CORRESP 1 filename1.htm Correspondence

 

 

 

 

 

 

 

April 20, 2009

 

     

Cognizant Technology Solutions

Glenpointe Centre West

500 Frank W. Burr Blvd.

Teaneck, New Jersey 07666

Telephone (201) 801-0233

Fax (201) 801-0243

www.cognizant.com

VIA EDGAR AND FAX

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Judiciary Plaza

Washington, D.C. 20549

Room 4561

Attention: Stephen G. Krikorian, Accounting Branch Chief

 

  Re: Cognizant Technology Solutions Corporation
     Form 10-K for Fiscal Year Ended December 31, 2008
     Filed March 2, 2009
     File No. 000-24429

Dear Mr. Krikorian:

This letter is submitted on behalf of Cognizant Technology Solutions Corporation (the “Company”) in response to the comments of the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) with respect to the above-referenced filing, as set forth in your letter dated April 14, 2009 (the “Comment Letter”).

For the convenience of the Staff’s review, the text of the Comment Letter has been reproduced herein with the Company’s response below each numbered comment.

Form 10-K For the Year Ended December 31, 2008

Notes to Consolidated Financial Statements

Note 13. Quarterly Financial Data (Unaudited), page F-27

 

1. We note your selected quarterly financial data does not contain gross profit or cost of sales information. In your response letter dated May 14, 2008, you indicated that you would revise your disclosures in future filings to comply with Item 302(a)(1) of Regulation S-K and Question 3 of SAB Topic 6.G. However, we note that your current presentation is inconsistent with your proposed revisions. Please tell us how the disclosure under this section reflects the assertion made in your May 14, 2008 letter and tell us how you concluded that these disclosures comply with Item 302(a)(1) of Regulation S-K.

April 20, 2009

Page 2

Response:

We acknowledge the issue and respectfully advise the Staff that such omission was inadvertent. We respectfully advise the Staff that we intend to include disclosure relating to this matter in our next Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 under “Item 5. Other Information” as presented below.

In addition, prospectively, in future Annual Reports on Form 10-K, we will present the Quarterly Financial Information (Unaudited) footnote as presented below, which is consistent with our proposed revisions included in our response letter dated May 14, 2008. In preparing this response we have considered that we have reported such quarterly financial information as part of the unaudited condensed consolidated statement of operations included in each of our Quarterly Reports on Form 10-Q during 2008 and in Current Reports on Form 8-K in which we report our quarterly results of operations, including our Form 8-K filed on February 13, 2009 in which we reported our results for the fourth quarter of 2008.

We respectively request the Staff’s concurrence with our planned approach to resolve this matter.

“Item 5. Other Information

The following information is included solely to supplement the quarterly results of operations information presented in Note 13 (Unaudited) to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission on March 2, 2009.

Summarized quarterly results for the two years ended December 31, 2008 are as follows:

 

     Three Months Ended       

2008

    March 31    June 30    September 30    December 31    Full Year  
     (in thousands, except per share data)  

Revenue

    $ 643,106    $ 685,427    $ 734,726    $ 753,045    $ 2,816,304  

Cost of revenues (exclusive of depreciation and amortization expense shown separately below)

    $ 366,265    $ 380,867    $ 405,936    $ 419,748    $ 1,572,816  

Selling, general and administrative expenses

    $ 148,853    $ 167,105    $ 166,685    $ 169,378    $ 652,021  

Depreciation and amortization expense

    $ 16,293    $ 17,777    $ 19,474    $ 21,253    $ 74,797  

Income from Operations

    $ 111,695    $ 119,678    $ 142,631    $ 142,666    $ 516,670  

Net Income

    $ 101,873    $ 103,856    $ 112,828    $ 112,288    $ 430,845  

Basic EPS(1)

    $ 0.35    $ 0.36    $ 0.39    $ 0.39    $ 1.49 (1)

Diluted EPS(1)

    $ 0.34    $ 0.35    $ 0.38    $ 0.38    $ 1.44 (1)

 

April 20, 2009

Page 3

 

     Three Months Ended       

2007

    March 31    June 30    September 30    December 31    Full Year  
     (in thousands, except per share data)  

Revenue

    $ 460,270    $ 516,514    $ 558,837    $ 599,956    $ 2,135,577  

Cost of revenues (exclusive of depreciation and amortization expense shown separately below)

    $ 254,909    $ 292,326    $ 317,286    $ 341,514    $ 1,206,035  

Selling, general and administrative expenses

    $ 109,499    $ 120,464    $ 126,551    $ 137,588    $ 494,102  

Depreciation and amortization expense

    $ 12,260    $ 13,053    $ 13,870    $ 14,735    $ 53,918  

Income from Operations

    $ 83,602    $ 90,671    $ 101,130    $ 106,119    $ 381,522  

Net Income

    $ 75,446    $ 82,277    $ 96,154    $ 96,256    $ 350,133  

Basic EPS(1)

    $ 0.26    $ 0.29    $ 0.33    $ 0.33    $ 1.22 (1)

Diluted EPS(1)

    $ 0.25    $ 0.27    $ 0.32    $ 0.32    $ 1.15 (1)

 

(1) The sum of the quarterly basic and diluted EPS for each of the four quarters may not equal the EPS for the year due to rounding.”

As requested, the Company acknowledges that:

 

  •  

the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

 

  •  

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and

 

  •  

the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If you have any questions regarding the foregoing responses or otherwise, please do not hesitate to call me at (201) 678-2712 or Steven Schwartz, Esq., our Senior Vice President and General Counsel, at (201) 678-2759.

Sincerely,

/s/ Gordon Coburn

Gordon Coburn

Chief Financial and Operating Officer

 

cc: Tamara Tangen
                (Securities and Exchange Commission)
   Steven Schwartz, Esq.
                (Cognizant Technology Solutions Corporation)
   Andrew P. Gilbert, Esq.
                (Morgan, Lewis & Bockius LLP)
   Michael Wagner
                (PricewaterhouseCoopers LLP)