Genpact Reports Results for 2012 Full Year and Fourth Quarter

Thu Feb 7, 2013 4:00pm EST

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Revenues of $1.9 Billion, Up 19% for FY '12 and Up 15% for 4Q '12
NEW YORK,  Feb. 7, 2013  /PRNewswire/ -- 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. 


(Logo:  http://photos.prnewswire.com/prnh/20120501/NY98560LOGO  )

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 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,         As of December 31,       
                                              2011                       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,         As of December 31,       
                                                                                                                                                            2011                       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,          June 30, 2012        September 30, 2012        December 31, 2012  
                                                                              
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 tochange 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 tochange 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 tochange 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     


SOURCE  Genpact Limited

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