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8-K - FORM 8-K - Genpact LTDd482021d8k.htm

Exhibit 99.1

 

LOGO

Genpact Reports Results for 2012 Full Year and Fourth Quarter

Revenues of $1.9 Billion, Up 19% for FY ’12 and Up 15% for 4Q ‘12

Adjusted Income from Operations of $313 Million, Up 18% for FY’ 12 and Up 9% for 4Q ’12

Cash Flow from Operations of $311 Million, Up 17% for FY ’12 and Up 13% for 4Q ’12

NEW YORK, February 7, 2013 – Genpact Limited (NYSE: G), a global leader in business process management and technology services, today announced financial results for the fourth quarter and full year ended December 31, 2012.

Key Financial Results – Full-Year 2012

 

 

Revenues were $1.9 billion, up 18.8% from $1.6 billion in 2011.

 

 

Net income attributable to Genpact Limited shareholders was $178.2 million, compared to $184.3 million in 2011; net income margin for 2012 was 9.4%, compared to 11.5% in 2011.

 

 

The effective tax rate was 30.6%, up from 27.7% in 2011.

 

 

Diluted earnings per common share were $0.78, compared to $0.81 per share in 2011.

 

 

Adjusted income from operations increased 18.4% to $313.1 million, up from $264.5 million in 2011.

 

 

Adjusted income from operations margin was 16.5%, unchanged from 2011.

 

 

Adjusted diluted earnings per share were $0.96, compared to $0.98 in 2011.

Key Financial Results – Fourth Quarter 2012

 

 

Revenues were $507.7 million, up 14.7% from $442.7 million in the fourth quarter of 2011.

 

 

Net income attributable to Genpact Limited shareholders was $53.4 million, compared to $61.1 million in the fourth quarter of 2011; net income margin for the fourth quarter of 2012 was 10.5%, compared to 13.8% in the fourth quarter of 2011.

 

 

Diluted earnings per common share were $0.23, compared to $0.27 per share in the fourth quarter of 2011.

 

 

Adjusted income from operations totaled $83.9 million, up from $77.1 million in the fourth quarter of 2011.

 

 

Adjusted income from operations margin was 16.5%, compared to 17.4% in the fourth quarter of 2011.

 

 

Adjusted diluted earnings per share were $0.25, compared to $0.32 in the fourth quarter of 2011.

N.V. ‘Tiger’ Tyagarajan, Genpact’s president and CEO said, “Our results in the fourth quarter and full year 2012 demonstrated strong client demand and profitable growth. In 2012, we delivered robust growth in revenues and adjusted operating income. In addition, we expanded and strengthened our capabilities across our enterprise services offerings, industry vertical markets and geographies with both investment initiatives and acquisitions. We also provided our shareholders a substantial return of capital in the form of a $502 million special cash dividend. All of these accomplishments build upon our solid foundation and position us to take advantage of the large market opportunity available to us and long runway to drive sustained growth in revenues and cash flows.”

Revenues from Global Clients grew 25.8% for the full year 2012 and 19.2% in the fourth quarter. Business process management revenues from Global Clients grew 21.3% for the full year, and 21.1% in the fourth quarter and were led by growth in Smart Decision Services of 31.3% for the full year and 21.0% for the fourth


quarter. Revenues from Global Clients represented approximately 73.9% of Genpact’s total revenues in 2012, with the remaining 26.1% of revenues coming from GE. GE revenues increased 2.8% for the full year 2012 and 3.1% in the fourth quarter.

As of the end of 2012, 65 client relationships each contributed revenues of $5 million or more in the last 12 months, up from 56 such relationships as of December 31, 2011. As of the end of 2012, 11 client relationships each contributed revenues of $25 million or more in the last 12 months, up from nine such client relationships as of December 31, 2011.

Approximately 76.6% of Genpact’s revenues for the full year 2012 and 76.8% for the fourth quarter came from business process management services, compared to 78.8% for 2011 and 75.9% for the fourth quarter of 2011. Revenues from IT services represented approximately 23.4% of total revenues for the full year 2012 and 23.2% for the fourth quarter, compared to 21.2% for 2011 and 24.1% for the fourth quarter of 2011.

Genpact generated $310.7 million of cash from operations in 2012 and $101.2 million in the fourth quarter of 2012, up from $266.6 million of cash from operations in 2011 and $89.5 million in the fourth quarter of 2011, primarily due to better working capital management resulting from lower days sales outstanding in the fourth quarter. Genpact had approximately $477.5 million in cash and cash equivalents and short-term deposits as of December 31, 2012.

In the third quarter of 2012, Genpact paid a special cash dividend of $2.24 per share, for an aggregate amount of approximately $502 million, to holders of Genpact common shares and facilitated the sale of approximately 26% of its outstanding shares to Bain Capital Partners from its original sponsors. The special dividend was funded through a combination of surplus cash on Genpact’s balance sheet and a portion of the proceeds of borrowings under a new $925 million senior credit facility. The costs and expenses associated with the above transactions are reflected in Genpact’s results for 2012, and adversely impacted net income for the year.

As of December 31, 2012, Genpact had approximately 60,200 employees worldwide, an increase from approximately 55,400 at the end of 2011. The attrition rate for the entire year, measured from day one, was 25%, down from 30% in 2011. Revenue per employee in 2012 was $34,000, compared to $34,100 in 2011.

2013 Outlook

Tyagarajan continued, “We remain cautious, as are many of our clients, about the global economy in the near term, even as we see signs of improvement, and we are bullish on the long term. For the full year 2013, we expect revenues to be in a range of $2.15 – $2.20 billion, and adjusted operating income margin in a range of 15.8% – 16.3%. This guidance reflects the revenue contribution and slight margin dilution for the year resulting from the recently-announced acquisition of JAWOOD. Without the anticipated impact of JAWOOD, we would have expected 2013 adjusted operating income margin to be in a range of 16.0% to 16.5%.”

Conference Call to Discuss Financial Results

Genpact management will host an hour-long conference call beginning at 8:00 a.m. ET on February 8, 2013 to discuss the company’s performance for the periods ended December 31, 2012. To participate, callers can dial 1-866-713-8395 from within the U.S. or +1 (617) 597-5309 from any other country. Thereafter, callers will be prompted to enter the participant code, 90489804.

A live webcast of this event will also be made available on the Genpact Investor Relations website at http://investors.genpact.com. For those who cannot participate in the call, a replay and podcast will be available on the Genpact website after the end of the call. A transcript of the call will also be made available via the website.

About Genpact

Genpact Limited (NYSE: G), a global leader in business process management and technology services, leverages the power of smarter processes, smarter analytics and smarter technology to help its clients drive intelligence across their enterprise. Genpact’s Smart Enterprise Processes (SEPSM) framework, its unique science of process combined with deep domain expertise in multiple industry verticals, leads to superior business outcomes. Genpact’s Smart Decision Services deliver valuable business insights to its clients through targeted analytics, reengineering expertise, and advanced risk management. Making technology more intelligent by embedding it with process and data insights, Genpact also offers a wide range of technology services. Driven by a passion for process innovation and operational excellence built on its Lean and Six Sigma DNA and the legacy of serving GE for more than 15 years, the company’s 60,000+ professionals around the globe deliver services to its more than 600 clients from a network of more than 70 delivery centers across 20 countries supporting more than 30 languages. For more information, visit www.genpact.com.


Safe Harbor

This press release contains certain statements concerning our future growth prospects and forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements. These risks, uncertainties and other factors include but are not limited to a slowdown in the economies and sectors in which our clients operate, a slowdown in the business process management and information technology services sectors, the risks and uncertainties arising from our past and future acquisitions, our ability to manage growth, factors which may impact our cost advantage, wage increases, changes in tax rates and tax legislation, our ability to attract and retain skilled professionals, risks and uncertainties regarding fluctuations in our earnings, general economic conditions affecting our industry as well as other risks detailed in our reports filed with the U.S. Securities and Exchange Commission, including Genpact’s Annual Report on Form 10-K. These filings are available at www.sec.gov. Genpact may from time to time make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. Although Genpact believes that these forward-looking statements are based on reasonable assumptions, you are cautioned not to put undue reliance on these forward-looking statements, which reflect management’s current analysis of future events and should not be relied upon as representing management’s expectations or beliefs as of any date subsequent to the time they are made. Genpact does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of Genpact.

Contact

 

Investors:    Bharani Bobba
   +1 (203) 300-9230
   bharani.bobba@genpact.com
Media:    Gail Marold
   +1 (919) 345-3899
   gail.marold@genpact.com


GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share data and share count)

 

     As of December 31,
2011
     As of December 31,
2012
 

Assets

     

Current assets

     

Cash and cash equivalents

   $ 408,020       $ 459,228   

Accounts receivable, net

     258,498         451,960   

Accounts receivable from related party, net

     143,921         29   

Short term deposits

     —           18,292   

Deferred tax assets

     46,949         48,489   

Due from related party

     10         —     

Prepaid expenses and other current assets

     127,721         150,769   
  

 

 

    

 

 

 

Total current assets

   $ 985,119       $ 1,128,767   

Property, plant and equipment, net

     180,504         200,362   

Deferred tax assets

     91,880         91,383   

Investment in equity affiliates

     220         416   

Customer-related intangible assets, net

     85,987         84,748   

Marketing-related intangible assets, net

     24,240         21,585   

Other intangible assets, net

     3,061         6,054   

Goodwill

     925,339         956,064   

Other assets

     107,037         116,548   
  

 

 

    

 

 

 

Total assets

   $ 2,403,387       $ 2,605,927   
  

 

 

    

 

 

 


GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share data and share count)

 

     As of December 31,
2011
    As of December 31,
2012
 

Liabilities and equity

    

Current liabilities

    

Short-term borrowings

   $ 252,000      $ 80,000   

Current portion of long-term debt

     29,012        4,982   

Current portion of capital lease obligations

     1,005        1,301   

Current portion of capital lease obligations payable to related party

     762        —     

Accounts payable

     20,951        18,652   

Income taxes payable

     20,118        22,304   

Deferred tax liabilities

     35        538   

Due to related party

     464        —     

Accrued expenses and other current liabilities

     337,481        390,041   
  

 

 

   

 

 

 

Total current liabilities

   $ 661,828      $ 517,818   

Long-term debt, less current portion

     73,930        656,879   

Capital lease obligations, less current portion

     846        2,533   

Capital lease obligations payable to related party, less current portion

     855        —     

Deferred tax liabilities

     1,905        6,068   

Due to related party

     9,154        —     

Other liabilities

     219,186        250,848   
  

 

 

   

 

 

 

Total liabilities

   $ 967,704      $ 1,434,146   
  

 

 

   

 

 

 

Shareholders’ equity

    

Preferred shares, $0.01 par value, 250,000,000 authorized, none issued

     —          —     

Common shares, $0.01 par value, 500,000,000 authorized, 222,347,968 and 225,480,172 issued and outstanding as of December 31, 2011 and 2012, respectively

     2,222        2,253   

Additional paid-in capital

     1,146,203        1,202,448   

Retained earnings

     605,386        281,982   

Accumulated other comprehensive income (loss)

     (320,753     (318,272
  

 

 

   

 

 

 

Genpact Limited shareholders’ equity

     1,433,058        1,168,411   

Noncontrolling interest

     2,625        3,370   
  

 

 

   

 

 

 

Total equity

     1,435,683        1,171,781   

Commitments and contingencies

    
  

 

 

   

 

 

 

Total liabilities and equity

   $ 2,403,387      $ 2,605,927   
  

 

 

   

 

 

 


GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data and share count)

 

     Year Ended December 31  
     2010     2011     2012  

Net revenues

      

Net revenues from services - related party

   $ 479,231      $ 484,464      $ 550   

Net revenues from services - others

     779,732        1,115,972        1,901,421   
  

 

 

   

 

 

   

 

 

 

Total net revenues

     1,258,963        1,600,436        1,901,971   
  

 

 

   

 

 

   

 

 

 

Cost of revenue

      

Services

     788,522        1,004,899        1,157,766   
  

 

 

   

 

 

   

 

 

 

Total cost of revenue

     788,522        1,004,899        1,157,766   
  

 

 

   

 

 

   

 

 

 

Gross profit

   $ 470,441      $ 595,537      $ 744,205   

Operating expenses:

      

Selling, general and administrative expenses

     282,102        357,959        456,611   

Amortization of acquired intangible assets

     15,959        19,974        23,233   

Other operating (income) expense, net

     (5,484     1,360        16   
  

 

 

   

 

 

   

 

 

 

Income from operations

   $ 177,864      $ 216,244      $ 264,345   

Foreign exchange (gains) losses, net

     (1,137     (35,099     (13,146

Other income (expense), net

     5,246        10,716        (14,499
  

 

 

   

 

 

   

 

 

 

Income before Equity-method investment activity, net and income tax expense

   $ 184,247      $ 262,059      $ 262,992   

Equity-method investment activity, net

     1,013        327        (17
  

 

 

   

 

 

   

 

 

 

Income before income tax expense

   $ 183,234      $ 261,732      $ 263,009   

Income tax expense

     34,203        70,656        78,419   
  

 

 

   

 

 

   

 

 

 

Net Income

   $ 149,031      $ 191,076      $ 184,590   

Net income attributable to noncontrolling interest

     6,850        6,782        6,374   
  

 

 

   

 

 

   

 

 

 

Net income attributable to Genpact Limited shareholders

   $ 142,181      $ 184,294      $ 178,216   

Net income available to Genpact Limited common shareholders

     142,181        184,294        178,216   

Earnings per common share attributable to Genpact Limited common shareholders

      

Basic

   $ 0.65      $ 0.83      $ 0.80   

Diluted

   $ 0.63      $ 0.81      $ 0.78   

Dividend per share

   $ —        $ —        $ 2.24   
  

 

 

   

 

 

   

 

 

 

Weighted average number of common shares used in computing earnings per common share attributable to Genpact Limited common shareholders

      

Basic

     219,310,327        221,567,502        223,696,567   

Diluted

     224,838,529        226,354,403        229,532,516   


GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

     Year ended December 31,  
     2010     2011     2012  

Operating activities

      

Net income attributable to Genpact Limited shareholders

   $ 142,181      $ 184,294      $ 178,216   

Net income attributable to noncontrolling interest

     6,850        6,782        6,374   
  

 

 

   

 

 

   

 

 

 

Net Income

   $ 149,031      $ 191,076      $ 184,590   

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

      

Depreciation and amortization

     57,881        58,357        56,089   

Amortization of debt issue costs

     385        1,952        8,079   

Amortization of acquired intangible assets

     16,275        20,132        23,305   

Reserve (release) for doubtful receivables

     (1,334     6,298        3,878   

Reserve for mortgage loans

     12        52        108   

Gain on business acquisition

     (247     —          —     

Unrealized (gain) loss on revaluation of foreign currency asset/liability

     (284     (18,276     (13,700

Equity-method investment activity, net

     1,013        327        (17

Stock-based compensation expense

     17,514        27,767        32,152   

Deferred income taxes

     (5,400     (7,981     (10,028

Others, net

     181        5,322        6,471   

Change in operating assets and liabilities:

      

Increase in accounts receivable

     (50,414     (46,314     (36,171

Increase in other assets

     (25,932     (10,461     (20,525

Increase/(Decrease) in accounts payable

     (2,631     6,800        (4,380

Increase/(Decrease) in accrued expenses and other current liabilities

     (2,560     27,517        38,478   

Increase in income taxes payable

     6,447        10,345        1,775   

Increase/(Decrease) in other liabilities

     3,161        (6,301     40,556   
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

   $ 163,098      $ 266,612      $ 310,660   
  

 

 

   

 

 

   

 

 

 

Investing activities

      

Purchase of property, plant and equipment

     (55,171     (35,776     (83,337

Proceeds from sale of property, plant and equipment

     1,239        916        500   

Investment in affiliates

     (2,324     —          (205

Purchase of short term investments

     (107,324     (129,458     —     

Proceeds from sale of short term investments

     162,940        206,443        —     

Short term deposits placed

     (6,530     —          (43,978

Redemption of short term deposits

     16,325        —          25,638   

Payment for business acquisitions, net of cash acquired

     (42,575     (577,233     (56,488
  

 

 

   

 

 

   

 

 

 

Net cash used for investing activities

   $ (33,420   $ (535,108   $ (157,870
  

 

 

   

 

 

   

 

 

 

Financing activities

      

Repayment of capital lease obligations

     (4,861     (2,821     (2,279

Proceeds from long-term debt

     —          120,000        675,000   

Repayment of long-term debt

     (45,000     (40,000     (106,688

Proceeds from Short-term borrowings

     —          260,000        80,000   

Repayment of Short-term borrowings

     (165     (8,000     (253,004

Proceeds from issuance of common shares under stock based compensation plans

     24,826        12,840        26,227   

Payment for net settlement of stock based awards

     —          —          (2,103

Dividend paid

     —          —          (501,620

Direct cost incurred in relation to Debt

     —          (9,115     (15,266

Distribution to noncontrolling interest

     (7,065     (6,805     (5,760
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used for) financing activities

   $ (32,265   $ 326,099      $ (105,493
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes

     17,887        (53,617     3,911   

Net increase in cash and cash equivalents

     97,413        57,603        47,297   

Cash and cash equivalents at the beginning of the period

     288,734        404,034        408,020   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

   $ 404,034      $ 408,020        459,228   
  

 

 

   

 

 

   

 

 

 

Supplementary information

      

Cash paid during the period for interest

   $ 1,617      $ 5,026        14,061   

Cash paid during the period for income taxes

   $ 40,466      $ 65,688        91,825   

Property, plant and equipment acquired under capital lease obligation

   $ 1,968      $ 1,787        2,699   


GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

 

     Three months ended  
     March 31, 2012      June 30, 2012      September 30, 2012      December 31, 2012  
     (dollars in millions)  

Statement of income data:

           

Total net revenues

   $ 435.5       $ 467.6       $ 491.2       $ 507.7   

Cost of revenue

     265.5         285.2         297.3         309.8   

Gross profit

     170.0         182.4         193.9         197.9   

Income from operations

     60.4         63.2         70.0         70.8   

Income before Equity method investment activity, net and income tax expense

     56.6         84.4         41.8         80.1   

Net income attributable to Genpact Limited common shareholders

   $ 38.5       $ 61.1       $ 25.2       $ 53.4   

 

     Three months ended  
     March 31, 2011      June 30, 2011      September 30, 2011      December 31, 2011  
     (dollars in millions)  

Statement of income data:

           

Total net revenues

   $ 330.6       $ 397.6       $ 429.6       $ 442.7   

Cost of revenue

     214.5         254.0         268.3         268.1   

Gross profit

     116.1         143.6         161.3         174.6   

Income from operations

     46.5         51.1         56.7         61.9   

Income before equity-method investment activity, net and income tax expense

     51.2         55.2         68.6         87.0   

Net income attributable to Genpact Limited shareholders

   $ 36.1       $ 39.0       $ 48.0       $ 61.1   


Reconciliation of Adjusted Non-GAAP Financial Measures to GAAP Measures

To supplement the consolidated financial statements presented in accordance with GAAP, this press release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: non-GAAP adjusted income from operations, adjusted net income attributable to shareholders of Genpact Limited, or adjusted net income, and adjusted diluted earnings per share attributable to shareholders of Genpact Limited, or adjusted diluted earnings per share. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures, the financial statements prepared in accordance with GAAP and the reconciliations of Genpact’s GAAP financial statements to such non-GAAP measures should be carefully evaluated.

For its internal management reporting and budgeting purposes, Genpact’s management historically used financial statements that did not include significant acquisition related expenses and amortization of acquired intangibles on such acquisitions, for financial and operational decision-making, to evaluate period-to-period comparisons or for making comparisons of Genpact’s operating results to that of its competitors.

As a result of frequent acquisitions of varying scale and size, it is difficult to predict the expenses related to acquisitions and amortization of the acquired intangibles on acquisitions. Therefore, with effect from July 1, 2012, for its internal management reporting and budgeting purposes, management considers using financial statements that do not include expenses related to all acquisitions and amortization of acquired intangibles on acquisitions for financial and operational decision-making, to evaluate period-to-period comparisons or for making comparisons of Genpact’s operating results to that of its competitors.

Besides this, for its internal management reporting and budgeting purposes, management uses financial statements that do not include stock-based compensation expense, amortization of acquired intangibles at formation in 2004, expenses related to change of shareholding and capital restructuring, net of recovery from the selling shareholders, affiliates of General Atlantic LLC and Oak Hill Capital Management LLC or GA/OH (excluding expenses related to the new credit facility) and withholding taxes relating to remittance of funds between subsidiaries to partly fund the payment of the special cash dividend in respect of capital restructuring, for financial and operational decision-making, to evaluate period-to-period comparisons or for making comparisons of Genpact’s operating results to that of its competitors. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use when adopting ASC 718 “Compensation-Stock Compensation”, Genpact’s management believes that providing financial statements that do not include stock-based compensation allows investors to make additional comparisons between Genpact’s operating results and those of other companies. In addition, Genpact’s management believes that providing non-GAAP financial measures that exclude amortization of acquired intangibles, expenses related to all acquisitions and amortization of acquired intangibles on acquisitions, expenses related to change of shareholding and capital restructuring, net of recovery from GA/OH (excluding expenses related to the new credit facility) and withholding taxes relating to remittance of funds between subsidiaries to partly fund the payment of the special cash dividend in respect of capital restructuring, allows investors to make additional comparisons between Genpact’s operating results and those of other companies. Genpact also believes that it is unreasonably difficult to provide its financial outlook in accordance with GAAP for a number of reasons including, without limitation, its inability to predict its future stock-based compensation expense under ASC 718, the amortization of intangibles associated with further acquisitions, acquisition related expenses, expenses related to change of shareholding and capital restructuring, net of recovery from GA/OH (excluding expenses related to new credit facility), and withholding taxes relating to remittance of funds between subsidiaries to partly fund the payment of the special cash dividend in respect of capital restructuring, if any. Accordingly, Genpact believes that the presentation of non-GAAP adjusted income from operations and adjusted net income, when read in conjunction with the Company’s reported results, can provide useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations.

A limitation of using non-GAAP adjusted income from operations and adjusted net income versus income from operations and net income attributable to shareholders of Genpact Limited calculated in accordance with GAAP is that non-GAAP adjusted income from operations and adjusted net income excludes costs, namely, stock-based compensation, that are recurring. Stock-based compensation has been and will continue for the foreseeable future to be a significant recurring expense in Genpact’s business. Management compensates for this limitation by providing specific information regarding the GAAP amounts excluded from non-GAAP adjusted income from operations and adjusted net income and evaluating such non-GAAP financial measures with financial measures calculated in accordance with GAAP.


The following tables show the reconciliation of these adjusted financial measures from GAAP for the three months and year ended December 31, 2011 and 2012:

Reconciliation of Adjusted Income from Operations

(Unaudited)

(In thousands)

 

     Year ended December 31,     Quarter ended December 31,  
     2011     2012     2011     2012  

Income from operations as per GAAP

   $ 216,244      $ 264,345      $ 61,928      $ 70,795   

Add: Amortization of acquired intangible assets resulting from Formation Accounting

     9,354        6,845        2,079        1,592   

Add: Amortization of acquired intangible assets relating to acquisitions

     7,865        10,739        2,949        2,791   

Add: Stock based compensation

     27,767        32,152        10,055        9,296   

Add: Acquisition related expenses

     5,619        298        —          —     

Add: Other income (expense)

     4,793        1,615        1,781        7,348   

Add: Consultancy, legal and banker fees relating to capital restructuring (excluding expenses related to the new credit facility), as recorded under selling, general and administrative expenses

     —          3,237        —          39   

Add: Consultancy, legal and banker fees relating to change of shareholding (excluding expenses related to the new credit facility), as recorded under other income (expense)

     —          17,227        —          10,620   

Less: Recovery from selling shareholder of consultancy, legal and banker fees relating to change of shareholding (excluding expenses related to the new credit facility), as recorded under other income (expense)

     —          (17,000     —          (17,000

Less: Equity-method investment activity, net

     (344     17        (38     (7

Less: Net income attributable to noncontrolling interest

     (6,782     (6,374     (1,611     (1,523
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted income from operations

   $ 264,516      $ 313,101      $ 77,143      $ 83,951   
  

 

 

   

 

 

   

 

 

   

 

 

 


Reconciliation of Adjusted Net Income

(Unaudited)

(In thousands, except per share data)

 

     Year ended December 31,     Quarter ended December 31,  
     2011     2012     2011     2012  

Net income as per GAAP

   $ 184,294      $ 178,216      $ 61,120      $ 53,401   

Add: Amortization of acquired intangible assets resulting from Formation Accounting

     9,354        6,845        2,079        1,592   

Add: Amortization of acquired intangible assets relating to acquisitions

     7,865        10,739        2,949        2,791   

Add: Stock based compensation

     27,767        32,152        10,055        9,296   

Add: Acquisition related expenses

     5,619        298        —          —     

Add: Consultancy, legal and banker fees relating to capital restructuring (excluding expenses related to the new credit facility), as recorded under selling, general and administrative expenses

     —          3,237        —          39   

Add: Consultancy, legal and banker fees relating to change of shareholding (excluding expenses related to the new credit facility), as recorded under other income (expense)

     —          17,227        —          10,620   

Less: Recovery from selling shareholder of consultancy, legal and banker fees relating to change of shareholding (excluding expenses related to the new credit facility), as recorded under other income (expense)

     —          (17,000     —          (17,000

Add: Withholding taxes relating to remittance of funds between subsidiaries to partly fund the payment of special cash dividend in respect of capital restructuring

     —          2,300        —          —     

Less: Tax impact on amortization of acquired intangibles resulting from Formation Accounting

     (2,250     (1,564     (412     (374

Less: Tax impact on amortization of acquired intangibles resulting from acquisitions

     (2,674     (3,650     (1,004     (971

Less: Tax impact on stock based compensation

     (7,800     (8,032     (2,743     (1,028

Less: Tax impact on acquisition related expenses

     (1,435     (75     (41     —     

Less: Tax impact on consultancy and legal fees relating to capital restructuring (excluding expenses related to the new credit facility)

     —          (194     —          (12
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income

   $ 220,740      $ 220,499      $ 72,003      $ 58,354   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted diluted earnings per share

   $ 0.98      $ 0.96      $ 0.32      $ 0.25