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GOODWILL | 12 Months Ended
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Dec. 31, 2012
GOODWILL [ABSTRACT] |
GOODWILL | (6) GOODWILL Goodwill consisted of the following (amounts in thousands):
|  | December 31, 2011 |  | Acquisitions |  | Impairments |  | Effect of Foreign Currency |  | December 31, 2012
Customer Management Services | $ | 20,594 |  | $ | - |  | $ | - |  | $ | (306) |  | $ | 20,288
Customer Growth Services |  | 24,439 |  |  | - |  |  | - |  |  | - |  |  | 24,439
Customer Technology Services |  | 18,516 |  |  | 20,075 |  |  | - |  |  | - |  |  | 38,591
Customer Strategy Services |  | 7,295 |  |  | 4,066 |  |  | - |  |  | - |  |  | 11,361
| Total | $ | 70,844 |  | $ | 24,141 |  | $ | - |  | $ | (306) |  | $ | 94,679
|  | December 31, 2010 |  | Acquisitions |  | Impairments |  | Effect of Foreign Currency |  | December 31, 2011
Customer Management Services | $ | 21,017 |  | $ | - |  | $ | - |  | $ | (423) |  | $ | 20,594
Customer Growth Services |  | 24,439 |  |  | - |  |  | - |  |  | - |  |  | 24,439
Customer Technology Services |  | - |  |  | 18,516 |  |  | - |  |  | - |  |  | 18,516
Customer Strategy Services |  | 7,251 |  |  | 44 |  |  | - |  |  | - |  |  | 7,295
| Total | $ | 52,707 |  | $ | 18,560 |  | $ | - |  | $ | (423) |  | $ | 70,844
Impairment The Company performs a goodwill impairment test on at least an annual basis. The Company conducts its annual goodwill impairment test during the fourth quarter, or more frequently, if indicators of impairment exist. As discussed in Note 1 the Company first assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If an entity determines that as a result of the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative test is required. Otherwise, no further testing is required. The Company has ten reporting units with goodwill. Two of the reporting units were from acquisitions made during the fourth quarter of 2012 and the Company concluded that fair value approximated carrying value as of December 31, 2012. The Company performed a qualitative assessment of the goodwill for five of its reporting units in the fourth quarter 2012. Of these five reporting units, three reporting units were substantially in excess of its estimated carrying value as of the most recent quantitative analysis of goodwill impairment performed in the fourth quarter of 2010. There have been no triggering events or changes in circumstances since that quantitative analysis to indicate that the fair value of any of these reporting units would be less than their carrying amount. In assessing the qualitative factors of the five reporting units, the Company considered factors including but not limited to, economic, market and industry conditions, cost factors, changes in business strategy, earnings multiples, and budgeted-to-actual performance of revenue and gross margin from prior year. Based on this assessment, the Company concluded that it was more likely than not that the fair value of each of the five reporting units exceeded its carrying value. As such, it was not necessary to perform a quantitative impairment analysis, and the Company concluded that these reporting units were not impaired as of December 31, 2012 and 2011. For the Company's remaining three reporting units, a quantitative assessment was performed. The quantitative assessment of goodwill includes comparing a reporting unit's calculated fair value to its carrying value. The calculation of fair value requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, the useful life over which cash flows will occur and determination of the Company's weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. As of December 31, 2012, the Company concluded that the fair value of two reporting units was substantially in excess of its carrying value and the goodwill in those reporting units was not impaired. For the remaining reporting unit with goodwill of $7.3 million, the calculated fair value of the reporting unit exceeded its carrying value by 4%. The fair value of this reporting unit was calculated using an income approach based on discounted future cash flows. Key assumptions used in the income approach included, but are not limited to, estimated future cash flows, a perpetuity growth rate of 6.6% based on the current inflation rate combined with the GDP growth rate for the reporting unit's region, and a discount rate of 26.5%, which is the Company's weighted average cost of capital adjusted for country specific factors associated with the reporting unit's economy and geography. Estimated future cash flows under the income approach are based on TeleTech's internal business plan, and adjusted as appropriate for TeleTech's view of market participant assumptions. The business plan assumes the occurrence of certain events in the future, such as realignment of operations and reduction of general and administrative costs. Significant differences in the outcome of some or all of these assumptions from the current assumptions may impact the fair value of this reporting unit resulting in impairment to goodwill in a future period. As of December 31, 2012, the Company concluded that the fair value of the reporting unit was in excess of its carrying value and the goodwill was not impaired.

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