Cognizant Technology Solutions (CTSH) 10-K 25 Feb 10 2009 FY Annual report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Thousands	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$1,100,930	$735,066
Short-term investments	298,402	27,513
Trade accounts receivable, net of allowances of $16,465 and $13,441, respectively	626,288	517,481
Unbilled accounts receivable	82,952	62,158
Deferred income tax assets, net	73,791	48,315
Other current assets	125,205	77,586
Total current assets	2,307,568	1,468,119
Property and equipment, net of accumulated depreciation of $274,570 and $199,188, respectively	481,516	455,254
Long-term investments	151,131	161,693
Goodwill	192,372	154,035
Intangible assets, net	75,757	47,790
Deferred income tax assets, net	80,618	52,816
Other assets	49,278	34,853
Total assets	3,338,240	2,374,560
Current liabilities:
Accounts payable	54,640	39,970
Deferred revenue	51,605	38,123
Accrued expenses and other current liabilities	540,363	309,484
Total current liabilities	646,608	387,577
Deferred income tax liabilities, net	0	7,294
Other noncurrent liabilities	38,455	14,111
Total liabilities	685,063	408,982
Stockholders' equity:
Preferred stock, $.10 par value, 15,000 shares authorized, none issued	0	0
Class A common stock, $.01 par value, 500,000 shares authorized, 297,231 and 291,670 shares issued and outstanding at December 31, 2009 and 2008, respectively	2,972	2,917
Additional paid-in capital	664,560	541,735
Retained earnings	1,965,368	1,430,405
Accumulated other comprehensive income (loss)	20,277	(9,479)
Total stockholders' equity	2,653,177	1,965,578
Total liabilities and stockholders' equity	$3,338,240	$2,374,560

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Thousands, except Per Share data	Dec. 31, 2009	Dec. 31, 2008
Trade accounts receivable, allowances	$16,465	$13,441
Property and equipment, accumulated depreciation	$274,570	$199,188
Preferred stock, par value	0.1	0.1
Preferred stock, shares authorized	15,000	15,000
Preferred stock, issued	0	0
Class A common stock, par value	0.01	0.01
Class A common stock, shares authorized	500,000	500,000
Class A common stock, shares issued	297,231	291,670
Class A common stock, shares outstanding	297,231	291,670

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Thousands, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Revenues	$3,278,663	$2,816,304	$2,135,577
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization expense shown separately below)	1,849,443	1,572,816	1,206,035
Selling, general and administrative expenses	721,359	652,021	494,102
Depreciation and amortization expense	89,371	74,797	53,918
Income from operations	618,490	516,670	381,522
Other income (expense), net:
Interest income	15,895	22,188	29,560
Other income (expense), net	2,566	(23,648)	3,274
Total other income (expense), net	18,461	(1,460)	32,834
Income before provision for income taxes	636,951	515,210	414,356
Provision for income taxes	101,988	84,365	64,223
Net income	$534,963	$430,845	$350,133
Basic earnings per share	1.82	1.49	1.22
Diluted earnings per share	1.78	1.44	1.15
Weighted average number of common shares outstanding-Basic	293,304	290,121	288,155
Dilutive effect of shares issuable under stock-based compensation plans	7,811	8,819	15,438
Weighted average number of common shares outstanding-Diluted	301,115	298,940	303,593

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Thousands	Class A Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income(Loss)	Total
Beginning Balance at Dec. 31, 2006	$2,850	$408,594	$650,277	$11,778	$1,073,499
Beginning Balance (in shares) at Dec. 31, 2006	285,026
Net income			350,133		350,133
Foreign currency translation adjustments				3,425	3,425
Adoption of FIN 48 (See Note 1)			(850)		(850)
Common stock issued, stock-based compensation plans (in shares)	6,374
Common stock issued, stock-based compensation plans	64	67,039			67,103
Tax benefit, stock-based compensation plans		44,344			44,344
Stock-based compensation expense		35,916			35,916
Repurchases of common stock and other (in shares)	(3,388)
Repurchases of common stock and other	(34)	(105,326)			(105,360)
Ending Balance (in shares) at Dec. 31, 2007	288,012
Ending Balance at Dec. 31, 2007	2,880	450,567	999,560	15,203	1,468,210
Net income			430,845		430,845
Foreign currency translation adjustments				(25,258)	(25,258)
Change in unrealized gain on cash flow hedges, net of taxes of $550 in 2009 and $22 in 2008				576	576
Common stock issued, stock-based compensation plans (in shares)	4,575
Common stock issued, stock-based compensation plans	46	54,830			54,876
Tax benefit, stock-based compensation plans		18,058			18,058
Stock-based compensation expense		43,900			43,900
Repurchases of common stock and other (in shares)	(979)
Repurchases of common stock and other	(10)	(27,825)			(27,835)
Acquisition (See Note 2) (in shares)	62
Acquisition (See Note 2)	1	2,205			2,206
Ending Balance (in shares) at Dec. 31, 2008	291,670
Ending Balance at Dec. 31, 2008	2,917	541,735	1,430,405	(9,479)	1,965,578
Net income			534,963		534,963
Foreign currency translation adjustments				11,922	11,922
Change in unrealized gain on cash flow hedges, net of taxes of $550 in 2009 and $22 in 2008				17,834	17,834
Common stock issued, stock-based compensation plans (in shares)	6,326
Common stock issued, stock-based compensation plans	63	61,588			61,651
Tax benefit, stock-based compensation plans		32,672			32,672
Stock-based compensation expense		44,816			44,816
Repurchases of common stock and other (in shares)	(765)
Repurchases of common stock and other	(8)	(16,251)			(16,259)
Ending Balance (in shares) at Dec. 31, 2009	297,231
Ending Balance at Dec. 31, 2009	$2,972	$664,560	$1,965,368	$20,277	$2,653,177

2_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008
Change in unrealized gain on cash flow hedges, taxes	$550	$22

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash flows from operating activities:
Net income	$534,963	$430,845	$350,133
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	89,371	74,797	53,918
Provision for doubtful accounts	3,347	8,473	3,560
Deferred income taxes	(26,589)	(5,028)	25,061
Stock-based compensation expense	44,816	43,900	35,916
Excess tax benefit on stock-based compensation plans	(31,556)	(16,993)	(42,265)
Other	(6,101)	2,587	0
Changes in assets and liabilities:
Trade accounts receivable	(98,451)	(168,395)	(119,882)
Other current assets	(42,778)	(31,151)	(34,232)
Other assets	(9,255)	(9,976)	(15,780)
Accounts payable	6,675	19,283	10,554
Other current and noncurrent liabilities	207,883	81,363	77,337
Net cash provided by operating activities	672,325	429,705	344,320
Cash flows used in investing activities:
Purchases of property and equipment	(76,639)	(169,410)	(182,467)
Purchases of investments	(348,209)	(135,200)	(968,669)
Proceeds from maturity or sale of investments	98,697	270,560	1,020,617
Acquisitions, net of cash acquired	(68,613)	(20,956)	(146,820)
Net cash used in investing activities	(394,764)	(55,006)	(277,339)
Cash flows from financing activities:
Issuance of common stock under stock-based compensation plans	61,651	54,876	67,103
Excess tax benefit on stock-based compensation plans	31,556	16,993	42,265
Repurchases of common stock	(16,259)	(27,835)	(105,360)
Net cash provided by financing activities	76,948	44,034	4,008
Effect of currency translation on cash and cash equivalents	11,355	(23,512)	2,919
Increase in cash and cash equivalents	365,864	395,221	73,908
Cash and cash equivalents, at beginning of year	735,066	339,845	265,937
Cash and cash equivalents, at end of year	1,100,930	735,066	339,845
Supplemental information:
Cash paid for income taxes during the year	$120,544	$82,802	$43,256

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies The terms Cognizant, we, our, us and the Company refer to Cognizant Technology Solutions Corporation and its subsidiaries unless the context indicates otherwise. Description of Business. Cognizant is a leading provider of custom Information Technology (IT) consulting and technology services and outsourcing services. Our customers are primarily Global 2000 Business companies located in North America, Europe and Asia. Our core competencies include Technology Strategy Consulting, Complex Systems Development, Enterprise Software Package Implementation and Maintenance, Data Warehousingand Business Intelligence, Application Testing, Application Maintenance, Infrastructure Management and Business and Knowledge Process Outsourcing. We tailor our services to specific industries, and utilize an integrated global delivery model. This seamless global delivery model combines technical and account management teams located on-site at the customer location and at dedicated near-shore and offshore development and delivery centers located primarily in India, China, the United States, Argentina, Hungary and the Philippines. Basis of Presentation and Principles of Consolidation. The consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America (US GAAP) and reflect the consolidated financial position, results of operations and cash flows and our consolidated subsidiaries for all periods presented. All intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents. Cash and cash equivalents consist of all cash balances, including money market funds and liquid instruments with an original maturity of three months or less. Cash and cash equivalents included time deposits of $11 at December31, 2008. Investments. All liquid investments with an original maturity greater than three months but less than one year are considered to be short-term investments. Investments with an original maturity greater than one year are considered to be long-term investments. Time deposits with financial institutions are valued at cost, which approximates fair value. Available-for-sale securities are reported at fair value with changes in unrealized gains and losses recorded as a separate component of accumulated other comprehensive income (loss) until realized. Trading securities are reported at fair value with any unrealized gains or losses related to the changes in fair value recorded in income or loss. Interest and amortization of premiums and discounts for debt securities are included in interest income. We also evaluate our available-for-sale investments periodically for possible other-than-temporary impairment by reviewing factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and our ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery of market value. An impairment charge would be recorded to the extent that the carrying value of the available-for-sale securities exce

Acquisitions

Acquisitions
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions	2. Acquisitions During 2009, we completed four acquisitions for an aggregate consideration of approximately $97,300 (net of cash acquired).We have allocated the purchase price for these acquisitions to tangible and intangible assets and liabilities based upon their fair values, including approximately $2,200 to tax deductible goodwill, $36,600 to non-deductible goodwill and $37,300 to intangible assets. The intangible assets are being amortized over a weighted average life of 6.3 years. In December 2009, we acquired the stock of UBS India Service Centre Private Limited (UBS ISC) for cash consideration of approximately $62,800, net of acquired cash.As part of this transaction, we acquired multi-year service agreements, an assembled workforce, land, equipment and other assets. The acquisition expands our business and knowledge process outsourcing capabilities in the financial services industry.In the third quarter of 2009, we entered into a transaction with Invensys pursuant to which we acquired a multi-year service agreement, an assembled workforce and certain other assets. Under the current authoritative business combination guidelines, this transaction qualified as business combination.This transaction, with no initial cash consideration, expands our business process outsourcing expertise within engineering services. The remaining two acquisitions were completed to strengthen our retail and infrastructure management capabilities. During 2008, we completed two acquisitions, which were completed in March and June of 2008. The acquisitions strengthen our IT consulting practice in the media and entertainment industry and service delivery capabilities in India. The initial consideration paid in cash and stock was approximately $24,000 (net of cash acquired and including direct transaction costs). The stock consideration consisted of 62,340 shares of ClassA common stock valued at $2,206. Additional purchase price, not to exceed $14,000, payable in cash, is contingent upon one of the acquired companies achieving certain financial and operating targets during an earn-out period and will be recorded when the contingency is resolved. We made an allocation of the purchase price to the tangible and intangible assets and liabilities acquired, including approximately $7,400 to tax deductible goodwill, $1,500 to non-tax deductible goodwill and $7,260 to intangible assets. The intangible assets are being amortized over a weighted average life of 10 years. In November 2007, we acquired marketRx, Inc. (marketRx), a U.S.-based leading provider of data analytics and process outsourcing to global life sciences companies in the pharmaceutical, biotechnology and medical devices segments for net cash consideration of approximately $136,000 (net of cash acquired and including direct transaction costs). In addition, the purchase price also included the estimated fair value of unvested stock options assumed by us. We completed this acquisition to strengthen our life sciences industry expertise as well as our data analytics capabilities in order to leverage such capabilities across multiple industries. We made an allocation of the purchase price to the ta

Investments

Investments
	12 Months Ended Dec. 31, 2009 USD / shares
Investments	3. Investments Investments as of December31, 2009 and 2008 were as follows: 2009 2008 Available-for-sale-securities: Agency discount notes $ 160 $ 7,008 Other 2 1,149 Total available-for-sale-securities 162 8,157 Trading securitiesauction-rate securities 129,103 139,398 UBS Right 22,028 28,158 Time deposits 298,240 13,493 Total investments $ 449,533 $ 189,206 The carrying value of the time deposits approximated fair value as of December31, 2009 and 2008. Gross realized gains or losses on the sale of available-for-sale securities were immaterial for the three years ended December31, 2009. As of December31, 2009 and 2008, available-for-sale securities in an unrealized loss or gain position were immaterial. All available-for-sale-securities at December31, 2009 contractually mature in 2010. Our investment in auction-rate securities is recorded at fair value and consists of AAA/A3-rated municipal bonds with an auction reset feature whose underlying assets are generally student loans, which are substantially backed by the Federal Family Education Loan Program (FFELP). Since February 2008, auctions for these securities have failed. The auction failures do not affect the value of the collateral underlying the auction-rate securities, and the Company continues to earn and receive interest on its auction-rate securities at a pre-determined formula with spreads tied to particular interest rate indices. As of December31, 2009, our investment in auction-rate securities was classified as a long-term investment. The classification of the auction-rate securities as long-term investments is due to continuing auction failures, the securities stated maturity of greater than one year and the Companys ability and intent to hold such securities beyond one year. The auction-rate securities mature as follows: $10,239 in 2012; and $118,864 after 2021. In November 2008, we accepted an offer from UBS AG (UBS) to sell to UBS, at par value ($151,275 at December31, 2009), our auction-rate securities at any time during an exercise period from June30, 2010 to July2, 2012 (the UBS Right). In accepting the UBS Right, we granted UBS the authority to purchase these auction-rate securities or sell them on our behalf at par value anytime after the execution of the UBS Right through July2, 2012. The offer is non-transferable. In 2008, we elected to measure the UBS Right under the fair value option as permitted under the authoritative accounting pronouncement and recorded pre-tax income of $28,158, and a corresponding long-term investment. At the same time, we transferred our investment in auction-rate securities from available-for-sale securities to trading securities. As a result of this transfer, we recognized a pre-tax loss in our consolidated statement of operations of $29,127 reflecting the reversal of the unrealized loss previously recorded in accumulated other comprehensive income (loss). In 2008, these transactions were recorded in the caption other income (expense), net in our accompanying consolidated

Property and Equipment, net

Property and Equipment, net
	12 Months Ended Dec. 31, 2009 USD / shares
Property and Equipment, net	4. Property and Equipment, net Property and equipment as of December31, 2009 and 2008 were as follows: EstimatedUsefulLife(Years) 2009 2008 Buildings 30 $ 230,418 $ 159,069 Computer equipment and purchased software 3 195,646 167,234 Furniture and equipment 5 9 131,368 91,587 Land 16,042 12,866 Leasehold land 16,930 16,930 Capital work-in-progress 70,639 128,566 Leasehold improvements Shorteroftheleasetermorthelifeofleasedasset 95,043 78,190 Sub-total 756,086 654,442 Accumulated depreciation and amortization (274,570 ) (199,188 ) Property and equipment, net $ 481,516 $ 455,254 Depreciation and amortization expense related to property and equipment was $79,126, $66,681and $50,337 for the years ended December31, 2009, 2008 and 2007, respectively. In India, leasehold land is leased by us from the government of India with lease terms ranging from 90 to 99 years. Lease payments are made at the inception of the lease agreement and amortized over the lease term. Amortization expense of leasehold land is immaterial for the periods presented and is included in depreciation and amortization expense in our accompanying consolidated statements of operations.

Goodwill and Intangible Assets,

Goodwill and Intangible Assets, net
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Intangible Assets, net	5. Goodwill and Intangible Assets, net Changes in goodwill for the years ended December31, 2009 and 2008 are as follows: 2009 2008 Balance, beginning of year $ 154,035 $ 148,789 Acquisitions and adjustments 38,067 5,634 Cumulative translation adjustments 270 (388 ) Balance, end of year $ 192,372 $ 154,035 In 2009, the increase in goodwill was primarily related to the 2009 acquisitions. In 2008, the increase in goodwill was related primarily to the acquisitions completed during the year net of adjustments of approximately $3,300 related to the final allocation of purchase price for the marketRx acquisition and the reduction of a valuation allowance initially established against deferred income tax assets recorded for acquired net operating losses related to an earlier acquisition. No impairment losses were recognized during the three years ended December31, 2009. Goodwill has been allocated to our reportable segments as follows: 2009 2008 Financial Services $ 72,577 $ 43,165 Healthcare 65,097 64,736 Manufacturing/Retail/Logistics 21,048 12,670 Other 33,650 33,464 Total goodwill $ 192,372 $ 154,035 Components of intangible assets as of December31, 2009 and 2008 were as follows: 2009 2008 Weighted AverageLife Customer relationships $ 94,489 $ 58,470 8.6years Developed technology 7,206 5,686 4.5 years Other 3,797 3,045 3.9years 105,492 67,201 Accumulated amortization (29,735 ) (19,411 ) Intangible assets, net $ 75,757 $ 47,790 All of the intangible assets have finite lives and as such are subject to amortization. Amortization of intangibles totaled $10,245 for 2009, $8,116 for 2008, and $3,581 for 2007. Estimated amortization expense related to our existing intangible assets for the next five years are as follows: Year Amount 2010 $ 14,676 2011 $ 12,142 2012 $ 11,578 2013 $ 10,401 2014 $ 10,301

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Accrued Expenses and Other Current Liabilities	6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of December31, 2009 and 2008 were as follows: 2009 2008 Compensation and benefits $ 356,127 $ 187,063 Taxes 10,300 11,312 Professional fees 26,508 16,066 Travel and entertainment 15,871 22,000 Customer volume incentives 44,537 24,560 Derivative financial instruments 20,968 Other 66,052 48,483 Total accrued expenses and other current liabilities $ 540,363 $ 309,484

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss)
	12 Months Ended Dec. 31, 2009 USD / shares
Accumulated Other Comprehensive Income (Loss)	7. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) as of December31, 2009 and 2008 were as follows: 2009 2008 Foreign currency translation adjustments $ 1,867 $ (10,055 ) Unrealized gain on cash flow hedges, net of taxes 18,410 576 Total accumulated other comprehensive income (loss) $ 20,277 $ (9,479 )

Employee Benefits

Employee Benefits
	12 Months Ended Dec. 31, 2009 USD / shares
Employee Benefits	8. Employee Benefits In the United States, we maintain a 401(k) savings plan and supplemental retirement plan which are defined contribution plans. Employer matching contributions for these plans were $5,562, $5,420, and $4,074 for the years ended December31, 2009, 2008 and 2007, respectively. Certain of our employees participate in defined contribution plans in Europe, primarily the United Kingdom, sponsored by us. The costs related to these plans were not material to our results of operations or financial position for the years presented. We maintain employee benefit plans that cover substantially all India-based employees. The employees provident fund, pension and family pension plans are statutory defined contribution retirement benefit plans. Under the plans, employees contribute up to 12% of their base compensation, which is matched by an equal contribution by the Company. For these plans, we recognized a contribution expense of $20,729, $17,925, and $12,963 for the years ended December31, 2009, 2008 and 2007, respectively. We also maintain a gratuity plan in India that is a statutory post-employment benefit plan providing defined lump sum benefits. We make annual contributions to an employees gratuity fund established with a government-owned insurance corporation to fund a portion of the estimated obligation. Accordingly, our liability for the gratuity plan reflects the undiscounted benefit obligation payable as of the balance sheet date which was based upon the employees salary and years of service. As of December31, 2009 and 2008, the amount accrued under the gratuity plan was $21,064 and $17,443, which is net of fund assets of $20,741 and $12,406, respectively. Expense recognized by us was $8,918, $12,371, and $7,013 for the years ended December31, 2009, 2008 and 2007, respectively.

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	9. Income Taxes Income before provision for income taxes shown below is based on the geographic location to which such income is attributed for years ended December31: 2009 2008 2007 United States $ 151,711 $ 135,797 $ 131,430 Foreign 485,240 379,413 282,926 Total $ 636,951 $ 515,210 $ 414,356 The provision for income taxes consists of the following components for the years ended December31: 2009 2008 2007 Current: Federal and state $ 101,170 $ 63,977 $ 58,830 Foreign 59,539 73,080 30,683 Total current 160,709 137,057 89,513 Deferred: Federal and state (35,315 ) (7,677 ) (11,193 ) Foreign (23,406 ) (45,015 ) (14,097 ) Total deferred (58,721 ) (52,692 ) (25,290 ) Total provision for income taxes $ 101,988 $ 84,365 $ 64,223 A reconciliation between our effective income tax rate and the U.S. federal statutory rate is as follows: 2009 % 2008 % 2007 % Tax expense, at U.S. federal statutory rate $ 222,933 35.0 $ 180,323 35.0 $ 145,025 35.0 State and local income taxes, net of federal benefit 8,648 1.4 7,740 1.5 7,559 1.8 Rate differential on foreign earnings (137,138 ) (21.5 ) (107,246 ) (20.8 ) (83,397 ) (20.1 ) Other 7,545 1.1 3,548 0.7 (4,964 ) (1.2 ) Total provision for income taxes $ 101,988 16.0 $ 84,365 16.4 $ 64,223 15.5 Deferred income tax assets and liabilities are comprised of the following at December31: 2009 2008 Deferred income tax assets: Net operating losses $ 9,304 $ 9,904 Revenue recognition 32,836 17,113 Compensation and benefits 32,526 13,107 Stock-based compensation 23,478 25,634 Minimum alternative tax and other credits 81,201 55,836 Depreciation and amortization 260 Other 13,085 3,012 192,690 124,606 Less valuation allowance (10,230 ) (7,883 ) Deferred income tax assets, net 182,460 116,723 Deferred income tax liabilities: Undistributed Indian income 6,134 6,141 Depreciation and amortization 2,862 Intangible assets 21,917 13,883 Deferred income tax liabilities 28,051 22,886 Net deferred income tax assets $ 154,409 $ 93,837 At December31, 2009, we had foreign net operating loss carryforwards of approximately $36,900. We have recorded a full valuation all

Fair Value Measurements

Fair Value Measurements
	12 Months Ended Dec. 31, 2009 USD / shares
Fair Value Measurements	10. Fair Value Measurements We measure our cash equivalents, investments, including auction-rate securities, and foreign exchange forward contracts at fair value. The authoritative guidance defines fair value as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entitys pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: Level 1Inputs are quoted prices in active markets for identical assets or liabilities. Level 2Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The following table summarizes our financial assets and (liabilities) measured at fair value on a recurring basis as of December31, 2009: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 778,311 $ $ $ 778,311 Investments: Available-for-sale securitiescurrent 162 162 Trading securitiesnoncurrent 129,103 129,103 UBS Rightnoncurrent 22,028 22,028 Other current assets: Derivative financial instrumentsforeign exchange forward contracts 20,358 20,358 Other current liabilities: Derivative financial instrumentsforeign exchange forward contracts (20,968 ) (20,968 ) Other assets: Derivative financial instrumentsforeign exchange forward contracts 688 688 Other noncurrent liabilities: Derivative financial instrumentsforeign exchange forward contracts (1,917 ) (1,917 ) Total assets and (liabilities) measured at fair value $ 778,311 $ (1,677 ) $ 151,131 $ 927,765 The following table summarizes our financial assets measured at fair value on a recurring basis as of December31, 2008: Level 1 Level 2 Level 3 Total Cash equivalents: Money

Derivative Financial Instrument

Derivative Financial Instruments
	12 Months Ended Dec. 31, 2009 USD / shares
Derivative Financial Instruments	11. Derivative Financial Instruments In the normal course of business, we use foreign exchange forward contracts to manage foreign currency exchange rate risk. The estimated fair value of the foreign exchange forward contracts considers the following items: discount rate, timing and amount of cash flow and counterparty credit risk. The following table provides information on the location and fair values of derivative financial instruments included in our consolidated statements of financial position as of December31, 2009: Designation of Derivatives Location on Statement of Financial Position Assets Liabilities Cash Flow HedgesDesignated as hedging instruments Foreign exchange forward contracts Other current assets $ 20,211 $ Other assets 688 Accrued expenses and other current liabilities Noncurrent liabilities 1,917 Total 20,899 1,917 Other DerivativesNot designated as hedging instruments Foreign exchange forward contracts Other current assets 147 Other assets Accrued expenses and other current liabilities 20,968 Noncurrent liabilities Total 147 20,968 Total $ 21,046 $ 22,885 The following table provides information on the location and fair values of derivative financial instruments included in our consolidated statements of financial position as of December31, 2008: Designation of Derivatives Location on Statement of Financial Position Assets Liabilities Cash Flow HedgesDesignated as hedging instruments Foreign exchange forward contracts Other current assets $ 598 $ Total $ 598 $ Cash Flow Hedges We have entered into a series of foreign exchange forward contracts that are designated as cash flow hedges of certain salary payments in India. These contracts are intended to partially offset the impact of movement of exchange rates on future operating costs and are scheduled to mature each month during 2010 and 2011. Under these contracts, we purchase Indian rupees and sell U.S. dollars and the changes in fair value of these contracts are initially reported in the caption accumulated other comprehensive income (loss) on our accompanying consolidated statements of financial position and is subsequently reclassified to earnings in the same period the hedge contract settles. As of December31, 2009 and December31, 2008, the notional value of our outstanding contracts was $810,000 and $82,000, respectively, and the net unrealized gain included in accumulated other comprehensive income (loss) for such contracts was $18,410 and $576, respectively, Upon settlement or maturity of the cash flow hedge contracts, we record the related gain or loss, based on our designation at the commencement of the contract, to salary expense reported within cost of revenues and selling, general and administrative expenses. The tables below provide information o

Stock-Based Compensation Plans

Stock-Based Compensation Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Stock-Based Compensation Plans	12. Stock-Based Compensation Plans On June5, 2009, our stockholders approved the adoption of the Cognizant Technology Solutions Corporation 2009 Incentive Compensation Plan (the 2009 Incentive Plan), under which 24,000,000 shares of our ClassA common stock were reserved for issuance. The 2009 Incentive Plan is the successor plan to our Amended and Restated 1999 Incentive Compensation Plan which terminated on April13, 2009 in accordance with its terms (the 1999 Incentive Plan), our Amended and Restated Non-Employee Directors Stock Option Plan (the Director Plan) and our Amended and Restated Key Employees Stock Option Plan (the Key Employee Plan) which terminated in July 2009 (collectively, the Predecessor Plans). The 2009 Incentive Plan will not affect any options or stock issuances outstanding under the Predecessor Plans. No further awards will be made under the Predecessor Plans. As of December31, 2009, we have 22,650,537 shares available for grant under the 2009 Incentive Plan. Stock options granted to employees under our plans have a life ranging from seven to ten years, vest proportionally over four years, unless specified otherwise, and have an exercise price equal to the fair market value of the common stock on the date of grant. Grants to non-employee directors vest proportionally over two years. Stock-based compensation expense relating to stock options is recognized on a straight-line basis over the requisite service period. Restricted stock units vest proportionately in quarterly or annual installments over three years. Stock-based compensation expense relating to restricted stock units is recognized on a straight-line basis over the requisite service period. We granted performance stock units that cliff vest after three years, principally to executive officers, and performance stock units that vest over periods ranging from one to three years to employees including the executive officers. The vesting of performance stock units is contingent on both meeting revenue performance targets and continued service. Stock-based compensation costs for performance stock units that cliff vest are recognized on a straight-line basis and awards that vest proportionally are recognized on a graded-vesting basis over the vesting period based on the most probable outcome of the performance conditions. If the minimum performance targets are not met, no compensation cost is recognized and any recognized compensation cost is reversed. The Companys 2004 Employee Stock Purchase Plan (the Purchase Plan) provides for the issuance of up to 6,000,000 shares of ClassA common stock to eligible employees. The Purchase Plan provides for eligible employees to purchase whole shares of ClassA common stock at a price of 90% of the lesser of: (a)the fair market value of a share of ClassA common stock on the first date of the purchase period or (b)the fair market value of a share of ClassA common stock on the last date of the purchase period. Stock-based compensation expense for the Purchase Plan is recognized over the vesting period of three months on a straight-line basis. As of December31, 2009, we had 1,225,501 shares available for future grants a

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies	13. Commitments and Contingencies We lease office space and equipment under operating leases, which expire at various dates through the year 2021. Certain leases contain renewal provisions and generally require us to pay utilities, insurance, taxes, and other operating expenses. Future minimum rental payments under non-cancelable operating leases as of December31, 2009 are as follows: 2010 $ 62,404 2011 55,457 2012 46,058 2013 32,510 2014 13,993 Thereafter 18,159 Total minimum lease payments $ 228,581 Rental expense totaled $75,170, $85,281 and $54,475 for years ended December31, 2009, 2008 and 2007, respectively. Our current India real estate development program includes planned construction of approximately 4.5million square feet of new space. The expanded program, which commenced during the quarter ended March31, 2007, includes the expenditure of approximately$330,000 on land acquisition, facilities construction and furnishings to build new state-of-the-art development and delivery centers in regions primarily designated as SEZs located in India. As of December31, 2009, we had outstanding fixed capital commitments of $35,936 related to our India development center expansion program. We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the outcome of such claims and legal actions, if decided adversely, is not expected to have a material adverse effect on our business, financial condition and results of operations. Additionally, many of our engagements involve projects that are critical to the operations of our customers business and provide benefits that are difficult to quantify. Any failure in a customers systems or our failure to meet our contractual obligations to our clients, including any breach involving a customers confidential information or sensitive data, or our obligations under applicable laws or regulations could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to contractually limit our liability for damages arising from negligent acts, errors, mistakes, or omissions in rendering our services, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances or will otherwise protect us from liability for damages. Although we have general liability insurance coverage, including coverage for errors or omissions, there can be no assurance that such coverage will continue to be available on reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, would have a material adverse effect on our business, results of operations and financial condition.

Segment Information

Segment Information
	12 Months Ended Dec. 31, 2009 USD / shares
Segment Information	14. Segment Information Our reportable segments are: Financial Services, which includes customers providing banking / transaction processing, capital markets and insurance services; Healthcare, which includes healthcare providers and payers as well as life sciences customers; Manufacturing/Retail/Logistics, which includes manufacturers, retailers, travel and other hospitality customers, as well as customers providing logistics services; and Other, which is an aggregation of industry segments which, individually, are less than 10% of consolidated revenues and segment operating profit. The Other reportable segment includes entertainment, media and information services, communications, and high technology operating segments. Our sales managers, account executives, account managers and project teams are aligned in accordance with the specific industries they serve. Our chief operating decision maker evaluates the Companys performance and allocates resources based on segment revenues and operating profit. Segment operating profit is defined as income from operations before unallocated costs. Generally, operating expenses for each operating segment have similar characteristics and are subject to the same factors, pressures and challenges. However, the economic environment and its effects on industries served by our operating groups may affect revenue and operating expenses to differing degrees. Expenses included in segment operating profit consist principally of direct selling and delivery costs as well as a per seat charge for use of the development and delivery centers. Certain expenses, such as general and administrative, and a portion of depreciation and amortization, are not specifically allocated to specific segments as management does not believe it is practical to allocate such costs to individual segments because they are not directly attributable to any specific segment. Further, stock-based compensation expense and the related stock-based Indian fringe benefit tax are not allocated to individual segments in internal management reports used by the chief operating decision maker. Accordingly, these expenses are separately disclosed as unallocated and adjusted only against our total income from operations. Additionally, management has determined that it is not practical to allocate identifiable assets, by segment, since such assets are used interchangeably among the segments. Revenues from external customers and segment operating profit, before unallocated expenses, for the Financial Services, Healthcare, Manufacturing/Retail/Logistics, and Other reportable segments were as follows for the years ended December31: 2009 2008 2007 Revenues: Financial Services $ 1,406,629 $ 1,284,013 $ 1,001,420 Healthcare 860,427 688,224 504,504 Manufacturing/Retail/Logistics 564,917 443,236 320,116 Other 446,690 400,831 309,537 Total revenue $ 3,278,663 $ 2,816,304 $ 2,135,577 2009 2008 2007 Segment Operating Profit: Financial Services $ 503,689 $ 439,

Quarterly Financial Data

Quarterly Financial Data (Unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
Quarterly Financial Data (Unaudited)	15. Quarterly Financial Data (Unaudited) Summarized quarterly results for the two years ended December31, 2009 are as follows: Three Months Ended Full Year 2009 March31 June30 September30 December31 Revenues $ 745,862 $ 776,592 $ 853,488 $ 902,721 $ 3,278,663 Cost of revenues (exclusive of depreciation and amortization expense shown separately below) 419,708 433,340 475,599 520,796 1,849,443 Selling, general and administrative expenses 166,872 170,003 193,806 190,678 721,359 Depreciation and amortization expense 21,152 21,579 22,301 24,339 89,371 Income from operations 138,130 151,670 161,782 166,908 618,490 Net Income 113,132 141,255 136,572 144,004 534,963 Basic EPS 0.39 0.48 0.47 0.49 1.82 (1) Diluted EPS 0.38 0.47 0.45 0.47 1.78 (1) Three Months Ended Full Year 2008 March31 June30 September30 December31 Revenues $ 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 0.35 0.36 0.39 0.39 1.49 (1) Diluted EPS 0.34 0.35 0.38 0.38 1.44 (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.

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Feb. 15, 2010	Jun. 30, 2009
Trading Symbol	CTSH
Entity Registrant Name	COGNIZANT TECHNOLOGY SOLUTIONS CORP
Entity Central Index Key	0001058290
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		297,561,219
Entity Public Float			$7,796,158,232