##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from           to
 
 Commission File Number 001-11919
 
 TeleTech Holdings, Inc.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    84-1291044
(I.R.S. Employer
Identification No.)
 9197 South Peoria Street
Englewood, Colorado 80112
   þ o
  o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
MARCH 31, 2010 FORM 10-Q
TABLE OF CONTENTS
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of March 31, 2010 (unaudited) and
December 31, 2009
    
    
    1Consolidated Statements of Operations for the three months ended
March 31, 2010 and 2009 (unaudited)
    
    
    2Consolidated Statement of Equity as of and for the
three months ended March 31, 2010 (unaudited)
    
    
    3Consolidated Statements of Cash Flows for the three months
ended March 31, 2010 and 2009 (unaudited)
    
    
    4Notes to the Unaudited Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    34Item 4. Controls and Procedures
    
    
    36PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    37Item 1A. Risk Factors
    
    
    38Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    38Item 3. Defaults Upon Senior Securities
    
    
    38Item 4. Reserved
    
    
    38Item 5. Other Information
    
    
    38Item 6. Exhibits
    
    
    39SIGNATURES
    
    
    40EXHIBIT INDEX
    
    
    41EX-10.1EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 TELETECH HOLDINGS, INC. AND SUBSIDIARIES
 
 Consolidated Balance Sheets
 (Amounts in thousands, except share amounts)
 March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    133,898
    
    
    $
    109,424Accounts receivable, net
    
    
    200,120
    
    
    
    216,614Prepaids and other current assets
    
    
    44,955
    
    
    
    45,322Deferred tax assets, net
    
    
    2,388
    
    
    
    5,911Income tax receivable
    
    
    25,148
    
    
    
    25,104Total current assets
    
    
    406,509
    
    
    
    402,375Long-term assetsProperty, plant and equipment, net
    
    
    122,438
    
    
    
    126,995Goodwill
    
    
    45,138
    
    
    
    45,250Contract acquisition costs, net
    
    
    7,121
    
    
    
    8,049Deferred tax assets, net
    
    
    37,736
    
    
    
    36,527Other long-term assets
    
    
    20,487
    
    
    
    20,971Total long-term assets
    
    
    232,920
    
    
    
    237,792Total assets
    
    $
    639,429
    
    
    $
    640,167LIABILITIES AND EQUITYCurrent liabilitiesAccounts payable
    
    $
    28,689
    
    
    $
    17,625Accrued employee compensation and benefits
    
    
    66,393
    
    
    
    67,106Other accrued expenses
    
    
    21,555
    
    
    
    18,481Income taxes payable
    
    
    17,885
    
    
    
    20,327Deferred tax liabilities, net
    
    
    4,264
    
    
    
    3,145Deferred revenue
    
    
    4,827
    
    
    
    13,164Other current liabilities
    
    
    4,342
    
    
    
    6,118Total current liabilities
    
    
    147,955
    
    
    
    145,966Long-term liabilitiesLine of credit
    
    
    
    
    
    
    Negative investment in deconsolidated subsidiary
    
    
    4,865
    
    
    
    4,865Deferred tax liabilities, net
    
    
    922
    
    
    
    Deferred rent
    
    
    13,297
    
    
    
    13,989Other long-term liabilities
    
    
    17,208
    
    
    
    19,446Total long-term liabilities
    
    
    36,292
    
    
    
    38,300Total liabilities
    
    
    184,247
    
    
    
    184,266Commitments and contingencies (Note 10)Stockholders equityPreferred stock  $0.01 par value: 10,000,000 shares authorized;
zero shares outstanding as of March 31, 2010 and
December 31, 2009
    
    
    
    
    
    
    Common stock  $0.01 par value; 150,000,000 shares authorized;
61,488,637 and 62,218,238 shares outstanding as of
March 31, 2010 and December 31, 2009, respectively
    
    
    615
    
    
    
    622Additional paid-in capital
    
    
    341,815
    
    
    
    344,251Treasury stock at cost: 20,565,808 and 19,836,208 shares as of
March 31, 2010 and December 31, 2009, respectively
    
    
    (266,914
    )
    
    
    (251,691
    )Accumulated other comprehensive income
    
    
    14,800
    
    
    
    10,513Retained earnings
    
    
    360,015
    
    
    
    346,728Non-controlling interest
    
    
    4,851
    
    
    
    5,478Total stockholders equity
    
    
    455,182
    
    
    
    455,901Total liabilities and stockholders equity
    
    $
    639,429
    
    
    $
    640,167
  1




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Operations
 (Amounts in thousands, except per share amounts)
 (Unaudited)
 Three Months EndedMarch 31,2010
    
    
    2009Revenue
    
    $
    271,526
    
    
    $
    304,030Operating expensesCost of services (exclusive of depreciation and amortization
presented separately below)
    
    
    194,618
    
    
    
    218,842Selling, general and administrative
    
    
    43,408
    
    
    
    48,515Depreciation and amortization
    
    
    12,724
    
    
    
    14,062Restructuring charges, net
    
    
    1,469
    
    
    
    303Impairment losses
    
    
    
    
    
    
    1,967Total operating expenses
    
    
    252,219
    
    
    
    283,689Income from operations
    
    
    19,307
    
    
    
    20,341Other income (expense)Interest income
    
    
    574
    
    
    
    807Interest expense
    
    
    (817
    )
    
    
    (843
    )Other, net
    
    
    32
    
    
    
    762Total other income (expense)
    
    
    (211
    )
    
    
    726Income before income taxes
    
    
    19,096
    
    
    
    21,067Provision for income taxes
    
    
    (5,054
    )
    
    
    (5,180
    )Net income
    
    
    14,042
    
    
    
    15,887Net income attributable to non-controlling interest
    
    
    (755
    )
    
    
    (824
    )Net income attributable to TeleTech shareholders
    
    $
    13,287
    
    
    $
    15,063Weighted average shares outstandingBasic
    
    
    61,877
    
    
    
    63,908Diluted
    
    
    63,483
    
    
    
    64,300Net income per share attributable to TeleTech shareholdersBasic
    
    $
    0.21
    
    
    $
    0.24Diluted
    
    $
    0.21
    
    
    $
    0.23
  2




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
 
 Consolidated Statement of Stockholders Equity
 (Amounts in thousands)
 (Unaudited)
 Stockholders Equity of the CompanyAccumulatedAdditional
    
    Other
    
    
    
    
    
    Non-Preferred Stock
    
    Common Stock
    
    Treasury
    
    Paid-in
    
    Comprehensive
    
    Retained
    
    controlling
    
    TotalShares
    
    Amount
    
    Shares
    
    Amount
    
    Stock
    
    Capital
    
    Income (Loss)
    
    Earnings
    
    interest
    
    EquityBalance as of December 31, 2009
    
    
    
    
    
    $
    
    
    
    
    62,218
    
    
    $
    622
    
    
    $
    (251,691
    )
    
    $
    344,251
    
    
    $
    10,513
    
    
    $
    346,728
    
    
    $
    5,478
    
    
    $
    455,901Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,287
    
    
    
    755
    
    
    
    14,042Dividends distributed to
non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,260
    )
    
    
    (1,260
    )Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,578
    
    
    
    
    
    
    
    (122
    )
    
    
    1,456Derivatives valuation, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,962
    
    
    
    
    
    
    
    
    
    
    
    2,962Vesting of restricted stock units
    
    
    
    
    
    
    
    
    
    
    267
    
    
    
    3
    
    
    
    3,398
    
    
    
    (5,606
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,205
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    74
    
    
    
    1
    
    
    
    937
    
    
    
    (126
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    812Excess tax benefit from equity-based
awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108Equity-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,188
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,188Purchases of common stock
    
    
    
    
    
    
    
    
    
    
    (1,070
    )
    
    
    (11
    )
    
    
    (19,558
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,569
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (253
    )
    
    
    
    
    
    
    
    
    
    
    (253
    )Balance as of March 31, 2010
    
    
    
    
    
    $
    
    
    
    
    61,489
    
    
    $
    615
    
    
    $
    (266,914
    )
    
    $
    341,815
    
    
    $
    14,800
    
    
    $
    360,015
    
    
    $
    4,851
    
    
    $
    455,182
  3




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TELETECH HOLDINGS, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows
 (Amount in thousands)
 (Unaudited)
 Three Months EndedMarch 31,2010
    
    
    2009Cash flows from operating activitiesNet income
    
    $
    14,042
    
    
    $
    15,887Adjustment to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    12,724
    
    
    
    14,062Amortization of contract acquisition costs
    
    
    928
    
    
    
    769Provision for doubtful accounts
    
    
    304
    
    
    
    304Loss on foreign currency derivatives
    
    
    60
    
    
    
    (Gain) loss on disposal of assets
    
    
    (49
    )
    
    
    556Impairment losses
    
    
    
    
    
    
    1,967Deferred income taxes
    
    
    1,564
    
    
    
    (1,160
    )Excess tax benefit from equity-based awards
    
    
    
    
    
    
    (1,746
    )Equity-based compensation expense
    
    
    3,188
    
    
    
    3,614Other
    
    
    
    
    
    
    (63
    )Changes in assets and liabilities:Accounts receivable
    
    
    15,016
    
    
    
    9,775Prepaids and other assets
    
    
    5,668
    
    
    
    3,746Accounts payable and accrued expenses
    
    
    9,242
    
    
    
    2,934Deferred revenue and other liabilities
    
    
    (11,255
    )
    
    
    3,366Net cash provided by operating activities
    
    
    51,432
    
    
    
    54,011Cash flows from investing activitiesPurchases of property, plant and equipment
    
    
    (6,608
    )
    
    
    (8,455
    )Net cash used in investing activities
    
    
    (6,608
    )
    
    
    (8,455
    )Cash flows from financing activitiesProceeds from line of credit
    
    
    215,150
    
    
    
    244,510Payments on line of credit
    
    
    (215,150
    )
    
    
    (278,010
    )Payments on capital lease obligations and equipment financing
    
    
    (951
    )
    
    
    (25
    )Dividends distributed to non-controlling interest
    
    
    (1,260
    )
    
    
    (900
    )Proceeds from exercise of stock options
    
    
    814
    
    
    
    206Excess tax benefit from equity-based awards
    
    
    108
    
    
    
    Purchases of common stock
    
    
    (19,568
    )
    
    
    (2,004
    )Net cash used in financing activities
    
    
    (20,857
    )
    
    
    (36,223
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    507
    
    
    
    (6,122
    )Increases in cash and cash equivalents
    
    
    24,474
    
    
    
    3,211Cash and cash equivalents, beginning of period
    
    
    109,424
    
    
    
    87,942Cash and cash equivalents, end of period
    
    $
    133,898
    
    
    $
    91,153Supplemental disclosuresCash paid for interest
    
    $
    802
    
    
    $
    424Cash paid for income taxes
    
    $
    1,197
    
    
    $
    2,947Non-cash investing and financing activitiesAcquisition of equipment through installment purchase agreements
    
    $
    186
    
    
    $
    915
  4




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 (1) OVERVIEW AND BASIS OF PRESENTATION
 Overview
  Basis of Presentation
    Use of Estimates
  Recently Issued Accounting Pronouncements
  5




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   (2) DECONSOLIDATION OF A SUBSIDIARY
  (3) SEGMENT INFORMATION
     Three Months EndedMarch 31,2010
    
    
    2009RevenueNorth American BPO
    
    $
    207,942
    
    
    $
    228,886International BPO
    
    
    63,584
    
    
    
    75,144Total
    
    $
    271,526
    
    
    $
    304,030Income (loss) from operationsNorth American BPO
    
    $
    19,788
    
    
    $
    25,427International BPO
    
    
    (481
    )
    
    
    (5,086
    )Total
    
    $
    19,307
    
    
    $
    20,341
 6




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  Three Months EndedMarch 31,2010
    
    
    2009RevenueUnited States
    
    $
    101,105
    
    
    $
    100,062Philippines
    
    
    70,970
    
    
    
    78,341Latin America
    
    
    48,002
    
    
    
    57,064Europe
    
    
    27,137
    
    
    
    31,411Canada
    
    
    14,779
    
    
    
    26,244Asia Pacific / Africa
    
    
    9,533
    
    
    
    10,908Total
    
    $
    271,526
    
    
    $
    304,030
 (4) SIGNIFICANT CLIENTS AND OTHER CONCENTRATIONS
   (5) GOODWILL
  December 31,
    
    
    
    
    
    
    
    
    
    
    Effect of Foreign
    
    
    March 31,2009
    
    
    Acquisitions
    
    
    Impairments
    
    
    Currency
    
    
    2010North American BPO
    
    $
    35,885
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    35,885International BPO
    
    
    9,365
    
    
    
    
    
    
    
    
    
    
    
    (112
    )
    
    
    9,253Total
    
    $
    45,250
    
    
    $
    
    
    
    $
    
    
    
    $
    (112
    )
    
    $
    45,138
  7




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 (6) DERIVATIVES
 Cash Flow Hedges
  Three Months EndedMarch 31,2010
    
    
    2009Aggregate unrealized net gain (loss) at beginning of year
    
    $
    4,468
    
    
    $
    (21,180
    )Net gain/(loss) from change in fair value of cash flow hedges
    
    
    3,889
    
    
    
    (1,724
    )Net (gain)/loss reclassified to earnings from effective hedges
    
    
    (927
    )
    
    
    4,763Aggregate unrealized net gain (loss) at end of period
    
    $
    7,430
    
    
    $
    (18,141
    )
  % MaturingLocal Currency
    
    
    U.S. Dollar
    
    
    in the Next 12
    
    
    Contracts MaturingAs of March 31, 2010
    
    Notional Amount
    
    
    Notional Amount
    
    
    Months
    
    
    ThroughCanadian Dollar
    
    
    10,800
    
    
    $
    8,749
    
    
    
    50.0
    %
    
    December 2011Canadian Dollar Call Options
    
    
    14,300
    
    
    
    12,750
    
    
    
    100.0
    %
    
    December 2010Philippine Peso
    
    
    7,183,000
    
    
    
    149,819
    (1)
    
    
    69.6
    %
    
    December 2012Argentine Peso
    
    
    39,600
    
    
    
    9,868
    (2)
    
    
    100.0
    %
    
    December 2010Mexican Peso
    
    
    509,500
    
    
    
    35,877
    
    
    
    78.6
    %
    
    December 2011British Pound Sterling
    
    
    7,956
    
    
    
    12,541
    (3)
    
    
    66.1
    %
    
    December 2011$
    229,604Local Currency
    
    
    U.S. DollarAs of December 31, 2009
    
    Notional Amount
    
    
    Notional AmountCanadian Dollar
    
    
    14,400
    
    
    $
    11,782Canadian Dollar Call Options
    
    
    19,400
    
    
    
    17,301Philippine Peso
    
    
    4,615,000
    
    
    
    96,354
    (1)Argentine Peso
    
    
    9,000
    
    
    
    2,454Mexican Peso
    
    
    491,500
    
    
    
    34,880South African Rand
    
    
    23,000
    
    
    
    2,081British Pound Sterling
    
    
    3,876
    
    
    
    6,565
    (3)$
    171,417
 8




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 
 (1)
    
    Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars, Australian dollars and, in 2009
only, British pound sterling, which are translated into equivalent U.S. dollars on March 31, 2010 and December 31, 2009.(2)
    
    Includes contracts to purchase Argentine pesos in exchange for Euros, which were translated into equivalent U.S.
dollars on March 31, 2010.(3)
    
    Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S.
dollars on March 31, 2010 and December 31, 2009. Hedge of Net Investment
  Fair Value Hedges
  Embedded Derivatives
  9




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 Derivative Valuation and Settlements
  March 31, 2010Designated as hedginginstruments
    
    
    Not designated as hedging instrumentsForeign
    
    
    Foreign
    
    
    Foreign
    
    
    ForeignDerivative contracts:
    
    Exchange
    
    
    Exchange
    
    
    Exchange
    
    
    Exchange
    
    
    LeasesOption andForward
    
    
    
    
    
    
    EmbeddedDerivative classification:
    
    Cash Flow
    
    
    Net Investment
    
    
    Contracts
    
    
    Fair Value
    
    
    DerivativeFair value and location of derivative in the
Consolidated Balance Sheet:Prepaids and other current assets
    
    $
    10,719
    
    
    $
    
    
    
    $
    46
    
    
    $
    44
    
    
    $
    Other long-term assets
    
    
    2,655
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other current liabilities
    
    
    (530
    )
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    (101
    )Other long-term liabilities
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (160
    )Total fair value of derivatives, net
    
    $
    12,792
    
    
    $
    
    
    
    $
    46
    
    
    $
    23
    
    
    $
    (261
    )
 December 31, 2009Designated as hedginginstruments
    
    
    Not designated as hedging instrumentsForeign
    
    
    Foreign
    
    
    Foreign
    
    
    ForeignDerivative contracts:
    
    Exchange
    
    
    Exchange
    
    
    Exchange
    
    
    Exchange
    
    
    LeasesOption andForward
    
    
    
    
    
    
    EmbeddedDerivative classification:
    
    Cash Flow
    
    
    Net Investment
    
    
    Contracts
    
    
    Fair Value
    
    
    DerivativeFair value and location of derivative in
the Consolidated Balance Sheet:Prepaids and other current assets
    
    $
    8,022
    
    
    $
    
    
    
    $
    42
    
    
    $
    29
    
    
    $
    Other long-term assets
    
    
    1,996
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other current liabilities
    
    
    (1,884
    )
    
    
    
    
    
    
    
    
    
    
    (137
    )
    
    
    (139
    )Other long-term liabilities
    
    
    (30
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (230
    )Total fair value of derivatives, net
    
    $
    8,104
    
    
    $
    
    
    
    $
    42
    
    
    $
    (108
    )
    
    $
    (369
    )
  Three Months Ended March 31,2010
    
    2009Designated as hedging instruments
    
    Designated as hedging instrumentsDerivative contracts:
    
    Foreign Exchange
    
    Foreign ExchangeDerivative classification:
    
    Cash Flow
    
    Net Investment
    
    Cash Flow
    
    Net InvestmentAmount of gain or (loss) recognized in other
comprehensive income  effective portion, net
of tax:
    
    $
    3,889
    
    
    $
    
    
    
    $
    (1,724
    )
    
    $
    (50
    )Amount and location of net gain or (loss) reclassified
from accumulated OCI to income  effective
portion:Revenue
    
    $
    1,520
    
    
    $
    
    
    
    $
    (7,808
    )
    
    $
    Amount and location of net gain or (loss) reclassified
from accumulated OCI to income  ineffective
portion
and amount excluded from effectiveness testing:Revenue
    
    $
    
    
    
    $
    
    
    
    $
    (35
    )
    
    $
    
 Three Months Ended March 31,2010
    
    2009Not designated as hedging instruments
    
    Not designated as hedging instrumentsDerivative contracts:
    
    Foreign Exchange
    
    Leases
    
    Foreign Exchange
    
    LeasesOption and
    
    
    
    
    
    Embedded
    
    Option and
    
    
    
    
    
    EmbeddedDerivative classification:
    
    Forward Contracts
    
    Fair Value
    
    Derivative
    
    Forward Contracts
    
    Fair Value
    
    DerivativeAmount and location of net gain or (loss) recognized
in the Consolidated Statement of Operations:Costs of services
    
    $
    
    
    
    $
    
    
    
    $
    107
    
    
    $
    
    
    
    $
    
    
    
    $
    261Other, net
    
    $
    4
    
    
    $
    1,136
    
    
    $
    
    
    
    $
    
    
    
    $
    374
    
    
    $
    
 10




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TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 (7) FAIR VALUE
  Level 1 
    
    Quoted prices in active markets for identical assets or liabilities.Level 2 
    
    Observable inputs other than quoted prices included in Level 1, such as
quoted prices for similar assets and liabilities in active markets, similar assets and
liabilities in markets that are not active or can be corroborated by observable market
data.Level 3 
    
    Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities. This includes
certain pricing models, discounted cash flow methodologies and similar techniques that
use significant unobservable inputs.
  Accounts Receivable and Payable
 Debt
 Derivatives 
 As of March 31, 2010
 Fair Value Measurements UsingQuoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableIdentical Assets
    
    
    Observable Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    At Fair ValueCash flow hedges
    
    $
    
    
    
    $
    12,792
    
    
    $
    
    
    
    $
    12,792Fair value hedges
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    23Embedded derivatives
    
    
    
    
    
    
    (261
    )
    
    
    
    
    
    
    (261
    )Option and forward contracts
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    46Total net derivative asset (liability)
    
    $
    
    
    
    $
    12,600
    
    
    $
    
    
    
    $
    12,600
 11




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TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 As of December 31, 2009
 Fair Value Measurements UsingQuoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableIdentical Assets
    
    
    Observable Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    At Fair ValueCash flow hedges
    
    $
    
    
    
    $
    8,104
    
    
    $
    
    
    
    $
    8,104Fair value hedges
    
    
    
    
    
    
    (108
    )
    
    
    
    
    
    
    (108
    )Embedded derivatives
    
    
    
    
    
    
    (369
    )
    
    
    
    
    
    
    (369
    )Option and forward contracts
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    42Total net derivative asset (liability)
    
    $
    
    
    
    $
    7,669
    
    
    $
    
    
    
    $
    7,669
  Money Market Investments
 Deferred Compensation Plan
  As of March 31, 2010
 Fair Value Measurements UsingQuoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableIdentical Assets
    
    
    Observable Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsMoney market investments
    
    $
    
    
    
    $
    25,201
    
    
    $
    Derivative instruments, net
    
    
    
    
    
    
    12,600
    
    
    
    Total assets
    
    $
    
    
    
    $
    37,801
    
    
    $
    Liabilities
    
    
    
    
    
    $Deferred compensation plan liability
    
    $
    
    
    
    $
    (3,516
    )
    
    $
    Total liabilities
    
    $
    
    
    
    $
    (3,516
    )
    
    $
    
 As of December 31, 2009
 Fair Value Measurements UsingQuoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableIdentical Assets
    
    
    Observable Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsMoney market investments
    
    $
    
    
    
    $
    
    
    
    $
    Derivative instruments, net
    
    
    
    
    
    
    7,669
    
    
    
    Total assets
    
    $
    
    
    
    $
    7,669
    
    
    $
    LiabilitiesDeferred compensation plan liability
    
    $
    
    
    
    $
    (3,399
    )
    
    $
    Total liabilities
    
    $
    
    
    
    $
    (3,399
    )
    
    $
    
 12




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TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 (8) INCOME TAXES
     (9) RESTRUCTURING CHARGES AND IMPAIRMENT LOSSES
 Restructuring Charges
   Three Months Ended March 31,2010
    
    
    2009North American BPOReduction in force
    
    $
    1,357
    
    
    $
    900Facility exit charges
    
    
    
    
    
    
    112Revision of prior estimates
    
    
    (5
    )
    
    
    (1,135
    )Total
    
    $
    1,352
    
    
    $
    (123
    )
 Three Months Ended March 31,2010
    
    
    2009International BPOReduction in force
    
    $
    117
    
    
    $
    426Facility exit charges
    
    
    
    
    
    
    Revision of prior estimates
    
    
    
    
    
    
    Total
    
    $
    117
    
    
    $
    426
 13




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##### Table of Contents



TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   Closure ofDelivery
    
    
    Reduction inCenters
    
    
    Force
    
    
    TotalBalance as of December 31, 2009
    
    $
    375
    
    
    $
    13
    
    
    $
    388Expense
    
    
    
    
    
    
    1,474
    
    
    
    1,474Payments
    
    
    
    
    
    
    (133
    )
    
    
    (133
    )Reversals
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )Balance as of March 31, 2010
    
    $
    375
    
    
    $
    1,349
    
    
    $
    1,724
  Impairment Losses
   (10) COMMITMENTS AND CONTINGENCIES
 Letters of Credit
  Guarantees
   Legal Proceedings
  14




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TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 Securities Class Action
 Beasley v. TeleTech Holdings, Inc., et al. Brown v. TeleTech Holdings,
Inc., et al., In re: TeleTech Litigation
 Derivative Action
 Susan M. Gregory v. Kenneth D. Tuchman, et al.
 (11) COMPREHENSIVE INCOME
  Three Months EndedMarch 31,2010
    
    
    2009Net income
    
    $
    14,042
    
    
    $
    15,887Foreign currency translation adjustment
    
    
    1,456
    
    
    
    (7,513
    )Derivatives valuation, net of tax
    
    
    2,962
    
    
    
    3,039Other
    
    
    (253
    )
    
    
    Total comprehensive income
    
    $
    18,207
    
    
    $
    11,413Comprehensive income attributable to non-controlling interest
    
    
    (633
    )
    
    
    (765
    )Comprehensive income attributable to TeleTech
    
    $
    17,574
    
    
    $
    10,648
 15




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TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  Three Months EndedMarch 31,2010
    
    
    2009Noncontrolling interest, January 1
    
    $
    5,478
    
    
    $
    5,011Net income attributable to noncontrolling interest
    
    
    755
    
    
    
    824Dividends distributed to noncontrolling interest
    
    
    (1,260
    )
    
    
    (900
    )Foreign currency translation adjustments
    
    
    (122
    )
    
    
    (59
    )Noncontrolling interest, March 31
    
    $
    4,851
    
    
    $
    4,876
 (12) NET INCOME PER SHARE
  Three Months EndedMarch 31,2010
    
    
    2009Shares used in basic earnings per share calculation
    
    
    61,877
    
    
    
    63,908Effect of dilutive securities:Stock options
    
    
    1,011
    
    
    
    202Restricted stock units
    
    
    595
    
    
    
    190Total effects of dilutive securities
    
    
    1,606
    
    
    
    392Shares used in dilutive earnings per share calculation
    
    
    63,483
    
    
    
    64,300
  (13) EQUITY-BASED COMPENSATION PLANS
  Stock Options
  Restricted Stock Unit Grants
  16




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TELETECH HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  17




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Introduction
    Executive Summary
  18




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
    
    Focus on providers who can offer fully integrated revenue generation solutions.A focus
on providers who can offer fully integrated revenue generation solutions to target new
markets and improve revenue and profitability through customer acquisition, retention and
growth by leveraging the profitability potential of each customer.
    
    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 see increasing interest in our
services for companies in the healthcare, retail and financial services industries. We
believe the number of other industries that will adopt or increase their level of
outsourcing will continue to grow, further enabling us to increase and diversify our
revenue and client base.
 19




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##### Table of Contents




    
    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 16 countries and our significant investment in standardized
technology and processes, we believe that clients select TeleTech because we can quickly
ramp large, complex business processes around the globe in a short period of time while
assuring a high-quality experience for our clients customers.
 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, adequate 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;
    
    Create focused revenue generation capabilities in targeted market segments;
    
    Better integrate front- and back-office processes; and
    
    Take advantage of cost efficiencies through the adoption of cloud based technology solutions.
 
    
    Deepen and broaden our relationships with existing clients;
    
    Win business with new clients and focus on end-to-end offerings in targeted industries
where we expect accelerating adoption of business process outsourcing;
    
    Continue to invest in innovative proprietary technology and new business offerings;
    
    Continue to diversify revenue into higher-margin offerings such as professional
services, talent acquisition, learning services and our hosted TeleTech OnDemand
capabilities;
 20




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##### Table of Contents




    
    Continue to improve our operating margins through selected profit improvement
initiatives and increased asset utilization of our globally diverse delivery centers; and
    
    Selectively pursue acquisitions that extend our capabilities, geographic reach and/or
industry expertise.
 Our First Quarter 2010 Financial Results
    Business Overview
  BPO Services
     21




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22




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##### Table of Contents



March 31, 2010
    
    March 31, 2009Total Production
    
    
    
    
    
    
    
    
    
    Total ProductionWorkstations
    
    In Use
    
    % In Use
    
    Workstations
    
    In Use
    
    % In UseMulti-client centersSites open <1 year
    
    
    181
    
    
    
    89
    
    
    
    49
    %
    
    
    4,748
    
    
    
    2,438
    
    
    
    51
    %Sites open >1 year
    
    
    31,332
    
    
    
    21,389
    
    
    
    68
    %
    
    
    24,478
    
    
    
    18,374
    
    
    
    75
    %Total multi-client centers
    
    
    31,513
    
    
    
    21,478
    
    
    
    68
    %
    
    
    29,226
    
    
    
    20,812
    
    
    
    71
    %
  Recently Issued Accounting Pronouncements
  Critical Accounting Policies and Estimates
  Revenue Recognition
  23




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##### Table of Contents



Production Rate 
 PerformanceBased 
 Hybrid 
   Income Taxes
    24




---



##### Table of Contents



Allowance for Doubtful Accounts
  Impairment of LongLived Assets
  Goodwill
   25




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##### Table of Contents



Restructuring Liability
  EquityBased Compensation
  Fair Value Measurement
    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.
 26




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##### Table of Contents



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, we perform an analysis of all instruments
subject to fair value measurements and include within Level 3 all
of those whose fair value is based on significant unobservable
inputs.
 Derivatives
      Contingencies
  Explanation of Key Metrics and Other Items
 Cost of Services
  27




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##### Table of Contents



Selling, General and Administrative
  Restructuring Charges, Net
  Interest Expense
  Other Income
  Other Expense
  Presentation of NonGAAP Measurements
 Free Cash Flow
   Three Months Ended 
March 31,2010
    
    
    2009Net cash provided by operating activities
    
    $
    51,432
    
    
    $
    54,011Purchases of property, plant and equipment
    
    
    6,608
    
    
    
    8,455Free cash flow
    
    $
    44,824
    
    
    $
    45,556
  28




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##### Table of Contents



Results of Operations
 Three months ended March 31, 2010 as compared to three months ended March 31, 2009
 Operating Review
  Three Months Ended March 31,% of
    
    
    
    
    
    
    % ofSegment
    
    
    
    
    
    
    Segment2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    $ Change
    
    
    % ChangeRevenueNorth American BPO
    
    $
    207,942
    
    
    
    
    
    
    $
    228,886
    
    
    
    
    
    
    $
    (20,944
    )
    
    
    -9.2
    %International BPO
    
    
    63,584
    
    
    
    
    
    
    
    75,144
    
    
    
    
    
    
    
    (11,560
    )
    
    
    -15.4
    %$
    271,526
    
    
    
    
    
    
    $
    304,030
    
    
    
    
    
    
    $
    (32,504
    )
    
    
    -10.7
    %Cost of servicesNorth American BPO
    
    $
    144,777
    
    
    
    69.6
    %
    
    $
    157,693
    
    
    
    68.9
    %
    
    $
    (12,916
    )
    
    
    -8.2
    %International BPO
    
    
    49,841
    
    
    
    78.4
    %
    
    
    61,149
    
    
    
    81.4
    %
    
    
    (11,308
    )
    
    
    -18.5
    %$
    194,618
    
    
    
    71.7
    %
    
    $
    218,842
    
    
    
    72.0
    %
    
    $
    (24,224
    )
    
    
    -11.1
    %Selling, general and administrativeNorth American BPO
    
    $
    32,075
    
    
    
    15.4
    %
    
    $
    35,699
    
    
    
    15.6
    %
    
    $
    (3,624
    )
    
    
    -10.2
    %International BPO
    
    
    11,333
    
    
    
    17.8
    %
    
    
    12,816
    
    
    
    17.1
    %
    
    
    (1,483
    )
    
    
    -11.6
    %$
    43,408
    
    
    
    16.0
    %
    
    $
    48,515
    
    
    
    16.0
    %
    
    $
    (5,107
    )
    
    
    -10.5
    %Depreciation and amortizationNorth American BPO
    
    $
    9,950
    
    
    
    4.8
    %
    
    $
    10,190
    
    
    
    4.5
    %
    
    $
    (240
    )
    
    
    -2.4
    %International BPO
    
    
    2,774
    
    
    
    4.4
    %
    
    
    3,872
    
    
    
    5.2
    %
    
    
    (1,098
    )
    
    
    -28.4
    %$
    12,724
    
    
    
    4.7
    %
    
    $
    14,062
    
    
    
    4.6
    %
    
    $
    (1,338
    )
    
    
    -9.5
    %Restructuring charges, netNorth American BPO
    
    $
    1,352
    
    
    
    0.7
    %
    
    $
    (123
    )
    
    
    -0.1
    %
    
    $
    1,475
    
    
    
    1199.2
    %International BPO
    
    
    117
    
    
    
    0.2
    %
    
    
    426
    
    
    
    0.6
    %
    
    
    (309
    )
    
    
    -72.5
    %$
    1,469
    
    
    
    0.5
    %
    
    $
    303
    
    
    
    0.1
    %
    
    $
    1,166
    
    
    
    384.8
    %Impairment lossesNorth American BPO
    
    $
    
    
    
    
    0.0
    %
    
    $
    
    
    
    
    0.0
    %
    
    $
    
    
    
    
    0.0
    %International BPO
    
    
    
    
    
    
    0.0
    %
    
    
    1,967
    
    
    
    2.6
    %
    
    
    (1,967
    )
    
    
    -100.0
    %$
    
    
    
    
    0.0
    %
    
    $
    1,967
    
    
    
    0.6
    %
    
    $
    (1,967
    )
    
    
    -100.0
    %Income (loss) from operationsNorth American BPO
    
    $
    19,788
    
    
    
    9.5
    %
    
    $
    25,427
    
    
    
    11.1
    %
    
    $
    (5,639
    )
    
    
    -22.2
    %International BPO
    
    
    (481
    )
    
    
    -0.8
    %
    
    
    (5,086
    )
    
    
    -6.8
    %
    
    
    4,605
    
    
    
    90.5
    %$
    19,307
    
    
    
    7.1
    %
    
    $
    20,341
    
    
    
    6.7
    %
    
    $
    (1,034
    )
    
    
    -5.1
    %Other income (expense), net
    
    $
    (211
    )
    
    
    -0.1
    %
    
    $
    726
    
    
    
    0.2
    %
    
    $
    (937
    )
    
    
    -129.1
    %Provision for income taxes
    
    $
    (5,054
    )
    
    
    -1.9
    %
    
    $
    (5,180
    )
    
    
    -1.7
    %
    
    $
    126
    
    
    
    2.4
    %
 29




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##### Table of Contents



Revenue
    Cost of Services
   Selling, General and Administrative
   30




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##### Table of Contents



Depreciation and Amortization
  Restructuring Charges
  Impairment Losses
  Other Income (Expense)
  Income Taxes
  Liquidity and Capital Resources
     31




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##### Table of Contents



Cash and Cash Equivalents
  Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  Free Cash Flow
  Obligations and Future Capital Requirements
  Less than 1Year
    
    
    1 to 3 Years
    
    
    3 to 5 Years
    
    
    Over 5 Years
    
    
    TotalCredit Facility
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital lease obligations
    
    
    1,645
    
    
    
    1,523
    
    
    
    
    
    
    
    
    
    
    
    3,168Equipment financing arrangements
    
    
    2,222
    
    
    
    1,404
    
    
    
    184
    
    
    
    
    
    
    
    3,810Purchase obligations
    
    
    20,323
    
    
    
    25,437
    
    
    
    1,264
    
    
    
    
    
    
    
    47,024Operating lease commitments
    
    
    28,437
    
    
    
    34,512
    
    
    
    13,112
    
    
    
    6,590
    
    
    
    82,651Total
    
    $
    52,627
    
    
    $
    62,876
    
    
    $
    14,560
    
    
    $
    6,590
    
    
    $
    136,653
 32




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##### Table of Contents




    
    Contractual obligations to be paid in a foreign currency are translated at the period
end exchange rate.
    
    Purchase obligations primarily consist of outstanding purchase orders for goods or
services not yet received, which are not recognized as liabilities in our Consolidated
Balance Sheets until such goods and/or services are received.
    
    The contractual obligation table excludes our liabilities of $1.6 million related to
uncertain tax positions because we cannot reliably estimate the timing of cash payments.
 Future Capital Requirements
    Debt Instruments and Related Covenants
  Client Concentration
   33




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
  Foreign Currency Risk
   Cash Flow Hedging Program
  34




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##### Table of Contents



% Maturing inLocal Currency
    
    
    U.S. Dollar
    
    
    the Next 12
    
    
    Contracts MaturingAs of March 31, 2010
    
    Notional Amount
    
    
    Notional Amount
    
    
    Months
    
    
    ThroughCanadian Dollar
    
    
    10,800
    
    
    $
    8,749
    
    
    
    50.0
    %
    
    December 2011Canadian Dollar Call Options
    
    
    14,300
    
    
    
    12,750
    
    
    
    100.0
    %
    
    December 2010Philippine Peso
    
    
    7,183,000
    
    
    
    149,819
    (1)
    
    
    69.6
    %
    
    December 2012Argentine Peso
    
    
    39,600
    
    
    
    9,868
    (2)
    
    
    100.0
    %
    
    December 2010Mexican Peso
    
    
    509,500
    
    
    
    35,877
    
    
    
    78.6
    %
    
    December 2011British Pound Sterling
    
    
    7,956
    
    
    
    12,541
    (3)
    
    
    66.1
    %
    
    December 2011$
    229,604Local Currency
    
    
    U.S. DollarAs of December 31, 2009
    
    Notional Amount
    
    
    Notional AmountCanadian Dollar
    
    
    14,400
    
    
    $
    11,782Canadian Dollar Call Options
    
    
    19,400
    
    
    
    17,301Philippine Peso
    
    
    4,615,000
    
    
    
    96,354
    (1)Argentine Peso
    
    
    9,000
    
    
    
    2,454Mexican Peso
    
    
    491,500
    
    
    
    34,880South African Rand
    
    
    23,000
    
    
    
    2,081British Pound Sterling
    
    
    3,876
    
    
    
    6,565
    (3)$
    171,417
 
 (1)
    
    Includes contracts to purchase Philippine pesos in exchange for
New Zealand dollars, Australian dollars and, in 2009 only, British
pound sterling, which are translated into equivalent U.S. dollars on
March 31, 2010 and December 31, 2009.(2)
    
    Includes contracts to purchase Argentine pesos in exchange for
Euros, which were translated into equivalent U.S. dollars on March 31,
2010.(3)
    
    Includes contracts to purchase British pound sterling in exchange
for Euros, which are translated into equivalent U.S. dollars on March
31, 2010 and December 31, 2009. 35




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##### Table of Contents



Maturing in theMarch 31, 2010
    
    
    Next 12 MonthsCanadian Dollar
    
    $
    3,219
    
    
    $
    2,257Philippine Peso
    
    
    5,537
    
    
    
    4,674Argentine Peso
    
    
    141
    
    
    
    141Mexican Peso
    
    
    4,175
    
    
    
    3,345British Pound Sterling
    
    
    (280
    )
    
    
    (228
    )$
    12,792
    
    
    $
    10,189
    Fair Value of Debt and Equity Securities
  
 ITEM 4. CONTROLS AND PROCEDURES
  Evaluation of Disclosure Controls and Procedures
   36




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  Securities Class Action
 Beasley v. TeleTech Holdings, Inc., et al. Brown v. TeleTech Holdings,
Inc., et al., In re: TeleTech Litigation
 37




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##### Table of Contents



Derivative Action
 Susan M. Gregory v. Kenneth D. Tuchman, et al.
 
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Issuer Purchases of Equity Securities
  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)1January 1, 2010  January 31, 2010
    
    
    224,663
    
    
    $
    18.82
    
    
    
    224,663
    
    
    $
    21,423February 1, 2010  February 28, 2010
    
    
    387,922
    
    
    $
    18.48
    
    
    
    387,922
    
    
    $
    39,253March 1, 2010  March 31, 2010
    
    
    457,084
    
    
    $
    17.88
    
    
    
    457,084
    
    
    $
    31,082Total
    
    
    1,069,669
    
    
    
    
    
    
    
    1,069,669
 
 (1)
    
    In November 2001, our Board of Directors (Board) authorized a stock repurchase program to
repurchase up to $5.0 million of our common stock with the objective of increasing stockholder
returns. The Board has since periodically authorized additional increases in the program. The most
recent Board authorization to purchase additional common stock occurred in February 2010, whereby
the Board increased the program allowance by $25.0 million. Since inception of the program through
March 31, 2010, the Board has authorized the repurchase of shares up to a total value of $337.3
million, of which we have purchased 24.9 million shares on the open market for $306.3 million. As
of March 31, 2010 the remaining amount authorized for repurchases under the program is
approximately $31.1 million. The stock repurchase program does not have an expiration date. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. RESERVED
 
 ITEM 5. OTHER INFORMATION
  38




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##### Table of Contents



ITEM 6. EXHIBITS
 Exhibit No.
    
    Exhibit Description10.1*
    
    Executive Employment Agreement dated March 8, 2010 between
Joseph Bellini and TeleTech*31.1
    
    Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)31.2
    
    Certification of Interim Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
Section 1350)32.1
    
    Certification of Chief Executive Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)32.2
    
    Certification of Interim Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
Section 1350)
 
 *
    
    Identifies exhibit that consists of or includes a management contract
or compensatory plan or arrangement. 39




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##### Table of Contents



SIGNATURES
  TELETECH HOLDINGS, INC.
(Registrant)Date: May 5, 2010
    By:
    /s/ Kenneth D. TuchmanKenneth D. TuchmanChairman and Chief Executive OfficerDate: May 5, 2010
    By:
    /s/ John R. Troka, Jr.John R. Troka, Jr.Interim Chief Financial Officer 40




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Exhibit Description10.1*
    
    Executive Employment Agreement dated March 8, 2010 between
Joseph Bellini and TeleTech*31.1
    
    Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)31.2
    
    Certification of Interim Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
Section 1350)32.1
    
    Certification of Chief Executive Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)32.2
    
    Certification of Interim Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
Section 1350)
 
 *
    
    Identifies exhibit that consists of or includes a management contract
or compensatory plan or arrangement. 41