WEST TELESERVICES CORP, S-3/A, 2000-04-11

WEST TELESERVICES CORP
S-3/A, 2000-04-11
BUSINESS SERVICES, NEC

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<PAGE>

As filed with the Securities and Exchange Commission on April 11, 2000

Registration No. 333-33926
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---------------

AMENDMENT NO. 1

TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

---------------

West TeleServices Corporation
(Exact Name of Registrant as Specified in its Charter)

Delaware 47-0777362
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)

---------------

11808 Miracle Hills Drive
Omaha, Nebraska 68154
(402) 963-1500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

---------------

Thomas B. Barker
President and Chief Executive Officer
West TeleServices Corporation
11808 Miracle Hills Drive
Omaha, Nebraska 68154
(402) 963-1500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

---------------

with copies to:

<TABLE>
<S> <C>
John S. D'Alimonte, Esq. Robert E. Buckholz, Jr., Esq.
Willkie Farr & Gallagher Sullivan & Cromwell
787 Seventh Avenue 125 Broad Street
New York, New York 10019-6099 New York, New York 10004-2498
(212) 728-8000 (212) 558-4000
</TABLE>

---------------

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

---------------

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and we are not soliciting offers to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Subject to Completion. Dated April 11, 2000.

4,500,000 Shares

West TeleServices Corporation
[LOGO OF WEST TELESERVICES CORPORATION]

Common Stock

-----------

All of the shares of common stock in the offering are being sold by the
selling stockholders identified in this prospectus. West TeleServices
Corporation will not receive any proceeds from the sale of the shares being
sold by the selling stockholders.

The common stock is quoted on the Nasdaq National Market under the symbol
"WTSC." On April 10, 2000, the last reported sale price of the common stock on
the Nasdaq National Market was $26.06 per share.

See "Risk Factors" beginning on page 5 to read about factors you should
consider before buying shares of our common stock.

-----------

Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.

-----------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Initial price to public........................................ $ $
Underwriting discount.......................................... $ $
Proceeds, before expenses, to the selling stockholders......... $ $
</TABLE>

To the extent that the underwriters sell more than 4,500,000 shares of common
stock, the underwriters have the option to purchase up to an additional 675,000
shares from the selling stockholders at the initial public offering price less
the underwriting discount.

-----------

The underwriters expect to deliver the shares against payment in New York,
New York on , 2000.

Goldman, Sachs & Co. Credit Suisse First Boston

-----------

Robert W. Baird & Co.
Janney Montgomery Scott LLC

-----------

Prospectus dated , 2000.
<PAGE>

[Artwork appearing on inside front cover of Prospectus]

[West Logo]

the connection between
you and your customers

<PAGE>

[Artwork appearing on inside front cover of Prospectus]

Commitment to Complete Customer Care

[West Logo]

[Diagram of Customer Care Solutions]

Fully Integrated Service Offering

<PAGE>

[Artwork appearing on inside front cover of Prospectus]

WEST-ENABLED CUSTOMER CARE SOLUTIONS

West iCare supports a suite of Internet-based, real-time interaction tools fully
integrated into West's already proven customer care platform.

[Pictures of Agents]
<PAGE>

PROSPECTUS SUMMARY

This summary contains a general summary of the information contained in this
prospectus. It may not include all the information that is important to you.
You should read the entire prospectus and the documents incorporated by
reference before making an investment decision. Unless otherwise indicated,
data in this prospectus is as of December 31, 1999 and assumes that the
underwriters will not exercise the over-allotment option.

West TeleServices Corporation

We provide our CRM solutions to Fortune 500 companies, leading Internet
oriented companies and e-commerce companies. These services help our clients
acquire customers, provide customer support and generate repeat sales. We
operate a national network of 24 state-of-the-art customer contact centers and
seven automated voice and data processing centers throughout North America,
with over 8,000 workstations and approximately 33,500 voice response ports.

We target clients in highly competitive industries that require sophisticated
CRM services, including:

<TABLE>
<S> <C> <C>
.communications .Internet/e-commerce .financial services
.pharmaceuticals .public utilities .consumer goods
.software services .direct marketing .insurance
</TABLE>

As part of our complete customer care solution we offer West iCare, a full
suite of Internet services, including "chat", e-mail, Voice over the Internet,
call back requests, form sharing, electronic faxing and co-browsing. West iCare
is integrated with our other services and can be provided on a stand-alone
basis.

Our management team is among the most experienced in the industry. Over the
last decade we have consistently delivered increasing revenue and profits each
year. Revenue has grown from approximately $257 million in 1995 to
approximately $562 million in 1999, and net income has grown from approximately
$22 million to approximately $50 million over the same period, representing a
compound annual growth rate of approximately 22% and 22%, respectively. All of
the growth in our operating results has been generated internally.

Our Opportunity

We serve a large and rapidly growing market for outsourced CRM services.
According to International Data Corporation, the market for CRM services is
expected to grow from approximately $17 billion in 1998 to nearly $48 billion
in 2003, representing a compound annual growth rate of 23%.

1
<PAGE>

We believe that industry growth will be driven primarily by three factors:

. the trend toward outsourcing of CRM operations to third parties which
are able to provide cost-effective, higher levels of service;

. the emergence of new Internet businesses, many of which lack
infrastructure and experience to effectively manage critical customer
relationships, which seek to outsource these CRM operations; and

. the increasing use of telephone and on-line media to acquire and service
customers whose expectations of immediate service and access to
extensive information have been driven by the explosive growth of the
Internet.

We believe we are well-positioned to capitalize on the expected growth of the
market. We actively help our diversified base of approximately 900 clients
outsource more functions, while selectively adding new clients. Our investment
in proprietary technology enables us to provide the highest level of customized
services to our clients. We have launched a targeted sales effort to further
the Internet oriented business initiatives of our core, Fortune 500 clients,
and are building new relationships with leading Internet oriented and e-
commerce companies.

Our Strengths

X Ability to capitalize on large and growing market opportunity

X Leading market position in all services we offer, with ability to
support large-volume programs and achieve operating efficiencies

X Integrated suite of Internet and telephone based solutions

X State-of-the-art technology and facilities offer improved levels of
information, data capture and cost-efficiency

X High quality, diverse client base, with over two-thirds of revenue
derived from consumer initiated interactions

Our Strategy

Our objective is to remain the leading full-service provider of voice and
Internet CRM services. Our strategy for achieving this objective is to offer a
fully integrated portfolio of services to our clients and to continue to
improve the quality and cost-effectiveness of our clients' customer service and
marketing operations. We seek to implement this strategy through the following:

I. Build Long-Term Client Relationships by Providing Quality Services

II. Provide Fully Integrated Service Solutions

III. Manage Profitable Growth Through Recurring and Large Volume Programs

IV. Capture Leadership Position in Internet CRM Services

V. Capitalize on State-of-the-Art Technology

VI. Leverage Strong Management Experience

----------------

Our principal offices are at 11808 Miracle Hills Drive, Omaha, Nebraska
68154. The telephone number at our offices is (402) 571-7700.

2
<PAGE>

The Offering

<TABLE>
<S> <C>
Common stock offered by the selling
stockholders....................... 4,500,000 shares
Common stock to be outstanding after
the offering (1)............. 63,821,365 shares
Use of Proceeds..................... We will not receive any proceeds from this offering.
Nasdaq National Market symbol....... "WTSC"
Risk Factors........................ See Risk Factors and other information included in
this prospectus for a discussion of factors you
should carefully consider before deciding to invest
in shares of the common stock.
</TABLE>
- --------
(1) We calculated outstanding shares above based on the number of shares
outstanding as of March 1, 2000, excluding a total of 912,335 shares of
common stock currently issuable upon exercise of outstanding options with a
weighted average exercise price of approximately $9.69 per share.

3
<PAGE>

Summary Consolidated Historical Financial Data

The summary consolidated historical financial data for our 1997, 1998 and
1999 fiscal years is derived from our consolidated financial statements for
these years. You should read this summary data along with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our consolidated financial statements and the related notes thereto, included
elsewhere in this prospectus.

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1999 1998 1997
---- ---- ----
(in thousands, except per
share, percentages,
workstations and port
data)
<S> <C> <C> <C>
Consolidated Statements of Operations Data:
Revenue.......................................... $562,444 $482,823 $398,832
Net operating income............................. 79,508 73,491 59,096
Net income....................................... 49,754 45,991 37,410
Basic earnings per share......................... $ 0.79 $ 0.73 $ 0.59
Shares used to compute basic earnings per share.. 63,330 63,330 63,330
Diluted earnings per share....................... $ 0.77 $ 0.73 $ 0.59
Shares used to compute diluted earnings per
share........................................... 64,380 63,353 63,346

Selected Operating Data:
EBITDA (1)....................................... $117,478 $ 99,909 $ 79,256
EBITDA margin (2)................................ 20.9% 20.7% 19.9%
Operating margin (3)............................. 14.1% 15.2% 14.8%
Net income margin (4)............................ 8.9% 9.5% 9.4%
Number of workstations (at end of period)........ 8,364 7,624 5,931
Number of ports (at end of period)............... 33,476 11,160 8,056
<CAPTION>
December 31, 1999
----------------------------
(in thousands)
<S> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents........................ $ 61,865
Working capital.................................. 104,427
Total assets..................................... 408,989
Total debt....................................... 45,196
Total stockholders' equity....................... 291,962
</TABLE>
- --------
(1) "EBITDA" is defined as income before income taxes, depreciation, interest
expense and amortization. EBITDA is presented because we believe it is
frequently used by investors and analysts in the evaluation of companies.
However, EBITDA should not be considered as an alternative to net income as
a measure of operating results or to cash flows as a measure of liquidity
in accordance with generally accepted accounting principles.
(2) Represents EBITDA as a percentage of revenue.
(3) Represents net operating income as a percentage of revenue.
(4) Represents net income as a percentage of revenue.

4
<PAGE>

RISK FACTORS

You should carefully consider the risks and uncertainties described below
and other information in this prospectus before deciding to invest in our
common stock. These are not the only risks and uncertainties that we face.
Additional risks and uncertainties that we do not currently know about or that
we currently believe are immaterial may also harm our business operations. If
any of these risks and uncertainties occurs, it could have a material adverse
effect on our business, the trading price of our common stock could decline
and you could lose all or part of your investment.

Intense competition in the CRM services industry may decrease our
profitability

The market for customer relationship management, or CRM, services is highly
competitive, highly fragmented and subject to rapid change. Many vendors offer
services that compete directly with the services we offer. We also compete
with internal marketing departments of current and potential clients. These
include, for example, mail order catalog businesses and reservation centers of
major hotel chains. In a broader sense, our services also compete with other
forms of marketing such as mail, television, Internet and radio. We expect
competition to increase significantly in the future, both from existing
competitors and from companies that may enter our existing and future markets.
Increased competition could have a material adverse effect on our
profitability.

Some of our current and potential competitors may have financial and other
resources substantially greater than ours. In addition, as the CRM services
industry continues to evolve, additional competitors with greater resources
than our company may enter the industry. Our clients may also choose to
conduct more of their sales, marketing or customer service activities
internally.

Potential future competing technologies and trends may have an adverse effect
on the demand for our services

New forms of direct sales and marketing techniques are constantly being
developed. Recent examples include interactive home shopping through
television, computer networks including the Internet, and radio. These new
techniques could have a material adverse effect on the demand for the services
that we provide. The effectiveness of marketing by telephone could also
decrease as a result of consumer saturation and increased consumer resistance
to teleservices generally or to the services that we provide. We may be unable
to anticipate and successfully respond to these trends.

We may not be able to manage our growth effectively which could adversely
affect our profitability

We have experienced rapid growth over the past several years. We anticipate
continued growth, driven by industry trends toward outsourcing of sales order
processing, marketing and customer service operations, as well as our
increased penetration of new and existing clients and markets. Our future
performance and profitability, however, will depend on our ability to:

. maintain a sufficient number of highly trained personnel to conduct
product implementation, sales activity, training and other customer
support services;

. expand, train and manage our current employee base; and

. enhance our operational, customer support and management systems and
adapt those systems to changes in our business.

We may be unable to manage our growth successfully, and this could have a
material adverse effect on our profitability.

5
<PAGE>

We depend upon a few major clients for most of our revenue

A significant portion of our revenue is generated from relatively few
clients. The loss of a large client or a number of our largest clients could
have a material adverse effect on our business. Our largest client, AT&T,
accounted for approximately 32% of our revenue in 1999 and 33% of our revenue
in 1998. We generally operate under contracts that have a term of less than one
year and may be terminated on 30-days' notice.

Subsequent contracts may be subject to open bidding among us and our
competitors. Our failure to "win" these contracts and retain these clients may
have a material adverse effect on our operating results.

We may be unable to hire and retain a sufficient number of qualified personnel,
and an unanticipated increase in wages could affect our profitability

The CRM services industry is very labor intensive and experiences high
personnel turnover. Many of our employees receive hourly wages and a
significant number are employed on a part-time basis. A significant increase in
the turnover rate among our employees would increase our recruiting and
training costs and decrease our operating efficiency and productivity.
Unexpected growth in our business may at times require us to recruit and train
qualified personnel at an accelerated rate. We may not be able to continue to
recruit, hire, train and retain a sufficient labor force of qualified employees
in order to meet the needs of our business.

A significant portion of our costs consist of wages to hourly workers. An
increase in hourly wages, costs of employee benefits or employment taxes could
have a material adverse effect on our profitability.

Inability to keep up with rapid technological changes would have a material
adverse affect on our business and prospects

We have made significant investments in sophisticated and specialized
telecommunications and computer technology, such as our recently launched West
iCare suite of products, to provide customized solutions to meet our client's
needs. To maintain our competitiveness, we must continue selecting, investing
in and developing new and enhanced technology. We may not be successful in
anticipating technological changes or in selecting and developing new and
enhanced technology.

Claims that we infringe third-party intellectual property rights could disrupt
our business

Third parties may assert claims based on patent, copyright, trademark and
other intellectual property rights in technologies that are important to our
business. Any claims could be time-consuming, result in costly litigation,
divert the efforts of our technical and management personnel or require us to
enter into royalty or licensing agreements, any of which could have an adverse
effect on our operating results. Royalty or licensing agreements, if required,
may not be available on acceptable terms or at all. In addition, in some of our
service agreements, we agree to indemnify our customers for any expenses or
liabilities resulting from claimed infringements of patents, trademarks or
copyrights of third parties.

Our stock price may be volatile

Since our initial public offering in November 1996, our stock price has
experienced significant volatility. We expect that the market price of our
common stock will continue to fluctuate in the future in response to many
factors, including those identified in the risk factors listed in this section.
These fluctuations may be exaggerated if the trading volume of our common stock
is low. In addition, the

6
<PAGE>

stock market has experienced extreme price and volume fluctuations that have
affected the market prices of many CRM service providers, which have often been
unrelated to the operating performance of these companies. Our stock price
could fluctuate as a result of these market fluctuations.

Frequent or prolonged service interruptions could materially and adversely
affect our reputation and business

Our business is highly dependent on our computer and telephone equipment and
software systems. The temporary or permanent loss of our equipment or systems
through casualty or operating malfunction could have a material adverse effect
on our reputation and business.

The loss of any of our key executive officers could adversely affect us

Our businesses are managed by a small number of key executive officers,
particularly Thomas B. Barker, Chief Executive Officer and President, Nancee
Shannon Berger, Chief Operating Officer, and Michael A. Micek, Chief Financial
Officer. The loss of any of these key executive officers could have a
materially adverse effect on our operations and financial results.

Our quarterly operating results may be subject to significant fluctuation

Our operating results may fluctuate from quarter to quarter as a result of
factors such as:

. pricing actions of our competitors and us;

. seasonality; and

. the level of advertising and promotional spending by our clients.

Existing stockholders will continue to control our company, which could affect
any matters requiring stockholder approval

Gary L. West and Mary E. West beneficially own an aggregate of approximately
70% of the outstanding common stock. As a result, these stockholders are able
to elect the entire board of directors and to control the outcome of other
matters requiring stockholder approval. This voting concentration may have the
effect of delaying or preventing a change in control of our company or any
other matter requiring stockholder approval.

Increases in the costs of communication services may have a material adverse
effect on our profitability

Our business materially depends on services provided by long-distance and
local telephone companies. These telephone services represent a significant
portion of our costs. Increases in these costs could significantly decrease our
profitability.

Anti-takeover provisions in our charter and by-laws could limit our share price
and delay a change in control

Our certificate of incorporation and by-laws contain provisions that could
make it more difficult or even prevent a third party from acquiring our company
without the approval of our incumbent board of directors. These provisions
include:

. a staggered board of directors, with only two of our directors elected
each year;

. restrictions on who may call a special meeting of stockholders; and

7
<PAGE>

. advance notice procedures with regard to the nomination of candidates
for election as directors of certain matters to be brought before an
annual or special meeting of stockholders.

Other provisions allow us to issue preferred stock without any further vote
by the stockholders, and impose procedural requirements that could make it more
difficult for stockholders to take corporate actions. In addition, we are
subject to the provisions of Section 203 of the Delaware General Corporation
Law. These provisions could also have the effect of delaying or preventing a
change in control of our company.

Increased governmental regulation could adversely affect our operations

Our industry has become subject to an increasing amount of federal and state
regulation. The Federal Telemarketing and Consumer Fraud and Abuse Prevention
Act of 1994 broadly authorizes the FCC to issue regulations prohibiting
misrepresentations in telephone sales. As a part of its 900 Number Rule
rulemaking review, the FTC has issued proposed revisions to the rule which
would impose additional restrictions on our business. Further federal and state
legislation, or changes in regulatory implementation, may limit our activities
or our clients' activities or significantly increase the cost of regulatory
compliance.

Several of the industries in which our clients operate are subject to varying
degrees of government regulation, particularly the insurance and financial
services industries. We could be subject to a variety of enforcement or private
actions for our failure or the failure of our clients to comply with these
regulations.

Our agents who sell insurance products are required to be licensed by various
state insurance commissions and to participate in regular continuing education
programs. We must comply with the extensive regulations of these state
commissions. Changes in these regulations or their implementation could
materially increase our operating costs or otherwise have a material adverse
effect on our business.

We are now, and may be in the future, involved in litigation which could have a
material affect on our financial condition and results of operations

We are currently the defendant in several lawsuits. Our potential liability
and expenses from these lawsuits could have a material adverse affect on our
financial condition and results of operations. For a description of these
lawsuits, see "Business--Legal Proceedings." In the future we may be subject to
additional lawsuits. These potential lawsuits may expose us to significant
expenses and damages.

Computer viruses may disrupt our service

Our systems may be vulnerable to computer viruses and other disruptions
caused by unauthorized or illegal access to our systems. We may incur
significant costs to protect against or correct such computer viruses or
disruptions. In addition, eliminating computer viruses and alleviating other
disruptive problems may require interruptions, delays or changes in our
delivery of services to our clients. On-line service providers have in the past
experienced, and in the future may experience, interruptions of service as a
result of the accidental or intentional actions of Internet users and current
and former employees. We cannot be certain that measures we take to prevent
these problems will continue to be protective in the future.

8
<PAGE>

Year 2000 problems may adversely affect us

We have not experienced any year 2000-related problems with our hardware or
software or with third-party software, hardware or services on which we rely.
It is possible that Year 2000 compliance problems exist that we cannot yet
identify. If problems arise and we fail to address them on a timely basis, it
could result in lost revenue, increased operating costs, the loss of customers
and other business interruptions.

9
<PAGE>

FORWARD-LOOKING STATEMENTS

This prospectus contains statements that plan for or anticipate the future.
In this prospectus, forward-looking statements are generally identified by the
use of such terms as "may", "believe", "will", "should", "expect", "intend",
"anticipate", "estimate", "continue" and similar words, although some forward-
looking statements are expressed differently. You should be aware that our
actual growth and results could differ materially from those contained in the
forward-looking statements due to a number of factors, including the following:

. changes in the teleservices industry;

. unexpected technological developments;

. new competitors;

. changes in customer and distributor relationships; and

. dependence on key personnel.

These factors could cause our results to differ from those set forth in
forward-looking statements including those identified above as well as those
discussed in "Risk Factors", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this prospectus.

USE OF PROCEEDS

We will not receive any proceeds from the sales of the shares offered by the
selling stockholders in this offering. All of the shares being offered in this
offering are beneficially owned by the selling stockholders named in this
prospectus.

PRICE RANGE OF COMMON STOCK

Our common stock has been quoted on the Nasdaq National Market under the
symbol "WTSC" since our initial public offering on December 2, 1996. The
following table shows the high and low per share sale prices of our common
stock as reported by the Nasdaq National Market for the periods indicated:

<TABLE>
<CAPTION>
High Low
------ ------
<S> <C> <C>
Year Ended December 31, 1997
First Quarter................................................. $25.25 $12.00
Second Quarter................................................ 16.25 12.38
Third Quarter................................................. 16.38 12.50
Fourth Quarter................................................ 15.13 10.13

Year Ended December 31, 1998
First Quarter................................................. 17.38 11.50
Second Quarter................................................ 18.25 11.25
Third Quarter................................................. 15.25 9.25
Fourth Quarter................................................ 14.25 8.38

Year Ended December 31, 1999
First Quarter................................................. 12.25 8.50
Second Quarter................................................ 10.63 7.38
Third Quarter................................................. 12.63 8.38
Fourth Quarter................................................ 25.00 11.63

Year Ended December 31, 2000
First Quarter................................................. 27.31 18.00
Second Quarter (through April 10, 2000)....................... 28.00 24.75
</TABLE>

On April 10, 2000, the price per share of our common stock was $26.06. As of
March 1, 2000, there were 77 holders of record of our common stock. We urge you
to obtain current market quotations of our common stock before making any
decision with respect to an investment in our common stock.

10
<PAGE>

DIVIDEND POLICY

Since our initial public offering in November 1996, we have not declared or
paid dividends on our common stock. We currently intend to retain future
earnings for use in our business, and we do not anticipate paying any cash
dividends on our common stock in the foreseeable future.

CAPITALIZATION

The following table summarizes our cash and cash equivalents and our
capitalization, on an actual basis, as of December 31, 1999 as follows:

<TABLE>
<CAPTION>
December 31, 1999
-----------------
(in thousands)
<S> <C>
Cash and cash equivalents.................................... $ 61,865
========
Long-term obligations, less current maturities............... 30,314
--------
Stockholders' equity:
Preferred stock, 10,000 shares authorized; no shares
outstanding............................................... --
Common stock, 200,000 shares authorized; 63,330 shares
outstanding (1)........................................... 633
Additional paid-in capital................................. 157,647
Retained earnings.......................................... 133,682
--------
Total stockholders' equity............................... 291,962
--------
Total capitalization................................... $322,276
========
</TABLE>
- --------
(1) The number of shares of common stock outstanding is based on the actual
number of shares outstanding as of December 31, 1999.

11
<PAGE>

SELECTED CONSOLIDATED FINANCIAL INFORMATION

The statement of operations data for the years ended December 31, 1997, 1998
and 1999 and the balance sheet data as of December 31, 1998 and 1999 are
derived from our historical consolidated financial statements and notes thereto
included elsewhere in this prospectus, which have been audited by Deloitte &
Touche LLP, independent auditors. The statement of operations data for the
years ended December 31, 1995 and 1996 and the balance sheet data as of
December 31, 1995, 1996 and 1997 are derived from our audited historical
consolidated financial statements which are not included in this prospectus.

The following selected financial data should be read in conjunction with our
consolidated financial statements and the related notes thereto appearing
elsewhere in this prospectus and the information under "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
(in thousands, except for per share,
percentages, workstations and port data)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenue...................... $562,444 $482,823 $398,832 $317,210 $256,894
Cost of services............. 288,503 256,494 220,858 180,380 146,531
Selling, general and
administrative expenses..... 194,433 152,838 118,878 87,499 70,575
-------- -------- -------- -------- --------
Net operating income......... 79,508 73,491 59,096 49,331 39,788
Net other income (expense)... 850 1,269 1,716 (3,420) (3,389)
-------- -------- -------- -------- --------
Net income before income tax
expense..................... 80,358 74,760 60,812 45,911 36,399
Actual income tax expense.... 30,604 28,769 23,402 4,213 828
Pro Forma Information (1):
Income tax expense.......... -- -- -- 12,950 13,130
-------- -------- -------- -------- --------
Net income.................. $ 49,754 $ 45,991 $ 37,410 $ 28,748 $ 22,441
======== ======== ======== ======== ========
Earnings per share:
Basic....................... $ 0.79 $ 0.73 $ 0.59 $ 0.52 $ 0.42
Diluted..................... $ 0.77 $ 0.73 $ 0.59 $ 0.52 $ 0.42
Weighted average number of
common shares outstanding:
Basic....................... 63,330 63,330 63,330 54,891 53,968
Diluted..................... 64,380 63,353 63,346 54,966 53,968
Selected Operating Data:
EBITDA (2)................... $117,478 $ 99,909 $ 79,256 $ 61,096 $ 48,338
EBITDA margin (3)............ 20.9% 20.7% 19.9% 19.3% 18.8%
Operating margin (4)......... 14.1% 15.2% 14.8% 15.6% 15.5%
Net income margin (5)........ 8.9% 9.5% 9.4% 9.1% 8.7%
Number of workstations (at
end of period).............. 8,364 7,624 5,931 4,440 3,158
Number of ports (at end of
period)..................... 33,476 11,160 8,056 5,804 3,870
</TABLE>

<TABLE>
<CAPTION>
As of December 31,
--------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents.......... $ 61,865 $ 6,928 $ 39,820 $ 55,065 $ 21,861
Working capital.................... 104,427 70,699 55,320 46,169 6,550
Property and equipment, net........ 167,934 144,139 111,710 70,608 45,889
Total assets....................... 408,989 326,139 282,150 238,285 123,452
Total debt......................... 45,196 30,952 21,686 22,523 41,743
Stockholders' equity............... 291,962 242,208 196,217 158,879 38,229
</TABLE>
- --------
(1) Reflects a pro forma provision for income taxes as if we had been subject
to Federal and state corporate income taxes for all periods. The pro forma
provision for income taxes represents a combined Federal and state tax
rate.
(2) "EBITDA" is defined as income before income taxes, depreciation, interest
expense and amortization. EBITDA is presented because we believe it is
frequently used by investors and analysts in the evaluation of companies.
However, EBITDA should not be considered as an alternative to net income
as a measure of operating results or to cash flows as a measure of
liquidity in accordance with generally accepted accounting principles.
(3) Represents EBITDA as a percentage of revenue.
(4) Represents net operating income as a percentage of revenue.
(5) Represents net income as a percentage of revenue.

12
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

This section contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ substantially from those
anticipated in these forward-looking statements as a result of many factors,
including those set forth under "Risk Factors" and elsewhere in this
prospectus. The following discussion and analysis of our financial condition
and results of operations should be read in conjunction with the consolidated
financial statements and related notes included elsewhere in this prospectus.

Overview

We are a leading provider of outsourced voice and Internet CRM solutions. We
believe we have established a distinct competitive advantage in our ability to
provide our clients with an integrated portfolio of CRM services through our
three operating divisions--Operator Teleservices, Interactive Teleservices and
Direct Teleservices.

Since our initial public offering in November 1996, we have experienced
significant growth in our business. Revenue has grown from $317.2 million for
the fiscal year ended 1996 to $562.4 million for the fiscal year ended 1999,
and net income has grown from $28.7 million to $49.8 million during the same
period. This represents a compound annual growth rate of approximately 21.0%
and 20.2%, respectively. All of the growth in our operating results has been
generated internally.

Since 1996, we have grown from an operation with 9,800 employees to over
20,000 employees by the end of 1999. Over the same period we increased the
number of our contact centers from eight to 24. Workstations also increased
from approximately 4,500 in 1996 to over 8,000 at year end 1999.

Throughout this growth period, our operating margins have remained
consistently between 14.1% and 15.6%.

Revenue. Operator Teleservices represented approximately 44.8% of total
revenue for the year ended December 31, 1999. Revenue for Operator Teleservices
is primarily generated at the time the contact with the customer begins.
Revenue is based on the duration and/or number of customer interactions
processed on behalf of our clients.

Interactive Teleservices represented approximately 23.4% of total revenue for
the year ended December 31, 1999. Revenue for Interactive Teleservices is
primarily generated at the time contacts are received or sent by automated
voice response units and is billed based on contact duration.

Direct Teleservices represented approximately 31.8% of total revenue for the
year ended December 31, 1999. Revenue for Direct Teleservices is generated
mainly on an hourly basis from the time the marketing agent begins initiating
contacts on behalf of our client.

Expenses. Costs of telecommunications services we incurred were primarily
comprised of long distance transmission charges. We effectively manage our
telecommunications costs company-wide through a long-term services contract
with AT&T which includes an established rate schedule subject to certain call
volume commitments. As one of AT&T's largest clients, we believe we have
negotiated a favorable contract at an attractive service rate. We have also
entered into a number of equipment maintenance and network management contracts
with AT&T in order to facilitate reliable and efficient network operations.
Rates for telecommunications services are primarily determined by total volume,
level of network management and technical support under contract.

We manage our direct labor costs through our flexible staffing and scheduling
initiatives. In particular, we have developed our own proprietary scheduling
systems which are designed to

13
<PAGE>

optimize staffing and pay levels in anticipation of fluctuating customer
initiated transaction volumes as clients' campaigns are scheduled. We control
our direct labor costs by decentralizing our operations and by seeking new
geographic markets which offer attractive labor market characteristics for our
Operator and Direct Teleservices divisions. Direct labor rates fluctuate based
upon local market factors such as the size and availability of a part-time
workforce. Labor rates are adjusted, as necessary, to attract the required
number of service agents during seasonal fluctuations. During the year ended
December 31, 1999, we reduced direct costs as a percentage of revenue due in
part to more favorable labor rates realized by entering new local markets.

Selling, general and administrative expenses consist of all expenses that
support our ongoing operations. These expenses include costs related to
salaries, facilities, equipment depreciation, maintenance, amortization of
goodwill, allowance for doubtful accounts, sales and marketing activities,
client support services and corporate management. Changes in selling, general
and administrative expenses primarily reflect the addition of new facilities
over certain periods or expanded marketing activities.

Results of Operations

Recent Developments--First Quarter Results

On April 6, 2000, we announced our results of operations for our quarter
ended March 31, 2000. For the quarter ended March 31, 2000, revenue increased
23.2% to $170.1 million from $138.0 million during the comparable period last
year. Operating income increased 21.0% to $26.4 million from $21.8 million in
the same quarter in the prior year. Net income increased 22.4% to $17.0 million
from $13.9 million in the same period of 1999. Basic earnings per share
increased to $0.27 for the first quarter versus $0.22 for the same period of
1999. Diluted earnings per share increased to $0.25 for the first quarter
versus $0.22 for the same period of 1999. EBITDA for the first quarter 2000
increased 21.8% to $36.9 million from $30.3 million for the first quarter 1999.

During the first quarter, Operator Teleservices contributed 50.2% of total
revenue. Direct and Interactive Teleservices constituted 30.5% and 19.3% of
total revenue for the same period, respectively. As a percentage of revenue,
operating income was 15.5% in the first quarter 2000 compared to 15.8% in the
first quarter 1999. Costs of services as a percentage of revenue decreased 1.3%
to 50.7% for the first quarter of 2000 compared to 52.0% for the same quarter
last year. Selling, general and administrative expenses as a percentage of
revenue increased 1.6% to 33.8% for the first quarter of 2000 from 32.2% for
the first quarter of 1999. This increase in selling, general and administrative
expense is due primarily to depreciation expense accrued for new contact
centers, expenses related to additional site development and a shift in
operating activity from Interactive to Operator Teleservices.

The following table sets forth our Consolidated Statement of Operations Data
as a percentage of revenue for the periods indicated:
<TABLE>
<CAPTION>
Year ended
December 31,
-------------------
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Revenue................................................. 100.0% 100.0% 100.0%
Cost of services........................................ 51.3 53.1 55.4
Selling, general and administrative expenses............ 34.6 31.7 29.8
----- ----- -----
Net operating income.................................... 14.1 15.2 14.8
Net other income (expense).............................. 0.2 0.3 0.5
----- ----- -----
Net income before income tax expense.................... 14.3 15.5 15.3
Income tax expense...................................... 5.4 6.0 5.9
----- ----- -----
Net income.............................................. 8.9% 9.5% 9.4%
===== ===== =====
</TABLE>

14
<PAGE>

Years Ended December 31, 1999 and 1998

Revenue. Revenue increased $79.6 million or 16.5% to $562.4 million in 1999
from $482.8 million in 1998. The increase in revenue included $32.6 million
derived from new clients and $47.0 million derived from existing clients. The
overall revenue increase is attributable to higher transaction volumes.

During the year ended December 31, 1999, we provided services to more than
900 clients. Eighty percent of our total revenue was generated by 46 clients.
During 1999, AT&T remained our largest client and accounted for 32% of total
revenue, down from 33% in 1998. Revenue from AT&T was derived from
approximately 39 distinct programs.

Cost of Services. Cost of services represents direct labor,
telecommunications expense and other costs directly related to service
activities. Cost of services increased $32.0 million or 12.5% for the year
ended December 31, 1999 to $288.5 million from $256.5 million for the
comparable period of 1998. As a percentage of revenue, cost of services
decreased to 51.3% for 1999 compared to 53.1% for 1998. The decreases in direct
costs as a percentage of revenue can be attributed to continued favorable labor
costs due to the deployment of new facilities earlier in 1999, lower
telecommunications costs and the shift in operating activity from Interactive
Teleservices to Direct and Operator Teleservices. Historically, Interactive
Teleservices has a higher cost of services.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $41.6 million or 27.2% to $194.4 million
for the year ended December 31, 1999, from $152.8 million in 1998. As a
percentage of revenue, selling, general and administrative expenses increased
to 34.6% for the year ended December 31, 1999, compared to 31.7% in 1998. The
increase can be attributed to higher depreciation expense taken on new contact
centers, selling, general and administrative expenses related to 1999 facility
site development and the shift in operating activity to Operator Teleservices.
Depreciation for the twelve months ended December 31, 1999 was $35.7 million
compared to $25.6 million in 1998. The change in revenue mix accounted for 1.8%
of the shift from direct costs of services to selling, general and
administrative expenses. The remaining 1.1% increase can be explained by 0.7%
in increased depreciation and the remaining 0.4% is due to the under
utilization of assets in Direct Teleservices.

Net Operating Income. Net operating income increased by $6.0 million or 8.2%
to $79.5 million in 1999 from $73.5 million in 1998. For the twelve months
ended December 31, 1999, operating income as a percentage of revenue decreased
1.1% to 14.1% from 15.2% for 1998 due primarily to the increase in selling,
general and administrative expenses.

Net Other Income (Expense). Net other income (expense) includes interest
income from short-term investments, interest income from an accounts receivable
financing program (net of the related interest expense to fund the program),
interest income from customer notes receivable and interest expense from short-
term and long-term borrowings under credit facilities and capital leases. Other
income (expense) for the year ended December 31, 1999, totaled $0.9 million
compared to $1.3 million for 1998. This decrease was due primarily to an
increase in interest expense related to new capital leases.

Net Income. Net income increased by $3.8 million or 8.2% for the year ended
December 31, 1999, to $49.8 million from net income of $46.0 million in 1998.
Net income includes a provision for income tax expense at a combined effective
rate of 38.1% and 38.5% for 1999 and 1998, respectively.

15
<PAGE>

Years Ended December 31, 1998 and 1997

Revenue. Revenue increased $84.0 million or 21.1% to $482.8 million in 1998
from $398.8 million in 1997. The increase in revenue included $19.6 million
derived from new clients and $64.4 million derived from existing clients. The
overall revenue increase is attributable to higher transaction volumes.

During the year ended December 31, 1998, we provided service to more than 800
clients. Eighty percent of our total revenue was generated by 41 clients.
During 1998, AT&T remained our largest client and accounted for 33% of total
revenue, up from 25% in 1997.

Cost of Services. Cost of services represents direct labor,
telecommunications expense and other costs directly related to service
activities. Cost of services increased $35.6 million or 16.1% for the year
ended December 31, 1998, to $256.5 million from $220.9 million for the
comparable period of 1997. As a percentage of revenue, cost of services
decreased to 53.1% for 1998 compared to 55.4% for 1997. The decreases are
partially due to the addition of nine contact centers in new markets that had
available, cost-effective quality labor.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $33.9 million or 28.6% to $152.8 million
for the year ended December 31, 1998, from $118.9 million in 1997. As a
percentage of revenue, selling, general and administrative expenses increased
to 31.7% for the year ended December 31, 1998, compared to 29.8% in 1997. The
increase can be attributed to higher depreciation expense and other costs
associated with contact center expansion and the shift in the overall service
mix from Interactive Teleservices to Direct and Operator Teleservices. Direct
and Operator Teleservices traditionally have higher selling, general and
administrative expenses as a percentage of revenue.

Net Operating Income. Net operating income increased by $14.4 million or
24.4% to $73.5 million in 1998 from $59.1 million in 1997. As a percentage of
revenue, net operating income increased slightly to 15.2% for the year ended
December 31, 1998, compared to 14.8% in 1997, due to the factors discussed
above for revenue, cost of services and selling, general and administrative
expenses.

Net Other Income (Expense). Net other income (expense) includes interest
income from short-term investments, interest income from an accounts receivable
financing program (net of the related interest expense to fund the program),
interest expense from short-term and long-term borrowings under credit
facilities and capital leases. Other income (expense) for the year ended
December 31, 1998, totaled $1.3 million compared to $1.7 million for 1997.

Net Income. Net income increased by $8.6 million or 22.9% for the year ended
December 31, 1998, to $46.0 million from $37.4 million in 1997. Net income
includes a provision for actual income tax expense at a combined effective rate
of 38.5% for 1997 and 1998.

Liquidity and Capital Resources

Our primary source of liquidity has been cash flow from operations,
supplemented by proceeds from notes payable, capital leases and borrowings
under our revolving bank lines of credit.

We have a $25.0 million unsecured revolving credit facility. Advances under
the revolving credit facility bear interest at the prime rate less 1.0%. We
previously had a $20.0 million revolving credit facility, which expired in June
of 1999. This credit facility was renewed on June 29, 1999 for $25.0 million
under substantially the same terms and conditions. There were no borrowings
outstanding under this facility at December 31, 1999. Our credit facility
contains certain financial and other covenants, which were met at December 31,
1999. The renewed credit facility expires on June 28, 2000. We believe we could
increase the amount of the facility, or renew the facility upon expiration, if
needed.

16
<PAGE>

We also have a $10.0 million revolving bank line used to fund an accounts
receivable financing program offered to certain customers in the pay per call
industry. Borrowings under the facility are limited to a borrowing base of
pledged accounts receivable from certain of our qualified customers which were
assigned by us to the bank. Borrowings bear interest at 1.0% below the prime
rate (actual rate of 7.50% at December 31, 1999). We previously had a $15.0
million credit facility which expired in June of 1999. This credit facility was
renewed on June 29, 1999 for $10.0 million under substantially the same terms
and conditions. There were no borrowings outstanding under this facility at
December 31, 1999. We believe we could increase the amount of the facility, or
renew the facility upon expiration, if needed.

On April 1, 1999 we obtained promissory notes from a bank for $6.0 million to
finance the growth in operations. The notes are payable in 36 monthly
installments of $185,000 and bear interest at 6.75%.

Throughout 1999, we purchased $22.0 million of furniture and telephone and
computer equipment financed through notes payable to vendors and banks and
capital leases over three years which bear interest from 6.10% to 8.10%.

Net cash flow from operating activities was $114.2 million for the year ended
December 31, 1999, compared to net cash flow from operating activities of $11.9
and $45.1 million for the years ended December 31, 1998 and 1997, respectively.
The increase was due principally to higher net income, decreases in accounts
receivable and increases in depreciation, accounts payable and other
liabilities and accrued expenses.

Net cash flow used in investing activities was $51.6 million for the year
ended December 31, 1999, compared to $43.5 million and $49.6 million, for the
comparable periods of 1998 and 1997, respectively. The net cash flow used in
investing activities was primarily due to investments in contact centers to
support the growth of our business and the issuance of notes receivable to some
customers.

Net cash flow used in financing activities was $7.7 million for the year
ended December 31, 1999, compared to $1.3 million and $10.8 million, for the
comparable periods of 1998 and 1997, respectively. The net cash flow used in
financing activities for the year ended December 31, 1999, was due primarily to
payments on capital lease obligations. Net cash flow used in financing
activities for the year ended December 31, 1998, was due primarily to the
repayment of $6.0 million in long-term obligations offset partially by $2.7
million in cash borrowings under existing lines of credit and the net change in
the accounts receivable financing program. The net cash flow used in financing
activities for the year ended December 31, 1997, was used primarily for the
repayment of $17.6 million in debt and capital lease obligations offset by $6.8
million in cash received from the accounts receivable financing program. At
December 31, 1999, we had $61.9 million of cash and cash equivalents.

We are subject to lawsuits and claims which arise out of the normal course of
our business. We and some of our subsidiaries are defendants in various
litigation matters in the ordinary course of business, some of which involve
claims for damages that are substantial in amount. Management believes, except
for the items listed in Note H to the notes to the Consolidated Financial
Statements included elsewhere in this prospectus, for which management is
currently unable to predict the outcome, the disposition of claims currently
pending will not have a material adverse effect on our financial position or
results of operations.

Capital Expenditures

Capital expenditures were $60.9 million for the year ended December 31, 1999.
Capital expenditures for 1999 consisted primarily of telephone, computer
equipment and furniture purchases. Our operations will continue to require
significant capital expenditures for capacity expansion and

17
<PAGE>

upgrades. We project our capital expenditures for 2000 to be approximately $40
million to $50 million, primarily for capacity expansion and upgrades at
existing facilities and the addition of two contact centers.

We believe that the cash flow from operations, together with existing cash
and cash equivalents, financing through capital or operating leases, and
available borrowings under our credit facilities will be adequate to meet our
capital requirements for the foreseeable future. We may pledge additional
property or assets of our company or any of our subsidiaries, which are not
already pledged as collateral securing existing or future credit facilities. We
or any of our affiliates may be required to guarantee any existing or
additional credit facilities.

Effects of Inflation

We do not believe that inflation has had a material effect on our results of
operations. However, there can be no assurance that our business will not be
affected by inflation in the future.

Quantitative and Qualitative Disclosures about Market Risk

We do not use derivative financial and commodity instruments. Our financial
instruments include cash and cash equivalents, accounts and notes receivable,
accounts and notes payable and long-term obligations. Our cash and cash
equivalents, accounts and notes receivable and accounts and notes payable
balances are generally short-term in nature and do not expose us to material
market risk. We have $45.2 million of long-term obligations and $35.0 million
of credit facilities with variable interest rates. There were no borrowings
outstanding under these credit facilities at December 31, 1999. Management does
not believe that changes in future interest rates on these fixed and variable
rate long-term obligations and credit facilities would have a material effect
on our results of operations.

18
<PAGE>

BUSINESS

West TeleServices Corporation is one of the largest independent providers of
customer relationship management, or CRM, solutions in the United States. We
enable our clients to completely outsource a full range of services, including
processing of customer initiated contacts, automated voice response services,
and direct marketing services. We provide our CRM solutions to Fortune 500
companies, leading Internet oriented companies and e-commerce companies. These
services help our clients acquire customers, provide customer support and
generate repeat sales. We operate a national network of 24 state-of-the-art
customer contact centers and seven automated voice and data processing centers
throughout North America, with over 8,000 workstations and approximately 33,500
voice response ports. As part of our complete customer care solution we offer
West iCare, a full suite of Internet services, including "chat", e-mail, Voice
over the Internet, call back requests, form sharing, electronic faxing and co-
browsing. West iCare is integrated with our other services and can be provided
on a stand-alone basis.

Market Opportunity

We serve a large and rapidly growing market for outsourced CRM services.
According to International Data Corporation, the market for CRM services in the
United States is expected to grow from approximately $17 billion in 1998 to
approximately $48 billion in 2003, representing a compound annual growth rate
of 23%.

We believe that industry growth will be primarily driven by three factors:

. The trend toward outsourcing of CRM operations continues to provide
significant growth to the industry. Advances in technology, like those
supporting our web-based West iCare suite of products, enable major CRM
solution providers to offer significantly higher levels of service and
data analysis than individual companies can efficiently and cost-
effectively manage on their own.

--According to a 1997 study by Datamonitor Research, the overall
call center market is growing at 6.5%, while the outsourced call
center market is expected to grow at a 20.4% compound annual growth
rate through 2002.

--Despite the rapid growth to date, we believe that there is
substantial opportunity for further growth. Datamonitor estimates
that by 2002, fewer than 25% of companies will be outsourcing call
center services.

. The emergence of new Internet businesses, many of which lack
infrastructure and experience to effectively manage critical customer
relationships, further fuels the growth of outsourced CRM services.

. The explosive growth of the Internet has led both established businesses
and new ventures to increasingly use the telephone and on-line media to
acquire and service their customers. At the same time, the ability of
customers to purchase products instantly on-line has led to the
customer's expectation of immediate service and access to extensive
information.

--According to a 1999 study by Forrester Research, on-line
households are projected to grow from 35% at the end of 1998 to
more than 70% by 2003. They expect a large rise in the number of
customer contacts as many interactions continue to migrate to the
Internet.

--According to Datamonitor, the on-line customer support market is
expected to grow from $150 million in 1998 to $2 billion in 2003.
Studies suggest that cybershoppers would spend more money on the
Web if they had the opportunity to communicate directly with a
customer service representative while they are browsing through a
Web site.

19
<PAGE>

We are well-positioned to capitalize on these trends. We actively help our
diverse base of approximately 900 clients outsource more functions. We are
selectively adding new clients. We have built an integrated, scaleable web-
based infrastructure for voice and electronic communication and data
management. Our investment in proprietary technology enables us to provide the
highest level of customized services to our clients. We have also launched a
targeted sales effort to further the Internet oriented business initiatives of
our core Fortune 500 clients. We are also building new relationships with
leading Internet oriented and e-commerce companies.

West iCare Internet Services Offering

In January of 2000 we launched our West iCare suite of products to build on
the e-mail and Internet CRM services we have offered our clients since 1998.
West iCare is a suite of products that supports CRM services. This suite of
services is fully integrated with our voice processing services and can
accommodate large scale growth. Through West iCare we can support a client's
Web site, materially improving the client's Internet initiatives by providing
the high-quality customer service that today's Internet consumers demand.

West iCare services include:

<TABLE>
<C> <S>
[icon] Chat Customers can immediately interact with an agent by
using text messaging.
[icon] e-mail Our high-volume, automated capability tracks and
routes customers' incoming messages and provides
automated acknowledgments and standard auto-
responses. Key word routing ensures that e-mails are
delivered to the agents best trained to handle
specific inquiries.
[icon] Call Back Customers can request a specific time for our agent
to call them. Our system then automatically initiates
the contact at the designated time.
[icon] Co-Browsing Our Agents can "push" web pages to customers to
provide the information they need.
[icon] Form Sharing Customers can fill out documents online or let a
representative type and submit the forms for them.
[icon] Electronic FAX Customers can fax documents, orders or other
information to our agents for handling.
[icon] Voice over Customers can speak directly with representatives
Internet from their individual PCs.
Protocol (VoiP)
</TABLE>

Our Service Offerings

Our Operator Teleservices division provides agent processing of customer
initiated transactions such as order capture, product support and general
customer service. Our Interactive Teleservices division provides technology
oriented automated voice response services for customer initiated transactions,
consisting of computerized transaction-processing programs such as automated
product information requests, computerized surveys and polling and secure
automated credit card activation. Our Direct Teleservices division provides our
clients with a premium service that includes agent direct marketing
applications, including product sales, customer acquisition and retention
campaigns. We have developed proprietary technology platforms designed to
provide a high degree of automation and reliability in all three of our service
categories.

20
<PAGE>

As illustrated in the table below, over two-thirds of our 1999 revenue was
derived from customer initiated interactions.

<TABLE>
<CAPTION>
Percentage
of 1999
Division Revenue
- -------- ----------
<S> <C>
Operator Teleservices................................................ 45%
Interactive Teleservices............................................. 23%
Direct Teleservices.................................................. 32%
</TABLE>

We are among the few CRM solution providers offering a complete portfolio of
services with an emphasis on the complex, higher margin categories that respond
to customer initiated interactions. We provide our offerings through our three
divisions--Operator Teleservices, Interactive Teleservices and Direct
Teleservices.

Operator Teleservices

We offer our clients large volume transaction-processing capabilities,
including order processing, customer acquisition and customer service
applications. Call Center CRM Solutions magazine ranked our Operator
Teleservices division as the third largest outsourced provider for 1999, based
upon number of minutes connected, up from the number four ranking in 1998. We
focus on two service offerings--Direct Response Services and Custom Operator
Services.

Custom Operator Services. Many companies find it increasingly difficult to
provide high quality customer service without diverting resources from their
core businesses. We address these concerns by providing customized solutions
with dedicated agents who have extensive knowledge of a single client and its
products. We work closely with each client to understand its CRM needs and
jointly develop solutions that enhance its customers' satisfaction. Examples of
solutions include:

. customer acquisition;

. customer service;

. product support;

. technical support; and

. collection services.

Customers initiate their interaction with Custom Operator Services using
their telephone or the Internet, and, depending upon the nature of the
interaction, may be directed to a voice workstation, an automated voice
response system or a web-enabled workstation.

Our performance is measured based on the critical success factors identified
by our client. These success factors are program specific, such as response
time, average length of customer interaction, average speed of answering the
customer initiated contact, quality and successful resolution of the customer's
concerns in a single transaction.

Direct Response Services. Direct Response Services focuses on maximizing our
clients' sales potential and, at the same time, lowering their cost per order.
Our agents typically process telephone or web-based order capture, sales lead
generation, dealer referral and other information gathering campaigns. Our
agents are trained on a sophisticated proprietary system that enables each of
them to process transactions for all of our clients. Agents receive
transactions for one of hundreds of different products at any given time. We
handle transactions 24 hours per day, 365 days per year. Our clients measure
our service quality by our ability to process a large volume of simultaneous
incoming calls and to minimize the number of calls which receive a busy signal.
The transaction volume is primarily generated from television advertisements
and we, therefore, handle extreme fluctuations in transaction volumes over
short periods of time.

21
<PAGE>

Interactive Teleservices

We provide large volume automated voice response services which we customize
for our clients. We have developed state-of-the-art proprietary software
systems and hardware platforms to service our clients. We often provide these
services with our other service offerings. Our Interactive Teleservices
division was ranked as the number one interactive teleservices company in each
of 1997, 1998 and 1999, based on number of minutes connected, by Call Center
CRM Solutions magazine.

The use of this automated system enhances our other service offerings by
processing routine customer transactions, while routing the more complicated
customer interaction to an appropriate agent. This results in a cost-effective
solution for the client. Examples of applications include:

. secure automated credit card activation;

. prepaid calling card services;

. automated product information requests;

. frequently asked questions, or FAQs; and

. routing and call transfer services.

Our Interactive Teleservices division strives to remain on the leading edge
of technology by incorporating new functions such as common language speech
recognition. We currently maintain approximately 33,500 voice response ports
for simultaneous transaction processing.

Direct Teleservices

We offer select clients premium direct marketing services, including product
sales, customer acquisition and retention campaigns. For the years 1996 through
1999, our Direct Teleservices division has been named the top outbound direct
marketing company, based on number of minutes connected, by Call Center CRM
Solutions magazine. Direct Teleservices focuses exclusively on providing direct
marketing services for leading brand products. We focus on two service
offerings--Consumer Direct Services and Business Direct Services.

Consumer Direct Services. Consumer Direct Services provides business-to-
consumer marketing services. Client applications include product sales, product
registration, customer acquisition and retention campaigns, sales lead
generation and database enhancement.

We contact consumers identified by our client as existing or potential
customers. Integrated call processing systems using large-scale predictive
dialers systematically call consumers and transfer successful connections to a
designated agent. As a call is presented to the agent, the consumer's name,
address and other available information are simultaneously presented along with
the client's customized script.

Business Direct Services. Business Direct Services provides business-to-
business marketing services for clients whose target markets include thousands
of small to medium sized businesses. These applications are designed to enhance
and increase our client's databases of information about their current and
prospective clients, schedule appointments for their regional and national
sales forces, and sell services to accounts that may not warrant a face-to-face
sales presentation.

Our Strategy

Our goal is to capitalize on the growth of our markets while maintaining
superior profit margins. We aim to remain a leading full-service provider of
voice and Internet CRM solutions. Our strategy is

22
<PAGE>

to offer a fully integrated portfolio of services that is customized to address
each client's unique needs and that continues to improve the quality and cost-
effectiveness of our clients' customer service and marketing operations. We
strive to implement this strategy through the following:

I. Build Long-Term Client Relationships by Providing Quality Services

We believe that service quality is a critical factor in a potential client's
decision to outsource its customer service and sales functions. We
differentiate the quality of our services through our ability to:

. quickly respond to new client programs;

. efficiently address staffing needs;

. effectively employ operating systems that can process client campaign
data; and

. provide meaningful reports.

We provide premium quality services through an extensive training program and
an experienced management team. We believe that the quality of our service is
one of our competitive advantages.

Our focus is on developing long-term client relationships. In 1999, 59% of
our revenue growth was derived from existing clients. We develop a detailed
understanding of each of our client's specialized business requirements to more
effectively manage interaction with our client's current and prospective
customers. This process enables us to create customized solutions that
consistently meet and exceed our clients' needs, minimizing client turnover. As
a result, we are better positioned to cross-sell our services and proactively
offer new applications. Our top 10 clients have been using our services for an
average of five years.

II. Provide Fully Integrated Service Solutions

We develop customized and integrated service solutions that incorporate all
of our resources. We integrate our service offerings by using our voice and
data networking technology and our software systems and hardware platforms. We
also design and implement highly flexible applications, combining the large
volume capacity of automated voice response with our specialized agent
services. Customer follow-up can also be coordinated through Direct
Teleservices. This integration of our CRM services provides a cost-effective,
comprehensive solution for the client and increases the effectiveness of our
agents.

We believe that our integrated services give us a significant competitive
advantage. By cross-selling our integrated services we have been able to
capture an increasing share of our clients' outsourced business. We currently
generate over 60% of our revenue from clients that use two or more of our
service offerings.

III. Manage Profitable Growth through Recurring and Large Volume Programs

We have established a strong track record of successfully managing large
volume client programs. We manage our growth by targeting clients with large
volume programs where we have both technological and personnel expertise. For
example, our prepaid calling card platform processed over three billion minutes
in 1999, up from approximately 95 million minutes in 1997. As a result, our
business is more predictable, and we maintain consistent revenue streams. We
select growth-oriented clients who need customized applications, which often
leads to long-term relationships.

23
<PAGE>

IV. Capture Leadership Position in Internet CRM Services

The rapidly growing Internet market is creating important new opportunities
to market our CRM solutions to existing clients and new Internet oriented and
e-commerce companies. We recently launched our West iCare suite of products,
which allows us to offer a full suite of on-line services. We believe that our
expertise in deploying new technology and integrating CRM services positions us
to become a leading provider of Internet based CRM services.

V. Capitalize on State-of-the-Art Technology

Our state-of-the-art technology enables us to offer premium quality, flexible
and cost-effective service solutions tailored to each client's needs. We
believe our significant and continuing investment in sophisticated contact
center technology provides us with a competitive advantage. We currently employ
approximately 750 information technology professionals to modify and enhance
our operating systems and to design client programs. Examples of our technology
include:

. computer/telephone and Internet protocol (IP) systems integration;

. proprietary contact management software systems;

. proprietary interactive voice response technology; and

. high speed, fault-tolerant computer systems.

We continually strive to improve our technological capabilities.

VI. Leverage Strong Management Experience

We believe we have distinguished ourselves through our ability to attract and
retain some of the most talented managers in our industry. Our management team
possesses extensive experience in CRM services. Each of our eight executive
officers have proven experience profitably managing the rapid growth of our
business and have been with us, on average, for more than nine years. The
members of our management team have continued to contribute to the development
of the CRM services industry. Our management team has delivered consistently
increasing revenue and profits since our inception in 1986.

Our Operational Excellence Produces Premium Quality Services

We believe that our ability to deliver premium quality service is primarily
due to our success in:

. developing integrated service offerings using state-of-the-art
technology;

. designing and deploying sophisticated contact management systems; and

. recruiting, hiring, training and retaining quality employees.

Our State-of-the-Art Technology

Our software and hardware systems, as well as our network infrastructure, are
designed to offer high-quality and integrated solutions. We have made
significant investments in reliable hardware systems. We also integrate
commercially available software when appropriate. Because our technology is
client focused, we also rely on proprietary software systems to customize our
services.

Our significant achievements include:

. integration of West iCare into existing service offerings;

24
<PAGE>

. development of sophisticated data collection tools and data warehousing
systems to analyze and measure the success of our clients' programs;

. design of a proprietary system that web-enables our workstations,
enhancing our agents' effectiveness in interacting with our clients'
customers; and

. development of a proprietary, state-of-the-art workforce management and
scheduling system.

Our network facilities and systems are designed to maximize system in-service
time and minimize the possibility of failure. Our infrastructure is designed to
reduce the possibility of system or site downtime or interruption of the
telecommunications service.

Our Contact Management Systems

We specialize in processing large and recurring volumes on behalf of our
clients. Our ability to consistently staff and manage our agents, across
geographically dispersed contact centers, is critical to providing our premium
quality service. We apply standardized practices in all contact centers to
ensure uniform quality of service. We maintain strong centralized control to
assure rigorous adherence to our management practices, including quality
assurance, and to provide daily staffing plans for each individual site.

We continuously evaluate the performance of our agents to ensure that we
achieve our internal and our clients' quality standards. Our testing includes
monitoring of the agent/consumer contacts. In addition, we measure our
performance against objective standards such as average handle time, average
response time, sales per hour and conversion percentages. We encourage our
clients to participate in all aspects of our quality assessment.

Our multiple remote sites present unique challenges in delivering consistent
premium quality service. Our Network Control Center, based in Omaha and
operated 24 hours a day, 365 days a year, uses both internal and external
systems to effectively create and operate this remote site environment. We
allocate transactions based upon agent availability for all contact centers
servicing customer initiated transactions, and can remotely adjust staffing
requirements based upon projected volume. Our Network Control Center is in
constant communication with the site operations personnel to ensure efficient
use of the available personnel and to maximize utilization of our assets.
During times of unexpected events such as weather-related situations we can
immediately react and, whenever possible, redirect transactions to an
unaffected site to satisfy our clients' business needs.

Our Employees

Our ability to recruit, hire and retain quality employees and agents is a key
to our success. We begin by selecting site locations that provide an available
skilled workforce. Depending on the needs of our clients' programs we develop a
profile of the required education, experience and skills necessary to ensure
appropriate selection.

We hire and train the necessary number of agents based upon the volume of
transactions projected by our contact management system. This system takes into
account the data provided by our clients and historical data collected by the
system. We provide extensive classroom and on-the-job training programs to our
agents.

In 1999, we employed an average of approximately 16,000 agents per day for
our Operator and Direct Teleservices with peak employment of approximately
17,900 agents per day. In addition, as of December 31, 1999, we employed
approximately 2,800 management, staff and administrative employees.

25
<PAGE>

Our Sales and Marketing Strategy

We focus our sales and marketing efforts to build our client base along the
following business selection criteria:

. large, recurring revenue opportunities with companies that have
aggressive growth plans;

. potential to sell multiple services to our clients;

. long-term relationship potential; and

. ability to maintain our profit margin.

We target highly competitive consumer based industries in which we can offer
clients large-scale cost-effective solutions on an outsourced basis. We have
launched a sales effort to target the Internet business initiatives of our
existing clients and to build new relationships with leading Internet oriented
and e-commerce companies.

Our Competitors

The CRM solution provider industry is highly fragmented and competitive. Some
competitors in this industry are starting to provide integrated Internet
services with their current service offerings. Our competitors range from very
small firms catering to specialized programs and short-term projects to large
independent firms. We also compete with the in-house operations of many
existing clients and potential clients. We believe that only a few competitors
have the capability to provide a fully integrated CRM solutions. The principal
competitive factors in this industry are quality of service, range of service
offerings, flexibility and speed of implementing customized solutions to meet
clients' needs, capacity, industry-specific experience, technological expertise
and price.

Our Facilities

We operate seven automated voice and data processing centers with over 33,500
voice response ports and a network of 24 state-of-the-art contact centers with
over 8,000 workstations.

We occupied approximately 1,181,523 square feet of office space at December
31, 1999 of which, 291,517 square feet is owned and 890,006 square feet is
leased. We believe that our facilities are sufficient for our current
requirements and that additional space will be available as required.

New Technology Venture

We have an option to acquire, develop and commercialize an innovative new
technology that is the subject of a pending patent application. The technology
relates to a process that we believe could have applications in our industry
and a wide range of other industries. We intend to seek board approval and we
may choose not to exercise this option. Even if we exercise it, the patent may
never be issued. The acquisition is conditioned on the patent being issued. We
currently expect the patent to be issued in the second quarter of 2000. In
addition, the covered technology may not be successfully commercialized.

If a venture is formed, we will have an initial equity interest in excess of
80% in the venture. In order to incentivize management to develop and pursue
the commercialization process, we will grant some of our executive officers in
the aggregate approximately a 6.5% equity interest in the venture, which is
subject to a five-year vesting period and non-transferable prior to vesting. In
addition, our venture partner will have the option, during the first 18 months
of the venture, to surrender its 5% equity interest in the venture in exchange
for $12 million in cash plus an option to acquire 325,000 shares of our common
stock, exercisable at the market price on the date of the execution of the
proposed agreement.

26
<PAGE>

Government Regulation

In March 1997, the FTC initiated a 900 Number Rule rulemaking review
proceeding to evaluate the operation of the 900 Number Rule which was adopted
in 1992 and to determine whether the scope of the 900 Number Rule should be
expanded to information services provided through dialing patterns other than
900 numbers. As part of this rulemaking review proceeding, the FTC has issued
proposed revisions to the 900 Number Rule which, among other things, would
expand the scope of the 900 Number Rule to information services provided
through other dialing patterns, impose more stringent requirements on the
establishment of pre-subscription arrangements governing the use of toll free
numbers for pay per call services and require express verifiable authorization
from a telephone subscriber in order for purchases to be billed to the
telephone subscriber's telephone bill. The industry filed written comments to
the FTC's proposed revisions in March 1999. The FTC held a workshop in May
1999. In addition to commenting on the FTC's proposed changes, the industry has
requested other reforms, which would help reduce the charge-back rates. The
Company cannot predict what final modifications to the 900 Number Rule will be
implemented and what impact those modifications will have on our operations or
our industry. We cannot predict whether any modifications will be made to the
900 Number Rule, and, if so, what impact they would have on our operations or
our industry.

The Telecommunications Act of 1996 also contains provisions which may have an
impact upon us. In general, this act eliminated the tariffed service exception
from the pay per call rules and required the FCC to adopt new and more
stringent rules for the use of toll free numbers for pay per call services
because of abuses that arose from pay per call services offering toll free
numbers. The FCC has proposed rules for the use of toll free numbers for pay
per call services. The FCC has also proposed rules designed to restrict the use
of toll free numbers in connection with pay per call information programming.
Among the most significant changes to the toll free number rules are that pre-
subscription agreements now must be executed in writing, require the use of a
personal identification number (PIN), or other identifier unique to the
subscriber and provide subscribers with a choice of the following billing
methods: direct remit, debit prepaid account phone bill or credit or calling
card. As an alternative, information providers may charge information services
provided via toll free numbers with a prepaid account or debit, credit, charge
or calling card if there is a preamble disclosing the costs, the point in time
when the charges begin and billing methods. There are also corresponding
disclosure requirements for soliciting pre-subscription agreements and for
consumers' billing statements.

In addition to the federal legislation and regulations, there are numerous
state statutes and regulations governing telemarketing activities, which do or
may apply to us. For example, some states also place restrictions on the
methods and timing of telemarketing calls and require that mandatory
disclosures be made during the course of a telemarketing call. Some states also
require that telemarketers be registered within their states and that sales
solicited through the telephone be confirmed by written agreement. A growing
number of states have enacted regulations requiring telemarketers to subscribe
to and maintain state maintained Do Not Call Lists.

Our employees who are involved in some types of sales activity, such as
activity regarding insurance or mortgage loans, are required to be licensed by
various state commissions or regulatory bodies and to comply with regulations
enacted by those entities.

The industries we serve are also subject to varying degrees of government
regulation. Generally, we rely on our clients and their advisors to develop the
scripts we use in making consumer solicitations. We generally require our
clients to indemnify us against claims and expenses arising with respect to the
scripts provided by its clients.

27
<PAGE>

We specifically train our marketing representatives to handle calls in an
approved manner and believe it is in compliance in all material respects with
all federal and state regulations. There can be no assurance, however, that we
would not be subject to regulatory challenge for a violation of federal or
state law by any of its clients.

Legal Proceedings

From time to time, we are subject to lawsuits and claims which arise out of
our operations in the normal course of our business. We are defendants in
various litigation matters in the ordinary course of business, some of which
involve claims for damages that are substantial in amount. We believe, except
for the items discussed below for which we are currently unable to predict the
outcome, the disposition of claims currently pending will not have a material
adverse effect on our financial position or results of operations.

Richard Carney, et al. v. West TeleServices, Inc., et al. was filed on
October 31, 1997, in the 131st Judicial District Court of Bexar County, Texas.
The parties were notified on March 22, 2000 that the court would certify the
class. No order has been entered as of the date of this filing. The certified
class consists of hourly employees of the Company and its subsidiaries.
Plaintiffs allege that they were not paid for all compensable work performed by
them during their employment. Plaintiff sued under the theories of breach of
contract, quantum meruit, common law debt and civil theft of services. Summary
judgment has been granted on breach of express contract and civil theft of
services and on all claims against the individual defendants.

West Telemarketing Corporation Outbound is a Defendant in three consolidated
cases entitled Bone, Zarella, et al. individually and on behalf of a class of
all other persons similarly situated against Horry Telephone Cooperative, Inc.;
AT&T Corp.; AT&T Communications, Inc.; AT&T Communications of the Southern
States, Inc.; and West Telemarketing Outbound Corporation, pending in the
United States District Court for the District of South Carolina. The Plaintiffs
in these cases allege they were marketed AT&T long distance calling plans, and
did not receive the full benefits of the marketed plans. Outbound provided
telemarketing services to AT&T in connection with AT&T's marketing of these
plans. On March 23, 2000, the Federal Judge to whom the cases are assigned
approved the Plaintiffs' motion, conditionally approving settlement.

Glenn K. Jackson and Elsie Jackson v. West Telemarketing Corporation Outbound
and Does 1 through 100, inclusive, was filed in the United States District
Court for the Central District of California (No. CV-97-8281 TJH (AIJx)), on
August 12, 1997, and transferred to the United States District Court for the
Northern District of Texas, Dallas Division, where it is pending (Civil Action
No. 3:98-CV-0960-H). The complaint contains several causes of action, all of
which deal with the purchase by Outbound of two pieces of property from the
Resolution Trust Corporation ("RTC") during 1993 and 1994. The plaintiffs
contend that they also bid on the property, that Outbound learned the amount of
their bids, used that information to out-bid them and, ultimately, purchase the
property. The complaint seeks general damages, special damages, equitable
injunctive and restitutionary relief, including restitution of the property
involved, punitive damages, attorneys' fees, and litigation costs. On November
19, 1999, the U.S. magistrate granted West's motion for summary judgment in
full. On December 9, 1999, the plaintiffs appealed to the U.S. Fifth Circuit
Court of Appeals the summary judgment granted Outbound by the United States
District Court for the Northern District of Texas, Dallas Division.

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<PAGE>

MANAGEMENT

Directors and Executive Officers

Set forth below is information as of April 3, 2000 about each director and
each executive officer of the Company. The executive officers have been
determined in accordance with the rules of the SEC.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Gary L. West.............. 54 Chairman of the Board and Director
Mary E. West.............. 54 Vice Chairman of the Board, Secretary and
Director
Thomas B. Barker.......... 45 President, Chief Executive Officer and
Director
Nancee Shannon Berger..... 39 Chief Operating Officer
Michael A. Micek.......... 50 Chief Financial Officer, Executive Vice
President--Finance and Treasurer
William E. Fisher......... 53 Director
Greg T. Sloma............. 48 Director
John W. Erwin............. 37 President--Direct Teleservices
Mark V. Lavin............. 41 President--Operator Teleservices
Steven M. Stangl.......... 41 Executive Vice President--Interactive
Teleservices
Michael M. Sturgeon....... 38 Executive Vice President--Sales and Marketing
Jon R. Hanson............. 33 Executive Vice President--Administrative
Services and Chief Administrative Officer
</TABLE>

Gary L. West co-founded WATS Marketing of America, or WATS, in 1978 and
remained with that company until 1985. Mr. West joined our company in July 1987
after the expiration of a noncompetition agreement with WATS. Mr. West has
served as Chairman of the board since joining our company. Mr. West and Mary E.
West are husband and wife.

Mary E. West co-founded WATS and remained until December 1985. In January
1986, she founded our company. Mrs. West has served as Vice Chair of our
company since 1987. Mrs. West and Mr. West are wife and husband.

Thomas B. Barker joined our company in 1991 as Executive Vice President of
Interactive. Mr. Barker was promoted to President and Chief Operating Officer
of our company in March 1995. Mr. Barker was promoted to President and Chief
Executive Officer in September 1998. Prior to joining our company, he served as
President and Chief Operating Officer of Cue Network Corp., a provider of
nationwide paging and satellite data distribution services.

Nancee Shannon Berger joined West Interactive Corporation in 1989 as Manager
of Client Services. Ms. Berger was promoted to Vice President of West
Interactive Corporation in May 1994. She was promoted to Executive Vice
President of West Interactive Corporation in March 1995, and to President of
West Interactive Corporation in October 1996. She was promoted to Chief
Operating Officer of our company in September 1998. Before joining West
Interactive Corporation, she was Senior Project Manager at Applied
Communications, Inc.

Michael A. Micek joined our company in 1988 and was appointed to Chief
Financial Officer, Vice President--Finance and Treasurer in 1990. In 1997, Mr.
Micek was promoted to Chief Financial Officer, Executive Vice President--
Finance and Treasurer. Prior to joining our company, Mr. Micek was a partner in
the accounting firm of Blackman and Micek, P.C. from 1983 to 1988 and was
employed by the accounting firm of Touche Ross from 1981 to 1983.

William E. Fisher was appointed to the board of directors in 1997. Since
1993, Mr. Fisher has been a director, Chairman of the board, President and
Chief Executive Officer of Transaction

29
<PAGE>

Systems Architects, Inc., or TSA, an Omaha based company which develops,
markets and supports a broad line of software products and services primarily
focused on facilitating electronic payments. Effective November 10, 1999, Mr.
Fisher resigned from his positions as President and Chief Executive Officer,
but remains Chairman of the board. Mr. Fisher is a director of TriZetto Group,
Inc. and Hypercom Corporation.

Greg T. Sloma was appointed to the board of directors in 1997. Since 1996,
Mr. Sloma has been the President and Chief Operating Officer of Data
Transmission Network, or DTN, an Omaha based provider of electronic information
and communication services. Mr. Sloma served as an Executive Vice President and
Chief Financial Officer of DTN prior to his promotion to his current position.
Prior to joining DTN in 1993, Mr. Sloma was a tax partner with the accounting
firm of Deloitte & Touche.

John W. Erwin joined our company in 1988 as Executive Vice President of West
Telemarketing Corporation Outbound. In March of 1995, Mr. Erwin became
President--West Telemarketing Corporation Outbound. Prior to joining our
company, Mr. Erwin held a management position with Dial America Marketing and a
management and ownership position with Telcom Communications Marketing, Inc.,
both of which provide outbound telemarketing services.

Mark V. Lavin joined our company in 1996 as Executive Vice President--West
Telemarketing Corporation. In September 1998, Mr. Lavin was promoted to
President--West Telemarketing Corporation. From 1991 until 1996, he held
various management positions in reservation services for Radisson Hospitality
Worldwide.

Steve M. Stangl joined Interactive in 1993 as Controller. Mr. Stangl was
promoted to Vice President of Accounting in 1996. He was promoted to Executive
Vice President of West Interactive Corporation in September 1998. Before
joining West Interactive Corporation, he was an audit manager with the
accounting firm of Deloitte & Touche.

Michael M. Sturgeon joined our company in 1991 as a National Account
Manager--West Interactive Corporation. In September 1994, Mr. Sturgeon was
promoted to Vice President of Sales and Marketing--West Interactive
Corporation. In March of 1997, Mr. Sturgeon was promoted to Executive Vice
President--Sales and Marketing for our company. Prior to joining our company,
Mr. Sturgeon was a management consultant for Andersen Consulting and Laventhol
& Hartworth.

Jon R. (Skip) Hanson joined our company in 1991 as a Business Analyst. Mr.
Hanson was promoted to Vice President, Corporate Administrative Services in
June 1996. In October 1999, he was promoted to Chief Administrative Officer and
Executive Vice President. Prior to joining our company, Mr. Hanson was a
consultant with Andersen Consulting from 1989 to 1991.

The board of directors is divided into three classes. One class of directors
is elected each year at the annual meeting of stockholders for terms of office
expiring after three years. The terms of Thomas B. Barker and William E. Fisher
expire in 2000, the term of Mary E. West will expire in 2001 and the terms of
Gary L. West and Greg T. Sloma will expire in 2002. Each director serves until
the expiration of his or her term and thereafter until his or her successor is
duly elected and qualified. Executive officers of the Company are appointed by
the board of directors on an annual basis.

30
<PAGE>

SELLING STOCKHOLDERS

The following table summarizes information regarding each selling
stockholder's beneficial ownership of common stock as of March 1, 2000.

<TABLE>
<CAPTION>
Percentage of
Common Stock Shares of Common Shares of Common Shares of Common
Name of Selling Beneficially Owned Stock to be Sold Stock Owned Stock
Stockholder Before the Offering in the Offering After the Offering After the Offering(3)
--------------- ------------------- ---------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
Troy L. Eaden(1)(2)..... 8,516,250 4,450,000(3) 4,066,250(3) 6.3%
Melinda M. Joern Boles.. 442,865 50,000 392,865 0.6%
</TABLE>
- --------
(1) Includes 1,516,250 shares of common stock held by the Eaden Family Limited
Partnership, of which Mr. Eaden is a general partner.
(2) Mr. Eaden served as our Chief Executive Officer from March 1995 until
September 1998 and the Co-Chairman of our board of directors from September
1998 through April 3, 2000. Mr. Eaden resigned from our board effective
April 3, 2000.

(3) Assuming no exercise of the underwriters' over-allotment option.

31
<PAGE>

DESCRIPTION OF CAPITAL STOCK

General

Our authorized capital stock consists of 200,000,000 shares of common stock
and 10,000,000 shares of preferred stock. As of March 1, 2000, there were
63,821,365 shares of common stock outstanding held of record by 77 persons and
no shares of preferred stock were outstanding. We are not issuing any shares
of our stock in this offering.

Common Stock

Holders of common stock are entitled to one vote per share in all matters
voted on by our stockholders, and do not have cumulative voting rights.
Subject to preferences that any preferred stock may have, holders of common
stock are entitled to receive ratably any dividends that our board may declare
out of funds legally available for dividends. In the event of a liquidation,
dissolution or winding up of our Company, holders of common stock are entitled
to share ratably in all assets remaining after payment of our liabilities and
the liquidation preference of any outstanding preferred stock. All of our
outstanding shares of common stock are fully paid and non-assessable. Holders
of common stock have no preemptive, subscription, redemption or conversion
rights. The rights of holders of our common stock are subject to, and may be
adversely affected by, the rights of the holders of any preferred stock which
we issue in the future.

Preferred Stock

Our board of directors has the authority, without any vote by the
stockholders, to issue up to 10,000,000 shares of preferred stock in one or
more series with whatever rights, preferences and other terms as our board may
determine. These other terms include the number of shares, dividend rates,
redemption provisions, liquidation preferences, sinking fund provisions,
conversion rights and voting rights. Although we cannot predict how any
issuance of preferred stock might affect the holders of our common stock, any
new preferred stock might:

. restrict common stock dividends if preferred stock dividends have not
been paid;

. dilute the voting power and equity interest of holders of common stock;
or

. prevent current holders of common stock from participating in the
distribution of our assets upon liquidation, or reduce the amount they
receive.

In addition, the issuance of preferred stock may have the effect of
discouraging a change in control by, for example, granting holders of
preferred stock approval rights over any amendment to the charter or any
reorganization, consolidation, merger or other similar transaction involving
our company. As a result, the issuance of preferred stock may discourage bids
for the common stock at a premium over its market price, and could have a
material adverse effect on the market value of our common stock. The board of
directors does not presently intend to issue any shares of preferred stock.

Limitations on Directors' Liability

Our Restated Certificate of Incorporation and By-laws limit the liability of
directors to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a corporation will not be personally liable for:

. monetary damages for breach of the directors' duty of loyalty;

. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law;

32
<PAGE>

. the unlawful payment of a dividend or unlawful stock purchase or
redemption; and

. any transaction from which the director derives an improper personal
benefit.

This provision of our charter has no effect of the availability of equitable
remedies such as injunction or rescission.

These provisions will not limit liability under state or federal securities
laws. We believe that these provisions will assist us in attracting and
retaining qualified individuals to serve as directors.

Charter and By-law Provisions Affecting Change in Control

Our charter and by-laws include certain provisions which are intended to
enhance the likelihood of continuity and stability in the composition of the
board of directors. These provisions also may have the effect of delaying,
deterring or preventing a future takeover or change in control unless the
takeover or change of control is approved by the board of directors. These
provisions may also make the removal of the directors and management more
difficult. Our charter provides that the board of directors is divided into
three classes serving staggered three-year terms. Our by-laws include
restrictions on who may call a special meeting of stockholders. The by-laws
also contain an advance notice procedure with regard to the nomination of
candidates for director and some matters to be brought before an annual meeting
of our stockholders.

Section 203 of the Delaware General Corporation Law

Section 203 of the Delaware General Corporation Law prohibits certain
transactions between a Delaware corporation and an interested stockholder. An
interested stockholder is a person who, together with any affiliates or
associates, beneficially owns, directly or indirectly, 15% or more of the
outstanding voting stock shares of a Delaware corporation. This provision
prohibits certain business combinations between an interested stockholder and a
corporation for a period of three years after the date the interested
stockholder becomes an interested stockholder, unless:

. the business combination is approved by the corporation's board of
directors prior to the date the interested stockholder becomes an
interested stockholder;

. the interested stockholder acquired at least 85% of the voting stock of
the corporation (other than stock held by directors who are also
officers or by certain employee stock plans) in the transaction in which
it becomes an interested stockholder; or

. the business combination is approved by a majority of the board of
directors and by the affirmative vote of 66 2/3% of the outstanding
voting stock that is not owned by the interested stockholder.

For this purpose, business combinations include mergers, consolidations,
sales or other dispositions of assets having an aggregate value in excess of
10% of the consolidated assets of the corporation, and certain transactions
that would increase the interested stockholders' proportionate share ownership
in the corporation.

Transfer Agent and Registrar

The Transfer Agent and Registrar of our common stock is First Chicago Trust
Company of New York.

33
<PAGE>

UNDERWRITING

We, the selling stockholders and the underwriters for the offering (the
"Underwriters") named below have entered into an underwriting agreement with
respect to the shares being offered. Subject to certain conditions, each
Underwriter has severally agreed to purchase the number of shares of common
stock indicated in the following table.

<TABLE>
<CAPTION>
Underwriters Number of Shares
------------ ----------------
<S> <C>
Goldman, Sachs & Co.........................................
Credit Suisse First Boston Corporation......................
Robert W. Baird & Co. Incorporated..........................
Janney Montgomery Scott LLC.................................
---------
Total..................................................... 4,500,000
=========
</TABLE>

If the Underwriters sell more shares than the total number set forth in the
table above, the Underwriters have an option to buy up to an additional 675,000
shares from Mr. Eaden to cover such sales. They may exercise that option for 30
days. If any shares are purchased pursuant to this option, the Underwriters
will severally purchase shares in approximately the same proportion as set
forth in the table above.

The following table shows the per share and total underwriting discounts and
commissions to be paid to the Underwriters by the selling stockholders. Such
amounts are shown assuming both no exercise and full exercise of the
Underwriters' option to purchase 675,000 additional shares.

<TABLE>
<CAPTION>
Paid by the
Selling Stockholders
----------------------
No
Exercise Full Exercise
-------- -------------
<S> <C> <C>
Per Share.......................................... $ $
Total.............................................. $ $
</TABLE>

Shares sold by the Underwriters to the public will initially be offered at
the initial price to public set forth on the cover of this prospectus. Any
shares sold by the Underwriters to securities dealers may be sold at a discount
of up to $ per share from the initial price to public. Any such securities
dealers may resell any shares purchased from the Underwriters to certain other
brokers or dealers at a discount of up to $ per share from the initial
price to public. If all the shares are not sold at the initial price to public,
the representatives may change the offering price and the other selling terms.

All of our senior executive officers, directors and the selling stockholders
have agreed with the Underwriters that, subject to certain exceptions, during
the period beginning from the date of this prospectus and continuing to and
including the date 90 days after the date of this prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any of our common stock
or other securities (other than pursuant to employee plans existing, or on the
conversion or exchange of convertible or exchangeable securities outstanding,
on the date of this prospectus) which are substantially similar to the common
stock, or which are convertible or exchangeable into common stock, without the
prior written consent of Goldman, Sachs & Co.

34
<PAGE>

In connection with the offering, the Underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale, by the Underwriters, of a greater
number of shares than they are required to purchase in the offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the common
stock while the offering is in progress.

The Underwriters also may impose a penalty bid. This occurs when a particular
Underwriter repays to the Underwriters a portion of the underwriting discount
received by it because the representatives have repurchased shares sold by or
for the account of such Underwriter in stabilizing or short covering
transactions.

These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the
common stock may be higher than the price that otherwise might exist in the
open market. If these activities are commenced, they may be discontinued by the
Underwriters at any time. These transactions may be effected on the Nasdaq
National Market, in the over-the-counter market or otherwise.

The selling stockholders estimate that their share of the total expenses of
the offering, excluding underwriting discounts and commissions, will be
approximately $35,500.

We and the selling stockholders have agreed to indemnify the several
Underwriters against certain liabilities including liabilities under the
Securities Act of 1933.

Goldman, Sachs & Co. has periodically performed investment banking and
financial advisory services for us and for the selling stockholders and related
entities.

VALIDITY OF COMMON STOCK

The validity of the shares of common stock being offered hereby will be
passed upon for us by Willkie Farr & Gallagher, New York, New York, and for the
underwriters by Sullivan & Cromwell, New York, New York.

EXPERTS

The financial statements as of December 31, 1999 and 1998 and for each of the
three years in the period ended December 31, 1999, included in this prospectus,
and the related financial statement schedule incorporated by reference in the
registration statement have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports appearing herein and incorporated by
reference in the registration statement, and have been so included in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.

35
<PAGE>

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference room at 450 Fifth
Street, NW, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Our SEC filings are also
available at the offices of the National Association of Securities Dealers,
Inc., in Washington, D.C.

The SEC allows us to incorporate by reference the information we file with
them, which means we can disclose important information to you by referring you
to those documents. The information incorporated by reference is an important
part of this prospectus, and information that we file with the SEC after the
date of this prospectus will automatically update and supersede this
information. We incorporate by reference our documents listed below and any
future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act until we sell all of the securities:

. Annual report on Form 10-K for the fiscal year ended December 31, 1999

. Registration statements on Form 8-A filed June 16, 1997 and April 3,
1997

. Current reports on Form 8-K filed April 11, 2000, as amended by Form 8-
K/A filed April 11, 2000

You may request a copy of these filings at no cost, by writing or telephoning
us at the following address:

Carol A. Padon
Vice President, Investor and Public Relations
West TeleServices Corporation
11808 Miracle Hills Drive
Omaha, Nebraska 68154
(402) 963-1500

This prospectus does not contain all the information contained in the
registration statement on Form S-3 filed by us for this offering. You should
refer to the registration statement for further information about us and the
selling stockholders. The full registration statement can be obtained from the
SEC as indicated above, or from us. Statements in this prospectus concerning
the terms of documents are necessarily summaries of those documents, and are
qualified in their entirety by reference to the actual document filed with the
SEC.

You should rely on the information incorporated by reference or provided in
this prospectus. We have not authorized anyone else to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other that the date
on the front cover of this prospectus. Our business, financial condition,
results of operations and prospects may have changed since that date. None of
our web sites or other publications are a part of this prospectus or the
registration statement.

36
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors Report................................................ F-2
Financial Statements:
Consolidated Balance Sheets.............................................. F-3
Consolidated Statements of Operations.................................... F-4
Consolidated Statements of Stockholders' Equity.......................... F-5
Consolidated Statements of Cash Flows.................................... F-6
Notes to Consolidated Financial Statements............................... F-7
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
West TeleServices Corporation
Omaha, Nebraska

We have audited the accompanying consolidated balance sheets of West
TeleServices Corporation and subsidiaries (the Company) as of December 31, 1999
and 1998 and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of West TeleServices Corporation and
subsidiaries as of December 31, 1999 and 1998 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999 in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Omaha, Nebraska
February 1, 2000

F-2
<PAGE>

WEST TELESERVICES CORPORATION

CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except per share amounts)

<TABLE>
<CAPTION>
December 31,
-------------------
1999 1998
--------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 61,865 $ 6,928
Accounts receivable, net of allowance for doubtful
accounts of $4,717 and $1,870........................... 88,056 98,300
Notes receivable......................................... 18,604 3,462
Accounts receivable--financing........................... 267 2,637
Other.................................................... 16,348 14,798
--------- --------
Total current assets................................... 185,140 126,125
PROPERTY AND EQUIPMENT:
Land and improvements.................................... 5,355 5,183
Buildings................................................ 29,908 27,746
Telephone and computer equipment......................... 164,691 124,950
Office furniture and equipment........................... 30,748 25,982
Leasehold improvements................................... 41,372 34,703
Construction in process.................................. 6,731 7,117
--------- --------
Total property and equipment........................... 278,805 225,681
Accumulated depreciation and amortization................ (110,871) (81,542)
--------- --------
Total property and equipment, net...................... 167,934 144,139
GOODWILL, net of accumulated amortization of $5,222 and
$3,537................................................... 45,311 46,996
NOTES RECEIVABLE AND OTHER ASSETS......................... 10,604 8,879
--------- --------
TOTAL ASSETS.............................................. $ 408,989 $326,139
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable--bank...................................... $ -- $ 2,000
Notes payable--financing................................. -- 344
Accounts payable......................................... 33,745 12,857
Customer deposits and holdbacks.......................... 9,273 13,476
Accrued wages and benefits............................... 7,411 5,305
Accrued phone expense.................................... 5,245 9,052
Other current liabilities................................ 10,157 4,146
Current maturities of long-term obligations.............. 14,882 8,246
--------- --------
Total current liabilities.............................. 80,713 55,426
LONG-TERM OBLIGATIONS, less current maturities............ 30,314 22,706
DEFERRED INCOME TAXES..................................... 6,000 5,799
COMMITMENTS AND CONTINGENCIES (Note H).................... -- --
STOCKHOLDERS' EQUITY
Preferred stock $0.01 par value, 10,000 shares
authorized,no shares issued and outstanding............. -- --
Common stock $0.01 par value, 200,000 shares authorized,
63,330 shares issued and outstanding.................... 633 633
Additional paid-in capital............................... 157,647 157,647
Retained earnings........................................ 133,682 83,928
--------- --------
Total stockholders' equity............................. 291,962 242,208
--------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................ $ 408,989 $326,139
========= ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE>

WEST TELESERVICES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands Except Per Share Amounts)

<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
REVENUE.......................................... $562,444 $482,823 $398,832
COST OF SERVICES................................. 288,503 256,494 220,858
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES..... 194,433 152,838 118,878
-------- -------- --------
NET OPERATING INCOME............................. 79,508 73,491 59,096
OTHER INCOME (EXPENSE):
Interest income................................ 3,596 3,762 3,240
Interest expense--including interest expense--
financing of $490, $772 and $320.............. (3,373) (1,627) (1,049)
Other, net..................................... 627 (866) (475)
-------- -------- --------
Net other income (expense)................... 850 1,269 1,716
-------- -------- --------
INCOME BEFORE INCOME TAX EXPENSE................. 80,358 74,760 60,812

INCOME TAX EXPENSE:
Current income tax expense..................... 31,476 27,340 22,392
Deferred income tax expense.................... (872) 1,429 1,010
-------- -------- --------
Income tax expense........................... 30,604 28,769 23,402
-------- -------- --------

NET INCOME....................................... $ 49,754 $ 45,991 $ 37,410
======== ======== ========
EARNINGS PER COMMON SHARE:
Basic.......................................... $ 0.79 $ 0.73 $ 0.59
======== ======== ========
Diluted........................................ $ 0.77 $ 0.73 $ 0.59
======== ======== ========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic common shares............................ 63,330 63,330 63,330
Dilutive impact of potential common shares from
stock options................................. 1,050 23 16
-------- -------- --------
Diluted common shares.......................... 64,380 63,353 63,346
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE>

WEST TELESERVICES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Amounts in Thousands)

<TABLE>
<CAPTION>
Total
Common Paid-in Retained Stockholders'
Stock Capital Earnings Equity
------ -------- -------- -------------
<S> <C> <C> <C> <C>
BALANCE, January 1, 1997................ $633 $157,719 $ 527 $158,879
Stock registration costs.............. -- (72) -- (72)
Net income............................ -- -- 37,410 37,410
---- -------- -------- --------
BALANCE, December 31, 1997.............. 633 157,647 37,937 196,217
Net income............................ -- -- 45,991 45,991
---- -------- -------- --------
BALANCE, December 31, 1998.............. 633 157,647 83,928 242,208
Net income............................ -- -- 49,754 49,754
---- -------- -------- --------
BALANCE, December 31, 1999.............. $633 $157,647 $133,682 $291,962
==== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE>

WEST TELESERVICES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)

<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................... $ 49,754 $ 45,991 $ 37,410
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation and amortization................ 37,343 27,284 20,635
Loss on sale of equipment.................... 170 58 238
Deferred income tax expense.................. (872) 1,429 1,010
Changes in operating assets and liabilities:
Accounts receivable.......................... 8,244 (36,699) (19,457)
Other assets and vendor receivables.......... (1,610) (11,139) (209)
Accounts payable............................. 20,888 (6,091) (4,323)
Other current liabilities and accrued
expenses.................................... 3,200 (637) 2,487
Income tax payable........................... 1,307 706 (2,472)
Customer deposits and holdbacks.............. (4,203) (8,999) 9,813
-------- -------- --------
Net cash flows from operating activities... 114,221 11,903 45,132
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment............. (38,953) (44,551) (43,852)
Proceeds from disposal of property and
equipment..................................... 1,285 1,684 287
Issuance of notes receivable................... (15,401) (6,990) (7,442)
Proceeds from payments of notes receivable..... 1,471 6,338 1,430
-------- -------- --------
Net cash flows from investing activities... (51,598) (43,519) (49,577)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt................. 6,000 -- --
Payments of long-term obligations.............. (13,712) (5,954) (17,562)
Net change in line of credit agreement......... (2,000) 2,000 --
Net change in accounts receivable financing and
notes payable financing....................... 2,026 2,678 6,834
Payments for stock registration costs.......... -- -- (72)
-------- -------- --------
Net cash flows from financing activities... (7,686) (1,276) (10,800)
-------- -------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS.......... 54,937 (32,892) (15,245)
CASH AND CASH EQUIVALENTS, Beginning of period... 6,928 39,820 55,065
-------- -------- --------
CASH AND CASH EQUIVALENTS, End of period......... $ 61,865 $ 6,928 $ 39,820
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest....... $ 3,092 $ 1,627 $ 1,381
======== ======== ========
Cash paid during the period for income taxes... $ 29,842 $ 26,366 $ 24,877
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
ACTIVITIES:
Acquisition of property through assumption of
long-term obligations......................... $ 21,956 $ 15,220 $ 16,725
======== ======== ========
Reduction of accounts receivable through
issuance of notes receivable.................. $ 2,000 $ 2,724 $ 1,114
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Description--West TeleServices Corporation (WTSC) and its direct
and indirect subsidiaries (West Telemarketing Corporation (WTC), West
Interactive Corporation (WIC), West Telemarketing Corporation Outbound (WTCO),
Interactive Billing Services, Inc. (IBS) and West Interactive Canada, Inc.
(WICI)) (the "Company") provide a full range of customized telecommunications-
based services to business clients on an outsourced basis. The Company is a
leading provider of inbound operator services, automated voice response
services and outbound direct teleservices through its call centers located
throughout the United States and in Canada. The Company's inbound operator
services ("Inbound") consist of live operator call-processing applications such
as order capture, customer service and product support. The Company's automated
voice response services ("Interactive") consist of computerized call-processing
applications, such as automated product information requests, pre-paid call
card services and secure automated credit card activation. The Company's
outbound direct teleservices ("Outbound") consist of live operator direct
marketing applications, such as product sales, customer acquisition and
retention campaigns. The Company has developed proprietary technology platforms
designed to provide a high degree of automation and reliability in all three of
its businesses.

The Company targets businesses in highly competitive, consumer-based
industries, including telecommunications, insurance, banking, pharmaceuticals,
public utilities, consumer goods and computer software services, that require
large volume applications.

Basis of Consolidation--The consolidated financial statements include the
accounts of the Company and its subsidiaries. All material intercompany
transactions and balances have been eliminated in the consolidated financial
statements.

Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Revenue Recognition--Inbound revenue is recognized at the time calls are
answered by a telemarketing representative based on the number of calls and/or
minutes received and processed on behalf of clients. Interactive revenue is
recognized at the time calls are received or sent by automated voice response
units and is billed based on call duration. Outbound revenue is generally
recognized on an hourly rate basis at the time the telemarketing
representatives place calls to consumers on behalf of its clients. The customer
is obligated to pay for these services when these activities have been
performed. Both Inbound and Outbound also generate revenue by providing
assistance to their clients in the design and programming of customized
applications which are generally recognized on a hourly basis at the time the
services are provided.

Cost of Services--Cost of services includes labor, telephone and other
expense directly related to teleservices activities.

Selling, General and Administrative Expenses--Selling, general and
administrative expenses consist of all expenses that support the ongoing
operation of the Company. These expenses include costs related to division
management, facilities costs, equipment depreciation and maintenance,
amortization of goodwill, allowance for doubtful accounts, sales and marketing
activities, client support services and corporate management costs.

F-7
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

Cash and Cash Equivalents--For purposes of the statement of cash flows, the
Company considers short-term investments with maturities of three months or
less at acquisition to be cash equivalents.

Financial Instruments--Cash and cash equivalents, accounts receivable and
accounts payable are short-term in nature and the net values at which they are
recorded are considered to be reasonable estimates of their fair values. The
carrying values of notes payable and long-term obligations are deemed to be
reasonable estimates of their fair values. Interest rates that are currently
available to the Company for the reissuance of debt with similar terms and
remaining maturities are used to estimate fair values of the notes payable and
long-term obligations.

Property and Equipment--Property and equipment are recorded at cost.
Depreciation expense is based on the estimated useful lives of the assets and
is calculated on the straight-line method. The Company's buildings have
estimated useful lives of 31.5 years and the majority of the other assets have
estimated useful lives of five years.

Goodwill--Goodwill represents the excess of the value of Company stock
received by minority shareholders upon their exchange of stock in WTC and WTCO
over the book value of this stock. Goodwill is being amortized over 30 years.
Recoverability of these assets is evaluated periodically based on management's
estimate of future undiscounted operating income for each respective component
of goodwill.

Customer Deposits and Holdbacks--The Company obtains directly from the
billing and collection agent, revenue generated from its Interactive customers'
programs. The Company retains a specified amount of the revenue and remits the
remainder to its customers. The retained amount is based upon the collection
history of the customer's program success and is necessary to allow for
potential adjustments which may be filed within one year of the actual
transactions.

The Company obtains security deposits from certain customers, which are
refunded to the customers when the Company discontinues service to the
customers' programs.

Income Taxes--The Company and its wholly-owned subsidiaries file a
consolidated income tax return. The Company uses an asset and liability
approach for the financial reporting of income taxes in accordance with
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes. Deferred income taxes arise from temporary differences between financial
and tax reporting.

Earnings Per Common Share--Basic earnings per share excludes dilution and is
computed by dividing income available to common stockholders by the weighted-
average number of common shares outstanding for the period. Diluted earnings
per share reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock or resulted in issuance of common stock that then shared in the earnings
of the entity.

Preferred Stock--The Board of Directors of the Company has the authority,
without any further vote or action by the stockholders, to provide for the
issuance of up to ten million shares of preferred stock from time to time in
one or more series with such designations, rights, preferences and limitations
as the Board of Directors may determine, including the consideration received
therefor. The Board also has the authority to determine the number of shares
comprising each series, dividend rates, redemption provisions, liquidation
preferences, sinking fund provisions, conversion rights and voting rights
without approval by the holders of common stock.

F-8
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

Reclassifications--Certain reclassifications have been made to prior years'
financial statements to conform to the current year presentation.

B. ACCOUNTS RECEIVABLE FINANCING PROGRAM

The Company maintains a line of credit with three participating banks in the
amount of $10,000. Outstanding borrowings totaled $ -0- and $344 at December
31, 1999 and 1998, respectively. Borrowings bear interest at 1.0% below the
prime rate (actual rate 7.50% at December 31, 1999) to fund customer advances.
Substantially all current assets of WIC are pledged as collateral on the line
of credit, which expires June 28, 2000. The Company had advances to Interactive
customers through their accounts receivable financing programs aggregating $267
and $2,637 at December 31, 1999 and 1998, respectively. Under terms of the
programs, advances are collateralized by the customer's accounts receivable
from unrelated national billing services. The Company charges interest at the
prime rate plus 3.0% (actual rate 11.50% at December 31, 1999).

C. LONG-TERM OBLIGATIONS AND CREDIT ARRANGEMENTS

The Company has a $25,000 unsecured revolving credit facility. Advances under
the revolving credit facility bear interest at the prime rate less 1.0% (actual
rate 7.50% at December 31, 1999). The revolving credit facility expires on June
28, 2000. Outstanding borrowings under the revolving credit facility totaled $
- -0- and $2,000 at December 31, 1999 and 1998, respectively. The Company's
credit facility contains certain financial and other covenants which contain
current ratio and tangible net worth requirements and limitations on
indebtedness, among others. The financial covenants were met at December 31,
1999.

Long-term obligations consist of the following:

<TABLE>
<CAPTION>
December 31,
---------------
1999 1998
------- -------
<S> <C> <C>
Mortgage note payable to bank, due in monthly installments
of $102 including interest at 7.63% with a balloon payment
at maturity at February 1, 2003............................ $11,977 $12,271
Notes payable to vendor, due in monthly installments of $215
including interest from 3.54% to 5.40% maturing from March
30, 2000 to January 1, 2002................................ 3,098 4,412
Notes payable to bank, due in monthly installments of $176
including interest at 6.20% maturing October 28, 2001...... 3,802 5,758
Notes payable to bank, due in monthly installments of $185
including interest at 6.75% maturing April 1, 2002......... 4,780 --
Capital lease obligations (See Note D)...................... 21,539 8,511
------- -------
45,196 30,952
Less current maturities:
Debt...................................................... 5,771 4,305
Capital lease obligations (See Note D).................... 9,111 3,941
------- -------
Current maturities of long-term obligations................. 14,882 8,246
------- -------
Long-term obligations....................................... $30,314 $22,706
======= =======
</TABLE>

F-9
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

Substantially all assets of the Company and its direct and indirect
subsidiaries are pledged as collateral on their debt. The agreements contain
restrictive covenants, which, among other things, require the maintenance of
certain ratios and minimum tangible net worth, as defined in the agreements.

Scheduled maturities on long-term debt excluding capital lease obligations
described in Note D, are as follows:

D. LEASES

The Company leases certain land, buildings and equipment under operating and
capital leases, which expire at varying dates through September 2007. Rent
expense on operating leases was $4,595, $4,190 and $2,666 for the years ended
December 31, 1999, 1998 and 1997, respectively, exclusive of related party
lease expense as discussed in Note E. On all real estate leases, the Company
pays real estate taxes, insurance and maintenance associated with the leased
sites. Certain of the leases offer extension options ranging from month to
month to five-years. All of the capital leases call for transfer of ownership
or contain bargain purchase options at the end of the lease term. Amortization
of assets purchased through capital lease agreements is included in
depreciation expense.

<TABLE>
<CAPTION>
December 31,
----------------
1999 1998
------- -------
<S> <C> <C>
Assets under capital leases consist of:
Telephone and computer equipment......................... $24,490 $17,012
Office furniture and equipment........................... 2,361 4,097
Lease/building improvements.............................. 633 633
------- -------
Total cost........................................... 27,484 21,742
Accumulated depreciation................................... (6,621) (5,463)
------- -------
Net book value............................................. $20,863 $16,279
======= =======
</TABLE>

F-10
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

Future minimum payments under non-cancelable operating and capital leases
with initial or remaining terms of one year or more, minimum future lease
payments and present value of the net minimum lease payments are as presented
below exclusive of related party leases as discussed in Note E:

<TABLE>
<CAPTION>
Operating Capital
Leases Leases
--------- -------
<S> <C> <C>
Year Ending December 31,
2000..................................................... $ 6,751 $10,339
2001..................................................... 5,915 10,084
2002..................................................... 5,515 3,032
2003..................................................... 4,965 --
2004..................................................... 3,077 --
2005 and thereafter...................................... 3,010 --
------- -------
Total minimum obligations.................................. $29,233 23,455
=======
Less interest at 6.10% to 8.10%............................ 1,916
-------
Present value of net minimum lease payments................ 21,539
Less current portion....................................... 9,111
-------
$12,428
=======
</TABLE>

E. RELATED PARTY TRANSACTIONS

The Company leases certain office space owned by a partnership whose partners
are majority stockholders of the Company. The lease expires August 31, 2004,
and is accounted for as an operating lease. Required lease payments are as
follows:

<TABLE>
<S> <C>
Year Ending December 31,
2000................................................................ $ 869
2001................................................................ 921
2002................................................................ 976
2003................................................................ 1,035
2004................................................................ 717
</TABLE>

Lease expense was $820, $773 and $730 for the years ended December 31, 1999,
1998 and 1997, respectively.

F-11
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

F. INCOME TAXES

Components of the actual income tax expense are as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Current income tax expense:
Federal......................................... $29,582 $24,450 $20,417
State........................................... 1,894 2,890 1,975
------- ------- -------
31,476 27,340 22,392
------- ------- -------
Deferred income tax expense:
Federal......................................... (687) 1,088 966
State........................................... (185) 341 44
------- ------- -------
(872) 1,429 1,010
------- ------- -------
$30,604 $28,769 $23,402
======= ======= =======

A reconciliation of income tax computed at statutory tax rates compared to
effective income tax rates is as follows:

<CAPTION>
Year Ended December 31,
-------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Statutory rate.................................... 35.0% 35.0% 35.0%
State income tax effect........................... 2.5% 2.3% 1.6%
Other............................................. 0.6% 1.2% 1.9%
------- ------- -------
38.1% 38.5% 38.5%
======= ======= =======

Significant temporary differences between reported financial and taxable
earnings that give rise to deferred tax assets and liabilities are as follows:

<CAPTION>
Year Ended December 31,
-------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts................. $ 1,792 $ 720 $ 162
Deferred tax liabilities:
Depreciation.................................... 6,000 5,799 3,684
------- ------- -------
Net deferred tax liability........................ $ 4,208 $ 5,079 $ 3,522
======= ======= =======
</TABLE>

G. EMPLOYEE BENEFITS AND INCENTIVE PLANS

The Company has a 401(k) plan, which covers substantially all employees.
Under the plan, the Company will match 50% of employee contributions up to 14%
of their gross salary. The Company matching contributions are 100% vested after
the employee has attained five years of service. Total contributions under the
plan were $2,841, $1,208 and $816 for the years ended December 31, 1999, 1998
and 1997, respectively.

F-12
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

The Company's 1996 Stock Incentive Plan (the Plan) authorized granting to
officers and directors the right to purchase shares of Common Stock of the
Company (Common Shares) at the fair market value determined on the date of
grant. Options generally vest over a three to seven year period and expire ten
years after grant date. Options to purchase a maximum of 9,499,500 Common
Shares may be granted under the Plan.

During May 1997, the Company amended the options granted during November
1996. The options to purchase the 3,601,000 Common Shares at $18.00 were
surrendered by option holders in June of 1997 and new options to purchase
4,707,400 Common Shares at $15.625 were issued. Ten percent of the options
granted to employees vest on the first and second anniversaries of the grant
date. An additional fifteen percent of the options granted to employees vest on
each of the third, fourth, fifth and sixth anniversaries of the grant date. The
final twenty percent of the options granted to employees vest on the seventh
anniversary of the grant date. All options expire ten years after the date of
the grant.

During December 1998, the Company amended all outstanding options granted.
The options to purchase the Common Shares at prices ranging from $15.625 to
$17.75 were surrendered by option holders in December of 1998 and replacement
options of 5,185,700 Common Shares with an exercise price, equal to the current
market price, of $9.6875 were issued including replacement options of 44,000
Common Shares held by non-employee directors. All replacement options retain
their original vesting schedules but are subject to a 382 day period in which
exercises are prohibited. During December 1998, additional options to purchase
1,810,000 Common Shares at $9.6875 were issued. Twenty-five percent of the
additional options vest on the first, second, third and fourth anniversaries of
January 1, 1999. All options expire ten years after the date of the grant. No
options were exercisable at December 31, 1999, 1998 and 1997.

F-13
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

The following table presents the activity of the stock options for each of
the fiscal years ended December 31, 1999, 1998 and 1997 and the stock options
outstanding at the end of the respective fiscal years.

<TABLE>
<CAPTION>
Stock Option Weighted Average Aggregate
Shares Exercise Price Amount
------------ ---------------- ---------
<S> <C> <C> <C>
Outstanding at January 1, 1997...... 3,601,000 $18.0000 $64,818
---------- -------- -------
Surrendered and replaced by plan
amendment........................ (3,601,000) 18.0000 (64,818)
Granted........................... 4,735,400 15.6375 74,050
Canceled.......................... (177,100) 15.6250 (2,767)
---------- -------- -------
Outstanding at December 31, 1997.... 4,558,300 15.6381 71,283
---------- -------- -------
Granted........................... 7,760,800 10.2726 79,724
Surrendered and replaced by plan
amendment........................ (5,185,700) 15.6361 (81,084)
Canceled.......................... (137,700) 15.6250 (2,152)
---------- -------- -------
Outstanding at December 31, 1998.... 6,995,700 9.6875 67,771
---------- -------- -------
Granted........................... 515,000 10.7693 5,546
Canceled.......................... (499,300) 9.7443 (4,865)
---------- -------- -------
Outstanding at December 31, 1999.... 7,011,400 $ 9.7634 $68,452
========== ======== =======
Shares available for future grants
at December 31, 1999............... 2,488,100
==========
</TABLE>

The following table summarizes information about the Company's stock options
outstanding at December 31, 1999:

<TABLE>
<CAPTION>
Average Weighted
Stock Option Remaining Average
Exercise Shares Contractual Exercise
Price Outstanding Life in Years Price
-------- ------------ ------------- --------
<S> <C> <C> <C>
$ 8.0000 8,000 9.36 $ 8.0000
$ 9.6875 6,521,400 8.95 $ 9.6875
$10.8130 482,000 9.58 $10.8130
--------- ---- --------
7,011,400 9.00 $ 9.7634
=========
</TABLE>

During May 1997, the Company and its stockholders adopted the 1997 Employee
Stock Purchase Plan (the Stock Purchase Plan). The Stock Purchase Plan provides
employees an opportunity to purchase Common Shares through annual offerings to
be made during the five-year period commencing July 1, 1997. Each employee
participating in any offering is granted an option to purchase as many full or
fractional Common Shares as the participating employee may elect so long as the
purchase price for such Common Shares does not exceed 10% of the compensation
received by such employee from the Company during the annual offering period or
1,000 Common Shares. The purchase price is to be paid through payroll
deductions. The purchase price for each Common Share is equal to 100% of the
fair market value of the Common Share on the date of the grant, determined by
the average of the high and low NASDAQ National Market quoted market price
($9.50 at July 1, 1999). On the last day of the offering period, the option to
purchase Common Shares

F-14
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)
becomes exercisable. If at the end of the offering the fair market value of the
Common Shares is less than 100% of the fair market value at the date of grant,
then the options will not be deemed exercised and the payroll deductions made
with respect to the options will be applied to the next offering unless the
employee elects to have the payroll deductions withdrawn from the Stock
Purchase Plan. The maximum number of Common Shares available for sale under the
Stock Purchase Plan is 2,000,000 shares. No options were exercisable at
December 31, 1999 and 1998.

The Company accounts for its stock-based compensation plans under the
provisions of Accounting Principles Board Opinion 25, Accounting for Stock
Issued to Employees, which utilizes the intrinsic value method. As a result of
the exercise price being equal to the market price at the date of grant, the
Company recognized no compensation expense for the years ended December 31,
1999, 1998 and 1997.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized over the options' vesting period. Had the Company's stock
option and stock purchase plan been accounted for under Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation; 1999,
1998 and 1997 net income and earnings per share would have been reduced to the
following pro forma amounts:

<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Net Income:
As reported.................................... $49,754 $45,991 $37,410
Pro forma...................................... $41,782 $39,885 $31,751

Earnings per common share:
Basic as reported.............................. $ 0.79 $ 0.73 $ 0.59
Diluted as reported............................ $ 0.77 $ 0.73 $ 0.59
Pro forma basic................................ $ 0.66 $ 0.63 $ 0.50
Pro forma diluted.............................. $ 0.65 $ 0.63 $ 0.50

The weighted average fair value per share of options granted in 1999, 1998,
and 1997 was $6.80, $3.45 and $7.65, respectively. The fair value for options
granted under the above described plans were estimated at the date of grant
using the Black Scholes pricing model with the following assumptions:

<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Risk-free interest rate.......................... 5.3% 4.7% 6.5%
Dividend yield................................... 0.0% 0.0% 0.0%
Expected volatility.............................. 60.0% 55.0% 45.0%
Expected life (years)............................ 4.1 4.1 5.4
</TABLE>

H. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is subject to lawsuits and claims which arise
out of its operations in the normal course of its business. The Company and
certain of its subsidiaries are defendants in various litigation matters in the
ordinary course of business, some of which involve claims for damages that are
substantial in amount. The Company believes, except for the items discussed
below for which the Company is currently unable to predict the outcome, the
disposition of claims currently pending will not have a material adverse effect
on the Company's financial position or results of operations.

F-15
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

Richard Carney, et al. v. West TeleServices, Inc., West Telemarketing
Corporation, West Telemarketing Corporation Outbound, West Telemarketing
Insurance Agency, Inc., Hal Morris, Matt Mazzarella and John Erwin (Cause No.
97-CI-15780) was filed on October 31, 1997, in the 131st Judicial District
Court of Bexar County, Texas. Plaintiffs seek certification of a class
consisting of all hourly employees of the Company, Inbound, Outbound, and West
Telemarketing Insurance Agency, Inc. Plaintiffs allege that they were not paid
for all compensable work performed by them during their employment. Plaintiffs
seek recovery under the theories of quantum meruit, common law fraud, common
law debt, conversion and civil theft. The Court conducted hearings on West's
motion for summary judgment and Plantiff's class certification motion on
November 8, 1999. No ruling has yet been issued.

Outbound is a defendant in a case filed on July 28, 1997, entitled Schurman,
Bowers, et al., individually and on behalf of a class of all other persons
similarly situated v. Horry Telephone Cooperative, Inc.; AT&T Corp.; AT&T
Communications, Inc.; AT&T Communications of the Southern States, Inc.; and
West Telemarketing Outbound Corporation, pending in the United States District
Court for the District of South Carolina (Civil Action No. 4:97-2635-12).
Outbound is also named as a defendant in a Fourth Amended Complaint filed on
October 26, 1998, in the case of Chris Bone, et al., individually and as class
representatives, vs. Horry Telephone Cooperative, Inc.; AT&T Corp.; AT&T
Communications, Inc.; AT&T Communications of Southern States, Inc.; and West
Telemarketing Outbound Corporation, which is also pending in United States
District Court for the District of South Carolina (Civil Action No. 4:96-3527-
22). Plaintiffs in both cases allege claims of negligent misrepresentation,
fraud, breach of contract and statutory violations in connection with offers by
AT&T of rate programs and long distance services which were allegedly either
unavailable or not provided to plaintiffs. Outbound provided telemarketing
services to AT&T in connection with AT&T's marketing of its programs and
services. Plaintiffs seek monetary damages, punitive damages, attorney's fees,
costs and injunctive relief. No class has been certified in either case. The
federal judge to whom both cases are assigned has consolidated the cases and
referred all issues in both cases to the FCC. The judge also stayed both cases
pending the outcome of the FCC referral.

Glenn K. Jackson and Elsie Jackson v. West Telemarketing Corporation Outbound
and Does 1 through 100, inclusive, was filed in the United States District
Court for the Central District of California (No. CV-97-8281 TJH (AIJx)), on
August 12, 1997, and transferred to the United States District Court for the
Northern District of Texas, Dallas Division, where it is pending (Civil Action
No. 3:98-CV-0960-H). The complaint contains several causes of action, all of
which deal with the purchase by Outbound of two pieces of property from the
Resolution Trust Corporation ("RTC") during 1993 and 1994. The plaintiffs
contend that they also bid on the property, that Outbound learned the amount of
their bids, used that information to out-bid them and, ultimately, purchase the
property. The complaint seeks general damages, special damages, equitable
injunctive and restitutionary relief, including restitution of the property
involved, punitive damages, attorneys' fees, and litigation costs. Pre-trial
discovery, including discovery on plaintiffs' damage claims and theories,
actively began in the second quarter of 1999. Outbound filed preliminary
motions for summary judgment on August 16, 1999. The Court assigned all
preliminary matters to a U.S. magistrate who heard all pending motions, except
the motion for summary judgment, on September 24, 1999. The court denied
Outbound's motion requesting plaintiffs be required to join RTC, Old Stone Bank
and a bank employee as defendants and dismissed, without prejudice, all of
plaintiff's motions related to discovery issues. On November 19, 1999, the U.S.
magistrate granted West's motion for summary

F-16
<PAGE>

WEST TELESERVICES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1999, 1998 and 1997
(Dollars in Thousands Except Per Share Amounts)

judgment in full. On December 9, 1999, the plaintiffs appealed to the Appellate
Court Fifth Circuit the summary judgment granted Outbound by the United States
District Court for the Northern District of Texas, Dallas Division. The
briefing schedule has not yet been set.

I. SIGNIFICANT CUSTOMERS AND SERVICE LINES

For the years ended December 31, 1999, through December 31, 1997, the Company
had 41 to 47 major customers who accounted for approximately 80% of total
revenues. The Company had one customer who accounted for 32% of total revenue
for the year ended December 31, 1999 and 33% of total revenue for the year
ended December 31, 1998, and two customers, accounted for 25% and 12% for the
year ended December 31,1997.

The following is revenue by service lines for years ending December 31, 1999,
1998 and 1997:

<TABLE>
<CAPTION>
For the Year Ending
December 31,
--------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Inbound........................................... $251,663 $186,454 $130,469
Interactive....................................... 131,720 122,601 138,874
Outbound.......................................... 179,061 173,768 129,489
-------- -------- --------
Total revenue..................................... $562,444 $482,823 $398,832
======== ======== ========
</TABLE>

J. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is the summary of the quarterly results of operations for the
two years ended December 31:

<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------
March 31, June 30, September 30, December 31,
1999 1999 1999 1999
-------- -------- ------------- ------------
<S> <C> <C> <C> <C>
Revenue................... $137,992 $138,085 $143,071 $143,295
Net operating income...... 21,802 17,612 19,650 20,444
Net income before income
taxes.................... 22,180 17,935 19,778 20,464
Net income................ 13,909 11,066 12,160 12,619
Earnings per common share:
Basic................... $ 0.22 $ 0.17 $ 0.19 $ 0.20
Diluted................. $ 0.22 $ 0.17 $ 0.19 $ 0.19
</TABLE>

<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------

March 31, June 30, September 30, December 31,
1998 1998 1998 1998
-------- -------- ------------- ------------
<S> <C> <C> <C> <C>
Revenue................... $116,075 $118,004 $123,294 $125,450
Net operating income...... 19,985 17,570 18,013 17,923
Net income before income
taxes.................... 20,223 17,916 18,438 18,183
Net income................ 12,412 11,016 11,355 11,208
Earnings per common share:
Basic................... $ 0.20 $ 0.17 $ 0.18 $ 0.18
Diluted................. $ 0.20 $ 0.17 $ 0.18 $ 0.18
</TABLE>

F-17
<PAGE>

[Artwork appearing on inside back cover of Prospectus]

Fully Integrated National Network

[Map depicting location of
contact centers, automated voice
and data processing centers and
Corporate Headquarters]
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely
on any unauthorized information or representations. This prospectus is an
offer to sell only the shares offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary........................................................ 1
Risk Factors.............................................................. 5
Forward Looking Statements................................................ 10
Use of Proceeds........................................................... 10
Price Range of Common Stock............................................... 10
Dividend Policy........................................................... 11
Capitalization............................................................ 11
Selected Consolidated Financial Information............................... 12
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 13
Business.................................................................. 19
Management................................................................ 29
Selling Stockholders...................................................... 31
Description of Capital Stock.............................................. 32
Underwriting.............................................................. 34
Validity of Common Stock.................................................. 35
Experts................................................................... 35
Where You Can Find More Information....................................... 36
Index to Consolidated Financial Statements................................ F-1
</TABLE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

4,500,000 Shares

West Teleservices
Corporation

Common Stock

-----------

[LOGO OF WEST TELESERVICES]
-----------

Goldman, Sachs & Co.

Credit Suisse First Boston

-----------

Robert W. Baird & Co.

Janney Montgomery Scott LLC

Representatives of the Underwriters

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table sets forth the fees and expenses payable by West
TeleServices Corporation in connection with this offering, other than
underwriting discounts and commissions. All the amounts shown are estimates,
except the SEC registration fee:

<TABLE>
<S> <C>
NASD fee........................................................ 13,909
Printing fees................................................... 40,000
Legal fees and expenses......................................... 350,000
Accounting fees and expenses.................................... 100,000
Miscellaneous fees and expenses................................. 46,091
--------
Total......................................................... $550,000
========
</TABLE>

Item 15. Indemnification of Directors and Officers

Generally, Section 145 of the General Corporation Law of the State of
Delaware (the "GCL") permits a corporation to indemnify certain persons made a
party to an action, by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise. To the extent that person has been
successful in any such matter, that person shall be indemnified against
expenses actually and reasonably incurred by him. In the case of an action by
or in the right of the corporation, no indemnification may be made in respect
of any matter as to which that person was adjudged liable unless and only to
the extent that the Delaware Court or Chancery or the court in which the action
was brought determines that despite the adjudication of liability that person
is fairly and reasonably entitled to indemnify for proper expenses.

Our By-laws provide for indemnification of our directors and officers to the
fullest extent permitted by law.

Section 102(b)(7) of the GCL enables a Delaware corporation to include a
provision in its certificate of incorporation limiting a director's liability
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty as a director. We have adopted a provision in our Restated
Certificate of Incorporation that provides for such limitation to the full
extent permitted under Delaware Law.

Our directors and officers are covered by insurance policies indemnifying
against certain liabilities, including certain liabilities arising under the
Securities Act which might be incurred by them in such capacities and against
which we may not indemnify them.

Item 16. Exhibits

<TABLE>
<CAPTION>
<C> <S>
1.1 Form of Underwriting Agreement.*
3.1 Restated Certificate of Incorporation (filed as Exhibit 3.01 to Amendment
No. 2 to the Company's Registration Statement on Form S-1 (File No. 333-
13991) on November 21, 1996)
3.2 Restated By-laws of West TeleServices Corporation (filed as Exhibit 3.02
to Amendment No. 2 to the Company's Registration Statement on Form S-1
(File No. 333-13991) on November 21, 1996)
</TABLE>

II-1
<PAGE>

<TABLE>
<C> <S>
5.1 Opinion of Willkie Farr & Gallagher.*
23.1 Consent of Willkie Farr & Gallagher (included in their opinion filed as
Exhibit 5.1).*
23.2 Consent of Deloitte & Touche LLP
24.1 Power of Attorney+
</TABLE>
- --------

* To be filed by amendment
+ Previously filed

Item 17. Undertakings.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(d)
or 15(d) of the Securities Exchange Act of 1934, (and, where applicable,. each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(2) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(3) For purposes of determining any liability under the Securities Act of
1933, the information omitted form the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(4) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-2
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, West TeleServices
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing a Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Omaha, State of
Nebraska, on the 11th day of April, 2000.

WEST TELESERVICES CORPORATION

/s/ Thomas B. Barker
By: _________________________________
Name: Thomas B. Barker
Title: President and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----

<S> <C> <C>
* Co-Chairman of the Board April 11, 2000
______________________________________ and Director
Gary L. West

* Vice Chair of the Board April 11, 2000
______________________________________ and Director
Mary E. West

/s/ Thomas B. Barker President and Chief April 11, 2000
______________________________________ Executive Officer and
Thomas B. Barker Director (Principal
Executive Officer)

* Chief Financial Officer, April 11, 2000
______________________________________ Executive Vice President-
Michael A. Micek Financial and Treasurer
(Principal Financial and
Accounting Officer)

* Director April 11, 2000
______________________________________
William E. Fisher

* Director April 11, 2000
______________________________________
</TABLE> Greg T. Sloma

/s/ Thomas B. Barker

*By: _______________________

Thomas B. Barker

Attorney-in-Fact

II-3
<PAGE>

EXHIBIT INDEX

<TABLE>
<C> <S>
3.1 Restated Certificate of Incorporation (filed as Exhibit 3.01 to Amendment
No. 2 to the Company's Registration Statement on Form S-1 (File No. 333-
13991) on November 21, 1996)
3.2 Restated By-laws of West TeleServices Corporation (filed as Exhibit 3.02
to Amendment No. 2 to the Company's Registration Statement on Form S-1
(File No. 333-13991) on November 21, 1996)
5.1 Opinion of Willkie Farr & Gallagher.*
23.1 Consent of Willkie Farr & Gallagher (included in their opinion filed as
Exhibit 5.1).*
23.2 Consent of Deloitte & Touche LLP
24.1 Power of Attorney+
</TABLE>
- --------

* To be filed by amendment

+ Previously filed

<PAGE>

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement of West TeleServices Corporation and subsidiaries on
Form S-3 of our reports dated February 1, 2000 included in the Annual Report on
Form 10-K of West TeleServices Corporation and subsidiaries for the year ended
December 31, 1999, and to the use of report dated February 1, 2000, appearing
in the Prospectus, which is part of the Registration Statement. We also consent
to the reference to us under the headings "Selected Consolidated Financial
Information" and "Experts" in such Prospectus.

/s/ Deloitte & Touche LLP

Omaha, Nebraska

April 11, 2000