David Nelson - Vice President of Investor Relations Francisco D'Souza - President and Chief Executive Officer Gordon Coburn - Chief Financial and Operating Officer

Edward Caso - Wachovia Capital Markets, Llc George Price - Stifel Nicolaus & Company, Inc. Julio Quinteros - Goldman Sachs Rod Bourgeois - Bernstein Ashwin Shirvaikar - Citigroup

Ladies and gentlemen, thank you for standing by. And welcome to the Cognizant Technology Solutions Fourth Quarter and Year-End 2008 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions). Thank you. I would now like to turn the conference over to David Nelson, Vice President of Investor Relations at Cognizant. Please go ahead, sir.

Thank you and good morning, everyone. By now you should have received a copy of the company's quarter four and year-end 2008 earnings release. If you have not a copy is available on our website cognizant.com. The speakers we have on today's call are Francisco D'Souza, President and Chief Executive Officer; and Gordon Coburn, Chief Financial and Operating Officer of Cognizant Technology Solutions. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. I would now like to turn the call over to Francisco D'Souza. Francisco, please go ahead. Francisco D'Souza: Thanks David. And good morning, everyone. Thank you for joining Gordon and me today for Cognizant's fourth quarter and full year 2008 earnings call. I would like to start my comments with an overview of our results and then I'll discuss why Cognizant has continued to demonstrate industry leading growth. I will also talk about our view of the current economic environment and how we are responding in order to emerge in a strong position. And finally, I'll discuss our guidance for the quarter and the full year of 2009. We are pleased to report strong revenue growth this quarter, which exceeded our guidance despite the turbulent economic environment and the currency headwinds. In the fourth quarter we generated $753 million in revenue, versus our previous guidance of at least $746.7 million. This is an increase of 2.5% versus the third quarter of 2008, and 26% over the fourth quarter of 2007. Revenue for the full year was in excess of $2.8 billion or 32% over the prior year. Our continued industry leading growth during the year validates the resilience of our business model and our strategy. Fundamental to our strategy is the ongoing commitment to invest for growth in the business. Our 2008 results reflect the effectiveness of this approach of reinvestment. During the full year of 2008, a number of key areas in which we have been investing showed significant growth and are well poised for continued growth as we go into 2009. Specifically service offerings, like IT infrastructure services, and business and knowledge process outsourcing as well as geographies like Europe and Asia, which have been key areas of focused investment, grew well in 2008 and are poised for additional growth. I will cover some of these growth areas in more details in a moment. The strategy of reinvestment is also evident in our 2008 results across each sector. Despite the significant headwinds and variations in demand during the year in certain industries, we produced balanced growth across industry sectors on a full year basis. Within our financial services segment, growth was essentially flat during the fourth quarter, a slowdown from previous quarters. Yes, this sector grew by 19% year-over-year in the fourth quarter. Over the longer term, we remain optimistic about this segment as we see many of our key banking clients actively reshaping the financial services industry, which gives us a number of opportunities as they work to transform their businesses. We were encouraged by the performance of other industry segments such as healthcare, which improved by 9% during the quarter and grew 31% year-over-year in the quarter. Retail manufacturing, and logistics grew by 7% during the quarter and by 42% year-over-year. Although our other sector, which includes communication, information media and entertainment, and high technology saw a decline of 5% during the quarter, it did grow 20% year-over-year. Turning to growth by geography during the quarter; North America grew sequentially by 4%, Europe declined sequentially by 6%, and the rest of the world, which is primarily our business in Asia, grew sequentially by 27%. On a full year basis Europe grew 58% and the rest of the world, again primarily our business in Asia grew by 95%. Our European results were affected by currency movement and in constant currency terms, European growth is actually substantially stronger as Gordon will detail in a few minutes. We were pleased in particular with the strong growth in Asia, which reflects the investments we have made in that region and we expect continued growth from there as we maintain our investments. In terms of hiring, we added a net of 2,200 employees during the quarter, and 6,300 for the full year. Our current head count stands at approximately 61,700. Employee attrition was 11.5% for the quarter, our lowest since the first quarter of 2006. We recently completed our employee satisfaction survey and our scores increased again this year. The survey reconfirmed that employees feel that management at Cognizant is open and flexible to change. That Cognizant fosters a strong team environment and that there is ample opportunity for career development and strong support for innovation. Now, let me turn to why Cognizant has consistently achieved industry leading growth even as the economy has become more challenging. Our business model has been built around the immediate and long-term needs of our customers. Over the course of our history, we've driven revenue growth by staying close to our customers. In the current economy, I think customers are looking for partners with four strengths. First; customers are looking for a partner that has demonstrated unabsorbing (ph) commitment to their industry, standing out as stock leaders. At Cognizant, we've systematically built strong positions in the markets we serve. Our leadership position goes well beyond labor arbitrage or offshoring, and it's based also on the depth of understanding and knowledge of the industries that we serve. During 2008, Cognizant's market edge was recognized through several awards across the banking and financial services, insurance healthcare and consumer goods industry. In addition, Cognizant has been consistently ranked in the leadership category by leading industry analyst firms, reinforcing and recognizing our vertical expertise. Our acquisition strategy also supports our goal of attaining market leadership in key industries. For example; our acquisition of SVC in 2008 and marketRX in May 2007 have significantly deepened our expertise in media and entertainment and life sciences. As a result of these acquisitions, we now serve six of the major movie studios in the United States, and almost all of the Top 30 global life sciences companies. In keeping with this strategy just last week, we completed the acquisition of Active Intelligence, a small systems integration company, specializing in Oracle's Retail Solutions portfolio. The retail industry is highly specialized and the future of retailing requires that retailers adapt to changing consumer needs. Active Intelligence has been in business since 1996, and specializes in providing consulting implementation and support services around the Oracle retail merchandizing planning and optimization suite, which is a solid growth area for Cognizant's retail practice. We plan to combine Active Intelligence's consulting capabilities and Cognizant's delivery capabilities in this area to create a compelling value proposition to clients. We are confident that we will be successful in this effort as we've already worked with Active Intelligence on a number of engagements as independent parties. As a result of this acquisition, we have solidified Cognizant's position as a leading provider of global services to the retail industry. I want to take this opportunity to welcome the 30 Active Intelligence employees to the Cognizant family. The second attribute that our customers are looking for in this environment is that they want partners that can provide service innovation. Cognizant has continually demonstrated its ability to bring new services to its customer base. This is of particular importance at this time, as time such as this, when customers are reacting to the pressures of a weak economy, and are looking for ways to limit costs and to improve productivity. Two of our newer services; IT infrastructure services and business and knowledge process outsourcing are bright spots in the current quarter. Infrastructure services grew 16% sequentially, and 59% year-over-year, representing 6% of revenue in the fourth quarter. Business and knowledge process outsourcing has grown 37% sequentially and 163% year-over-year, and represented close to 5% of revenues. Together these two service offerings, which we launched just about three years ago, now represent over 10% of our revenues and provide further evidence of the success of our strategy of reinvestment. The third attribute, customers are looking for is for a trusted partner to help them navigate through the rough economy. Our strong client facing front-end team of over 700 client partners and account managers gives us two important capabilities. First, by staying deeply connected with our clients, we are able to very quickly take new services to the market. Second, our model of client intimacy also allows us in reverse to quickly gauge the pulse of the market, and to derive insights that drive our ability to quickly innovate and bring new services to the market. Finally, in light of recent developments, customers are looking for partners that demonstrate strong corporate governance controls. At Cognizant transparency is essential to our business and every member of the Cognizant team is committed to the highest levels of ethics and integrity. We have at most confidence that we have the systems and controls in place to continue to meet the criteria, Sarbanes-Oxley requires from U.S. listed and U.S. domiciled companies. We are hereto and are audited according to U.S. GAAP and we have a dedicated Chief Compliance Officer with a strong financial and regulatory background. Our policies and practices reflect corporate governance initiatives that are compliant with the listing requirements of NASDAQ, the regulatory mandate of the SEC, and the corporate governance regulations of Sarbanes-Oxley. And so with these four combined attributes on one platform, we believe Cognizant provides the unique offer with a broad array of world-class offshore services to drive further cost savings, industry insight and consulting to help our clients transform to be well positioned after the recession, and the best in client management and corporate governance. An example, of the strength of our platform is our relationship with HealthNet, one of the U.S.' largest publicly traded managed healthcare companies. I spoke to you last quarter about HealthNet in the context of our multi-year relationship to provide a range of application related services to them. We recently extended our relationship with yet another multi-year engagement to provide HealthNet with a range of business process outsourcing services in the area of claims processing. Cognizant will provide services, including claims adjudication, adjustment, audit and process improvement services. Now, let me discuss our approach in 2009, given the economy, which remains very challenging. In this environment, our basic game plans for 2009 remains unchanged from 2008. First and foremost, we're determined to use this environment as an opportunity to strengthen our business. We believe that there are opportunities to take market share, diversify further geographically, invest in talent acquisition, prudently take advantage of M&A opportunities, and create innovation in new services. Our reinvestment strategy remains in place even in times of severe economic downturn. Second, we're seeing shifting patterns of demand given the microeconomic environment. And we have shifted our focus and emphasis to those services that are most relevant. Overall, the market for our services is very active. However, our most impressive growth has come from cost containment services such application maintenance, IT infrastructure services and business and knowledge process outsourcing. During the tech rack (ph) economic slowdown of eight years ago, tyrant need for cost containment drove the mainstream adoption of the offshoring of applications. During this recession, we are seeing early signs of similar adoption at the business process and the IT infrastructure layers, where significant potential of cost savings exist. Thirdly, as in the past, we remain focused on operating discipline and cost management, and have been successful at this as demonstrated by our margins. During 2008, as discussed on prior calls, we continually increased our employee utilization rate. As a next step in our ongoing efforts to focus on operating discipline, during the second half of 2008, we conducted a benchmarking exercise, where we gauged Cognizant's performance and key operating parameters. We've identified a number of areas, where we can manage our cost structure in order to continue to benefit from our scale economies. We'll continue to manage cost in a prudent way, ensuring that we are able to continue to invest in the business while delivering our historical target operating margin. Also, as part of our efforts to create predictability in our cost structure, during the fourth quarter, we initiated a hedging program to protect a portion of our rupee denominated expenses. Gordon will cover this aspect in greater detail shortly. All of these steps have helped us to protect and to opportunistically strengthen up the business. Now, let me turn to guidance. We have guided to at least $735 million for the current quarter, and to at least $3.1 billion or 10% for the full year. This guidance assumes, the economy continues to face the current challenges throughout the year. We're projecting a weak start to the year followed by a modest pick-up starting in Q2. I want to discuss two points about our guidance; first, why we're expecting a sequentially down Q1. And second, why we're forecasting a modest pick-up beginning in Q2. We're expecting Q1 to be sequentially down due to several factors; first, client budget cycles have been elongated this year, resulting in delays in kicking off projects funded by this year's budgets. Second, some of our banking and financial services clients, that have merged together, are aggressively eliminating duplicate systems which we had been previously supporting. Third, we're seeing IT budget reductions, concentrated with our BFS client base. Amongst this set of clients, we're seeing a reset in spending levels, reflecting budgets that have been reduced in 2009, compared to 2008. And finally, a few operational items which Gordon will cover in greater detail, such as currency and billing days create further headwinds in the first quarter. All of these factors contribute to our view of a sequential decline in Q1. Now, let me tell you why we think our expectation of a modest pick-up in growth in Q2 is reasonable. Even though client budgets are taking longer to finalize and some will be lower in 2009, than in 2008. At this point we do have healthy visibility into these budgets through our client partners and account managers. As in prior years, we have been active participants with many of our clients as they prepare and finalize their spending plans. Client budgets are far enough a long, that we can see a stream of projects that supports our assumption of a return to sequential growth in Q2. Although the current environment has meant, discretionary decisions are taking longer to be made, the need for services such as application outsourcing, IT infrastructure services, business and knowledge process outsourcing, and other services that are focused on cost containment has never been stronger. Our sizable team of business developers is actively working with clients to proactively propose these types of services. Let me finish my comments on guidance, by saying that we are disappointed in that our expected growth at, at least 10% in 2009, is well below our historical rate of growth. However, given the extraordinary economic environment, we believe that our expectation to deliver at least 10% growth is a testament to the strength of our differentiated business model, which includes strong client facing teams resulting in enduring client relationships. Let me now comment on the pricing environment. During Q4, our pricing in constant currency terms remained flat from Q3. However, as we enter the first quarter, we are starting to see some softness in pricing as clients struggle to finalize their budgets and close budget gaps. We are making every effort to maintain our pricing as we did in Q4. We are working with clients to provide creating price incentives around greater volumes, additional value and transformational services. We are also watching the competitive pricing environment very carefully. And as we've said in the past, we are prepared to respond should we deem it necessary to react to actions via competition. Let me just finish by saying that we are pleased with our strong execution in 2008, particularly in the tumultuous economic environment of the second half of the year. We achieved strong growth, maintained operating efficiency and continued to build on our strong balance sheet. I would like to thank all of the people at Cognizant, our partners and our customers for their many contributions in helping us achieve these milestones in very difficult times. Now, I'll turn the call over to Gordon who will walk you through our financial and operating results in greater detail. Gordon?

Thank you, Francisco. And good morning to everyone. I would like to provide some additional information on our 2008 results, and then discuss our financial expectations for the first quarter as well as full year of 2009. Revenue for the fourth quarter exceeded our current guidance due to better than anticipated performance by several of our segments. Quarterly revenue grew 2.5% sequentially and 26% year-over-year. Full year revenue was up 32%. Our fourth quarter GAAP and non-GAAP diluted EPS includes the negative impact of $0.03 in non-operating foreign exchange currency losses. This I will discuss later in more detail. As a reminder, our most recent guidance for the fourth quarter and full year 2008, had specifically excluded any such losses during the fourth quarter. During the fourth quarter, our financial services segment, which includes our practices in insurance, banking and transaction processing grew by almost $55 million year-over-year and represented 45% of revenue for the quarter. Healthcare grew over $44 million and represented 25% of revenues. Retail manufacturing and logistics grew by almost $37 million, representing approximately 16% of revenues for the quarter. The remaining 13% of our revenues came primarily from other service oriented industries of communications, media and new technology, which grew by almost $17 million, compared to Q4 of 2007. For the full year 2008, financial services grew 28%, healthcare grew 36%, retail manufacturing logistics grew 38% and our other segment grew 29%. For the quarter application management represented 55% of revenues and application development was 45%. On a quarterly sequential basis, application management grew 5.5% and development declined by almost 1%. We believe this trend is reflective of the overall macroeconomic environment, whereby customers are reducing discretionary spend in areas like development, while increasing the amounts of application management that they outsource in order to reduce ongoing operating costs. For the full year, application management grew over 35% and development grew 28%, comprising 53% and 47% of revenue respectively. During the quarter, 80% of revenues came from clients in North America. Europe was 18% of total revenues and the remaining 2% of revenue came from the Asian market. Our European business declined 6% sequentially and grew 26% year-over-year for the quarter. For the full year, Europe grew 58% and represents slightly more than 19% of total revenue, compared to 16% of revenue in 2007. European quarterly sequential revenue growth was negatively impacted in the fourth quarter by approximately $17 million due to significant depreciation for the quarter, and the average rate of the British pound, euro and Swiss franc versus the U.S. dollar. On a constant dollar basis, Europe grew 5% sequentially versus the 6% decline on a reported basis. We had a gross addition of 56 new clients during the fourth quarter. We closed the quarter with a active customer base of 567 clients. During the quarter, the number of accounts which we consider to be strategic, having the potential to ramp up to at least $5 million to more than $50 million in annual revenue, increased by 4, bringing the total number of strategic clients to 128. Turning to costs. On a GAAP basis, cost of revenues exclusive of depreciation and amortization increased 22.9% for the quarter as compared to the fourth quarter of 2007. Fourth quarter cost of revenues include approximately $4 million of stock-based compensation expense, as well as $22,000 of non-cash expenses related to the accounting for India fringe benefit tax expense, recovered from employees related to the exercise of stock option. The increase in cost of revenues is primarily due to additional technical staff both onsite and offshore required to support our revenue growth, partially offset by the impact of the weakening rupee. We increased our technical staff approximately 2,200 during the quarter and ended the quarter with approximately 57,600 technical staff. This is a net increase of over 5,500 technical staff, from December 31, 2007. For the full year cost of revenues, exclusive of depreciation and amortization increased 30.4%, as compared to 2007. Full year cost of revenues, include approximately $18.7 million of stock-based compensation expense, and $2.7 million of non-cash fringe benefit tax expense. Fourth quarter SG&A, depreciation and amortization expenses were $190.6 million on a GAAP basis, up from $152.3 million. GAAP SG&A expense in the fourth quarter, included approximately $6.9 million of stock-based compensation expense and $635,000 of fringe benefit tax expense. For the full year SG&A depreciation and amortization was $727 million, compared to $548 million in 2007. Full year SG&A included approximately $25.2 million of stock-based compensation expense and $5.4 million of fringe benefit tax expense. GAAP operating income for the quarter increased 34.4% to $142.7 million from $106 million in the fourth quarter of 2007. On a non-GAAP basis, which excludes the impact of $10.9 million of stock-based compensation expense and low of the $650,000 of fringe benefit tax expense, operating income was $154.3 million of 26.6%. Our GAAP operating margin was 18.9% for the quarter and our non-GAAP operating margin, which excludes stock-based compensation expense and fringe benefit tax, was 20.5% for the quarter, slightly above our target range of 19% to 20%, due to the stronger than anticipated revenue in the back half of the fourth quarter. GAAP operating income was $516.7 million, non-GAAP operating income was $568.7 million for the full year, which excludes $43.9 million of stock-based compensation expense and $8.1 million of fringe benefit tax expense. Interest income for the fourth quarter decreased to $5.8 million, compared to $8.5 million in the fourth quarter of 2007 this decline in interest income compared to the fourth quarter of the prior year was due to lower short-term interest rates throughout the world, partially offset by an increase in average cash balances and investment balances. We had $12.4 million in non-operating expenses during the fourth quarter including $11.4 million of non-operating foreign exchange losses primarily resulting from the strength in the U.S. dollar against the British pound and Indian rupee. Specifically, these losses were attributed to the U.S. dollars denominated into company payables from our European subsidiaries, the Cognizant India, the services performed by Cognizant India on behalf of our European customers, as well as the re-measurement of the Indian rupee net monetary assets at Cognizant India books to the U.S. dollar functional currency for Cognizant India. Our GAAP tax rate for the fourth quarter was 17.5%, bringing our full year tax rate to 16.4%. The fourth quarter tax rate was slightly above our annual rate, due primarily to a discrete tax item that was recorded during the quarter, spending from certain investment earnings in our non-U.S. operations. We expect the 2009 tax rate to be approximately 16.5%. However, this could vary based on the extent of the India fringe benefit tax expense discussed earlier. Since such expenses are non-cash, and therefore are not eligible for tax deduction. Our diluted share count for the fourth quarter was 297.6 million. This was down slightly from the third quarter due to our lower average stock price during the quarter. Later, in the fourth quarter, we announced a $15 million share repurchase program, none of the authorization was used during the fourth quarter. Turning to the balance sheet; our balance sheet remained very healthy. We finished the year with over $924 million of cash and short-term and long-term investments, up over $253 million from the beginning of 2008 and up about $167 million from September 30th of 2008. During the fourth quarter, operating activities generated approximately $193 million of cash. Financing activities generated $7 million of cash primarily from the proceeds of options exercise and related tax benefits. In addition, we spend approximately $23 million on capital expenditures during the quarter, bringing our full year capital expenditure to $169 million. For the full year operating activities generated approximately $430 million of cash. For 2009, we expect to spend between $175 million and $200 million on capital expenditures. The substantial majority of which is related to the previously announced construction and equipping of additional development facilities to support our growth. We recently entered into a series of foreign exchange forward contracts to hedge a portion of our 2009 India based rupee expenses. In total for 2009, we hedged $350 million at an average rate of $49.44. Our collection of trade receivables during the quarter, rebounded beyond our expectations, based on our $579.6 million balance on December 31st, we finished the quarter with a DSO including unbilled receivables of 71 days, compared to 67 days with the same period of 2007 and more importantly down from 75 days in the third quarter of 2008. During Q4, excluding unbilled receivables, our DSO was approximately 63 days. The quality of our receivables portfolio remain strong. Our unbilled receivables balance was approximately $62.2 million at the end of the fourth quarter, up about $8.7 million or 16% on a full year basis from December 31, 2007, and down $9.2 million from Q3 of 2008. Approximately 53% of our December 31 unbilled balance was billed in January. During the fourth quarter overall 27.8% of our revenue came from fixed price contracts up from 26.3% in the third quarter of 2008 and up from 25.6% in the fourth quarter of 2007. When we look at the mix by solution type during the fourth quarter, 32% of our development revenue and 24% of our maintenance revenue came from fixed price contracts. For the full year 26.7% of our revenue came from fixed price contracts. Turning to head count, at the end of the fourth quarter, our worldwide head count including both technical and support staff, totaled approximately 61,700 people, this represents a net increase of 2,200 people for the quarter and 6,300 people for the year. Approximately 30% of our Q4 additions were recent college graduates, who will enter our training program and the remainder were lateral hires of experienced IT professionals. Turnover, including both voluntary and involuntary was 11.5% annualized in the fourth quarter. Fourth quarter attrition represented a significant improvement, it was 80 basis points lower than our fourth quarter of 2007 and over 600 basis points lower than Q3 of 2008. On a full year basis, total attrition dropped to 14.2% and 15% in 2007. As we discussed previously, we are increasing the company's utilization levels due to scaled economies and historically heavy over investment and bench resources. This trend continued of offshore in Q4, offshore utilization was 64% during the quarter. Offshore utilization excluding recent college graduates, who were in our training program during the quarter was approximately 70%. Onsite utilization was approximately 88% during the quarter. At the end of Q4, we had approximately 3,000 unbilled people remaining in our training program. As discussed previously, we expect a large number of 2008 graduates who are joining Cognizant, who joined the company during the first and more importantly second quarter of this year. I'd now like to comment on our growth expectations for the first quarter. The investments we are making continue to produce results. It is allowing us to differentiate ourselves in the marketplace in this current challenging economic environment both; in terms of winning and growing new clients, expanding our service offerings and strengthening our geographic presence. As Francisco mentioned, in addition our client-employee satisfaction levels remain at a level, which we are proud. This resulted in strong and expected Q4 performance and provides us with the foundation for growth in 2009. For the first quarter of 2009, we are projecting revenue of at least $735 million. As our revenue guidance indicates, we expect a sequential decline during the first quarter. As Francisco discussed, this is being driven by several factors. First, and most importantly; we are experiencing weakness in our core financial services portfolio. Although, our financial services clients held up nicely in the fourth quarter, the weakness resulting from significant reductions in overall 2009 IT budgets in the sector is causing a reset in spending levels in this quarter. In addition, we have seen the impact of system eliminations during the quarter due to recent mergers. We expect Q1 to bear the brunt of this reset and stability after that. Second, as we discussed on our last earning call, some of our client budget cycles are running later than normal this year. In addition, some clients are taking a wait and see approach to kicking off new initiatives in 2009. Third, the British pound has weakened further compared to the average rate in Q4. If FX rate stay at today's level for the remaining of the quarter, the weakening of the pound has a $4 million negative impact on a sequential basis, which is included in our guidance. And finally, due to the way the calendar breaks this year, there are 2% fewer billing days in Q1 versus Q4 of last year. The good news is that the second quarter of 2009 has 4% more billing days than the current quarter. Our revenue guidance is based on the worsening economic trends that we've seen over the past recent months. As Francisco mentioned, we continue to see an environment of belt tightening and/or reductions around IT budgets, with increasing focus on managing cost without sacrificing business performance. For full year 2009, we are pleased to provide guidance of at least $3.1 billion this represents growth of at least 10%. Although this represented significant reduction compared to our stock of growth rates, given the fragile economy and uncertainty around discretionary development spending, we believe such conservative guidance is appropriate. As has been typical in past years, we expect majority of our growth in 2009 will come from ramp up of clients won in the past few years. During 2009, we intend to closely monitor our spending and expect our margin to be in the range of 19% to 20% before the impact of equity-based compensation and India fringe benefit tax, in line with our historic margin level goals. With this expected level of revenue growth and our expected operating margins, we're currently comfortable with our ability to deliver in Q1, GAAP EPS of $0.37 and non-GAAP EPS of $0.41, excluding $0.04 of stock-based compensation costs. This guidance includes anticipation of the Q1 share count of approximately 300 million shares, a tax rate of 60.5% and operating margin within our target range of 19% to 20% on a non-GAAP basis. For the full year 2009, based on current business trends, we currently project GAAP EPS to be at least $1.54, and full year non-GAAP EPS to be at least $1.72, excluding estimated stock-based compensation and India fringe benefit tax expenses of $0.18. This guidance includes the anticipation of the full year share count of approximately 304 million shares. Finally, please note that the accounting for the non-cash stock-based India fringe benefit tax expense as a level of complication in forecasting GAAP operating expenses since this GAAP expense is driven by employee's decision to exercise his or her options which is obviously difficult to predict or control. We have put a pace holder in our GAAP guidance, but actual level of option exercises are dependent on many factors including our stock price in a given quarter. We'd now like to open the call for questions. Operator?

Thank you. (Operator Instructions). Your first question comes from the line of Ed Caso with Wachovia. Edward Caso - Wachovia Capital Markets, Llc: Good morning. Two quick questions, I know you didn't do anything against the new $50 million, authorization, but was there any money left to buyback stock in the fourth quarter.

The original $200 million authorization had expired at the beginning of the quarter, and we penetrated new authorization late in the quarter. So we had a window of like two days, where we could have washed it very end of the quarter before black out. Edward Caso - Wachovia Capital Markets, Llc: The other question is can you talk a little bit about what you're doing from a credit risk perspective, have you added resources, do you have watch list? And may be talk about your reserving policy.

Sure. We've not added resources, clearly we are watching much more carefully, two buckets in particular, one is small clients, and then the second is larger clients, that have had some economic challenges obviously we had a couple of bankruptcies last year. In our bad debt reserve, it includes a sort of discrete... just the amount for potential future bankruptcies. So we've taken a conservative approach and we're also watching very carefully and obviously the fact that DSO improved is testament that we are being fairly aggressive and making sure that we collect the amounts future as fairly quickly. Edward Caso - Wachovia Capital Markets, Llc: Thank you.

Thank you. Your next question comes from the line of George Price at Stifel Nicolaus. George Price - Stifel Nicolaus & Company, Inc.: Hi. Thanks very much. Nice numbers could end the week on that now even if it is the Friday, the 13th.

Yes, we're very worried about doing this on Friday, the 13th. George Price - Stifel Nicolaus & Company, Inc.: Okay, I can imagine in this market. I wondered, one question wanted just see if we can get a little bit of color may be on your assumptions around volume in the guidance that is behind the guidance on volumes, pricing, currency, you will to have currency for the quarter, but may be how you're thinking of it as you go through the year, utilization, hiring and head count that sort of thing, if you can give us a little granularity on to what's behind the guidance, that will be great.

Sure. Let me talk about a couple and then Francisco will have the others. Currency, as I mentioned, yes have been just stated where it is right now, we have $4 million headwind for Q1, that's built into to the numbers. Any foreign exchange gains or losses below the line, the non-operating stuff, the guidance assumes zero. So rather than try to project that volatility, that number will be what it is. But, we've not assumed any... for operating income we've not assumed any further movements on the currency from where it is today. As we mentioned, a good... we said $350 million of hedges, which hedged the portion of our India based rupee expenses, which should take some of the volatility out on the expense side but obviously there's still if the European countries move this say their exposure opportunity on the revenue side. On hiring, we stopped giving guidance a while ago on that. The big chunk of hiring that will happen in the first half of the year is the students who graduated last year. As we discussed on our prior calls, we are honoring all those offers. However, we did push and started to take back. So a lot of them starting this year and since last year and a good chunk of those starts will be in the second quarter. And then the lateral hire, which is probably can turn on and off quickly, that will depend on revenue and especially in this market, there is a very robust ability to do lateral hiring if we needed. But we are not projecting what that hire will be till we understand where revenue eventually settles down. So when you think about utilization throughout the year on a full year basis, I would expect it to go up some more, but if you look at utilization including trainee's jobs and lumpiness, because we have a big improvement that is coming in the second quarter. Franc, do you want to talk a little bit... I think you talked earlier a little bit about pricing that, I don't know if you want to mention anymore on that? Francisco D'Souza: Yes, I'd just reiterate what I said during my comments on pricing. During the fourth quarter, in constant currency terms, pricing remained flat in Q3. We are seeing some softness in pricing and... but we're making every effort to maintain pricing and to offset any declines in pricing through some creative means working with clients around, volumes and incentive brokerage for volumes, additional values, those kinds of things. As we look forward, a big part of what happens with pricing is going to depend on the competitive environment. So we're watching that very carefully. As we built into the guidance, we still think that we've got the leverage that we can hold to meet our... to provide margins on a non-GAAP basis within our target range. So it is one... pricing is one of the variables out there, but we think we've built it into the range of possibilities within our guidance. George Price - Stifel Nicolaus & Company, Inc.: If I could kind of push on that though. I mean, what, in at least 10%. I mean, what's the, what kind of magnitude are you assuming that's got to be a pricing assumption in there, can you share something on that with us? Francisco D'Souza: Yes, we're assuming in the at least 10% that there is a very small if any decline in pricing. So we are assuming that there might be some pricing pressure, but on an average across the book of business, that will be relatively small. George Price - Stifel Nicolaus & Company, Inc.: And, do you think... do you feel given the environment and where we stand at this point in the cycle that, that's conservative enough? Francisco D'Souza: I think so, yes. I think based on what we're seeing, like I said, we are seeing some pricing pressures. So I don't want to say that we're not, but we think across the book of business that we can manage it to a very modest level and we've build that into our guidance. George Price - Stifel Nicolaus & Company, Inc.: Okay. If I could ask one more on healthcare, on a vertical basis you talked about BFSI in pretty good detail. But I wanted to may be get a sense on healthcare, you had some pressure towards the end of last year on the payer side, does that seem to be over and done with, have you seen the worse there, what do you think about that vertical kind of going forward and is there anything in what's happening in the stimulus discussions that you guys might ultimately see some benefit with? Thank you.

On the stimulus side, a lot of those dollars are going towards the providers in the hospitals and so forth. So we may pick up some benefit from stimulus but we aren't generally excited about that. When we look at 2008, the place where we've built in significant weakness is in the financial services segment, particularly in Q1. Q1 financial services will be down maturely, outside of that we don't expect any other segments to have any mature declines. So the big headwind is financial services, when you look at from a segment standpoint. George Price - Stifel Nicolaus & Company, Inc.: Great. Thank you.

Your next question comes from the line of Julio Quinteros with Goldman Sachs. Julio Quinteros - Goldman Sachs: Hi, guys. Just trying to go back to just one or two quick comments just to reconcile a couple of the things you are just saying. First of all with the pricing commentary that you just made for fiscal, it almost feels like you've given yourself really no room if pricing would come down relative to here at least about 10% revenue guidance, can you just walk us through what you meant by that, because it almost sounded like you weren't assuming too much there, may be it's just a more factor of how pricing trends it's across the entire portfolio but just want to make sure I understand that.

I think, that's the key thing Julio, when you look at across the whole portfolio, you would see a virtue being material, you're not just seeing very widespread pricing pressure, and we're not seeing widespread are there cases of softness yes, but it's not, not widespread to the level where it's material. Julio Quinteros - Goldman Sachs: Okay. And then, one of your--

And as Francisco said we've built some assumptions into our guidance for softness so, yes we think we have about great level from what we're seeing. Francisco D'Souza: The other thing that I should say but worth stating exclusively is that as we though about our 10%, we've built a level of conservatism into the 10% forecast just because of the economic uncertainty out there. So within the 10%, obviously, from an operating level, or from an operating standpoint, we're pushing the group, the teams, and we think that there is an opportunity to do more than that. But obviously, we're not ready to commit to that as yet. Some of that will be through additional volume growth some of it may be impacted by pricing. But we think that there is enough of a cushion there and that we feel comfortable with the 10% number.

So this room for things go wrong you've built in that, which in this economic environment, yes just seems to go. Julio Quinteros - Goldman Sachs: That's right. And then the guidance also does include this acquisition, but it sound like there was only 30 employees, is that right?

Yes, it's that's all. Julio Quinteros - Goldman Sachs: Okay, got it. And then I'm just thinking about the some of your clients on VSSI side, and TARP exposure taking, having taken some TARP money there, what are you guys hearing there in terms of political pressure to do anything about using offshore, anything you can talk but to that extent, any sort of political sort of how that you might have on some of the bank lines that have TARP exposure using offshore abundance?

Yes, obviously, we need to keep an eye on it, based on what's in the legislation right now. It would not impact us where there are some ideas kicked around, there was more with the banks directly employing reasonable holders. We need to keep an eye on it, but at this point, we have seen, I think legislation that directly impacts us. Julio Quinteros - Goldman Sachs: And nothing from your clients that as you were incrementally that this could be probably down the road?

Our clients need to be competitive on a global pipeline, and so they need to have a cost structure where they are going to be able to compete with banks around the world. I think everyone is wise enough to realize that no one can adjust with them officially and inflate the cost structure. So we've not seen any change in behavior from our customers? Julio Quinteros - Goldman Sachs: Got it, okay. And then finally, just thinking about the ERP environment specifically, obviously with the acquisition you guys have and today, it sounds like Oracle is a still a focus and I'm assuming SAP is still a pretty big focus for you. Talk a little bit about the ERP environment, what you guys are seeing there, and when can we expect to see projects really comeback on the ERP side, what type of activity around development work around should we expect to see and when we expect to see that? Francisco D'Souza: I'll start by saying that our ERP business is not directly tied to ... only a portion of our ERP business is related to implementation of new systems or new licenses that clients buy. A lot of our ERP revenue is maintenance of existing systems, of existing ERP systems or upgrades of existing installation. So that portion of the business I would say remains robust given the economic environment, obviously we're seeing the impact of the broad economy even on that sector. But I don't think that, that segment of the ERP businesses is exposed more or it impacted more by the economic environment. In terms of the portion of our business, which is a relatively small portion of our overall ERP business that's related to a new license sales or new implementations of systems, they are clearly... we're seeing a little bit of a slowdown some lumpiness in that sector of the business. But frankly, even there what we're seeing is that as the clients push to consolidate systems and as clients push to rationalize their footprint and focus more on total cost of ownership. Very often that involves bringing in a new system a new ERP system to take out a number of all legacy applications. And so we're still seeing reasonable growth in that part of the business and reasonable activity in that part of the business. But I think that there, we are somewhat tied to the new license revenues from these firms. So that is like I said that's the relatively smaller piece of our overall ERP business, so as a whole the ERP business is fine. Julio Quinteros - Goldman Sachs: And just a close up on just the last question, for me just something you are, as you are talking as kind of bringing to my mind just the question of, even within your apps maintenance work, I think your apps maintenance work is roughly 50-50 mix, the apps maintenance work that you guys have, what percentage of that is recurring, if you kind were to sort of think about it from that perspective, so it sounds like just it based on what you are saying it sound like a majority of you are out saying this is going to end up being recurring, but just trying to get a sense for whether there is any risk on just sort of push back on, any work on the AM side? Francisco D'Souza: You have to think about recurring in couple of different ways, there is... we generally don't tend to have long-term contracts for perhaps, even perhaps maintenance work. However, most of the work that we do on app maintenance is not really discretionary from a client standpoint. So it is de facto recurring in that unless the client somehow is going to shutdown the system or decommission the system or stop that line of business. They have to keep the systems up and running and so we tend to be the logical provider to that. Now, what we saw in the, in particular in financial services, and what we're seeing in the first quarter is that some apps are actually being decommissioned, where particularly in merger situations where you've got duplicate systems, clients are decommissioning one of the duplicate system. And if we are happen to be maintaining that it creates an impact on our revenue. But that sort of a one-time thing that happens during an M&A situation and often times even in those scenarios, we can benefit a little bit because there is often work to be done to merge the two systems together to migrate data and so on and so forth. So there is the temporary project to do that. So in general, apps maintenance is recurring from an operational standpoint, the one caveat to that is in M&A situation there, there can be situations, the systems actually get decommissioned. Julio Quinteros - Goldman Sachs: Okay, all right. Good luck, guys. Francisco D'Souza: Thanks.

Your next question comes from the line of Rod Bourgeois with Bernstein. Rod Bourgeois - Bernstein: Yes, guys. I wanted to ask a little bit about the assumptions in your volume growth guidance. And I know it may be difficult to answer this. But you can give us any insight, how much buffer is in your guidance to account for potential project cancellations and spending cut types of prices that could occur as some clients may get financial distract over the next year. Can you give us as an idea of how much buffer you're putting into your guidance to account for those scenarios?

We are not specifically quantifying it. But as Francisco mentioned, the goals for the field have are materially above the at least 10% guidance precise. I think you're right Rod, there will be surprises. So we've based in our guidance that there will be negative surprises. Rod Bourgeois - Bernstein: All right, got it. And so, your people internally are on the hook for something that's at least in the surprises are not going to be an excuse. I mean, that's a number you guys have to meet internally to hit your incentives?

To hit the incentives, we would have to deliver something more than 10%, yes. Rod Bourgeois - Bernstein: All right, good. And then on the pricing front, and we've talked about the effective pricing on revenues I think you guys have addressed that. But, on the margin front, can you give us an idea and I know this is tough to answer because the reality is, when rate per hour changes, you can creatively change the contract structure to mitigate the effect on margins. But, can you give us an idea of how much price decline we'd have to occur for you to no longer be able to meet the low end of your margin target range, just to give people an idea of how bad pricing need to be for it to really affect your margin target.

I don't want to say the specific numbers. But, the answer is, it would have to be significant, just remember from a price you have already heard us it has to be across a lot of customers. So if you have couple of customers where you have some softness, it's not going move the needle a whole lot. And also remember, we have and continued to heavily over invest in the business. So we still have the functional levers that we can pull. So things would have to get pretty bad on pricing for us to be outside of our 19% to 20% range. Rod Bourgeois - Bernstein: That being in the 10% range or being in 5% range?

As I quantified it, it's specifically about... it would have to be immaterial, a fundamental change in the industry and certainly not the kind of thing that we or I believe others currently think today. Rod Bourgeois - Bernstein: You must be competing against six or seven competitors, so you need several of those guys to really get desperate with pricing to have a big affect is that the way to look at it?

Yes, and even within that, we would need to see two or three of them who we see most often to become irrational on pricing and what I have said I think they're smart enough to really that's not a prudent thing to do. Rod Bourgeois - Bernstein: You've not seen not yet even in the financial services vertical or people would become consistently irrational?

I would say very specifically not from a vendor standpoint or financial services or clients looking for ways to be more efficient as Francisco mentioned, which causes some softness that you tried to offset by reducing their cost, by moving more offshore et cetera, et cetera. Clearly there is some softness in financial services, but I would not characterize it as irrational. Rod Bourgeois - Bernstein: Got it, all right, great. And then one of the thing on the margin front, you exceeded your margin target range for '09 and you were clearly helped by the rupee and some cost disciplines, in 2008 you are able to do that? In 2009, as you look forward, is your implied margin guidance at the lower end of the target range to account for the potential to put some pricing pressure or you just doing your normal conservatives in the margin that you are assuming with your EPS guidance for '09?

No, I think it's real that I would not expect just unless revenue growth is a lot above what we are expecting, because the bigger issue I have is revenue growth as far as, I still want to invest in the long-term opportunities. So, I think it's less driven by prices, more driven by revenue growth most likely be slower than it was in 2008. But we don't want to make short-term investment decisions. So to be very clear our guidance assumes 19.5%, I would strongly encourage people not to be above that. Rod Bourgeois - Bernstein: All right--

On GAAP basis. Rod Bourgeois - Bernstein: Okay. The slower revenue growth affects you because you need to invest to grow as you move into the next year, but also, is there a less kind of G&A leverage and benefit along those lines, what benefit from pressure hiring and all of those factors that have helped you in the past, is that the other part of it?

There is some of that, if you think about 2008, we took utilization up significantly, you will tick it up some more in 2009, that is specially with growth being a little bit slower and commitment to honor in the 2008 offers that we made. You don't get the same whole year jump in utilization. And as Francisco mentioned, where companies really can differentiate themselves is in tough times still making long-term decisions and we're going to do that. We're not going to make short-term decisions. Rod Bourgeois - Bernstein: Great, thanks guys.

Your next question comes from the line of, Ashwin Shirvaikar with Citigroup.

Ashwin, this will be the last call just because we've starting to run overtime. But now please go ahead. Ashwin Shirvaikar - Citigroup: Sure. Well, good quarter and overall guidance seems just what investor has expected. So, congratulations. I wanted to ask you about specifics within the BFSI practice. Can you remind us what is the split-off banking insurance and transaction processing? And, will you see different trends within that split?

Sure. The core... the insurance is about 15 of the 45 points, and the other 30 is a combination of course core financial services plus transaction processing. When I... let me focus on what you want, when I look at Q1, the weakness that's driving the sequential decline is in that core financial. So essentially that's 30% of revenue. The insurance for Q1 looks fine. Ashwin Shirvaikar - Citigroup: Okay. And, in situations, where you have agreed with clients for sort of higher volume in return for a lower price is there any kind of a volume commitment that they'll give you, X volume in 2Q and they will hire in 3Q and so on, so you can actually bank on that?

Let's talk about spending down this volumes, and this is nothing new. We're more than happy if someone wants to dramatically increase their volume, given the price that reflects the efficiencies that we can gain from a higher volume. Now, I can plan it one or two ways, Ashwin. It could be either of the two scenarios, it can be what set out that do whatever revenue you want, and as you get bigger, you will get a lower price because we will share the efficiencies we can gain, or it can be we'll commit up front and therefore they can get that benefits and price of the efficiencies day one. But, the fundamental change happening in the market of large customers are consolidated towards fewer vendors and is a wider range of services occurring. And those two things together translate with their to be the opportunity for much larger relationships. And, quite honestly the larger the relationship, the more efficiencies we have and we're more than happy to share those efficiencies. That's ... we wanted to do what's right for the customer. Ashwin Shirvaikar - Citigroup: Okay. That's what I was looking for. Thank you.

Thank you. Presenters, I return the conference to you for closing remark. Francisco D'Souza: Thank you very much. So, thanks to every one for joining us today. Let me just conclude by saying that we are pleased with our financial and operating performance during the fourth quarter and full year of 2008. We maintained industry leading growth. We exceeded our guidance, our latest guidance, despite the current economic environment. We think as Gordon said that we have a tremendous opportunity ahead of us to maintain a position of leadership. So, what we are doing is we are managing the business prudently. We are making important investments in our strategic initiatives. We've got good confidence in our ability to execute on the unique opportunity in front of us in 2009. Our plan is to continue to grow, to assume a leadership stance, to stay the course with our growth strategy and our business model, and to be well positioned to be one of the significant winners when the economy recovers. We look forward to talking to you again next quarter. Thank you.

Thank you. This concludes today's conference call. You may now disconnect.