factors, the creditworthiness of these counterparties. Conversely, the fair value of derivative liabilities reflects the Company's creditworthiness. As of June 30, 2012, the Company has not experienced, nor does it anticipate, any issues related to derivative counterparty defaults. The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the three and six months ended June 30, 2012 and 2011 (amounts in thousands and net of tax):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Aggregate unrealized net gain (loss) at beginning of period	$	1,245	$	5,634	$	(5,852)	$	7,091
Add: Net gain/(loss) from change in fair value of cash flow hedges		2,024		(3,189)		9,095		(2,431)
Less: Net (gain)/loss reclassified to earnings from effective hedges		(305)		(1,934)		(279)		(4,149)
Aggregate unrealized net gain (loss) at end of period	$	2,964	$	511	$	2,964	$	511

The Company's foreign exchange cash flow hedging instruments as of June 30, 2012 and December 31, 2011 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts unless noted otherwise.

As of June 30, 2012	Local Currency Notional Amount	U.S. Dollar Notional Amount			% Maturing in the Next 12 Months			Contracts Maturing Through
Canadian Dollar	15,250	$	14,740			78.7	%	March 2014
Costa Rican Colon	500,000		963			100.0	%	August 2012
Philippine Peso	11,270,000		255,746	(1)		56.9	%	December 2015
Mexican Peso (Forwards)	1,322,500		95,791			50.5	%	December 2015
Mexican Peso (Collars)	70,149		6,000	(3)		100.0	%	December 2012
British Pound Sterling	6,162		9,628	(2)		66.6	%	June 2014
New Zealand Dollars	726		550			100.0	%	June 2013
		$	383,418

As of December 31, 2011	Local Currency Notional Amount	U.S. Dollar Notional Amount
Canadian Dollar	25,750	$	25,137
Costa Rican Colon	2,000,000		3,874
Philippine Peso	13,304,000		301,361	(1)
Mexican Peso (Forwards)	1,081,000		80,735
Mexican Peso (Collars)	140,298		12,000	(4)
British Pound Sterling	8,808		13,822	(2)
		$	436,929

(1)Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.

(2)Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on June 30, 2012 and December 31, 2011.

(3)The Mexican peso collars include call options with a floor total of MXN 70.1 million and put options with a cap total of MXN (81.8 million) as of June 30, 2012.

(4)The Mexican peso collars include call options with a floor total of MXN 140.3 million and put options with a cap total of MXN (157.0 million) as of December 31, 2011.

The Company's interest rate swap arrangements as of June 30, 2012 and December 31, 2011 were as follows:

	Notional Amount (millions)		Variable Rate Received	Fixed Rate Paid			Contract Commencement Date	Contract Maturity Date
As of June 30, 2012	$	25.0	1 - month LIBOR		2.55	%	April 2012	April 2016
		15.0	1 - month LIBOR		3.14	%	May 2012	May 2017
	$	40.0
As of December 31, 2011	$	25.0	1 - month LIBOR		2.55	%	April 2012	April 2016
		15.0	1 - month LIBOR		3.14	%	May 2012	May 2017
	$	40.0

Fair Value Hedges

The Company enters into foreign exchange forward contracts to economically hedge against foreign currency exchange gains and losses on certain receivables and payables of the Company's foreign operations. Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings in Other income (expense), net. As of June 30, 2012 and December 31, 2011 the total notional amount of the Company's forward contracts used as fair value hedges were $111.3million and $49.8 million, respectively.

Embedded Derivatives

In addition to hedging activities, the Company's foreign subsidiary in Argentinawas party to U.S. dollar denominated lease contracts which the Company determined contain embedded derivatives. As such, the Company bifurcated the embedded derivative features of the lease contracts and valued these features as foreign currency derivatives.As of June 30, 2012, the fair value of the embedded derivatives was $0.3 million and was included in Other current liabilities and Other long-term liabilities in the accompanying Consolidated Balance Sheets as shown in the table below.

Derivative Valuation and Settlements

The Company's derivatives as of June 30, 2012 and December 31, 2011 were as follows (amounts in thousands):

		June 30, 2012
		Designated as Hedging Instruments				Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Leases
Derivative classification:		Cash Flow		Cash Flow		Fair Value		Embedded Derivative
Fair value and location of derivative in the
	Consolidated Balance Sheet:
Prepaids and other current assets		$	6,288	$	-	$	900	$	-
Other long-term assets			4,140		-		-		-
Other current liabilities			(2,047)		(997)		-		(101)
Other long-term liabilities			(552)		(1,877)		-		(165)
	Total fair value of derivatives, net	$	7,829	$	(2,874)	$	900	$	(266)
		December 31, 2011
		Designated as Hedging Instruments				Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Leases
Derivative classification:		Cash Flow		Cash Flow		Fair Value		Embedded Derivative
Fair value and location of derivative in
	the Consolidated Balance Sheet:
Prepaids and other current assets		$	2,325	$	-	$	12	$	-
Other long-term assets			1,119		-		-		-
Other current liabilities			(7,828)		-		(341)		-
Other long-term liabilities			(2,786)		(2,263)		-		-
	Total fair value of derivatives, net	$	(7,170)	$	(2,263)	$	(329)	$	-

The effects of derivative instruments on the Consolidated Statements of Comprehensive Income for the three months ended June 30, 2012 and 2011 were as follows (amounts in thousands):

		Three Months Ended June 30,
		2012				2011
		Designated as Hedging Instruments				Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Interest Rate
Derivative classification:		Cash Flow		Cash Flow		Cash Flow		Cash Flow
Amount of gain or (loss) recognized in other
	comprehensive income - effective portion, net of tax:	$	2,337	$	(313)	$	(2,673)	$	(516)
Amount and location of net gain or (loss) reclassified
	from accumulated OCI to income - effective portion:
Revenue		$	692	$	-	$	3,224	$	-
Interest expense			-		(183)		-		-

		Three Months Ended June 30,
		2012						2011
		Not Designated as Hedging Instruments						Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange				Leases		Foreign Exchange				Leases
Derivative classification:		Option and Forward Contracts		Fair Value		Embedded Derivative		Option and Forward Contracts		Fair Value		Embedded Derivative
Amount and location of net gain or (loss) recognized in the
	Consolidated Statement of Comprehensive Income:
Costs of services		$	-	$	-	$	(266)	$	-	$	-	$	78
Other income (expense), net		$	-	$	1,686	$	-	$	-	$	(207)	$	-

The effects of derivative instruments on the Consolidated Statements of Comprehensive Incomefor the six months ended June 30, 2012 and 2011 were as follows (amounts in thousands):

		Six Months Ended June 30,
		2012				2011
		Designated as Hedging Instruments				Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Interest Rate
Derivative classification:		Cash Flow		Cash Flow		Cash Flow		Cash Flow
Amount of gain or (loss) recognized in other
	comprehensive income - effective portion, net of tax:	$	9,571	$	(476)	$	(2,104)	$	(327)
Amount and location of net gain or (loss) reclassified
	from accumulated OCI to income - effective portion:
Revenue		$	649	$	-	$	6,915	$	-
Interest expense		$	-	$	(183)	$	-	$	-

		Six Months Ended June 30,
		2012						2011
		Not Designated as Hedging Instruments						Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange				Leases		Foreign Exchange				Leases
Derivative classification:		Option and Forward Contracts		Fair Value		Embedded Derivative		Option and Forward Contracts		Fair Value		Embedded Derivative
Amount and location of net gain or (loss) recognized in the
	Consolidated Statement of Comprehensive Income:
Costs of services		$	-	$	-	$	(266)	$	-	$	-	$	122
Other income (expense), net		$	-	$	3,855	$	-	$	-	$	503	$	-

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FAIR VALUE

6 Months Ended

Jun. 30, 2012

FAIR VALUE [Abstract]

FAIR VALUE

(7)       FAIR VALUE

The authoritative guidance forfair value measurementsestablishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The following presents information as of June 30, 2012 and December 31, 2011for the Company's assets and liabilities required to be measured at fair value on a recurring basis, as well as the fair value hierarchy used to determine their fair value.

Accounts Receivable and Payable- The amounts recorded in the accompanying balance sheets approximate fair value because of their short-term nature.

Debt-The Company's debt consists primarily of the Company's Credit Agreement, which permits floating-rate borrowings based upon the current Prime Rate or LIBOR plus a credit spread as determined by the Company's leverage ratio calculation (as defined in the Credit Agreement). As of June 30, 2012 and December 31, 2011, the Company had $78.0 million and $64.0 million, respectively, of borrowings outstanding under the Credit Agreement. During the three and six months ended June 30, 2012outstanding borrowings accrued interest at an average rate of1.6% and 1.6% per annum, respectively, excluding unused commitment fees. The amounts recorded in the accompanying balance sheets approximate fair value due to the variable nature of the debt.

Derivatives -Net derivative assets (liabilities) are measured at fair value on a recurring basis.The portfolio is valued using models based on market observable inputs, including both forward and spot foreign exchange rates, interest rates,implied volatility, and counterparty credit risk, including the ability of each party to execute its obligations under the contract. As of June 30, 2012, credit risk did not materially change the fair value of the Company's derivative contracts.

The following is a summary of the Company's fair value measurements for its net derivative assets (liabilities) as of June 30, 2012 and December 31, 2011 (amounts in thousands):

As of June 30, 2012
		Fair Value Measurements Using
		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
		(Level 1)		(Level 2)		(Level 3)		At Fair Value
Cash flow hedges		$	-	$	7,829	$	-	$	7,829
Interest rate swaps			-		(2,874)		-		(2,874)
Embedded derivatives			-		(266)		-		(266)
Fair value hedges			-		900		-		900
	Total net derivative asset (liability)	$	-	$	5,589	$	-	$	5,589
As of December 31, 2011
		Fair Value Measurements Using
		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
		(Level 1)		(Level 2)		(Level 3)		At Fair Value
Cash flow hedges		$	-	$	(7,170)	$	-	$	(7,170)
Interest rate swaps			-		(2,263)		-		(2,263)
Fair value hedges			-		(329)		-		(329)
	Total net derivative asset (liability)	$	-	$	(9,762)	$	-	$	(9,762)

The following is a summary of the Company's fair value measurements as of June 30, 2012 and December 31, 2011 (amounts in thousands):

As of June 30, 2012
			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
	Money market investments		$	-	$	400	$	-
	Derivative instruments, net			-		5,589		-
		Total assets	$	-	$	5,989	$	-
Liabilities
	Deferred compensation plan liability		$	-	$	(4,808)	$	-
	Derivative instruments, net			-		-		-
	Purchase price payable			-		-		(3,234)
		Total liabilities	$	-	$	(4,808)	$	(3,234)
As of December 31, 2011
			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
	Money market investments		$	-	$	507	$	-
	Derivative instruments, net			-		-		-
		Total assets	$	-	$	507	$	-
Liabilities
	Deferred compensation plan liability		$	-	$	(3,990)	$	-
	Derivative instruments, net			-		(9,762)		-
	Purchase price payable			-		-		(4,985)
		Total liabilities	$	-	$	(13,752)	$	(4,985)

Money Market Investments — The Company invests in various well-diversified money market funds which are managed by financial institutions. These money market funds are not publicly traded, but have historically been highly liquid. The value of the money market funds are determined by the banks based upon the funds' net asset values (“NAV”). All of the money market funds currently permit daily investments and redemptions at a $1.00 NAV.

Deferred Compensation Plan — The Company maintains a non-qualified deferred compensation plan structured as a Rabbi trust for certain eligible employees. Participants in the deferred compensation plan select from a menu of phantom investment options for their deferral dollars offered by the Company each year, which are based upon changes in value of complementary, defined market investments. The deferred compensation liability represents the combined values of market investments against which participant accounts are tracked.

Purchase Price Payable — The Company recorded a purchase price payable related to the acquisition of iKnowtion. The purchase price payable was recognized at fair value using a discounted cash flow approach and a discount rate of 21.0%. This measurement was based on significant inputs not observable in the market. The Company will record interest expense each period using the effective interest method until the future value of this purchase price payable reaches its expected future value of $4.3 million in 2016. Interest expense related to all recorded purchase price payables is included in Interest expense in the Consolidated Statements of Comprehensive Income.

The Company also had a future payable related to the purchase of PRG. As part of the PRG acquisition, the Company paidthe previously recognized purchase price payable of $5.0 million on March 1, 2012. The Company recorded interest expense each period using the effective interest rate method until the payable reachedthe $5.0 million payment.

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RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

6 Months Ended

Jun. 30, 2012

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract]

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

(9)       RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES

Restructuring Charges

During the three and six months ended June 30, 2012 and 2011, the Company undertook a number ofrestructuring activities primarily associated with reductions in the Company's capacity and workforce in both the Customer Management Services and Customer Growth Services segments to better align the capacity and workforce with current business needs.

During the second quarter of 2012, the Company made the decision to cease operations in Spain as a result of the termination of contracts with its clients. The Company has notified the employees and has commenced severance procedures as required under Spanish law. In connection with this decision, a severance liability was established as of June 30, 2012 for $13.9 million and was included in Other accrued expenses in the Consolidated Balance Sheets.

A summary of the expenses recorded in Restructuring, net in the accompanying Consolidated Statements of Comprehensive Incomefor the three and six months ended June 30, 2012 and 2011, respectively, is as follows (amounts in thousands):

			Three Months Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Reduction in force
	Customer Management Services		$	15,909	$	(57)	$	17,453	$	565
	Customer Growth Services			32		-		135		110
	Customer Technology Services			56		-		56		-
	Customer Strategy Services			-		-		-		-
	Corporate			200		-		511		-
		Total	$	16,197	$	(57)	$	18,155	$	675
			Three Months Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Facility exit charges
	Customer Management Services		$	99	$	-	$	99	$	7
	Customer Growth Services			-		-		-		-
	Customer Technology Services			-		-		-		-
	Customer Strategy Services			-		-		-		-
	Corporate			-		-		-		-
		Total	$	99	$	-	$	99	$	7

A rollforward of the activity in the Company's restructuring accruals is as follows (amounts in thousands):

		Closure of Delivery Centers		Reduction in Force		Total
Balance as of December 31, 2011		$	415	$	1,652	$	2,067
	Expense		99		18,155		18,254
	Payments		(139)		(3,269)		(3,408)
	Reversals		-		-		-
Balance as of June 30, 2012		$	375	$	16,538	$	16,913

The remaining restructuring accrualsare expected to be paid or extinguished during the next twelve months and are all classified as current liabilities within Other accrued expenses in the Consolidated Balance Sheet.

Impairment Losses

During each of the periods presented, the Company evaluated the recoverability of its leasehold improvement assets at certain delivery centers. An asset is considered to be impaired when the anticipated undiscounted future cash flows of an asset group are estimated to be less than the asset group's carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. To determine fair value, the Company used Level 3 inputs in its discounted cash flows analysis. Assumptions included the amount and timing of estimated future cash flows and assumed discount rates. During the three and six months ended June 30, 2012, the Company recognized $1.0 million of losses related to leasehold improvement assets in the Customer Management Services segment. During the three and six months ended June 30, 2011, the Company recognized zero and $0.2 million, respectively, of losses related to leasehold improvement assetsin the Customer Management Services segment.

During the first quarter of 2012, the Company elected to rebrand the Direct Alliance Corporation (“DAC”) subsidiary to Revana™. Based on this decision and management's intention not to use the DAC name on a go-forward basis, the future cash flows associated with the trade name indefinite-lived intangible asset that was established as part of the purchase price accounting of DAC in 2006 is less than the asset's carrying value. Thus the $1.8 million asset was impaired as of March 31, 2012. This expense was included in the Impairment losses in the Consolidated Statements of Comprehensive Income.

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GOODWILL (GOODWILL ROLLFORWARD) (DETAILS) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Goodwill [Line Items]
December 31, 2011	$ 70,844
Acquisitions	1,579
Impairments	0
Effect of Foreign Currency	(366)
June 30, 2012	72,057
Customer Management Services
Goodwill [Line Items]
December 31, 2011	20,594
Acquisitions	0
Impairments	0
Effect of Foreign Currency	(366)
June 30, 2012	20,228
Customer Growth Services
Goodwill [Line Items]
December 31, 2011	24,439
Acquisitions	0
Impairments	0
Effect of Foreign Currency	0
June 30, 2012	24,439
Customer Technology Services
Goodwill [Line Items]
December 31, 2011	18,516
Acquisitions	1,132
Impairments	0
Effect of Foreign Currency	0
June 30, 2012	19,648
Customer Strategy Services
Goodwill [Line Items]
December 31, 2011	7,295
Acquisitions	447
Impairments	0
Effect of Foreign Currency	0
June 30, 2012	$ 7,742

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NET INCOME PER SHARE (NARRATIVE) (DETAILS) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Options [Member]
Anti-dilutive options to purchase common stock [Line Items]
Anti-dilutive securities	0.1	0.1	0.1	0.1
Restricted Stock Units (RSUs) [Member]
Anti-dilutive options to purchase common stock [Line Items]
Anti-dilutive securities	1.3	0.6	1.0	0.6

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OVERVIEW AND BASIS OF PRESENTATION (POLICIES)

6 Months Ended

Jun. 30, 2012

OVERVIEW AND BASIS OF PRESENTATION [Abstract]

Basis of Presentation

Basis of Presentation

The Consolidated Financial Statements are comprised of the accounts of TeleTech, its wholly owned subsidiaries, its 55% equity owned subsidiary Percepta, LLC, its 80% interest inPeppers & Rogers Group (“PRG”) and its 80% interest in iKnowtion, LLC which was acquired on February 27, 2012 (see Note 2 for additional information). All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited Consolidated Financial Statements do not include all of the disclosures required by accounting principles generally accepted in the U.S. (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company as of June 30, 2012, and the consolidated results of operations and comprehensive income and cash flows of the Company for the three and six months ended June 30, 2012 and 2011. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

These unaudited Consolidated Financial Statements should be read in conjunction with the Company's audited Consolidated Financial Statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

Certain amounts for 2011 have been reclassified in the Consolidated Financial Statements to conform to the 2012 presentation.

Use of Estimates

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to derivatives and hedging activities, income taxes including the valuation allowance for deferred tax assets, self-insurance reserves, litigation reserves, restructuring reserves, allowance for doubtful accounts and valuation of goodwill, long-lived and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. In the three months ended June 30, 2012, the Company recorded a change in estimate which resulted in a decrease of $4.6 million to employee related expenses in connection with an authoritative ruling in Spain related to the legally required cost of living adjustment for our employees' salaries for the years 2010, 2011 and 2012.

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FAIR VALUE (TABLES)

6 Months Ended

Jun. 30, 2012

FAIR VALUE [Abstract]

Schedule of Fair Value Derivative Assets and Liabilities

As of June 30, 2012
		Fair Value Measurements Using
		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
		(Level 1)		(Level 2)		(Level 3)		At Fair Value
Cash flow hedges		$	-	$	7,829	$	-	$	7,829
Interest rate swaps			-		(2,874)		-		(2,874)
Embedded derivatives			-		(266)		-		(266)
Fair value hedges			-		900		-		900
	Total net derivative asset (liability)	$	-	$	5,589	$	-	$	5,589
As of December 31, 2011
		Fair Value Measurements Using
		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
		(Level 1)		(Level 2)		(Level 3)		At Fair Value
Cash flow hedges		$	-	$	(7,170)	$	-	$	(7,170)
Interest rate swaps			-		(2,263)		-		(2,263)
Fair value hedges			-		(329)		-		(329)
	Total net derivative asset (liability)	$	-	$	(9,762)	$	-	$	(9,762)

Schedule of Fair Value Assets and Liabilities

As of June 30, 2012
			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
	Money market investments		$	-	$	400	$	-
	Derivative instruments, net			-		5,589		-
		Total assets	$	-	$	5,989	$	-
Liabilities
	Deferred compensation plan liability		$	-	$	(4,808)	$	-
	Derivative instruments, net			-		-		-
	Purchase price payable			-		-		(3,234)
		Total liabilities	$	-	$	(4,808)	$	(3,234)
As of December 31, 2011
			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
	Money market investments		$	-	$	507	$	-
	Derivative instruments, net			-		-		-
		Total assets	$	-	$	507	$	-
Liabilities
	Deferred compensation plan liability		$	-	$	(3,990)	$	-
	Derivative instruments, net			-		(9,762)		-
	Purchase price payable			-		-		(4,985)
		Total liabilities	$	-	$	(13,752)	$	(4,985)

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NONCONTROLLING INTEREST (NCI ROLLFORWARD) (DETAILS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stockholders' Equity Attributable to Noncontrolling Interest
Noncontrolling interest, January 1			$ 11,260	$ 11,092
Acquisition of noncontrolling interest			941	0
Net income attributable to noncontrolling interest	925	1,007	1,861	1,905
Dividends distributed to noncontrolling interest			(720)	(1,859)
Foreign currency translation adjustments			47	2
Noncontrolling interest, June 30	$ 13,389	$ 11,140	$ 13,389	$ 11,140

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FAIR VALUE (DERIVATIVES TABLE) (DETAILS) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash flow hedges	$ 7,829	$ (7,170)
Interest rate swaps	(2,874)	(2,263)
Fair value hedges	900	(329)
Embedded derivatives	(266)
Total net derivative asset (liability)	5,589	(9,762)
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash flow hedges	0	0
Interest rate swaps	0	0
Fair value hedges	0	0
Embedded derivatives	0
Total net derivative asset (liability)	0	0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash flow hedges	7,829	(7,170)
Interest rate swaps	(2,874)	(2,263)
Fair value hedges	900	(329)
Embedded derivatives	(266)
Total net derivative asset (liability)	5,589	(9,762)
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Net Derivative Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash flow hedges	0	0
Interest rate swaps	0	0
Fair value hedges	0	0
Embedded derivatives	0
Total net derivative asset (liability)	$ 0	$ 0

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Consolidated Statement of Stockholders' Equity (USD $)	Total	Stockholders' Equity of the Company Preferred Stock [Member]	Stockholders' Equity of the Company Common Stock [Member]	Stockholders' Equity of the Company Treasury Stock [Member]	Stockholders' Equity of the Company Additional Paid-in Capital [Member]	Stockholders' Equity of the Company Accumulated Other Comprehensive Income (Loss) [Member]	Stockholders' Equity of the Company Retained Earnings [Member]	Noncontrolling Interest [Member]
Beginning balance,value at Dec. 31, 2011	$ 470,247,000	$ 0	$ 566,000	$ (357,267,000)	$ 350,386,000	$ (5,474,000)	$ 470,776,000	$ 11,260,000
Preferred stock beginning balance, share at Dec. 31, 2011	0	0
Common stock beginning balance, share at Dec. 31, 2011	56,635,319		56,635,000
Net income	23,065,000						21,204,000	1,861,000
Acquisition of noncontrolling interest	941,000							941,000
Dividends distributed to noncontrolling interest	(720,000)							(720,000)
Foreign currency translation adjustments	3,252,000					3,205,000		47,000
Derivatives valuation, net of tax	8,816,000					8,816,000
Vesting of restricted stock units issued out of treasury, share			475,000
Vesting of restricted stock units issued out of treasury, value	(3,824,000)		5,000	6,626,000	(10,455,000)
Exercise of stock options, share			63,000
Exercise of stock options, value	770,000		1,000	879,000	(110,000)
Excess tax benefit from equity-based awards	(648,000)				(648,000)
Equity-based compensation expense	6,845,000				6,845,000
Purchases of common stock, share			(2,618,000)
Purchases of common stock, value	(40,732,000)		(26,000)	(40,706,000)
Other	650,000					650,000
Ending balance,value at Jun. 30, 2012	$ 468,662,000	$ 0	$ 546,000	$ (390,468,000)	$ 346,018,000	$ 7,197,000	$ 491,980,000	$ 13,389,000
Preferred stock ending balance, share at Jun. 30, 2012	0	0
Common stock ending balance, share at Jun. 30, 2012	54,555,105		54,555,000

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2012

SEGMENT INFORMATION [ABSTRACT]

SEGMENT INFORMATION

(3)       SEGMENT INFORMATION

Effective January 1, 2012, the Company completed certain changes focused on streamlining the organization to more closely align the Company's reporting structure with its products and services and toincrease management accountability. Beginning in the first quarter of 2012, the Company will now report the following four segments:

• the Customer Management Services segment includes the customer experience delivery solutions which integrate innovative technology with highly-trained customer experience professionals to optimize the customer experience across all channels and all stages of the customer lifecycle from an onshore, offshore or work-from-home environment;
• the Customer Growth Services segment includes the technology-enabled sales and marketing business;
• the Customer Technology Services segment includes the hosted and managed technology offerings, including certain acquired assets of eLoyalty; and
• the Customer Strategy Services segment includes the customer experience strategy and data analytics offerings.

TeleTech revised previously reported segment information to conform to its new segments in effect as of January 1, 2012.

All intercompany transactions between the reported segments for the periods presented have been eliminated.

The following tables present certain financial data by segment (amounts in thousands):

Three Months Ended June 30, 2012
			Gross Revenue		Intersegment Sales		Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services		$	229,401	$	-	$	229,401	$	5,890	$	28,563
Customer Growth Services			24,409		-		24,409		631		4,212
Customer Technology Services			25,578		(622)		24,956		678		4,103
Customer Strategy Services			10,347		(315)		10,032		341		316
	Total segments		289,735		(937)		288,798		7,540		37,194
Corporate			-		-		-		2,689		(30,748)
	Total	$	289,735	$	(937)	$	288,798	$	10,229	$	6,446
Three Months Ended June 30, 2011
			Gross Revenue		Intersegment Sales		Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services		$	248,207	$	-	$	248,207	$	7,305	$	49,588
Customer Growth Services			23,483		-		23,483		766		4,594
Customer Technology Services			11,660		-		11,660		448		3,156
Customer Strategy Services			10,286		-		10,286		309		1,309
	Total segments		293,636		-		293,636		8,828		58,647
Corporate			-		-		-		2,595		(34,018)
	Total	$	293,636	$	-	$	293,636	$	11,423	$	24,629
Six Months Ended June 30, 2012
			Gross Revenue		Intersegment Sales		Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services		$	464,277	$	-	$	464,277	$	12,030	$	74,269
Customer Growth Services			47,173		-		47,173		1,196		5,291
Customer Technology Services			52,062		(1,553)		50,509		1,465		7,808
Customer Strategy Services			20,709		(1,216)		19,493		690		847
	Total segments		584,221		(2,769)		581,452		15,381		88,215
Corporate			-		-		-		4,964		(63,019)
	Total	$	584,221	$	(2,769)	$	581,452	$	20,345	$	25,196
Six Months Ended June 30, 2011
			Gross Revenue		Intersegment Sales		Net Revenue		Depreciation & Amortization		Income (Loss) from Operations
Customer Management Services		$	494,280	$	-	$	494,280	$	15,736	$	97,839
Customer Growth Services			45,626		-		45,626		1,552		7,576
Customer Technology Services			16,317		-		16,317		517		5,868
Customer Strategy Services			18,392		-		18,392		607		1,773
	Total segments		574,615		-		574,615		18,412		113,056
Corporate			-		-		-		4,609		(66,937)
	Total	$	574,615	$	-	$	574,615	$	23,021	$	46,119

			Three Months Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Capital Expenditures
	Customer Management Services		$	7,336	$	4,958	$	12,982	$	7,079
	Customer Growth Services			524		94		893		200
	Customer Technology Services			375		45		701		115
	Customer Strategy Services			18		-		84		138
	Corporate			2,741		3,395		2,818		4,830
		Total	$	10,994	$	8,492	$	17,478	$	12,362
			June 30, 2012		December 31, 2011
Total Assets
	Customer Management Services		$	496,401	$	479,818
	Customer Growth Services			46,241		50,950
	Customer Technology Services			77,865		70,745
	Customer Strategy Services			50,339		42,882
	Corporate			114,106		102,583
		Total	$	784,952	$	746,978
			June 30, 2012		December 31, 2011
Goodwill
	Customer Management Services		$	20,228	$	20,594
	Customer Growth Services			24,439		24,439
	Customer Technology Services			19,648		18,516
	Customer Strategy Services			7,742		7,295
		Total	$	72,057	$	70,844

The following table presents revenue based upon the geographic location where the services are provided (amounts in thousands):

			Three Months Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Revenue
	United States		$	111,857	$	94,184	$	222,433	$	178,813
	Philippines			83,336		85,519		162,002		169,026
	Latin America			46,259		53,066		94,155		108,664
	Europe / Middle East / Africa			33,085		44,013		71,450		83,771
	Canada			10,288		13,047		23,241		25,845
	Asia Pacific			3,973		3,807		8,171		8,496
		Total	$	288,798	$	293,636	$	581,452	$	574,615

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RESTRUCTURING CHARGES AND IMPAIRMENT (TABLES)

6 Months Ended

Jun. 30, 2012

RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES [Abstract]

Schedule of Restructuring Liabilities

			Three Months Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Reduction in force
	Customer Management Services		$	15,909	$	(57)	$	17,453	$	565
	Customer Growth Services			32		-		135		110
	Customer Technology Services			56		-		56		-
	Customer Strategy Services			-		-		-		-
	Corporate			200		-		511		-
		Total	$	16,197	$	(57)	$	18,155	$	675
			Three Months Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Facility exit charges
	Customer Management Services		$	99	$	-	$	99	$	7
	Customer Growth Services			-		-		-		-
	Customer Technology Services			-		-		-		-
	Customer Strategy Services			-		-		-		-
	Corporate			-		-		-		-
		Total	$	99	$	-	$	99	$	7

Schedule of Restructuring Liability Rollforward

		Closure of Delivery Centers		Reduction in Force		Total
Balance as of December 31, 2011		$	415	$	1,652	$	2,067
	Expense		99		18,155		18,254
	Payments		(139)		(3,269)		(3,408)
	Reversals		-		-		-
Balance as of June 30, 2012		$	375	$	16,538	$	16,913

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DERIVATIVES (BALANCE SHEET CLASSIFICATION) (DETAILS) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member]
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	$ 7,829	$ (7,170)
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Prepaids and other current assets
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	6,288	2,325
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Other long-term assets
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	4,140	1,119
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Other current liabilities
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	(2,047)	(7,828)
Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Cash Flow [Member] | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	(552)	(2,786)
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member]
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	(2,874)	(2,263)
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Prepaids and other current assets
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	0	0
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Other long-term assets
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	0	0
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Other current liabilities
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	(997)	0
Designated as Hedging Instruments [Member] | Interest Rate [Member] | Cash Flow [Member] | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	(1,877)	(2,263)
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member]
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	900	(329)
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Prepaids and other current assets
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	900	12
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Other long-term assets
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	0	0
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Other current liabilities
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	0	(341)
Not Designated as Hedging Instruments [Member] | Foreign Exchange [Member] | Fair Value [Member] | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	0	0
Not Designated as Hedging Instruments [Member] | Leases | Embedded Derivative [Member]
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	(266)	0
Not Designated as Hedging Instruments [Member] | Leases | Embedded Derivative [Member] | Prepaids and other current assets
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	0	0
Not Designated as Hedging Instruments [Member] | Leases | Embedded Derivative [Member] | Other long-term assets
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	0	0
Not Designated as Hedging Instruments [Member] | Leases | Embedded Derivative [Member] | Other current liabilities
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	(101)	0
Not Designated as Hedging Instruments [Member] | Leases | Embedded Derivative [Member] | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Total net derivative asset (liability)	$ (165)	$ 0

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EQUITY-BASED COMPENSATION PLANS

6 Months Ended

Jun. 30, 2012

EQUITY-BASED COMPENSATION PLANS [Abstract]

EQUITY-BASED COMPENSATION PLANS

(13)       EQUITY-BASED COMPENSATION PLANS

All equity–based awards to employees are recognized in the Consolidated Statements of Comprehensive Income at the fair value of the award on the grant date. During the three and six months ended June 30, 2012 and 2011, the Company recognized total compensation expense of $3.5 million and $6.8 million and $4.0 million and $7.7 million, respectively. Of the total compensation expense, $0.5 million and $1.0 million was recognized in Cost of services and $3.0 million and $5.9 million was recognized in Selling, general and administrative during the three and six months ended June 30, 2012. During the three and six months ended June 30, 2011, the Company recognized total compensation expense of $4.0 million and $7.7 million, respectively, in Selling, general and administrative.

Stock Options

As of June 30, 2012, there was approximately $0.9 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to unvested option arrangements granted under the Company's equity plans. The Company recognizes compensation expense straight–line over the vesting term of the option grant. The Company recognized compensation expense related to stock options of approximately $132,000 and $5,000for the three months ended June 30, 2012 and 2011, respectively. The Company recognized compensation expense related to stock options of approximately $264,000 and $19,000 for the six months ended June 30, 2012 and 2011, respectively.

Restricted Stock Unit Grants

During the six months ended June 30, 2012 and 2011, the Company granted 505,887and 568,580restricted stock units (“RSUs”), respectively, to new and existing employees, which vest in equal installments over four or fiveyears. The Company recognized compensation expense related to RSUs of $3.3 million and $6.6 million for the three and six months ended June 30, 2012, respectively. The Company recognized compensation expense related to RSUs of $4.0 million and $7.7 million for the three and six months ended June 30, 2011, respectively. As of June 30, 2012, there was approximately $32.1 million of total unrecognized compensation cost (including the impact of expected forfeitures) related to RSUs granted under the Company's equity plans.

As of June 30, 2012 and 2011, the Company had performance-based RSUs outstanding that vest based on the Company achieving specified revenue and operating income performance targets. The Company determined that it was not probable these performance targets would be met; therefore no expense was recognized for the three and six months ended June 30, 2012 or 2011.

Cash Based Awards

During the six months ended June 30, 2012, the Company granted 30,000 cash based awards that vest over a period of five years. These awards will be settled in cash equal to the Company's stock price on each vesting date. Since these awards are settled in cash, the Companyaccounts for these as liability awards and marks to market the fair value of the award until final settlement.

As of the June 30, 2012 Company stock price, there was approximately $0.4 million of total unrecognized compensation cost related to unvested cash based awards. The Company recognized approximately $22,000and $30,000 of compensation expense related to these cash based awardsfor the three and six months ended June 30, 2012, respectively.