Welcome to the CSG Systems Q3 Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, conference will be open for question. (Operator Instructions). This conference is being recorded today, October 26, 2010. I would now like to turn the conference over to Ms. Liz Bauer. Please go ahead, ma’am.

Today’s discussion will contain a number of forward-looking statements. These will include but are not limited to statements regarding our projected financial results; our ability to meet our clients’ needs through our products, services, and performance; our ability to successfully integrate and manage acquired businesses in order to achieve their expected strategic, operating and financial goals and our proposed acquisition of Intec Telecom, which we announced on September 24th of this year. All these statements reflect our best current judgments they are subject to risks and uncertainties that could cause our actual results to differ materially. Please note that these statements reflect our opinions only as of the date of this call and we undertake no obligation to revise or publicly release any revision to these forward looking statements in light of new or future events. In addition to factors noted during this call, a more comprehensive discussion of our risk factors can be found in today’s press release as well as our most recently filed 10-K and 10-Q, which are available on the Investor Relations section of our website. Also, we may discuss certain financial information that is not prepared in accordance with GAAP. We use this non-GAAP information in our internal analysis in order to exclude significant items that may have a disproportionate effect in a particular period. We believe that isolating the effects of such events enables us as well as investors to consistently analyze the critical components of our operating results and to have meaningful comparisons to prior periods. For more information regarding our use of non-GAAP financial measures we refer you to today’s earnings release and non-GAAP reconciliation tables on our website, which will also be furnished to the SEC on Form 8-K. With me today on the phone are Peter Kalan, our Chief Executive Officer and Randy Wiese, our Chief Financial Officer. Finally, before I turn it over to Peter, I would like to remind everyone that our announced acquisition of Intec Telecom is being governed by UK law and regulation; therefore we will be limited in our remarks outside of the details under the rule 2.5 announcement, which is posted on our website. With that, I’d now like to turn the call over to Peter.

I am pleased to report that CSG continues to execute well, posting third quarter revenues of $134 million and non-GAAP earnings per share of $0.59. Our revenues increased 7% and our non-GAAP EPS increased 13% over the same period last year and we have demonstrated a steady quarter-over-quarter growth this year. In addition to executing well on the revenue side of the business, we continued our strong heritage of operational excellence and performance. This quarter, we expanded on our non-GAAP operating margin to approximately 20%, as a result of our focus on running our operations well and our success in helping our clients grow their businesses. Today, I am going to provide you with an update on our operations, what we are seeing with our clients and our announced acquisition of Intec Telecom. First, we reached a significant operational milestone this quarter. We completed our two-plus-year data center migration without any major disruption. Thanks to our employees and our clients. The primary purpose for moving from our provider to Infocrossing was to ensure that we are providing the highest quality operations to our clients. The secondary purpose was to ensure that we continue to identify ways to optimize our operations. We are pleased with the partnership that we have established with Infocrossing, we can believe this will help us implement several new initiatives aimed at taking our solutions to the next level. I want to provide you with an ideas to the scope of this project. During the migration, we setup redundant data network, moved over 800 open system servers and switched our high volume transaction processing engine over to Infocrossing. This was a highly complex project and entailed moving almost 50 million subscriber accounts, many of which were double and triple play customers. I can’t say enough about the…

I’m happy to share with you the financial results for our third quarter and our outlook for remainder of 2010. Once again, we had another quarter with a favorable combination of solid organic revenue growth and margin improvement together yielding strong bottom line results. Along with our consistent cash flows and solid balance sheet, we are in a very strong position to invest in new solutions that will enable our clients to more effectively compete and operate in this changing market. Now, I’d like to walk you through the financial results for the quarter. Total revenues for the quarter were close to $134 million, representing an increase of 7% year-over-year. This 7% revenue growth is all organic relating to the continued adoption of our solutions and year-over-year subscriber growth on our systems. Revenue generated from Comcast and DISH Network for the quarter were 24% and 19%, respectively, relatively consistent with the second quarter. Our non-GAAP operating income for the quarter was $27 million, or 20% margin. This non-GAAP operating income excludes $2 million of expense related to the transition of our data center and $3 million of acquisition-related charges associated with our proposed acquisition of Intec Telecom, which I will discuss in more detail in a few minutes. This represents sequential improvement over our second quarter non-GAAP operating margin of about 19%. This increase can be attributed primarily to the four quarterly benefit of operating in our new data center as well as strong revenue growth and continued good expense management. Our GAAP operating income for the quarter was $23 million, or 17% margin. Non-GAAP EPS for the third quarter was $0.59, which compares to $0.52 for the same period last year. This represents growth of 13% year-over-year driven mainly by growth in our operating results since last year. For…

(Operator Instructions) Our first question will be from Tom Roderick with Stifel Nicolaus.

This is [Chris Cohen] for Tom. Good job on the quarter. Obviously, the margin performance was pretty good, and Randy mentioned that you attributed it to operating performance or expense control as usual, but just as far as your long-term, like not including the Intec guidance of 18% to 20%, would you say that going forward, if we exclude any Intec costs, like 20% would have been like a reasonable run rate going forward? Could you maybe bump up your long-term operating margin target for the core business?

See for the core business, Chris, is what I have said in the past is the range of 18% to 20% was intended to be arranged as time we believe operate above it, the time when we operate below it, going well above 20% is really its not enough part of our target because we believe that we will continue to make a lots of investments in this company and, therefore, an expectation of operating between 18% and 20% we believe make more sense.

You guys would have plowed it back into your product R&D investments or something like that?

We will do what we have done historic in which is to continue invest in the opportunities we see in the front of us in the form of R&D, M&A and any other investments we believe are appropriate to grow the company.

As far as the discretionary spend, you mentioned this last quarter that it was still a little bit soft; I was wondering if you have an update on that?

We still don’t see uptick in our clients on some of their marketing efforts in what we have seen in the past Chris and those we view as some of the discretionary spending of how they communicate on some of the on the fringe of their business. It hasn’t big backup, where we are cautions with the still the choppy economy and consumer spending still being somewhat restrained. We didn’t see return in this quarter and we are still cautious as we look forward.

Got it so as far as just the overall tone of the spending, it’s pretty much the same as it was last quarter?

Yes.

Great and then just mechanical issue, on the portion of the data center expense that was attributable to COGS, I was wondering if you could break that up for me?

Of the $1.8 million that we spend this quarter was all costs. There was no depreciation in that.

Our next question will be from the line of Scott Sutherland with Wedbush Securities.

Good job on the quarter. Just a couple of housekeeping questions first. Can you give us the number of subscriber accounts that you had on the system, maybe some color on numbers taking multiple services, and also what is the amount of revenue excluding outside of broadband?

The revenue outside of broadband, you are probably outside the cable, where we describe our non-cable is about 14%, which was consistent with the previous quarter. The number of subscribers I believe is 48.8 million I believe. 48.8 million is correct. I’m sorry what was the third portion of your question?

Could you give some color on the number of those subscribers maybe taking multiple services and how that has been trending?

Well, we don’t give specific number on that Scott because we don’t think its appropriate to share those numbers relative to how our customers are performing any of their specific numbers either in total or by individual customer, but its clearly been growing. Some examples are, we are over 10 million voice accounts on our system in total and that has been growing over time, and then the same thing the data services you look at any of the industry analysis and it shows those are continuing to grow as well.

A couple of questions, you talked a little bit about some of the functionality Intec brings to you and integrating ACP; do you bring any functionality maybe on the video side to Intec customers, and have you heard any feedback there so far?

No, we are in the early stages on that Scott. As we have been working on the integration we believe a lot of the modularization that we have done in our assets could have applicability in the foreign markets, but there are restrictions of how much work we can do under the 2.5 arrangement business planning relative declines and so we are being cautious on that so we don’t step any type of regulatory hole. We do believe that there is a very broad suite of products that we have developed over the years to help our clients to manage those interactions and that’s an area, where Intec historically has not invested they have been much more around the billing and rating and mediation assets which are probably closer to the network. We have been closer to the customer extension and so what we got to figure out as in some of their foreign markets as well as the markets in the US, if there is an ability to extend our capabilities to them as we think we can take their assets to our clients.

Lastly, have you seen any more wins or momentum on the content business I know you’ve had a couple of wins already.

We have had some good traction over the quarters. We didn’t have anything that we can announce it at this point, but we continue to see strong pipelines in that business.

:

I echo the comments on outstanding execution here. I want to follow-up on Scott’s question, if I may. You seem to be growing the processing and related services line pretty well without subscriber growth, and with the non-cable business as you described as somewhat flat, it does seem, without giving specifics on how many are taking new services, it does seem that that is the engine of growth is these multiple and add-on services, and I’m curious, is there anything trial or otherwise that wouldn’t be repeating into future quarters on a recurring basis?

Well, what you see indicative of our growth in our business within the cable and satellite customers, is indicative how they’re focused on their growth and that’s to get closer to their ends customers to buy more products, whether its buying products such as more DVR services, high definition channels and packages, voice services and so forth. They are extending into small business and medium business. They’re looking to extend their networks to Wifi and WiMax’s. Those are all things that we’re hoping them work on. The absolute organic growth in the number of household in US, who are taking broadband services as the full suite of services is really not on an accelerated basis, which holding pretty constant because we’ve had a fairly we are reaching almost saturation state in North America for that. Our clients are focused on those next services that are going really bring value and depth to their relationship and as we help them do that, whether its by delivering a service or delivering how they provide customer service and responsiveness, which really edge to a better customer experience, that’s what driving our profits. We’re really aligned from a business offering to be consistent with what our clients are focusing on what challenges they face. The good thing is that there are clients are focused on the type of new services. They recognize their networks are going to evolve. They’re going to be consumed in different ways and that gives us an outlook that we think we believe that there is going to be a sustainable spending pattern with us to support our businesses as which evolved.

I’d one thing Peter, is that it also demonstrates the broad set of applications that we provided that. There is no single one-item that really is driving at it. It is lots of smaller product pieces that are rent a lot of success. The amount of investment we have done on R&D over the years is showing some payment payback on this since we have such a broad suite of products to deliver.

: Our areas that they recognize have a higher chance of turn and they want to add services to those and when they don’t, they see a loss of those accounts. They recognize the value of those relationships of building depth is really important and they report every year that they are absolute basic videos subs go down in number, but their RGUs are going up for all the others and that really gives the foundation for them and for us to have good growth from those.

That’s a very comprehensive answer. That’s great. It means thorough, you really answered the question, which is great. Depreciation, I just want to make sure I understand, since it jumped around a little bit maybe more than your property equipment base. I just want to understand, is there anything that makes the $4.9 million current number in that quarter not the run rate going forward that we might be building off of?

The way look at Howard, there were some unique adjustments as a result of the data center migration, what I would tell you probably do, look at the last two quarters, Q2 is like $5.5 million and this quarter is right at $5 million. Look at those on an average basis and used at it on a go forward.

Our next question will be from the line Shaul Eyal with Oppenheimer & Company Shaul Eyal - Oppenheimer & Company: Congrats on the good quarter. Peter, in your prepared remarks, if I’m not mistaken, you have mentioned the words "newcomers to the arena" anything new, anything specific, or just a general commentary?

Its nothing new, it’s the message you see in the market place all the time these days is that there are new entrants, whether AT&T and Verizon and they are really not that new any more. They have been pursuing this for 2 to 3 years. They are coming in and have built a reasonable amount of skill that allows them to compete in certain markets very aggressively with our traditional clients. You see the satellite operators with their single play solution getting very aggressive to retain their clients and then equally important as you have different channels of content consumption, whether its Hulu, who’s coming in and trying to find ways to monetize their distribution and access to content or in some cases people, who want they don’t want a package to an aggregator like Hulu, but they want to go directly. All that’s creating a different dynamic for the consumer than what’s been seen before and you add to that what I see is the broadening of the type for distribution as this and accessibility to these network types, that is only going to drive more optionality to the consumer. : Shaul Eyal - Oppenheimer & Company: Got it.

Sorry for another comprehensive answer Shaul Eyal - Oppenheimer & Company: That’s all good. One quick housekeeping for Randy, just want to make sure that I get it right. As it relates to this tax settlements, and potential impact on capital, that’s basically a non-tax event, correct?

A non said it again. Shaul Eyal - Oppenheimer & Company: A non-tax event, the tax settlement, potential settlement.

Are you talking about from the second quarter? Shaul Eyal - Oppenheimer & Company: Correct

Yes, in the second quarter it was a non-cash adjustment to the tax reserve, correct.

Our next question will be from the line of Lauren Ye with JPMorgan.

Hey guys, this is Lauren for Sterling Auty. The first question is around I guess Intec. I know that you guys can’t say much because its UK related, but we’ve also dealt with other companies, who have done deals in the UK, and there usually is milestones maybe that we can watch out for? Are there any you can talk about in terms of what to expect next in terms of regulatory approval and such?

Well, there are some stages that are published at this point around this stages Lauren. There is a shareholder vote that comes up in the month of November and the early part of November 3rd.

November 3rd and then there is schedule core date dependent upon the results of that vote is in latter part of November, around November 25th. Those are probably two big miles stones to look for.

I guess the question is, the relationship at Time Warner and Charter, were those below 10% this quarter?

No, they will not be below 10%.

They won’t, okay. Will you give that out or?

That will be in the 10-Q. We will expect quarter-over-quarter the revenues of the top four clients do not fluctuate all that much, you could probably look at the second quarter levels and anticipate and being comparable from a percentage standpoint. It will be in 10Q.

Last quarter is, I think last quarter you mentioned you are continuing to kind of invest some in R&D and operations; did you guys meet your goals in the quarter?

We continue to invest in the areas that I mention in the past, and we’ll continue to do so going forward as well.

What about in the quarter, did you get to the headcount that you wanted to or was it other areas that you are?

We met the goals that we were looking to do. Your next question is why did you better operating margin and what I say, across the board we had a very solid operational quarter such that the benefits full quarterly impact of the datacenter came through the bottomline. If you call we had moved our datacenter mid Q2 so, there was only a half quarter benefit. So, we had the full quarterly benefit can through in Q3and really solid operational performance allowed us to invest and also see that come to the bottom line.

I guess not related to data centers but just people-wise, I think last quarter you guys also mentioned there might be a slight uptick in Q4 the back half of the year, second half; is that going to continue in Q4, just headcount-wise?

I believe so. Also, in my prepared comments I mention that I expect the fourth quarter margin with the third quarter. So, you are not going to see something that going to move the numbers.

(Operator Instructions). I am showing no questions at this time.