17. Selected Quarterly Financial Data (Unaudited)

Selected financial data by calendar quarter were as follows:


	First Quarter		Second Quarter			Third Quarter		Fourth Quarter		Full Year
	(In thousands, except per share data)
2014
Net revenues	$	219,523	$	228,250		$	228,332	$	235,324	$	911,429
Cost of revenues		123,500		138,702			133,804		137,856		533,862

Gross profit		96,023		89,548			94,528		97,468		377,567

Selling, general and administrative expenses		32,221		26,321			26,566		24,109		109,217

Income from operations		63,802		63,227			67,962		73,359		268,350

Other income , net		11,785		12,175			10,657		15,906		50,523

Income before income taxes		75,587		75,402			78,619		89,265		318,873
Income tax expense (1)		17,439		16,118			17,013		18,563		69,133


Net income	$	58,148	$	59,284		$	61,606	$	70,702	$	249,740


Earnings per share, diluted (a)	$	0.69	$	0.71		$	0.73	$	0.84	$	2.97

Weighted average shares outstanding, diluted		83,944		83,916			83,968		84,055		83,971


2013
Net revenues	$	189,106	$	202,501		$	209,871	$	223,287	$	824,765

Cost of revenues		111,329		118,920			112,158		118,169		460,576

Gross profit		77,777		83,581			97,713		105,118		364,189

Selling, general and administrative expenses		25,693		18,690			22,445		29,759		96,587


Income from operations		52,084		64,891			75,268		75,359		267,602

Other income (expense), net*		8,804		(1,335	)		949		9,802		18,220

Income before income taxes		60,888		63,556			76,217		85,161		285,822
Income tax expense (2)		14,464		16,044			16,800		18,856		66,164


Net income	$	46,424	$	47,512		$	59,417	$	66,305	$	219,658


Earnings per share, diluted (a)	$	0.55	$	0.57		$	0.71	$	0.79	$	2.62

Weighted average shares outstanding, diluted		83,678		83,700			83,776		83,900		83,764

Other income, net includes interest expenses of $0.2 million, $0.4 million and $0.6 million regrouped from selling general and administration expenses for the quarters ended March 31, 2013, June 30, 2013 and September 30, 2013, respectively. For the quarter ended December 31, 2013, interest expenses of $0.6 million were reported under other income.

(1)

The tax rate for the year ended December 31, 2014 was impacted by a favorable adjustment of $1.20 million, which related to the true up of tax provisions, pursuant to finalization of the tax computation of Syntel Limited, which had arisen on account of setoff of inter units unabsorbed expenses. Further, a $0.86 million tax charge has arisen on account of the particular tax dispute raised during the year. The Company has provided tax charges of $1.63 million and $0.88 million on account of valuation allowances against deferred tax assets recognized on investments and the minimum alternative tax, respectively. Without the above, the effective tax rate for the year ended December 31, 2014 would have been 21.1%.

(2)

The tax rate for the year ended December 31, 2013 was impacted by a favorable adjustment of $1.09 million which related to the true up of tax provisions, pursuant to finalization of the tax computation for filing tax returns of Syntel Limited, which had arisen on account of finalization of the actual numbers of expenses apportionment, wage reconciliations, meal disallowances etc., compared with the amounts estimated earlier for the tax provisions. Further, a $0.43 million reversal of tax reserve has arisen on account of the reversal of a valuation allowance, created in the past, and against deferred tax assets recognized on the allowance on the accumulated losses. During the year ended December 31, 2013, the Company reviewed the filing requirements for certain U.S. State and City income tax returns. The Company has updated the profit apportionment method in those certain states and cities. Accordingly, the Company had provided $1.59 million, out of which $0.6 million relates to the prior years. Without the above, the effective tax rate for the year ended December 31, 2013 would have been 23.5%.

(3)

The tax rate for the year ended December 31, 2012 was impacted by a favorable adjustment of $0.24 million as a result of the Company’s review of its global uncertain tax liabilities provided on the “more likely than not” concept and other tax positions, which is based on the completion of certain tax appeals. Without the above, the effective tax rate for the year ended December 31, 2012 was 22.8%.

(a)	Earnings per share for the quarter are computed independently and may not equal the earnings per share computed for the total year.

During 2014, the Company’s Board of Directors authorized a two-for-one stock split of its outstanding common shares. On November 3, 2014, an additional common share was issued for each existing common share held by shareholders of record on October 20, 2014. Accordingly, all share and per share amounts for all periods presented above, have been adjusted retroactively, where applicable, to reflect this stock split.