##### 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, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number:
    001-11919
      TeleTech Holdings,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

84-1291044(State or other jurisdiction
    of
    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
  þ o
  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   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    DECEMBER 31, 2008
    FORM 10-K
    TABLE OF CONTENTS
   
 Page No.CAUTIONARY NOTE ABOUT FORWARD-LOOKING
    STATEMENTS


iiPART IItem 1.

Business


1Item 1A.

Risk Factors


9Item 1B.

Unresolved Staff Comments


16Item 2.

Properties


16Item 3.

Legal Proceedings


17Item 4.

Submission of Matters to a Vote of Security
    Holders


18PART II.Item 5.

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


18Item 6.

Selected Financial Data


21Item 7.

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


22Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


45Item 8.

Financial Statements and Supplementary Data


47Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


47Item 9A.

Controls and Procedures


48Item 9B.

Other Information


51PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


51Item 11.

Executive Compensation


51Item 12.

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


51Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


52Item 14.

Principal Accountants Fees and Services


52PART IVItem 15.

Exhibits and Financial Statement Schedules


52SIGNATURES


55INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
    OF TELETECH
    HOLDINGS, INC.


F-1EX-10.05EX-10.07EX-10.08EX-10.13EX-10.15EX-10.17EX-10.19EX-10.21EX-21.01EX-23.01EX-23.02EX-31.01EX-31.02EX-32.01   i




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##### Table of Contents



NON-GAAP FINANCIAL
    MEASURES
  Form 10-K (Form 10-K), Form 10-K
 CAUTIONARY
    NOTE ABOUT  FORWARD-LOOKING STATEMENTS  Form 10-K Form 10-K Form 10-K Form 10-K
 ii




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##### Table of Contents



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




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##### 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 services,
    learning services and hosted technology solutions;
    Increasing delivery capabilities with expanded onshore, 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




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##### Table of Contents



24-hour
    Our Future Growth
    Goals and Strategy
    
    Capitalize 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.  
    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 through increased
    asset utilization of our globally diverse delivery centers;
    Scaling our work from home initiative to increase operational
    flexibility; and
    Selectively pursue acquisitions that extend our capabilities,
    geographic reach
    and/or
    industry expertise.  Our Market
    Opportunity
   3




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##### Table of Contents




    Integration of front- and back-office business processes to
    provide increased operating efficiencies and an enhanced
    customer experience especially in light of the weakening global
    economic environment.  Companies have realized
    that integrated business processes reduce operating costs and
    allow customer needs to be met more quickly and efficiently
    resulting in higher customer satisfaction and brand loyalty
    thereby improving their competitive position. A majority of our
    historic revenue has been derived from providing customer-facing
    front-office solutions to our clients. Given that our global
    delivery centers are also fully capable of providing back-office
    solutions, we are uniquely positioned to grow our revenue by
    winning more back-office opportunities and providing the
    services during non-peak hours with minimal incremental
    investment. Furthermore, by spreading our fixed costs across a
    larger revenue base and increasing our asset utilization, we
    expect our profitability to improve over time.
    Increasing percentage of company operations being outsourced
    to most capable third-party providers.  Having
    experienced success with outsourcing a portion of their business
    processes, companies are increasingly inclined to outsource a
    larger percentage of this work. We believe companies will
    continue to consolidate their business processes with
    third-party providers, such as TeleTech, who are financially
    stable and able to invest in their business while also
    demonstrating an extensive global operating history and an
    ability to cost-effectively scale to meet their evolving needs.
    Increasing adoption of outsourcing across broader groups of
    industries.  Early adopters of the business
    process outsourcing trend, such as the media and communications
    industries, are being joined by companies in other industries,
    including healthcare, retail and financial services. These
    companies are beginning to adopt outsourcing to improve their
    business processes and competitiveness. For example, we have
    seen an increase in our revenue from the healthcare, retail and
    financial services industries. We believe the number of other
    industries that will adopt or increase their level of
    outsourcing will continue to grow further enabling us to
    increase and diversify our revenue and client base.
    Focus on speed-to-market by companies launching new products
    or entering new geographic locations.  As
    companies broaden their product offerings and seek to enter new
    emerging markets, they are looking for outsourcing 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, the financial strength to invest
    in innovation to deliver more strategic capabilities and the
    ability to scale and meet customer demands quickly. Given our
    financial stability, geographic presence in 17 countries and our
    significant investment in standardized technology and processes,
    clients increasingly select TeleTech because we can quickly ramp
    large, complex business processes around the globe in a short
    period of time while assuring a high-quality experience for
    their customers.  Our Business
    Overview
   4




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
    Design, implement and manage industry-specific end-to-end
    enterprise level 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 as well as governmental
    agencies;
    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;
    Providing services and tools for clients internal human
    capital operations 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 and
    most financially sound industry providers with 27 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




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




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##### Table of Contents



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
      Seasonality
   7




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Employees
    
    In Argentina, approximately 4,400 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 2,400 employees are covered by
    industry-wide collective bargaining agreements with Sintratel
    and SintelMark that expire in May 2009;
    In Mexico, we have approximately 4,400 employees covered by
    an industry-wide collective bargaining agreement with the
    Federacion Obrero Sindicalista that expires in January 2010;
    In Spain, we have approximately 3,500 employees covered by
    industry-wide collective bargaining agreements with COMFIA-CCOO
    and FES-UGT that expires in December 2009; and
    In New Zealand, we have approximately 100 employees covered
    by a collective bargaining agreement with the Engineering
    Printing and Manufacturing Union that expires in June 2009.    Intellectual
    Property and 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.
 8




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##### Table of Contents



ITEM 1A.  RISK
    FACTORS  Form 10-K.
  Risks Relating to
    Our Business
  Recent changes
    in U.S. and global economic conditions could have an adverse
    effect on the profitability of our business
  and/or
  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
      Client
    consolidations could result in a loss of clients or contract
    concessions that would adversely affect our operating
    results
   9




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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
  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
   10




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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
  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
    Our business
    may be affected by risks associated with international
    operations and expansion
    
    Management of personnel overseas;
    Longer payment cycles; 11




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
    Difficulties in accounts receivable collections;
    Foreign currency exchange rates;
    Difficulties in complying with foreign laws;
    Unexpected changes in regulatory requirements;
    Political and social instability, as demonstrated by terrorist
    threats, regime change, increasing tension in the Middle East
    and other regions, 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
   12




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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;
    Maintain and 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.   13




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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.    If we fail to
    recruit, hire, train and retain key executives or qualified
    employees, our business will be adversely affected
  and/or
    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; 14




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
    We may assume liabilities associated with the sale of the
    acquired companys products or services;
    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.      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; or
    Other events or factors, many of which are beyond our control.    You may suffer
    significant dilution as a result of our outstanding stock
    options and our equity incentive programs
   15




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Our Chairman
    and Chief Executive Officer has practical control over all
    matters requiring action by our stockholders
    We and certain
    of our officers and directors have been named as parties to
    class action and related lawsuits 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;
    Dedicated Center  We lease space for
    these centers and dedicate the entire facility to one
    client; and
    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. 16




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##### Table of Contents



Multi-Client


Dedicated


Managed


Total Number ofCenters


Centers


Centers


Delivery CentersArgentina


6







2



8Australia


3



1



1



5Brazil


2







1



3Canada


3



7



1



11China


1







1



2Costa Rica


1











1England


1







1



2Germany










1



1Malaysia


1











1Mexico


3











3New Zealand


1







3



4Northern Ireland


1











1Philippines


12











12Scotland






1



3



4South Africa


1











1Spain


3



1



2



6U.S


6



5



7



18Total


45



15



23



83     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
  Derivative
    Action
  Susan
    M. Gregory v. Kenneth D. Tuchman, et al.
 17




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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 2008

$
13.20


$
6.43Third Quarter 2008

$
21.07


$
10.02Second Quarter 2008

$
26.88


$
19.88First Quarter 2008

$
23.59


$
16.17Fourth Quarter 2007

$
27.43


$
18.76Third Quarter 2007

$
35.24


$
22.75Second Quarter 2007

$
40.41


$
30.05First Quarter 2007

$
37.52


$
23.34     Stock Repurchase
    Program
   18




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##### Table of Contents



Issuer Purchases
    of Equity Securities During the Fourth Quarter of 2008
    Total Number


Approximateof Shares


Dollar Value ofPurchased as


Shares that MayTotal


Average


Part of Publicly


Yet Be PurchasedNumber of


Price Paid


Announced


Under the PlansShares


per Share


Plans or


or ProgramsPeriod

Purchased


(or Unit)


Programs


(In thousands)October 1, 2008 - October 31, 2008


182,600


$
12.53



182,600


$
22,759November 1, 2008 - November 30, 2008


775,800



9.01



775,800



15,765December 1, 2008 - December 31, 2008


719,200



7.44



719,200



10,418Total


1,677,600







1,677,600   Equity
    Compensation Plan Information
    Number of SecuritiesNumber of





Remaining AvailableSecurities to be





for Future IssuanceIssued Upon





Under EquityExercise of


Weighted- Average


Compensation PlansOutstanding


Exercise Price of


(ExcludingOptions, RSUs,


Outstanding


SecuritiesWarrants and


Options, Warrants


Reflected in ColumnPlan Category

Rights (a)


and Rights(b)


(a))Equity compensation plans approved by security holders


6,825,275
(1)

$
11.71
(2)


3,202,904Equity compensation plans not approved by security holders










Total


6,825,275







3,202,904     (1)

    
    Includes options to purchase 4,201,404 shares and 2,623,871
    RSUs issued under our equity incentive plans.(2)

    
    Weighted average exercise price of outstanding stock options;
    excludes RSUs, which have no exercise price. 19




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Stock Performance
    Graph
      COMPARISON OF 5
    YEAR CUMULATIVE TOTAL RETURN* Among
    TeleTech Holdings, Inc., The NASDAQ Composite Index,
    The Russell 2000 Index, An Old Peer Group And A New Peer Group
  12/03


12/04


12/05


12/06


12/07


12/08TeleTech Holdings, Inc.

$
100


$
86


$
107


$
211


$
188


$
74NASDAQ Composite

$
100


$
110


$
113


$
127


$
138


$
80Russell 2000

$
100


$
118


$
124


$
146


$
144


$
95Old Peer Group

$
100


$
84


$
97


$
144


$
106


$
60New Peer Group

$
100


$
94


$
109


$
156


$
130


$
77   
  *$100 invested on 12/31/03 in stock
    & index-including reinvestment of dividends.
    Fiscal year ending December 31.
 20




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ITEM 6.  SELECTED
    FINANCIAL DATA  Form 10-K
  Year Ended December 31,2008


2007


2006


2005


2004Statement of Operations DataRevenue

$
1,400,147


$
1,369,632


$
1,210,753


$
1,085,903


$
1,052,690Cost of services


(1,024,451
)


(1,001,459
)


(882,809
)


(809,059
)


(772,573
)Selling, general and administrative


(199,495
)(1)


(207,528
)(1)


(199,995
)


(183,111
)


(165,533
)Depreciation and amortization


(59,166
)


(55,953
)


(51,989
)


(54,412
)


(61,147
)Other operating expenses


(8,077
)(2)


(22,904
)(4)


(2,195
)(6)


(7,384
)(7)


(4,693
)(8)Income from operations


108,958



81,788



73,765



31,937



48,744Other income (expense)


(4,354
)


(6,437
)(5)


(4,442
)


(156
)


(15,250
)(9)Provision for income taxes


(27,269
)(3)


(19,562
)


(16,474
)(3)


(3,953
)(3)


(9,124
)Minority Interest


(3,588
)


(2,686
)


(1,868
)


(1,542
)


(738
)Net income

$
73,747


$
53,103


$
50,981


$
26,286


$
23,632Weighed average shares outstandingBasic


68,208



70,228



69,184



72,121



74,751Diluted


69,578



72,638



69,869



73,134



75,637Net income per shareBasic

$
1.08


$
0.76


$
0.74


$
0.36


$
0.32Diluted

$
1.06


$
0.73


$
0.73


$
0.36


$
0.31Balance Sheet DataTotal assets

$
668,942


$
760,295


$
664,421


$
527,973


$
499,567Total long-term liabilities

$
127,949


$
118,729


$
111,800


$
68,646


$
36,805     (1)

    
    Includes $14.6 million and $11.5 million for 2008 and
    2007, respectively, for costs incurred for the Companys
    review of its equity-based compensation practices and
    restatement of the Consolidated Financial Statements.(2)

    
    Includes $3.3 million charge related to reductions in
    force; $3.0 million charge related to facility exit charges
    in accordance with Statement of Financial Accounting Standards
    (SFAS) No. 146 Accounting for Costs
    Associated with Exit or Disposal Activities(SFAS
    146); and a $2.0 million charge related to the
    impairment of property and equipment in accordance with
    SFAS No. 144 Accounting for the Impairment or
    Disposal of Long-Lived Assets(SFAS 144).(3)

    
    Includes benefits due to the reversal of income tax valuation
    allowances of $3.9 million, $5.7 million, and
    $12.7 million for the years 2008, 2006 and 2005,
    respectively. The year 2006 includes a $3.3 million benefit
    due to the Enhansiv Holdings, Inc. loss carry forward. The year
    2005 includes a $3.7 million charge related to the
    repatriation of foreign earnings under a Qualified Domestic
    Reinvestment Plan.(4)

    
    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); $2.4 million charge
    related to the impairment of property and equipment in
    accordance with SFAS 144; $3.8 million charge related
    to reductions in force; $4.0 million charge related to
    facility exit charges in accordance with SFAS 146; and
    $0.7 million benefit related to the revised estimates of
    restructuring charges.(5)

    
    Includes $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. 21




---



##### Table of Contents



(6)

    
    Includes $1.0 million charge related to reductions in
    force; $0.8 million related to facility exit costs in
    accordance with SFAS 146; and $0.6 million charge
    related to the impairment of property and equipment in
    accordance with SFAS 144.(7)

    
    Includes $2.3 million charge related to the impairment of
    property and equipment in accordance with SFAS 144;
    $2.1 million charge related to reductions in force;
    $2.6 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; and $0.2 million benefit related
    to revised estimates of restructuring and impairment charges.(8)

    
    Includes $2.6 million charge related to the impairment of
    property and equipment in accordance with SFAS 144; and
    $2.1 million charge related to a reduction in workforce and
    facility exit charges under SFAS 146.(9)

    
    Includes $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. ITEM 7.  MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
    RESULTS OF OPERATIONS  Executive
    Summary
  27-year
      
    Integration of front- and back-office business processes to
    provide increased operating efficiencies and an enhanced
    customer experience especially in light of the weakening global
    economic environment.  Companies have realized
    that integrated business processes reduce operating costs and
    allow customer needs to be met more quickly and efficiently
    resulting in higher customer satisfaction and brand loyalty
    thereby improving their competitive position. A majority of our
    historic revenue has been derived from providing customer-facing
    front-office solutions to our clients. Given that our global
    delivery centers are also fully capable of providing back-office
    solutions, we are uniquely positioned to grow our revenue by
    winning more back-office opportunities and providing the
    services during non-peak hours with minimal incremental
    investment. Furthermore, by spreading our fixed costs across a
    larger revenue base and increasing our asset utilization, we
    expect our profitability to improve over time.
    Increasing percentage of company operations being outsourced
    to most capable third-party providers.  Having
    experienced success with outsourcing a portion of their business
    processes, 22




---



##### Table of Contents



companies are increasingly inclined to outsource a larger
    percentage of this work. We believe companies will continue to
    consolidate their business processes with third-party providers,
    such as TeleTech, who are financially stable and able to invest
    in their business while also demonstrating an extensive global
    operating history and an ability to cost-effectively scale to
    meet their evolving needs.  
    Increasing adoption of outsourcing across broader groups of
    industries.Early adopters of the business
    process outsourcing trend, such as the media and communications
    industries, are being joined by companies in other industries,
    including healthcare, retail and financial services. These
    companies are beginning to adopt outsourcing to improve their
    business processes and competitiveness. For example, we have
    seen an increase in our revenue from the healthcare, retail and
    financial services industries. We believe the number of other
    industries that will adopt or increase their level of
    outsourcing will continue to grow further enabling us to
    increase and diversify our revenue and client base.
    Focus on speed-to-market by companies launching new products
    or entering new geographic locations.As
    companies broaden their product offerings and seek to enter new
    emerging markets, they are looking for outsourcing 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, the financial strength to invest
    in innovation to deliver more strategic capabilities and the
    ability to scale and meet customer demands quickly. Given our
    financial stability, geographic presence in 17 countries and our
    significant investment in standardized technology and processes,
    clients increasingly select TeleTech because we can quickly ramp
    large, complex business processes around the globe in a short
    period of time while assuring a high-quality experience for
    their customers.  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 through increased
    asset utilization of our globally diverse delivery
    centers; and
    Selectively pursue acquisitions that extend our capabilities,
    geographic reach
    and/or
    industry expertise. 23




---



##### Table of Contents



Our 2008
    Financial Results
    24-hour
      gross-ups.
  Business
    Overview
   24




---



##### Table of Contents



North American BPO

International BPOUnited States

ArgentinaCanada

AustraliaPhilippines

BrazilChinaCosta RicaEnglandGermanyMalaysiaMexicoNew ZealandNorthern IrelandScotlandSouth AfricaSpain         BPO
    Services
   25




---



##### 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.       26




---



##### Table of Contents



and/or
         27




---



##### Table of Contents



December 31, 2008


December 31, 2007Total








TotalProduction





% In


Production





% InWorkstations


In Use


Use


Workstations


In Use


UseNorth American BPOSites open < 1 year


2,401



1,043



43
%


3,061



1,204



39
%Sites open > 1 year


15,682



12,515



80
%


13,036



11,839



91
%Total North American BPO


18,083



13,558



75
%


16,097



13,043



81
%International BPOSites open < 1 year


2,795



1,233



44
%


2,502



1,346



54
%Sites open > 1 year


10,010



7,239



72
%


9,746



7,879



81
%Total International BPO


12,805



8,472



66
%


12,248



9,225



75
%Total


30,888



22,030



71
%


28,345



22,268



79
%   Database
    Marketing and Consulting
      ccounting for the Impairment
    or Disposal of Long-Lived Assets
  Goodwill and Other
    Intangible Assets
 28




---



##### Table of Contents



Consolidated
    Financial Statements
  Overall
  and/or
    Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
      Production Rate
  Performance based
 29




---



##### Table of Contents



Hybrid
      Income
    Taxes
  Accounting for Income Taxes
    Accounting for Uncertainty in
    Income Taxes
  Allowance for
    Doubtful Accounts
  account-by-account
  Impairment of
    Long-Lived Assets
   30




---



##### Table of Contents



Goodwill
      Restructuring
    Liability
  Accounting for Costs Associated
    with Exit or Disposal Activities
  and/or
  Adoption of
    SFAS No. 123(R) and Equity-Based Compensation
    Expense
  Accounting for Share Based Payment
 31




---



##### Table of Contents



Fair Value
    Measurement
  Fair Value Measurements
      Level 1
    Quoted prices are available in active markets for identical
    assets or liabilities as of the reporting date. Active markets
    are those in which transactions for the asset or liability occur
    in sufficient frequency and volume to provide pricing
    information on an ongoing basis. Level 1 primarily consists
    of financial instruments such as exchange-traded derivatives,
    listed equities and U.S. government treasury securities.Level 2
    Pricing inputs are other than quoted prices in active markets
    included in Level 1, which are either directly or
    indirectly observable as of the reporting date. Level 2
    includes those financial instruments that are valued using
    models or other valuation methodologies. These models are
    primarily industry-standard models that consider various
    assumptions, including quoted forward prices for commodities,
    time value, volatility factors, and current market and
    contractual prices for the underlying instruments, as well as
    other relevant economic measures. Substantially all of these
    assumptions are observable in the marketplace throughout the
    full term of the instrument, can be derived from observable data
    or are supported by observable levels at which transactions are
    executed in the marketplace. Instruments in this category
    include non-exchange-traded derivatives such as over-the-counter
    forwards, options and repurchase agreements.  Level 3
    Pricing inputs include significant inputs that are generally
    less observable from objective sources. These inputs may be used
    with internally developed methodologies that result in
    managements best estimate of fair value from the
    perspective of a market participant. Level 3 instruments
    include those that may be more structured or otherwise tailored
    to customers needs. At each balance sheet date, the
    Company performs an analysis of all instruments subject to
    SFAS 157 and includes in Level 3 all of those whose
    fair value is based on significant unobservable inputs.  Derivatives
  Accounting for Derivative
    Instruments and Hedging Activities, as amended
 32




---



##### Table of Contents



Contingencies
  Accounting for Contingencies case-by-case
  Explanation of
    Key Metrics and Other Items
  Cost of
    Services
    Selling, General
    and Administrative
   33




---



##### Table of Contents



Restructuring
    Charges, Net
    Interest
    Expense
    Other
    Income
    Other
    Expenses
    Presentation of
    Non-GAAP Measurements
  Free Cash
    Flow
      Year Ended December 31,2008


2007


2006Free cash flow

$
98,854


$
42,431


$
33,058Purchases of property, plant and equipment


61,712
(1)


61,083



66,016Net cash provided by operating activities

$
160,566


$
103,514


$
99,074     (1)

    
    Purchases of property, plant and equipment in 2008 are net of
    proceeds from a government grant of $4,276.    Non-GAAP Income
    from Operations
   34




---



##### Table of Contents



Non-GAAP Effective
    Tax Rate
   35




---



##### Table of Contents



RESULTS OF
    OPERATIONS
  Year Ended
    December 31, 2008 Compared to December 31,
    2007
    Year Ended December 31,% of





% ofSegment





Segment2008


Revenue


2007


Revenue


$ Change


% ChangeRevenueNorth American BPO

$
974,815



69.6
%

$
955,810



69.8
%

$
19,005



2.0
%International BPO


425,332



30.4
%


396,080



28.9
%


29,252



7.4
%Database Marketing and Consulting






0.0
%


17,742



1.3
%


(17,742
)


(100.0
)%$
1,400,147



100.0
%

$
1,369,632



100.0
%

$
30,515



2.2
%Cost of servicesNorth American BPO

$
708,290



72.7
%

$
689,793



72.2
%

$
18,497



2.7
%International BPO


315,989



74.3
%


299,927



75.7
%


16,062



5.4
%Database Marketing and Consulting


172



0.0
%


11,739



66.2
%


(11,567
)


(98.5
)%$
1,024,451



73.2
%

$
1,001,459



73.1
%

$
22,992



2.3
%Selling, general and administrativeNorth American BPO

$
125,034



12.8
%

$
126,517



13.2
%

$
(1,483
)


(1.2
)%International BPO


74,044



17.4
%


66,700



16.8
%


7,344



11.0
%Database Marketing and Consulting


417



0.0
%


14,311



80.7
%


(13,894
)


(97.1
)%$
199,495



14.2
%

$
207,528



15.2
%

$
(8,033
)


(3.9
)%Depreciation and amortizationNorth American BPO

$
36,521



3.7
%

$
31,964



3.3
%

$
4,557



14.3
%International BPO


22,631



5.3
%


20,076



5.1
%


2,555



12.7
%Database Marketing and Consulting


14



0.0
%


3,913



22.1
%


(3,899
)


(99.6
)%$
59,166



4.2
%

$
55,953



4.1
%

$
3,213



5.7
%Restructuring charges, netNorth American BPO

$
2,880



0.3
%

$
1,280



0.1
%

$
1,600



125.0
%International BPO


3,226



0.8
%


1,050



0.3
%


2,176



207.2
%Database Marketing and Consulting


(47
)


0.0
%


4,785



27.0
%


(4,832
)


(101.0
)%$
6,059



0.4
%

$
7,115



0.5
%

$
(1,056
)


(14.8
)%Impairment lossesNorth American BPO

$
1,854



0.2
%

$
154



0.0
%

$
1,700



1103.9
%International BPO


164



0.0
%






0.0
%


164



100.0
%Database Marketing and Consulting






0.0
%


15,635



88.1
%


(15,635
)


(100.0
)%$
2,018



0.1
%

$
15,789



1.2
%

$
(13,771
)


(87.2
)%Income (loss) from operationsNorth American BPO

$
100,236



10.3
%

$
106,102



11.1
%

$
(5,866
)


(5.5
)%International BPO


9,278



2.2
%


8,327



2.1
%


951



11.4
%Database Marketing and Consulting


(556
)


0.0
%


(32,641
)


(184.0
)%


32,085



98.3
%$
108,958



7.8
%

$
81,788



6.0
%

$
27,170



33.2
%Other income (expense)

$
(4,354
)


(0.3
)%

$
(6,437
)


(0.5
)%

$
2,083



32.4
%Provision for income taxes

$
(27,269
)


(1.9
)%

$
(19,562
)


(1.4
)%

$
(7,707
)


(39.4
)%   Revenue
   36




---



##### Table of Contents



Cost of
    Services
        Selling, General
    and Administrative
       37




---



##### Table of Contents



Depreciation and
    Amortization
    Restructuring
    Charges
    Impairment
    Losses
    Other Income
    (Expense)
    Income
    Taxes
   38




---



##### Table of Contents



Year Ended
    December 31, 2007 Compared to December 31,
    2006
    Year Ended December 31,% of





% ofSegment





Segment2007


Revenue


2006


Revenue


$ Change


% ChangeRevenueNorth 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
   39




---



##### Table of Contents



Cost of
    Services
        Selling, General
    and Administrative
        Depreciation and
    Amortization
   40




---



##### Table of Contents



Restructuring
    Charges, Net
    Impairment
    Losses
    Other Income
    (Expense)
    Income
    Taxes
    Liquidity and
    Capital Resources
   41




---



##### Table of Contents



Cash and Cash
    Equivalents
    Cash Flows from
    Operating Activities
    Cash Flows from
    Investing Activities
    Cash Flows from
    Financing Activities
   42




---



##### Table of Contents



Free Cash
    Flow
    Obligations and
    Future Capital Requirements
    Less than


1 to 3


3 to 5


Over 51 Year


Years


Years


Years


TotalCredit
    Facility(1)

$
2,065


$
84,415


$



$



$
86,480Capital lease obligations


2,058



3,771



576







6,405Purchase obligations


19,106



26,254



11,966







57,326Operating lease commitments


30,645



50,243



28,813



21,056



130,757Total

$
53,874


$
164,683


$
41,355


$
21,056


$
280,968     (1)

    
    Includes estimated interest payments based on the weighted
    average interest rate and debt outstanding as of
    December 31, 2008.  
    Contractual obligations to be paid in a foreign currency are
    translated at the period end exchange rate.
    Purchase obligations primarily consist of outstanding purchase
    orders for goods or services not yet received, which are not
    recognized as liabilities in our Consolidated Balance Sheets
    until such goods
    and/or
    services are received.
    The contractual obligation table excludes our FIN 48
    liabilities of $1.6 million because we cannot reliably
    estimate the timing of cash payments. See Note 11 to the
    Consolidated Financial Statements for further discussion.  Purchase
    Obligations
    Future Capital
    Requirements
  and/or
   43




---



##### Table of Contents



Debt Instruments
    and Related Covenants
    %
  Client
    Concentration
     44




---



##### Table of Contents



Recently Issued
    Accounting Pronouncements
    ITEM 7A.  QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    Interest Rate
    Risk
    Foreign Currency
    Risk
  non-U.S. countries
     45




---



##### Table of Contents



Year Ended December 31,2008


2007


2006Canadian Dollar vs. U.S. Dollar


(23.9
)%


15.2
%


0.1
%Philippine Peso vs. U.S. Dollar


(15.1
)%


15.9
%


7.5
%Argentine Peso vs. U.S. Dollar


(11.5
)%


(2.7
)%


(1.4
)%Mexican Peso vs. U.S. Dollar


(26.7
)%


(1.1
)%


(1.6
)%S. African Rand vs. U.S. Dollar


(36.1
)%


2.7
%


N/A   Cash Flow Hedging
    Program
  and/or
      Local Currency


U.S. Dollar


% Maturing in


Contracts Maturing2008

Notional Amount


Amount


2009


ThroughCanadian Dollar


88,300


$
77,865



54.1
%

December 2011Canadian Dollar Call Options


44,400



39,305



54.1
%

December 2010Philippine Peso


6,656,909



150,418
(1)


75.6
%

February 2011Argentine Peso


102,072



29,054
(2)


91.2
%

May 2010Mexican Peso


856,500



70,530



68.0
%

September 2011S. African Rand


92,000



8,399



81.5
%

February 2010British Pound Sterling


1,725



2,537
(3)


44.3
%

March 2011$
378,108   Local Currency


U.S. Dollar2007

Notional Amount


AmountCanadian Dollar


54,000


$
49,679Canadian Dollar Call Options


82,800



73,344Philippine Peso


7,600,000



166,457Argentine Peso


126,674



37,842Mexican Peso


464,500



40,846$
368,168  46




---



##### Table of Contents



(1)

    
    Includes contracts to purchase Philippine pesos in exchange for
    British pound sterling and New Zealand dollars, which are
    translated into equivalent U.S. dollars on December 31,
    2008 and 2007.(2)

    
    Includes contracts to purchase Argentine pesos in exchange for
    Euros, which are translated into equivalent U.S. dollars on
    December 31, 2008 and 2007.(3)

    
    Includes contracts to purchase British pound sterling in
    exchange for Euros, which are translated into equivalent U.S.
    dollars on December 31, 2008 and 2007.    December 31,


Maturing in2008


2009Canadian Dollar

$
(3,059
)

$
(2,837
)Philippine Peso


(13,301
)


(11,639
)Argentine Peso


(5,710
)


(4,953
)Mexican Peso


(11,370
)


(9,862
)S. African Rand


809



683British Pound Sterling


(458
)


(222
)$
(33,089
)

$
(28,830
)         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   47




---



##### Table of Contents



ITEM 9A.  CONTROLS
    AND PROCEDURES  Form 10-K Rule 13a-14
  Background
  Form 10-K Form 10-K
    Evaluation of
    Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Form 10-K,
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f)
  Form 10-K,
 48




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##### Table of Contents



Internal
    Control  Integrated Framework
  Changes in
    Internal Control Over Financial Reporting
  Form 10-K
  
    Attained a sufficient complement of personnel with an
    appropriate level of accounting knowledge, experience and
    training in the application of U.S. GAAP, thereby enhancing
    the effectiveness over the preparation and review of account
    reconciliations and analysis over the completeness and accuracy
    of account balances. This was achieved by executing the
    following activities:  -
    In March 2008, we hired a Vice President and 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 Vice President and Controller who is a
    licensed CPA with extensive experience in public accounting and
    public company accounting operations;-
    In July 2008, we hired an Accounting Manager over equity-based
    compensation and lease accounting;-
    In August 2008, we hired an Assistant Controller who is
    responsible for the general ledger operations and
    monthly/quarterly closing processes;-
    In the second half of 2008, we hired additional accounting
    personnel at various levels within the accounting organization
    with sufficient knowledge and technical expertise in the
    application of U.S. GAAP;-
    In Q4 2008, we instituted a CPA reimbursement program to promote
    and support CPA certification;-
    In Q3 2008, we improved the effectiveness over the preparation
    and review of account reconciliations;-
    In Q3 2008, we realigned the Accounting Organization based on
    the skill sets of the individuals and functional areas within
    the organization; and-
    Throughout 2008, we provided specific training over equity and
    lease accounting and will continue to provide training designed
    to ensure that we have sufficient personnel with knowledge,
    experience, and training in the application of U.S. GAAP.  
    We have enhanced our processes, procedures and controls in our
    equity-based compensation practices which have remediated our
    past deficiencies in our historical equity-based 49




---



##### Table of Contents



compensation practices. We have implemented the following
    actions which became completely effective as of the fourth
    quarter:  -
    The Compensation Committee makes annual equity awards to named
    recipients at a set time each year;-
    The Compensation Committee makes all periodic equity awards,
    including new hire, promotion and special circumstance grants,
    at pre-scheduled monthly meetings;-
    A senior member of the Human Capital Department, supported by
    designated members of the Legal, Tax and Accounting Departments,
    is responsible for ensuring that the accounting treatment,
    recipient notification requirements, and required disclosures
    have been determined for each equity award before the award is
    authorized by the Compensation Committee;-
    In advance of each meeting, the Compensation Committee is
    provided with information on the accounting treatment and any
    non-standard terms of each proposed equity award;-
    Other than as approved under new grant procedures, changes to
    grants after their approval date are prohibited, 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);-
    In July 2008, we hired an Accounting Manager to oversee
    equity-based compensation with specific experience in
    equity-based compensation accounting;-
    In December 2008, the Board of Directors approved the
    Companys proposed policy regarding equity award procedures;-
    In the second half of 2008, we provided training for pertinent
    personnel in the terms of our equity compensation plans and
    improved policies and procedures;-
    In Q4 2008, internal audit performed expanded audit procedures
    over the Companys grant approval and documentation
    process; and-
    Currently in the process of implementing a software system that
    tracks all equity-based awards and automates the equity-based
    compensation calculations. Implementation is expected to be
    completed in 2009.  
    We remediated the lease accounting control deficiency by
    redesigning our accounting and control processes over the
    complete and accurate recording of our real estate lease
    transactions. Specifically:  -
    We instituted additional levels of managerial review over all
    lease agreements and the associated accounting;-
    We established 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 hired an Accounting Manager over leases with specific
    experience in lease accounting.       50




---



##### Table of Contents



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; and
    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.    ITEM 9B.  OTHER
    INFORMATION    PART III ITEM 10.  DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.  EXECUTIVE
    COMPENSATION   ITEM 12.  SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS   51




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##### Table of Contents



ITEM 13.  CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE    ITEM 14.  PRINCIPAL
    ACCOUNTANTS FEES AND SERVICES    PART IV  ITEM 15.  EXHIBITS AND
    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*

Amendment to 1999 Stock Option and Incentive Plan dated
    February 11, 200910
.06

Form of Restricted Stock Unit Agreement (effective in 2007 and
    2008) (incorporated by reference to Exhibit 10.05 to
    TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2007)**10
.07*

Amendment to Form of Restricted Stock Unit Agreement (effective
    December 2008)10
.08*

Form of Restricted Stock Unit Agreement (effective in 2009)
    (incorporated by reference to Exhibit 10.1 TeleTechs
    Current Report on
    Form 8-K
    filed on February 17, 2009)**10
.09

Form of Non-Qualified Stock Option Agreement (below Vice
    President) (incorporated by reference to Exhibit 10.06 to
    TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2007)** 52




---



##### Table of Contents



Exhibit No.

Description10
.10

Form of Non-Qualified Stock Option Agreement (Vice President and
    above) (incorporated by reference to Exhibit 10.07 to
    TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2007)**10
.11

Form of Non-Qualified Stock Option Agreement (Non-Employee
    Director) (incorporated by reference to Exhibit 10.08 to
    TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2007)**10
.12

Employment Agreement between James E. Barlett and TeleTech dated
    October 15, 2001 (incorporated by reference to
    Exhibit 10.66 to TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2001)**10
.13*

Amendment to Employment Agreement between James E. Barlett and
    TeleTech dated December 31, 200810
.14

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

Amendment dated September 17, 2008 to Stock Option
    Agreement between James E. Barlett and TeleTech10
.16

Employment Agreement between Kenneth D. Tuchman and TeleTech
    dated October 15, 2001 (incorporated by reference to
    Exhibit 10.68 to TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2001)**10
.17*

Amendment to Employment Agreement between Kenneth D. Tuchman and
    TeleTech dated December 31, 200810
.18

Stock Option Agreement between Kenneth D. Tuchman and TeleTech
    dated October 1, 2001 (incorporated by reference to
    Exhibit 10.69 to TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2001)**10
.19*

Amendment dated September 17, 2008 to Stock Option
    Agreement between Kenneth D. Tuchman and TeleTech10
.20

Employment Agreement dated April 6, 2004 between Gregory G.
    Hopkins and TeleTech (incorporated by reference to
    Exhibit 10.1 to TeleTechs Quarterly Report on
    Form 10-Q
    for the for the quarter ended September 30, 2008)**10
.21*

Amendment to Employment Agreement between Gregory G. Hopkins and
    TeleTech dated December 16, 200810
.22

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
.23

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
.24

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
.25

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
.26

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) 53




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##### Table of Contents



Exhibit No.

Description10
.27

Fifth 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
    September 4, 2008 (incorporated by reference to
    Exhibit 10.1 TeleTechs Current Report on
    Form 8-K
    filed on September 8, 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. 54




---



##### 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/  Robert
    M. TarolaRobert
    M. Tarola

DIRECTOR/s/  Shirley
    YoungShirley
    Young

DIRECTOR  55




---



##### 



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-3Consolidated Balance Sheets as of
    December 31, 2008 and 2007


F-4Consolidated Statements of Operations and
    Comprehensive Income (Loss) for the Years Ended
    December 31, 2008, 2007 and 2006


F-5Consolidated Statements of Stockholders
    Equity for the Years Ended December 31, 2008, 2007 and
    2006


F-6Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2008, 2007 and 2006


F-7Notes to the Consolidated Financial Statements


F-8   F-1




---



##### Table of Contents



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




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM          
    except for the impact of the restatement
 of the consolidated statements of
 operations and comprehensive income,
 stockholders equity and cash flows
 referred to above, due to (i)
 equity-based compensation adjustments,
 (ii) lease accounting adjustments, (iii)
 other accounting and income tax
 adjustments, and (iv) tax effects
 relating to items (i) through (iii)
 above, as to which the date is
  F-3




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIESConsolidated Balance Sheets
    (Amounts in thousands except share amounts)
  December 31,2008


2007ASSETSCurrent assetsCash and cash equivalents

$
87,942


$
91,239Accounts receivable, net


236,997



270,988Prepaids and other current assets


31,279



62,344Deferred tax assets, net


30,328



8,386Income taxes receivable


18,342



26,868Total current assets


404,888



459,825Long-term assetsProperty, plant and equipment, net


157,747



174,809Goodwill


44,150



45,154Contract acquisition costs, net


7,591



6,984Deferred tax assets, net


31,504



39,764Other long-term assets


23,062



33,759Total long-term assets


264,054



300,470Total assets

$
668,942


$
760,295LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
26,214


$
38,761Accrued employee compensation and benefits


71,919



87,480Other accrued expenses


18,887



28,872Income taxes payable


19,168



18,552Deferred tax liabilities, net






88Deferred revenue


12,867



13,057Other current liabilities


31,044



Total current liabilities


180,099



186,810Long-term liabilitiesLine of credit


80,800



65,400Grant advances


1,824



6,741Negative investment in deconsolidated subsidiary


4,865



Deferred tax liabilities, net






57Other long-term liabilities


40,460



46,531Total long-term liabilities


127,949



118,729Total liabilities


308,048



305,539Minority interest


5,011



3,555Commitments and contingencies (Note 15)Stockholders equityPreferred stock; $0.01 par; 10,000,000 shares
    authorized; zero shares outstanding as of December 31, 2008
    and 2007






Common stock; $.01 par value; 150,000,000 shares
    authorized; 63,816,379 and 69,827,671 shares outstanding as
    of December 31, 2008 and 2007, respectively


638



698Additional paid-in capital


341,887



334,593Treasury stock at cost: 18,238,066 and 12,077,609 shares,
    respectively


(228,596
)


(143,205
)Accumulated other comprehensive income (loss)


(33,020
)


57,888Retained earnings


274,974



201,227Total stockholders equity


355,883



451,201Total liabilities and stockholders equity

$
668,942


$
760,295    F-4




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIESConsolidated Statements of Operations and
    Comprehensive Income (Loss)
    (Amounts in thousands except per share amounts)
  Year Ended December 31,2008


2007


2006Revenue

$
1,400,147


$
1,369,632


$
1,210,753Operating expensesCost of services (exclusive of depreciation and amortization
    presented separately below)


1,024,451



1,001,459



882,809Selling, general and administrative


199,495



207,528



199,995Depreciation and amortization


59,166



55,953



51,989Restructuring charges, net


6,059



7,115



1,630Impairment losses


2,018



15,789



565Total operating expenses


1,291,189



1,287,844



1,136,988Income from operations


108,958



81,788



73,765Other income (expense)Interest income


4,816



2,364



2,209Interest expense


(6,738
)


(6,645
)


(6,560
)Other, net


(2,432
)


(2,156
)


(91
)Total other expense


(4,354
)


(6,437
)


(4,442
)Income before income taxes and minority interest


104,604



75,351



69,323Provision for income taxes


(27,269
)


(19,562
)


(16,474
)Income before minority interest


77,335



55,789



52,849Minority interest


(3,588
)


(2,686
)


(1,868
)Net income

$
73,747


$
53,103


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


(48,412
)


25,887



9,068Derivatives valuation, net of tax


(42,596
)


21,593



(4,925
)Other


100



(117
)


(71
)Total other comprehensive income (loss)


(90,908
)


47,363



4,072Comprehensive income (loss)

$
(17,161
)

$
100,466


$
55,053Weighted average shares outstandingBasic


68,208



70,228



69,184Diluted


69,578



72,638



69,869Net income per shareBasic

$
1.08


$
0.76


$
0.74Diluted

$
1.06


$
0.73


$
0.73    F-5




---



##### Table of Contents





TELETECH
    HOLDINGS, INC. AND SUBSIDIARIESConsolidated Statements of Stockholders
    Equity
    (Amounts in thousands except share amounts)
  AccumulatedAdditional


Other





TotalPreferred Stock


Common Stock


Treasury


Paid-in


Comprehensive


Retained


StockholdersShares


Amount


Shares


Amount


Stock


Capital


Income (Loss)


Earnings


EquityBalance as of December 31, 2005





$




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










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



451,201Net income






























73,747



73,747Foreign currency translation adjustments


























(48,412
)






(48,412
)Derivatives valuation, net of tax


























(42,596
)






(42,596
)Vesting of restricted stock units










148



2







(1,059
)










(1,057
)Exercise of stock options










334



3



4,124



(1,194
)










2,933Excess tax benefit from exercise of stock options






















(1,176
)










(1,176
)Equity-based compensation expense






















10,312











10,312Modifications to equity-based awards






















411











411Purchases of common stock










(6,494
)


(65
)


(89,515
)














(89,580
)Other


























100







100Balance as of December 31, 2008





$




63,816


$
638


$
(228,596
)

$
341,887


$
(33,020
)

$
274,974


$
355,883    F-6




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##### Table of Contents





TELETECH
    HOLDINGS, INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows
    (Amounts in thousands)
  December 31,2008


2007


2006Cash flows from operating activitiesNet income

$
73,747


$
53,103


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


59,166



55,953



51,989Amortization of contract acquisition costs


2,384



2,544



3,392Provision for doubtful accounts


1,990



576



2,723Loss on embedded derivatives


1,942







(Gain) loss on disposal of assets


(305
)


(428
)


232Impairment losses


2,018



15,789



565Deferred income taxes


752



(1,079
)


(9,367
)Minority interest


3,588



2,686



1,868Excess tax benefit from exercise of stock options


(1,485
)






Equity-based compensation expense


10,312



13,361



7,485Changes in assets and liabilities:










Accounts receivable


17,668



(32,588
)


(12,934
)Prepaids and other assets


8,658



(1,834
)


(14,751
)Accounts payable and other accrued expenses


(14,259
)


(5,135
)


12,130Deferred revenue and other liabilities


(5,610
)


566



4,761Net cash provided by operating activities


160,566



103,514



99,074Cash flows from investing activitiesProceeds from disposition of assets






11,968



(45,802
)Proceeds from grant for property, plant and equipment


4,276







Purchases of property, plant and equipment


(65,988
)


(61,083
)


(66,016
)Purchases of intangible assets










(1,510
)Purchases of foreign currency option contracts


(416
)






(486
)Net cash used in investing activities


(62,128
)


(49,115
)


(113,814
)Cash flows from financing activitiesProceeds from line of credit


1,147,730



657,700



468,400Payments on line of credit


(1,132,330
)


(657,300
)


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


(1,359
)


(1,301
)


(1,511
)Payments of debt issuance costs


(1,109
)


(18
)


(923
)Payments to minority shareholder


(2,148
)


(5,076
)


(2,594
)Proceeds from exercise of stock options


2,933



15,949



19,434Excess tax benefit from exercise of stock options


309



6,969



2,255Purchases of treasury stock


(89,580
)


(47,021
)


(16,576
)Net cash (used in) provided by financing activities


(75,554
)


(30,098
)


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


(26,181
)


8,586



2,393Increase (decrease) in cash and cash equivalents


(3,297
)


32,887



26,038Cash and cash equivalents, beginning of year


91,239



58,352



32,314Cash and cash equivalents, end of year

$
87,942


$
91,239


$
58,352Supplemental disclosuresCash paid for interest

$
4,098


$
5,696


$
4,798Cash paid for income taxes

$
21,196


$
19,658


$
8,746Noncash investing and financing activitiesAcquisition of equipment through capital leases

$



$
2,030


$
479Landlord incentives credited to deferred rent

$



$
1,978


$
487Recognition of asset retirement obligations

$



$
180


$
486    F-7




---



##### 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
  Consolidated
    Financial Statements
  Use of
    Estimates
    Concentration of
    Credit Risk
    Fair Value of
    Financial Instruments
   F-8




---



##### 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, as amended
       F-9




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  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 economic useful life or original lease termOther

3 to 7 years     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).
 F-10




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Other Intangible
    Assets
  Goodwill and Other Intangible
    Assets
  Self Insurance
    Liabilities
    Restructuring
    Liabilities
  Accounting for Costs Associated with
    Exit or Disposal Activities
  and/or
  Grant
    Advances
    Income
    Taxes
  Accounting for Income Taxes
 F-11




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Accounting for Uncertainty in
    Income Taxes
    Stock Option
    Accounting
  Share-Based
    Payment Transition Election Related to
    Accounting for the Tax Effects of Share-Based Payment Awards,
  Foreign Currency
    Translation
    Revenue
    Recognition
    Production Rate
 F-12




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Performance based
  Hybrid
    Training Revenue
    and Costs
  No. 00-21 Revenue Arrangements with Multiple Deliverables (EITF 00-21), EITF 00-21
  Deferred
    Revenue
    Rent
    Expense
    Asset Retirement
    Obligations
  Accounting for Asset Retirement
    Obligations and/or
 F-13




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Recently Issued
    Accounting Pronouncements
  Fair Value
    Measurements 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
 F-14




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    No. FAS 140-3 FAS 140-3), Accounting for Transfers of Financial Assets and Repurchase
    Financing Transactions FAS 140-3 FAS 140-3
  Disclosures about Derivative Instruments and Hedging
    Activities
  No. FAS 142-3, Determination of the Useful Life of Intangible Assets FAS 142-3). FAS 142-3 FAS 142-3 FAS 142-3
  The
    Hierarchy of Generally Accepted Accounting Principles The Meaning of
    Present Fairly in Conformity With Generally Accepted Accounting
    Principles
  No. FAS 157-3 FAS 157-3), Determining the Fair Value of a Financial Asset in a Market
    That is Not Active FAS 157-3 FAS 157-3 FAS 157-3 FAS 157-3
 F-15




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  FAS 157-3
  (2)
    DISPOSITIONS AND
    ACQUISITIONS  Dispositions
  Database
    Marketing and Consulting
          Customer
    Solutions Mauritius
     F-16




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    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   Acquisitions
  e-commerce,
      (Unaudited)Year EndedDecember 31,2006Revenue

$
1,244,848Income from operations

$
76,371Net income

$
51,571Weighted average shares outstandingBasic


69,184Diluted


69,869Net income per shareBasic

$
0.75Diluted

$
0.74    F-17




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (3)
    DECONSOLIDATION
    OF A SUBSIDIARY  Consolidated
    Financial Statements
  90-7, Financial Reporting by Entities in Reorganization under the
    Bankruptcy Code
  December 22,


December 31,2008


2008Total current assets

$
1,700


$
1,700Total long-term assets


3,110



2,379Total assets


4,810



4,079Total current liabilities

$
3,931


$
7,886Total long-term liabilities


5,744



Total liabilities


9,675



7,886Total stockholders deficit


(4,865
)


(3,807
)Total liabilities and stockholders deficit

$
4,810


$
4,079   (4)
    SEGMENT
    INFORMATION    U.S.-based U.S.-based
 F-18




---



##### Table of Contents



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

International BPOUnited States
    Canada
    Philippines

Argentina
    Australia
    Brazil
    China
    Costa Rica
    England
    Germany
    Malaysia
    Mexico
    New Zealand
    Northern Ireland
    Scotland
    South Africa
    Spain          F-19




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
      As of and for theYear Ended December 31,2008


2007


2006RevenueNorth American BPO

$
974,815


$
955,810


$
814,419International BPO


425,332



396,080



356,106Database Marketing and Consulting






17,742



40,228Total

$
1,400,147


$
1,369,632


$
1,210,753Depreciation and amortizationNorth American BPO

$
36,521


$
31,964


$
27,918International BPO


22,631



20,076



16,569Database Marketing and Consulting


14



3,913



7,502Total

$
59,166


$
55,953


$
51,989Income from operationsNorth American BPO

$
100,236


$
106,102


$
85,639International BPO


9,278



8,327



3,219Database Marketing and Consulting


(556
)


(32,641
)


(15,093
)Total

$
108,958


$
81,788


$
73,765Capital expendituresNorth American BPO

$
40,216


$
42,445


$
46,265International BPO


25,772



18,008



18,149Database Marketing and Consulting






630



1,602Total

$
65,988


$
61,083


$
66,016AssetsNorth American BPO

$
432,450


$
469,261


$
390,889International BPO


236,492



288,757



238,887Database Marketing and Consulting






2,277



34,645Total

$
668,942


$
760,295


$
664,421GoodwillNorth American BPO

$
35,885


$
35,885


$
35,885International BPO


8,265



9,269



8,613Database Marketing and Consulting










13,361Total

$
44,150


$
45,154


$
57,859  F-20




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    As of and for theYear Ended December 31,2008


2007


2006RevenueUnited States

$
407,546


$
431,602


$
441,821Latin America


304,093



234,167



171,658Philippines


290,402



222,499



122,950Canada


154,190



203,061



205,691Europe


151,069



146,451



141,550Asia Pacific / Africa


92,847



131,852



127,083Total

$
1,400,147


$
1,369,632


$
1,210,753Property, plant and equipment, grossUnited States

$
261,064


$
241,660


$
275,214Latin America


82,201



88,823



66,863Philippines


71,974



62,044



35,759Canada


49,813



63,126



58,177Europe


19,226



16,206



15,618Asia Pacific / Africa


22,620



52,824



51,256Total

$
506,898


$
524,683


$
502,887Other long-term assetsUnited States

$
15,836


$
25,139


$
17,918Latin America


1,814



3,363



3,627Philippines


2,573



2,555



2,050Canada


561



631



4,648Europe


781



726



900Asia Pacific / Africa


1,497



1,345



1,366Total

$
23,062


$
33,759


$
30,509   (5)
    ACCOUNTS
    RECEIVABLE AND SIGNIFICANT CLIENTS    December 31,2008


2007Accounts receivable

$
242,548


$
275,713Less: Allowance for doubtful accounts


(5,551
)


(4,725
)Accounts receivable, net

$
236,997


$
270,988     Year Ended December 31,2008


2007


2006Balance, beginning of year

$
4,725


$
4,720


$
3,422Provision for doubtful accounts


1,990



576



2,723Deductions for uncollectible receivables written-off


(193
)


(380
)


(466
)Effect of foreign currency


(971
)


(191
)


(959
)Balance, end of year

$
5,551


$
4,725


$
4,720  F-21




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Year Ended December 31,2008

2007

2006Sprint Nextel


13.0
%


14.9
%


15.5
%     Year EndedDecember 31,2008

2007$
20,979


$
37,347     (6)
    PROPERTY, PLANT
    AND EQUIPMENT    December 31,2008


2007Land and buildings

$
44,532


$
44,532Computer equipment and software


215,688



214,714Telephone equipment


47,692



57,037Furniture and fixtures


54,402



56,353Leasehold improvements


143,105



142,597Construction-in-progress


1,333



6,351Other


146



3,099Property, plant and equipment, gross


506,898



524,683Less: Accumulated depreciation and amortization


(349,151
)


(349,874
)Property, plant and equipment, net

$
157,747


$
174,809      F-22




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (7)
    GOODWILL    Effect ofDecember 31,








Foreign


December 31,2007


Acquisitions


Impairments


Currency


2008North American BPO

$
35,885


$



$



$



$
35,885International BPO


9,269











(1,004
)


8,265Database Marketing and Consulting


















Total

$
45,154


$



$



$
(1,004
)

$
44,150   Effect ofDecember 31,








Foreign


December 31,2006


Acquisitions


Impairments


Currency


2007North 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   Impairment
         F-23




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (8)
    CONTRACT
    ACQUISITION COSTS    December 31,2008


2007Contract acquisition costs, gross

$
26,802


$
23,811Less: Accumulated amortization


(19,211
)


(16,827
)Contract acquisition costs, net

$
7,591


$
6,984       2009

$
3,1112010


2,4072011


1,9682012


105Total

$
7,591   (9)
    OTHER INTANGIBLE
    ASSETS    As of December 31, 2008Gross Carrying


Accumulated


Net CarryingValue


Amortization


ValueCustomer relationships

$
11,445


$
(5,494
)

$
5,951Trade name  indefinite life


1,800







1,800$
13,245


$
(5,494
)

$
7,751   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       2009

$
1,2062010


7302011


7302012


730Thereafter


2,555Total

$
5,951  F-24




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (10)
    DERIVATIVES  Cash Flow
    Hedges
    Year Ended December 31,2008


2007


2006Aggregate unrealized net gain (loss) at beginning of year

$
21,417


$
(176
)

$
4,749Net gain reclassified to earnings


(2,973
)


(8,295
)


(3,810
)Change in fair value of cash flow hedges


(39,624
)


29,888



(1,115
)Aggregate unrealized net (loss) gain at end of year

$
(21,180
)

$
21,417


$
(176
)     Local Currency


U.S. Dollar


% Maturing in


Contracts Maturing2008

Notional Amount


Amount


2009


ThroughCanadian Dollar


88,300


$
77,865



54.1
%

December 2011Canadian Dollar Call Options


44,400



39,305



54.1
%

December 2010Philippine Peso


6,656,909



150,418
(1)


75.6
%

February 2011Argentine Peso


102,072



29,054
(2)


91.2
%

May 2010Mexican Peso


856,500



70,530



68.0
%

September 2011S. African Rand


92,000



8,399



81.5
%

February 2010British Pound Sterling


1,725



2,537
(3)


44.3
%

March 2011$
378,108   Local Currency


U.S. Dollar2007

Notional Amount


AmountCanadian Dollar


54,000


$
49,679Canadian Dollar Call Options


82,800



73,344Philippine Peso


7,600,000



166,457Argentine Peso


126,674



37,842Mexican Peso


464,500



40,846$
368,168     (1)

    
    Includes contracts to purchase Philippine pesos in exchange for
    British pound sterling and New Zealand dollars, which are
    translated into equivalent U.S. dollars on December 31,
    2008 and 2007.(2)

    
    Includes contracts to purchase Argentine pesos in exchange for
    Euros, which are translated into equivalent U.S. dollars on
    December 31, 2008 and 2007.(3)

    
    Includes contracts to purchase British pound sterling in
    exchange for Euros, which are translated into equivalent U.S.
    dollars on December 31, 2008 and 2007. F-25




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
     Year Ended December 31,2008


2007Other current assets

$
1,926


$
23,885Other long-term assets

$
2,297


$
11,259Other current liabilities

$
(30,757
)

$
Other long-term liabilities

$
(6,555
)

$
Total net derivative asset (liability)

$
(33,089
)

$
35,144       Hedge of Net
    Investment
    Embedded
    Derivatives
    Derivative
    Valuation Inputs
  Value Measurements
  Fair Value Measurements UsingLevel 1


Level 2


Level 3


At Fair ValueCash flow hedges

$



$
(33,089
)

$



$
(33,089
)Net investment hedges

$



$
(113
)

$



$
(113
)Intercompany payable hedges

$



$
(44
)

$



$
(44
)Embedded derivatives

$



$
(1,476
)

$



$
(1,476
)Total net derivative asset (liability)

$



$
(34,722
)

$



$
(34,722
)  F-26




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (11)
    INCOME
    TAXES    Year Ended December 31,2008


2007


2006Domestic

$
23,113


$
(141
)

$
26,599Foreign


81,491



75,492



42,724Total

$
104,604


$
75,351


$
69,323     Year Ended December 31,2008


2007


2006Current provisionFederal

$
8,480


$
3,106


$
12,158State


933



1,361



982Foreign


17,104



16,174



12,701Total current provision


26,517



20,641



25,841Deferred provision (benefit)Federal


1,009



(3,973
)


(4,157
)State


331



(543
)


(80
)Foreign


(588
)


3,437



(5,130
)Total deferred provision (benefit)


752



(1,079
)


(9,367
)Total provision for income taxes

$
27,269


$
19,562


$
16,474     Year Ended December 31,2008


2007


2006Income tax per U.S. federal statutory rate (35%)

$
36,611


$
26,372


$
24,227State income taxes, net of federal deduction


716



342



400Change in valuation allowances


(2,825
)


(378
)


(3,603
)Foreign income taxes at different rates than the U.S


(11,426
)


(6,693
)


(5,881
)Foreign withholding taxes


2,501



1,731



313Record increase to deferred tax assets due to implementation of
    tax planning strategies






(828
)


(3,300
)Losses in international markets without tax benefits


560



912



836Nondeductible compensation under
    Section 162(m)


175



224



248FIN 48 Contingency


(72
)


(162
)


Permanent difference related to foreign exchange gains


(149
)


(2,381
)


404(Income)/losses of foreign branch operations


2,501



3,535



564Permanent difference related to sale of joint venture






(2,406
)


Non-taxable earnings of minority interest


(863
)


(785
)


(654
)Other


(460
)


79



2,920Income tax per effective tax rate

$
27,269


$
19,562


$
16,474  F-27




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    December 31,2008


2007Deferred tax assets, grossAccrued workers compensation, deferred compensation and employee
    benefits

$
5,682


$
4,469Allowance for doubtful accounts, insurance and other accruals


8,694



7,067Depreciation and amortization


12,257



23,110Amortization of deferred rent liabilities


5,227



1,271Net operating losses


10,064



14,388Equity compensation


7,451



9,409Customer acquisition and deferred revenue accruals


6,196



4,340Federal and state tax credits


21,299



9,047Unrealized losses on derivatives


13,541



Other


3,331



5,966Total deferred tax assets, gross


93,742



79,067Valuation allowances


(28,851
)


(20,448
)Total deferred tax assets, net


64,891



58,619Deferred tax liabilitiesLong-term lease obligations


(1,573
)


(872
)Unrealized gains on derivatives






(8,647
)Contract acquisition costs


(1,362
)


(445
)Other


(124
)


(650
)Total deferred tax liabilities


(3,059
)


(10,614
)Net deferred tax assets

$
61,832


$
48,005        F-28




---



##### Table of Contents



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

$
2009


2010


2011


92012


1002013


1742014


1,7872015


525No expiration


28,468Total

$
31,063         Accounting for
    Uncertainty in Income Taxes
       F-29




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##### Table of Contents



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

$
22,305Additions for current year tax positions


35Reductions in prior year tax positions


(337
)Lapses in statute of limitations


(71
)Balance as of December 31, 2007

$
21,932Additions for current year tax positions


613Reductions in prior year tax positions


(627
)Balance as of December 31, 2008

$
21,918     Tax Jurisdiction

Tax Year EndedUnited States


2002 to presentArgentina


2003 to presentAustralia


2004 to presentBrazil


2000 to presentCanada


2003 to presentMexico


2004 to presentPhilippines


2003 to presentSpain


2004 to present    F-30




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##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (12)
    RESTRUCTURING
    CHARGES AND IMPAIRMENT LOSSES  Restructuring
    Charges
      Year Ended December 31,2008


2007


2006North American BPOReduction in Force

$
97


$
1,902


$
134Facility exit charges


2,975







47Reversals


(192
)


(622
)


(78
)Total

$
2,880


$
1,280


$
103   Year Ended December 31,2008


2007


2006International BPOReduction in Force

$
3,226


$
964


$
815Facility exit charges






86



753Reversals










(148
)Total

$
3,226


$
1,050


$
1,420   Year Ended December 31,2008


2007


2006Database Marketing and ConsultingReduction in Force

$
10


$
936


$
107Facility exit charges


(57
)


(102
)


Reversals






3,951



Total

$
(47
)

$
4,785


$
107  F-31




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##### Table of Contents



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


ReductionCenters


in Force


TotalBalance 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



4,674Expense


2,975



3,333



6,308Payments


(4,832
)


(3,586
)


(8,418
)Reversals


(154
)


(95
)


(249
)De-consolidation of subsidiary


(202
)






(202
)Balance as of December 31, 2008

$
2,113


$



$
2,113     Impairment
    Losses
      (13)
    INDEBTEDNESS     F-32




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##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (14)
    DEFERRED TRAINING
    REVENUE AND COSTS    December 31,2008


2007Deferred Training Revenue − Current

$
10,550


$
9,549Deferred Training Revenue − Long-term


4,758



3,113Total Deferred Training Revenue

$
15,308


$
12,662     Year Ended December 31,2008


2007


2006Balance, beginning of year

$
12,662


$
12,552


$
8,512Add: Amounts deferred due to new business


20,961



9,333



9,432Less: Revenue recognized


(17,830
)


(9,293
)


(5,418
)Net increase/(decrease) in deferred revenue


3,131



40



4,014Effect of foreign currency


(485
)


70



26Balance, end of year

$
15,308


$
12,662


$
12,552     December 31,2008


2007Deferred Training Costs − Current

$
4,447


$
4,065Deferred Training Costs − Long-term


2,112



1,262Total Deferred Training Costs

$
6,559


$
5,327     Year Ended December 31,2008


2007


2006Balance, beginning of year

$
5,327


$
5,209


$
3,635Add: Amounts deferred due to new business


8,916



3,572



4,208Less: Recognized expense


(7,452
)


(3,452
)


(2,633
)Net increase/(decrease) in deferred costs


1,464



120



1,575Effect of foreign currency


(232
)


(2
)


(1
)Balance, end of year

$
6,559


$
5,327


$
5,209   (15)
    COMMITMENTS AND
    CONTINGENCIES  Letters of
    Credit
    Guarantees
   F-33




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##### 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
  Susan
    M. Gregory v. Kenneth D. Tuchman, et al.
    (16)
    LEASES  Leases
     F-34




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##### Table of Contents



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


Sub-LeaseLeases


Income2009

$
30,645


$
1,7522010


27,349



1,7522011


22,894



1,7522012


16,535



1,8232013


12,278



1,823Thereafter


21,056



16,141Total

$
130,757


$
25,043   CapitalLeases2009

$
2,0582010


1,9422011


1,8292012


576Total

$
6,405Less amount representing interest


886Present value of minimum lease payments


5,519Less current portion


1,315Long-term portion

$
4,204       December 31,2008


2007Historical cost

$
14,173


$
14,173Less: Accumulated depreciation


10,370



8,789$
3,803


$
5,384  F-35




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##### 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 31,2007


Obligations


Accretion


settlements(1)


2008ARO liability at inception

$
2,334


$



$



$
(546
)

$
1,788Accumulated accretion


647







116



(61
)


702$
2,981


$



$
116


$
(607
)

$
2,490   Balance at








Modifications


Balance atDecember 31,


New Lease





and


December 31,2006


Obligations


Accretion


settlements(1)


2007ARO liability at inception

$
2,175


$
180


$



$
(21
)

$
2,334Accumulated accretion


517







150



(20
)


647$
2,692


$
180


$
150


$
(41
)

$
2,981     (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 paid. Differences between the actual costs of restoration and
    the balance recorded as ARO liabilities are recognized as gains
    or losses in the accompanying Consolidated Statements of
    Operations.  (17)
    NET INCOME PER
    SHARE    Year Ended December 31,2008


2007


2006Shares used in basic earnings per share calculation


68,208



70,228



69,184Effect of dilutive securities:Stock options


1,370



2,363



685Restricted stock units






47



Total effects of dilutive securities


1,370



2,410



685Shares used in dilutive earnings per share calculation


69,578



72,638



69,869    F-36




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##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (18)
    EMPLOYEE
    COMPENSATION PLANS  Employee Benefit
    Plan
    Equity
    Compensation Plans
  Stock
    Options
       F-37




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##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    Year Ended December 31,2008

2007

2006Risk-free interest rate

2.3%

4.5% - 4.9%

4.3% - 5.2%Expected life in years

2.6

2.6 - 4.4

2.6 - 4.8Expected volatility

60.6%

43.1% - 53.3%

55.0% - 58.9%Dividend yield

0%

0%

0%Weighted-average volatility

60.6%

47.2%

58.5%       WeightedWeighted


Average


AggregateAverage


Remaining


IntrinsicExercise


Contract


ValueShares


Price


Term in Years


(000s)Outstanding as of December 31, 2007


4,860,074


$
11.45Grants


95,000


$
14.27Exercises


(334,440
)

$
8.91Forfeitures/expirations


(419,230
)

$
12.19Outstanding as of December 31, 2008


4,201,404


$
11.71



5.0


$
43   WeightedWeighted

Average

AggregateAverage

Remaining

IntrinsicExercise

Contract

ValueShares

Price

Term in Years

(000s)Vested and exercisable as of
    December 31, 2008


3,495,279


$
11.67



4.6


$
403        F-38




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##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  Restricted Stock
    Units
  2007 RSU Awards: 10-year
  2008 RSU Awards:
  Summary of RSUs:
      WeightedAverageGrantDate FairShares


ValueUnvested as of December 31, 2007


2,224,033


$
30.36Grants


1,349,000


$
10.78Vested


(198,934
)

$
30.05Cancellations/expirations


(750,228
)

$
27.02Unvested as of December 31, 2008


2,623,871


$
19.43      F-39




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##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
    (19)
    STOCK REPURCHASE
    PROGRAM    (20)
    RELATED PARTY
    TRANSACTIONS    (21)
    OTHER FINANCIAL
    INFORMATION  Self-insurance
    Liabilities
    December 31,2008


2007Workers compensation

$
3,096


$
4,132Employee health and dental insurance


2,657



3,015Other general liability insurance


1,222



1,155Total self-insurance liabilities

$
6,975


$
8,302   Accumulated Other
    Comprehensive Income (Loss)
   F-40




---



##### Table of Contents



TELETECH
    HOLDINGS, INC. AND SUBSIDIARIES
    Notes to the Consolidated Financial Statements
  (22)
    QUARTERLY
    FINANCIAL DATA (UNAUDITED)    First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterRevenue

$
367,636


$
357,416


$
349,110


$
325,985Cost of services


270,100



265,833



252,666



235,852Selling, general and administrative


51,372



45,858



51,157



51,108Depreciation and amortization


15,160



15,624



14,998



13,384Restructuring charges, net


2,202



440



2,015



1,402Impairment losses










1,033



985Income from operations


28,802



29,661



27,241



23,254Other income (expense)


(1,048
)


(543
)


(777
)


(1,986
)Provision for income taxes


(7,793
)


(7,536
)


(5,368
)


(6,572
)Minority interest


(836
)


(1,220
)


(936
)


(596
)Net income

$
19,125


$
20,362


$
20,160


$
14,100Weighted average shares outstandingBasic


69,937



69,977



68,217



64,741Diluted


71,508



71,729



69,508



65,217Net income per shareBasic

$
0.27


$
0.29


$
0.30


$
0.22Diluted

$
0.27


$
0.28


$
0.29


$
0.22        F-41




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##### Table of Contents



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


Second


Third


FourthQuarter


Quarter


Quarter


QuarterRevenue

$
332,740


$
329,608


$
335,727


$
371,557Cost of services


237,242



237,228



246,558



280,431Selling, general and administrative


52,096



48,611



46,968



59,853Depreciation and amortization


13,554



13,794



14,250



14,355Restructuring charges, net






262



2,588



4,265Impairment losses






13,515



2,274



Income from operations


29,848



16,198



23,089



12,653Other income (expense)


(1,277
)


(2,235
)


(6,826
)


3,901Provision for income taxes


(10,374
)


(4,737
)


(1,082
)


(3,369
)Minority interest


(434
)


(508
)


(808
)


(936
)Net income

$
17,763


$
8,718


$
14,373


$
12,249Weighted average shares outstandingBasic


70,309



70,580



70,214



69,818Diluted


72,929



73,104



72,343



71,574Net income per shareBasic

$
0.25


$
0.12


$
0.20


$
0.18Diluted

$
0.24


$
0.12


$
0.20


$
0.17        F-42




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##### 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*

Amendment to 1999 Stock Option and Incentive Plan dated
    February 11, 200910
.06

Form of Restricted Stock Unit Agreement (effective in 2007 and
    2008) (incorporated by reference to Exhibit 10.05 to
    TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2007)**10
.07*

Amendment to Form of Restricted Stock Unit Agreement (effective
    December 2008)10
.08*

Form of Restricted Stock Unit Agreement (effective in 2009)
    (incorporated by reference to Exhibit 10.1 TeleTechs
    Current Report on
    Form 8-K
    filed on February 17, 2009)**10
.09

Form of Non-Qualified Stock Option Agreement (below Vice
    President) (incorporated by reference to Exhibit 10.06 to
    TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2007)**10
.10

Form of Non-Qualified Stock Option Agreement (Vice President and
    above) (incorporated by reference to Exhibit 10.07 to
    TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2007)**10
.11

Form of Non-Qualified Stock Option Agreement (Non-Employee
    Director) (incorporated by reference to Exhibit 10.08 to
    TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2007)**10
.12

Employment Agreement between James E. Barlett and TeleTech dated
    October 15, 2001 (incorporated by reference to
    Exhibit 10.66 to TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2001)**10
.13*

Amendment to Employment Agreement between James E. Barlett and
    TeleTech dated December 31, 200810
.14

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

Amendment dated September 17, 2008 to Stock Option
    Agreement between James E. Barlett and TeleTech10
.16

Employment Agreement between Kenneth D. Tuchman and TeleTech
    dated October 15, 2001 (incorporated by reference to
    Exhibit 10.68 to TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2001)**10
.17*

Amendment to Employment Agreement between Kenneth D. Tuchman and
    TeleTech dated December 31, 200810
.18

Stock Option Agreement between Kenneth D. Tuchman and TeleTech
    dated October 1, 2001 (incorporated by reference to
    Exhibit 10.69 to TeleTechs Annual Report on
    Form 10-K
    for the year ended December 31, 2001)**10
.19*

Amendment dated September 17, 2008 to Stock Option
    Agreement between Kenneth D. Tuchman and TeleTech




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##### Table of Contents



Exhibit No.

Description10
.20

Employment Agreement dated April 6, 2004 between Gregory G.
    Hopkins and TeleTech (incorporated by reference to
    Exhibit 10.1 to TeleTechs Quarterly Report on
    Form 10-Q
    for the for the quarter ended September 30, 2008)**10
.21*

Amendment to Employment Agreement between Gregory G. Hopkins and
    TeleTech dated December 16, 200810
.22

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
.23

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
.24

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
.25

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
.26

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)10
.27

Fifth 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
    September 4, 2008 (incorporated by reference to
    Exhibit 10.1 TeleTechs Current Report on
    Form 8-K
    filed on September 8, 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.