CLIENT PASSION + INVESTMENT IN INNOVATION = BETTER OUTCOMES

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2 CLIENT PASSION + INVESTMENT IN INNOVATION = BETTER OUTCOMES REVENUES (IN THOUSANDS) $8.843,189 $7,346,472 $6,121,156 $3,278, $4,592, BUSINESSES TODAY ARE EXPERIENCING A ONCE-IN-A-DECADE TECHNOLOGY SHIFT, AS THE CONFLUENCE OF SOCIAL, MOBILE, ANALYTICAL AND CLOUD TECHNOLOGIES TRANSFORMS OPERATING PROCESSES, CREATES NEW SOURCES OF DATA-DRIVEN INSIGHT, AND RADICALLY ALTERS CUSTOMER BEHAVIOR To win in this shifting landscape, companies must adopt the qualities of successful entrepreneurs, embracing OPERATING INCOME (IN THOUSANDS) $1,677,910 $1,361, so, they create new competencies, enable more agile decision-making, reach beyond their four walls for $1,136,468 $618,490 new technologies and applying new thinking. By doing $861,852 new ideas, and reinvent their business models for a changing global marketplace. At Cognizant, we help leading global businesses, STOCKHOLDERS EQUITY (IN THOUSANDS) $6,135,791 $2,653,177 $3,952,886 $4,854, across diverse industries, to realize the promise of today s technologies transforming the ways in which they connect with their customers, markets, employees, $3,584,431 partners and value chains in both the physical and digital worlds. In just 20 years, we have grown from fewer than 200 employees and one client to become a EMPLOYEES 171, ,700 services, with more than 170,000 employees, nearly 137,700 78, , global leader in business, consulting and technology 1,200 active clients, and over $8.8 billion in revenues Our progress reflects a passion for helping clients grow great businesses, a commitment to invest in innovation, and a culture that drives our talented associates to keep challenging and charging ahead. COGNIZANT ANNUAL REPORT 1

3 TO OUR STOCKHOLDERS: AT COGNIZANT, WE BELIEVE THAT CHALLENGING THE STATUS QUO IS VITAL TO OUR CLIENTS BUSINESSES AND TO OUR OWN. In today s shifting technology and business landscape, enterprises face a dual mandate: they must operate with greater efficiency and productivity to run better, while also achieving innovation-led advances in performance and value to run differently. To meet the challenge of this dual mandate, we have strengthened our capacity to guide our clients through transformations that leverage the potential of new technologies:: Integrating social, social, mobile, analytical and and cloud cloud technologies, which which we we call call the the SMAC SMAC Stack Stack TM, TM into, into a new a new IT IT foundation that that will will alter alter the the way way businesses interact and and transact with with customers, employees, partners and and markets; Helping clients to to extract business meaning from from what what we we call call the the Code Code Halo Halo TM, TM the, the aura aura of of digital digital information that that surrounds people, products and and organizations, will will be be a key a key determinant of of business success; and and Building new new platforms that that allow allow businesses to to migrate key key processes, services and and infrastructure to to the the cloud cloud will will increase their their operational flexibility and and cost cost effectiveness through the the emerging Business Cloud. Cloud. Enabling clients to unlock the promise of these technologies represents an exciting growth opportunity for Cognizant. We are applying our strengths depth in key industries, significant global scale in program delivery, business consulting prowess and technology leadership to assist clients with their transformation. Toward that end, we partner with clients to make existing operations as efficient and cost-effective to operate as possible and to free up resources to invest in innovation that builds new capabilities and unleashes new potential. 2 COGNIZANT ANNUAL REPORT COGNIZANT ANNUAL REPORT 3

4 INDUSTRY LEADING GROWTH In 2013, our focus on helping clients to reinvent their businesses led to another year of revenue growth for Cognizant. Revenue grew to $8.84 billion, rising more than 20% from GAAP net income was $1.23 billion, or $4.03 per diluted share ($2.02 on a post-split basis),* up from $1.05 billion, or $3.44 per diluted share ($1.72 on a post-split basis), for Diluted EPS on a non-gaap basis, which excludes stock-based compensation costs and acquisition-related charges, was $4.38 ($2.19 on a post-split basis). GAAP operating margin was 19.0%, while nongaap operating margin was 20.6%, topping our targeted 19% to 20% range.** With cash and short-term investments of $3.75 billion, we ended the year with Healthcare revenues, primarily from payer, pharmaceutical and medical device clients, rose more than 17% year-on-year. Engagements related to Affordable Care Act initiatives were among the key contributors to this growth. For example, we are helping CareFirst BlueCross BlueShield, a leading not-for-profit healthcare company, launch technology that will permit its 3.3 million members to manage their health coverage via smartphones and tablets. In the pharma sector, we are helping leading players accelerate the development of new treatments through more precise and effective clinical trial data management; others are using our advanced analytics to make sales and marketing programs more cost-efficient. a solid balance sheet, reflecting the continued strength of our business model. STRENGTH ACROSS INDUSTRIES The Company s performance in 2013 benefited from the diversity and breadth of our business across multiple industry sectors and service offerings. We ended the year with nearly 1,200 active clients; 243 of these represent strategic accounts, which we define as clients with the potential to spend at least $5 million to potentially more than $50 million with us annually. Demand for SMAC services was evident across many of our engagements, leading to more than $500 million in revenues from projects related to client SMAC initiatives and our SMAC-based offerings. Among our best-performing industry sectors, financial services revenues were up over 22% from the prior year. Revenues from retail/manufacturing/logistics clients grew by almost 25%. In addition to a growing interest in SMAC-related services, other key focus areas for financial clients included cost rationalization, regulatory and compliance initiatives. As an example, XL Group plc, a global insurance company, engaged us to develop a mobile risk engineering platform that will provide real-time information to underwriters to transform and optimize risk assessment. * On March 7, 2014, we completed a 2-for-1 stock split of our common stock in the form of a stock dividend. ** Non-GAAP diluted earnings per share and non-gaap operating margin are not measurements of financial performance prepared in accordance with GAAP. See Non-GAAP Financial Measures beginning on page 54 of the Company s Annual Report on Form 10-K included in this Annual Report for more information and a reconciliation to the most directly comparable GAAP financial measures. 4 COGNIZANT ANNUAL REPORT The move toward retail without boundaries is leading clients to partner with us on a range of consumer-facing and supply chain initiatives. For instance, we are working with John Lewis, a leading UK retailer, to map out a consistent, highquality omnichannel customer experience. Revenues from clients in other industries, which include high technology, communication and information/media/entertainment, increased 13% from the prior year. COGNIZANT ANNUAL REPORT 5

5 GROWTH WAS STRONG ACROSS ALL REGIONS North America revenues rose nearly 18%, as we added an array of new clients and expanded existing relationships, including Fallon Health and U.S. Bancorp. Europe was up 32% overall, reflecting 23% growth in the UK and a robust 48% revenue increase in Continental Europe, including the contributions from our Equinox and C1 Group acquisitions. In a recent engagement, Network Rail, the UK s leading rail infrastructure provider, named Cognizant as its key IT solutions and systems integration framework partner to help improve core information management functions and processes that are critical to its infrastructure and performance. OPPORTUNITY ON THE HORIZON For the last few years, we have embraced a three horizon strategy to grow our businesses: Horizon 1 Optimizing core IT services Horizon 2 Building momentum in services such as Business Consulting, Business Process Services (BPS) and IT Infrastructure Services Horizon 3 Incubating new technology architectures, delivery models and markets REVENUE GROWTH ACROSS REGIONS 18% NORTH AMERICA We continued to expand in other key regional markets, including Asia-Pacific, Japan, Australia, the Middle East and Latin America, with revenues increasing 28% over the prior year. For example, Saudi Electricity Company, the Middle East s largest utility, chose Cognizant to develop a comprehensive billing and revenue management solution to enable the delivery of superior service to a growing customer base. In Latin America, we are building the foundation for future growth by expanding our near-shore footprint: opening our first delivery center in Costa Rica, expanding our delivery center in Brazil and further extending our operations in Argentina. 32% EUROPE Horizon 1 services, such as Enterprise Application Services, Enterprise Information Management, and Quality Excellence & Assurance (which includes testing), grew steadily in In Horizon 2, Cognizant Business Consulting won several marquee clients in healthcare, retailing and technology. BPS landed engagements in mortgage servicing, clinical operations and healthcare provider services. IT Infrastructure Services had solid growth, including assignments for remote infrastructure management and service desk solutions. We also are seeing a strong pace of growth in Horizon 3 services, which includes many of our SMAC-related offerings, as well as other initiatives around new technologies, delivery models and markets. 28% ASIA, AUSTRALIA, MIDDLE EAST AND LATIN AMERICA 6 COGNIZANT ANNUAL REPORT COGNIZANT ANNUAL REPORT 7

6 INVESTING IN GROWTH GIVING BACK, MAKING A DIFFERENCE We have continued to grow our capacity to enable client transformation through selective acquisitions, as well as investments in new services and an expanding delivery network. In October 2013, we acquired Equinox Consulting, based in Paris, which provides business consulting services to investment banking, asset management, retail banking, insurance and specialized financial services clients. Founded in 2004, Equinox is well known for its regulatory consulting expertise, an essential skill given today s fast-changing regulatory landscape, as well as strategy consulting, organization and operations management, change management and human resources consulting. The addition of Equinox and its consulting professionals is expected to strengthen our integrated offering for financial services clients and our presence in Europe. Early in 2013 we acquired six companies of the C1 Group, a consulting and IT services firm based in Hamburg, Germany. The transaction expanded our footprint in Europe, added depth to our Manufacturing/Logistics, Energy/Utilities and Financial practices, and enhanced our Enterprise Application Services (specifically SAP services) and high-end testing capabilities. Since the acquisition, the C1 team has been pivotal in helping Cognizant to acquire new clients, winning assignments at Monier, BMW, Heinemann and GLOBAL FOUNDRIES. We are also developing new service delivery models as part of our Horizon 3 initiative to address the changing dynamics of our clients businesses. To that end, we are launching a portfolio of proprietary Cognizant BusinessCloud TM Solutions that will allow clients to quickly deploy on-demand business and IT solutions without the large capital outlays and long implementation timelines that are sometimes associated with traditional on-premise solutions. The BusinessCloud portfolio encompasses platforms such as Software as a Service (SaaS) and Business Process as a Service (BPaaS). Our BusinessCloud platforms help clients accelerate innovation by reducing the cost, time-to-market and execution risk of new products and services. We continuously challenge ourselves to make a difference in areas such as education, the environment and employee development, health and safety. For example, we have a major commitment to science, technology, engineering and math (STEM) education in the U.S., supporting 25 Making the Future after-school and summer programs in 2013, and helping to found US2020, which aims to mobilize one million volunteer STEM mentors annually by Last year, we also made a three-year, $150,000 commitment to help fund universitysponsored STEM education programs at Texas A&M University. Our Project Outreach volunteer program supports a range of learning initiatives in India and other countries, with over 57,000 associates dedicating more than 247,300 hours to mentoring, career counseling and talent development efforts last year. Cognizant Foundation has funded 18 education projects, covering engineering scholarships, school improvements and other resources, and 14 healthcare projects, such as eye-care screening programs. With respect to the environment, we have begun purchasing meaningful amounts of renewable energy for some of our India facilities, and we now source roughly 10% of our global energy needs from wind and biomass. Our volunteers are involved in clean-up efforts, recycling campaigns and awareness-raising activities in their communities, and overall per capita carbon emissions have been reduced 40% from the 2008 baseline. As a people- and knowledge-based service business, we are continually expanding and refining our professional development, diversity and wellness programs. I encourage you to read our Sustainability Report for an in-depth discussion of our efforts in these and other areas. 8 COGNIZANT ANNUAL REPORT COGNIZANT ANNUAL REPORT 9

7 Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. Ut wisi enim ad minim veniam, quis nostrud exerci tation ullamcorper suscipit lobortis nisl ut aliquip ex ea commodo consequat. Duis autem vel eum iriure dolor in hendrerit in vulputate velit esse molestie consequat, vel illum dolore eu feugiat nulla facilisis at vero eros et accumsan et iusto odio dignissim qui blandit praesent luptatum zzril delenit augue duis dolore te feugait nulla facilisi. Nam liber tempor cum soluta nobis eleifend option congue nihil imperdiet doming id quod mazim placerat facer possim assum. Typi non habent claritatem insitam; est usus legentis in iis qui facit eorum claritatem. Investigationes demonstraverunt lectores legere me lius quod ii legunt saepius. Claritas est etiam processus dynamicus, qui sequitur mutationem consuetudium lectorum. Mirum est notare quam littera gothica, quam nunc putamus parum claram, anteposuerit litterarum formas humanitatis per seacula quarta decima et quinta decima. Eodem modo typi, qui nunc nobis videntur parum clari, fiant sollemnes in futurum. RECOGNIZING RESULTS It is gratifying that our accomplishments in client service, financial performance and corporate responsibility have been recognized by independent sources, and I would like to share just a few of these accolades. Cognizant is #1 on the Fortune All Star list of fastest growing companies, and ranks among the Fortune 500, Financial Times 500 and Forbes Global We have been cited as a leader in the Forrester WaveTM ranking of workplace services providers. Our commitment to environmental stewardship was cited in the Newsweek Green and FTSE4Good rankings. And our employee development efforts were honored with a BEST award from the American Society for Training and Development. COGNIZANT COGNIZANTANNUAL ANNUALREPORT REPORT 11

8 CHALLENGING, CHANGING AND GROWING As Cognizant marks 20 years in business, we can look back with pride at our achievements: partnering with clients to spark entrepreneurship and innovation, providing leadership and direction through two decades of technology shifts and economic cycles, and driving profitable growth and rising business value. We deeply appreciate the loyalty of our clients, the dedication of our employees, and the confidence of our stakeholders throughout our history, and we look forward to many more years of progress. The voluminous growth of data and devices, the continued digitization of our clients markets, and the exciting potential for social, mobile, analytical and cloud-enabled enterprises have combined to make business more IT-intensive than ever before. As a result, we anticipate another year of industry-leading growth in To support that growth, we will continue to invest in new service platforms, delivery centers and global talent, to enhance our value to existing and prospective clients, extend our track record of outperformance, and deliver on our commitments to clients, employees, stakeholders and society. We always keep challenging, and that s central to our success in the past and will continue to be in the future. KEEP CHALLENGING TM Sincerely, Francisco D Souza Chief Executive Officer 12 COGNIZANT ANNUAL REPORT COGNIZANT ANNUAL REPORT 13

9 SOLVING CHALLENGES THE NEW IT FOUNDATION OF DIGITAL BUSINESS SMAC STACK (SOCIAL, MOBILE, ANALYTICAL AND CLOUD) TECHNOLOGIES ARE CONVERGING TO FORM A NEW IT INFRASTRUCTURE. The adoption of SMAC as the new corporate technology foundation is occurring with breathtaking speed, and is having a profound impact on the way enterprises conduct business. It is estimated that by 2020 as many as 100 billion computing devices will be connected to the Web, and corporations will be managing 50 times the data they do currently. It is essential that businesses not view each of these technologies in isolation, but rather combine them into an integrated IT architecture. This creates a multiplier effect in which each function complements and enables the others for maximum benefit. For example, a retailer could use advanced analytics to gather insights into shoppers preferences, and then send special offers to their mobile devices while they are visiting a store. A medical device manufacturer might use cloud-based mobility features to monitor a patient s condition remotely and send information to care providers. And companies in such diverse sectors as financial services, automotive, telecommunications, hospitality and many others can employ SMAC technologies to build one-toone relationships with customers or to leverage smart, connected products. The SMAC Stack is thus becoming the new enterprise IT model, promising to make organizations more connective, collaborative and productive. At Cognizant, we are applying the full range of our service capabilities to help clients challenge the limitations of legacy IT frameworks. Our deep domain expertise, delivered by a collaborative global workforce, is enabling leading companies to integrate the SMAC Stack into their IT architectures to drive competitive advantage, market leadership and profitable growth. CODE HALO MAKING MEANING FROM DIGITAL FOOTPRINTS EVERY DAY, WE GENERATE AND SHARE VAST QUANTITIES OF DIGITAL INFORMATION. Each click, swipe, like, comment, search or transaction produces data about us and about the brands, products and devices we use. Such information constitutes what we refer to as a Code Halo. Decoding and analyzing Code Halos and quickly converting that information into meaningful insights and foresights offers the potential to create unprecedented levels of business value. Code Halos are potential treasure troves of business meaning that can be as valuable (if not more valuable) to an enterprise as bricks, mortar and other physical assets. Winning companies essentially compete on code making meaning from Code Halo intersections to inform strategic decisions on everything from product development and operational processes, to customer interactions and go-to-market strategies. To extract business meaning from Code Halos, companies need strong analytical skills, sophisticated algorithmic capabilities and a willingness to reinvent legacy models. Deciphering Code Halos may make the difference between businesses that achieve exceptional performance, and those that risk extinction. We are helping clients to understand the business implications of Code Halo thinking through a framework we call the Crossroads Model. Developed from our research into sectors as varied as media/entertainment, mobile devices and industrial equipment, this model gives decision makers a Code Halo path to start moving forward quickly. The Crossroads Model can be used by clients, regardless of industry, to assess how effectively they compete on code and what steps they must take to emulate successful patterns pioneered by winning companies born digital or otherwise. BUSINESS CLOUD THE NEW HOW COMBINING DEMONSTRATED DOMAIN EXPERTISE, ADVANCED ALGORITHMS AND FLEXIBLE COMMERCIAL MODELS TO DELIVER SUPERIOR BUSINESS PERFORMANCE. A rapidly growing number of organizations are seeking greater agility, versatility and costeffectiveness by migrating business processes, services, platforms and infrastructure to the cloud. This model, known as everything-as-a-service, or XaaS, enables businesses to consume and pay for services per use. Beyond cost savings and operational flexibility, we apply XaaS principles to provide clients with innovative cloud-facilitated business capabilities in weeks instead of months or years. Our new Cognizant BusinessCloud Solutions represent an important addition to our services portfolio. Cognizant BusinessCloud is a suite of products that draw on our vertical expertise, integration capability, agility, partner relationships and our ability to bring people, process and technology together in a nimble, efficient, cost-effective way. Now, clients can use the cloud not only to access IT services on a variable basis, but to perform a wide range of mainstream business functions, such as digital asset management or clinical trials. Our BusinessCloud Solutions include: CLOUD 360 a hyper-efficient platform for enterprise cloud services ASSETSERV a centralized repository for managing large libraries of digital assets SMARTTRIALS an automated, real-time, regulatory-compliant service to manage clinical trials TRUMOBI TM ENTERPRISE MOBILITY SUITE a service that manages and secures mobile app deployment and operation These and other BusinessCloud Solutions provide a unique value proposition for clients seeking to reinvent their businesses with expanded capabilities, lower operating costs and improved outcomes. 14 COGNIZANT ANNUAL REPORT COGNIZANT ANNUAL REPORT 15

10 CLIENT SUCCESS CIRCULATION MANAGEMENT MAKES HEADLINES News Corp Australia, the number-one media company in its market and part of the global News Corp organization, sought to centralize circulation management across its 21 divisions. Previously, each division managed circulation locally through separate systems a major challenge for a company that sells millions of copies of newspapers and community publications, and provides an array of digital content. Cognizant was tasked with creating a framework for quality engineering and assurance for the new circulation management program. We established a unified process to identify and validate each division s requirements, while ensuring overall control quality and consistency. A specialized parallel testing process allowed multiple divisions to test functions simultaneously, accelerating the testing phase. The resulting quality assurance framework enabled 95% of the Digital Technology International (DTI) circulation transaction scenarios to be automated. Testing was speedy and efficient, with test cycle execution time reduced to two-plus weeks from approximately four weeks. Cognizant has since been integral to the launch of the system in 12 divisions, with two major DTI upgrades over a period of 14 months bringing cost and business benefits to the circulation management process across News Corp Australia. ONLINE TOOLS FOR BETTER HEALTHCARE Fallon Health, a Massachusetts-based not-for-profit healthcare services organization, became the first Massachusetts health insurer to provide quotes for merged market plans under the Affordable Care Act (ACA) with help from Cognizant. As Fallon s strategic partner, Cognizant developed and deployed QuoteNow, a new online quoting tool that enables best-practice quoting, rating and underwriting, and streamlines application submission and enrollment. Based on Pegasystems technology, QuoteNow helps Fallon deliver a tailored experience to consumers and insurance brokers, while complying with relevant ACA requirements. QuoteNow also makes it easier for Fallon to implement new automated processes and manage changes based on regulatory demands. By helping Fallon to successfully exchange HIPAA-compliant electronic information with the Massachusetts Health Connector within just five months, Cognizant enabled Fallon to accept applications and enroll members in record time meeting the open enrollment date of October 1, Cognizant s domain, technology and consulting capabilities resulted in a fully functional application, delivered on time, with the capabilities to meet the changing healthcare needs of the population Fallon serves. POWERFUL MOBILE RISK ENGINEERING SOLUTION XL Group Insurance Reinsurance Through its global insurance and reinsurance subsidiaries, XL Group plc provides property, casualty and specialty products to help enterprises manage complex risks. To enhance the accuracy, agility and efficiency of risk assessment, XL partnered with Cognizant to create a mobile-enabled risk engineering platform for its Global Asset Protection Services business. The resulting mobile solution will offer near real-time access to data, improve analysis and differentiation of risks with superior pricing accuracy, and deliver a better customer experience. The mobile platform enables an improved view of complex risks to underwriters and customers by providing powerful mobile tools for XL Group s risk engineers to quickly and seamlessly access, capture and analyze critical data. It also allows risk engineers to stay engaged with clients continuously, thus facilitating stronger collaboration between clients and engineers. Additionally, it will improve throughput, cost-effectiveness, and turnaround time from data capture to customer reporting, while reducing the amount of equipment and paperwork that risk engineers need to carry onsite. XL believes that, with risks becoming more complex every day, working with Cognizant to leverage best-in-class mobile technology is the key to enhancing risk management capabilities, improving the customer experience, and ensuring XL s continued market leadership in global risk consulting. 16 COGNIZANT ANNUAL REPORT 2013 COGNIZANT ANNUAL REPORT 17

11 A SMART ENTERPRISE MOBILITY PLATFORM Max Life Insurance, one of India s leading life insurance companies, licensed Cognizant s TruMobi suite as its enterprise mobility platform to transform the way thousands of its agent advisors conduct business and engage with customers. Part of the Cognizant BusinessCloud Solutions portfolio, TruMobi allows users to leverage social, mobile, analytics and cloud technologies to run more efficiently, while spurring innovation and competitive advantage by responding to business priorities and customers needs. TruMobi will enable Max Life to seamlessly transition to the digital world of tablets and smartphones, and help distribute and manage mobile applications effectively. Max Life agent advisors will have the most current information on their mobile devices and be able to offer products that best suit customer needs, thereby boosting distribution effectiveness and conversion rates, while reducing the risk of errors. At the same time, Max Life will have better control over enterprise applications and data access by agent advisors. With its comprehensive mobility capabilities, high levels of usability, security and control, and the ability to instantly connect to multiple enterprise systems, the TruMobi suite helps ensure enhanced business performance for Max Life. SPARKING A RETAIL REVOLUTION John Lewis (JL), a fashion, electronics and home retailer, with 40 locations across the United Kingdom, plus online and catalogue businesses, maintains a loyal customer base built on a 150-year legacy of high quality and service. Working closely with Cognizant to reimagine its business and develop solutions for omnichannel retailing, the company s Retail Revolution Strategy is already helping JL to consistently outperform its UK peers across a variety of business dimensions. As a result of a series of innovative bricks-and-clicks initiatives across a wide range of categories, JL was recently named Multichannel Retailer of the Year for the second year in a row at the Retail Week Awards. We have partnered with JL to define the business-it architecture needed to accelerate marketplace solutions and support its e-commerce environment. In fact, we are JL s senior systems integrator and lead consultant for its Omnichannel Customer Order program (OCCO). Moreover, we are working with JL to bring together UK organizations in a best practice-sharing supply chain consortium. Finally, we function as JL s strategic testing partner for all solutions launched into the marketplace through a Testing Center of Excellence. A SCALABLE SOLUTION FOR BANKING ON THE GO U.S. Bank, the fifth largest commercial bank in the U.S., has more than 3,000 banking offices in 25 states and offers a broad range of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. The bank partnered with Cognizant to build a new mobile marketing platform that leverages cutting-edge technologies to provide a mobile-optimized experience for on-the-go customers and to create a scalable online banking solution that can support user growth in perpetuity. To deliver solid business outcomes for the bank, Cognizant provided best-of-breed capabilities in consulting, user experience and digital offerings, supported by expertise in technology, delivery, performance optimization and testing. Our mobile channel solution allows U.S. Bank to offer a differentiated experience for mobile users. The site is consistently ranked among the best for performance by independent analysts, and its rich interactive features are optimized for efficient mobile device delivery. The mobile optimized site attracts over 700,000 visitors monthly serving existing bank customers while also generating leads via integrated CRM and digital marketing solutions. 18 COGNIZANT ANNUAL REPORT 2013 COGNIZANT ANNUAL REPORT 19

12 AGILITY AND SCALABILITY FOR A GLOBAL FACILITIES SERVICES LEADER The ISS Group was founded in Copenhagen in 1901 and has grown to become one of the world s leading facility services companies. With more than 530,000 employees, ISS offers a wide range of services such as cleaning, catering, security, property and support services, as well as facility management in more than 50 countries across Europe, Asia, North America, Latin America and the Pacific. ISS has tapped Cognizant as a strategic partner in its journey to be even more efficient and service-centric. After starting with smaller IT projects, ISS is now working with Cognizant on transformation projects such as Finance and Accounting (F&A) Business Process Outsourcing, covering core financial processes. Key elements of this effort include Master Data Management, where the goal is to provide ISS with structured, streamlined and integrated master data hubs across different domains. Cognizant will also replace the company s existing Data Warehouse with a best practices-driven solution leveraging the SQL Server platform. Enabling greater agility and scalability will advance ISS s growth plans, and with our global footprint and proven strengths, Cognizant will be able to support ISS in its IT initiatives on a country, regional and worldwide level. 20 COGNIZANT ANNUAL REPORT

13 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013 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 COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) Glenpointe Centre West, 500 Frank W. Burr Blvd., Teaneck, New Jersey (Address of Principal Executive Offices) (Zip Code) Registrant s telephone number, including area code (201) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Class A Common Stock, $0.01 par value per share The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. È Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes È No 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. È Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). È Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ( of this chapter) is not contained herein, and will not be contained, to the best of registrant s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. È Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer È Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes È No The aggregate market value of the registrant s voting shares of common stock held by non-affiliates of the registrant on June 28, 2013, based on $62.64 per share, the last reported sale price on the NASDAQ Global Select Market of the NASDAQ Stock Market LLC on that date, was $18,777,386,589 The number of shares of Class A common stock, $0.01 par value, of the registrant outstanding as of February 14, 2014 was 303,711,987 shares. DOCUMENTS INCORPORATED BY REFERENCE The following documents are incorporated by reference into the Annual Report on Form 10-K: Portions of the registrant s definitive Proxy Statement for its 2014 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

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15 Item TABLE OF CONTENTS PART I Business A. Risk Factors B. Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations A. Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure A. Controls and Procedures B. Other Information PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services PART IV Exhibits, Financial Statements Schedules 67 SIGNATURES EXHIBIT INDEX INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE... F-1 Page i

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17 PART I Item 1. Business Overview We are a leading provider of information technology (IT), consulting and business process services, dedicated to helping the world s leading companies build stronger businesses. Our clients engage us to help them build more efficient operations, provide solutions to critical business and technology problems, and to help them drive technology-based innovation and growth. Our core competencies include: Business, Process, Operations and IT Consulting, Application Development and Systems Integration, Enterprise Information Management, or EIM, Application Testing, Application Maintenance, IT Infrastructure Services, or IT IS, and Business Process Services, or BPS. We tailor our services to specific industries and utilize an integrated global delivery model. This seamless global sourcing model combines client service teams based on-site at the client locations with delivery teams located at dedicated near-shore and offshore global delivery centers that are located primarily in India, China, the United States, Canada, Argentina, Brazil, Hungary, France and the Philippines. Industry Background In today s complex business environment, many companies face intense competitive pressure and rapidly changing market dynamics, driven by such factors as changes in the economy, government regulations, globalization, virtualization and other technology innovations. At the same time, companies must evaluate the effect of emerging technologies such as social networks, mobile devices, advanced analytics and cloud computing, or SMAC, on their business operations. These technologies represent a new IT stack that will profoundly change the way companies relate to their customers, engage with employees, and bring innovative products and services to market. In response to these challenges, many companies are focused on improving efficiencies, enhancing effectiveness and driving innovation through technology to favorably impact both the bottom-line and the top-line. Companies need to build agility into both the cost and revenue sides of their models. In this context, they increasingly view the global sourcing model as a key to their efforts to operate more cost-effectively and productively. Separately, to confront secular industry shifts, changing demographics and new technologies, companies are looking to innovate and build new and different capabilities with emerging technologies to ensure their business models stay relevant. Companies increasingly seek to meet the dual mandate of more efficient and effective operations, including cost reduction, along with technology-based innovation and business transformation in a comprehensive, integrated manner. Achieving these objectives presents major challenges and requires companies to have highly skilled professionals trained in many diverse and new technologies and specialized industries. Increasingly, companies are relying on service providers, like us, operating with global delivery models, to help them meet these ever-changing objectives. Global demand for high quality, lower cost technology services from outside providers has created a significant opportunity for IT service providers that can successfully leverage the benefits of and address the challenges in using a global talent pool. The effective use of personnel from across the globe can offer a variety of benefits, including lower costs, faster delivery of new IT solutions and innovations in industry-specific solutions, processes and technologies. Certain countries, particularly India, the Philippines, Singapore and China, have large talent pools of highly qualified technical professionals who can provide high quality IT and business process services at a lower cost. India is a leader in IT services and is regarded as having one of the largest and highest quality pools of talent in the world. Historically, IT service providers have used offshore labor pools primarily to supplement the internal staffing needs of customers. However, evolving customer demands have led to the increasing acceptance and use of offshore resources for higher value-added services. These services include application design, development, testing and systems integration, technology consulting and infrastructure management. 1

18 The Cognizant Approach Our approach is built on a global network of delivery centers, deep domain expertise and a robust portfolio of services. Global Delivery Model. Our geographic reach extends across the globe, with more than 50 delivery centers worldwide. We have a four-tiered global architecture for service delivery and operations, consisting of employees co-located at clients sites, local or in-country delivery centers, regional delivery centers and global delivery centers. We are continuously expanding global delivery capacity in our centers in India, China and the Philippines. In 2013, we added more regional delivery capabilities in Latin America and in-country delivery centers in the United States and Europe and increased our presence in other regions throughout the world. We use our proprietary Cognizant 2.0 knowledge-sharing and project-management platform to unite all of our operations around the globe, access capabilities across the company, and streamline workflow. Our extensive facilities, technology and communications infrastructure facilitate the seamless integration of our global workforces. Domain Expertise. Our business is organized and managed primarily around our four industry-oriented business segments: Financial Services; Healthcare; Manufacturing, Retail and Logistics; and Other, which includes Communications, Information, Media and Entertainment, and High Technology. This industry focus has been central to our revenue growth and high client satisfaction. As the IT services industry continues to mature, clients are looking for service providers who understand their businesses, industry initiatives, customers, markets and cultures, and can create solutions tailored to meet their individual business needs. To strengthen our industry practices, we hire professionals who are deeply experienced in the industries we serve, thus establishing a broad base of business analysts and consultants. We continually invest in industry training for our staff and build out industry-specific services and solutions. This approach is central to our high levels of on-time delivery and client satisfaction, as we understand the full context of our clients challenges and have deep experience in addressing them. Portfolio of Services. We offer a broad range of services designed to help clients address business challenges and enhance their ability to pursue growth opportunities. Our key service areas, Consulting and Technology Services and Outsourcing Services, are delivered to our clients across our four business segments in a standardized, high-quality manner through our global delivery model. We continually invest in the expansion of our service portfolio to anticipate and meet clients evolving needs. In recent years, in addition to our traditional offerings, we have begun to provide services that enable clients to harness emerging SMAC technologies. Our current service areas include: Consulting and Technology Services Business, Process, Operations and IT Consulting Application Development and Systems Integration Application Testing Outsourcing Services Application Maintenance IT Infrastructure Services Business Process Services 2

19 Business Segments We are organized around our four industry-oriented business segments, and we report the operations of our business as follows: Financial Services Healthcare Manufacturing/Retail/Logistics Other Banking Insurance Healthcare Life Sciences Manufacturing and Logistics Retail, Travel and Hospitality Consumer Goods Communications Information, Media and Entertainment High Technology Financial Services Our Financial Services business segment serves leading financial institutions throughout the world. Our clients include banks, investment firms and insurance companies. In 2013, this segment represented approximately 42.0% of our total revenues. Revenues from our Financial Services business segment were $3,717.6 million, $3,035.4 million, and $2,518.4 million for the years ended December 31, 2013, 2012, and 2011, respectively. This business segment provides services to our customers operating in the following industries: Banking. We focus on serving traditional retail and commercial banks, diversified financial enterprises, broker-dealers, asset management firms, depositories, clearing organizations and exchanges. Our clients engage us to help make their operations as effective, productive and cost-efficient as possible, and to support new capabilities. We assist these clients in such areas as: Retail Banking, Wholesale Banking, Consumer Lending, Cards and Payments, Risk Management, Investment Banking and Brokerage, Asset and Wealth Management, and Securities Services. The demand for our services in the banking sector is being driven by several significant changes in the industry. In response to the global economic crisis, central banks and government bodies have adopted policies designed to maintain low interest rates, raise capital requirements, impose new regulations, and institute risk-mitigation measures, such as restricting proprietary trading. Such actions have the effect of curtailing some revenue sources and increasing compliance costs for most financial institutions. In addition, financial institutions must consider adopting new technologies, such as SMAC, which will impact the way they interface with customers and employees, and how they manage their operations. We help our customers adapt to these changes by providing technology-based industry-specific solutions. In addition to Application Development and Maintenance, the services increasingly in demand in this sector include EIM, Testing, Customer Relationship Management, or CRM, Enterprise Resource Planning, or ERP, BPS, IT IS, and Business and Technology Consulting. Insurance. We serve the needs of global property and casualty insurers, life insurers, reinsurance firms and insurance brokers who turn to us for assistance in improving the efficiency and effectiveness of their operations and in achieving business transformation. We focus on such aspects of our clients operations as: Business Acquisition, Policy Administration, Claims Processing, Management Reporting, Regulatory Compliance and Reinsurance. Among the factors driving the need for our services in the insurance industry is a desire to improve the sales and marketing process, both by deepening direct retail customer relationships and strengthening interactions with networks of independent and captive insurance agents, often through the use of social and mobile technologies. Insurers also seek to enhance their profitability by differentiating their products and services, resulting in a need for specialized underwriting models and systems. Additionally, many insurers seek to improve business effectiveness by reducing expense ratios and exiting non-core lines of business and operations. Our services which are most in demand in this sector include: Application Development and Integration, Consulting, BPS, IT IS, EIM, and SMAC services. 3

20 Healthcare Our Healthcare segment serves many leading healthcare and life sciences companies. In 2013, our Healthcare business segment represented approximately 25.6% of our total revenues. Revenues from our Healthcare business segment were $2,264.8 million, $1,934.9 million, and $1,622.2 million for the years ended December 31, 2013, 2012, and 2011, respectively. This business segment provides services to our clients operating in the following industries: Healthcare. We work with many leading global healthcare organizations, including healthcare payers, providers and pharmacy benefit managers. The healthcare industry today faces the dual challenge of improving the quality of care while lowering the cost of care and making healthcare affordable to a larger population. A key factor driving this transformation has been the Affordable Care Act. Our Healthcare Practice focuses on providing a broad range of services and solutions to the industry to address regulatory requirements and emerging industry trends such as: Regulatory Compliance (including compliance with the Affordable Care Act and work related to state health insurance exchanges), Integrated Health Management (including establishing health information exchanges), EIM, Claims Investigative Services (aimed at preventing fraud and abuse and strengthening administrative processes), and Operational Improvement (in areas such as claims processing, enrollment, membership and billing). We also partner with our clients to enable their systems and processes to deal with the retail orientation of health care, such as the support of individual mandates and the adoption of mobile and analytics solutions to improve access to health information and decision making by end consumers. Life Sciences. We partner with leading pharmaceutical, biotech, and medical device companies, as well as providers of generics, animal health and consumer health products to assist them in transforming their business by helping them be more efficient and effective from an IT and business operations perspective while helping them drive innovation and virtualization in growing their business. Among the industry forces generating demand for our services are: financial pressures caused by payer and government pricing pressures, patent expiry and competition from generics; the drive to expand into new geographic markets; the need for more targeted or personalized therapies leading to R&D innovation; continued diversification of product portfolios and the related high cost of product development; and a dynamic regulatory environment with greater emphasis on product safety, ethics and compliance, transparency of pricing and promotional activity. Our Life Sciences solutions help transform many of the business processes in the life sciences value chain (Research, Clinical Development, Manufacturing and Supply Chain, Sales and Marketing) as well as regulatory and administrative functions and general IT. Among our services most often in demand are Consulting, EIM, Customer Solutions, BPS, IT IS, Application Maintenance, Application Development and Systems Integration, Testing and SMAC services. Manufacturing/Retail/Logistics Our Manufacturing, Retail and Logistics segment provides outsourcing, business consulting and technology services for global leaders in a range of sub-sectors, including industrial, automotive, process logistics and retail. In 2013, this segment represented approximately 21.1% of our total revenues. Revenues from our Manufacturing/ Retail/Logistics business segment were $1,868.3 million, $1,498.7 million, and $1,197.5 million for the years ended December 31, 2013, 2012, and 2011, respectively. This business segment services customers in the following industry groups: Manufacturing and Logistics. Clients in this sector include manufacturers of automobiles and industrial products, and processors of natural resources, chemicals and raw materials. In logistics, our clients include rail, truck, marine and other transportation and distribution companies. We also serve many leading energy utilities, as well as oil and gas producers. Our clients seek our help in implementing business-relevant changes that will make them more productive, competitive and cost-effective. To that 4