##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
     Form
    10-K
     (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

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

(I.R.S. Employer 
    Identification No.)   9197 South Peoria Street
 Englewood, Colorado 80112
 (Address of principal executive
    offices)
  Registrants telephone number, including area code:
 (303) 397-8100
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of each class

Name of each exchange on which registeredCommon Stock, $0.01 par value

NASDAQ Global Select Market   Securities registered pursuant to Section 12(g) of the Act:
 None.
  o þ
  o þ
  o þ
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller reporting
    company o   o þ
      DOCUMENTS INCORPORATED BY REFERENCE




---



##### 





TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    DECEMBER 31, 2007
    FORM 10-K
  TABLE OF CONTENTS
   
 Page No.EXPLANATORY NOTE


iiCAUTIONARY NOTE ABOUT FORWARD-LOOKING
    STATEMENTS


ivPART IItem 1.

Business


1Item 1A.

Risk Factors


9Item 1B.

Unresolved Staff Comments


18Item 2.

Properties


18Item 3.

Legal Proceedings


19Item 4.

Submission of Matters to a Vote of Security
    Holders


20PART II.Item 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


20Item 6.

Selected Financial Data


22Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


26Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


62Item 8.

Financial Statements and Supplementary Data


64Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


64Item 9A.

Controls and Procedures


64Item 9B.

Other Information


68PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


69Item 11.

Executive Compensation


73Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


89Item 13.

Certain Relationships and Related Transactions


91Item 14.

Principal Accountants Fees and Services


92PART IVItem 15.

Exhibits, Financial Statement Schedules


93SIGNATURES


95INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
    OF TELETECH HOLDINGS, INC.


F-1Form of Restricted Stock Unit AgreementForm of Non-Qualified Stock Option Agreement (Below VP)Form of Restricted Stock Unit Agreement (VP and above)Form of Restricted Stock Unit Agreement (Non-Employee Director)List of SubsidiariesConsent of PricewaterhouseCoopers LLPConsent of Ernst & Young LLPRule 13a-14(a) Certification of CEORule 13a-14(a) Certification of CFOWritten Statement Pursuant to Section 906   i




---



##### Table of Contents



EXPLANATORY
    NOTE  Form 10-K
  Summary of
    Adjustments
    Pre-Tax Accounting AdjustmentsEquity-Based








Total Pre-Tax


Provision for


Total AccountingYear Ended December 31,

Compensation


Leases


Other


Adjustments


Income
    Tax(1)


Adjustments1996

$
763


$
132


$



$
895


$
(334
)

$
5611997


1,776



515







2,291



(862
)


1,4291998


2,396



1,552







3,948



(1,412
)


2,5361999


12,779



1,112







13,891



(5,022
)


8,8692000


26,684



3,022







29,706



(9,004
)


20,7022001


5,648



679



10



6,337



(2,354
)


3,9832002


6,105



150



817



7,072



(1,479
)


5,5932003


2,214



492



3



2,709



(4,390
)


(1,681
)2004


237



477



(3
)


711



(340
)


371Cumulative effect at December 31, 2004


58,602



8,131



827



67,560



(25,197
)


42,3632005


965



(922
)


392



435



1,437



1,8722006


611



(1,437
)


(111
)


(937
)


1,798



861First quarter 2007


(209
)


(75
)


(863
)


(1,147
)


711



(436
)Second quarter 2007


(272
)


227



(559
)


(604
)


1,056



452Total

$
59,697


$
5,924


$
(314
)

$
65,307


$
(20,195
)

$
45,112     (1)
    
    In any given year, the Provision for Income Tax may not directly
    correlate with the amount of total pre-tax accounting
    adjustments. The provision as shown reflects the tax benefits of
    the pre-tax accounting adjustments, permanent tax differences,
    and rate differences for foreign jurisdictions. These benefits
    are offset in part by changes in deferred tax valuation
    allowances and other adjustments restating the amount or period
    in which income taxes were originally recorded.  Equity-Based
    Compensation Accounting
   ii




---



##### Table of Contents



Accounting for Stock Issued to Employees Accounting for Stock-Based Compensation Share-Based Payment
    Lease
    Accounting
  Accounting for Leases Accounting for Asset
    Retirement Obligations
  Other Accounting
    Adjustments
    Income Tax
    Adjustments and Income Tax Payables
     iii




---



##### Table of Contents



Accounting for Income Taxes
    Form 10-K, Form 10-Q Form 8-K Form 10-Q Form 8-K
  NON-GAAP FINANCIAL
    MEASURES
  Form 10-K, Form 10-K
 CAUTIONARY
    NOTE ABOUT FORWARD-LOOKING STATEMENTS  Form 10-K Form 10-K Form 10-K Form 10-K
 iv




---



##### Table of Contents



PART I ITEM 1.  BUSINESS  Our
    Business
  26-year
      Our Business
    History
         1




---



##### Table of Contents



Historical
    Performance
      
    Migrating from a decentralized holding company to a centralized
    operating company to enhance financial and operating disciplines;
    Centralizing our technology infrastructure and migrating to a
    100%
    IP-based
    delivery platform;
    Standardizing our global operational processes and applications;
    Automating and virtualizing our human capital needs primarily
    around talent acquisition, training and performance optimization;
    Improving the efficiency of certain underperforming operations
    and reducing our selling, general and administrative expenses;
    Improving pricing or rationalizing the performance of certain
    underperforming client programs;
    Investing in sales and client account management;
    Investing in innovative new solutions to diversify revenue into
    higher margin offerings, including professional, learning and
    hosted services;
    Expanding delivery capabilities with expanded onshore,
    near-shore, offshore and work-from-home solutions;
    Reducing long-term debt by nearly $120 million from 2003 to
    2004 with cash surpluses and borrowings under our revolving
    credit facility; and
    Approving and executing a stock repurchase program.   2




---



##### Table of Contents



e-commerce,
        Our Future Growth
    Goals and Strategy
    
    Capitalizing on the favorable trends in the global outsourcing
    environment, which we believe will include more companies that
    want to:  -
    Adopt or increase BPO services;-
    Consolidate outsourcing providers with those that have a solid
    financial position, capital resources to sustain a long-term
    relationship and globally diverse delivery capabilities across a
    broad range of solutions;-
    Modify their approach to outsourcing based on total value
    delivered versus the lowest priced provider; and-
    Better integrate front and back office processes.  
    Deepening and broadening relationships with existing clients;
    Winning business with new clients and focusing on targeted high
    growth industry verticals; 3




---



##### Table of Contents




    Continuing to diversify revenue into higher margin offerings
    such as professional services, talent acquisition, learning
    services and our hosted TeleTech
    OnDemandtm
    capabilities;
    Increasing capacity utilization during peak and non-peak hours;
    Scaling our work-from-home initiative to increase operational
    flexibility; and
    Completing select acquisitions that extend our core BPO
    capabilities or vertical expertise.  Our Market
    Opportunity
          
    Integration of front- and back-office processes to provide an
    enhanced customer experience.Companies have
    realized that integrated business processes allow customer needs
    to be resolved more accurately and efficiently, resulting in
    higher customer satisfaction, loyalty and sales. By providing a
    high-quality customer experience, companies can improve their
    competitive position and continue to grow and retain their
    customer base.
    Increasing percentage of company operations being outsourced
    to the most capable providers.Having experienced
    success with outsourcing a portion of their business processes,
    companies are outsourcing a larger percentage of their business
    processes. Furthermore, companies are outsourcing more complex
    business processes, recognizing the importance of achieving
    continuous process improvements and enhanced productivity. To
    achieve these benefits, companies are consolidating their
    outsourcing by focusing on third-party providers that have an
    extensive operating history, global reach, world-class
    capabilities and an ability to scale and meet their evolving
    needs.
    Increasing adoption of outsourcing across a broader group of
    industries.Early adopters of the BPO trend, such
    as the media and communications industries, are being joined by
    companies in the financial services, healthcare, retail and
    other industries. These companies are beginning to adopt
    outsourcing to improve their business processes and
    competitiveness.
    Focusing 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 providers
    that can give them speed-to-market while reducing their capital
    and operating risk. To achieve these benefits, companies are
    seeking service providers with an extensive operating history,
    an established global footprint and the financial strength to
    invest in innovation to deliver more strategic capabilities and
    the ability to scale and meet customer demands quickly. 4




---



##### Table of Contents



Our Business
    Overview
      
    Design, implement and manage industry-specific end-to-end back
    office processes to achieve efficient and effective global
    service delivery for discrete or multiple back office
    requirements;
    Manage the customer lifecycle, from acquiring and on-boarding
    through support and retention;
    Support field sales teams and manage sales relationships with
    small and medium-sized businesses;
    Design, implement and manage
    e-commerce
    portals;
    Provide a suite of pre-integrated TeleTech
    OnDemandtm
    business process applications through a monthly license
    subscription;
    Offer infrastructure deployment, including the development of
    data and BPO delivery centers;
    License tools within our human capital suite including talent
    acquisition, learning services and performance optimization for
    use in clients internal operations; and
    Offer professional consulting services in each of the above
    areas.  Our Competitive
    Strengths
      
    Industry reputation and our position as one of the largest
    industry providers with 26 years of expertise in delivering
    complex BPO solutions across targeted industries;
    Ability to scale infrastructure and employees worldwide using
    globally deployed best practices to ensure a consistent,
    high-quality service;
    Ability to optimize the performance of our workforce through
    proprietary hiring, training and performance optimization
    tools; and
    Commitment to continued product and services innovation to
    further the strategic capabilities of our clients.    Technological
    Excellence
   5




---



##### Table of Contents



® tm
  on-site
      Globally Deployed
    Best Operating Practices
    Innovative Human
    Capital Strategies
        Innovative New
    Revenue Opportunities
    TeleTech
    OnDemandtm
  tm best-in-class tm
 6




---



##### Table of Contents



tm
  TeleTech@Home
      
    Outstanding quality, low employee turnover, high call resolution
    and superior sales and customer management performance;
    Greater flexibility and scalability through the benefit of
    dispersed geography and proven processes;
    Ability to reach a new and talented employee pool that includes
    licensed and certified professionals in a variety of industries
    with multiple years of experience; and
    Access to a unique and flexible employee population that
    includes
    stay-at-home
    parents, workers with physical challenges that make office
    commuting undesirable, rural workers and workers in highly
    technical urban centers.  Clients
      Competition
     7




---



##### Table of Contents



Seasonality
      Database
    Marketing and Consulting Business
  U.S.-based
    Employees
    
    In Argentina, approximately 4,100 employees are covered by
    an industry-wide collective bargaining agreement with the
    Confederation of Commerce Employees that expires annually in
    March 2009;
    In Brazil, approximately 3,200 employees are covered by
    industry-wide collective bargaining agreements with Sintratel
    and SintelMark that expire in May 2009;
    In Mexico, we have approximately 3,700 employees covered by
    an industry-wide collective bargaining agreement with the
    Federacion Obrero Sindicalista that expires in December
    2008; and
    In Spain, we have approximately 3,500 employees covered by
    industry-wide collective bargaining agreements with COMFIA-CCOO
    and FES-UGT that expire in December 2009.   8




---



##### Table of Contents



Intellectual
    Property & Proprietary Technology
  ® ® ® ® ® ® ® ® ® ®
  Our Corporate
    Information
  (303) 397-8100. Form 10-K, Form 10-Q Form 8-K http://www.teletech.com investor.relations@teletech.com. 1-800-SEC-0330.
  ITEM 1A.  RISK
    FACTORS
  Form 10-K.
  Risks Relating to
    Our Business
  A large
    portion of our revenue is generated from a limited number of
    clients, and the loss of one or more of our clients could cause
    a reduction in our revenue and operating results
     9




---



##### Table of Contents



Client
    consolidations could result in a loss of clients or contract
    concessions that would adversely affect our operating
    results
    Our business
    may be affected by the performance of our clients and general
    economic conditions
  and/or
  Unauthorized
    disclosure of sensitive or confidential client and customer data
    could expose us to protracted and costly litigation, penalties
    and cause us to lose clients
  and/or
 10




---



##### Table of Contents



Our financial
    results depend on our capacity utilization, in particular our
    ability to forecast our clients customer demand and make
    corresponding decisions regarding staffing levels, investments
    and operating expenses
    
    Our ability to maintain and increase capacity in each of our
    delivery centers during peak and non-peak hours;
    Our ability to predict our clients customer demand for our
    services and thereby to make corresponding decisions regarding
    staffing levels, investments and other operating expenditures in
    each of our delivery center locations;
    Our ability to hire and assimilate new employees and manage
    employee turnover; and
    Our need to devote time and resources to training, professional
    development and other non-chargeable activities.    Our business
    depends on uninterrupted service to clients
    Many of our
    contracts utilize performance pricing that link some of our fees
    to the attainment of various performance or business targets,
    which could increase the variability of our revenue and
    operating margin
  agreed-upon
 11




---



##### Table of Contents



Our contracts
    provide for early termination, which could have a material
    adverse effect on our operating results
  and/or
  We may not be
    able to offset increased costs with increased service fees under
    long-term contracts
    Our business
    may be affected by our ability to obtain financing
  Form 10-K Form 10-Q
  Our business
    may be affected by risks associated with international
    operations and expansion
    
    Management of personnel overseas;
    Longer payment cycles;
    Difficulties in accounts receivable collections;
    Foreign currency exchange rates;
    Difficulties in complying with foreign laws;
    Unexpected changes in regulatory requirements; 12




---



##### Table of Contents




    Political and social instability, as demonstrated by terrorist
    threats, regime change, increasing tension in the Middle East
    and other countries and the resulting need for enhanced security
    measures; and
    Potentially adverse tax consequences.    Our financial
    results may be impacted by foreign currency exchange
    risk
  non-U.S.-based
      Our global
    operations expose us to numerous and sometimes conflicting legal
    and regulatory requirements
  and/or
   13




---



##### Table of Contents



Our financial
    results and projections may be impacted by our ability to
    maintain and find new locations for our delivery centers in
    countries with stable wage rates
    The business
    process outsourcing markets are highly competitive, and we might
    not be able to compete effectively
    
    Initiate, develop and maintain new client relationships;
    Expand existing client programs;
    Staff and equip suitable delivery center facilities in a timely
    manner; and
    Develop new solutions and enhance existing solutions we provide
    to our clients.    
    Large multinational providers, including the service arms of
    large global technology providers;
    Offshore service providers in lower-cost locations that offer
    services similar to those we offer, often at highly competitive
    prices;
    Niche solution or service providers that compete with us in a
    specific geographic market, industry segment or service
    area; and
    Most importantly, the in-house operations of clients or
    potential clients.    We may not be
    able to develop our services and solutions in response to
    changes in technology and client demand
    
    Expand our existing solutions and offerings;
    Achieve cost efficiencies in our existing delivery center
    operations; and
    Introduce new solutions that leverage and respond to changing
    technological developments. 14




---



##### Table of Contents



If we fail to
    recruit, hire, train and retain key executives or qualified
    employees, our business will be adversely affected
  and/or
    Our Chairman
    and Chief Executive Officer has practical control over all
    matters requiring action by our stockholders
    If we fail to
    integrate businesses and assets that we may acquire through
    joint ventures or acquisitions, we may lose clients and our
    liquidity, capital resources and profitability may be adversely
    affected
    
    We may encounter difficulties integrating acquired software,
    operations and personnel and our managements attention
    could be diverted from other business concerns;
    We may not be able to successfully incorporate acquired
    technology and rights into our service offerings and maintain
    uniform standards, controls, procedures and policies;
    The businesses or assets we acquire may fail to achieve the
    revenue and earnings we anticipated, causing us to incur
    additional debt to fund operations and to write down the value
    of acquisitions on our financial statements;
    We may assume liabilities associated with the sale of the
    acquired companys products or services; 15




---



##### Table of Contents




    Our resources may be diverted in asserting and defending our
    legal rights and we may ultimately be liable for contingent and
    other liabilities, not previously disclosed to us, of the
    companies that we acquire;
    Acquisitions may disrupt our ongoing business and dilute our
    ownership interest;
    Acquisitions may result in litigation from former employees or
    third parties; and
    Due diligence may fail to identify significant issues with
    product quality, product architecture, ownership rights and
    legal contingencies, among other matters.      We face risks
    relating to our completed and continued actions to remediate the
    weaknesses in our financial reporting and disclosure controls,
    which could result in a material misstatement of our
    consolidated financial statements and have a material adverse
    effect on our operating results and stock price
    Risks Relating to
    Our Common Stock
  The market
    price for our common stock may be volatile
    
    Actual or anticipated variations in our quarterly results;
    Announcements of new contracts or contract cancellations;
    Changes in financial estimates by securities analysts;
    Our ability to meet the expectations of securities analysts;
    Conditions or trends in the business process outsourcing
    industry;
    Changes in the market valuations of other business process
    outsourcing companies;
    Developments in countries where we have significant delivery
    centers, GigaPOPs or operations;
    The ability of our clients to pay for our services;
    Other events or factors, many of which are beyond our control. 16




---



##### Table of Contents



You may suffer
    significant dilution as a result of our outstanding stock
    options and our equity incentive programs
    Risks Relating to
    the Review of Our Historical Equity-Based Compensation
    Practices
  The review of
    our historical equity-based compensation practices, together
    with the preparation of the restated financial restatements, has
    consumed a considerable amount of Board member and management
    time and caused us to incur substantial expenses
    The ongoing
    government inquiries relating to our historical equity-based
    compensation practices are time consuming and expensive and
    could result in fines and penalties
    If we do not
    maintain compliance with the SEC reporting requirements and the
    NASDAQ Global Select Market listing requirements, our common
    stock could be delisted, which could, among other things, reduce
    the price and liquidity of our common stock
  Form 10-K Form 10-Q
 17




---



##### Table of Contents



We and our
    officers and directors have been named as parties to a class
    action lawsuit relating to our historical equity-based
    compensation practices and resulting restatements, and
    additional lawsuits may be filed in the future
    ITEM 1B.  UNRESOLVED
    STAFF COMMENTS
    ITEM 2.  PROPERTIES
      
    Multi-Client Center We lease space for these
    centers and serve multiple clients in each facility;
    Managed Center These facilities are leased or
    owned by our clients and we staff and manage these sites on
    behalf of our clients in accordance with facility management
    contracts; and
    Dedicated Center We lease space for these
    centers and dedicate the entire facility to one client. 18




---



##### Table of Contents



Multi-Client


Managed


Dedicated


Total Number ofCenters


Centers


Centers


Delivery CentersArgentina


6



2







8Australia


5



2



1



8Brazil


2



2







4Canada


4



1



7



12China


1



1







2Costa Rica


1











1England






1







1Germany






1







1Malaysia


1











1Mexico


3











3New Zealand


1



2







3Northern Ireland


1











1Philippines


10











10Scotland






3



1



4Singapore






1







1Spain


4



4



1



9U.S.


6



9



5



20Total


45



29



15



89     ITEM 3.  LEGAL
    PROCEEDINGS
    Securities
    Class Action
  Beasley v. TeleTech Holdings, Inc.,
    et. al. Rule 10b-5 Brown v. TeleTech Holdings, Inc., et al., In re: TeleTech
    Litigation
  NASDAQ Delisting
    Proceedings
  Form 10-Q Form 10-K
 19




---



##### Table of Contents



Form 10-K Form 10-Q
  ITEM 4.  SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS
   PART II ITEM 5.  MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES    High


LowFourth Quarter 2007

$
27.43


$
18.76Third Quarter 2007

$
35.24


$
22.75Second Quarter 2007

$
40.41


$
30.05First Quarter 2007

$
37.52


$
23.34Fourth Quarter 2006

$
24.12


$
14.78Third Quarter 2006

$
16.14


$
10.72Second Quarter 2006

$
13.88


$
10.93First Quarter 2006

$
13.08


$
10.90     Stock Repurchase
    Program
   20




---



##### Table of Contents



Stock Performance
    Graph
    COMPARISON OF
    5-YEAR
    CUMULATIVE TOTAL RETURN Based on
    investment of $100 on December 31, 2002
  12/31/02


12/31/03


12/31/04


12/31/05


12/31/06


12/31/07TeleTech Holdings, Inc.

$
100


$
156


$
133


$
166


$
329


$
293NASDAQ Composite Index


100



150



165



169



188



205Russell 2000 Index


100



147



174



182



216



212Peer Group


100



134



125



134



163



122   
 21




---



##### Table of Contents



ITEM 6.  SELECTED
    FINANCIAL DATA   Form 10-K.
  Form 10-K, Form 10-K.
  Year Ended December 31,2007


2006


2005


2004


2003As restated


As restated


As restated


As restatedStatement of Operations DataRevenue

$
1,369,632


$
1,210,753


$
1,085,903


$
1,052,690


$
1,001,128Cost of services


(1,001,459
)


(882,809
)


(809,059
)(5)


(772,573
)


(762,685
)Selling, general and administrative


(207,528
)


(199,995
)


(183,111
)


(165,533
)


(152,083
)Depreciation and amortization


(55,953
)


(51,989
)


(54,412
)


(61,147
)


(60,059
)Other operating expenses


(22,904
)(1)


(2,195
)(3)


(7,384
)(6)


(4,693
)(8)


(10,631
)(10)Income from operations


81,788



73,765



31,937



48,744



15,670Other income (expense)


(6,437
)(2)


(4,442
)


(156
)


(15,250
)(9)


(13,021
)Provision for income taxes


(19,562
)


(16,474
)(4)


(3,953
)(7)


(9,124
)


(30,469
)(11)Minority Interest


(2,686
)


(1,868
)


(1,542
)


(738
)


(1,003
)Net income (loss)

$
53,103


$
50,981


$
26,286


$
23,632


$
(28,823
)Weighed average shares outstandingBasic


70,228



69,184



72,121



74,751



74,206Diluted


72,638



69,869



73,134



75,637



74,206Net income (loss) per shareBasic

$
0.76


$
0.74


$
0.36


$
0.32


$
(0.39
)Diluted

$
0.73


$
0.73


$
0.36


$
0.31


$
(0.39
)     (1)
    
    Includes the following items: $13.4 million charge related
    to the impairment of goodwill in accordance with
    SFAS No. 142 Goodwill and Other Intangible
    Assets (SFAS 142); $2.2 million
    charge related to the impairment of property and equipment in
    accordance with SFAS 144; $3.8 million charge related
    to reductions in force and $4.0 million charge related to
    facility exit charges in accordance with SFAS 146;
    $0.7 million benefit related to the revised estimates of
    restructuring charges; and $11.5 charge related to the costs of
    the Companys review of its equity based compensation
    practices.(2)
    
    Includes the following items: $6.1 million charge related
    to the sale of assets in accordance with SFAS 144,
    $7.0 million benefit related to the sale of assets in
    accordance with SFAS 144; and $2.2 million benefit
    related to the execution of a software and intellectual property
    license agreement.(3)
    
    Includes the following items: $1.1 million charge related
    to reductions in force; $0.8 million related to facility
    exit costs in accordance with SFAS 146; $0.6 million
    charge related to the impairment of property and equipment in
    accordance with SFAS 144; and $3.6 million benefit due
    to revised estimates of self-insurance accruals.(4)
    
    Includes the following items: $4.5 million benefit due to
    the reversal of income tax valuation allowance for Spain;
    $1.2 million benefit due to the reversal of income tax
    valuation allowance for Argentina; and $3.3 million benefit
    due to the EHI loss carryforward.(5)
    
    Includes the following item: $2.0 million benefit due to
    revised estimates of self-insurance accruals.(6)
    
    Includes the following items: $2.1 million charge related
    to the impairment of property and equipment in accordance with
    SFAS 144; $2.1 million charge related to reductions in
    force; 22




---



##### Table of Contents



$2.0 million charge related to facility exit charges in
    accordance with SFAS 146; $0.6 million impairment loss
    related to a decision to exit a lease early and to discontinue
    use of certain software; $1.0 million benefit due to
    revised estimates of self-insurance accrual; and
    $0.5 million benefit related to revised estimates of
    restructuring and impairment charges.(7)
    
    Includes the following items: $1.4 million benefit due to
    the reversal of income tax valuation allowance for Argentina;
    $1.4 million benefit due to the reversal of income tax
    valuation allowance for Brazil; $9.9 million benefit due to
    the reversal of U.S. income tax valuation allowance; and
    $3.7 million charge related to the repatriation of foreign
    earnings under a Qualified Domestic Reinvestment Plan.(8)
    
    Includes the following items: $2.6 million charge related
    to the impairment of property and equipment in accordance with
    SFAS 144; $2.1 million charge related to a reduction
    in workforce and facility exit charges under SFAS 146; and
    $1.9 million reversal of part of the sales and use tax
    liability.(9)
    
    Includes the following items: $7.6 million one-time charge
    related to restructuring of our long-term debt; and
    $2.8 million one-time charge related to the termination of
    an interest rate swap agreement.(10)
    
    Includes the following items: $7.0 million charge related
    to the impairment of property and equipment; $5.6 million
    charge related to a reduction in force and facility exit
    charges; and $1.9 million benefit related to revised
    estimates of restructuring charges.(11)
    
    Includes the following item: $30.9 million charge primarily
    for the impairment of deferred tax assets.      Year EndedDecember 31, 2006December 31,


As Previously2007


Reported


Adjustments


As restatedStatement of Operations DataRevenue

$
1,369,632


$
1,211,297


$
(544
)

$
1,210,753Cost of services


(1,001,459
)


(885,602
)


2,793



(882,809
)Selling, general and administrative


(207,528
)


(199,226
)


(769
)


(199,995
)Depreciation and amortization


(55,953
)


(51,429
)


(560
)


(51,989
)Other operating expenses


(22,904
)


(2,195
)






(2,195
)Income from operations


81,788



72,845



920



73,765Other income (expense)


(6,437
)


(4,459
)


17



(4,442
)Provision for income taxes


(19,562
)


(14,676
)


(1,798
)


(16,474
)Minority interest


(2,686
)


(1,868
)






(1,868
)Net income (loss)

$
53,103


$
51,842


$
(861
)

$
50,981Weighted average shares outstandingBasic


70,228



69,184







69,184Diluted


72,638



70,615



(746
)


69,869Net income (loss) per shareBasic

$
0.76


$
0.75


$
(0.01
)

$
0.74Diluted

$
0.73


$
0.73


$
(0.00
)

$
0.73  23




---



##### Table of Contents



As ofDecember 31,2007


December 31, 2006As PreviouslyReported


Adjustments


As RestatedBalance Sheet DataTotal assets

$
760,295


$
658,716


$
5,705


$
664,421Total current liabilities

$
186,810


$
182,015


$
2,015


$
184,030Total long-term liabilities

$
118,729


$
107,417


$
4,383


$
111,800Total stockholders equity

$
451,201


$
363,407


$
(693
)

$
362,714   Year Ended December 31, 2005As PreviouslyReported


Adjustments


As RestatedStatement of Operations DataRevenue

$
1,086,673


$
(770
)

$
1,085,903Cost of services


(812,174
)


3,115



(809,059
)Selling, general and administrative


(182,262
)


(849
)


(183,111
)Depreciation and amortization


(53,317
)


(1,095
)


(54,412
)Other operating expenses


(7,384
)






(7,384
)Income from operations


31,536



401



31,937Other income (expense)


680



(836
)


(156
)Provision for income taxes


(2,516
)


(1,437
)


(3,953
)Minority interest


(1,542
)






(1,542
)Net income (loss)

$
28,158


$
(1,872
)

$
26,286Weighted average shares outstandingBasic


72,121







72,121Diluted


73,631



(497
)


73,134Net income (loss) per shareBasic

$
0.39


$
(0.03
)

$
0.36Diluted

$
0.38


$
(0.02
)

$
0.36   As of December 31, 2005As PreviouslyReported


Adjustments


As RestatedBalance Sheet DataTotal assets

$
522,172


$
5,801


$
527,973Total current liabilities

$
160,915


$
(3,194
)

$
157,721Total long-term liabilities

$
61,339


$
7,307


$
68,646Total stockholders equity

$
293,374


$
1,689


$
295,063   24




---



##### Table of Contents



Year Ended December 31, 2004As PreviouslyReported


Adjustments


As RestatedStatement of Operations DataRevenue

$
1,052,690


$



$
1,052,690Cost of services


(774,521
)


1,948



(772,573
)Selling, general and administrative


(165,630
)


97



(165,533
)Depreciation and amortization


(59,378
)


(1,769
)


(61,147
)Other operating expenses


(4,693
)






(4,693
)Income from operations


48,468



276



48,744Other income (expense)


(14,263
)


(987
)


(15,250
)Provision for income taxes


(9,464
)


340



(9,124
)Minority interest


(738
)






(738
)Net income (loss)

$
24,003


$
(371
)

$
23,632Weighted average shares outstandingBasic


74,751







74,751Diluted


76,109



(472
)


75,637Net income (loss) per shareBasic

$
0.32


$



$
0.32Diluted

$
0.32


$
(0.01
)

$
0.31   As of December 31, 2004As PreviouslyReported


Adjustments


As RestatedBalance Sheet DataTotal assets

$
496,795


$
2,772


$
499,567Total current liabilities

$
136,192


$
(4,741
)

$
131,451Total long-term liabilities

$
30,186


$
6,619


$
36,805Total stockholders equity

$
322,545


$
894


$
323,439   25




---



##### Table of Contents



Year Ended December 31, 2003As PreviouslyReported


Adjustments


As RestatedStatement of Operations DataRevenue

$
1,001,128


$



$
1,001,128Cost of services


(764,687
)


2,002



(762,685
)Selling, general and administrative


(149,860
)


(2,223
)


(152,083
)Depreciation and amortization


(58,596
)


(1,463
)


(60,059
)Other operating expenses


(10,631
)






(10,631
)Income from operations


17,354



(1,684
)


15,670Other income (expense)


(11,996
)


(1,025
)


(13,021
)Provision for income taxes


(34,859
)


4,390



(30,469
)Minority interest


(1,003
)






(1,003
)Net income (loss)

$
(30,504
)

$
1,681


$
(28,823
)Weighted average shares outstandingBasic


74,206







74,206Diluted


74,206







74,206Net income (loss) per shareBasic

$
(0.41
)

$
0.02


$
(0.39
)Diluted

$
(0.41
)

$
0.02


$
(0.39
)   As of December 31, 2003As PreviouslyReported


Adjustments


As RestatedBalance Sheet DataTotal assets

$
554,816


$
20,198


$
575,014Total current liabilities

$
139,751


$
3,009


$
142,760Total long-term liabilities

$
120,370


$
15,892


$
136,262Total stockholders equity

$
285,512


$
1,298


$
286,810  ITEM 7.  MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Executive
    Summary
  26-year
   26




---



##### Table of Contents




    Integration of front and back office business processes to
    provide an enhanced customer
    experience.  Companies have realized that
    integrated business processes allow customer needs to be met
    more quickly and efficiently. This integration results in higher
    customer satisfaction and brand loyalty and thereby improves
    their competitive position.
    Increasing percentage of company operations being outsourced
    to most capable third-party providers.  Having
    experienced success with outsourcing a portion of their business
    processes, companies are increasingly outsourcing a larger
    percentage of this work. To achieve these benefits, companies
    are consolidating their business processes with third-party
    providers that have an extensive operating history, global
    reach, world-class capabilities and an ability to 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, retailing and financial services. These
    companies are beginning to adopt outsourcing to improve their
    business processes and competitiveness.
    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 providers
    that can provide speed-to-market while reducing their capital
    and operating risk. To achieve these benefits, companies are
    seeking BPO providers with an extensive operating history, an
    established global footprint and the financial strength to
    invest in innovation to deliver more strategic capabilities and
    the ability to scale and meet customer demands quickly.  Our
    Strategy
      
    Deepen and broaden our relationships with existing clients.
    Win business with new clients and focus on targeted industries
    where we expect accelerating adoption of business process
    outsourcing.
    Continue to invest in innovative proprietary technology and new
    business offerings.
    Continue to improve our operating margins.
    Selectively pursue acquisitions that extend our capabilities
    and/or
    industry expertise.  Our 2007
    Financial Results
   27




---



##### Table of Contents



24-hour
          Restatement of
    Financial Statements
  Form 10-K, Form 10-K Form 10-K. Accounting for Stock Issued to Employees Accounting for
    Share Based Payment ,
 28




---



##### Table of Contents



Pre-Tax Accounting AdjustmentsEquity-Based








Total Pre-Tax


Provision for


Total AccountingYear Ended December 31,

Compensation


Leases


Other


Adjustments


Income
    Tax(1)


Adjustments1996

$
763


$
132


$



$
895


$
(334
)

$
5611997


1,776



515







2,291



(862
)


1,4291998


2,396



1,552







3,948



(1,412
)


2,5361999


12,779



1,112







13,891



(5,022
)


8,8692000


26,684



3,022







29,706



(9,004
)


20,7022001


5,648



679



10



6,337



(2,354
)


3,9832002


6,105



150



817



7,072



(1,479
)


5,5932003


2,214



492



3



2,709



(4,390
)


(1,681
)2004


237



477



(3
)


711



(340
)


371Cumulative effect at December 31, 2004


58,602



8,131



827



67,560



(25,197
)


42,3632005


965



(922
)


392



435



1,437



1,8722006


611



(1,437
)


(111
)


(937
)


1,798



861First quarter 2007


(209
)


(75
)


(863
)


(1,147
)


711



(436
)Second quarter 2007


(272
)


227



(559
)


(604
)


1,056



452Total

$
59,697


$
5,924


$
(314
)

$
65,307


$
(20,195
)

$
45,112     (1)
    
    In any given year, the Provision for Income Tax may not directly
    correlate with the amount of total pre-tax accounting
    adjustments. The provision as shown reflects the tax benefits of
    the pre-tax accounting adjustments, permanent tax differences,
    and rate differences for foreign jurisdictions. These benefits
    are offset in part by changes in deferred tax valuation
    allowances and other adjustments restating the amount or period
    in which income taxes were originally recorded.  Equity-Based
    Compensation
  Accounting for Stock Issued to
    Employees Accounting for Stock-Based
    Compensation Share-Based
    Payment
  Background
   29




---



##### Table of Contents




    Reviewing hard copy and electronic files obtained from us as
    well as other sources that totaled hundreds of thousands of
    pages of hard copy and electronic documents;
    Conducting interviews of 34 past and present employees, officers
    and directors, some of whom were interviewed more than once;
    Engaging outside consultants to conduct various statistical
    analyses of our equity awards;
    Reviewing Board and Committee minutes and related materials from
    1996 through August 2007;
    Reviewing actions by unanimous written consent
    (UWCs) and other granting actions relating to equity
    awards from 1996 through August 2007;
    Reviewing our public filings and equity compensation plans;
    Frequent communications by the Chairman of the Audit Committee
    with the Audit Committees independent counsel and its
    accounting consultants; and
    Numerous telephonic and in-person meetings of the Audit
    Committee.      Historical
    Equity-Based Compensation Practices
    
    Annual pool grants in conjunction with our annual merit review
    process, which generally occurred within a few months following
    our year end (referred to as annual grants);
    Individual grants to newly hired or promoted Section 16
    Officers and employees and, from time to time, grants in
    recognition of performance or as incentives;
    Options granted or assumed in connection with acquisitions; and
    Options granted to non-employee directors and, from time to
    time, consultants.  Form 8-K
  
    There was no willful misconduct in connection with our equity
    compensation granting process.
    There was no evidence of improper conduct by the Chairman and
    Chief Executive Officer, the Vice Chairman, any current member
    of senior management, any past or present member of the
    Compensation Committee, or any other outside director. 30




---



##### Table of Contents




    There was no regular or systematic practice of using hindsight
    to select grant dates and no pattern of consistently hitting
    lows.    
    Certain employees/officers involved in the administration of our
    stock options, none of which are actively employed by us, did
    not adequately meet all of the demands of their positions
    and/or did
    not adequately appreciate their responsibilities in the stock
    option granting process, particularly in the period prior to
    2002.
    There were control and other deficiencies in our equity
    compensation granting process.
    Our policies were not sufficient to ensure compliance with all
    applicable accounting and disclosure rules relevant to equity
    compensation.
    There were episodic instances of selecting grant dates with some
    hindsight.  -
    There was some evidence that certain employees/officers involved
    in selecting grant dates, none of which are actively employed by
    us, had some understanding of the accounting implications of
    selecting dates with hindsight. However, there was no conclusive
    evidence demonstrating that those involved in selecting dates
    knowingly
    and/or
    purposely violated accounting or disclosure rules.  
    There were instances where we failed to appreciate that certain
    required granting actions needed to be completed before a
    measurement date for a grant could be established under
    applicable equity compensation accounting rules.
    Certain stock option awards were not properly recorded under
    applicable equity compensation accounting rules, including in
    connection with:  -
    modification of grants;-
    a recipients status as a consultant or an employee; and-
    treatment of performance-based vesting conditions.  Delegation of
    Authority
     31




---



##### Table of Contents



Measurement
    Dates
     32




---



##### Table of Contents



Equity-Based
    Compensation Expense Adjustments
    
    Measurement date mistakes were made in connection with annual
    pool grants where the allocation of the grants to individual
    recipients was not known with finality until after the stated
    grant date;
    Measurement date mistakes were made on new hire and promotional
    grants to Section 16 Officers, employees and non-employee
    directors as a result of delayed or missing approvals and grants
    made prior to the start date;
    Certain stock option awards were modified after the
    establishment of a measurement date to accelerate the vesting of
    the employees stock options or to allow the exercise of
    stock options beyond the standard
    90-day
    period following termination of employment; and
    Certain grants previously accounted for as employee awards were
    determined to have been made for non-employee consulting
    services and should have been accounted for under
    SFAS No. 123, Accounting for Stock-Based
    Compensation(SFAS 123).    Pre-Tax Equity Based Compensation ExpenseMeasurement


Modifications to


Non-EmployeeYear Endend December 31,

Date Changes


Employee Grants


Grants


Other


Total1996

$
21


$



$
742


$



$
7631997


223



422



1,131







1,7761998


454



199



1,743







2,3961999


2,714



3,030



6,559



476



12,7792000


7,380



13,411



4,069



1,824



26,6842001


4,921



815



(135
)


47



5,6482002


5,865



76



(10
)


174



6,1052003


499



1,237



231



247



2,2142004


357



82



(425
)


223



237Cumulative effect at December 31, 2004


22,434



19,272



13,905



2,991



58,6022005


276



303



311



75



9652006


(15
)


425



49



152



611First quarter 2007


28



859



(478
)


(618
)


(209
)Second quarter 2007


62



186



(13
)


(507
)


(272
)Total

$
22,785


$
21,045


$
13,774


$
2,093


$
59,697   Measurement Date
    Adjustments
   33




---



##### Table of Contents




    Board and Committee meeting minutes and related materials;
    evidence relating to the dates UWCs were prepared and circulated
    for signature
    and/or
    signed by Compensation Committee members;
    personnel files of employees who were granted options;
    e-mail
    communications and other electronic files from our computer
    system and in
    back-up
    media;
    documentation relating to the allocation of annual grants to
    individual employees;
    information as to the respective hire dates of employees
    receiving the option grants, including (if the grant was a new
    hire grant) the date of any offer letter;
    correspondence, memoranda and other documentation supporting
    option grants;
    information concerning the dates that stock options were entered
    into our (or our third-party administrators) stock option
    tracking systems; and
    information obtained from current and former officers,
    directors, employees and outside professionals. 34




---



##### Table of Contents



grant-by-grant
  New Hire, Promotional &


New Hire, Promotional &Annual Pool Grants


Merit Grants to Employees


Merit Grants to Section 16 OfficersTotal








Total








TotalGrants


Shares


Compensation


Grants


Shares


Compensation


Grants


Shares


CompensationIssued in


Granted in


Expense by


Issued in


Granted in


Expense by


Issued in


Granted in


Expense byPeriod


Period


Period


Period


Period


Period


Period


Period


PeriodPre-IPO through 1996









$




542



5,047,544


$
21










$
1997














50



997,000



511











1998














90



1,627,000



421











1999


273



1,038,953



741



114



2,451,204



4,381



9



1,706,749



7642000


327



895,478



1,167



346



2,485,887



11,636



5



600,000



8,6812001


530



1,339,385



1,096



58



564,225



3,817



9



1,160,000



9222002


569



1,108,100



1,250



65



999,300



4,088



8



735,000



6862003


242



457,100



289



45



1,082,200



634



3



407,300



1,0362004


256



1,091,000



145



83



1,408,000



379



5



550,000



107Cumulative effect at December 31, 2004


2,197



5,930,016



4,688



1,393



16,662,360



25,888



39



5,159,049



12,1962005










53



79



1,002,500



410



4



1,220,000



1912006


133



591,950



1,492



61



770,500



2,464











2,957First quarter 2007










313



89



1,210,000



1,551



6



635,000



730Second quarter 2007










309



9



232,500



895



1



15,000



819Totals


2,330



6,521,966


$
6,855



1,631



19,877,860


$
31,208



50



7,029,049


$
16,893   Grants Made to Employees of Acquired Companies


Non-employee Director Grants


Grants to ConsultantsTotal








Total








TotalGrants


Shares


Compensation


Grants


Shares


Compensation


Grants


Shares


CompensationIssued in


Granted in


Expense by


Issued in


Granted in


Expense by


Issued in


Granted in


Expense byPeriod


Period


Period


Period


Period


Period


Period


Period


PeriodPre-IPO through 1996


9



15,600


$




6



262,500


$




3



105,000


$
7421997


131



276,000



97



4



75,000



38











1,1301998


116



1,547,899



152



7



106,250



80



7



547,744



1,7431999


177



1,491,785



320



6



133,750



14



1



10,000



6,5592000


295



848,230



1,117



5



131,000



14



3



40,000



4,0692001










1,203



5



155,000



14











(135
)2002










77



6



95,000



14



11



55,000



(10
)2003










22



7



100,000



2



6



30,000



2312004










30



6



80,000















34Cumulative effect at December 31,2004


728



4,179,514



3,018



52



1,138,500



176



31



787,744



14,3632005














4



60,000







1



5,000



202006


45



197,000



132



4



60,000



402











85First quarter 2007










86























2Second quarter 2007










231



4



60,000



678











(13
)Totals


773



4,376,514


$
3,467



64



1,318,500


$
1,256



32



792,744


$
14,457   35




---



##### Table of Contents



Total Equity GrantsTotal Pre-TaxEquity-Based


ExpenseGrants


Shares


Compensation


PreviouslyIssued in


Granted in


Expense by


Recorded by


NetPeriod


Period


Period


Period


AdjustmentPre-IPO through 1996


560



5,430,644


$
763


$



$
7631997


185



1,348,000



1,776







1,7761998


220



3,828,893



2,396







2,3961999


580



6,832,441



12,779







12,7792000


981



5,000,595



26,684







26,6842001


602



3,218,610



6,917



1,269



5,6482002


659



2,992,400



6,105







6,1052003


303



2,076,600



2,214







2,2142004


350



3,129,000



695



458



237Cumulative effect at December 31, 2004


4,440



33,857,183



60,329



1,727



58,6022005


88



2,287,500



674



(291
)


9652006


243



1,619,450



7,532



6,921



611First quarter 2007


95



1,845,000



2,682



2,891



(209
)Second quarter 2007


14



307,500



2,919



3,191



(272
)Totals


4,880



39,916,633


$
74,136


$
14,439


$
59,697   Annual Pool Grants 
  New Hire, Promotional and Merit Grants to
    Employees
  New Hire, Promotional and Merit Grants to Section 16
    Officers 
  Grants Made to Employees of Acquired
    Companies
 36




---



##### Table of Contents



Non-Employee Director Grants
  Grants to Consultants EITF 96-18 Accounting for Equity Instruments That are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services
  Modifications to Employee Grants
  
    Severance agreements offered to certain terminated employees
    that allowed for continued vesting and the right to exercise
    stock options beyond the standard time period permitted under
    the terms of the stock option agreement;
    Employment agreements that provided for the accelerated vesting
    of stock options;
    Continued vesting and the ability to exercise stock options for
    certain employees not terminated from our database in a timely
    manner following their departure from TeleTech due to
    administrative errors; and
    Options granted to certain employees that were not entered into
    our equity tracking system until after their dates of
    termination, primarily due to administrative delays in
    processing stock option requests and the lack of communication
    of employee termination dates to our third party plan
    administrator.  Impact of the
    Mistakes on our Financial Statements
   37




---



##### Table of Contents



Pre-TaxEquity-Based





Net ChargeCompensation


Income


to NetYear Ended December 31,

Expense


Taxes


Income1996

$
763


$
(283
)

$
4801997


1,776



(659
)


1,1171998


2,396



(888
)


1,5081999


12,779



(4,739
)


8,0402000


26,684



(9,895
)


16,7892001


5,648



(2,094
)


3,5542002


6,105



(2,264
)


3,8412003


2,214



(822
)


1,3922004


237



(235
)


2Cumulative effect at December 31, 2004


58,602



(21,879
)


36,7232005


965



(164
)


8012006


611



137



748First quarter 2007


(209
)


316



107Second quarter 2007


(272
)


213



(59
)Total

$
59,697


$
(21,377
)

$
38,320   Tax Consequences
    Under Internal Revenue Code
        gross-up
 38




---



##### Table of Contents



Regulation Section 1.162-27.
  Accounting for Income Taxes
  Judgments
   39




---



##### Table of Contents



grant-by-grant e-mail
     40




---



##### Table of Contents



Pre-Tax Sensitivity Analysis (Amounts in Thousands)Hypothetical


HypotheticalEquity-Based








Equity-Based


Equity-BasedCompensation


Equity-Based


Total Equity-


Compensation


CompensationExpense


Compensation


Based


Expense at


Expense atPreviously


Expense


Compensation


Lowest


HighestRecorded


Adjustments


Expense


Closing Price


Closing PricePre-IPO through 1996

$



$
763


$
763


$
763


$
7721997






1,776



1,776



1,755



2,0461998






2,396



2,396



2,346



3,1171999






12,779



12,779



10,912



13,5242000






26,684



26,684



22,940



32,6612001


1,269



5,648



6,917



4,776



8,9452002






6,105



6,105



3,075



7,8342003






2,214



2,214



1,972



2,9982004


458



237



695



641



1,152Cumulative effect at December 31, 2004


1,727



58,602



60,329



49,180



73,0492005


(291
)


965



674



584



7892006


6,921



611



7,532



7,413



7,665First quarter 2007


2,891



(209
)


2,682



2,665



2,689Second quarter 2007


3,191



(272
)


2,919



2,901



2,925Totals

$
14,439


$
59,697


$
74,136


$
62,743


$
87,117   Lease
    Accounting
  Accounting for Leases Accounting for
    Asset Retirement Obligations
  Other Accounting
    Adjustments
    Income Tax
    Adjustments and Income Tax Payables
   41




---



##### Table of Contents



Cost of
    Restatement
  gross-ups.
  Cost of
    Securities Class Action Lawsuits
    Regulatory
    Inquiries Related to Historical Equity-Based Compensation
    Practices
   42




---



##### Table of Contents



NASDAQ Delisting
    Proceedings
  Form 10-Q Form 10-K Form 10-K Form 10-Q
  Amendment of
    Credit Facility
    Form 10-K
  Business
    Overview
   43




---



##### Table of Contents



North American BPO

International BPOUnited States

ArgentinaCanada

AustraliaPhilippines

BrazilChinaCosta RicaEnglandGermanyMalaysiaMexicoNew ZealandNorthern IrelandScotlandSingaporeSouth AfricaSpain   e-commerce,
        BPO
    Services
   44




---



##### Table of Contents




    Capitalizing on the favorable trends in the global outsourcing
    environment, which we believe will include more companies that
    want to:  -
    Adopt or increase BPO services;-
    Consolidate outsourcing providers with those that have a solid
    financial position, capital resources to sustain a long-term
    relationship and globally diverse delivery capabilities across a
    broad range of solutions;-
    Modify their approach to outsourcing based on total value
    delivered versus the lowest priced provider; and-
    Better integrate front and back office processes.  
    Deepening and broadening relationships with existing clients;
    Winning business with new clients and focusing on targeted high
    growth industry verticals;
    Continuing to diversify revenue into higher-margin offerings
    such as professional services, talent acquisition, learning
    services and our hosted TeleTech
    OnDemandtm
    capabilities;
    Increasing capacity utilization during peak and non-peak hours;
    Scaling our work-from-home initiative to increase operational
    flexibility; and
    Completing select acquisitions that extend our core BPO
    capabilities or vertical expertise.     45




---



##### Table of Contents



(Start-Up Start-Up Start-Up
  Start-up Start-up
  Start-up
       46




---



##### Table of Contents



December 31, 2007


December 31, 2006Total








TotalProduction





% In


Production





% InWorkstations


In Use


Use


Workstations


In Use


UseNorth American BPO


16,097



13,043



81
%


13,137



10,362



79
%International BPO


12,248



9,225



75
%


10,121



8,129



80
%Total


28,345



22,268



79
%


23,258



18,491



80
%     Database
    Marketing and Consulting
       47




---



##### Table of Contents



ccounting for the Impairment or Disposal of Long-Lived
    Assets
  Goodwill and Other
    Intangible Assets
  Overall
  and/or
  Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
      Production Rate
  Performance based
  Hybrid
 48




---



##### Table of Contents



Income
    Taxes
  Accounting for Income Taxes
      Accounting for Uncertainty in
    Income Taxes
  Allowance for
    Doubtful Accounts
  account-by-account
  Impairment of
    Long-Lived Assets
   49




---



##### Table of Contents



Goodwill
         50




---



##### Table of Contents



Restructuring
    Liability
    and/or
  Adoption of
    SFAS No. 123(R) and Equity-Based Compensation
    Expense
    Derivatives
  Accounting for
    Derivative Instruments and Hedging Activities
   51




---



##### Table of Contents



Contingencies
  Accounting for Contingencies case-by-case
  Explanation of
    Key Metrics and Other Items
  Cost of
    Services
  time-to-time
  Selling, General
    and Administrative
    Restructuring
    Charges, Net
    Interest
    Expense
    Other
    Income
    Other
    Expenses
   52




---



##### Table of Contents



Presentation of
    Non-GAAP Measurements
  Free Cash
    Flow
      Year Ended December 31,2007


2006


2005As restated


As restatedFree cash flow

$
42,431


$
33,231


$
7,328Purchases of property, plant and equipment


61,083



66,016



37,606Net cash provided by operating activities

$
103,514


$
99,247


$
44,934    53




---



##### Table of Contents



RESULTS OF
    OPERATIONS
  Year Ended
    December 31, 2007 Compared to December 31,
    2006
    Year Ended December 31,% of





% ofSegment





Segment2007


Revenue


2006


Revenue


$ Change


% ChangeAs restated


As restatedRevenueNorth American BPO

$
955,810



69.8
%

$
814,419



67.3
%

$
141,391



17.4
%International BPO


396,080



28.9
%


356,106



29.4
%


39,974



11.2
%Database Marketing and Consulting


17,742



1.3
%


40,228



3.3
%


(22,486
)


(55.9
)%$
1,369,632



100.0
%

$
1,210,753



100.0
%

$
158,879



13.1
%Cost of servicesNorth American BPO

$
689,793



72.2
%

$
587,984



72.2
%

$
101,809



17.3
%International BPO


299,927



75.7
%


271,986



76.4
%


27,941



10.3
%Database Marketing and Consulting


11,739



66.2
%


22,839



56.8
%


(11,100
)


(48.6
)%$
1,001,459



73.1
%

$
882,809



72.9
%

$
118,650



13.4
%Selling, general and administrativeNorth American BPO

$
126,517



13.2
%

$
112,688



13.8
%

$
13,829



12.3
%International BPO


66,700



16.8
%


62,434



17.5
%


4,266



6.8
%Database Marketing and Consulting


14,311



80.7
%


24,873



61.8
%


(10,562
)


(42.5
)%$
207,528



15.2
%

$
199,995



16.5
%

$
7,533



3.8
%Depreciation and amortizationNorth American BPO

$
31,964



3.3
%

$
27,918



3.4
%

$
4,046



14.5
%International BPO


20,076



5.1
%


16,569



4.7
%


3,507



21.2
%Database Marketing and Consulting


3,913



22.1
%


7,502



18.6
%


(3,589
)


(47.8
)%$
55,953



4.1
%

$
51,989



4.3
%

$
3,964



7.6
%Restructuring charges, netNorth American BPO

$
1,280



0.1
%

$
103



0.0
%

$
1,177



1142.7
%International BPO


1,050



0.3
%


1,420



0.4
%


(370
)


(26.1
)%Database Marketing and Consulting


4,785



27.0
%


107



0.3
%


4,678



4372.0
%$
7,115



0.5
%

$
1,630



0.1
%

$
5,485



336.5
%Impairment lossesNorth American BPO

$
154



0.0
%

$
87



0.0
%

$
67



77.0
%International BPO






0.0
%


478



0.1
%


(478
)


(100.0
)%Database Marketing and Consulting


15,635



88.1
%






0.0
%


15,635



100.0
%$
15,789



1.2
%

$
565



0.0
%

$
15,224



2694.5
%Income (loss) from operationsNorth American BPO

$
106,102



11.1
%

$
85,639



10.5
%

$
20,463



23.9
%International BPO


8,327



2.1
%


3,219



0.9
%


5,108



158.7
%Database Marketing and Consulting


(32,641
)


(184.0
)%


(15,093
)


(37.5
)%


(17,548
)


(116.3
)%$
81,788



6.0
%

$
73,765



6.1
%

$
8,023



10.9
%Other income (expense)

$
(6,437
)


(0.5
)%

$
(4,442
)


(0.4
)%

$
(1,995
)


(44.9
)%Provision for income taxes

$
(19,562
)


(1.4
)%

$
(16,474
)


(1.4
)%

$
(3,088
)


(18.7
)%   Revenue
   54




---



##### Table of Contents



Cost of
    Services
        Selling, General
    and Administrative
        Depreciation and
    Amortization
     55




---



##### Table of Contents



Restructuring
    Charges, Net
    Impairment
    Losses
    Other Income
    (Expense)
    Income
    Taxes
   56




---



##### Table of Contents



Year Ended
    December 31, 2006 Compared to December 31,
    2005
    Year Ended December 31,% of





% ofSegment





Segment2006


Revenue


2005


Revenue


$ Change


% ChangeAs restated


As restated


As restated


As restatedRevenueNorth American BPO

$
814,419



67.3
%

$
678,768



62.5
%

$
135,651



20.0
%International BPO


356,106



29.4
%


324,303



29.9
%


31,803



9.8
%Database Marketing and Consulting


40,228



3.3
%


82,832



7.6
%


(42,604
)


(51.4
)%$
1,210,753



100.0
%

$
1,085,903



100.0
%

$
124,850



11.5
%Cost of servicesNorth American BPO

$
587,984



72.2
%

$
502,987



74.1
%

$
84,997



16.9
%International BPO


271,986



76.4
%


261,798



80.7
%


10,188



3.9
%Database Marketing and Consulting


22,839



56.8
%


44,274



53.5
%


(21,435
)


(48.4
)%$
882,809



72.9
%

$
809,059



74.5
%

$
73,750



9.1
%Selling, general and administrativeNorth American BPO

$
112,688



13.8
%

$
83,553



12.3
%

$
29,135



34.9
%International BPO


62,434



17.5
%


61,793



19.1
%


641



1.0
%Database Marketing and Consulting


24,873



61.8
%


37,765



45.6
%


(12,892
)


(34.1
)%$
199,995



16.5
%

$
183,111



16.9
%

$
16,884



9.2
%Depreciation and amortizationNorth American BPO

$
27,918



3.4
%

$
27,664



4.1
%

$
254



0.9
%International BPO


16,569



4.7
%


17,192



5.3
%


(623
)


(3.6
)%Database Marketing and Consulting


7,502



18.6
%


9,556



11.5
%


(2,054
)


(21.5
)%$
51,989



4.3
%

$
54,412



5.0
%

$
(2,423
)


(4.5
)%Restructuring charges, netNorth American BPO

$
103



0.0
%

$
1,160



0.2
%

$
(1,057
)


(91.1
)%International BPO


1,420



0.4
%


1,242



0.4
%


178



14.3
%Database Marketing and Consulting


107



0.3
%


271



0.3
%


(164
)


(60.5
)%$
1,630



0.1
%

$
2,673



0.2
%

$
(1,043
)


(39.0
)%Impairment lossesNorth American BPO

$
87



0.0
%

$




0.0
%

$
87



100.0
%International BPO


478



0.1
%


4,711



1.5
%


(4,233
)


(89.9
)%Database Marketing and Consulting






0.0
%






0.0
%






0.0
%$
565



0.0
%

$
4,711



0.4
%

$
(4,146
)


(88.0
)%Income (loss) from operationsNorth American BPO

$
85,639



10.5
%

$
63,404



9.3
%

$
22,235



35.1
%International BPO


3,219



0.9
%


(22,433
)


(6.9
)%


25,652



(114.3
)%Database Marketing and Consulting


(15,093
)


(37.5
)%


(9,034
)


(10.9
)%


(6,059
)


(67.1
)%$
73,765



6.1
%

$
31,937



2.9
%

$
41,828



131.0
%Other income (expense)

$
(4,442
)


(0.4
)%

$
(156
)


0.0
%

$
(4,286
)


(2747.4
)%Provision for income taxes

$
(16,474
)


(1.4
)%

$
(3,953
)


(0.4
)%

$
(12,521
)


(316.7
)%   Revenue
   57




---



##### Table of Contents



Cost of
    Services
        Selling, General
    and Administrative
        Depreciation and
    Amortization
      Restructuring
    Charges, Net
   58




---



##### Table of Contents



Impairment
    Losses
    Other Income
    (Expense)
    Income
    Taxes
    Liquidity and
    Capital Resources
      Cash and Cash
    Equivalents
    Cash Flows from
    Operating Activities
   59




---



##### Table of Contents



Cash Flows from
    Investing Activities
    Cash Flows from
    Financing Activities
    Free Cash
    Flow
    Obligations and
    Future Capital Requirements
  off-balance
  Less than


1 to 3


3 to 5


Over 51 Year


Years


Years


Years


TotalCredit Facility

$



$



$
65,400


$



$
65,400Capital lease obligations


1,645



3,290



1,935







6,870Purchase obligations


23,331



24,201



14,817



138



62,487Operating lease commitments


32,790



55,588



35,557



31,437



155,372Total

$
57,766


$
83,079


$
117,709


$
31,575


$
290,129   
    Contractual obligations to be paid in a foreign currency are
    translated at the period end exchange rate.
    The contractual obligation table excludes our FIN 48
    liabilities of $1.6 million because we cannot reliably
    estimate the timing of cash payments. See Note 12 of the
    Notes to the Consolidated Financial Statements for further
    discussion.  Purchase
    Obligations
    Future Capital
    Requirements
  and/or
 60




---



##### Table of Contents



Debt Instruments
    and Related Covenants
       61




---



##### Table of Contents



Client
    Concentration
      Recently Issued
    Accounting Pronouncements
   ITEM 7A.  QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    Interest Rate
    Risk
    Foreign Currency
    Risk
     62




---



##### Table of Contents



PercentageU.S. Dollar


Settled Within


Dates ContractsDerivative Assets

Amount


One Year


are ThroughCanadian Dollar

$
14,841
(1)


59.0
%

December 2010Philippine Peso


17,186



74.7
%

December 2009Argentine Peso


865



79.5
%

September 2009Mexican Peso


360



75.3
%

December 2009$
33,252     (1)
    
    The Canadian dollar derivative asset amount excludes
    approximately $1.9 million in unamortized option premiums.     63




---



##### Table of Contents



Foreign Exchange
    Counterparty Exposure
    Fair Value of
    Debt and Equity Securities
   ITEM 8.  FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  page F-1
 ITEM 9.  CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE   ITEM 9A.  CONTROLS
    AND PROCEDURES  Form 10-K Rule 13a-14
  Background
  Form 10-K,
 64




---



##### Table of Contents



Form 10-K:
  
    Completion of the Audit Committees Review and our own
    internal review of 100%, or 4,347, of the equity awards made
    from our IPO in 1996 through August 2007 and an additional 539
    pre-IPO grants for subsequent modifications, cancellations, and
    other accounting issues;
    Our review of 100% of real estate lease arrangements entered
    into since our IPO in August 1996 to properly record asset
    retirement obligations and deferred rent, along with a review of
    all material lease agreements to properly identify capital
    versus operating leases;
    Our efforts to remediate the material weaknesses in internal
    control over financial reporting described below; and
    The performance of additional procedures by management designed
    to ensure the reliability of our financial reporting.  Evaluation of
    Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Form 10-K,
  Form 10-K
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f)
 65




---



##### Table of Contents



Form 10-K, Internal Control  Integrated Framework
  Insufficient Complement of Personnel with Appropriate
    Accounting Knowledge and Training.
  Equity-Based Compensation Accounting.
  Lease Accounting.
    Form 10-K.
  Remediation
    Plan
   66




---



##### Table of Contents



Insufficient Complement of Personnel with Appropriate
    Accounting Knowledge and Training.
  
    In March 2008, we hired a new Assistant General Counsel with
    experience at major law firms, a public company, the SEC and a
    public accounting firm, who will provide advice with regard to
    the disclosures in our periodic reports and our equity-based
    compensation practices;
    In May 2008, we hired a new Vice President and Controller who is
    a licensed CPA with extensive experience in public accounting
    and public company accounting operations;
    We are actively seeking to hire two assistant corporate
    controllers who will report directly to the Vice President and
    Controller. One will be responsible for external/SEC reporting,
    technical accounting issues (in accordance with U.S. GAAP)
    and Sarbanes-Oxley compliance and the other will oversee general
    ledger operations and monthly/quarterly closing processes;
    We are also actively seeking to hire additional accounting
    personnel with knowledge of, and technical expertise in
    U.S. GAAP; and
    We are implementing personnel resource plans and training
    designed to ensure that we have sufficient personnel with
    knowledge, experience, and training in the application of
    U.S. GAAP.  Equity-Based Compensation Accounting.
  
    Making annual equity awards at a set time each year and
    allocating annual grants to recipients before the grant;
    Making all grants that require Compensation Committee approval,
    including new hire, promotion and special circumstance grants,
    at a duly convened meeting, absent extraordinary circumstances
    warranting action by unanimous written consent, and providing
    the Compensation Committee with information on the accounting
    treatment and any non-standard terms of each proposed grant;
    Designating a senior member of the Human Capital Department who,
    supported by designated members of the Legal, Tax and Accounting
    Departments, shall be responsible for ensuring that the
    accounting treatment, recipient notification requirements, and
    required disclosure have been determined for each equity award
    before the award is authorized by the Compensation Committee;
    Other than as approved under new grant procedures, prohibiting
    any changes to grants after their approval date, other than to
    withdraw a grant to an individual in its entirety because of a
    change in circumstances between approval and issuance of the
    grant (or to correct clear clerical errors);
    Undertaking a training program for pertinent personnel in the
    terms of the Companys equity compensation plans and
    improved policies and procedures;
    Expanding internal audit procedures relating to grant approval
    and documentation;
    We are actively seeking to hire additional accounting personnel
    with specific education and experience in accounting for
    equity-based compensation; and
    In addition to implementation of on-going monitoring controls to
    ensure the above equity compensation grant practices are
    operating effectively, conduct a review of the new equity
    compensation grant practices after one year of operation on
    behalf of the Audit Committee.  Lease Accounting.
  
    We have instituted additional levels of managerial review over
    all lease agreements and the associated accounting; 67




---



##### Table of Contents




    We are establishing processes to evaluate all new or modified
    leases, including the preparation of a summary of key terms for
    each lease in order to ensure complete and accurate recording of
    real estate lease arrangements in accordance with
    U.S. GAAP; and
    We are actively seeking to hire additional accounting personnel
    with specific education and experience in lease accounting.    Inherent
    Limitations of Internal Controls
    
    Judgments in decision-making can be faulty, and control and
    process breakdowns can occur because of simple errors or
    mistakes.
    Controls can be circumvented by individuals, acting alone or in
    collusion with each other, or by management override.
    The design of any system of controls is based in part on certain
    assumptions about the likelihood of future events, and there can
    be no assurance that any design will succeed in achieving its
    stated goals under all potential future conditions.
    Over time, controls may become inadequate because of changes in
    conditions or deterioration in the degree of compliance with
    associated policies or procedures.
    The design of a control system must reflect the fact that
    resources are constrained, and the benefits of controls must be
    considered relative to their costs.    Changes in
    Internal Control over Financial Reporting
    ITEM 9B.  OTHER
    INFORMATION   68




---



##### Table of Contents



PART III ITEM 10.  DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE DIRECTORS
    AND EXECUTIVE OFFICERS    Kenneth D. Tuchman,
  James E. Barlett, Korn/Ferry
  William A. Linnenbringer, 32-year
  Ruth C. Lipper,
  Shrikant Mehta,
  Shirley Young, Chinese-American U.S.-China
  Brian J. Delaney
 69




---



##### Table of Contents



Gregory G. Hopkins
  Michael M. Jossi
  Carol J. Kline
  Alan Schutzman
  John R. Troka, Jr.
  Information
    Regarding the Board and Committees of the Board
     70




---



##### Table of Contents



Audit
    Committee
    
    overseeing our accounting and financial reporting processes and
    the audits of our financial statements;
    the appointment of our independent registered public accounting
    firm;
    the scope and fees of the prospective annual audit and the
    results thereof;
    compensation, retention and oversight of the independent
    registered public accounting firm engaged to prepare and issue
    audit reports on our financial statements and to perform other
    audits;
    compliance with our accounting and financial policies and
    managements procedures and policies relative to the
    adequacy of our internal accounting controls; and
    reviewing and approving related party transactions.  32-year Form 10-K,
  Compensation
    Committee
    
    reviews performance goals and determines or approves the annual
    salary, bonus and all other compensation for each executive
    officer (consistent with the terms of any applicable employment
    agreement);
    reviews, approves and recommends terms and conditions for all
    employee benefit plans (and changes thereto); and
    administers the TeleTech Holdings, Inc. Amended and Restated
    1999 Stock Option and Incentive Plan, the TeleTech Holdings,
    Inc. 1995 Stock Option Plan, and other employee benefit plans as
    may be adopted by us from time to time.  non-employee Rule 16b-3,
 71




---



##### Table of Contents



Nominating and
    Governance Committee
    
    identifying and recommending to the Board qualified candidates
    for election or appointment to the Board; and
    overseeing matters of corporate governance, including the
    evaluation of Board performance and processes, and assignment
    and rotation of Board committee members.    Committee
    Composition
    Nominating andAudit


Compensation


GovernanceDirector

Committee


Committee


CommitteeJames E. BarlettWilliam A. Linnenbringer


ü







üRuth C. Lipper


ü



ü



üShrikant Mehta






üKenneth D. TuchmanShirley Young


ü   Code of Conduct
    and Committee Charters
  http://www.teletech.com
  Section 16(a)
    Beneficial Ownership Reporting Compliance
   72




---



##### Table of Contents



ITEM 11.  EXECUTIVE
    COMPENSATION  Report of the
    Compensation Committee
  The following report of the Compensation Committee shall not
    be deemed to be soliciting material or to otherwise
    be considered filed with the SEC, nor shall such
    information be incorporated by reference into any future filing
    under the Securities Act of 1933, as amended, or the Securities
    Exchange Act of 1934 except to the extent that we specifically
    incorporate it by reference into such filing.
  http://www.teletech.com/teletech/
    Compensation Committee.pdf
  Form 10-K.
  Members of the
    Compensation Committee
  
  Compensation
    Discussion and Analysis
  Executive
    Summary
    Kenneth D. Tuchman

Chairman of the Board and Chief Executive OfficerJames E. Barlett

Vice Chairman of the BoardBrian J. Delaney

Executive Vice President of Global Service Delivery and Chief
    Operations OfficerJohn R. Troka, Jr.

Interim Chief Financial Officer and Senior Vice President of
    Global FinanceGregory G. Hopkins

Executive Vice President of Global Accounts   s time-in-service
 73




---



##### Table of Contents



Funding of
    Incentive Benefit Pool
    Executive
    Compensation Objectives
    Executive
    Compensation Overview
  Five
    Overarching Principles
    
    Structure compensation programs with a significant portion of
    variable, or at-risk, compensation to ensure that the actual
    compensation realized by named executive officers directly and
    demonstrably links to individual and companywide performance;
    Offer market competitive compensation opportunities that will
    allow us to attract and retain named executive officers capable
    of leading us to the fulfillment of our business objectives;
    Ensure that our named executive officers remain focused on
    individual operational goals to build the foundation for our
    long-term success;
    Align the interests of named executive officers and stockholders
    to achieve long-term stock price performance; and
    Maintain an egalitarian culture with respect to compensation
    programs, such that, generally, certain management employees may
    generally participate in the same equity-based and cash-based
    incentive programs as the named executive officers.  Four
    Components
    
    Equity awards in the form of RSUs under our 1999 Amended and
    Restated Stock Option Plan, as amended and restated (the
    1999 Plan);
    Annual performance-based cash incentives under the MIP (although
    the CEO and the Vice Chairman are eligible for performance-based
    cash incentives under the MIP, they elected not to participate
    in 2007);
    Discretionary cash bonuses to recognize exceptional individual
    achievement and contributions to our overall financial
    performance; and
    Base salary. 74




---



##### Table of Contents



Mix of Equity,
    Cash Incentives/Bonuses and Salary
  The Role of Peer Groups, Surveys
    and Benchmarking
  CEO
    Compensation
  time-in-service time-in-service
  Vice Chairman
    Compensation
   75




---



##### Table of Contents



Compensation
    Committees View on CEO and Vice Chairman
    Compensation
  Form 10-K). Form 8-K
  Executive
    Compensation Program Design and Implementation
  Team-Based
    Compensation
    Independent
    Compensation Committee Determines All Executive
    Compensation
    The Role of
    Equity Awards
  RSUs Minimize
    Dilution and Support Long-Term Focus
  time-in-service
 76




---



##### Table of Contents



time-in-service
  Vesting
    Conditions
  time-in-service time-in-service 12-month
  2007 RSU
    Awards
  time-in-service
 77




---



##### Table of Contents



time-in-service
  The Role of
    Cash Compensation
    Performance-Based
    Cash Incentives
      Form 10-K.
 78




---



##### Table of Contents



Discretionary
    Cash Bonuses
      Base
    Salaries
      The Role of
    Consultants
    The Role of
    Peer Groups, Surveys and Benchmarking
   79




---



##### Table of Contents



The Role of
    Employment Agreements
  changes-in-control
  Tax and
    Accounting Considerations
  Limitations on
    the Deductibility of Compensation
    Tax Implications
    for Officers
  change-in-control change-in-control
   80




---



##### Table of Contents



Effect of
    Equity-Based Compensation Review on Compensation of Named
    Executive Officers
  Form 10-K, gross-ups
  Accounting
    Considerations
   81




---



##### Table of Contents



Summary
    Compensation Table
    Change inValue ofNonqualifiedNon-Equity


DeferredStock


Option


Incentive Plan


Compensation


All OtherSalary


Bonus(1)


Awards(2)


Awards(2)


Compensation(3)


Earnings(4)


Compensation(5)


TotalName and Principal Position(a)

Year(b)


($)(c)


($)(d)


($)(e)


($)(f)


($)(g)


($)(h)


($)(i)


($)(j)Kenneth D. Tuchman


2007



350,000







1,384,193



1,344,908











53,778



3,132,879(Chief Executive Officer)


2006



350,000











1,344,908







252,321



60,986



2,008,2152005



350,000















500,000



148,322



55,294



1,053,616James E. Barlett


2007



350,000







1,384,193



306,104







21,751



339,535



2,401,583(Vice Chairman)


2006



350,000











340,263







20,409



42,347



753,0192005



350,000











17,784







7,746



44,613



420,143Brian J. Delaney


2007



298,077







412,919



227,081



300,000







411,155



1,649,231(Chief Operations


2006



250,000











228,971



400,000







15,039



894,010Officer)


2005



246,154











6,195



250,000







7,835



510,184John R. Troka, Jr.


2007



196,923



160,000



121,570



40,992



75,000







5,392



599,877(Interim Chief


2006



180,000











48,136



75,000



11,326



5,390



319,852Financial Officer)


2005



180,000



33,000











13,000



2,815



2,632



231,447Gregory G. Hopkins


2007



275,000



375,000







440,780











632,007



1,722,787(Executive Vice President


2006



275,000











431,450



550,000







22,246



1,278,696Global Accounts)


2005



275,000











170,425



275,000







15,839



736,264     (1)
    
    Amounts set forth in column (d) are discretionary cash
    bonus payments outside of the MIP that are not subject to
    pre-established and communicated performance measures. Bonuses
    are paid in the first quarter of the year following the year for
    which such bonus was awarded.(2)
    
    Amounts set forth in columns (e) and (f) were
    calculated pursuant to SFAS 123(R) for 2007 and 2006 and
    APB 25 for 2005. For a discussion of the assumptions and
    methodologies used to calculate the amounts referred to above,
    please see Item 7. Managements Discussion and
    Analysis of Financial Condition and Results of
    Operations  Adoption of SFAS No. 123(R) and
    Equity-Based Compensation Expense in this
    Form 10-K.(3)
    
    Amounts set forth in column (g) are annual MIP payments
    that are subject to the pre-established and communicated
    performance measures (specifically, the success factors
    described above in the section entitled Executive
    Compensation Program Design and Implementation  The
    Role of Cash Compensation  Performance-Based Cash
    Incentives) and are paid during the first quarter of the
    year following the year for which such bonus was awarded.(4)
    
    Amounts set forth in column (h) are summarized below in the
    section entitled Nonqualified Deferred Compensation.
    Pursuant to Instruction 3 to Item 402(c)(viii) of
    Regulation S-K,
    negative amounts are disclosed in the Nonqualified Deferred
    Compensation table below, but are excluded from the Summary
    Compensation Table.(5)
    
    Amounts set forth in column (i) are summarized below in the
    section entitled All Other Compensation.   82




---



##### Table of Contents



Nonqualified
    Deferred Compensation
    AggregateExecutive


Registrant


Aggregate


Withdrawals/


AggregateContributions


Contributions


Earnings in


Distributions


Balance atin Last


in Last


Last Fiscal


in Last


Last FiscalFiscal
    Year(1)


Fiscal Year


Year(2)


Fiscal Year


Year
    End(3)Name(a)

($)(b)


($)(c)


($)(d)


($)(e)


($)(f)Kenneth D. Tuchman










(63,194
)






1,655,450James E. Barlett










21,751







583,531Brian J. Delaney


















John R. Troka, Jr.


15,215







(272
)






98,146Gregory G. Hopkins


















     (1)
    
    Amounts set forth in column (b) are included in
    Salary, Bonus and/or Non-Equity
    Incentive Plan compensation columns of the Summary
    Compensation Table above for the named executive officers.(2)
    
    With the exception of negative amounts for Messrs. Tuchman
    and Troka, amounts set forth in column (d) are included in
    the in the Change in Value of Non-qualified Deferred
    Compensation Earnings column of the Summary Compensation
    Table above for the named executive officers.(3)
    
    Amounts set forth in column (f) were reported as
    compensation to the named executive officers in the Summary
    Compensation Table for 2007 and previous years.  All Other
    Compensation Table
    Mr.


Mr.


Mr.


Mr.


Mr.Perquisite

Tuchman


Barlett


Delaney


Troka


HopkinsPersonal Use of Company
    Aircraft(1)

$
14,169


$
15,237


$



$



$
Automobile(1)


33,952



15,474











Executive Health/Dental/Vision Premiums


4,879



3,741



2,885







5,104Group Term/Executive Life Premiums


108



475



6,917



111



5,868Deferred Death Benefit


670



9,080







129



401(k) Plan Matching Contributions










6,750



5,152



6,750409A
    Payments(2)






295,528



394,603







614,285Total

$
53,778


$
339,535


$
411,155


$
5,392


$
632,007     (1)
    
    Automobile and personal use of the company aircraft are
    generally limited to Messrs. Tuchman and Barlett, the CEO
    and Vice Chairman, respectively.(2)
    
    We believe perquisites for executive officers should be
    extremely limited in scope and value. As a result, we have
    historically given nominal perquisites. However, as previously
    disclosed above in the section entitled Executive
    Compensation Program Design and Implementation  Tax
    and Accounting Considerations  Tax Implications for
    Officers, in 2007 our Board determined that in the case of
    stock options issued with stated exercise prices that were lower
    than the fair market value on the appropriate measurement dates,
    we would pay for all Incremental Adverse Taxes (as defined
    above) on behalf of any employees (including named executive
    officers). We have already paid 83




---



##### Table of Contents



Incremental Adverse Taxes on behalf of Messrs. Barlett,
    Delaney and Hopkins with respect to options exercised (or, under
    Section 409A of the Internal Revenue Code, deemed
    exercised with respect to Mr. Barlett) during 2007.
    We have estimated the amount of Incremental Adverse Taxes that
    will be made on behalf of Messrs. Barlett, Delaney and
    Hopkins with respect to stock options vested, exercised or, with
    respect to Mr. Barlett, deemed exercised during
    2006.  Grants of
    Plan-Based Awards
    EstimatedFuturePayoutsUnderEquity


All Other


All OtherIncentive


Stock


OptionPlan


Awards:


Awards:





Grant DateEstimated Future Payouts Under Non-Equity Incentive Plan
    Awards(1)


Awards(2)


Number of


Number of


Exercise or


Fair ValueThreshold,


Shares of


Securities


Base Price


of StockTarget &


Stock or


Underlying


of Option


and OptionThreshold


Target


Maximum


Maximum


Units(3)


Options


Awards


Awards(4)Name(a)

Grant Date(b)


($)(c)


($)(d)


($)(e)


($)(f)


(#)(g)


(#)(h)


($ / Sh)(i)


($)(j)Kenneth D. Tuchman


6/22/2007















250,000
(5)


250,000











8,300,000James E. Barlett


6/22/2007



















500,000











16,600,000Brian J. Delaney


1/22/2007



200,000



400,000



600,000



166,667
(6)


83,333











2,192,491John R. Troka, Jr.


1/22/2007



93,750



187,500



281,250



50,000
(6)


25,000











645,500Gregory G. Hopkins






150,000



300,000



450,000



















     (1)
    
    Amounts set forth in columns (c), (d) and (e) are
    based on estimated future payouts under the 2008 Management
    Incentive Plan (the 2008 MIP), assuming that the
    2008 MIP is funded by the incentive benefit pool and the
    Compensation Committee elects to award performance-based cash
    incentives. Messrs. Tuchman and Barlett have elected not to
    participate in Management Incentive Plans in prior years and it
    is anticipated that they will not participate in the 2008 MIP.
    However, Messrs. Tuchman and Barlett are still eligible to
    receive payments under the 2008 MIP.(2)
    
    Amounts set forth in column (f) represent the number of
    shares underlying performance-based RSU awards. The threshold,
    target and maximum amounts are the same for each award.(3)
    
    Amounts set forth in column (g) represent the number of
    shares underlying
    time-in-service
    based RSU awards.(4)
    
    Amounts set forth in column (j) represent the grant date
    fair value as determined pursuant to SFAS 123(R). See
    Note 20 of the Notes to Consolidated Financial Statements
    for a discussion of the relevant assumptions used in this
    determination.(5)
    
    This performance-based RSU award is scheduled to vest in five
    equal annual installments beginning on March 1, 2008.
    Subsequent to year end, the first 50,000 RSUs did not vest
    because we did not meet the RSU operating income objectives in
    our internal business plan. No performance objectives have been
    established for the vesting scheduled to vest on March 1,
    2011 and 2012.(6)
    
    This performance-based RSU award is scheduled to vest in three
    equal annual installments beginning on March 1, 2008.
    Subsequent to year end, the first annual installment of RSUs did
    not vest because we did not meet the RSU operating income
    objectives in our internal business plan.  Description of
    Plan-Based Awards
   84




---



##### Table of Contents



Outstanding
    Equity Awards at Year-End
    Option Awards (as of December 31, 2007)Number of Securities Underlying


OptionOption


Unexercised Options


Exercise


OptionGrant


Exercisable


Unexercisable


Price


ExpirationName(a)

Date(b)


(#)(c)


(#)(d)


($)(e)


Date(f)Kenneth D. Tuchman


10/1/2001



420,000







6.98



10/1/20112/25/2002



420,000







11.83



2/25/201211/4/2005



400,000



400,000
(1)


11.35



11/4/2015James E. Barlett


1/31/2000



25,000







24.06



1/31/20105/3/2000



31,000







31.63



5/3/20105/24/2004



31,000







9.42



5/24/201110/15/2001



400,000







7.84



10/15/20112/25/2002



100,000







11.83



2/25/20125/13/2005



125,000



125,000
(1)


7.34



5/13/2015Brian J. Delaney


12/2/2002



3,000







8.86



12/2/20126/7/2004







12,000
(1)


7.78



6/7/20146/23/2004







7,500
(2)


8.36



6/23/20149/9/2005







50,000
(1)


8.59



9/9/2015John R. Troka, Jr.


1/14/2002



35,000







13.10



1/14/20122/28/2002



7,500







11.63



2/28/20123/3/2003



3,000







5.01



3/3/20136/23/2004



15,000



5,000
(2)


8.36



6/23/20142/15/2006



2,500



7,500
(3)


12.75



2/15/2016Gregory G. Hopkins


4/12/2004







75,000
(2)


6.24



4/12/2014     (1)
    
    The unvested portion of this option award is scheduled to vest
    in two equal installments beginning on the next anniversary of
    the option grant date.(2)
    
    The unvested portion of this option award is scheduled to vest
    in its entirety on June 23, 2008.(3)
    
    The unvested portion of this option award is scheduled to vest
    in three equal installments beginning on the next anniversary of
    the option grant date.  Stock Awards (as of December 31, 2007)Equity IncentiveEquity Incentive


Plan Awards:Plan Awards:


Market or PayoutNumber of


Value ofNumber of


Market Value of


Unearned


UnearnedShares or


Shares or


Shares,


Shares,Units of


Units of


Units or


Units orStock


Stock


Other Rights


Other RightsThat Have


That Have


That Have


That HaveAward


Not Vested


Not
    Vested(1)


Not Vested


Not
    Vested(2)Name(a)

Grant Date(g)


(#)(h)


($)(i)


(#)(j)


($)(k)Kenneth D. Tuchman


6/22/2007



250,000
(3)


5,317,500



250,000
(4)


5,317,500James E. Barlett


6/22/2007



500,000
(5)


10,635,000







Brian J. Delaney


1/22/2007



83,333
(6)


1,772,500



166,667
(7)


3,545,000John R. Troka, Jr.


1/22/2007



25,000
(6)


531,750



50,000
(7)


1,063,500Gregory G. Hopkins


















  85




---



##### Table of Contents



(1)
    
    The dollar amounts set forth in column (i) are determined
    by multiplying (x) the number of shares or units reported
    in column (h) by (y) $21.27 (the closing price of our
    common stock on December 31, 2007, the last trading day of
    2007).(2)
    
    The dollar amounts set forth in column (k) are determined
    by multiplying (x) the number of shares or units reported
    in column (j) by (y) $21.27 (the closing price of our
    common stock on December 31, 2007, the last trading day of
    2007).(3)
    
    The unvested portion of this
    time-in-service
    RSU award is scheduled to vest in five equal annual installments
    beginning on January 22, 2008.(4)
    
    The unvested portion of this performance-based RSU award is
    scheduled to vest in five equal annual installments beginning on
    March 1, 2008. Subsequent to year end, the first 50,000
    RSUs did not vest because we did not meet the RSU operating
    income objectives in our internal business plan. No performance
    objectives have been established for the RSUs scheduled to vest
    on March 1, 2011 and 2012.(5)
    
    The unvested portion of this
    time-in-service-based
    RSU award is scheduled to vest in ten equal annual installments
    beginning on January 22, 2008.(6)
    
    The unvested portion of this
    time-in-service
    RSU award is scheduled to vest in three equal annual
    installments beginning on January 22, 2008. Subsequent to
    year end, the first annual installment RSUs did not vest because
    we did not meet the RSU operating income objectives in our
    internal business plan.(7)
    
    The unvested portion of this performance-based RSU award is
    scheduled to vest in three equal annual installments beginning
    on March 1, 2008. Subsequent to year end, the first annual
    installment of RSUs did not vest because we did not meet the RSU
    operating income objectives in our internal business plan.  Option
    Exercises and Stock Vested
    Option Awards


Stock AwardsNumber of





Number ofShares


Value


Shares


ValueAcquired on


Realized on


Acquired on


Realized onExercise


Exercise(1)


Vesting


VestingName(a)

(#)(b)


($)(c)


(#)(d)


($)(e)Kenneth D. Tuchman














James E. Barlett














Brian J. Delaney


67,250



1,411,858







John R. Troka, Jr.














Gregory G. Hopkins


75,000



1,809,683







     (1)
    
    The dollar amounts set forth in column (c) above for option
    awards are determined by multiplying (i) the number of
    shares of common stock to which the exercise of the option
    related by (ii) the excess of the per-share closing price
    of our common stock on the date of exercise over the exercise
    price of the options.  Potential
    Payments Upon Termination or Change in Control
  Employment
    Agreements
   86




---



##### Table of Contents



Agreement with Kenneth D. Tuchman.
  Agreement with James E. Barlett.
  Agreement with Gregory G. Hopkins.
  Change in
    Control
    
    Any RSUs scheduled to vest more than 12 months from the
    effective date of a change in control will vest on the one-year
    anniversary of the change in control; and
    Any RSUs scheduled to vest less than 12 months from the
    effective date of a change in control will continue to vest
    pursuant to the original vesting provisions, provided that if
    the executives employment is terminated by TeleTech
    without cause or by the executive for good
    reason (as those terms are defined in the applicable award
    agreement), the unvested RSUs will vest in full.    TotalEmployment


Estimated Total


Change inAgreement


Value of Equity


ControlName

Payout


Acceleration(1)


ValueKenneth D. Tuchman

$
807,557


$
14,603,000


$
15,410,557James E. Barlett

$
788,015


$
12,376,250


$
13,164,265Brian J. Delaney

$



$
6,210,205


$
6,210,205John R. Troka, Jr.

$



$
1,723,700


$
1,723,700Gregory G. Hopkins

$
137,500


$
1,127,250


$
1,264,750  87




---



##### Table of Contents



(1)
    
    Dollar amounts set forth in this column represent the aggregate
    of: (i) the number of unvested RSUs that would vest upon a
    change in control multiplied by $21.27, the closing price of our
    common stock on December 31, 2007; and (ii) the number
    of unvested stock options that would vest upon a change in
    control multiplied by the excess of $21.27 over the exercise
    price of such stock options.  Director
    Compensation
      2007 Non-Employee
    Director Compensation
    Change inPensionValue andFees











Non-qualifiedEarned or








Non-Equity


DeferredPaid in


Stock


Option


Plan


Compensation


All OtherCash


Awards(1)


Awards(1)


Compensation


Earnings


Compensation


TotalName(a)

($)(b)


($)(c)


($)(d)


($)(e)


($)(f)


($)(g)


($)(h)William A. Linnenbringer


88,000







169,383















257,383Ruth C. Lipper


73,000







169,383















242,383Shrikant Mehta


56,000







169,383















225,383Shirley Young


61,000







169,383















230,383     (1)
    
    The amounts set forth in columns (c) and (d) of the
    table above reflect the aggregate dollar amounts recognized for
    stock awards and option awards, respectively, for financial
    statement reporting purposes with respect to 2007. The dollar
    amount set forth in column (d) for each director is based
    on the fair market value of the stock at the time of the grant
    (June 1, 2007), which was $35.81, the closing market price
    on that date. For a discussion of the assumptions and
    methodologies used to calculate the amounts referred to above,
    please see Item 7. Managements Discussion and
    Analysis of Financial Condition and Results of Operations
    Adoption of SFAS No. 123(R) and Equity-Based
    Compensation Expense in this
    Form 10-K. 88




---



##### Table of Contents



Equity Interests
    of Non-Employee Directors
    Number ofShares Subject


Number ofto Outstanding


Unvested StockOptions as of


Awards as of12/31/07(1)


12/31/07William A. Linnenbringer


35,000



Ruth C. Lipper


100,000



Shrikant Mehta


15,000



Shirley Young


45,000



     (1)
    
    As described above, we granted each of our non-employee
    directors an option to purchase 15,000 shares of common
    stock on June 1, 2007, and each award had a fair value of
    $169,383 on that date.     ITEM 12.  SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    AND RELATED STOCKHOLDER MATTERS
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT    
    Each person whom we know beneficially owns more than five
    percent of our common stock;
    Each of our directors and nominees for the Board;
    Each of our named executive officers; and
    All of our directors and executive officers as a group.  c/o TeleTech
     89




---



##### Table of Contents



Shares Beneficially OwnedOptions andRSUs VestingWithin 60 Days of


Percent ofName

Common Stock


7/1/2008


ClassKenneth D. Tuchman


30,736,626
(1)


1,240,000



44.9
%James E. Barlett


234,136
(2)


774,500



1.4
%William A. Linnenbringer


50,100
(3)


35,000



*Ruth C. Lipper


25,000



100,000



*Shrikant C. Mehta


15,000



15,000



*Shirley Young


7,000



45,000



*Brian J. Delaney


11,156
(4)


16,500



*John R. Troka, Jr.


3,136
(5)


70,500



*Gregory G. Hopkins






75,000



*All directors and executive officers as a group (12 persons)


31,089,329



2,409,700



46.3
%     *
    
    Less than 1%.(1)
    
    Consists of 30,709,872 shares subject to sole voting and
    investment power and 26,754 shares with shared voting and
    investment power. The shares with sole voting and investment
    power consist of (i) 5,743,066 shares held by
    Mr. Tuchman, (ii) 14,766,806 shares held by a
    limited liability limited partnership controlled by
    Mr. Tuchman, (iii) 10,000,000 shares held by a
    revocable trust controlled by Mr. Tuchman and
    (iv) 200,000 shares held by another limited liability
    limited partnership controlled by Mr. Tuchman. The shares
    with shared voting and investment power consist of
    (i) 16,754 shares owned by a trust for the benefit of
    Mr. Tuchmans nieces and nephews, for which
    Mr. Tuchmans spouse is the sole trustee and
    (ii) 10,000 shares owned by Mr. Tuchmans
    spouse.(2)
    
    Includes 34,136 shares received in connection with vesting
    of RSUs, consisting of 50,000 RSUs that vested less
    15,864 shares surrendered in satisfaction of the estimated
    income tax liability.(3)
    
    Includes 50,100 shares beneficially owned through a family
    trust.(4)
    
    Includes 3,136 shares received in connection with vesting
    of RSUs, consisting of 5,000 RSUs that vested less
    1,864 shares surrendered in satisfaction of the estimated
    income tax liability.(5)
    
    Includes 11,156 shares received in connection with vesting
    of RSUs, consisting of 16,667 RSUs that vested less
    5,511 shares surrendered in satisfaction of the estimated
    income tax liability. 90




---



##### Table of Contents



Equity
    Compensation Plan Information
    Number ofSecuritiesRemainingNumber of





Available forSecurities to be





Future IssuanceIssued Upon





Under EquityExercise of


Weighted-Average


CompensationOutstanding


Exercise Price of


Plans (ExcludingOptions, RSUs,


Outstanding


SecuritiesWarrants and


Options, Warrants


Reflected inPlan Category

Rights(a)


and Rights(b)


Column (a))(c)Equity compensation plans approved by security holders


7,084,107
(1)

$
11.45
(2)


3,722,994Equity compensation plans not approved by security holders










Total


7,084,107







3,722,994     (1)
    
    Includes options to purchase 4,860,074 shares and 2,224,033
    RSUs issued under our equity incentive plans.(2)
    
    Weighted average exercise price of outstanding stock options;
    excludes RSUs, which have no exercise price. ITEM 13.  CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS       91




---



##### Table of Contents



ITEM 14.  PRINCIPAL
    ACCOUNTANTS FEES AND SERVICES  Fees Paid to
    Accountants
    2007


2007


2006PwC


E&Y


E&YAudit fees

$
3,030


$
5,294


$
1,894Audit-related fees


105



416



316Tax fees


8



73



62All other fees


129



60



Total

$
3,272


$
5,843


$
2,272   
    Audit Fees:  This category includes the audit
    of our annual financial statements; review of financial
    statements included in our
    Form 10-Q
    quarterly reports; the audit of managements assessment of
    the effectiveness, as well as the audit of the effectiveness, of
    our internal controls over financial reporting included in this
    Form 10-K
    and as required by Section 404 of the Sarbanes-Oxley Act of
    2002; and services that are normally provided by the independent
    registered public accounting firm in connection with statutory
    and regulatory filings or engagements for those years. This
    category also includes advice on accounting matters that arose
    during, or as a result of, the audit or the review of interim
    financial statements, statutory audits required by
    non-U.S. jurisdictions
    and the preparation of an annual management letter
    on internal control matters. Of the total audit fees related to
    2007, $5.8 million is related to the audit of restatement
    of prior periods, and $0.9 million relates to statutory
    audits required by
    non-U.S. jurisdictions.
    Audit-related fees:  This category consists of
    assurance and related services provided by the independent
    registered public accounting firm that are reasonably related to
    the performance of the audit or review of our financial
    statements and are not reported above under Audit
    Fees. Audit-related fees included accounting consultations
    and audits of benefit plans, IT and payroll.
    Tax fees:  This category consists of
    professional services rendered by the independent registered
    public accounting firm, primarily in connection with our tax
    planning and compliance activities, including the preparation of
    tax returns in certain overseas jurisdictions and technical tax
    advice related to the preparation of tax returns.
    All other fees:  This category consists of fees
    for other corporate services.    Policy on Audit
    Committee Pre-Approval of Audit and Permissible Non-Audit
    Services
    
    Any and all services to be provided by our external audit firm
    must be approved by the Audit Committee. Any director, officer
    or employee of the company proposing to engage the services of
    our external audit firm for any reason (regardless of scope of
    the project or associated costs) must submit a request for
    approval, in writing, to our corporate controller. The corporate
    controller will review the request and, if necessary, obtain
    additional information from the requestor.
    If the proposed services fall into one of the specified
    prohibited services categories as set forth in the
    Sarbanes-Oxley Act of 2002, the corporate controller will deny
    the request. 92




---



##### Table of Contents




    Both the corporate controller and the assistant general counsel
    will review requests that are not clearly determined to fall
    into the prohibited services category. Requests that are
    approved by the corporate controller and assistant general
    counsel will then be forwarded to the corporate chief financial
    officer for further review.
    Requests that are approved by the corporate chief financial
    officer will be forwarded to the Audit Committee chairperson
    (projects with a total expected cost of less than or equal to
    $100,000) or to the Audit Committee (projects with a total
    expected cost of more than $100,000) by the assistant general
    counsel. The Audit Committee chairperson reports all
    pre-approvals to the full Audit Committee at each regularly
    scheduled meeting and all such pre-approvals are ratified by the
    full Audit Committee.
    The corporate controller will be responsible for tracking the
    status of all requests and for reporting the final disposition
    to the requestor and to the assistant general counsel. The
    assistant general counsel will be responsible for maintaining
    documentation supporting the disposition of all requests. No
    contracts or engagement letters may be signed and no work may
    commence until the requisite written approval has been received. PART IV  ITEM 15.  EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES
    1
.

Consolidated Financial Statements.The Index to Consolidated Financial Statements is set forth on
    page F-1
    of this report.2
.

Financial Statement Schedules.All schedules for TeleTech have been omitted since the required
    information is not present or not present in amounts sufficient
    to require submission of the schedule, or because the
    information is included in the respective Consolidated Financial
    Statements or notes thereto.3


Exhibits.   EXHIBIT INDEX
  Exhibit No.

Description3
.01

Restated Certificate of Incorporation of TeleTech (incorporated
    by reference to Exhibit 3.1 to TeleTechs Amendment
    No. 2 to
    Form S-1
    Registration Statement (Registration
    No. 333-04097)
    filed on July 5, 1996)3
.02

Amended and Restated Bylaws of TeleTech (incorporated by
    reference to Exhibit 3.2 to TeleTechs Current Report
    on
    Form 8-K
    filed on May 29, 2008)10
.01

TeleTech Holdings, Inc. Stock Plan, as amended and restated
    (incorporated by reference to Exhibit 10.7 to
    TeleTechs Amendment No. 2 to
    Form S-1
    Registration Statement (Registration
    No. 333-04097)
    filed on July 5, 1996)**10
.02

TeleTech Holdings, Inc. Amended and Restated Employee Stock
    Purchase Plan (incorporated by reference to Exhibit 99.1 to
    TeleTechs
    Form S-8
    Registration Statement (Registration
    No. 333-69668)
    filed on September 19, 2001)**10
.03

TeleTech Holdings, Inc. Directors Stock Option Plan, as amended
    and restated (incorporated by reference to Exhibit 10.8 to
    TeleTechs Amendment No. 2 to
    Form S-1
    Registration Statement (Registration
    No. 333-04097)
    filed on July 5, 1996)**10
.04

TeleTech Holdings, Inc. Amended and Restated 1999 Stock Option
    and Incentive Plan (incorporated by reference to
    Exhibit 99.1 to TeleTechs
    Form S-8
    Registration Statement (Registration
    No. 333-96617)
    filed on July 17, 2002)**10
.05*

Form of Restricted Stock Unit Agreement**10
.06*

Form of Non-Qualified Stock Option Agreement (below Vice
    President)**10
.07*

Form of Restricted Stock Unit Agreement (Vice President and
    above)** 93




---



##### Table of Contents



Exhibit No.

Description10
.08*

Form of Restricted Stock Unit Agreement (Non-Employee Director)**10
.09

Employment Agreement dated October 15, 2001 between James
    Barlett and TeleTech (incorporated by reference to
    Exhibit 10.66 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.10

Stock Option Agreement dated October 15, 2001 between James
    Barlett and TeleTech (incorporated by reference to
    Exhibit 10.70 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.11

Restricted Stock Agreement dated October 15, 2001 between
    James Barlett and TeleTech (incorporated by reference to
    Exhibit 10.71 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.12

Restricted Stock Agreement dated October 15, 2001 between
    James Barlett and TeleTech (incorporated by reference to
    Exhibit 10.72 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.13

Employment Agreement dated October 15, 2001 between Ken
    Tuchman and TeleTech (incorporated by reference to
    Exhibit 10.68 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.14

Stock Option Agreement dated October 1, 2001 between Ken
    Tuchman and TeleTech (incorporated by reference to
    Exhibit 10.69 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.15

Amended and Restated Credit Agreement among TeleTech Holdings,
    Inc. as Borrower, The Lenders named herein, as lenders and
    Keybank National Association, as Lead Arranger, Sole Book Runner
    and Administrative Agent dated as of September 28, 2006
    (incorporated by reference to Exhibit 10.39 to
    TeleTechs Annual Report on
    Form 10-K
    filed on February 7, 2007)10
.16

First Amendment to the Amended and Restated Credit Agreement
    among TeleTech Holdings, Inc. as Borrower, the Lenders named
    herein, as Lenders and Keybank National Association, as Lead
    Arranger, Sole Book Runner and Administrative Agent dated as of
    October 24, 2006 (incorporated by reference to
    Exhibit 10.40 to TeleTechs Annual Report on
    Form 10-K
    filed on February 7, 2007)10
.17

Second Amendment to the Amended and Restated Credit Agreement
    among TeleTech Holdings, Inc. as Borrower, the Lenders named
    herein, as Lenders and Keybank National Association, as Lead
    Arranger, Sole Book Runner and Administrative Agent dated as of
    November 15, 2007 (incorporated by reference to
    Exhibit 10.1 to TeleTechs Current Report on
    Form 8-K
    filed on December 4, 2007)10
.18

Third Amendment to the Amended and Restated Credit Agreement
    among TeleTech Holdings, Inc. as Borrower, the Lenders named
    herein, as Lenders and Keybank National Association, as Lead
    Arranger, Sole Book Runner and Administrative Agent dated as of
    March 25, 2008 (incorporated by reference to
    Exhibit 10.1 TeleTechs Current Report on
    Form 8-K
    filed on March 27, 2008)10
.19

Fourth Amendment to the Amended and Restated Credit Agreement
    among TeleTech Holdings, Inc. as Borrower, the Lenders named
    herein, as Lenders and Keybank National Association, as Lead
    Arranger, Sole Book Runner and Administrative Agent dated as of
    June 30, 2008 (incorporated by reference to
    Exhibit 10.1 TeleTechs Current Report on
    Form 8-K
    filed on June 30, 2008)21
.01*

List of subsidiaries23
.01*

Consent of PricewaterhouseCoopers LLP, Independent Registered
    Public Accounting Firm23
.02*

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm31
.01*

Rule 13a-14(a)
    Certification of CEO of TeleTech31
.02*

Rule 13a-14(a)
    Certification of CFO of TeleTech32
.01*

Written Statement of Chief Executive Officer and Acting Chief
    Financial Officer Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)     *
    
    Filed herewith.**
    
    Identifies exhibit that consists of or includes a management
    contract or compensatory plan or arrangement. 94




---



##### Table of Contents



SIGNATURES      By:
    /s/  Kenneth
    D. Tuchman      Signature

Title/s/  Kenneth
    D. TuchmanKenneth
    D. Tuchman

PRINCIPAL EXECUTIVE OFFICER
    Chief Executive Officer and Chairman of the Board/s/  John
    R. Troka, Jr.John
    R. Troka, Jr.

PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER Senior Vice President
    Finance  Global Operations and Interim Chief
    Financial Officer/s/  James
    E. BarlettJames
    E. Barlett

DIRECTOR/s/  William
    A. LinnenbringerWilliam
    A. Linnenbringer

DIRECTOR/s/  Ruth
    C. LipperRuth
    C. Lipper

DIRECTOR/s/  Shrikant
    MehtaShrikant
    Mehta

DIRECTOR/s/  Shirley
    YoungShirley
    Young

DIRECTOR  95




---



##### 



INDEX TO THE
    CONSOLIDATED FINANCIAL STATEMENTS OF TELETECH HOLDINGS,
    INC.   
 Page No.Report of Independent Registered Public
    Accounting Firm, PricewaterhouseCoopers LLP


F-2Report of Independent Registered Public
    Accounting Firm, Ernst & Young LLP


F-4Consolidated Balance Sheets as of
    December 31, 2007 and 2006


F-5Consolidated Statements of Operations and
    Comprehensive Income for the Years Ended December 31, 2007,
    2006 and 2005


F-6Consolidated Statements of Stockholders
    Equity for the Years Ended December 31, 2007, 2006 and
    2005


F-7Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2007, 2006 and 2005


F-8Notes to the Consolidated Financial Statements


F-9   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control 
    Integrated Framework
 F-2




---



##### Table of Contents



PRICEWATERHOUSECOOPERS
    LLP
    F-3




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              ERNST &
    YOUNG LLP
    Except for Note 2, as to which the date is
 F-4




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets
    (Amounts in thousands except share amounts)  December 31,2007


2006As restatedASSETSCurrent assetsCash and cash equivalents

$
91,239


$
58,352Accounts receivable, net


270,988



235,958Prepaids and other current assets


62,344



37,886Deferred tax assets, net


8,386



11,081Income taxes receivable


26,868



15,875Total current assets


459,825



359,152Long-term assetsProperty, plant and equipment, net


174,809



161,061Goodwill


45,154



57,859Contract acquisition costs, net


6,984



9,674Deferred tax assets, net


39,764



46,166Other long-term assets


33,759



30,509Total long-term assets


300,470



305,269Total assets

$
760,295


$
664,421LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
38,761


$
31,287Accrued employee compensation and benefits


87,480



75,445Other accrued expenses


28,872



37,649Income taxes payable


18,552



29,734Deferred tax liabilities


88



395Other short-term liabilities


13,057



9,520Total current liabilities


186,810



184,030Long-term liabilitiesLine of credit


65,400



65,000Grant advances


6,741



8,001Deferred tax liabilities


57



137Other long-term liabilities


46,531



38,662Total long-term liabilities


118,729



111,800Total liabilities


305,539



295,830Minority interest


3,555



5,877Commitments and contingencies (Note 17)Stockholders equityPreferred stock; $0.01 par; 10,000,000 shares
    authorized; zero shares outstanding as of December 31, 2007
    and 2006






Common stock; $.01 par value; 150,000,000 shares
    authorized; 69,827,671 and 70,103,437 shares outstanding as
    of December 31, 2007 and 2006, respectively


698



701Additional paid-in capital


334,593



298,327Treasury stock at cost: 12,077,609 and 10,492,209 shares,
    respectively


(143,205
)


(96,200
)Accumulated other comprehensive income


57,888



10,525Retained earnings


201,227



149,361Total stockholders equity


451,201



362,714Total liabilities and stockholders equity

$
760,295


$
664,421    F-5




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Consolidated Statements of Operations and Comprehensive
    Income
    (Amounts in thousands except per share amounts)  Year Ended December 31,2007


2006


2005As restated


As restatedRevenue

$
1,369,632


$
1,210,753


$
1,085,903Operating expensesCost of services (exclusive of depreciation and amortization
    presented separately below)


1,001,459



882,809



809,059Selling, general and administrative


207,528



199,995



183,111Depreciation and amortization


55,953



51,989



54,412Restructuring charges, net


7,115



1,630



2,673Impairment losses


15,789



565



4,711Total operating expenses


1,287,844



1,136,988



1,053,966Income from operations


81,788



73,765



31,937Other income (expense)Interest income


2,364



2,209



2,790Interest expense


(6,645
)


(6,560
)


(4,696
)Other, net


(2,156
)


(91
)


1,750Total other expense


(6,437
)


(4,442
)


(156
)Income before income taxes and minority interest


75,351



69,323



31,781Provision for income taxes


(19,562
)


(16,474
)


(3,953
)Income before minority interest


55,789



52,849



27,828Minority interest


(2,686
)


(1,868
)


(1,542
)Net income

$
53,103


$
50,981


$
26,286Other comprehensive income (loss)Foreign currency translation adjustments


25,887



9,068



3,380Derivatives valuation, net of tax


21,593



(4,925
)


(979
)Other


(117
)


(71
)


(24
)Total other comprehensive income


47,363



4,072



2,377Comprehensive income

$
100,466


$
55,053


$
28,663Weighted average shares outstandingBasic


70,228



69,184



72,121Diluted


72,638



69,869



73,134Net income per shareBasic

$
0.76


$
0.74


$
0.36Diluted

$
0.73


$
0.73


$
0.36    F-6




---



##### Table of Contents





TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Consolidated Statements of Stockholders Equity
    (Amounts in thousands)  AccumulatedAdditional


Stock


Other





TotalPreferred Stock


Common Stock


Treasury


Paid-in


Purchase


Comprehensive


Retained


StockholdersShares


Amount


Shares


Amount


Stock


Capital


Warrants


Income (Loss)


Earnings


EquityBalance as of December 31, 2004, as previously
    reported





$




74,932


$
750


$
(11,864
)

$
210,853


$
5,100


$
3,249


$
114,457


$
322,545Cumulative effect of restatement adjustments






















42,430







827



(42,363
)


894Balance as of December 31, 2004 (as restated)










74,932



750



(11,864
)


253,283



5,100



4,076



72,094



323,439Net income


































26,286



26,286Foreign currency translation adjustments






























3,380







3,380Derivatives valuation, net of tax






























(979
)






(979
)Purchases through employee stock purchase plan










65











536















536Exercise of stock options










1,269



13







7,374















7,387Excess tax benefit from exercise of stock options






















2,832















2,832Purchases of common stock










(7,104
)


(71
)


(67,773
)


















(67,844
)Equity-based compensation expense






















674















674Expiration of stock purchase warrants






















5,100



(5,100
)










Amortization of deferred compensation






















74















74Other






















(698
)






(24
)






(722
)Balance as of December 31, 2005 (as restated)










69,162



692



(79,637
)


269,175







6,453



98,380



295,063Net income


































50,981



50,981Foreign currency translation adjustments






























9,068







9,068Derivatives valuation, net of tax






























(4,925
)






(4,925
)Exercise of stock options










2,231



22







19,412















19,434Excess tax benefit from exercise of stock options






















2,255















2,255Equity-based compensation expense






















7,485















7,485Purchases of common stock










(1,290
)


(13
)


(16,563
)


















(16,576
)Other






























(71
)






(71
)Balance as of December 31, 2006 (as restated)










70,103



701



(96,200
)


298,327







10,525



149,361



362,714Net income


































53,103



53,103Foreign currency translation adjustments






























25,887







25,887Derivatives valuation, net of tax






























21,593







21,593Cumulative effect of adoption of FIN 48


































(1,237
)


(1,237
)Exercise of stock options










1,311



13







15,936















15,949Excess tax benefit from exercise of stock options






















6,969















6,969Equity-based compensation expense






















13,361















13,361Purchases of common stock










(1,586
)


(16
)


(47,005
)


















(47,021
)Other






























(117
)






(117
)Balance as of December 31, 2007





$




69,828


$
698



(143,205
)

$
334,593


$



$
57,888


$
201,227


$
451,201


F-7




---



##### Table of Contents





TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Consolidated Statements of Cash Flows
    (Amounts in thousands)  December 31,2007


2006


2005As restated


As restatedCash flows from operating activitiesNet income

$
53,103


$
50,981


$
26,286Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


55,953



51,989



54,412Amortization of contract acquisition costs


2,544



3,392



3,890Provision for doubtful accounts


576



2,723



(153
)(Gain) loss on disposal of assets


(428
)


232



(271
)Impairment losses


15,789



565



4,711Deferred income taxes


(1,079
)


(9,367
)


(19,918
)Minority interest


2,686



1,868



1,542Excess tax benefit from exercise of stock options










2,832Equity-based compensation expense


13,361



7,485



674Changes in assets and liabilitiesAccounts receivable


(32,588
)


(12,934
)


(57,541
)Prepaids and other assets


(1,834
)


(14,578
)


(3,150
)Accounts payable and other accrued expenses


(5,135
)


12,130



20,495Other liabilities


566



4,761



11,125Net cash provided by operating activities


103,514



99,247



44,934Cash flows from investing activitiesAcquisition of a business, net of cash acquired of
    $0.5 million






(45,802
)


Proceeds from disposition of assets


11,968







Purchases of property, plant and equipment


(61,083
)


(66,016
)


(37,606
)Payment for contract acquisition costs






(173
)


(2,160
)Purchases of intangible assets






(1,510
)


(1,587
)Purchases of foreign currency forward option contracts






(486
)


(1,683
)Net cash used in investing activities


(49,115
)


(113,987
)


(43,036
)Cash flows from financing activitiesProceeds from line of credit


657,700



468,400



412,500Payments on line of credit


(657,300
)


(430,100
)


(385,800
)Payments on long-term debt and capital lease obligations


(1,301
)


(1,511
)


(1,107
)Payments of debt issuance costs


(18
)


(923
)


Payments from minority shareholder










640Payments to minority shareholder


(5,076
)


(2,594
)


(3,354
)Payments from employee stock purchase plan










536Proceeds from exercise of stock options


15,949



19,434



7,387Excess tax benefit from exercise of stock options


6,969



2,255



Purchases of treasury stock


(47,021
)


(16,576
)


(67,844
)Net cash (used in) provided by financing activities


(30,098
)


38,385



(37,042
)Effect of exchange rate changes on cash and cash equivalents


8,586



2,393



(5,834
)Increase (decrease) in cash and cash equivalents


32,887



26,038



(40,978
)Cash and cash equivalents, beginning of year


58,352



32,314



73,292Cash and cash equivalents, end of year

$
91,239


$
58,352


$
32,314Supplemental disclosuresCash paid for interest

$
5,696


$
4,798


$
1,527Cash paid for income taxes

$
19,658


$
8,746


$
22,071Noncash investing and financing activitiesAcquisition of equipment through capital leases

$
2,030


$
479


$
999Landlord incentives credited to deferred rent

$
1,978


$
487


$
Recognition of asset retirement obligations

$
180


$
486


$
259


F-8




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIESNotes to the Consolidated Financial
    Statements
  (1)
    OVERVIEW AND
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Overview
    Basis of
    Presentation
    Use of
    Estimates
    Concentration of
    Credit Risk
    Fair Value of
    Financial Instruments
   F-9




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Cash and Cash
    Equivalents
    Accounts
    Receivable
    Derivatives
  Accounting for Derivative Instruments and Hedging Activities
      Property, Plant
    and Equipment
      Building


25 yearsComputer equipment and software


3 to 5 yearsTelephone equipment


4 to 7 yearsFurniture and fixtures


5 to 7 yearsLeasehold improvements


Lesser of 10 years or original lease termOther


3 to 7 years    F-10




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Accounting for the Impairment or Disposal of Long-Lived
    Assets
    Software
    Development Costs
  98-1 Accounting for the Cost of Computer Software Developed or
    Obtained for Internal Use
  Goodwill
    Contract
    Acquisition Costs
  No. 01-09 Accounting for Consideration Given by a Vendor to a Customer
    or Reseller of the Vendors Products (EITF 01-09).
  Other Intangible
    Assets
  Goodwill and Other Intangible
    Assets
 F-11




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Self Insurance
    Liabilities
    Restructuring
    Liabilities
  Accounting for Costs Associated with
    Exit or Disposal Activities
  and/or
  Grant
    Advances
    Income
    Taxes
  Accounting for Income Taxes
    Stock Option
    Accounting
  Share-Based
    Payment
 F-12




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Transition Election Related to
    Accounting for the Tax Effects of Share-Based Payment Awards,
  Foreign Currency
    Translation
    Revenue
    Recognition
    Production Rate
  Performance-based
  Hybrid
    Start-Up
    Training Revenue and Costs
  No. 00-21 Revenue Arrangements with Multiple Deliverables (EITF 00-21), EITF 00-21
 F-13




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Start-Up
  Start-Up
  Deferred
    Revenue
    Operating
    Leases
    Asset Retirement
    Obligations
  Accounting for Asset Retirement
    Obligations and/or
    Recently Issued
    Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes  An
    Interpretation of FASB Statement No. 109
  Fair Value Measurements
 F-14




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  FAS 157-2,
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  including an amendment of FASB Statement
    No. 115
    Business Combinations  a replacement of
    FASB Statement No. 141
  Non-controlling Interests in Consolidated Financial
    Statements  an amendment of Accounting Research
    Bulletin No. 51
  Disclosures about Derivative Instruments and Hedging
    Activities
 F-15




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    (2)
    RESTATEMENT OF
    PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS  Background and
    Scope of the Review
      Summary of
    Findings
      Pre-Tax Accounting Adjustments





Provision


TotalEquity-Based








Total Pre-Tax


for Income


AccountingYear Ended December 31,

Compensation


Leases


Other


Adjustments


Tax(1)


Adjustments1996

$
763


$
132


$



$
895


$
(334
)

$
5611997


1,776



515







2,291



(862
)


1,4291998


2,396



1,552







3,948



(1,412
)


2,5361999


12,779



1,112







13,891



(5,022
)


8,8692000


26,684



3,022







29,706



(9,004
)


20,7022001


5,648



679



10



6,337



(2,354
)


3,9832002


6,105



150



817



7,072



(1,479
)


5,5932003


2,214



492



3



2,709



(4,390
)


(1,681
)2004


237



477



(3
)


711



(340
)


371Cumulative effect at December 31, 2004


58,602



8,131



827



67,560



(25,197
)


42,3632005


965



(922
)


392



435



1,437



1,8722006


611



(1,437
)


(111
)


(937
)


1,798



861Total

$
60,178


$
5,772


$
1,108


$
67,058


$
(21,962
)

$
45,096     (1)
    
    In any given year, the Provision for Income Tax may not directly
    correlate with the amount of total pre-tax accounting
    adjustments. The provision as shown reflects the tax benefits of
    the pre-tax accounting adjustments, permanent tax differences,
    and rate differences for foreign jurisdictions. F-16




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  These benefits are offset in part by changes in deferred tax
    valuation allowances and other adjustments restating the amount
    or period in which income taxes were originally recorded.  Equity-Based
    Compensation Expense Adjustments
    Pre-Tax Equity Based Compensation ExpenseNon-Measurement


Modifications to


Employee








Income


Total ExpenseYear Ended December 31,

Date Changes


Employee Grants


Grants


Other


Total


Taxes


Net of Tax1996

$
21


$



$
742


$



$
763


$
(283
)

$
4801997


223



422



1,131







1,776



(659
)


1,1171998


454



199



1,743







2,396



(888
)


1,5081999


2,714



3,030



6,559



476



12,779



(4,739
)


8,0402000


7,380



13,411



4,069



1,824



26,684



(9,895
)


16,7892001


4,921



815



(135
)


47



5,648



(2,094
)


3,5542002


5,865



76



(10
)


174



6,105



(2,264
)


3,8412003


499



1,237



231



247



2,214



(822
)


1,3922004


357



82



(425
)


223



237



(235
)


2Cumulative effect at December 31, 2004


22,434



19,272



13,905



2,991



58,602



(21,879
)


36,7232005


276



303



311



75



965



(164
)


8012006


(15
)


425



49



152



611



137



748Total

$
22,695


$
20,000


$
14,265


$
3,218


$
60,178


$
(21,906
)

$
38,272   Measurement Date Changes Accounting for Stock Issued to Employees
      Modifications to Employee Grants
 F-17




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    
    Severance agreements offered to certain terminated employees
    that allowed for continued vesting and the right to exercise
    stock options beyond the standard time period permitted under
    the terms of the stock option agreement;
    Employment agreements that provided for the accelerated vesting
    of stock options;
    Continued vesting and the ability to exercise stock options for
    certain employees not terminated from the Companys
    database in a timely manner following their departure from
    TeleTech due to administrative errors; and
    Options granted to certain employees that were not entered into
    the Companys equity tracking system until after their
    dates of termination, primarily due to administrative delays in
    processing stock option requests and the lack of communication
    of employee termination dates to the Companys third party
    plan administrator.  Non-Employee Grants EITF 96-18. EITF 00-19
  Other
  Tax Consequences Under Internal Revenue Code
       F-18




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  gross-up
    Regulation Section 1.162-27.
  Accounting for Income Taxes
  Lease
    Accounting
  Accounting for Leases
 F-19




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Other Accounting
    Adjustments
    Income Tax
    Adjustments and Income Tax Payables
       F-20




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Year Ended December 31, 2006AdjustmentsAs Previously


Equity-BasedReported


Compensation


Leases


Other


As RestatedRevenue

$
1,211,297


$



$



$
(544
)

$
1,210,753Operating expensesCost of services


885,602







(2,101
)


(692
)


882,809Selling, general and administrative


199,226



611







158



199,995Depreciation and amortization


51,429







560







51,989Restructuring charges, net


1,630















1,630Impairment losses


565















565Income from operations


72,845



(611
)


1,541



(10
)


73,765Interest income


2,209















2,209Interest expense


(5,943
)






(796
)


179



(6,560
)Other, net


(725
)






692



(58
)


(91
)Income before income taxes and minority interest


68,386



(611
)


1,437



111



69,323Provision for income taxes


(14,676
)


(137
)


(568
)


(1,093
)


(16,474
)Minority interest


(1,868
)














(1,868
)Net income (loss)

$
51,842


$
(748
)

$
869


$
(982
)

$
50,981Other comprehensive income (loss)Foreign currency translation adjustments


7,433











1,635



9,068Derivatives valuation, net of tax


(5,401
)










476



(4,925
)Other














(71
)


(71
)Comprehensive income

$
53,874


$
(748
)

$
869


$
1,058


$
55,053Weighted average shares outstandingBasic


69,184















69,184Diluted


70,615



(746
)










69,869Net income (loss) per shareBasic

$
0.75


$
(0.01
)

$



$



$
0.74Diluted

$
0.73


$
(0.00
)

$



$



$
0.73  F-21




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Year Ended December 31, 2005AdjustmentsAs Previously


Equity-BasedReported


Compensation


Leases


Other


As RestatedRevenue

$
1,086,673


$



$



$
(770
)

$
1,085,903Operating expensesCost of services


812,174







(3,149
)


34



809,059Selling, general and administrative


182,262



965







(116
)


183,111Depreciation and amortization


53,317







1,375



(280
)


54,412Restructuring charges, net


2,673















2,673Impairment losses


4,711















4,711Income from operations


31,536



(965
)


1,774



(408
)


31,937Interest income


2,789











1



2,790Interest expense


(3,510
)






(877
)


(309
)


(4,696
)Other, net


1,401







25



324



1,750Income before income taxes and minority interest


32,216



(965
)


922



(392
)


31,781Provision for income taxes


(2,516
)


164



(365
)


(1,236
)


(3,953
)Minority interest


(1,542
)














(1,542
)Net income (loss)

$
28,158


$
(801
)

$
557


$
(1,628
)

$
26,286Other comprehensive income (loss)Foreign currency translation adjustments


3,152











228



3,380Derivatives valuation, net of tax


(2,703
)










1,724



(979
)Other














(24
)


(24
)Comprehensive income

$
28,607


$
(801
)

$
557


$
300


$
28,663Weighted average shares outstandingBasic


72,121















72,121Diluted


73,631



(497
)










73,134Net income (loss) per shareBasic

$
0.39


$
(0.01
)

$
(0.02
)

$



$
0.36Diluted

$
0.38


$
(0.01
)

$
(0.01
)

$



$
0.36  F-22




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    December 31, 2006As PreviouslyReported


Adjustments


As RestatedASSETSCurrent assetsCash and cash equivalents

$
60,484


$
(2,132
)

$
58,352Accounts receivable, net


237,353



(1,395
)


235,958Prepaids and other current assets


34,552



3,334



37,886Deferred tax assets, net


12,212



(1,131
)


11,081Income taxes receivable


16,543



(668
)


15,875Total current assets


361,144



(1,992
)


359,152Long-term assetsProperty, plant and equipment, net


156,047



5,014



161,061Goodwill


58,234



(375
)


57,859Contract acquisition costs, net


9,674







9,674Deferred tax assets, net


44,585



1,581



46,166Other long-term assets


29,032



1,477



30,509Total long-term assets


297,572



7,697



305,269Total assets

$
658,716


$
5,705


$
664,421LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
30,738


$
549


$
31,287Accrued employee compensation and benefits


76,071



(626
)


75,445Other accrued expenses


39,165



(1,516
)


37,649Income taxes payable


26,211



3,523



29,734Deferred tax liabilities


309



86



395Other short-term liabilities


9,521



(1
)


9,520Total current liabilities


182,015



2,015



184,030Long-term liabilitiesLine of credit


65,000







65,000Grant advances


8,000



1



8,001Deferred tax liabilities


6,741



(6,604
)


137Other long-term liabilities


27,676



10,986



38,662Total long-term liabilities


107,417



4,383



111,800Total liabilities


289,432



6,398



295,830Minority interest


5,877







5,877Commitments and contingenciesStockholders equityCommon stock


701







701Additional paid-in capital


258,719



39,608



298,327Treasury stock


(96,200
)






(96,200
)Accumulated other comprehensive income


5,730



4,795



10,525Retained earnings


194,457



(45,096
)


149,361Total stockholders equity


363,407



(693
)


362,714Total liabilities and stockholders equity

$
658,716


$
5,705


$
664,421  F-23




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    December 31, 2006As PreviouslyReported


Adjustments


As RestatedCash flows from operating activitiesNet cash provided by (used in):Net income

$
51,842


$
(861
)

$
50,981Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


51,429



560



51,989Amortization of contract acquisition costs


3,392







3,392Provision for doubtful accounts


2,723







2,723(Gain) loss on disposal of assets


232







232Impairment losses


565







565Deferred income taxes


(10,526
)


1,159



(9,367
)Minority interest


1,868







1,868Excess tax benefit from exercise of stock options










Equity compensation expense


6,916



569



7,485Other










Changes in working capital and other assets and liabilities, net
    of changes due to acquisitions:Accounts receivable


(19,098
)


6,164



(12,934
)Prepaids and other assets


(11,589
)


(2,989
)


(14,578
)Accounts payable and other accrued expenses


15,347



(3,217
)


12,130Other liabilities


1,633



3,128



4,761Net cash provided by operating activities


94,734



4,513



99,247Cash flows from investing activitiesAcquisition of a business, net of cash acquired of
    $0.5 million


(45,802
)






(45,802
)Proceeds from dispositions of businesses, net of cash










Purchases of property, plant and equipment


(65,528
)


(488
)


(66,016
)Payment for contract acquisition costs


(173
)






(173
)Purchases of intangible assets


(1,510
)






(1,510
)Purchases of foreign currency forward option contracts






(486
)


(486
)Net cash used in investing activities


(113,013
)


(974
)


(113,987
)Cash flows from financing activitiesProceeds from line of credit


468,400







468,400Payments on line of credit


(430,100
)






(430,100
)Payments on long-term debt and capital lease obligations


(332
)


(1,179
)


(1,511
)Payments of debt issuance costs


(923
)






(923
)Payments from minority shareholder










Payments to minority shareholder


(2,594
)






(2,594
)Payments from employee stock purchase plan










Proceeds from exercise of stock options


19,430



4



19,434Excess tax benefit from exercise of stock options


6,385



(4,130
)


2,255Purchases of treasury stock


(16,576
)






(16,576
)Net cash provided by financing activities


43,690



(5,305
)


38,385Effect of exchange rate changes on cash and cash equivalents


2,568



(175
)


2,393Net increase in cash and cash equivalents


27,979



(1,941
)


26,038Cash and cash equivalents at beginning of year


32,505



(191
)


32,314Cash and cash equivalents at end of year

$
60,484


$
(2,132
)

$
58,352  F-24




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    December 31, 2005As PreviouslyReported


Adjustments


As RestatedCash flows from operating activitiesNet cash provided by (used in):Net income

$
28,158


$
(1,872
)

$
26,286Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


53,317



1,095



54,412Amortization of contract acquisition costs


3,890







3,890Provision for doubtful accounts


(153
)






(153
)(Gain) loss on disposal of assets


(271
)






(271
)Impairment losses


4,711







4,711Deferred income taxes


(23,003
)


3,085



(19,918
)Minority interest


1,542







1,542Excess tax benefit from exercise of stock options


2,763



69



2,832Equity compensation expense






674



674Other


(131
)


131



Changes in working capital and other assets and liabilities, net
    of changes due to acquisitions:Accounts receivable


(58,310
)


769



(57,541
)Prepaids and other assets


1,222



(4,372
)


(3,150
)Accounts payable and other accrued expenses


22,253



(1,758
)


20,495Other liabilities


5,498



5,627



11,125Net cash provided by operating activities


41,486



3,448



44,934Cash flows from investing activitiesAcquisition of a business, net of cash acquired of
    $0.5 million










Proceeds from dispositions of businesses, net of cash










Purchases of property, plant and equipment


(37,606
)






(37,606
)Payment for contract acquisition costs


(2,160
)






(2,160
)Purchases of intangible assets


(1,587
)






(1,587
)Purchases of foreign currency forward option contracts






(1,683
)


(1,683
)Net cash used in investing activities


(41,353
)


(1,683
)


(43,036
)Cash flows from financing activitiesProceeds from line of credit


412,500







412,500Payments on line of credit


(385,800
)






(385,800
)Payments on long-term debt and capital lease obligations


(155
)


(952
)


(1,107
)Payments of debt issuance costs










Payments from minority shareholder


640







640Payments to minority shareholder


(3,354
)






(3,354
)Payments from employee stock purchase plan


537



(1
)


536Proceeds from exercise of stock options


7,387







7,387Excess tax benefit from exercise of stock options










Purchases of treasury stock


(67,841
)


(3
)


(67,844
)Net cash used in financing activities


(36,086
)


(956
)


(37,042
)Effect of exchange rate changes on cash and cash equivalents


(6,608
)


774



(5,834
)Net decrease in cash and cash equivalents


(42,561
)


1,583



(40,978
)Cash and cash equivalents at beginning of year


75,066



(1,774
)


73,292Cash and cash equivalents at end of year

$
32,505


$
(191
)

$
32,314  F-25




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (3)
    ACQUISITIONS  e-commerce,
      Current assets

$
14,548Property, plant and equipment


4,410Intangible assets


9,100Goodwill


24,438Total assets acquired


52,496Current liabilities


(6,123
)Total liabilities assumed


(6,123
)Net assets acquired

$
46,373     Value


Amortization PeriodTrade name

$
1,800


None; indefinite lifeCustomer relationships


7,300


10 yearsTotal

$
9,100    F-26




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    (Unaudited)Year EndedDecember 31,2006As restatedRevenue

$
1,244,848Income from operations

$
76,371Net income

$
51,571Weighted-average shares outstandingBasic


69,184Diluted


69,869Net income per shareBasic

$
0.75Diluted

$
0.74     (4)
    DISPOSITIONS  Database
    Marketing and Consulting
      Current assets

$
3,870Property plant and equipment


4,464Current liabilities assumed


(608
)Net assets disposed of


7,726Fair value of consideration received


(2,691
)Costs incurred in relation to the sale


1,087Net loss recorded on sale

$
6,122      F-27




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
      Customer
    Solutions Mauritius
        Current assets

$
(840
)Property, plant and equipment


(1,601
)Non-current assets


(1,196
)Liabilities assumed


1,911Net assets disposed of


(1,726
)Fair value of consideration received, net of costs of sale


8,731Gain recorded on sale

$
7,005   (5)
    SEGMENT
    INFORMATION   F-28




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
     North American BPO

International BPOUnited States

ArgentinaCanada

AustraliaPhilippines

BrazilChinaCosta RicaEnglandGermanyMalaysiaMexicoNew ZealandNorthern IrelandScotlandSingaporeSouth AfricaSpain          F-29




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
      As of and for theYear Ended December 31,2007


2006


2005As restated


As restatedRevenueNorth American BPO

$
955,810


$
814,419


$
678,768International BPO


396,080



356,106



324,303Database Marketing and Consulting


17,742



40,228



82,832Total

$
1,369,632


$
1,210,753


$
1,085,903Depreciation and amortizationNorth American BPO

$
31,964


$
27,918


$
27,664International BPO


20,076



16,569



17,192Database Marketing and Consulting


3,913



7,502



9,556Total

$
55,953


$
51,989


$
54,412Income from operationsNorth American BPO

$
106,102


$
85,639


$
63,404International BPO


8,327



3,219



(22,433
)Database Marketing and Consulting


(32,641
)


(15,093
)


(9,034
)Total

$
81,788


$
73,765


$
31,937Capital expendituresNorth American BPO

$
42,467


$
46,265


$
22,046International BPO


17,986



18,149



12,201Database Marketing and Consulting


630



1,602



3,359Total

$
61,083


$
66,016


$
37,606AssetsNorth American BPO

$
469,261


$
390,889


$
287,864International BPO


288,757



238,887



191,062Database Marketing and Consulting


2,277



34,645



49,047Total

$
760,295


$
664,421


$
527,973Goodwill, netNorth American BPO

$
35,885


$
35,885


$
11,446International BPO


9,269



8,613



7,270Database Marketing and Consulting






13,361



13,361Total

$
45,154


$
57,859


$
32,077  F-30




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    As of and for theYear Ended December 31,2007


2006


2005As restated


As restatedRevenueUnited States

$
431,867


$
441,821


$
471,611Latin America


234,167



171,658



105,792Philippines


222,499



122,950



53,143Canada


203,061



205,691



199,947Europe


146,451



141,550



123,042Asia Pacific


131,587



127,083



132,368Total

$
1,369,632


$
1,210,753


$
1,085,903Property, plant and equipment, grossUnited States

$
242,487


$
275,214


$
260,807Latin America


88,811



66,863



51,826Philippines


62,044



35,759



13,465Canada


63,126



58,177



57,300Europe


16,217



15,618



24,459Asia Pacific


51,998



51,256



52,222Total

$
524,683


$
502,887


$
460,079Other long-term assetsUnited States

$
25,524


$
17,918


$
9,395Latin America


3,363



3,627



3,811Philippines


2,555



2,050



1,963Canada


631



4,648



442Europe


726



900



786Asia Pacific


960



1,366



995Total

$
33,759


$
30,509


$
17,392   (6)
    ACCOUNTS
    RECEIVABLE AND SIGNIFICANT CLIENTS    December 31,2007


2006Accounts receivable

$
275,713


$
240,678Less: Allowance for doubtful accounts


(4,725
)


(4,720
)Accounts receivable, net

$
270,988


$
235,958  F-31




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Year Ended December 31,2007


2006


2005As restatedBalance, beginning of year

$
4,720


$
3,422


$
4,042Provision for doubtful accounts


576



2,723



(153
)Deductions for uncollectible receivables written-off


(571
)


(1,425
)


(467
)Balance, end of year

$
4,725


$
4,720


$
3,422     Year Ended December 31,2007

2006

2005Sprint Nextel


14.9
%


15.5%



17.0%Verizon


4.5
%


7.1%



10.1%     Year Ended December 31,2007

2006As restated$
37,347


$
31,977    F-32




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (7)
    PROPERTY, PLANT
    AND EQUIPMENT    December 31,2007


2006As restatedLand and buildings

$
44,532


$
43,711Computer equipment and software


214,714



230,493Telephone equipment


57,037



59,800Furniture and fixtures


56,353



51,782Leasehold improvements


142,597



109,753Construction-in-progress


6,351



6,672Other


3,099



676Property, plant and equipment, gross


524,683



502,887Less: Accumulated depreciation and amortization


(349,874
)


(341,826
)Property, plant and equipment, net

$
174,809


$
161,061       (8)
    GOODWILL    Effect ofDecember 31,








Foreign


December 31,2006


Acquisitons


Impairments


Currency


2007As restatedNorth American BPO

$
35,885


$



$



$



$
35,885International BPO


8,613











656



9,269Database Marketing and Consulting


13,361







(13,361
)






Total

$
57,859


$



$
(13,361
)

$
656


$
45,154   Effect ofDecember 31,








Foreign


December 31,2005


Acquisitons


Impairments


Currency


2006As restated











As restatedNorth American BPO

$
11,446


$
24,439


$



$



$
35,885International BPO


7,270



1,144







199



8,613Database Marketing and Consulting


13,361















13,361Total

$
32,077


$
25,583


$



$
199


$
57,859   Acquisitions
   F-33




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Impairment
          (9)
    CONTRACT
    ACQUISITION COSTS    December 31,2007


2006North American BPO

$
23,811


$
23,811Database Marketing and Consulting






2,160Contract acquisition costs, gross


23,811



25,971Less: Accumulated amortization


(16,827
)


(16,297
)Contract acquisition costs, net

$
6,984


$
9,674    F-34




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    2008

$
2,1072009


2,1072010


1,4032011


1,2622012


105Total

$
6,984   (10)
    OTHER INTANGIBLE
    ASSETS    As of December 31, 2007Gross Carrying


Accumulated


Net CarryingValue


Amortization


ValueCustomer relationships

$
12,689


$
(4,937
)

$
7,752Trade name  indefinite life


1,800







1,800$
14,489


$
(4,937
)

$
9,552   As of December 31, 2006Gross Carrying


Accumulated


Net CarryingAs Restated

Value


Amortization


ValueCustomer relationships

$
11,793


$
(2,794
)

$
8,999Other intangible assets


120



(110
)


10Trade name  indefinite life


1,800







1,800$
13,713


$
(2,904
)

$
10,809       2008

$
1,6592009


1,3492010


7302011


7302012


730Thereafter


2,554Total

$
7,752   (11)
    DERIVATIVES   F-35




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  and/or
      Year Ended December 31,2007


2006


2005As restated


As restatedAggregate unrealized net gain (loss) at beginning of year

$
(176
)

$
4,749


$
4,884Net gain reclassified to earnings


(8,295
)


(3,810
)


(3,468
)Change in fair value of cash flow hedges


29,888



(1,115
)


3,333Aggregate unrealized net gain (loss) at end of year

$
21,417


$
(176
)

$
4,749     Percentage


DatesU.S. Dollar


Settled Within


ContractsDerivative Assets

Amount


One Year


are ThroughCanadian Dollar

$
14,841(1
)


59.0
%


December 2010Philippine Peso


17,186



74.7
%


December 2009Argentine Peso


865



79.5
%


September 2009Mexican Peso


360



75.3
%


December 2009$
33,252     (1)
    
    The Canadian dollar derivative asset amount excludes
    approximately $1.9 million in unamortized option premiums.    Local





DatesCurrency


U.S. Dollar


ContractsAmount


Amount


are ThroughCanadian Dollar


136,800


$
123,023



December 2010Philippine Peso


7,600,000



166,457



December 2009Argentine Peso


126,674



37,842



September 2009Mexican Peso


464,500



40,846



December 2009$
368,168  F-36




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
      (12)
    INCOME
    TAXES    Year Ended December 31,2007


2006


2005As restated


As restatedDomestic

$
(141
)

$
26,599


$
20,861Foreign


75,492



42,724



10,920Total

$
75,351


$
69,323


$
31,781     Year Ended December 31,2007


2006


2005As restated


As restatedCurrent provisionFederal

$
3,106


$
12,158


$
16,899State


1,361



982



2,111Foreign


16,174



12,701



4,861Total current provision


20,641



25,841



23,871Deferred benefitFederal


(3,973
)


(4,157
)


(16,300
)State


(543
)


(80
)


(2,213
)Foreign


3,437



(5,130
)


(1,405
)Total deferred benefit


(1,079
)


(9,367
)


(19,918
)Total provision for income taxes

$
19,562


$
16,474


$
3,953  F-37




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Year Ended December 31,2007


2006


2005As restated


As restatedIncome tax per U.S. federal statutory rate (35%)

$
26,372


$
24,227


$
11,099State income taxes, net of federal deduction


342



400



1,038Change in valuation allowances


(378
)


(3,603
)


(11,157
)Foreign income taxes at different rates than the U.S.


(6,693
)


(5,881
)


(1,407
)Foreign withholding taxes


1,731



313



1,331Record increase to deferred tax assets due to implementation of
    tax planning strategies


(828
)


(3,300
)


Losses in international markets without tax benefits


912



836



2,546Tax cost of Domestic Reinvestment Plan










3,695Nondeductible compensation under Section 162(m)


224



248



264FIN 48 Contingency


(162
)






Permanent difference related to foreign exchange gains


(2,381
)


404



(3,855
)(Income)/losses of foreign branch operations


3,535



564



(148
)Permanent difference related to sale of joint venture


(2,406
)






Non-taxable earnings of minority interest


(785
)


(654
)


(540
)Other


79



2,920



1,087Income tax per effective tax rate

$
19,562


$
16,474


$
3,953  F-38




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
     December 31,2007


2006As restatedDeferred tax assets, grossAccrued workers compensation, deferred compensation and
    employee benefits

$
4,469


$
8,249Allowance for doubtful accounts, insurance and other accruals


7,067



6,637Depreciation and amortization


23,110



34,152Amortization of deferred rent liabilities


1,271



331Net operating losses


14,388



17,359Equity compensation


9,409



1,832Customer acquisition and deferred revenue accruals


4,340



4,336Federal and state tax credits


9,047



6,097Unrealized losses on derivatives






2,818Other


5,966



7,352Total deferred tax assets, gross


79,067



89,163Valuation allowances


(20,448
)


(25,891
)Total deferred tax assets, net


58,619



63,272Deferred tax liabilitiesLong-term lease obligations


(872
)


(1,362
)Unrealized gains on derivatives


(8,647
)


Capitalized software


(436
)


(1,974
)Contract acquisition costs


(445
)


(1,933
)Other


(214
)


(1,288
)Total deferred tax liabilities


(10,614
)


(6,557
)Net deferred tax assets

$
48,005


$
56,715        F-39




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
      2007

$2,6412008

4492009

6012010

2011

92012

1212013

1742014

2,1022015

8922016

2862017

2,0412018

7972020

2021

No expiration

31,099Total

$41,212        F-40




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Accounting for
    Uncertainty in Income Taxes
             F-41




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Balance as of December 31, 2006 (As restated)

$
22,305Additions for prior year tax positions


Additions for current year tax positions


35Reductions in prior year tax positions


(337
)Settlements


Lapses in statute of limitations


(71
)Balance as of December 31, 2007

$
21,932     Tax Jurisdiction

Tax Year EndedUnited States


2002 to presentArgentina


2003 to presentAustralia


2003 to presentBrazil


2002 to presentCanada


2003 to presentMexico


2003 to presentPhilippines


2002 to presentSpain


2003 to present     (13)
    RESTRUCTURING
    CHARGES AND IMPAIRMENT LOSSES  Restructuring
    Charges
    change-of-control
 F-42




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
            Closure ofDelivery


ReductionCenters


in Force


TotalBalance as of December 31, 2005

$
1,088


$
1,079


$
2,167Expense


801



1,057



1,858Payments


(747
)


(1,772
)


(2,519
)Reversals


(55
)


(173
)


(228
)Balance as of December 31, 2006


1,087



191



1,278Expense


4,037



3,801



7,838Payments


(199
)


(3,168
)


(3,367
)Reversals


(599
)


(126
)


(725
)Non-cash items






(350
)


(350
)Balance as of December 31, 2007

$
4,326


$
348


$
4,674   Impairment
    Losses
    (14)
    INDEBTEDNESS   F-43




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
      (15)
    GRANT
    ADVANCES    (16)
    START-UP
    TRAINING REVENUE AND COSTS  Start-Up
  December 31,2007


2006Deferred
    start-up
    revenue  current

$
9,549


$
6,616Deferred
    start-up
    revenue  long-term


3,113



5,936Total deferred
    start-up
    revenue

$
12,662


$
12,552  F-44




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Start-Up
  Year Ended December 31,2007


2006


2005Balance, beginning of year

$
12,552


$
8,512


$
3,451Amounts deferred due to new business


9,333



9,432



6,583Revenue recognized


(9,293
)


(5,418
)


(1,921
)Total net increase in deferred revenue


40



4,014



4,662Foreign currency impact


70



26



399Balance, end of year

$
12,662


$
12,552


$
8,512   Start-Up
  December 31,2007


2006Deferred
    start-up
    costs  current

$
4,065


$
2,865Deferred
    start-up
    costs  long-term


1,262



2,344Total deferred
    start-up
    costs

$
5,327


$
5,209   Start-Up
  Year Ended December 31,2007


2006


2005Balance, beginning of year

$
5,209


$
3,635


$
1,306Amounts deferred due to new business


3,572



4,208



3,212Recognized expense


(3,452
)


(2,633
)


(1,082
)Total net increase in deferred costs


120



1,575



2,130Foreign currency impact


(2
)


(1
)


199Balance, end of year

$
5,327


$
5,209


$
3,635   (17)  COMMITMENTS
    AND CONTINGENCIES
  Letters of
    Credit
    Guarantees
     F-45




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Legal
    Proceedings
  Beasley v. TeleTech Holdings, Inc.,
    et. al. Rule 10b-5 Brown v. TeleTech Holdings, Inc., et al., In re: TeleTech
    Litigation
  time-to-time,
    (18)
    LEASES  Leases
      2008

$
32,7902009


29,5122010


26,0762011


21,2112012


14,346Thereafter


31,437Total

$
155,372    F-46




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Asset Retirement
    Obligations
    Balance at








Modifications


Balance atDecember 31,


New Lease





and


December 31,2006


Obligations


Accretion


Settlements(1)


2007As restatedARO liability at inception

$
2,175


$
180


$



$
(21
)

$
2,334Accumulated accretion


517







150



(20
)


647$
2,692


$
180


$
150


$
(41
)

$
2,981   Balance at








Modifications


Balance atDecember 31,


New Lease





and


December 31,2005


Obligations


Accretion


Settlements(1)


2006As restatedARO liability at inception

$
2,043


$
486


$



$
(354
)

$
2,175Accumulated accretion


637







200



(320
)


517$
2,680


$
486


$
200


$
(674
)

$
2,692     (1)
    
    Modifications to ARO liabilities and accumulated accretion occur
    when lease agreements are amended or when assumptions change,
    such as the rate of inflation. Modifications are accounted for
    prospectively as changes in estimates. Settlements occur when
    leased premises are vacated and the actual cost of restoration
    is accrued. Differences between the actual costs of restoration
    and the balance recorded as ARO liabilities are recognized as
    gains or losses in the accompanying statements of income. The
    Company recognized gains totaling $0.6 million in 2006 and
    a negligible gain in 2007 related to lease terminations.  (19)
    NET INCOME PER
    SHARE    Year Ended December 31,2007


2006


2005As restated


As restatedShares used in basic earnings per share calculation


70,228



69,184



72,121Effect of dilutive securities:Stock options


2,363



685



1,013Restricted stock units


47







Total effects of dilutive securities


2,410



685



1,013Shares used in dilutive earnings per share calculation


72,638



69,869



73,134    F-47




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (20)
    EMPLOYEE
    COMPENSATION PLANS  Employee Benefit
    Plan
    Equity
    Compensation Plans
  Stock
    Options
       F-48




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Year Ended December 31,2007

2006

2005Risk-free interest rate

4.45% - 4.88%

4.33% - 5.19%

3.30% - 4.52%Expected life in years

2.6 - 4.4

2.6 - 4.8

4.1 - 4.7Expected volatility

43.09% - 53.25%

54.96% - 58.87%

74.66% - 76.34%Dividend yield

0.00%

0.00%

0.00%Weighted-average volatility

47.24%

58.45%

75.32%       WeightedWeighted


Average


AggregateAverage


Remaining


IntrinsicExercise


Contract


ValueShares


Price


Term in Years


(000s)Outstanding as of December 31, 2004 (as restated)


9,913,356


$
10.23Grants


2,287,500


$
10.04Exercises


(1,270,734
)

$
6.11Cancellations/expirations


(2,135,963
)

$
11.29Outstanding as of December 31, 2005 (as restated)


8,794,159


$
10.52Grants


1,619,450


$
12.94Exercises


(2,282,648
)

$
8.36Cancellations/expirations


(1,356,292
)

$
12.74Outstanding as of December 31, 2006 (as restated)


6,774,669


$
11.38Grants


104,000


$
32.23Exercises


(1,310,134
)

$
12.17Cancellations/expirations


(708,461
)

$
12.49Outstanding as of December 31, 2007


4,860,074


$
11.45



6.1


$
52,131   WeightedWeighted


Average


AggregateAverage


Remaining


IntrinsicExercise


Contract


ValueShares


Price


Term in Years


(000s)Vested and exercisable as of December 31, 2005 (as
    restated)


4,745,962


$
11.87



5.0Vested and exercisable as of December 31, 2006 (as
    restated)


3,256,442


$
12.15



5.3Vested and exercisable as of December 31, 2007


3,057,824


$
11.67



5.0


$
29,358  F-49




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
          December 31,2005As restatedNet income as reported

$
26,286Add (deduct): equity-based employee compensation expense
    included in reported net income, net of related tax effects


411Deduct: Total equity-based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effects


(3,865
)Pro-forma net income

$
22,832Weighted-average shares outstanding as reportedBasic


72,121Diluted


73,134Net income per share as reportedBasic

$
0.36Diluted

$
0.36Pro-forma net income per shareBasic

$
0.32Diluted

$
0.31   EITF 96-18 Accounting for Equity Instruments That are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling
    Goods or Services (EITF 96-18) EITF 00-19 Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Stock (EITF 00-19). EITF 96-18 EITF 00-19,
 F-50




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Restricted Stock
    Units
  10-year
        WeightedAverage GrantShares


Date Fair ValueUnvested as of December 31, 2006





$
Grants


3,163,500


$
29.79Exercises





$
Cancellations/expirations


(939,467
)

$
28.43Unvested as of December 31, 2007


2,224,033


$
30.36      F-51




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    (21)  STOCK
    REPURCHASE PROGRAM
    (22)  RELATED
    PARTY TRANSACTIONS
    (23)  OTHER
    FINANCIAL INFORMATION
  Self-insurance
    Liabilities
    December 31,2007


2006As restatedWorkers compensation

$
4,132


$
4,784Employee health insurance


2,654



1,220Other general liability insurance


1,155



549Total self-insurance liabilities

$
7,941


$
6,553   Accumulated Other
    Comprehensive Income
   F-52




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (24)
    QUARTERLY
    FINANCIAL DATA (UNAUDITED)    For the Quarter EndedDecember 31,


September 30,2007


2007As currently reportedRevenue

$
371,557


$
335,727Cost of services


280,431



246,558Selling, general and administrative


59,853



46,968Depreciation and amortization


14,355



14,250Restructuring charges, net


4,265



2,588Impairment losses






2,274Income from operations


12,653



23,089Other income (expense)


3,901



(6,826
)Provision for income taxes


(3,369
)


(1,082
)Minority interest


(936
)


(808
)Net income (loss)

$
12,249


$
14,373Weighted average shares outstandingBasic


69,818



70,214Diluted


71,574



72,343Net income per shareBasic

$
0.18


$
0.20Diluted

$
0.17


$
0.20  F-53




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    For the Quarter Ended June 30, 2007


For the Quarter Ended March 31, 2007As








AsPreviously








PreviouslyReported


Adjustments


As Restated


Reported


Adjustments


As RestatedRevenue

$
329,832


$
(224
)

$
329,608


$
332,532


$
208


$
332,740Cost of services


237,760



(532
)


237,228



238,305



(1,063
)


237,242Selling, general and administrative


49,479



(868
)


48,611



52,487



(391
)


52,096Depreciation and amortization


13,380



414



13,794



13,254



300



13,554Restructuring charges, net


262







262











Impairment losses


13,515







13,515











Income from operations


15,436



762



16,198



28,486



1,362



29,848Other income (expense)


(2,077
)


(158
)


(2,235
)


(1,062
)


(215
)


(1,277
)Provision for income taxes


(3,681
)


(1,056
)


(4,737
)


(9,663
)


(711
)


(10,374
)Minority interest


(508
)






(508
)


(434
)






(434
)Net income (loss)

$
9,170


$
(452
)

$
8,718


$
17,327


$
436


$
17,763Weighted average shares outstandingBasic


70,599



(19
)


70,580



70,335



(26
)


70,309Diluted


72,973



131



73,104



72,880



49



72,929Net income per shareBasic

$
0.13


$
(0.01
)

$
0.12


$
0.25


$



$
0.25Diluted

$
0.13


$
(0.01
)

$
0.12


$
0.24


$



$
0.24   F-54




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  For The Quarter Ended December 31, 2006


For The Quarter Ended September 30, 2006As








AsPreviously








PreviouslyReported


Adjustments


As Restated


Reported


Adjustments


As RestatedRevenue

$
336,737


$
(80
)

$
336,657


$
303,804


$
35


$
303,839Cost of services


238,779



(1,144
)


237,635



219,744



(1,323
)


218,421Selling, general and administrative


54,094



(178
)


53,916



49,271



316



49,587Depreciation and amortization


14,736



(528
)


14,208



12,925



430



13,355Restructuring charges, net


175







175



515







515Impairment losses


87







87











Income from operations


28,866



1,770



30,636



21,349



612



21,961Other income (expense)


(439
)


(111
)


(550
)


(1,559
)


391



(1,168
)Provision for income taxes


(6,787
)


(841
)


(7,628
)


(6,428
)


(745
)


(7,173
)Minority interest


(209
)






(209
)


(583
)






(583
)Net income (loss)

$
21,431


$
818


$
22,249


$
12,779


$
258


$
13,037Weighted average shares outstandingBasic


69,798







69,798



69,085







69,085Diluted


71,777



164



71,941



70,366



(89
)


70,277Net income per shareBasic

$
0.31


$
0.01


$
0.32


$
0.18


$
0.00


$
0.19Diluted

$
0.30


$
0.01


$
0.31


$
0.18


$
0.00


$
0.19   For the Quarter Ended June 30, 2006


For the Quarter Ended March 31, 2006As








AsPreviously








PreviouslyReported


Adjustments


As Restated


Reported


Adjustments


As RestatedRevenue

$
287,334


$
(329
)

$
287,005


$
283,422


$
(170
)

$
283,252Cost of services


213,777



(339
)


213,438



213,302



13



213,315Selling, general and administrative


48,451



167



48,618



47,410



464



47,874Depreciation and amortization


11,971



341



12,312



11,797



317



12,114Restructuring charges, net


183







183



757







757Impairment losses


302







302



176







176Income from operations


12,650



(498
)


12,152



9,980



(964
)


9,016Other income (expense)


(1,234
)


(89
)


(1,323
)


(1,227
)


(174
)


(1,401
)Provision for income taxes


1,520



(225
)


1,295



(2,981
)


13



(2,968
)Minority interest


(692
)






(692
)


(384
)






(384
)Net income (loss)

$
12,244


$
(812
)

$
11,432


$
5,388


$
(1,125
)

$
4,263Weighted average shares outstandingBasic


68,925







68,925



68,928







68,928Diluted


70,387



(347
)


70,040



70,344



(327
)


70,017Net income per shareBasic

$
0.18


$
(0.01
)

$
0.17


$
0.08


$
(0.02
)

$
0.06Diluted

$
0.17


$
(0.01
)

$
0.16


$
0.08


$
(0.02
)

$
0.06  F-55




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Fourth Quarter


Third QuarterDecember 31,


September 30,


Second Quarter


First Quarter2007


2007


June 30, 2007


March 31, 2007As








AsPreviously








PreviouslyAs Currently Reported


Reported


Adjustments


As Restated


Reported


Adjustments


As RestatedASSETSCurrent assetsCash and cash equivalents

$
91,239


$
70,684


$
60,138


$
(2,849
)

$
57,289


$
65,282


$
(2,795
)

$
62,487Accounts receivable, net


270,988



238,623



239,172



(1,609
)


237,563



237,042



(1,388
)


235,654Prepaids and other current assets


62,344



61,273



47,581



3,457



51,038



36,755



3,351



40,106Deferred tax assets, net


8,386



5,925



8,120



2,524



10,644



11,778



2,558



14,336Income taxes receivable


26,868



28,924



20,501



1,182



21,683



16,913



3,428



20,341Total current assets


459,825



405,429



375,512



2,705



378,217



367,770



5,154



372,924Long-term assetsProperty, plant and equipment, net


174,809



168,992



165,686



4,423



170,109



158,335



4,708



163,043Goodwill


45,154



45,054



45,222



(389
)


44,833



58,334



(374
)


57,960Contract acquisition costs, net


6,984



7,511



8,329







8,329



9,002







9,002Deferred tax assets, net


39,764



46,659



40,920



11,388



52,308



43,066



4,604



47,670Other long-term assets


33,759



34,548



29,696



2,888



32,584



25,894



4,474



30,368Total long-term assets


300,470



302,764



289,853



18,310



308,163



294,631



13,412



308,043Total assets

$
760,295


$
708,193


$
665,365


$
21,015


$
686,380


$
662,401


$
18,566


$
680,967LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
38,761


$
30,656


$
26,715


$
(31
)

$
26,684


$
28,466


$
(145
)

$
28,321Accrued employee compensation and benefits


87,480



88,563



77,047



(1,465
)


75,582



82,363



(572
)


81,791Other accrued expenses


28,872



38,421



35,392



2,588



37,980



35,660



3,406



39,066Income taxes payable


18,552



23,069



26,823



2,081



28,904



27,827



2,963



30,790Deferred tax liabilities


88



436



311



3,906



4,217



311



3,898



4,209Other short-term liabilities


13,057



11,324



9,154



(121
)


9,033



8,239



(107
)


8,132Total current liabilities


186,810



192,469



175,442



6,958



182,400



182,866



9,443



192,309Long-term liabilitiesLine of credit


65,400



38,500



45,000







45,000



39,000







39,000Grant advances


6,741



6,187



7,298



(150
)


7,148



8,027



(473
)


7,554Deferred tax liabilities


57



88



419



(299
)


120



6,273



(6,148
)


125Other long-term liabilities


46,531



42,373



19,860



15,341



35,201



21,708



14,337



36,045Total long-term liabilities


118,729



87,148



72,577



14,892



87,469



75,008



7,716



82,724Total liabilities


305,539



281,404



248,019



21,850



269,869



257,874



17,159



275,033Minority interest


3,555



4,700



5,181







5,181



5,280







5,280Commitments and contingenciesStockholders equityCommon stock


698



698



704







704



707







707Additional paid-in capital


334,593



331,028



284,996



37,933



322,929



274,550



38,803



313,353Treasury stock


(143,205
)


(143,205
)


(119,915
)






(119,915
)


(96,200
)






(96,200
)Accumulated other comprehensive income


57,888



46,377



26,034



6,972



33,006



9,015



7,893



16,908Retained earnings


201,227



188,978



220,346



(45,740
)


174,606



211,175



(45,289
)


165,886Total stockholders equity


451,201



423,876



412,165



(835
)


411,330



399,247



1,407



400,654Total liabilities and stockholders equity

$
760,295


$
708,193


$
665,365


$
21,015


$
686,380


$
662,401


$
18,566


$
680,967  F-56




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Fourth Quarter


Third QuarterDecember 31, 2006


September 30, 2006As








AsPreviously








PreviouslyReported


Adjustments


As Restated


Reported


Adjustments


As RestatedASSETSCurrent assetsCash and cash equivalents

$
60,484


$
(2,132
)

$
58,352


$
55,192


$
(2,500
)

$
52,692Accounts receivable, net


237,353



(1,395
)


235,958



220,668



(1,292
)


219,376Prepaids and other current assets


34,552



3,334



37,886



38,494



3,186



41,680Deferred tax assets, net


12,212



(1,131
)


11,081



11,960



(1,709
)


10,251Income taxes receivable


16,543



(668
)


15,875



16,146



1,248



17,394Total current assets


361,144



(1,992
)


359,152



342,460



(1,067
)


341,393Long-term assetsProperty, plant and equipment, net


156,047



5,014



161,061



154,614



4,288



158,902Goodwill


58,234



(375
)


57,859



57,385



(375
)


57,010Contract acquisition costs, net


9,674







9,674



10,734







10,734Deferred tax assets, net


44,585



1,581



46,166



38,563



2,842



41,405Other long-term assets


29,032



1,477



30,509



22,540



2,774



25,314Total long-term assets


297,572



7,697



305,269



283,836



9,529



293,365Total assets

$
658,716


$
5,705


$
664,421


$
626,296


$
8,462


$
634,758LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
30,738


$
549


$
31,287


$
28,318


$



$
28,318Accrued employee compensation and benefits


76,071



(626
)


75,445



82,933



(156
)


82,777Other accrued expenses


39,165



(1,516
)


37,649



36,632



236



36,868Income taxes payable


26,211



3,523



29,734



18,108



2,659



20,767Deferred tax liabilities


309



86



395



1,542



(1,166
)


376Other short-term liabilities


9,521



(1
)


9,520



8,367







8,367Total current liabilities


182,015



2,015



184,030



175,900



1,573



177,473Long-term liabilitiesCapital lease obligations














680



(680
)


Line of credit


65,000







65,000



77,750







77,750Grant advances


8,000



1



8,001



7,163







7,163Deferred tax liabilities


6,741



(6,604
)


137



6,329



(6,196
)


133Other long-term liabilities


27,676



10,986



38,662



21,240



14,016



35,256Total long-term liabilities


107,417



4,383



111,800



113,162



7,140



120,302Total liabilities


289,432



6,398



295,830



289,062



8,713



297,775Minority interest


5,877







5,877



6,731







6,731Commitments and contingenciesStockholders equityCommon stock


701







701



693







693Additional paid-in capital


258,719



39,608



298,327



244,892



42,961



287,853Treasury stock


(96,200
)






(96,200
)


(94,275
)






(94,275
)Accumulated other comprehensive income


5,730



4,795



10,525



6,167



2,704



8,871Retained earnings


194,457



(45,096
)


149,361



173,026



(45,916
)


127,110Total stockholders equity


363,407



(693
)


362,714



330,503



(251
)


330,252Total liabilities and stockholders equity

$
658,716


$
5,705


$
664,421


$
626,296


$
8,462


$
634,758  F-57




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Second Quarter


First QuarterJune 30, 2006


March 31, 2006As Previously








AsReported


Adjustments


As Restated


Previously Reported


Adjustments


As RestatedASSETSCurrent assetsCash and cash equivalents

$
31,315


$
160


$
31,475


$
34,483


$
(345
)

$
34,138Accounts receivable, net


219,662



(1,299
)


218,363



198,918



(946
)


197,972Prepaids and other current assets


35,639



997



36,636



33,090



846



33,936Deferred tax assets, net


10,612



(1,128
)


9,484



11,649



(787
)


10,862Income taxes receivable


16,729



1,461



18,190



16,294



1,262



17,556Total current assets


313,957



191



314,148



294,434



30



294,464Long-term assetsProperty, plant and equipment, net


144,362



4,549



148,911



138,692



4,822



143,514Goodwill


57,172



(375
)


56,797



32,803



(375
)


32,428Contract acquisition costs, net


11,453







11,453



12,163







12,163Deferred tax assets, net


38,264



4,114



42,378



31,864



3,074



34,938Other long-term assets


22,699



2,542



25,241



12,667



2,141



14,808Total long-term assets


273,950



10,830



284,780



228,189



9,662



237,851Total assets

$
587,907


$
11,021


$
598,928


$
522,623


$
9,692


$
532,315LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable


27,669



432



28,101



25,067







25,067Accrued employee compensation and benefits


67,061



(426
)


66,635



65,331



(360
)


64,971Other accrued expenses


35,985



292



36,277



38,558



309



38,867Income taxes payable


16,479



2,445



18,924



15,675



1,179



16,854Deferred tax liabilities


1,724



(1,424
)


300



1,508



(1,133
)


375Other short-term liabilities


6,452







6,452



8,801







8,801Current portion of long-term debt


81,600







81,600











Total current liabilities


236,970



1,319



238,289



154,940



(5
)


154,935Long-term liabilitiesLine of credit














32,500







32,500Grant advances


7,109







7,109



6,732



1



6,733Deferred tax liabilities


5,135



(4,997
)


138



6,136



(5,987
)


149Other long-term liabilities


21,080



14,887



35,967



19,949



14,423



34,372Total long-term liabilities


33,324



9,890



43,214



65,317



8,437



73,754Total liabilities


270,294



11,209



281,503



220,257



8,432



228,689Minority interest


7,064







7,064



6,951







6,951Commitments and contingenciesStockholders equityCommon stock


688







688



732



(44
)


688Additional paid-in capital


234,872



43,265



278,137



230,803



43,928



274,731Treasury stock


(90,305
)






(90,305
)


(87,710
)






(87,710
)Accumulated other comprehensive income


5,047



2,721



7,768



3,587



2,738



6,325Retained earnings


160,247



(46,174
)


114,073



148,003



(45,362
)


102,641Total stockholders equity


310,549



(188
)


310,361



295,415



1,260



296,675Total liabilities and stockholders equity

$
587,907


$
11,021


$
598,928


$
522,623


$
9,692


$
532,315  F-58




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit No.

Description3
.01

Restated Certificate of Incorporation of TeleTech (incorporated
    by reference to Exhibit 3.1 to TeleTechs Amendment
    No. 2 to
    Form S-1
    Registration Statement (Registration
    No. 333-04097)
    filed on July 5, 1996)3
.02

Amended and Restated Bylaws of TeleTech (incorporated by
    reference to Exhibit 3.2 to TeleTechs Current Report
    on
    Form 8-K
    filed on May 29, 2008)10
.01

TeleTech Holdings, Inc. Stock Plan, as amended and restated
    (incorporated by reference to Exhibit 10.7 to
    TeleTechs Amendment No. 2 to
    Form S-1
    Registration Statement (Registration
    No. 333-04097)
    filed on July 5, 1996)**10
.02

TeleTech Holdings, Inc. Amended and Restated Employee Stock
    Purchase Plan (incorporated by reference to Exhibit 99.1 to
    TeleTechs
    Form S-8
    Registration Statement (Registration
    No. 333-69668)
    filed on September 19, 2001)**10
.03

TeleTech Holdings, Inc. Directors Stock Option Plan, as amended
    and restated (incorporated by reference to Exhibit 10.8 to
    TeleTechs Amendment No. 2 to
    Form S-1
    Registration Statement (Registration
    No. 333-04097)
    filed on July 5, 1996)**10
.04

TeleTech Holdings, Inc. Amended and Restated 1999 Stock Option
    and Incentive Plan (incorporated by reference to
    Exhibit 99.1 to TeleTechs
    Form S-8
    Registration Statement (Registration
    No. 333-96617)
    filed on July 17, 2002)**10
.05*

Form of Restricted Stock Unit Agreement**10
.06*

Form of Non-Qualified Stock Option Agreement (below Vice
    President)**10
.07*

Form of Restricted Stock Unit Agreement (Vice President and
    above)**10
.08*

Form of Restricted Stock Unit Agreement (Non-Employee Director)**10
.09

Employment Agreement dated October 15, 2001 between James
    Barlett and TeleTech (incorporated by reference to
    Exhibit 10.66 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.10

Stock Option Agreement dated October 15, 2001 between James
    Barlett and TeleTech (incorporated by reference to
    Exhibit 10.70 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.11

Restricted Stock Agreement dated October 15, 2001 between
    James Barlett and TeleTech (incorporated by reference to
    Exhibit 10.71 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.12

Restricted Stock Agreement dated October 15, 2001 between
    James Barlett and TeleTech (incorporated by reference to
    Exhibit 10.72 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.13

Employment Agreement dated October 15, 2001 between Ken
    Tuchman and TeleTech (incorporated by reference to
    Exhibit 10.68 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.14

Stock Option Agreement dated October 1, 2001 between Ken
    Tuchman and TeleTech (incorporated by reference to
    Exhibit 10.69 to TeleTechs Annual Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2001)**10
.15

Amended and Restated Credit Agreement among TeleTech Holdings,
    Inc. as Borrower, The Lenders named herein, as lenders and
    Keybank National Association, as Lead Arranger, Sole Book Runner
    and Administrative Agent dated as of September 28, 2006
    (incorporated by reference to Exhibit 10.39 to
    TeleTechs Annual Report on
    Form 10-K
    filed on February 7, 2007)10
.16

First Amendment to the Amended and Restated Credit Agreement
    among TeleTech Holdings, Inc. as Borrower, the Lenders named
    herein, as Lenders and Keybank National Association, as Lead
    Arranger, Sole Book Runner and Administrative Agent dated as of
    October 24, 2006 (incorporated by reference to
    Exhibit 10.40 to TeleTechs Annual Report on
    Form 10-K
    filed on February 7, 2007)




---



##### Table of Contents



Exhibit No.

Description10
.17

Second Amendment to the Amended and Restated Credit Agreement
    among TeleTech Holdings, Inc. as Borrower, the Lenders named
    herein, as Lenders and Keybank National Association, as Lead
    Arranger, Sole Book Runner and Administrative Agent dated as of
    November 15, 2007 (incorporated by reference to
    Exhibit 10.1 to TeleTechs Current Report on
    Form 8-K
    filed on December 4, 2007)10
.18

Third Amendment to the Amended and Restated Credit Agreement
    among TeleTech Holdings, Inc. as Borrower, the Lenders named
    herein, as Lenders and Keybank National Association, as Lead
    Arranger, Sole Book Runner and Administrative Agent dated as of
    March 25, 2008 (incorporated by reference to
    Exhibit 10.1 TeleTechs Current Report on
    Form 8-K
    filed on March 27, 2008)10
.19

Fourth Amendment to the Amended and Restated Credit Agreement
    among TeleTech Holdings, Inc. as Borrower, the Lenders named
    herein, as Lenders and Keybank National Association, as Lead
    Arranger, Sole Book Runner and Administrative Agent dated as of
    June 30, 2008 (incorporated by reference to
    Exhibit 10.1 TeleTechs Current Report on
    Form 8-K
    filed on June 30, 2008)21
.01*

List of subsidiaries23
.01*

Consent of PricewaterhouseCoopers LLP, Independent Registered
    Public Accounting Firm23
.02*

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm31
.01*

Rule 13a-14(a)
    Certification of CEO of TeleTech31
.02*

Rule 13a-14(a)
    Certification of CFO of TeleTech32
.01*

Written Statement of Chief Executive Officer and Acting Chief
    Financial Officer Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)     *
    
    Filed herewith.**
    
    Identifies exhibit that consists of or includes a management
    contract or compensatory plan or arrangement.