Karen Breen - Vice President of Investor Relations andTreasurer Ken Tuchman - Chairman and Chief Executive Officer John Troka - Chief Financial Officer

Tobey Sommer - SunTrust Robinson Humphrey Matt McCormack - Friedman Billings Ramsey Bob Evans - Craig-Hallum Capital Shlomo Rosenbaum - Stifel Nicolaus Ashwin Shirvaikar - Citigroup Dhruv Chopra - Morgan Stanley Josh Vogel - Sidoti & Company

Welcome to the TeleTech third quarter 2007 earningsconference call. I would like to remind all parties that you will be in alisten-only mode until the question-and-answer session. This call is beingrecorded at the request of TeleTech. I would now like to turn the call over to Karen Breen. Thankyou, ma’am. You may begin.

Good morning, and thank you for joining us. My name is KarenBreen. I am Vice President of Investor Relations and Treasurer. TeleTech ishosting this call today to discuss its preliminary results for the thirdquarter ended September 30th, 2007. Speaking on today's call are Ken Tuchman,our Chairman and CEO, and John Troka, our Chief Financial Officer. Before we begin let me briefly cover a few items related tothis press release this morning, as well as our cautionary statements regardingrisks factors and forward-looking statements. As we announced in our press release today, during the thirdquarter our Audit Committee undertook a self-initiated review of accounting forequity based compensation practices. The review is still underway and based onthe work conducted thus far, management believes it will be required to incuradditional compensation charges for prior periods. And that restatement ofprior, interim, and annual financial statements is likely. There may also be an impact on the current fiscal year'sresulted including those reported in the release this morning. Due to theongoing review, all financial results released today and discussed on ourconference call, should be considered preliminary and subject to change. Our objective along with the Audit Committee is to completethe review in a comprehensive, accurate and transparent fashion, and to fileour third quarter Form 10-Q and any required restated financial statements assoon as practical. In addition, I would like to remind you of our disclosureregarding forward-looking statements. Matters discussed on today's conference call may includeforward-looking statements relating to future plans and developments, financialgoals, and operating performance, and are based on management's current beliefsand assumptions. Such statements are subject to risks and uncertainties. Factors that could cause TeleTech's actual results to differmaterially from those described include but are not limited to, reliance on afew major clients, the risks associated with lower profitability from, or theloss of one or more significant client relationships, risks associated with achievingour 2007 and 2008 financial goals. Execution risks associated with expanding capacity in atimely manner to meet demand, changes in the amount of timing of previouslyreported non-cash equity-based compensation expense for current and previous fiscalperiods resulting from the Audit Committee's ongoing review, the effect of thisreview on our ability to meet requirements set forth by various regulatoryagencies, and the possibility of additional asset impairment and restructuringcharges. I will now turn the call over to Ken Tuchman, our Chairmanand CEO.

Thank you, Karen, and good morning. Let me provide anoverview of our preliminary third quarter results, and discuss the key driversof our financial and operating performance. I am pleased to report that ourthird quarter revenue was a record $336 million, up 10.5% from the year-agoperiod. Year-to-date, our consolidated revenue has grown 14% to $998 million,and revenue in our core BPO business grew 17%. Our 25 years of experience along with our breadth, scale,and geographic diversity, continue to fuel our growth and have enabled us toconsistently deliver innovative front and back office business processoutsourcing solutions, to both new and existing global 1000 clients. Preliminary operating income excluding $4.8 million of assetimpairment, and restructuring charges was $30.7 million, or 9.1% of therevenue. The $4.8 million in restructuring charges related to several itemsincluding. One a $3.1 million loss on the sale of Newgen, and two, a$1.7 million restructuring charge related to optimizing our BPO segment, whichwe discussed on our second quarter call. Operating income was further reducedby $3 million due to ramp-related costs from added a record 3,600 workstationsfor committed new business wins in this quarter. The revenue contribution from these workstations, andincreased capacity utilization and our existing workstations during the fourthquarter, puts us on-track to achieve record fourth quarter revenues. Wecontinue to enjoy strong growth in our offshore markets. Revenue from clients served in these locations grew 33%year-over-year to $136 million in the third quarter, representing more than 40%of the total revenue. Year-to-date, our offshore revenue has grown 41% to $396million. Our offshore delivery capacity now spans eight countries,and more than 23,000 BPO positions, representing 62% of our global deliverycapabilities. I believe this makes us one of the largest and mostgeographically diverse providers of offshore services in our industry. Ourfacility in Costa Rica was operational in third quarter, and we are currentlyunderway with expansion in to South Africa, which is expected to open laterthis year. By the end of 2007, we expect to have nearly 25,000 offshoreBPO workstations, nearly twice the 13,000 we had at the end of 2005. The thirdquarter was our biggest quarter for new capacity additions, with an incremental3,600 workstations deployed in both offshore and in U.S. locations to meet committeddemand. This puts us on-track to add approximately 7,500workstations during 2007, primarily in five geographies, including thePhilippines, Argentina, Costa Rica, Mexico, and the U.S. This is up from ourbeginning of year expectations to add 5,500 to 6,000 workstations for all of2007. During the last half of 2007, we are on-track to hire an additional 7,000people across the globe, primarily to address incremental growth. Our ability to rapidly ramp this amount of new capacity,further validates our proven Six Sigma-based processes, management'soperational experience in the industry, and the scalability and technologicalsophistication of our global delivery platform. We are continuing to see someof the largest and most significant opportunities in our company's history. These opportunities span many of our targeted verticals,including financial services, technology, communications, and the retailsectors. In the third quarter alone, we signed over $100 million of annualizedincremental revenue, further, we have a high degree of confidence that we willadd multiple new global 1000 clients in fourth quarter. At the same time, the competitive landscape of qualifiedproviders continues to narrow. We see more companies seeking partners withstrategic capabilities, and continuing to rapidly consolidate the number ofoutsourced providers, as they shift their focus towards quality over cost. Andto those providers who have a broad array of front to back-office capabilities. Companies enjoying rapid global growth are also keenlyfocused on finding providers who can offer speed to market on a global scale.These trends offer significant new and expanded business opportunities forTeleTech. We believe our extensive global footprint and scalableinnovative global delivery model, further distances us from the competition, asdemonstrated by our industry-leading double-digit revenue growth rates, andrecent new client wins. These trends are further validated by our recent win with aFortune 50 global technology product client. As this client reviewed andconsolidated BPO providers, TeleTech was the only non-incumbent provider to beawarded business. The new relationship is currently ramping with nearly 1,000full-time employees spanning several counties, thereby leveraging our globalinfrastructure, to provide high-quality service to our clients, and theircustomers in addition. The client has aligned several of their 2008 corporategoals around our recommendation for elevating their customer's experience. A global provider of wireless voice messaging, and dataservices also recently chose TeleTech to serve its rapid customer growth, as aresult of our ability to quickly deploy our services in North America'sfacilities. Within two weeks we began the process of adding 700 newworkstations for this client, with the intent to further expand this businessoffshore in early 2008. Increasingly, we are also providing more front andback-office solutions. One of the largest Asian communication and mediacompanies recently expanded the amount of complexity of the business it doeswith TeleTech, from primarily front-office work, to a highly complex suite offront and back-office services spanning its mobile, fixed line, and cableproduct offerings. We are now providing seamless support for over 90 differentnon-voice back-office processes, including complex provisioning, activation,resolution of failed work tickets, along with managing many aspects of theircable provider relationships. Our future growth will continue to come frominnovation and the development of new scalable solutions. We have seen impressive growth in our work from homeinitiative since it's launch in January of this year. TeleTech at Home is nowboth profitable and fully operational in the U.S., the U.K., and Australiamarkets, with plans to expand in to more countries during 2008. We believe the rapid growth of this virtual business, whichincreased its employee count by over 40% during the third quarter, is thedirect result of our highly differentiated at-home platform. Unlike many of ourcompetitors work from home offerings, the technology supporting this solutionwas internally developed and offers innovative scheduling, security and qualityassurance capabilities. It capitalizes on hundreds of millions of dollars we haveinvested in our centralized and standardized GigaPOP delivery architecture,further enabling us to rapidly scale this business and to have it contributepositively to our overall operating margin. Bolstered by strong demand and plans for continued globalrollout over the next 12 months, we are confident we will meet or exceed ourgoal of having 5% of our North American employees working from home by the endof this year. In summary, we are pleased with our continued strongfinancial results in the third quarter, and are on-track to achieve our fourthquarter goals that we first announced nearly three years ago. Let me now turn the call over to John Troka, after which, Iwill make a few closing remarks.

Thank you, Ken and good morning. As Ken has just indicated,we are very happy with the financial performance of the business, we continueto achieve results, which show our steady progress towards our long-term goals. As discussed when we began the call, due to the AuditCommittee's current review of our accounting for equity based compensation, wewill not be filing our third quarter Form 10-Q at this time, and all financialresults we have released today and those discussed on today's call, should be consideredpreliminary and subject to change. In addition, we are limited in the financial data that canbe currently disclosed, so we are unable to share with you information that wemay have in our previous releases or in our prior calls. With that said, let meprovide some additional insight into our preliminary third quarter financialresults. We reported record third quarter revenue of $336 million, anincrease of 10.5% over the year ago quarter. As we have stated before, ourquarterly revenue may vary based on seasonal business trends and the timing ofvarious program launches. This is why our focus and guidance remains onachieving and tracking towards our annual and longer term growth andprofitability targets. Our preliminary gross margin was 27.1%, included in thismargin is the impact approximately $3 million of new capacity ramp costs,associated with adding 3,600 workstations and several new site locations duringthe third quarter. This compares to adding 2,300 workstations in the year agoquarter. Our preliminary SG&A was $46.4 million, or 13.8% ofrevenue. This percentage continues to decline, as we further leverage ourscale, and centralize delivery platform across our higher revenue base. Our preliminary third quarter operating margin was 7.7%,excluding the non-recurring BPO restructuring charges and those associated withthe Newgen disposal, the operating margin was 9.1%. Relative to the BPO restructuring charges, you may recallthat on our second quarter call, we spoke of eliminating certain SG&Apositions in our North American delivery centers. We were able to do this as aresult of achieving greater operational efficiencies from our ongoinginvestments in standardizing, centralizing and automating our global deliverycapability. This resulted in a third quarter restructuring charge ofapproximately $1.7 million. The annualized savings from this initiative isestimated to range between $8 million and $10 million per year, and willcontribute to our 2008 goal of achieving a 200 basis point improvement over our2007 full year operating margin. As previously disclosed, during the third quarter, wedisposed of substantially all of the assets and certain of the liabilities ofNewgen, as part of our ongoing commitment to enhance shareholder value. Newgenis the sole business unit in our database marketing and consulting segment. Theconsideration we received a part of the sale is comprised of three maincomponents. First was cash consideration of $3.2 million, second wassoftware license revenue of $2.2 million, and the third is a three yearcustomer management agreement valued at $18 million over a multi-year period. Given TeleTech will have ongoing and net positive cashflows, the sale did not qualify to be accounted for as a discontinued operation.As such, any future revenue or cost related to Newgen during the remainder of2007 and beyond, will continue to be shown in the database, marketing andconsulting segment in our financial statements. Accordingly, the preliminary third quarter operating loss ofapproximately $4 million for this business segment is reflected in our incomestatement as continuing operations. This operating loss was in line with ourexpectations. Further, because not all of the segment's liabilities wereincluded in the sale, over the next couple of quarters, we have anticipatehaving certain wind-down costs of approximately $1 million. As Ken mentionedearlier, our operating income this quarter was reduced $3.1 million, due torestructuring and impairment costs related to the Newgen sale. In addition to these charges, other income and expense itemsreported below operating income, included a net charge of $3.9 million relatedto the transaction, bringing the total pre-tax charges for the disposal to $7million. Turning now to our balance sheet, we ended the quarter with$74 million in cash and a debt to equity ratio of 10%. We continue to see ourROIC strengthen, as we leverage our substantial investment in our centralizeddelivery platform. Our DSOs were 67 days in the third quarter, and within ourtargeted range of 65 to 70 days. Our strong financial position enabled us to repurchase $23million of our common stock during the third quarter. Since inception of ourbuyback program in 2001, we have invested $162 million to acquire approximately20% of our shares outstanding. We have suspended repurchases under this program, pendingcompletion of the Audit Committee review. Once this review is completed, wewill promptly address the resumption of our repurchase program. Capital expenditures were $15.7 million in the thirdquarter, compared to $22.8 million in the year ago quarter. Approximately 80%of our total capital spending was for growth related needs, with the balancefor maintaining our embedded infrastructure. As Ken mentioned, in the third quarter we added 3,600workstations for committed new business in primarily offshore locations. Inaddition, we are currently in the process of adding another 2,000 workstationsthis quarter. We believe our total capital expenditures for 2007 willrange between $60 million and $70 million, reflecting the investment requiredto support the increased pace of new business wins. Regarding our businessoutlook for 2007, we are reaffirming our previously stated goal to end the fourthquarter with a $1.5 billion annualized revenue run rate, and a 10% operatingmargin, excluding unusual charges. In conclusion, we are very pleased with our solid financialperformance in the third quarter. We continue to enjoy strong demand for our expandingarray of offering, as demonstrated by our seventh quarter of double-digittop-line growth. In addition, our focus on leveraging our ongoing investmentsand our global delivery capability continues to drive increasing profitability.The combination of these factors puts us in a solid position, to continue ourtrack record of profitable growth. With that, I will turn the call back over to Ken.

Thank you, John. In closing, TeleTech's preliminary thirdquarter results further build on our reputation of successfully managing ourindustry leading growth, through a highly integrated Six Sigma based globalmodel. We just celebrated our 25-year anniversary in October, andwe firmly believe that our success over the next 25 years will be driven by ourextensive global footprint. The breadth of our front to back office serviceofferings, and our ability to rapidly scale Best-in-Class infrastructure, aswell as our commitment to technological innovation. I am very proud of what TeleTech and its employees haveachieved over the past 25 years and appreciate our loyal long-standing globalclient base. I am even more excited about the business opportunities ahead, andI look forward to sharing these and other accomplishments with you in the comingquarters. One point I would like to make before we take questions, isthat as much as we’d like to give you additional information about the reviewof our equity compensation grant practices, because the Audit Committee reviewis not complete, we will not be able to comment further on this matter. We also are not in a position to discuss financialinformation beyond what we have included in our press release today. As you areno doubt aware, there are more than 200 other public companies in the UnitedStates that have gone through similar reviews over the past two years. I want to make clear, that while we are fully supporting theAudit Committee's review, we are not going to let this matter distract us fromthe task of profitably growing our business. With that, we will open the call to your questions about ourbusiness operations and outlook. Thank you.

(Operator Instructions) Our first question comes from TobeySommer, SunTrust Robinson Humphrey. Your line is open. Tobey Sommer - SunTrust Robinson Humphrey: Thank you. I wanted to ask you a question about the goal of200 basis point of operating margin expansion in 2008. Am I doing the mathcorrectly that based on the trends this year and the losses in the databasemarketing unit. Do you expect that the absence of those losses to contributeabout 70 or 80 basis points of that 200 basis point improvement? Am I doing themath correctly there?

Tobey, this is John. Relative to that 200 basis pointimprovement, obviously, taking Newgen out of the mix will contribute. But weare driving it from many areas, including our expansion in our offshorelocations and other things. So yes, Newgen is factored in there, but it is not the onlything. Tobey Sommer - SunTrust Robinson Humphrey: I know, I understand it's not the only thing. But am I doingthe math correctly? Is it contributing roughly, a third of that expected marginexpansion?

Yeah, again, we are not prepared to say that at this pointin time.

Yes, I mean, I think, Tobey the one thing you need to lookat is the fact that our offshore business is growing so rapidly, that by themiddle of next year offshore revenues will make up 50% of our overall revenues. So we are at 41% revenues as it relates to offshore. As wecross the river or the chasm of going from 41 to 50, that certainly will have asignificant impact on our ability to achieve these margins. The second thing, that I would remind you of is that, we arepretty good at managing our cost and as our top line continues to grow,obviously that allows us to dilute our SG&A. And so I think that, if you really wanted to say where are,what are going to be the biggest margin drivers, we think we’ve got theefficiencies already built in to the business now and really it is going tocome out of growth and how that growth impacts our overall SG&A andlowering it, as well as the fact that more and more business is migrating fromthat growth to offshore. So hopefully, that answers your question, but we’re seeingvery positive trends in that area. Tobey Sommer - SunTrust Robinson Humphrey: Right. Thank you, and then on a different issue, kind ofattack, you have expanded in to some new countries and you are always lookingfor new areas that can supply, a talented labor pool for you to service yourcustomers. What are your expectations over the next couple of years? Doyou think from a little, a slightly longer-term perspective you are looking atcountry or two a year? I was just wondering from a high-level perspective, ifyou could comment on what your expectations are there?

This is Ken. As you know, we were about to launch in SouthAfrica and South Africa will really be our portal to the African continent. So I think it is safe to say that between now and let's justsay 2010, we will most likely be adding multiple additional countries,potentially as many as four countries that we have on the drawing board that weare developing as we speak and we look forward to updating you on thoseparticular countries as they unfold. Virtually all of our focus, I would say about 90% of ourfocus is in offshore markets. As you know our strategy is to not put all of oureggs in one basket, to have a very diversified platform. And we are alsolooking at, which I can't discuss which ones, but potentially entering a coupleof, let's just say G-7 nations that we are not currently in as well over thenext few years. So we are seeing requests from our clients to basically beable to be pretty much ubiquitous across the globe and our goal is to make surethat we have that ability to do so. Tobey Sommer - SunTrust Robinson Humphrey: Right. Now, I will ask question queues and then I will getback in the queue, if I could. One from a mechanics standpoint, at what pointwould you be able to reengage with company share repurchases? And secondly, in terms of the sales cycle, I was wondering,if you could comment on the relative timeframe it is taking for customers, tosign on a deal from the time they express interest and you begin to the timeyou actually close the deal, just whether any changes have taken place in termsof that pace? Thanks.

In terms of repurchase program, this is John. I mean, wewill take a look at it as soon as we are current are all of our regulatoryfilings and again assess it at that time, relative to what is going on in themarket place.

Now that said, this is Ken again, we are working withcounsel right now on the potential to be able to do some block-trades, but theywould be unique types of block trades and once they have sorted out how we cando that, we will make sure that appropriate investors understand what theactual opportunity is. It is safe to say that we are very confident in our stockand are very, very interested in continuing to purchase our stock, but in noway, shape or form do we want to do anything that could potentially, create anadministrative problem or a violation of any form.

Is there another part to your question? I'm sorry, Tobey? Tobey Sommer - SunTrust Robinson Humphrey: Just is there any acceleration or deceleration in the timeit takes to close business? Thank you.

I think, it's very safe to say that we are seeing businessaccelerate and we are seeing, at this point in time, sales cycles shorteningpretty dramatically and there is a whole myriad of reasons, but we would liketo allow other people to ask questions, but the short answer is that salescycles are shortening and there is a significant amount of pent-up demand ofpeople that are trying to get deals done in this calendar year, as well as weare seeing significantly larger deals than we have historically seen. Tobey Sommer - SunTrust Robinson Humphrey: Thank you very much.

Our next question comes from Matt McCormack, FBR CapitalMarkets. Your line is open. Matt McCormack - Friedman Billings Ramsey: Hi, good morning. Obviously offshore revenue target is 50%of the business by next year, I guess, you are diversified in to variouscountries, but the Philippines I think is probably the biggest driver there. So I guess, could you just tell us what your targets are forgrowth in the Philippines and what do you think the biggest challenge for thatis?

Hi, Matt, this is Ken. Right now, we are at about, actuallylet me just see what, right now, we have, how many total employees? We haveover 13,000 employees and close to 10,000 workstations in the Philippines.

Right.

And I believe that we think we will achieve somewhere in the15,000 to 16,000 employee headcount by the close of this year. We are rapidlyramping as we speak. We have numerous real estate projects throughout the entirecountry and we believe there is still a lot of room for growth with our type ofmodel since, once again, our model is not the build everything in centralMaccaudy, where all of the wage inflation and attrition is taking place. We realistically, we are planning our growth in thePhilippines through 2009 and then we will reassess as to whether we are goingto take it any further. But simultaneously, we will be ramping up othermarkets, so that we can ensure that we have ample competitive cost,high-quality labor markets. But I think, it's safe to say that it is common knowledge weare the largest provider in the Philippines. We have more employees. We havemore real estate and that is according to the Philippine government. And we are comfortable that we'll take that number to 25,000over the next couple of years. Matt McCormack - Friedman Billings Ramsey: Okay. And in terms of the pipeline, you were talking aboutfor the fourth quarter, just in general saying the sales cycle have beenshortening. Could you just talk about verticals and talk about demand ifthis is coming from companies that haven't outsourced before? Or, if it's moredue to vendor consolidation?

Well, it is like anything. It is a little of both. I wouldsay that the majority of what we are seeing right now is clients that aredefinitely saying that they want to go from 10 vendors down to one or two. Aswell as we are also having dialogue with clients who are basically saying theydon't want to have a front or back-office operation period. And so that also is driving the growth. Interestinglyenough, several of the clients that we have won recently we have historicallynot been focused on, and what has happened is many of them have kind of movedfrom cost at any cost as we say, to they have now really moved to a model wherethere is a value proposition. So, there was such a flight to places like India, and otherplaces where they weren't necessarily achieving the quality, and they weregetting customer defection, that now the pendulum has swung very hard the otherdirection, and there is this huge flight to quality, huge flight to strategiccapable they we can provide on the desktop, as well as database managementcapabilities, etcetera. And we believe at the end of the day when you get past justthe experience and how long we have been doing this, that really what isdriving our business the most is the fact that we have, we think, very uniquetechnology, and that once you win the client, the client expands if you areperforming, and if you are not performing, they don't expand. And I would say we are seeing expansion pretty muchthroughout our entire client base across the globe, where we are outperformingtheir internal operations or competitive operations. So, sorry for thelong-winded answer, but I think it is coming from a combination of areas. Certainly the embedded base is doing very well, but we arealso seeing quite a bit of new logo growth, and we will be adding multiple newlogos between now and the end of the year. Matt McCormack - Friedman Billings Ramsey: Okay. Thank you.

Our next question comes from Bob Evans, Craig-HallumCapital. Your line is Open. Bob Evans - Craig-Hallum Capital: Good morning, everyone. Firstly can you clarify, I believeyou made a comment saying that you signed $100 million of new business annuallyin the third quarter. Is that other business that just ramped this quarter, oris that other business that you are referring to?

Bob, it's John Troka. You want to that business. It is acombination of both. It is new programs that we are doing from new clients. Itis new programs that we are doing for existing clients, as well as expansion ofprograms that are underway with clients that we have already today. And the$100 million represents, again, what those programs will be when they are fullyramped to their expected levels. Bob Evans - Craig-Hallum Capital: Okay. And that ramp, so some of that ramp is yet to be done,and some of that ramp was partially done in this quarter, is that a fairstatement?

Yes.

Yes.

We will be ramping all the way through this quarter, andthings are looking like in to, well in to first quarter as well, so the rampingis not going to stop in the near term. Bob Evans - Craig-Hallum Capital: Okay. And then, I am not sure how much you can say aboutthis, but obviously there has been a lot of concern from an industry standpointin terms of currency. It looks like you were able to manage currency quite wellthis quarter. I don't know if you can give us any sense of impact this quarter. But I assume, I guess give us color in terms of the your 200basis points of operating margin improvement for '08. I assume you have arecomfortable with your current hedging strategy and where things are at relativeto that? If you could elaborate on currency, given that there has been fears inthe marketplace on currency impact on companies in your industry.

Sure, Bob, this is John again. Obviously we are closelymonitoring what is going on in the currency markets, especially as they relateto some of our larger markets, Canada and the Philippines. We have beenactively hedging those currencies for many years, and our exposures there forthis remainder of this year, and well in to next year, are hedged well over 50to 60%. Especially as we get towards the latter parts of next year.But we have over $350 million worth of contracts out there right now forpurchasing of currencies in to future periods. So, it has been something thatwe have been actively doing. We are watching it and continuing to assess whatthat means for these markets. We work with a whole group of banks and it is as withanything you talk to 20 bankers, you get 20 different opinions, as to which wayvarious currencies are going. We believe we have a great handle on it, and ourforecast for next year and the 200 basis point improvement that we areprojecting, includes what we see happening relative to currency, taking in toconsideration what we have done to protect ourselves.

Bill, this is Ken. Just couple of other comments. We are, asyou can imagine, very focused on making sure that our costs are properlyin-line with our revenues, and therefore, it is safe to say that we have beensuccessfully raising our rates, because our clients are very sympathetic to thecurrency issues. In addition to that, I think that on our fourth quartercall, people will be pleased as to some of the creative things that we will bedoing in Canada, to reduce our exposure to the Canadian. In that, I mean thatA) we will be receiving more Canadian dollars that we have historicallyreceives through, a winning more Canadian business that pays in Canadiandollars. And b) with several of our non-Canadian clients that areutilizing Canada, choosing to pay us in Canadian, which obviously helps us,since the Canadian is just steaming ahead like no other currency. So we feelpretty good about where we are taking this, and I think it is safe to say thatwe have got it under control. Bob Evans - Craig-Hallum Capital: Okay. Thanks. A final question. Pricing environment for kindof new business, can you give us some sense of how that is shaping up relativeto your discussions, and I don't know how much of this new business that youare looking at is competitive bid versus just your own discussions?

Yes, you know, Bob, it's pretty simple. We are drinking froma fire hydrant right now, and therefore we are being very selective on thebusiness that we take. And therefore, we have a profit threshold. We are not inany way, shape, or form, going to step off of that profit threshold, andtherefore there are clients that are truly focused on receiving the highestpossible quality, on the most capability, and on the best performancedelivered, and for that there is a cost associated. And so the point is, is that we are getting the price thatwe need to be able to provide our shareholders with a return that we believewill exceed what others are delivering in the industry. So, we are not having,really any issues from a pricing standpoint, and in addition to us being ableto obtain it on new business. We also are finding, as I said before, our clients are beingsympathetic to currency, as well as to labor-wage increases, and are allowingus to pass that on through our normal cost of living increases as well. So wefeel good about that. Bob Evans - Craig-Hallum Capital: Okay. Thank you.

Our next question comes from Shlomo Rosenbaum, StifelNicolaus. Your line is open. Shlomo Rosenbaum - Stifel Nicolaus: Hi, good morning, Ken, John, and Karen. I just have a fewquestions. First of I want to just clarify some of the guidance of this year,the $1.5 billion run rate, and 10% operating margin by the fourth quarter. Doesthat mean that the fourth quarter itself should have that run rate and achieve10% margin? Does that mean like the last month of the quarter that's where youguys expect to be?

Hi Shlomo. It's John Troka. The guidance reflects what weexpect the quarter to be in totality. So we will exit the quarter with a runrate on revenue, we plan to exit the quarter at $1.5 billion, and then thequarterly operating margin will be 10%, excluding any unusual charges. Shlomo Rosenbaum - Stifel Nicolaus: Okay. Great. And just looking at some of the CapEx. Youbuilt 50% more workstations in the quarter, but the CapEx is pretty much flatquarter-over-quarter, and you maintained your CapEx guidance, is there sometiming issues, or can you give me a little bit more detail on how that workedout?

Sure, this is John again, what you are seeing there is whatis literally driving again our improved ROIC. I mean, we are becoming moreefficient in the utilization of our capital, the GigaPOP strategy, where wecentralized this technology allows us to grow it at very little incrementalcost and so it is really allowing us to spend less and get much more for it. Shlomo Rosenbaum - Stifel Nicolaus: Okay. And the SG&A has been coming down sequentially forthe last three quarters. Is that -- when does that end? You have taken out alot of costs and I understand that, but would we be looking, I am talking on anabsolute dollar basis. Should we be looking for that to reverse next quarter?

I don't know that we would say that we would look to it toreverse. I mean obviously, cost control is key. We want to make sure that as wecontinue to grow the top line that we are not expanding the corporate overhead,if you will, that is required to deliver it. With that said, given the size and growth that we areexperiencing, we may have to look at layering on some incremental costs tocontinue that support. Shlomo Rosenbaum - Stifel Nicolaus: Okay. And I know you are trying to stay away from anythingto do with the equity comp discussion. The one thing, I want to ask though, isthe companies we have seen this from, it basically came up about a year ago. And I was wondering what prompted this investigation, Iwon't call it investigation, the review, what prompted this review from theAudit Committee at this point in time?

I am sorry. I apologize. What was the question? Shlomo Rosenbaum - Stifel Nicolaus: The question was that most of the companies I have seen whohave the internal reviews from their equity comp, have had this in last year orso. But earlier on, I am wondering what prompted your Audit Committee to decideto review your equity comp practices during the third quarter?

Yes. The review was undertaken during the third quarter,after we discovered some administrative errors in certain grant awards. Andthen, it was self-initiated and not in response to any regulatory action. So, it is a review that our Audit Committee is undergoingand it was really upon something that we self-discovered. Shlomo Rosenbaum - Stifel Nicolaus: Okay. Is there anything else, I mean, what is anadministrative error? Just any kind of clarification in and something likethat?

Shlomo, this is John, again. We are just not at libertyright now to say that given the outstanding review, and we understand thequestion and the like, but we cannot address it at that point.

But we look forward to giving you an update and hope to doso before the next quarterly call. Shlomo Rosenbaum - Stifel Nicolaus: Ken, just one last question on the fundamentals, revenue wasjust a little lighter than what we and I think most other people wereexpecting, were there any particular verticals that came in notably belowexpectations, or was it just matter of ramping a lot, and you are going to seethe revenue coming out over the next nine months, and it just wasn't factoredin properly in the way the people were expecting it?

No, Shlomo, actually it has nothing to do with that, it isall really just tied to timing and ramping, and just the sheer volume of peoplethat we have to bring on. The sheer volume of people that we have to train,because our projects tend to be significantly more complex. The averagetraining on the majority of our projects right now is running 10 to 14 weeks. Therefore, a lot of these projects we are not reallyrecognizing any meaningful revenue other than potentially some trainingrevenue, until after we get past the training curve. So no, we are verysatisfied with the top line and this is exactly why we choose not to givequarterly guidance, because as I have always said for us the game is all aboutfour quarters combined and what the score is at the end of the game, which isat the end of the year. And so that is what we are focused on. That is what we arecommitted to. And that is where our confidence is. Shlomo Rosenbaum - Stifel Nicolaus: Okay. Fair enough. Thanks.

Our next question comes from Ashwin Shirvaikar of Citigroup.Your line is open. Ashwin Shirvaikar - Citigroup: Hi, guys.

Hi, Ashwin. Ashwin Shirvaikar - Citigroup: Thanks. Question I have is the new seats that you added, notjust this quarter, but as you add them, most, I guess trading periods and soon, they become revenue generating. But when do they become profit generatingon a fully loaded basis and start approaching, sort of, company average? Howlong of a time period do you have where it is a drag?

Ashwin, this is John, I mean relative to the profitabilityof any given workstation. I mean, it is a difficult question, in that we haveprograms that are ramping centers that have taken the whole center, so as soonas it reaches full scale, which is typically three to six months, those will beprofitable workstations. If it is a smaller program that is going in to a center thatwe have opened that is dealing several program ramps, it may take a little bitlonger. So again, I would say three to six months on average for dedicatedfacilities, maybe six to nine months for a facility that is serving multipleclients.

But when he says up to nine months just for clarification,what we mean by that is not the project or that client, we mean that particularfacility. So another way of looking at it is that our goal is always forprofitability to take place right out of the gate when training is completed. Ashwin Shirvaikar - Citigroup: Right. No, I understand that. I am just trying to get,because you have essentially a little bump up, well not a little, but a bigbump up, in terms of the seats that you are adding.

Correct. Ashwin Shirvaikar - Citigroup: And you are maintaining in spite of that your 200 basispoint improvement.

Correct. And so it is very much like an airline you reallyneed to cross the chasm of about 60% of facility utilization, so that you cancover your overall administrative and infrastructural cost, etcetera, and thenonce you get past that you start to endure profit.

And again, the good thing is we have become very good atmaking sure that we don't get too far ahead of ourselves in terms of addingfacilities. So they are coming online very closely to when we have committed tobusiness to go in them. Ashwin Shirvaikar - Citigroup: Right. And that makes me, I guess comfortable with theprofitability aspect of it. The demand side, the revenue growth side the 12 to15% range is, is a pretty big range. You are talking about all of this newdemand, does that make your more confident in maybe the upper half of yourtarget maybe?

It makes us more confident in 2008. And the reason why I saythat is only because there is so much ramping that is taking place in thirdquarter, and the ramping is continuing to go on through fourth quarter, that itreally puts us in a very nice position going in to first quarter. So, and that quite frankly is where we are focused at thispoint in time, as we always do towards this part of the year. It is alwaysabout lining up for the next year. So everyone's head is all focused now on2008, and meeting or exceeding the numbers that we have out there for 2008. Soit is a wave. Right, and the wave rolls forward, and that is what is takingplace. Ashwin Shirvaikar - Citigroup: Got it. Now, one question on pricing, but I wanted to askabout terms and conditions on the new deals you are signing other than pricing.Are there any changes that you see as these companies come to you with, withthese large projects? And these are large companies they have considerablebargaining power. What changes are you seeing in the terms and conditions thatyou have signed, in terms of collections, DSOs, up front, things like that?

Yes. Well, Ashwin I would say that we are not seeing a tonof changes. Contract terms, are the low ones are in three years, the longerones are in five. We're actually working on some that are longer than five,right now. But what we are seeing is we are very focused on currencyand so we are in, we now have new terms that have collars on currencies, sothat we burden less of the currency risk going forward, and attempt to transferit. Now this is something new, and we only have a few contractsnow that have this, but it's our intent for all contracts going forward to havethese types of clauses in them and I would say that really, that is the onlyfocus that we have added to. As far as clients looking for terms that in any way make thecontract less desirable, we are not, I don't think John, I don't think we'reseeing that anywhere at this point in time. There is no question about thatthere is a significant demand for business and there is a scarcity ofcapability. And I think it's what is driving our ability, to be able toexpand at the rate that we are expanding at. Ashwin Shirvaikar - Citigroup: Got it. Thank you.

You have a question from Dhruv Chopra, Morgan Stanley. Yourline is open. Dhruv Chopra - Morgan Stanley: Yes, good morning. A lot of my questions have been answered,but I was just wondering, to get to your fourth quarter target of $1.5 billionrun rate, that is about $375 million for the quarter in revenue, which is abouta $40 million sequential increase. I was just you know, I know that there are some seasonalprograms that make Q4 higher like the Medicare Part D, but could you give us alittle bit of visibility on what would be driving that increase?

Hey Dhruv, it’s John again. Relative to what is driving it,you mentioned some of the key things. There is some seasonality that we have inthe fourth quarter that you mentioned. And again, it gets back to all of theramps that we have talked about, and so we realize that $40 million is anextremely large number. If you look back from our third to fourth quartergrowth last year, it was about $30 million. So we believe, or we know that we're capable of bringingthat revenue online in an efficient way, and again, what’s driving it, we havethat visibility today, we know what is out there, because it is all in ramp asKen indicated, 10 to 14 weeks, these people are in these facilities beingtrained as we speak. Dhruv Chopra - Morgan Stanley: Great. And then just quickly, the last question is onSprint's conference call, they said they added 4,500 customer care seats duringthe September quarter. How did they specifically perform with you, given thatare your largest client?

I don't understand the question. Dhruv Chopra - Morgan Stanley: Well, did you see a pickup in growth with Sprint? I know yousigned a lot of…

Yes, of course. We added a new facility for them in, I don'tknow if we can say the country, but we added a new facility for them near, inthe near-shore environment, and it is live and operational, and performingquite well. Dhruv Chopra - Morgan Stanley: Okay. Great. Thank you.

Thank you.

We have time for one more question. Josh Vogel, Sidoti &Company. Your line is open. Josh Vogel - Sidoti & Company: Thank you, good morning. Could you maybe give a snapshot ofyour vertical concentration, maybe, notably the exposure of financial services,and maybe discuss any pockets of weakness or negative trends you seeing acrossany of these sectors?

I’m going to say, you go ahead, and I'll figure out thenumbers.

Hi, this is Ken. While John figures out the breakdown ofthat let me just say, make one statement. TeleTech across its more than 53,000employees is currently not providing any services to the subprime marketplace,not in the mortgage area, nor in the credit card area. I want to be perfectlyclear. We have not providing any services in the subprime marketplace. Now,maybe John has a breakdown of…

Yes. Josh, just real quick. Relative to financial servicesand again, based on what Ken indicated, let you know that we have about 10% ofour revenue coming out of the financial services sector. Telecommunications and media continues to be a large sectorfor us representing over 50%. That represents landline customers, wirelesscustomers, cable, satellite, so it's across the wide spectrum of businessesthat are in that. And then transportation represents over 10% as well. So thoseare the big sectors for us. Josh Vogel - Sidoti & Company: Okay. Great. You guys did a good job of signing a lot of newbusiness last quarter, but I was wondering if you had lost any clients ornotable business during the quarter?

I do not believe that we did lose any business at all.

And our attrition rate has stayed relatively the same fromwhat it was second quarter. I think we are at about 93% retention.

Exactly. One other comment on financial services, weactually believe that financial services will be a growth engine for the BPOindustry in 2008. There is a number of very large institutions, that because ofthe various different issues that are taking place, and the distractions thatthey are having to deal with, as it relates to their own portfolios that arelooking to a company that has professional capabilities that can assist them inthe front and back-office area. So we view it as, we feel bad for the financial servicesindustry and what they are currently going through. That said, we are happy tojoin, to offer a helping hand, and I think that you are going to see that therewill be some tremendous opportunity in the very near future. Josh Vogel - Sidoti & Company: Okay. Great, and shifting gears a little bit; it appearsthat demand for your U.S. based services is still strong. I was wondering ifyou could tell us how many of the 3,600 seats added last quarter were in theU.S. and how many of the 2,000 you expect to build in the fourth quarter willbe in the U.S.?

It’s roughly a little less than 1,000 in each of those twoquarters, in the U.S. capacity that was added. And what you need to know aboutthat is those were only signed after we had a committed contract, if you will,for business to go in them. Josh Vogel - Sidoti & Company: Okay. And just lastly, Ken you did mention you will havemore detail on the accounting review before the next conference call, but I waswondering if you could give us any sort of timeline of when we should expect tosee you guys release your full results for the third quarter?

You know what I can say is that I have all of confidence inthe world in our Board, and in their process, and in the professionals that aresupporting us, and I am confident that they will work as expeditiously aspossible. No one has a higher goal of getting this behind us asquickly and as efficiently, and as accurately as possible, and you can be restassured that we will get this done, as fast as humanly possible, and obviously,we are every bit as motivated as you are. So that’s where we stand, and we lookforward to giving you an update shortly. Josh Vogel - Sidoti & Company: Okay. Great. Thank you.

This concludes the TeleTech conference call. Thank you forjoining.