Press Release


Genpact Reports Results for the First Quarter of 2017

Revenues of $623 Million, Up 2% (~3% on a constant currency basis)1
Global Client BPO Revenues of $462 Million, Up 7% (~9% on a constant currency basis)2
Diluted EPS of $0.26, Down 4%; Adjusted Diluted EPS  of $0.31, Flat YoY
3

NEW YORK, May 4, 2017 — Genpact Limited (NYSE: G), a global professional services firm focused on delivering digital transformation for clients, today announced financial results for the first quarter ended March 31, 2017.

“We delivered solid first quarter results, highlighted by continued momentum from our transformational services in consulting, digital and analytics driving our Global Client BPO growth,” said N.V. ‘Tiger’ Tyagarajan, Genpact’s president and CEO. “Our clients are excited about our recent acquisitions. RAGE Frameworks adds tremendous capabilities in the area of Artificial Intelligence, and BrightClaim expands our deep insurance domain expertise. Our investments in digital, domain and analytics have cemented our reputation as a digital transformation thought leader.”

Key Financial Results – First Quarter 2017

  • Total revenue was $623.0 million, up 2% year over year (up ~3% on a constant currency basis).  
  • Income from operations was $79.1 million, up 4.6% year over year, with a corresponding margin of 12.7%.  Adjusted income from operations was $88.1 million, up 3% year over year, with a corresponding margin of 14.1%.4
  • Diluted earnings per share were $0.26, down 4% year over year, and adjusted diluted earnings per share were $0.31, flat year over year. The current quarter diluted earnings per share includes a $0.02 foreign currency loss resulting from balance sheet re-measurement.
  • Genpact repurchased approximately 9.0 million of its common shares during the quarter for total consideration of $220 million at an average price per share of $24.33.5

Revenue Details – First Quarter 2017
At the end of each fiscal year, we reclassify revenue related to certain divested GE businesses as Global Client revenue as of the dates of divestiture. Such reclassifications are reflected in the revenue results and growth rates presented below. In addition, to provide a consistent view of the trends underlying our business, we are also presenting below revenue results and growth rates adjusted to assume that all 2016 reclassifications occurred on January 1, 2016.

  • Revenue from Global Clients was $554 million, up 8% year over year (up ~9% on a constant currency basis), representing approximately 89% of total revenues. If all 2016 revenue reclassifications had occurred on January 1, 2016, revenue from Global Clients would have increased 5% year over year (6% on a constant currency basis).
  • Revenue from GE was $69 million, down 28% year over year, representing approximately 11% of total revenues. If all 2016 revenue reclassifications had occurred on January 1, 2016, revenue from GE would have decreased 17% year over year.
  • Total BPO revenue was $511 million, up 5% year over year, representing approximately 82% of total revenues. If all 2016 revenue reclassifications had occurred on January 1, 2016, total BPO revenue would have increased 5% year over year.
  • Global Client BPO revenue was $462 million, up 11% year over year (up ~12% on a constant currency basis). If all 2016 revenue reclassifications had occurred on January 1, 2016, Global Client BPO revenue would have increased 7% year over year (~9% on a constant currency basis).
  • GE BPO revenue was $49 million, down 31% year over year. If all 2016 revenue reclassifications had occurred on January 1, 2016, GE BPO revenue would have decreased 17% year over year.
  • Total IT revenue was $112 million, down 7% year over year, representing approximately 18% of total revenues. If all 2016 revenue reclassifications had occurred on January 1, 2016, total IT revenue would have decreased 7% year over year.
  • Global Client IT revenue was $91 million, down 5% year over year. If all 2016 revenue reclassifications had occurred on January 1, 2016, Global Client IT revenue would have decreased 5% year over year.
  • GE IT revenue was $20 million, down 17% year over year. If all 2016 revenue reclassifications had occurred on January 1, 2016, GE IT revenue would have decreased 17% year over year.

Cash Flow from Operations

  • Cash generated from operations was $31 million in the first quarter of 2017, compared to cash used for operations of $10 million in the first quarter of 2016.

Revised 2017 Outlook

  • Total revenue outlook increasing by $20 million from the prior outlook to $2.63 to $2.70 billion reflecting expected revenues from our recent acquisitions (including an assumed adverse foreign exchange impact of $32 million, almost all of which is reflected in Global Client revenue). This represents growth of 2% to 5%, or 4% to 6% on a constant currency basis;
  • Global Client revenue growth improving to 5% to 8%, or 6% to 9% on a constant currency basis;
  • Adjusted income from operations margin6 of approximately 15.7%; and
  • Adjusted diluted EPS7 of $1.53 to $1.57.

Conference Call to Discuss Financial Results
Genpact’s management will host an hour-long conference call beginning at 4:30 p.m. ET on May 4, 2017 to discuss the company’s performance for the first quarter of 2017. To participate, callers can dial +1 (877) 654-0173 from within the U.S. or +1 (281) 973-6289 from any other country. Thereafter, callers will be prompted to enter the participant code, 2876453.

A live webcast of the call will also be made available on the Genpact Investor Relations website at http://investors.genpact.com. For those who cannot participate in the call, a replay and podcast will be available on the Genpact website after the end of the call. A transcript of the call will also be made available on the website.

About Genpact
Genpact (NYSE: G) is a global professional services firm focused on delivering digital transformation for our clients, putting digital and data to work to create competitive advantage. We do this by integrating lean principles, design thinking, analytics and digital technologies with our domain and industry expertise to deliver disruptive business outcomes – an approach we call Lean DigitalSM. We deliver value to our clients in two ways – through digital-led, domain-enabled solutions that drive innovation, and through intelligent operations enabled by digital that design, transform and run clients’ operations. Our approach is continually refined in one of the world’s largest digital process sandboxes, where we test and improve thousands of processes. For two decades, first as a General Electric division and since 2005 as an independent company, we have been passionately serving our clients. We generate impact for clients from the Fortune Global 500 and beyond, and employ over 77,000 people in more than 20 countries, with key offices in New York City, Palo Alto, London, and Delhi. For additional information, visit www.genpact.com

Safe Harbor
This press release contains certain statements concerning our future growth prospects and forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements. These risks, uncertainties and other factors include but are not limited to a slowdown in the economies and sectors in which our clients operate, a slowdown in the business process outsourcing and information technology services sectors, the risks and uncertainties arising from our past and future acquisitions, our ability to convert bookings to revenues, our ability to manage growth, factors which may impact our cost advantage, wage increases, changes in  tax rates and tax legislation, our ability to attract and retain skilled professionals, risks and uncertainties regarding fluctuations in our earnings, foreign currency fluctuations, general economic conditions affecting our industry as well as other risks detailed in our reports filed with the U.S. Securities and Exchange Commission, including Genpact's Annual Report on Form 10-K. These filings are available at www.sec.gov. Genpact may from time to time make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. Although Genpact believes that these forward-looking statements are based on reasonable assumptions, you are cautioned not to put undue reliance on these forward-looking statements, which reflect management's current analysis of future events and should not be relied upon as representing management's expectations or beliefs as of any date subsequent to the time they are made. Genpact undertakes no obligation to update any forward-looking statements that may be made from time to time by or on behalf of Genpact.

Contacts

Investors
Roger Sachs, CFA
+1 (203) 808-6725
roger.sachs@genpact.com

Media
Gail Marold
+1 (919) 345-3899
gail.marold@genpact.com


GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share data and share count) 

 

 

As of December 31,

 

 

As of March 31,

 

 

 

2016

 

 

2017

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

422,623

 

 

$

388,186

 

Accounts receivable, net

 

 

615,265

 

 

 

602,871

 

Prepaid expenses and other current assets

 

 

189,149

 

 

 

227,635

 

Total current assets

 

$

1,227,037

 

 

$

1,218,692

 

Property, plant and equipment, net

 

 

200,115

 

 

 

212,562

 

Deferred tax assets

 

 

70,143

 

 

 

61,029

 

Investment in equity affiliates

 

 

4,800

 

 

 

769

 

Intangible assets, net

 

 

72,049

 

 

 

69,070

 

Goodwill

 

 

1,069,408

 

 

 

1,097,329

 

Other assets

 

 

242,328

 

 

 

252,279

 

Total assets

 

$

2,885,880

 

 

$

2,911,730

 

Liabilities and equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Short-term borrowings

 

$

160,000

 

 

$

15,000

 

Current portion of long-term debt

 

 

39,181

 

 

 

39,192

 

Accounts payable

 

 

9,768

 

 

 

9,086

 

Income taxes payable

 

 

24,159

 

 

 

33,091

 

Accrued expenses and other current liabilities

 

 

498,247

 

 

 

426,953

 

Total current liabilities

 

$

731,355

 

 

$

523,322

 

Long-term debt, less current portion

 

 

698,152

 

 

 

1,035,778

 

Deferred tax liabilities

 

 

2,415

 

 

 

1,815

 

Other liabilities

 

 

162,790

 

 

 

165,561

 

Total liabilities

 

$

1,594,712

 

 

$

1,726,476

 

Redeemable non-controlling interest

 

 

4,520

 

 

 

3,610

 

Shareholders equity

 

 

 

 

 

 

 

 

Preferred shares, $0.01 par value, 250,000,000 authorized, none issued

 

 

 

 

 

 

Common shares, $0.01 par value, 500,000,000 authorized, 198,794,052 and 192,727,001 issued and outstanding as of December 31, 2016 and March 31, 2017, respectively

 

 

1,984

 

 

 

1,924

 

Additional paid-in capital

 

 

1,384,468

 

 

 

1,347,265

 

Retained earnings

 

 

358,121

 

 

 

219,776

 

Accumulated other comprehensive income (loss)

 

 

(457,925

)

 

 

(387,321

)

Total equity

 

$

1,286,648

 

 

$

1,181,644

 

Total liabilities, redeemable non-controlling interest and equity

 

$

2,885,880

 

 

$

2,911,730

 


GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data and share count)

 

 

Three months ended March 31,

 

 

 

20168

 

 

2017

 

Net revenues

 

$

609,703

 

 

$

622,995

 

Cost of revenue

 

 

372,848

 

 

 

383,337

 

Gross profit

 

$

236,855

 

 

$

239,658

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

160,149

 

 

 

160,858

 

Amortization of acquired intangible assets

 

 

6,145

 

 

 

7,242

 

Other operating (income) expense, net

 

 

(5,061

)

 

 

(7,538

)

Income from operations

 

$

75,622

 

 

$

79,096

 

Foreign exchange gains (losses), net

 

 

(998

)

 

 

(4,913

)

Interest income (expense), net

 

 

(2,838

)

 

 

(5,493

)

Other income (expense), net

 

 

878

 

 

 

553

 

Income before equity-method investment activity, net and income tax expense

 

$

72,664

 

 

$

69,243

 

Equity-method investment activity, net

 

 

(2,145

)

 

 

(4,558

)

Income before income tax expense

 

$

70,519

 

 

$

64,685

 

Income tax expense

 

 

12,014

 

 

 

12,245

 

Net income

 

$

58,505

 

 

$

52,440

 

Net loss (income) attributable to non-controlling interest/redeemable non-controlling interest

 

 

289

 

 

 

898

 

Net income attributable to Genpact Limited shareholders

 

$

58,794

 

 

$

53,338

 

Net income available to Genpact Limited common shareholders

 

$

58,794

 

 

$

53,338

 

Earnings per common share attributable to Genpact Limited common shareholders

 

 

 

 

 

 

 

 

Basic

 

$

0.28

 

 

$

0.27

 

Diluted

 

$

0.27

 

 

$

0.26

 

Weighted average number of common shares used in computing earnings per common share attributable to Genpact Limited common shareholders

 

 

 

 

 

 

 

 

Basic

 

 

210,780,165

 

 

 

199,069,528

 

Diluted

 

 

213,892,964

 

 

 

202,655,937

 


GENPACT LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

 

 

Three months ended March 31,

 

 

 

20169

 

 

2017

 

Operating activities

 

 

 

 

 

 

 

 

Net income attributable to Genpact Limited shareholders

 

$

58,794

 

 

$

53,338

 

Net income (loss) attributable to non-controlling interest/redeemable non-controlling interest

 

 

(289

)

 

 

(898

)

Net income

 

$

58,505

 

 

$

52,440

 

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

13,155

 

 

 

14,139

 

Amortization of debt issuance costs

 

 

385

 

 

 

375

 

Amortization of acquired intangible assets

 

 

6,145

 

 

 

7,242

 

Intangible assets write-down

 

 

4,943

 

 

 

 

Reserve for doubtful receivables

 

 

3,120

 

 

 

 

Unrealized loss on revaluation of foreign currency asset/liability

 

 

354

 

 

 

8,757

 

Equity-method investment activity, net

 

 

2,145

 

 

 

4,558

 

Stock-based compensation expense

 

 

5,336

 

 

 

4,986

 

Deferred income taxes

 

 

(3,184

)

 

 

(2,890

)

Others, net

 

 

63

 

 

 

(4,301

)

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Decrease (increase) in accounts receivable

 

 

(17,697

)

 

 

19,649

 

Increase in prepaid expenses, other current assets and other assets

 

 

(27,123

)

 

 

(12,025

)

Decrease in accounts payable

 

 

(70

)

 

 

(928

)

Decrease in accrued expenses, other current liabilities and other liabilities

 

 

(64,360

)

 

 

(69,131

)

Increase in income taxes payable

 

 

8,660

 

 

 

8,157

 

Net cash provided by (used for) operating activities

 

$

(9,623

)

 

$

31,028

 

Investing activities

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(25,495

)

 

 

(19,698

)

Proceeds from sale of property, plant and equipment

 

 

132

 

 

 

389

 

Investment in equity affiliates

 

 

(3,783

)

 

 

(467

)

Payment for business acquisitions, net of cash acquired

 

 

(2,339

)

 

 

(9,237

)

Net cash used for investing activities

 

$

(31,485

)

 

$

(29,013

)

Financing activities

 

 

 

 

 

 

 

 

Repayment of capital lease obligations

 

 

(454

)

 

 

(494

)

Payment of debt issuance costs

 

 

 

 

 

(1,481

)

Proceeds from long-term debt

 

 

 

 

 

350,000

 

Repayment of long-term debt

 

 

(10,000

)

 

 

(10,000

)

Proceeds from short-term borrowings

 

 

60,000

 

 

 

40,000

 

Repayment of short-term borrowings

 

 

 

 

 

(185,000

)

Proceeds from issuance of common shares under stock-based compensation plans

 

 

4,937

 

 

 

7,761

 

Payment for net settlement of stock-based awards

 

 

(49

)

 

 

(9,939

)

Payment of earn-out/deferred consideration

 

 

(965

)

 

 

(1,097

)

Dividend paid

 

 

 

 

 

(11,957

)

Payment for stock purchased and retired

 

 

(33,017

)

 

 

(219,784

)

Payment for expenses related to stock purchase

 

 

(27

)

 

 

(16

)

Net cash provided by (used for) financing activities

 

$

20,425

 

 

$

(42,007

)

Effect of exchange rate changes

 

 

(429

)

 

 

5,555

 

Net increase (decrease) in cash and cash equivalents

 

 

(20,683

)

 

 

(39,992

)

Cash and cash equivalents at the beginning of the period

 

 

450,907

 

 

 

422,623

 

Cash and cash equivalents at the end of the period

 

$

429,795

 

 

$

388,186

 

Supplementary information

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

3,968

 

 

$

5,324

 

Cash paid during the period for income taxes

 

$

23,229

 

 

$

16,426

 

Property, plant and equipment acquired under capital lease obligations

 

$

283

 

 

$

576

 


Reconciliation of Non-GAAP Financial Measures to GAAP Measures
To supplement the consolidated financial statements presented in accordance with GAAP, this press release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures:

  • Adjusted income from operations attributable to shareholders of Genpact Limited, or adjusted income from operations;
  • Adjusted income from operations margin;
  • Adjusted diluted earnings per share attributable to shareholders of Genpact Limited, or adjusted diluted earnings per share; and
  • Net revenues on a constant currency basis.

These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Accordingly, these non-GAAP financial measures, the financial statements prepared in accordance with GAAP and the reconciliations of Genpact’s GAAP financial statements to such non-GAAP financial measures should be carefully evaluated.

Prior to July 2012, Genpact’s management used financial statements that excluded significant acquisition-related expenses, amortization of related acquired intangibles, and amortization of acquired intangibles at the company’s formation in 2004 for its internal management reporting, budgeting and decision making purposes, including comparing Genpact’s operating results to that of its competitors. However, considering Genpact’s frequent acquisitions of varying scale and size, and the difficulty in predicting expenses relating to acquisitions and the amortization of acquired intangibles thereof, since July 2012 Genpact’s management has used financial statements that exclude all acquisition-related expenses and amortization of acquired intangibles for its internal management reporting, budgeting and decision-making purposes, including comparing Genpact’s operating results to those of its competitors. For the same reasons, beginning in April 2016, Genpact’s management also excludes the impairment of acquired intangible assets from the financial statements it uses for internal management purposes.

Acquisition-related expenses are excluded in the period in which an acquisition is consummated. Genpact’s management also uses financial statements that exclude stock-based compensation expense. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use when adopting ASC 718 “Compensation-Stock Compensation,” Genpact’s management believes that providing non-GAAP financial measures that exclude such expenses allows investors to make additional comparisons between Genpact’s operating results and those of other companies. Additionally, in its calculations of such non-GAAP financial measures, Genpact’s management has adjusted certain gains, losses and impairment charges attributable to equity-method investments and gains or losses attributable to non-controlling interests because management views these interests as part of its ongoing operations. For the purpose of calculating adjusted diluted earnings per share, the combined current and deferred tax effect is determined by multiplying each pre-tax adjustment by the applicable statutory income tax rate.

Genpact’s management provides information about revenues on a constant currency basis so that the revenues may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of our true business performance. Revenues on a constant currency basis are calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates adjusted for hedging gains/losses in such period.

Accordingly, Genpact believes that the presentation of adjusted income from operations, adjusted income from operations margin, adjusted diluted earnings per share and revenues on a constant currency basis, when read in conjunction with the Company’s reported results, can provide useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations.

A limitation of using adjusted income from operations and adjusted income from operations margin versus income from operations and adjusted income from operations margin calculated in accordance with GAAP is that these non-GAAP financial measures exclude certain recurring costs, namely stock-based compensation and amortization of acquired intangibles. Management compensates for this limitation by providing specific information on the GAAP amounts excluded from adjusted income from operations and adjusted income from operations margin.


The following tables show the reconciliation of these adjusted financial measures from GAAP for the three months ended March 31, 2016 and 2017:

Reconciliation of Adjusted Income from Operations and Adjusted Income from Operations Margin
(Unaudited)
(In thousands)

 

 

Three months ended March 31,

 

 

 

2016

 

 

2017

 

Income from operations

 

$

75,622

 

 

$

79,096

 

Add: Stock-based compensation

 

 

5,336

 

 

 

4,986

 

Add: Amortization of acquired intangible assets10

 

 

5,238

 

 

 

6,709

 

Add: Acquisition-related expenses

 

 

164

 

 

 

422

 

Add: Other income, net

 

 

878

 

 

 

553

 

Less: Equity-method investment activity, net

 

 

(2,145)


 

 

(4,558)


Add: Net loss attributable to non-controlling interest/redeemable non-controlling interest

 

 

289

 

 

 

898

 

Adjusted income from operations

 

$

85,382

 

 

$

88,106

 

Adjusted income from operations margin

 

 

14.0%


 

 

14.1%



Reconciliation of Adjusted Diluted EPS11
(Unaudited)
(Per share data) 

 

 

Three months ended March 31,

 

 

 

2016

 

 

2017

 

Diluted EPS

 

$

0.27

 

 

$

0.26

 

Add: Stock-based compensation

 

 

0.02

 

 

 

0.02

 

Add: Amortization of acquired intangible assets10

 

 

0.02

 

 

 

0.03

 

Add: Acquisition-related expenses

 

 

 

 

 

 

Less: Tax impact on stock-based compensation

 

 

(0.01)

        

 

 

(0.01)

       

Less: Tax impact on amortization of acquired intangibles

 

 

(0.01)


 

 

(0.01)

       

Less: Tax impact on acquisition-related expenses

 

 

 

 

 

 

Adjusted diluted EPS

 

$

0.31

 

 

$

0.31

 


The following tables show the reconciliation of forward-looking adjusted financial measures from GAAP for the year ending December 31, 2017:

Reconciliation of Outlook for Adjusted Income from Operations Margin
(Unaudited) 

 

 

Year ending
December 31, 2017

 

Income from operations margin

 

 

13.4%


Add: Estimated stock-based compensation

 

 

1.3%


Add: Estimated amortization of acquired intangible assets

 

 

1.0%


Add: Estimated acquisition-related expenses

 

 

 

Add: Estimated other income (expense), net

 

 

0.2%


Less: Estimated equity-method investment activity, net

 

 

(0.2)%


Adjusted income from operations margin

 

 

15.7%



Reconciliation of Outlook for Adjusted Diluted EPS
(Unaudited)
(Per share data) 

 

 

Year ending December 31, 2017

 

 

 

Lower

 

 

Upper

 

Diluted EPS

 

$

1.31

 

 

$

1.35

 

Add: Estimated stock-based compensation

 

 

0.18

 

 

 

0.18

 

Add: Estimated amortization of acquired intangible assets

 

 

0.13

 

 

 

0.13

 

Add: Estimated acquisition-related expenses

 

 

 

 

 

 

Less: Estimated tax impact on stock-based compensation

 

 

(0.05

)

 

 

(0.05

)

Less: Estimated tax impact on amortization of acquired intangibles

 

 

(0.04

)

 

 

(0.04

)

Less: Estimated tax impact on acquisition-related expenses

 

 

 

 

 

 

Adjusted diluted EPS

 

$

1.53

 

 

$

1.57

 


  1. Revenue growth on a constant currency basis is a non-GAAP measure and is calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates adjusted for hedging gains/losses in such period.
  2. Global Client BPO revenue growth rates have been adjusted to assume that the revenue reclassifications we undertook at the end of fiscal 2016 occurred on January 1, 2016.  On an unadjusted basis, Global Client BPO revenue was up 11% (~12% on a constant currency basis). See the information under the heading “Revenue Details – First Quarter 2017.”
  3. Adjusted diluted earnings per share is a non-GAAP measure. A reconciliation of GAAP diluted earnings per share and adjusted diluted earnings per share is attached to this release.
  4. Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. A reconciliation of GAAP income from operations and adjusted income from operations and a reconciliation of GAAP income from operations margin and adjusted income from operations margin are attached to this release.
  5. Includes the initial delivery of approximately 6.6 million common shares in the first quarter of 2017 as well as an estimated 1.6 million common shares expected to be repurchased under our previously announced $200 million accelerated share repurchase (“ASR”) agreement. The number of shares ultimately repurchased under the ASR agreement will be determined based on the price of our common shares during the ASR period. Any necessary changes to the estimated number of shares expected to be repurchased under the ASR agreement will be made on a quarterly basis.
  6. Adjusted income from operations margin is a non-GAAP measure.   A reconciliation of the outlook for GAAP income from operations margin and adjusted income from operations margin is attached to this release.
  7. Adjusted diluted earnings per share is a non-GAAP measure.  A reconciliation of the outlook for GAAP diluted earnings per share and adjusted diluted earnings per share is attached to this release.   
  8. Income taxes, net income, and basic and diluted net income per common share for the three months ended March 31, 2016 have been restated due to the adoption of ASU No. 2016-09 with effect from January 1, 2016.
  9. Income taxes, net income, and cash flows for the three months ended March 31, 2016 have been restated due to the adoption of ASU No. 2016-09 with effect from January 1, 2016.
  10.  See “Reconciliation of Non-GAAP Financial Measures to GAAP Measures” above for a description of the amortization expenses included in this item.
  11.  Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

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