Welcome to the Fourth Quarter and Full Year 2011 Earnings Conference Call. [Operator Instructions] This call is being recorded at the request of TeleTech. I'd now like to turn the call over to Karen Breen, TeleTech's Vice President of Investor Relations. Thank you, you may begin.

Good morning, and thank you for joining us today. TeleTech is hosting this call to discuss our fourth quarter and full year 2011 results ended December 31. Participating on today's call will be Ken Tuchman, our Chairman and Chief Executive Officer; and Regina Paolillo, our Chief Financial Officer. Yesterday, TeleTech issued a press release announcing its financial results for the fourth quarter and full year 2011 and also filed its annual report on Form 10-K with the SEC. This call will reflect items discussed within those documents, and we will make reference to them several times on the call today. We encourage all listeners to read our annual report as well on Form 10-K. Before we begin, I want to remind you that matters discussed on today's call may include forward-looking statements relating to our operating performance, financial goals and business outlook, which are based on our current beliefs and assumptions. Please note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise this information as a result of new information that may become available. Forward-looking statements that are subject to various risks, uncertainties and other factors that could cause our actual results to differ materially from those described. Such factors include, but are not limited to, reliance on several major clients, the risks associated with lower profitability from or the loss of one or more significant client relationships, execution risks associated with ramping new business or integrating acquired businesses and the possibility of additional asset impairments and/or restructuring charges. For a more detailed description of our risk factors, please do review our most recent SEC filings along with our recently filed Form 10-K. A replay of this call will be available on our website through March 14. And I will now turn the call over to Ken Tuchman, our Chairman and CEO.

Thank you, Karen, and good morning to everyone joining us today. I'd like to review our results for the fourth quarter and full year 2011 and discuss our strategic priorities for 2012. After that, Regina Paolillo, our CFO, will discuss our financial results in more detail. Our full year 2011 revenue increased 7.7% to $1.2 billion compared to $1.1 billion in 2010. Excluding $81 million of revenue from the U.S. Census program in 2010, full year revenue grew 16.3%. Our fourth quarter 2011 revenue increased 7.2% to $301 million compared to $280 million in the year-ago period. Sequentially, fourth quarter revenue reflects a negative foreign currency impact of $6 million due to the strengthening of the U.S. dollar. During the fourth quarter 2011, we signed an incremental $85 million of annualized business from both new and existing clients. This brings our total signings for the year to $355 million, which represents the addition of 41 new clients. This was an 18% increase over the amount of new business signed during 2010. We saw particularly strong growth in our transportation, technology and retail verticals, all of which grew more than 20%. Importantly, our 2011 new business wins represented a solid mix of solutions across our expanding portfolio. The near doubling of our global client base to 175 of the world's leading brands creates tremendous opportunities to drive new business going forward. Turning now to our operating performance. Full year 2011 non-GAAP operating margin was 8.3%. Full year 2011 non-GAAP earnings per share grew 22.3% to $1.26. Fourth quarter operating margin excluding restructuring charges was 7.4% of revenue. Our margin was impacted by increased severance and other related costs during the quarter. This was attributable to our decision to exit certain non-profitable programs and geographies late in the fourth quarter. As a…

Thank you, Ken, and good morning, everyone. Given Ken's confirming comments on our next-gen customer experience strategy, let me start by sharing my personal perspective on this topic. There's no exaggeration to the statement, I'm excited to be a part of the TeleTech team. In a nutshell, my first 120 days are confirmation of the value-creating opportunities I anticipated, as I concluded my research and committed to joining the company. Working with the leading provider in an industry where innovation, IP and transformation are critical to realizing significant and lasting shareholder value was and is the deciding factor for me in joining Ken and the team. The breadth and depth of TeleTech's customer experience portfolio, an impressive client base and experienced an expanding leadership team, a strong financial profile, a demonstrated commitment to invest in technology and information-rich platforms and a transition from transaction to outcome-based selling are top of mind relative to my early observations. The challenges and opportunities I see ahead of us will make full use of my information and technology industry experience, as well as my background in private equity. Today, our current BPO-centric valuation does not do justice to the sum of our business pieces. I look forward to the clarity our future reporting structure will bring to the client and shareholder value we are creating. We're building an end-to-end integrated customer experience delivery platform. Already, this holistic platform is delivering differentiated results, efficiently executing customer acquisition and growth for our clients and promoting customer NPS and retention via a personalized channel-of-choice customer interaction. In so doing, we are growing our strategy, revenue generation and managed technology services at an accelerated rate to our core BPO business. We expect our new segment reporting, which will begin with our first quarter filing, to provide greater insight…

Thank you, Regina. [Operator Instructions] Jane, you can now open it up to questions.

[Operator Instructions] Our first question comes from Tobey Sommer with SunTrust.

Ken, I wanted to ask you a question, kind of why now with the exiting of certain markets in the accounts that aren't that profitable?

It's really very simple. We set a goal, and we're executing on that goal. We think that this is something that's long overdue. And we are comfortable with our overall business and the position that it's in and the pipeline, et cetera, that we feel that we can handle this and absorb it. And so consequently, we think the timing is right, and we're going to stay steadfast to executing on this to continue to drive our growth and our profitability and no longer be distracted with certain geographies that have certainly weighed us down.

So from your perspective, it's feeling that you're in a good position to take these actions is what precipitated the timing?

I think absolutely, that's one -- that's certainly one of them. But not -- but in addition to that, as Regina stressed, we are 100% focused on shareholder value creation. And we realized that it is very difficult to do if, in fact, we have certain geographies that have been weighing us down over the years. We have very intentional goals in 2014, and we are absolutely focused on those goals. And in order to achieve those goals, we're going to move every possible obstacle out of the way early on so that we can stay focused on these goals.

Inside your commentary about the higher growth areas, it looks like your guidance calls for them to kind of have around a 15% aggregate growth rate, at least by my calculation. Does that sound about right?

Yes, I would agree with that. On a combined basis, those businesses will grow, I would say, somewhere between 15% and 20%.

Our next question comes from Mike Malouf with Craig-Hallum Capital Group.

I'm just curious, can you just give us a little bit more color on which areas that you're talking about and how long they have actually been such a drag? And are they mostly focused on, say, South Africa, Spain, U.K., those types of countries?

Mike, good question. However, unfortunately, because of -- as you can imagine, negotiations with labor, et cetera, that were -- that are well underway and almost complete, we're not in a position to discuss that. I think that it's probably safe to say that by the end of this quarter, when we report our next quarter, that there'll be far greater transparency. And so I would appreciate if others do not even ask questions in this area because frankly, we're not going to comment on them. And in addition to that, we also have very strict client confidentiality agreements that we in no way, shape or form would ever possibly breach.

Okay. That's fair enough. And then since you're unable to answer that question for obvious reasons, can I just ask how do you think this affects the pipeline in the competitive position? I know that some of the competitors out there have said that a global presence is critical to winning in this sort of global economy. And I'm just wondering if we do exit certain areas around the globe, what does that do to the pipeline and your competitive position?

Well, I would say first of all, it has 0 impact on us being global. We're every bit as committed to being global as we were when we were the first company to go -- to start adding countries out of the U.S. So none of that changes. We're representing no less countries, it's really just about the delivery platform and where we deliver from, and it's about the economics of those delivery platforms and how we can most efficiently deliver them. And so that's what we're focused on. You'd expect any well-run business to operate that way. And I think that you'll see that if anything, we feel that this gives us significantly more confidence in our future pipeline, as well as our existing pipeline because frankly, it makes us more competitive.

We have a question from Matt McCormack, BGB Securities.

I guess the first question, could you just talk about the acquisition that you made and the revenue contribution?

Yes, I'll take that one. So the acquisition of iKnowtion, this is a data analytics company. It's a small company, 40 to 45 people. Really at this point, the financials are immaterial to TeleTech. More importantly, this is an area that we expect to build out and make as a real differentiator across our BPO business and our RevGen business, as well as stand-alone. To simplify it, I guess I'd say there's really 4 things that they do for clients. But each of these 4 things is absolutely focused on increased revenue and profit per customer. And these are things like propensity models, channel optimization, optimizing market dollars and offer optimization. We can certainly go off-line and talk a little bit more about it, but I'd say 2 other things. They do have a very premier customer base, and so we expect to be penetrating that base. And also this is, while small, a recurring revenue base, which is obviously an important part of our business profile.

And then the last point I'd make is obviously, it is growing rapidly or we would not have acquired it. And in addition to that, it's accretive and it's nicely profitable. So it fits all of our criterias from a strategic standpoint.

Our next question comes from Ashwin Shirvaikar, Citigroup.

My question is didn't you already sort of go through the process over the last few years of whittling down your business? And how is this year going to be different? What's different about what you're doing this year versus what you did before with dropping unprofitable clients and getting out of a few locations?

Good question. I would say a few things. One, we're always going through our overall business and trying to make sure that in fact, that we have aligned relationships with our clients and that in fact, they're all profitable going forward. So this is a common part of being in a business in the service business, et cetera. That said, we're at the tail end. And we're feeling actually quite good about that. And then I think the third thing that makes this different is that this is a bit more focused on the geographic delivery locations per se that are just frankly not economical to deliver from. And that's what I think should be your takeaway. So we're -- we think that although the normal course of business is to be proactive with business that's not profitable, I would say we've been less proactive as it relates to nonperforming geographies. This will put to an end any potential for nonperforming geographies, which again, of course, I can't discuss what those geographies are.

Our next question comes from Kevin McVeigh, Macquarie.

This is actually Derek Sbrogna for Kevin McVeigh. Just had one question. In regards to the 2012 revenue guidance that came in a little light of what we have been expecting, is there anything other than the exiting of those certain markets that we should be thinking about, anything material that we should be thinking about which may have impacted the guidance?

No. And I would say the range to some extent will always be based on variability and bookings and timing of bookings and the ramp. But I think equally importantly is as we set that guidance to $1.15 billion to $1.2 billion, it includes $100 million to $115 million. And clearly that range of $100 million to $115 million and clearly the timing of the runoff of that will impact. So couple of variables here. I think as we get through the next quarter, we will continue to have more clarity on that timing and certainly update you as and if our guidance changes.

Our next question comes from Shlomo Rosenbaum, Stifel, Nicolaus.

This is Steven Shui in for Shlomo. Can you give us some color as to how the volumes are doing in different verticals and why revenue was lighter than expected? Did you see an overall volume decline or the issue is more client-specific?

Could you repeat the last part of that question? For some reason, the volume faded down.

Oh, yes. Just did you see an overall volume decline this quarter or were the issues more client-specific?

Yes -- no, we -- in fact, we had our typical kind of volume up for holiday, where the volume decrease is -- as I said earlier, we've got about 75% of the $100 million to the $115 million planned. As we started to execute that early in November, the clients that are affected, the programs that are affected obviously adjusted. And so what we saw in Q4 just generally relative to revenue was a $6 million impact from FX, negative impact, about a $4 million impact from the clients behind these exits of geographies and programs and, you know what, I would say the other thing is we have -- we saw a slight difference in what we expected the ramp of our new bookings to be. But those are more operational issues like circuits and things like that, which don't cause any concern on a go-forward basis.

Our final question comes from Tobey Sommer with SunTrust.

Just one follow-up question in -- that had to do with kind of the good new sales you've had over the last couple of years. I wanted to get a sense for whether the dollar values that you've assigned to them in 2010 and '11 have mapped out accurately. Because even with the revenue that you're trimming from the unprofitable markets, you might think that the revenue growth rate would be a little bit higher if that $300 million in new signings in 2010 was kind of hitting the books and up and running and ramped by now.

Yes, I mean, I think generally those bookings are panning out. Timing maybe slightly different than what we thought. I think the most important piece there, though, is that today, we have effectively 4 businesses, right? Our core BPO business, our RevGen business, Direct Alliance, our technology services business and then our strategy and analytics business. And in particular, in the technology services business and the strategy and analytics business, iKnowtion aside, those bookings are onetime and need to be replaced. So I think what you're probably seeing, especially if you're trying to model, is there's a different rhythm and profile to those bookings on a quarterly basis relative to their link to revenue.

We have a final question from Ross Berner, Weintraub Capital.

Just a quick question, which is can you sort of walk us through the math on all this revenue you've been adding, kind of the $75 million to $95 million a quarter of run rate of bookings? And you've been doing that for the last, I think, like 6 to 8 quarters. And minus the Census revenue I get in 2010, where does that show up? I mean, is this really quick turn stuff or did it take a year to implement? I mean, it would seem like the trajectory would be higher for organic growth based on the numbers you're putting out there. Help me understand that.

So, I mean, just to level that right, $81 million in 2010 number of $1.95 billion, right? So that was $1.15 billion going to $1.179 billion. The link between the bookings and that $1.179 billion is 2 other things: We do have attrition, and while we had good retention in 2011, we generally estimate that attrition to be 6% to 8%. Second, there is a component of these bookings that are nonrecurring, as I just said. And then last but not least, given the size of some of these bookings and the launch, it takes anywhere from 4 to 6 quarters to get this to its full run rate as described in the annual contract value of our bookings.

And if you want, we're happy to, off-line, try to take you through that even more.

Yes, help you bridge that.

Sort of get you to help you bridge it and get you comfortable.

This concludes the fourth quarter and full year 2011 earnings conference call. You may disconnect at this time.