-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IHX6ag4VImmOSucyLOWy9v1dR/t0aYZbe9C9kcl1b3QHXnx6jPmh1xOgKupPAOfh Pq95K6fHGXe8/kC6WXFW8g== 0000950124-01-504032.txt : 20020410 0000950124-01-504032.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950124-01-504032 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNTEL INC CENTRAL INDEX KEY: 0001040426 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 382312018 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22903 FILM NUMBER: 1788355 BUSINESS ADDRESS: STREET 1: 2800 LIVERNOIS RD STREET 2: SUITE 400 CITY: TROY STATE: MI ZIP: 48043 BUSINESS PHONE: 2486192800 MAIL ADDRESS: STREET 1: 2800 LIVERNOID RD STREET 2: SUITE 400 CITY: TROY STATE: MI ZIP: 48043 10-Q 1 k65987e10-q.txt FORM 10-Q FOR QUARTER ENDING SEPTEMBER 30, 2001 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2001 or [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ____________ to _____________ Commission file number 0-22903 Syntel, Inc. ------------ (Exact Name of Registrant as Specified in Its Charter) Michigan 38-2312018 ------------------------------ ------------------- (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 2800 Livernois Road, Suite 400, Troy, Michigan 48083 - ---------------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) (248) 619-2800 ---------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------------------------ --------------------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, no par value: 38,306,087 shares issued and outstanding as of October 31, 2001. 1 SYNTEL, INC. INDEX
Page ---- Part I Financial Information Item 1 Financial Statements Condensed Consolidated Statement of Income 3 Condensed Consolidated Balance Sheet 4 Condensed Consolidated Statement of Cash Flows 5 Notes to the Condensed Consolidated Financial Statements 6 Item 2 Management's Discussion and Analysis of 8 Financial Condition and Results of Operations Part II Other Information 11 Signatures 12
2 SYNTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (in thousands, except per share data)
3 MONTHS 9 MONTHS ENDED SEPTEMBER 30 ENDED SEPTEMBER 30 ---------------------- ----------------------- 2001 2000 2001 2000 ---- ---- ---- ---- Revenues $ 42,825 $ 41,105 $ 127,817 $ 123,690 Cost of revenues 26,294 26,001 79,063 78,386 --------- --------- --------- --------- Gross profit 16,531 15,104 48,754 45,304 Selling, general and administrative expenses 8,622 8,348 25,871 25,791 Goodwill impairment and related charges -- -- -- 21,650 --------- --------- --------- --------- Income (loss) from operations 7,909 6,756 22,883 (2,137) Other income, principally interest 1,108 829 2,977 2,409 --------- --------- --------- --------- Income before income taxes 9,017 7,585 25,860 272 Income tax (provision) benefit (2,471) (2,035) (6,858) 2,744 --------- --------- --------- --------- Net income before loss from equity investment in unconsolidated subsidiaries 6,546 5,550 19,002 3,016 Loss from equity investment in unconsolidated subsidiaries 213 200 752 319 --------- --------- --------- --------- Net income $ 6,333 $ 5,350 $ 18,250 $ 2,697 ========= ========= ========= ========= EARNINGS PER SHARE Basic $ 0.16 $ 0.14 $ 0.47 $ 0.07 Diluted $ 0.16 $ 0.14 $ 0.47 $ 0.07 Weighted average common shares outstanding - diluted 38,826 39,255 38,827 39,666 ========= ========= ========= =========
3 SYNTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (in thousands)
September 30, December 31, 2001 2000 ------------- ------------ ASSETS Current assets: Cash and cash equivalents $ 95,130 $ 73,478 Accounts receivable, net 28,996 31,194 Advanced billings and other current assets 12,389 9,437 -------- -------- Total current assets 136,515 114,109 Property and equipment 20,858 19,183 Less accumulated depreciation 13,961 12,023 -------- -------- Property and equipment, net 6,897 7,160 Goodwill, net of amortization 1,111 1,026 Equity and other investments 4,135 3,918 Deferred income taxes, noncurrent 5,995 6,685 -------- -------- $154,653 $132,898 ======== ======== LIABILITIES Current liabilities: Accrued payroll and related costs $ 12,763 $ 10,909 Accounts payable and other current liabilities 21,360 20,072 Deferred revenue 6,463 5,234 -------- -------- Total current liabilities 40,586 36,215 SHAREHOLDERS' EQUITY Total shareholders' equity 114,067 96,683 -------- -------- Total liabilities and shareholders' equity $154,653 $132,898 ======== ========
4 SYNTEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands)
NINE MONTHS ENDED SEPTEMBER 30 ----------------------- 2001 2000 ---- ---- Cash flows from operating activities: Net income $ 18,250 $ 2,697 -------- -------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,938 1,925 Goodwill amortization 56 636 Goodwill impairment and related charges -- 21,650 Deferred income taxes 690 (6,808) Compensation expense related to stock options 41 96 Loss on equity investments 752 319 Changes in assets and liabilities: Accounts receivable, net 1,478 (12,446) Advance billing and other assets (2,952) 858 Accrued payroll and other liabilities 3,001 (2,401) Deferred revenues 1,229 1,046 -------- -------- Net cash provided by operating activities 24,483 7,572 -------- -------- Cash flows used in investing activities, Property and equipment expenditures (2,264) (3,077) Equity and other investments (380) (2,700) -------- -------- Net cash used in investing activities (2,644) (5,777) -------- -------- Cash flows provided by (used in) financing activities: Net proceeds from issuance of stock 1,380 1,071 Common stock repurchases (1,491) (1,413) -------- -------- Net cash used in financing activities (111) (342) -------- -------- Effect of foreign currency exchange rate changes on cash (76) (176) -------- -------- Net increase in cash and cash equivalents 21,652 1,277 Cash and cash equivalents, beginning of period 73,478 63,611 -------- -------- Cash and cash equivalents, end of period $ 95,130 $ 64,888 ======== ========
5 SYNTEL, INC. AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION: The accompanying condensed consolidated financial statements of Syntel, Inc. (the "Company") have been prepared by management, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of the management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position of Syntel, Inc. and its subsidiaries as of September 30, 2001, the results of their operations for the three and nine month periods ended September 30, 2001 and September 30, 2000, and cash flows for the nine months ended September 30, 2001 and September 30, 2000. The year end condensed balance sheet as of December 31, 2000 was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10K for the year ended December 31, 2000. Operating results for the nine months ended September 30, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001. 2. PRINCIPLES OF CONSOLIDATION AND ORGANIZATION The condensed consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries; Syntel (India) Limited, ("Syntel India"), an Indian limited liability company, Syntel (Singapore) Pte, Ltd. ("Syntel Singapore"), a Singapore limited liability company, Syntel (Europe) Ltd. ("Syntel Europe"), a United Kingdom limited liability company, Syntel Canada Ltd. ("Syntel Canada"), a Canadian limited liability company and Syntel Deutschland GmbH ("Syntel Germany") a German limited liability company. All intercompany accounts and transactions have been eliminated. 3. RECLASSIFICATION Certain prior quarter amounts have been reclassified to conform with the current quarter presentation. 4. CASH EQUIVALENTS For the purpose of reporting cash and cash equivalents, the Company considers all liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents are principally triple A rated corporate bonds and treasury notes held by a bank with maturity dates of less than ninety days. 5. COMPREHENSIVE INCOME Total Comprehensive Income for the three and nine months periods ended September 30, 2001 and 2000 was as follows (in thousands):
Three Months Ended Nine Months Ended September 30 September 30 ------------------ ----------------- 2001 2000 2001 2000 ---- ---- ---- ---- Net Income $ 6,333 $ 5,350 $ 18,250 $ 2,697 Other Comprehensive income Foreign currency translation adjustments (613) (112) (796) (176) -------- -------- -------- -------- Total comprehensive income $ 5,720 $ 5,238 $ 17,454 $ 2,521 ======== ======== ======== ========
6 6. EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income by the weighted average number of shares outstanding during the applicable period. The Company has stock options, which are considered to be potentially dilutive to common stock. Diluted earnings per share are calculated considering these potentially dilutive options. The following table sets forth the computation of earnings per share.
Three Months Ended September 30, 2001 September 30, 2000 --------------------- ------------------ Weighted Earnings Weighted Earnings Average per Average per Shares share Shares share -------- -------- -------- -------- (in thousands, except per share earnings) Basic earnings per share 38,436 $ 0.16 38,583 $ 0.14 Net dilutive effect of stock options outstanding 390 672 ------ --------- ------ --------- Diluted earnings per share 38,826 $ 0.16 39,255 $ 0.14 ====== ========= ====== ========= Nine Months Ended September 30, 2001 September 30, 2000 --------------------- ------------------ Weighted Earnings Weighted Earnings Average per Average per Shares share Shares share -------- -------- -------- -------- (in thousands, except per share earnings) Basic earnings per share 38,457 $ 0.47 38,606 $ 0.07 Net dilutive effect of stock options Outstanding 370 1,060 ------ --------- ------ --------- Diluted earnings per share 38,827 $ 0.47 39,666 $ 0.07 ====== ========= ====== =========
7. SEGMENT REPORTING The Company manages its operations through three segments, Applications Outsourcing, e-Business, and TeamSourcing. Management allocates all direct expenses to the segments. Financial data for each segment for the three and nine months period ended September 30, 2001 and September 30, 2000 is as follows:
Three Months Ended Nine Months Ended ------------------ ----------------- Sept 30, 2001 Sept 30, 2000 Sept 30, 2001 Sept 30, 2000 ------------- ------------- ------------- ------------- (In thousands) (In thousands) Revenues: Applications Outsourcing $ 28,565 $ 23,479 $ 80,581 $ 64,942 e-Business 8,682 10,643 29,774 33,040 TeamSourcing 5,578 6,983 17,462 25,708 -------- -------- -------- -------- 42,825 41,105 127,817 123,690 Gross Profit: Applications Outsourcing 12,485 10,144 34,013 28,414 e-Business 3,015 3,697 10,798 10,848 TeamSourcing 1,031 1,263 3,943 6,042 -------- -------- -------- -------- 16,531 15,104 48,754 45,304
7 PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. SYNTEL INC. AND SUBSIDIARIES RESULTS OF OPERATIONS Revenues. The Company's revenues consist of fees derived from its Applications Outsourcing, e-Business, and TeamSourcing business segments. Revenues increased 4.2% to $42.8 million in the third quarter of 2001 from $41.1 million in the third quarter of 2000. Worldwide billable headcount, including personnel employed by Syntel India, Syntel Singapore, Syntel Europe, and Syntel Germany as of September 30, 2001 decreased to 1,421 compared to 1,579 as of September 30, 2000. Applications Outsourcing Revenues. Applications Outsourcing revenues increased to $28.6 million for the third quarter of 2001, or 66.7% of total revenues, from $23.5 million, or 57.1% of third quarter revenues for 2000. The revenues for the first nine months of 2001 increased to $80.6 million, or 63.0% of total revenues, from $64.9 million or 52.5% of total revenues for the first nine months of 2000. The $5.1 million increase for the third quarter was attributable principally to net growth in new engagements, contributing approximately $10.8 million, partially offset by $5.7 million in lost revenues as a result of project completion. The $15.7 million increase for the first nine months of 2001 was attributable principally to net growth in new engagements, contributing approximately $24.1 million, partially offset by $8.4 million in lost revenues as a result of project completions. Applications Outsourcing Cost of Revenues. Cost of revenues consists of costs directly associated with billable consultants in the US and offshore, including salaries, payroll taxes, benefits, relocation costs, immigration costs, finders fees, trainee compensation, and travel. Applications Outsourcing costs of revenues decreased to 56.3% of total Applications Outsourcing revenues for the third quarter of 2001, from 56.8% for the third quarter of 2000. The 0.5% decrease in cost of revenues as a percent of revenues for the second quarter was attributable primarily to improved onsite utilization rates. Costs of revenues for the first nine months of 2001 increased to 57.8% of total Applications Outsourcing revenues, from 56.2% for the first nine months of 2000. The 1.6% increase in cost of revenues as a percent of revenues for the nine months was attributable primarily to the release of warranty reserves no longer deemed necessary associated with Y2K remediation engagements in the first nine months of 2000 contributing approximately 9% with no material corresponding release in 2001, partially offset by an increase in the higher margin offshore component of the overall services contributing approximately 7.4 %. E-Business Revenues. e-Business revenues decreased to $8.7 million for the third quarter of 2001, or 20.3% of total consolidated revenues, from $10.6 million, or 25.9% of total consolidated revenues for the third quarter of 2000. The $1.9 million decrease for the third quarter was attributable principally to a $1.7 million decrease due to discontinued Metier Division revenues and $5.7 million in other completed engagements, largely offset by new business revenues of $5.5 million. Revenues for the first nine months of 2001 decreased to $29.8 million, or 23.3% of total revenues, from $33.0 million, or 26.7% of total revenues for the first nine months of 2000. The $3.2 million decrease for the nine months was attributable principally to a $7.6 million decrease due to discontinued Meter Division revenues and $10.8 million in other completed engagements, largely offset by new business revenues of $15.2 million. E-Business Cost of Revenues. e-Business cost of revenues consists of costs directly associated with billable consultants in the US and offshore, including salaries, payroll taxes, benefits, relocation costs, immigration costs, finders fees, trainee compensation, and travel. e-Business cost of revenues remained at 65.3% of total e-Business revenues for the third quarter of 2001, same as the third quarter of 2000. For the first nine months of 2001, e-business costs of revenues decreased to 63.7% of total e-business revenues, from 67.2% for the first nine months of 2000. The 3.5% decrease was attributable principally to improved billing rates in relation to compensation levels. Teamsourcing Revenues. TeamSourcing revenues decreased to $5.6 million for the third quarter of 2001, or 13.0% of total revenues, down from $7.0 million, or 17.0% of total revenues for the third quarter of 2000. For the first nine months of 2001, Teamsourcing revenues decreased to $17.5 million, or 13.7% of total revenues, down from $25.7 million, or 20.8% of total revenues for the first nine months of 2000. Both the $1.4 million decrease for the third quarter as well as the $8.2 million decrease for the first nine months of 2001 were principally due to a decrease in US based billable consultants on various engagements, as a result of a conscious decision by management to reduce organizational focus away from this segment. 8 Teamsourcing Cost of Revenues. TeamSourcing cost of revenues consists of costs directly associated with billable consultants in the US, including salaries, payroll taxes, benefits, relocation costs, immigration costs, finders fees, trainee compensation, and travel. TeamSourcing cost of revenues decreased to 81.5% of TeamSourcing revenues for the third quarter of 2001, from 81.9% for the third quarter of 2000. The 0.4% decrease in cost of revenues as a percent of total TeamSourcing revenues was attributable primarily to the improvement in the ratio of compensation rate to bill rate. The cost of revenues as a percent of revenues increased to 77.4% of total TeamSourcing revenues for the nine months period ended Sept 30, 2001, from 76.5% for the nine months period ending Sept 30, 2000. The 0.9% increase was attributable principally to lower utilization due to softness in the economy. Selling, General, and Administrative Expenses. Selling, general, and administrative expenses consist primarily of salaries, payroll taxes and benefits for sales, solutions, finance, administrative, and corporate staff, travel, telecommunications, business promotions, marketing and various facility costs for the Company's Global Development Centers and various offices. Selling, general, and administrative costs for the three months ended September 30, 2001 were $8.6 million, or 20.1% of total revenues, compared to $8.3 million or 20.3% of total revenues for the three months ended September 30, 2000. The $0.3 million increase was attributable principally to increase marketing costs, professional fees, and an allowance for doubtful accounts in the US of approximately $0.4 million, $0.2 million and $0.2 million, respectively, largely offset by savings in Metier administrative costs, contributing approximately $ 0.5 million. Selling, general, and administrative costs increased to $25.9 million, or 20.2% of total revenues for the nine month period ending September 30, 2001, from $25.8 million, or 20.9% of total revenues for the same period in 2000. The $0.1 million increase was attributable principally due to increased marketing costs, professional fees, and an allowance for doubtful accounts in the US of approximately $0.8 million, $0.7 million, and $0.6 million, respectively, as well as increased compensation and facility costs of approximately $0.7 million at the offshore facilities necessary to support increased staffing levels. This increase was largely offset by the savings in discontinued Metier Division administrative costs and Metier Division goodwill amortization, contributing approximately $2.1 million and $0.6 million to the decrease in selling, general, and administrative costs, respectively. LIQUIDITY AND CAPITAL RESOURCES In recent history, the Company has financed its working capital needs through operations. Net cash generated by operating activities was $25.4 million for the first nine months of 2001, compared to $7.6 million for the first nine months of 2000. The number of days sales outstanding in accounts receivable was approximately 61 days and 79 days as of Sept 30, 2001 and Sept 30, 2000, respectively. Net cash used in investing activities was $2.6 million and $5.8 million for the first nine months of 2001 and 2000, respectively. Cash used for investing activities for the first nine months of 2001 consisted principally of $1.1 million for the acquisition of land for construction of the new development and training center in Pune, India, $0.4 million for equity investments and $1.1 million in capitalized software costs and computer equipment. Cash used for investing activities for the nine months of 2000 consisted primarily of equity investment of approximately $2.7 million, capitalized software development costs of approximately $1.6, and computer and communications equipment of $1.5 million. Net cash used in financing activities for the first nine months of 2001 totalled approximately $0.1 million, consisting primarily of common stock repurchases of $1.5 million, partially offset by issuance of stock from the employee stock option and stock purchase program of $1.4 million. Net cash used in financing activities for the nine months ended September 30, 2000 totalled approximately $0.3 million, consisting primarily of common stock repurchases of $1.4 million, partially offset by $1.1 million from the issuance of stock from the employee stock option and stock purchase program. The Company had a line of credit with Bank One, which provided for borrowings up to $40.0 million. The above line of credit expired on August 31, 2001. Before the expiry of the above, in view of the adequacy of the liquid cash available, the Company has extended the line of credit providing for borrowings only up to $20.0 million. The line of credit contains covenants restricting the Company from, among other things, incurring additional debt, issuing guarantees and creating liens on the Company's property, without prior consent of the bank. The line of credit also requires the Company to maintain certain tangible net worth levels and leverage ratios. As of September 30, 2001, there was no indebtedness outstanding under the line of credit. Borrowings under the line of credit bear interest at the lower of the Eurodollar rate plus the applicable Eurodollar margin, the bank's prime rate or a negotiated rate established with the bank at the time of borrowing. In addition to the bank line of credit, the Company had a $20.0 million facility with Bank One to finance acquisitions which also expired on August 31, 2001. The Company had not borrowed any amounts under this facility. In view of the adequacy of the liquid cash the company has not extended the above line of credit. The Company believes that the combination of present cash balances and future operating cash flows will be sufficient to meet 9 the Company's currently anticipated cash requirements for at least the next 12 months. RECENT ACCOUNTING PRONOUNCEMENTS In July 2001, the Financial Accounting Standards Board issued SFAS No. 141, "Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets". SFAS 141 replaces Accounting Principles Board Opinion 16, "Business Combinations" and requires that the purchase method of accounting be used for all business combinations initiated after June 30,2001. SFAS 142 replaces APB 17, "Intangible Assets". In accordance with SFAS No. 141 and 142, effective for the Company's year ended December 31, 2002, as a replacement to amortization of goodwill and intangible assets with indefinite lives, the Company will evaluate goodwill and intangible assets for impairment annually. The Company is currently reviewing these statements to determine their impact. FORWARD LOOKING STATEMENTS This report contains forward-looking statements, including those with respect to future levels of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company's Annual Report Form 10-K document dated March 30, 2001. Factors that could cause results to differ materially from those set forth above include general trends and developments in the information technology industry, which is subject to rapid technological changes, and the Company's concentration of sales in a relatively small number of large customers, as well as intense competition in the information technology industry, which the Company believes will increase. 10 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is currently not a party to any material pending legal proceedings. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits None. (b) Reports on Form 8-K The Corporation did not file any reports on Form 8-K during the three month period ended September 30, 2001. 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Syntel, Inc. ------------------------ (Registrant) Date November 13, 2001 By /s/ Bharat Desai ------------------ --------------------------- Bharat Desai, President and Chief Executive Officer Date November 13, 2001 By /s/ Sanjay Chheda ------------------ --------------------------- Sanjay Chheda, Interim Chief Financial Officer (principal financial and chief accounting officer) 12 -----END PRIVACY-ENHANCED MESSAGE-----