# EDGAR Filing Document

**Accession Number:** 0001058290
**File Stem:** 0001058290-23-000027
**Filing Date:** 2023-2
**Character Count:** 476156
**Document Hash:** bc31925009a2a5511461046477229cce
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001058290-23-000027.hdr.sgml**: 20230215

**ACCESSION NUMBER**: 0001058290-23-000027

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 151

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230215

**DATE AS OF CHANGE**: 20230215

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** COGNIZANT TECHNOLOGY SOLUTIONS CORP
- **CENTRAL INDEX KEY:** 0001058290
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
- **IRS NUMBER:** 133728359
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-24429
- **FILM NUMBER:** 23636123

**BUSINESS ADDRESS:**
- **STREET 1:** 300 FRANK W. BURR BLVD., STE. 36, 6 FL.
- **CITY:** TEANECK
- **STATE:** NJ
- **ZIP:** 07666
- **BUSINESS PHONE:** 2018010233

**MAIL ADDRESS:**
- **STREET 1:** 300 FRANK W. BURR BLVD., STE. 36, 6 FL.
- **CITY:** TEANECK
- **STATE:** NJ
- **ZIP:** 07666

?xml version="1.0" ? ctsh-20221231

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>

  

&nbsp;&nbsp;&nbsp;&nbsp;**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

**FOR ANNUAL AND TRANSITION REPORTS** 

**PURSUANT TO SECTIONS 13 OR 15(d) OF THE** 

**SECURITIES EXCHANGE ACT OF 1934** 

(Mark One)

---

| | | |
|:---|:---|:---|
| ☒ | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | **For the fiscal year ended** | **December 31, 2022** |
|  | **OR** | **OR** |
| ☐ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; |

---

**Commission File Number 0-24429**

**COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION** 

**(Exact Name of Registrant as Specified in Its Charter)**

---

| | |
|:---|:---|
| **Delaware** | **13-3728359** |
| **(State or Other Jurisdiction of**<br>**Incorporation or Organization)** | **(I.R.S. Employer<br>Identification No.)** |

---

 **300 Frank W. Burr Blvd.**

**Teaneck, New Jersey 07666**

**(Address of Principal Executive Offices including Zip Code)**

**Registrant's telephone number, including area code: (201) 801-0233**

**Securities registered pursuant to Section 12(b) of the Act:** 

---

| | | |
|:---|:---|:---|
| **<u>Title of each class</u>** | **<u>Trading Symbol(s)</u>** | **<u>Name of each exchange on which registered</u>** |
| Class A Common Stock, $0.01 par value per share | CTSH | The Nasdaq Stock Market LLC |

---

**Securities registered pursuant to Section 12(g) of the Act: None**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; ☒ Yes&nbsp;&nbsp;&nbsp;&nbsp; ☐ 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ☐ Yes&nbsp;&nbsp;&nbsp;&nbsp; ☒ 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.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; ☒ Yes&nbsp;&nbsp;&nbsp;&nbsp;☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large Accelerated Filer | ☒ | Accelerated Filer | ☐ |
| Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ |
| | | Emerging Growth Company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).&nbsp;&nbsp;&nbsp;&nbsp;☐ Yes&nbsp;&nbsp;&nbsp;&nbsp; ☒ No

The aggregate market value of the registrant's voting shares of common stock held by non-affiliates of the registrant on June 30, 2022, based on $67.49 per share, the last reported sale price on the Nasdaq Global Select Market of the Nasdaq Stock Market LLC on that date, was $34.9 billion.

The number of shares of Class A common stock, $0.01 par value, of the registrant outstanding as of February 10, 2023 was 509,294,618 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 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

  

------

**TABLE OF CONTENTS**

---

| | | | |
|:---|:---|:---|:---|
| | **Item** | **Item** | **Page** |
| <u>[GLOSSARY](#i3254ddb0bbd740dd900dc699f73182d2_10)</u> |  |  | <u>[1](#i3254ddb0bbd740dd900dc699f73182d2_10)</u> |
| <u>[FORWARD LOOKING STATEMENTS](#i3254ddb0bbd740dd900dc699f73182d2_82)</u> | <u>[FORWARD LOOKING STATEMENTS](#i3254ddb0bbd740dd900dc699f73182d2_82)</u> | <u>[FORWARD LOOKING STATEMENTS](#i3254ddb0bbd740dd900dc699f73182d2_82)</u> | <u>[2](#i3254ddb0bbd740dd900dc699f73182d2_82)</u> |
| <u>[PART I](#i3254ddb0bbd740dd900dc699f73182d2_13)</u> |  |  | <u>[5](#i3254ddb0bbd740dd900dc699f73182d2_13)</u> |
|  | 1. | <u>[Business](#i3254ddb0bbd740dd900dc699f73182d2_16)</u> | <u>[5](#i3254ddb0bbd740dd900dc699f73182d2_16)</u> |
|  | 1A. | <u>[Risk Factors](#i3254ddb0bbd740dd900dc699f73182d2_19)</u> | <u>[15](#i3254ddb0bbd740dd900dc699f73182d2_19)</u> |
|  | 1B. | <u>[Unresolved Staff Comments](#i3254ddb0bbd740dd900dc699f73182d2_22)</u> | <u>[23](#i3254ddb0bbd740dd900dc699f73182d2_22)</u> |
|  | 2. | <u>[Properties](#i3254ddb0bbd740dd900dc699f73182d2_25)</u> | <u>[24](#i3254ddb0bbd740dd900dc699f73182d2_25)</u> |
|  | 3. | <u>[Legal Proceedings](#i3254ddb0bbd740dd900dc699f73182d2_28)</u> | <u>[24](#i3254ddb0bbd740dd900dc699f73182d2_28)</u> |
|  | 4. | <u>[Mine Safety Disclosures](#i3254ddb0bbd740dd900dc699f73182d2_31)</u> | <u>[24](#i3254ddb0bbd740dd900dc699f73182d2_31)</u> |
| <u>[PART II](#i3254ddb0bbd740dd900dc699f73182d2_34)</u> |  |  | <u>[25](#i3254ddb0bbd740dd900dc699f73182d2_34)</u> |
|  | 5. | <u>[Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i3254ddb0bbd740dd900dc699f73182d2_37)</u> | <u>[25](#i3254ddb0bbd740dd900dc699f73182d2_37)</u> |
|  | 6. | <u>[\[Reserved\]](#i3254ddb0bbd740dd900dc699f73182d2_40)</u> | <u>[26](#i3254ddb0bbd740dd900dc699f73182d2_40)</u> |
|  | 7. | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i3254ddb0bbd740dd900dc699f73182d2_46)</u> | <u>[27](#i3254ddb0bbd740dd900dc699f73182d2_46)</u> |
|  | 7A. | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i3254ddb0bbd740dd900dc699f73182d2_85)</u> | <u>[40](#i3254ddb0bbd740dd900dc699f73182d2_85)</u> |
|  | 8. | <u>[Financial Statements and Supplementary Data](#i3254ddb0bbd740dd900dc699f73182d2_88)</u> | <u>[41](#i3254ddb0bbd740dd900dc699f73182d2_88)</u> |
|  | 9. | <u>[Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#i3254ddb0bbd740dd900dc699f73182d2_91)</u> | <u>[41](#i3254ddb0bbd740dd900dc699f73182d2_91)</u> |
|  | 9A. | <u>[Controls and Procedures](#i3254ddb0bbd740dd900dc699f73182d2_94)</u> | <u>[41](#i3254ddb0bbd740dd900dc699f73182d2_94)</u> |
|  | 9B. | <u>[Other Information](#i3254ddb0bbd740dd900dc699f73182d2_97)</u> | <u>[42](#i3254ddb0bbd740dd900dc699f73182d2_97)</u> |
|  | 9C. | <u>[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i3254ddb0bbd740dd900dc699f73182d2_100)</u> | <u>[42](#i3254ddb0bbd740dd900dc699f73182d2_100)</u> |
| <u>[PART III](#i3254ddb0bbd740dd900dc699f73182d2_103)</u> |  |  | <u>[43](#i3254ddb0bbd740dd900dc699f73182d2_103)</u> |
|  | 10. | <u>[Directors, Executive Officers and Corporate Governance](#i3254ddb0bbd740dd900dc699f73182d2_106)</u> | <u>[43](#i3254ddb0bbd740dd900dc699f73182d2_106)</u> |
|  | 11. | <u>[Executive Compensation](#i3254ddb0bbd740dd900dc699f73182d2_109)</u> | <u>[43](#i3254ddb0bbd740dd900dc699f73182d2_109)</u> |
|  | 12. | <u>[Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#i3254ddb0bbd740dd900dc699f73182d2_112)</u> | <u>[43](#i3254ddb0bbd740dd900dc699f73182d2_112)</u> |
|  | 13. | <u>[Certain Relationships and Related Transactions, and Director Independence](#i3254ddb0bbd740dd900dc699f73182d2_115)</u> | <u>[43](#i3254ddb0bbd740dd900dc699f73182d2_115)</u> |
|  | 14. | <u>[Principal Accountant Fees and Services](#i3254ddb0bbd740dd900dc699f73182d2_118)</u> | <u>[43](#i3254ddb0bbd740dd900dc699f73182d2_118)</u> |
| <u>[PART IV](#i3254ddb0bbd740dd900dc699f73182d2_121)</u> |  |  | <u>[44](#i3254ddb0bbd740dd900dc699f73182d2_121)</u> |
|  | 15. | <u>[Exhibits, Financial Statements Schedules](#i3254ddb0bbd740dd900dc699f73182d2_124)</u> | <u>[44](#i3254ddb0bbd740dd900dc699f73182d2_124)</u> |
|  | 16. | <u>[Form 10-K Summary](#i3254ddb0bbd740dd900dc699f73182d2_130)</u> | <u>[46](#i3254ddb0bbd740dd900dc699f73182d2_130)</u> |
| <u>[SIGNATURES](#i3254ddb0bbd740dd900dc699f73182d2_133)</u> | <u>[SIGNATURES](#i3254ddb0bbd740dd900dc699f73182d2_133)</u> | <u>[SIGNATURES](#i3254ddb0bbd740dd900dc699f73182d2_133)</u> | <u>[48](#i3254ddb0bbd740dd900dc699f73182d2_133)</u> |
| <u>[INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE](#i3254ddb0bbd740dd900dc699f73182d2_136)</u> | <u>[INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE](#i3254ddb0bbd740dd900dc699f73182d2_136)</u> | <u>[INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE](#i3254ddb0bbd740dd900dc699f73182d2_136)</u> | <u>[F-1](#i3254ddb0bbd740dd900dc699f73182d2_136)</u> |

---

------

**GLOSSARY**

---

| | |
|:---|:---|
| **<u>Defined Term</u>** | **<u>Definition</u>** |
| 10b5-1 Plan | Trading plan adopted pursuant to Rule 10b5-1 under the Exchange Act |
| 2009 Incentive Plan | Cognizant Technology Solutions Corporation Amended and Restated 2009 Incentive Compensation Plan |
| 2017 Incentive Plan | Cognizant Technology Solutions Corporation 2017 Incentive Award Plan |
| Adjusted Diluted EPS | Adjusted diluted earnings per share |
| AI | Artificial Intelligence |
| APA | Advance Pricing Agreement |
| ASC | Accounting Standards Codification |
| ASR | Accelerated Stock Repurchase |
| ASU | Accounting Standards Update |
| AustinCSI | Austin CSI, LLC |
| CC | Constant Currency |
| CITA | Commissioner of Income Tax (Appeals) in India |
| Class Action Settlement Loss | Loss recorded in connection with the filing of a settlement agreement that resolved the consolidated putative securities class action against us and certain of our former officers |
| CMT | Communications, Media and Technology |
| COVID-19 | The novel coronavirus disease |
| COVID-19 Charges | Costs directly related to the COVID-19 pandemic |
| CPI | Consumer Price Index |
| Credit Agreement | Credit agreement with a commercial bank syndicate dated November 6, 2018, as amended |
| Credit Loss Standard | ASC Topic 326 "Financial Instruments - Credit Losses" |
| CTS India | Our principal operating subsidiary in India |
| D&I | Diversity and Inclusion |
| Devbridge | Devbridge Group LLC |
| DevOps | Agile relationship between development and IT operations |
| DOJ | United States Department of Justice |
| DSO | Days Sales Outstanding |
| EPS | Earnings Per Share |
| ESG | Environmental, social and corporate governance |
| ESG Mobility | ESG Mobility GmbH |
| EU | European Union |
| Exchange Act | Securities Exchange Act of 1934, as amended |
| Executive Committee | Cognizant's Chief Executive Officer and his direct reports |
| FASB | Financial Accounting Standards Board |
| FCPA | Foreign Corrupt Practices Act |
| FS | Financial Services |
| GAAP | Generally Accepted Accounting Principles in the United States of America |
| High Court | Madras, India High Court |
| HR | Human Resources |
| HS | Health Sciences |
| Hunter | Certain net assets of Hunter Technical Resources, LLC |
| India Defined Contribution Obligation | Certain statutory defined contribution obligations of employees and employers in India |
| India Tax Law | New tax regime enacted by the Government of India enacted December 2019 |
| IP | Intellectual property |

---

---

| | |
|:---|:---|
| **Cognizant**<sub>1</sub> | **December 31, 2022 Form 10-K** |

---

------

---

| | |
|:---|:---|
| IoT | Internet of Things |
| IRS | Internal Revenue Service |
| IT | Information Technology |
| ITD | Indian Income Tax Department |
| Linium | The ServiceNow business of Ness Digital Engineering |
| Magenic | Magenic Technologies, LLC |
| Mobica | MOBICA HOLDINGS LIMITED |
| New Credit Agreement | Credit agreement with a commercial bank syndicate dated October 6, 2022 |
| New Term Loan | Unsecured term loan under the New Credit Agreement |
| OneSource Virtual | Certain net assets of OneSource Virtual, Inc. and OneSource Virtual (UK) Ltd. |
| PSU | Performance Stock Units |
| Purchase Plan | Cognizant Technology Solutions Corporation 2004 Employee Stock Purchase Plan, as amended |
| P&R | Products and Resources |
| ROU | Right of Use |
| RSU | Restricted Stock Units |
| Samlink | Oy Samlink Ab |
| SCI | Supreme Court of India |
| SEC | United States Securities and Exchange Commission |
| Second Circuit | United States Court of Appeals for the Second Circuit |
| Servian | SVN HoldCo Pty Limited |
| SEZ | Special Economic Zone |
| SG&A | Selling, general and administrative |
| Syntel | Syntel Sterling Best Shores Mauritius Ltd. |
| Tax on Accumulated Indian Earnings | The income tax expense related to the reversal of our indefinite reinvestment assertion on Indian earnings accumulated in prior years |
| Tax Reform Act | Tax Cuts and Jobs Act |
| Term Loan | Unsecured term loan under the Credit Agreement |
| TQS | TQS Integration Limited |
| TriZetto | The TriZetto Group, Inc., now known as Cognizant Technology Software Group, Inc. |
| USDC-NJ | United States District Court for the District of New Jersey |
| USDC-SDNY | United States District Court for the Southern District of New York |
| Utegration | Utegration, LLC |

---

---

| | |
|:---|:---|
| **Cognizant**<sub>2</sub> | **December 31, 2022 Form 10-K** |

---

------

**Forward Looking Statements**

The statements contained in this Annual Report on Form 10-K that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Exchange Act) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believe," "expect," "may," "could," "would," "plan," "intend," "estimate," "predict," "potential," "continue," "should" or "anticipate" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. From time to time, we or our representatives have made or may make forward-looking statements, orally or in writing.

Such forward-looking statements may be included in various filings made by us with the SEC, in press releases or in oral statements made by or with the approval of one of our authorized executive officers. These forward-looking statements, such as statements regarding our anticipated future revenues or operating margin, earnings, capital expenditures, impacts to our business, financial results and financial condition as a result of the competitive marketplace for talent and future attrition trends, anticipated effective income tax rate and income tax expense, liquidity, financing strategy, access to capital, capital return strategy, investment strategies, cost management, plans and objectives, including those related to our digital practice areas, investment in our business, potential acquisitions, industry trends, client behaviors and trends, the outcome of and costs associated with regulatory and litigation matters, the appropriateness of the accrual related to the India Defined Contribution Obligation and other statements regarding matters that are not historical facts, are based on our current expectations, estimates and projections, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Actual results, performance, achievements and outcomes could differ materially from the results expressed in, or anticipated or implied by, these forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• economic and political conditions globally, including inflation and the invasion of Ukraine by Russia, and in particular in the markets in which our clients and operations are concentrated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract, train and retain skilled employees, including highly skilled technical personnel and personnel with experience in key digital areas and senior management to lead our business globally, at an acceptable cost;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unexpected terminations of client contracts on short notice or reduced spending by clients for reasons beyond our control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• challenges related to growing our business organically as well as inorganically through acquisitions, and our ability to achieve our targeted growth rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to achieve our profitability goals and maintain our capital return strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of future pandemics, epidemics or other outbreaks of disease, on our business, results of operations, liquidity and financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in foreign currency exchange rates, or the failure of our hedging strategies to mitigate such fluctuations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to meet specified service levels or milestones required by certain of our contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• intense and evolving competition and significant technological advances that our service offerings must keep pace with in the rapidly changing markets we compete in;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• legal, reputation and financial risks if we fail to protect client and/or our data from security breaches and/or cyber attacks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• climate change impact on our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effectiveness of our risk management, business continuity and disaster recovery plans and the potential that our global delivery capabilities could be impacted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on visas, in particular in the United States, United Kingdom and EU, or immigration more generally or increased costs of such visas or the wages we are required to pay employees on visas, which may affect our ability to compete for and provide services to our clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks related to anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing, both of which could impair our ability to serve our clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks and costs related to complying with numerous and evolving legal and regulatory requirements and client expectations in the many jurisdictions in which we operate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential changes in tax laws, or in their interpretation or enforcement, failure by us to adapt our corporate structure and intercompany arrangements, or adverse outcomes of tax audits, investigations or proceedings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential exposure to litigation and legal claims in the conduct of our business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the other factors set forth in Part I, in the section entitled "<u>[Item 1A. Risk Factors](#i3254ddb0bbd740dd900dc699f73182d2_19)</u>" in this report.

---

| | |
|:---|:---|
| **Cognizant**<sub>3</sub> | **December 31, 2022 Form 10-K** |

---

------

You are advised to consult any further disclosures we make on related subjects in the reports we file with the SEC, including this report in the sections titled "<u>[Part I, Item 1. Business](#i3254ddb0bbd740dd900dc699f73182d2_16)</u>," "<u>[Part I, Item 1A. Risk Factors](#i3254ddb0bbd740dd900dc699f73182d2_19)</u>" and "<u>[Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](#i3254ddb0bbd740dd900dc699f73182d2_46)</u>." We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

---

| | |
|:---|:---|
| **Cognizant**<sub>4</sub> | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**PART I**

**Item 1. Business**

**Overview**

Cognizant is one of the world's leading professional services companies, engineering modern businesses and delivering strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in a fast-changing world. We tailor our services and solutions to specific industries with an integrated global delivery model that employs client service and delivery teams based at client locations and dedicated global and regional delivery centers. Our services include digital services and solutions, consulting, application development, systems integration, quality engineering and assurance, application maintenance, infrastructure and security as well as business process services and automation. Digital services continue to be an important part of our portfolio, aligning with our clients' focus on becoming data-enabled, customer-centric and differentiated businesses.

Our purpose, vision and values comprise the Cognizant agenda.

![ctsh-20221231_g1.jpg](ctsh-20221231_g1.jpg)

In order to achieve this vision and support our clients, we are continuing to focus our business on four strategic priorities to increase our commercial momentum and accelerate growth. These strategic priorities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Accelerating digital - growing our digital business organically and inorganically;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Globalizing Cognizant - accelerating the growth of our business in key international markets and diversifying our leadership, capabilities and delivery footprint;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increasing our relevance to our clients - leading with thought leadership and capabilities to address clients' business needs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Repositioning our brand - improving global brand recognition and becoming better known as a global digital partner to the entire C-suite.

We seek to drive organic growth through investments in our digital capabilities across industries and geographies, including the extensive training and reskilling of our technical teams and the expansion of our local workforces in the United States and other markets around the world. Additionally, we pursue select strategic acquisitions that can expand our talent, experience and capabilities in key digital areas or in particular geographies or industries. In 2022, we completed two such acquisitions to complement the 16 acquisitions we completed during 2020 and 2021. See <u>[Note 3](#i3254ddb0bbd740dd900dc699f73182d2_169)</u> to our consolidated financial statements for additional information.

---

| | |
|:---|:---|
| **Cognizant**<sub>5</sub> | **December 31, 2022 Form 10-K** |

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**Reportable Business Segments**

We go to market across seven industry-based operating segments, which are aggregated into four reportable business segments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Financial Services (FS)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Banking

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Insurance

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Health Sciences (HS)** - This reportable business segment is comprised of a single operating segment of the same name.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Products and Resources (P&R)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Retail and Consumer Goods

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Manufacturing, Logistics, Energy and Utilities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Travel and Hospitality

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Communications, Media and Technology (CMT)** - This reportable business segment is comprised of a single operating segment of the same name.

Our clients seek to partner with service providers that have a deep understanding of their businesses, industry initiatives, customers, markets and cultures and the ability to create solutions tailored to meet their individual business needs. Across industries, our clients are confronted with the risk of being disrupted by nimble, digital-native competitors. They are therefore redirecting their focus and investment to digital operating models and embracing DevOps and key technologies that enable quick adjustments to shifts in their markets. We believe that our deep knowledge of the industries we serve and our clients' businesses has been central to our growth and high client satisfaction, and we continue to invest in those digital capabilities that help to enable our clients to become modern businesses.

Our P&R segment includes manufacturers, automakers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services. Demand in this segment is driven by our clients' focus on improving the efficiency and sustainability of their operations; the enablement and integration of mobile platforms to support sales and other omni-channel commerce initiatives; the generational shift from mechanical to software-defined, experience-driven vehicles; grid modernization to prepare for a decarbonized and consumer-driven energy landscape; and their adoption and integration of digital technologies, such as the application of intelligent systems to manage supply chains and enhance overall customer experiences, and IoT to instrument functions for factories, real estate, fleets and products to increase access to insight-generating data.

Our CMT segment includes global communications, media and entertainment, education, information services and technology companies. Demand in this segment is driven by our clients' need for services related to digital content, the creation of personalized user experiences, acceleration of digital engineering and access to new revenue streams to drive growth. In response to this demand, we are focusing on services and solutions in the areas of monetization of networks, assets and platforms, as well as data modernization and customer experience design.

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| | |
|:---|:---|
| **Cognizant**<sub>6</sub> | **December 31, 2022 Form 10-K** |

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For the year ended December 31, 2022, the distribution of our revenues across our four reportable business segments was as follows:

![ctsh-20221231_g2.jpg](ctsh-20221231_g2.jpg)

The services we provide are distributed among a number of clients in each of our reportable business segments. A loss of a significant client or a few significant clients in a particular segment could materially reduce revenues for that segment. The services we provide to our larger clients are often critical to their operations and a termination of our services would typically require an extended transition period with gradually declining revenues. Nevertheless, the volume of work performed for specific clients may vary significantly from year to year.

See <u>[Note 2](#i3254ddb0bbd740dd900dc699f73182d2_166)</u> to our consolidated financial statements for additional information related to disaggregation of revenues by client location, service line and contract-type for each of our reportable business segments.

**Services and Solutions**

Our services include digital services and solutions, consulting, application development, systems integration, quality engineering and assurance, application maintenance, infrastructure and security as well as business process services and automation. Additionally, we develop, license, implement and support proprietary and third-party software products and platforms. Central to our strategy to align with our clients' need to modernize is our continued investment in digital, with a focus on four key areas: IoT, digital engineering, data and cloud. These four capabilities enable clients to put data at the core of their operations, improve the experiences they offer to their customers, tap into new revenue streams, automate operations, defend against technology-enabled competitors and reduce costs. In many cases, our clients' new digital systems are built on the backbone of their existing legacy systems, which can increase complexity and impact business continuity. In the post-pandemic environment, our clients have a sustained need to modernize their businesses, which has led to increased demand for digital capabilities such as mobile workplace solutions, e-commerce, automation, AI and cybersecurity services and solutions. We believe our deep knowledge of our clients' infrastructure and systems provides us with a significant advantage as we work with them to build new digital capabilities to make their operations more modern and intuitive. We deliver all of our services and solutions across our four reportable business segments to best address our clients' individual needs.

Our services and solutions are organized into four integrated practices to simplify our operating model and better serve our clients through integrated solutioning and delivery. These integrated practices are Core Technologies and Insights, Enterprise Platform Services, Intuitive Operations and Automation, and Software and Platform Engineering. Our consulting professionals have deep industry-specific expertise and work closely across our practices to create intuitive operating models that leverage a wide range of digital technologies across our clients' enterprises to deliver higher levels of efficiency, new value for their customers and business outcomes that align to their industries.

***Core Technologies and Insights***

Our Core Technologies and Insights integrated practice helps clients build agile and relevant organizations that apply the power of cloud, data, software, and IoT to help them perform better and innovate faster. Our clients are able to harness data securely in cloud-first architectures, enabling them to become highly resilient enterprises that are capable of quickly adapting to market dynamics. Areas of focus within this practice are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cloud, infrastructure and security, which helps simplify, modernize and safeguard IT environments, creating new business opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• AI and analytics, which helps clients formulate actionable insights from unstructured data to drive a greater understanding of their customers and operations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• IoT, which unlocks greater productivity and new business models.

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|:---|:---|
| **Cognizant**<sub>7</sub> | **December 31, 2022 Form 10-K** |

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***Enterprise Platform Services***

Our Enterprise Platform Services integrated practice helps our clients digitally transform multiple front- and back-office business processes, implementing enterprise-wide platforms that enable customer experience, customer relationship management, human capital management, supply chain management, enterprise resource planning and finance. Our services decrease time to market, drive efficiencies and deliver impactful experiences. Our clients are able to better share information, simplify IT processes, automate workflow and improve flexibility. This practice focuses on application services, which help enterprises engage their partner ecosystems more productively, and run their operations and financial organizations more efficiently while enabling improved employee and customer experiences. We work closely with partners including Adobe, Amazon Web Services, Cisco, Google, Microsoft, Oracle, Pegasystems, Salesforce, SAP, ServiceNow, Workday and many others.

***Intuitive Operations and Automation***

Our Intuitive Operations and Automation integrated practice helps clients build and run modern operations through two main vehicles: intelligent automation and business process outsourcing services. Our automation advisory, implementation and managed services experts partner with clients to transform end-to-end processes, design and manage the next-generation human and digital workforce, enable seamless experiences and achieve multi-fold productivity increases. Our business process outsourcing services help clients transform and run functions and industry-specific processes such as finance and accounting, omni-channel customer care, loan origination, annotation services, location-based services and medical data management. Areas of focus are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Business process outsourcing services, which help deliver business outcomes including revenue growth, increased customer and employee satisfaction, and cost savings; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Intelligent automation, which includes advisory and process and IT automation solutions designed to simplify and accelerate automation adoption.

***Software and Platform Engineering***

Our Software and Platform Engineering integrated practice helps clients develop modern enterprises through digital products, services and solutions that help them improve employee experiences and deliver new value for their customers. Our clients are able to leverage data, technologies and our digital engineering, design and product development capabilities to build world-class experiences, and a responsive, agile and intuitive framework for continuous innovation. Areas of focus are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Digital engineering, which delivers modern business software; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Application development and management, which improves or reimagines applications.

**Global Delivery Model**

We operate in an integrated global delivery model, with delivery centers worldwide to provide our full range of services to our clients. Our delivery model includes employees deployed at client sites, local or in-country delivery centers, regional delivery centers and offshore delivery centers, as required to best serve our clients. As we continue to scale our digital services and solutions, we are focused on hiring in the United States and other countries where we deliver services to our clients to expand our in-country delivery capabilities. Our extensive facilities, technology and communications infrastructure are designed to enable the effective collaboration of our global workforce across locations and geographies.

**Competition**

The markets for our services are highly competitive, characterized by a large number of participants and subject to rapid change. Competitors may include systems integration firms, contract programming companies, application software companies, cloud computing service providers, traditional consulting firms, professional services groups of computer equipment companies, infrastructure management companies, outsourcing companies and boutique digital companies. Our direct competitors include, among others, Accenture, Atos, Capgemini, Deloitte Digital, DXC Technology, EPAM Systems, Genpact, HCL Technologies, IBM Consulting, Infosys Technologies, Tata Consultancy Services and Wipro. In addition, we compete with numerous smaller local companies in the various geographic markets in which we operate. For additional information, see <u>[Part I, Item 1A. Risk Factors](#i3254ddb0bbd740dd900dc699f73182d2_19)</u>.

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|:---|:---|
| **Cognizant**<sub>8</sub> | **December 31, 2022 Form 10-K** |

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The principal competitive factors affecting the markets for our services include the provider's reputation and experience, strategic advisory capabilities, digital services capabilities, performance and reliability, responsiveness to customer needs, financial stability, corporate governance and competitive pricing of services. Accordingly, we rely on the following to compete effectively:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investments to scale our digital services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our recruiting, training and retention model;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our global delivery model;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an entrepreneurial culture and approach to our work;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a broad client referral base;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investment in process improvement and knowledge capture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• financial stability and good corporate governance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• continued focus on responsiveness to client needs, quality of services and competitive prices; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• project management capabilities and technical expertise.

**Intellectual Property, Certain Trademarks, Trade Names and Service Marks**

We provide value to our clients based, in part, on our proprietary innovations, methodologies, software, reusable knowledge capital and other IP assets. We recognize the importance of IP and its ability to differentiate us from our competitors. We seek IP protection for many of our innovations and rely on a combination of patent, copyright and trade secret laws, confidentiality procedures and contractual provisions, to protect our IP. We have registered, and applied for the registration of, U.S. and international trademarks, service marks, and domain names to protect our brands, including our Cognizant brand, which is one of our most valuable assets. We own or are licensed under a number of patents, trademarks and copyrights of varying duration, relating to our products and services. We also have policies requiring our employees to respect the IP rights of others. While our proprietary IP rights are important to our success, we believe our business as a whole is not materially dependent on any particular IP right or any particular group of patents, trademarks, copyrights or licenses, other than our Cognizant brand.

Cognizant® and other trademarks appearing in this report are registered trademarks or trademarks of Cognizant and its affiliates in the United States and other countries, or third parties, as applicable.

This Annual Report on Form 10-K includes trademarks and service marks owned by us. This Annual Report on Form 10-K also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names and service marks referred to in this Annual Report on Form 10-K may appear without the®,™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, trade names and service marks. We do not intend our use or display of other parties' trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

**Workforce**

We had approximately 355,300 employees at the end of 2022, with 258,500 in India, 41,100 in North America, 18,200 in Continental Europe, 9,200 in the United Kingdom and 28,300 in various other locations throughout the rest of the world. This represents an increase of 24,700 employees as compared to December 31, 2021. We utilize subcontractors to provide additional capacity and flexibility in meeting client demand, though the number of subcontractors has historically been immaterial relative to our employee headcount. We are not party to any significant collective bargaining agreements.

We balance the portion of our employees in the United States and other jurisdictions that rely on visas with consideration of the needs of our business to fulfill client demand and risks to our business from potential changes in immigration laws and regulations that may increase the costs associated with and ability to staff employees on visas to work in-country. For additional information, see <u>[Part I, Item 1A. Risk Factors](#i3254ddb0bbd740dd900dc699f73182d2_19)</u>.

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|:---|:---|
| **Cognizant**<sub>9</sub> | **December 31, 2022 Form 10-K** |

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**Engaging Our People** 

As a global professional services company, Cognizant competes on the basis of the knowledge, experience, insights, skills and talent of its employees and the value they can provide to clients. We aim for our employees to feel motivated, engaged, and empowered to do their best work through careers they find meaningful. In a market where competition for skilled IT professionals is intense, we focus on the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Engagement & Retention:** We regularly monitor employee engagement and retention levels, and assess employee sentiment through third-party engagement surveys, leader listening sessions and interactions on our internal channels. On an annual basis, after each engagement survey, we develop and communicate clear action plans to continue to build on our strengths and address shortfalls. In 2022, we saw meaningful increases in our employee engagement results, including scores above benchmark across multiple categories.

Competition for skilled employees in the current labor market is intense, and we experienced significantly elevated attrition during 2022. We continue to enhance our employee value proposition and our pay-for-performance approach as well as increase our efforts with respect to recruitment, talent management and employee engagement. For the three months ended December 31, 2022 and 2021, our annualized attrition rate, including both voluntary and involuntary, was 25.3% and 34.6%, respectively. Our attrition rate for the years ended December 31, 2022 and 2021, including both voluntary and involuntary, was 31.7% and 30.8%, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Advancing Diversity & Inclusion:** We strive to continually improve upon D&I over the long term. A diverse and inclusive workforce strengthens our ability to innovate and to understand our clients' needs and aspirations.

Highlights from our D&I efforts include:

–Global D&I organization embedded within our HR function to drive accountability through our people processes and systems;

–Global D&I training and programs, including allyship, psychological safety, and inclusive mindset training for leaders;

–Progressive hiring policies and initiatives:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a diverse candidate pipeline initiative to ensure a more diverse interview slate at the Vice President level and above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our Returnship Program, a 12-week paid, immersive experience for experienced professionals who have taken an extended career break;

–Seven global affinity groups sponsored by Executive Committee members that welcome, nurture and provide safe spaces in which our employees can share their unique interests and aspirations;

–For the first time in 2022, Executive Committee compensation included a metric focused on gender diversity globally, and developing and retaining talent. In addition, every leader at the level of director and above has a goal for hiring and retaining women at the senior manager level and above in their business area;

–Our sponsorships with the PGA, LPGA, where we doubled the Cognizant Founders Cup purse, and the Aston Martin Cognizant Formula One Team, where we partnered with Racing Pride to promote LGBTQ+ inclusivity in motor racing, demonstrate our commitment to equality and furthering diversity and inclusion around the world; and

–In 2022, Cognizant earned a perfect score on the Human Rights Campaign Foundation's 2022 Corporate Equality Index, a foremost benchmarking survey related to LGBTQ+ workplace equality.

As of December 31, 2022, we employed approximately 134,000 women, or 38% of our workforce, as compared to approximately 123,000 women, or 38% of our workforce, as of December 31, 2021.

In our 2022 engagement survey, D&I continued to score higher than external benchmarks, showing as a consistent strength for Cognizant.

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|:---|:---|
| **Cognizant**<sub>10</sub> | **December 31, 2022 Form 10-K** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• High Performance Culture:** We aim to create a work environment where every person is inspired to achieve, driven to perform and rewarded for their contributions. Our culture of meritocracy fosters individual and team high performance to fuel our growth.

Highlights include:

–Annual performance-based promotions and merit increases for eligible associates at all levels;

–Encouraging regular role movement and career growth through our internal job moves initiative. This program is enhancing career velocity and bringing fresh thinking to our clients as employees identify new lateral and next-level opportunities across our organization; and

–Continuously fostering a culture focused on recognition, Cognizant has created programs to reward all levels of employees through both monetary recognition as well as peer-driven non-monetary recognition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Learning & Upskilling:** From campus hire training for entry-level workforce to providing capability assurance programs for professional practitioners, our skilling ecosystem offers growth for associates at all levels. Training our talent in new digital skills supports career growth, internal talent movement, and brings seasoned Cognizant associates to projects. These trainings are provided in collaboration with the world's leading educational and technology partners.

Highlights include:

–Robust technical programs that reskill and upskill our employees with a focus on building digital skills in areas such as IoT, digital engineering, data and cloud;

–Innovative pre-employment training programs for graduates and early to mid-career professionals that focus on cultivating technology skills required for the next-generation workforce;

–Our in-house, access-from-anywhere learning experience platform provides a marketplace recognizing both formal and informal learning, as well as recommended learning journeys;

–A platform-driven mentorship program connects mentees with mentors across the global organization to learn and develop;

–Development plans for all levels to encourage employees to own and prioritize their growth; and

–Our approach to talent development has been recognized by leading learning and development organizations, such as the Association for Talent Development and the Brandon Hall group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Leadership Development & Talent Management:** Cognizant continuously fosters its pipeline of diverse, high-performing leaders who have the breadth and versatility to drive growth. We are focused on building leadership capability at all levels - whether someone is a first-time manager, taking on a larger team or scope of responsibility, or leading at an executive level - through continuous assessment and high impact development opportunities.

Highlights include:

–Targeted talent programs for key talent pools that include various training opportunities, digital leadership programs, custom leadership development initiatives and leadership transition programs to equip employees for taking on a leadership role;

–Fast-tracking high-performing and high-potential leadership talent through personalized assessments, executive coaching and executive education programs;

–More than 1,000 leaders have participated in our LEAD@Cognizant partnership with Harvard University, which is a 4.5-month leadership capability program designed exclusively for Cognizant leaders to learn, practice and internalize how to set the course, connect the dots, inspire followership and deliver results through strategic alignment, collaboration and building high performing teams;

–Accelerating a diverse leadership pipeline through programs like Propel, an initiative focused on priming the next level of women leaders within Cognizant. More than 1,200 women have progressed through this initiative; and

–Periodic talent processes such as talent reviews aim to help individuals develop in role and prepare for the future, while strengthening our leadership pipeline overall.

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|:---|:---|
| **Cognizant**<sub>11</sub> | **December 31, 2022 Form 10-K** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Supporting Wellbeing at Work and Home:** Our Be Well program offers a portfolio of benefits and rewards across all dimensions of wellbeing - physical, mental, financial and life & work. These offerings aim to care for the diverse needs of our employees to assist them in feeling resilient, innovative and engaged. These include total compensation programs, health benefits, risk protection coverage, overall wellbeing and family care, tax savings programs, income protection, retirement and financial planning resources, time off programs, recognition and voluntary programs. We continually review and enhance our offerings to best meet the needs of today's modern workforce.

Highlights include:

–Our WorkFlex program, which provides employees greater flexibility to complete their required hours outside their standard schedule or to transition to a part-time schedule to accommodate personal priorities. In 2022, we expanded this program, making it available to more geographies;

–We ensure access and support for all employees globally for mental health through a robust Employee Assistance Program. In 2022, we expanded mental health insurance coverage in many countries;

–We provide various resources and access to third party mental health platforms, webinars, and events throughout the year. This includes global and regional wellbeing challenges that bring employees and their families together (in person and virtually) to partake in physical activities and mental health events; and

–Managers are equipped with tools and resources to support the engagement and wellbeing of their teams. This includes guides and training on topics such as engaging hybrid teams, preventing fatigue and burnout, and more.

**Environmental, Social and Corporate Governance**

We believe integrating ESG considerations into our strategy will help us meet client and other stakeholder expectations. Responsible operations and transparency around environmental and social efforts are increasingly important to our stakeholders, which is why our ESG program is designed to align with our clients' and employees' increasing focus on ESG-related topics in our value chain, including but not limited to, our supply chain, delivery and solutions. In 2022, we took the following steps to advance our ESG agenda:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In 2022, we focused on engaging our associates on sustainability and community efforts, such as skills-based volunteering, on team and culture building through social impact and voluntary training on sustainability fundamentals. Employees who participated in our affinity groups or Outreach programs had a lower attrition rate than Company average in 2022;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In June 2022, we issued our ESG report with limited assurance on greenhouse gas emissions data. We continue to report against criteria aligned to GRI (Global Reporting Index), SASB (Sustainability Accounting Standards Board) and TCFD (Taskforce on Climate-related Financial Disclosures); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In April 2022, we set a near-term target of sourcing 100% renewable energy for all our global offices and facilities by the end of 2026. Additionally, we continue in our commitment to drive towards reducing our greenhouse gas emissions. This commitment calls for reducing emissions from the Company's global operations and supply chain by 50% by 2030, and by 90% by 2040, in each case compared to our 2019 emissions baseline. Where absolute emissions reductions are not physically or financially viable, we plan to use carbon offsets.

**Governmental Regulation**

As a result of the size, breadth and geographic diversity of our business, our operations are subject to a variety of laws and regulations in the jurisdictions in which we operate, including with respect to import and export controls, temporary work authorizations or work permits and other immigration laws, content requirements, trade restrictions, tariffs, taxation, anti-corruption, the environment, government affairs, internal and disclosure control obligations, data privacy, intellectual property, employee and labor relations. For additional information, see <u>[Part I, Item 1A. Risk Factors](#i3254ddb0bbd740dd900dc699f73182d2_19)</u> as well as the "Business Outlook" section within <u>[Part I.](#i3254ddb0bbd740dd900dc699f73182d2_49)[Item 7](#i3254ddb0bbd740dd900dc699f73182d2_49)[.](#i3254ddb0bbd740dd900dc699f73182d2_49)[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i3254ddb0bbd740dd900dc699f73182d2_49)[. Executive Summary](#i3254ddb0bbd740dd900dc699f73182d2_49)</u>.

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|:---|:---|
| **Cognizant**<sub>12</sub> | **December 31, 2022 Form 10-K** |

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**Information About Our Executive Officers**

The following table identifies our current executive officers:

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|:---|:---|:---|:---|
| **Name** | **Age** | **Capacities in Which Served** | **In Current<br>Position Since** |
| Ravi Kumar S | 51 | Chief Executive Officer | 2023 |
| Jan Siegmund | 58 | Chief Financial Officer | 2020 |
| Robert Telesmanic | 56 | Senior Vice President, Controller and Chief Accounting Officer | 2017 |
| John Kim | 55 | Executive Vice President, General Counsel, Chief Corporate Affairs Officer and Secretary | 2021 |
| Rebecca Schmitt | 49 | Executive Vice President, Chief People Officer | 2020 |
| Balu Ganesh Ayyar | 61 | Executive Vice President and President, Intuitive Operations and Automation | 2019 |
| Surya Gummadi | 46 | Executive Vice President and President, Americas | 2023 |
| Robert Walker | 49 | Executive Vice President and President, Global Growth Markets | 2022 |

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Ravi Kumar Singisetti (also referred to as Ravi Kumar S or Ravi Kumar) has been our Chief Executive Officer since January 2023. Prior to joining Cognizant, Mr. Kumar was the President of Infosys, where he led the Infosys Global Services Organization across all global industry segments from January 2016 to October 2022. While serving as President of Infosys, he also served as Chairman of the Board of various Infosys subsidiaries. Prior to such role, Mr. Kumar served in positions of increasing authority at Pricewaterhouse Coopers, Cambridge Tech Partners, Oracle Corporation, Sapient and Infosys. He is a member of the Board of Directors of Digimarc Corporation, where he is a member of the Compensation & Talent Management Committee and the Market Development Committee, and Transunion, where he is a member of the Compensation Committee and the Mergers, Acquisitions and Integration Committee. Mr. Kumar has a bachelor's degree in Engineering from Shivaji University and an M.B.A. from Xavier Institute of Management, India.

Jan Siegmund has been our Chief Financial Officer since September 2020. Prior to joining Cognizant, Mr. Siegmund spent over 19 years with Automatic Data Processing (ADP), where he served as Corporate Vice President and Chief Financial Officer from 2012 to 2019 and Chief Strategy Officer and President of the Added Value Services Division from 1999 to 2012. He began his career at McKinsey & Company as a Senior Engagement Manager. Mr. Siegmund is a member of the Board of Directors of The Western Union Company, where he is Chair of the Audit Committee and a member of the Compliance Committee. He holds a master's degree in Industrial Engineering from Technical University Karlsruhe, Germany, a master's degree in Economics from the University of California, Santa Barbara and a doctorate in Economics from Technical University of Dresden, Germany.

Robert Telesmanic has been our Senior Vice President, Controller and Chief Accounting Officer since January 2017, a Senior Vice President since 2010 and our Corporate Controller since 2004. Prior to that, he served as our Assistant Corporate Controller from 2003 to 2004. Prior to joining Cognizant, Mr. Telesmanic spent over 14 years with Deloitte & Touche LLP. Mr. Telesmanic has a Bachelor of Science degree from New York University and an MBA degree from Columbia University.

John Kim has been our Executive Vice President, General Counsel, Chief Corporate Affairs Officer and Secretary since March 2021. Previously, he served as our Senior Vice President and Deputy General Counsel, Global Commercial Contracts. Prior to joining Cognizant in 2019, Mr. Kim held a variety of senior leadership roles at Capgemini from January 2012 to November 2019, including Global Head of Big Deals. Prior to Capgemini, Mr. Kim served as U.S. Counsel for WNS Global Services from July 2009 to June 2011 and held a variety of leadership roles at Cendant Travel Distribution Services (now known as Travelport) from January 2001 to June 2006, including General Counsel and Chief Compliance Officer. He holds a bachelor's degree in English Literature from Columbia University and obtained his law degree from Cornell Law School.

Rebecca (Becky) Schmitt has been our Executive Vice President, Chief People Officer since February 2020. Prior to joining Cognizant, Ms. Schmitt was the Chief People Officer of Sam's Club, a division of Walmart, Inc. from October 2018 through January 2020. Prior to that, she served as SVP, Chief People Officer, US eCommerce & Corporate Functions for Walmart from October 2016 through September 2018 and as VP, HR - Technology from February 2016 until October 2016. Prior to joining Walmart, Ms. Schmitt spent over 20 years with Accenture plc in various human resources roles, culminating in her role as HR Managing Director, North America Business from March 2014 through February 2016. Ms. Schmitt has a Bachelor of Arts degree from University of Michigan, Ann Arbor.

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| **Cognizant**<sub>13</sub> | **December 31, 2022 Form 10-K** |

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Balu Ganesh Ayyar has been our Executive Vice President and President, Intuitive Operations and Automation since July 2022. Previously, he was Executive Vice President and President, Digital Operations from August 2019 to June 2022. Prior to joining Cognizant, Mr. Ayyar was the CEO of Mphasis, a global IT services company listed in India, from 2009 to 2017. Prior to Mphasis, Mr. Ayyar spent nearly two decades with Hewlett-Packard, holding a variety of leadership roles across multiple geographies.

Surya Gummadi has been our Executive Vice President and President, Americas since January 2023. He held the role on an interim basis from late June 2022 to January 2023. Prior to being appointed President of the Americas, Mr. Gummadi served as Senior Vice President of our Health Sciences business segment from April 2022 to January 2023, Senior Vice President and head of our Healthcare business from July 2020 to April 2022, Vice President and market leader of our Healthcare business from February 2020 to July 2020 and Vice President and market head for our Health Plans business from October 2017 to February 2020. Prior to that, he served in a variety of roles in his 24-year tenure with Cognizant. He holds a degree in mechanical engineering from Indian Institute of Technology, Bombay.

Robert Walker has been our Executive Vice President and President, Global Growth Markets, which covers all of Cognizant's markets outside of North America, since June 2022. From January 2021 to June 2022, he served as Managing Director of our United Kingdom & Ireland business. Prior to joining Cognizant, Mr. Walker spent 24 years at Ernst & Young, including from 2006 to 2020 as a partner, including risk advisory services and most recently helping clients improve the efficiency of their business using emerging technologies and digital capabilities across a wide range of sectors and industries. He holds a bachelor's degree in Economics from Newcastle University and is a chartered accountant.

None of our executive officers is related to any other executive officer or to any of our Directors. Our executive officers are appointed annually by the Board of Directors and generally serve until their successors are duly appointed and qualified.

**Corporate History**

We began our IT development and maintenance services business in early 1994 as an in-house technology development center for The Dun & Bradstreet Corporation and its operating units. In 1996, we were spun-off from The Dun & Bradstreet Corporation and, in 1998, we completed an initial public offering to become a public company.

**Available Information**

We make our SEC filings available free of charge through our website at *www.cognizant.com* as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.

No information on our website is incorporated by reference into this Form 10-K or any other public filing made by us with the SEC. The SEC maintains an internet site at *http://www.sec.gov* that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

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**Item 1A. Risk Factors**

***We face various important risks and uncertainties, including those described below, that could adversely affect our business, results of operations and financial condition and, as a result, cause a decline in the trading price of our common stock*.**

**Risks Related to our Business and Operations**

**Our results of operations could be adversely affected by economic and political conditions globally and in particular in the markets in which our clients and operations are concentrated.**

Global macroeconomic conditions have a significant effect on our business as well as the businesses of our clients. Volatile, negative or uncertain economic conditions could cause our clients to reduce, postpone or cancel spending on projects with us and could make it more difficult for us to accurately forecast client demand and have available the right resources to profitably address such client demand. Clients may reduce demand for services quickly and with little warning, which may cause us to incur extra costs where we have employed more personnel than client demand supports.

Our business is particularly susceptible to economic and political conditions in the markets where our clients or operations are concentrated. Our revenues are highly dependent on clients located in the United States and Europe, and any adverse economic, political or legal uncertainties or adverse developments, including due to the uncertainty related to the economic environment and inflation, may cause clients in these geographies to reduce their spending and materially adversely impact our business. Many of our clients are in the financial services and healthcare industries, so any decrease in growth or significant consolidation in these industries or regulatory policies that restrict these industries may reduce demand for our services. Economic and political developments in India, where a significant majority of our operations and technical personnel are located, or in other countries where we maintain delivery operations, may also have a significant impact on our business and costs of operations. As a developing country, India has experienced and may continue to experience high inflation and wage growth, fluctuations in gross domestic product growth and volatility in currency exchange rates, any of which could materially adversely affect our cost of operations. Additionally, we benefit from governmental policies in countries that encourage foreign investment and promote the ease of doing business, such as tax incentives, and any change in policy or circumstances that results in the elimination of such benefits or degradation of the rule of law, or imposition of new adverse restrictions or costs on our operations could have a material adverse effect on our business, results of operations and financial condition.

**If we are unable to attract, train and retain skilled employees to satisfy client demand, including highly skilled technical personnel and personnel with experience in key digital areas, as well as senior management to lead our business globally, our business and results of operations may be materially adversely affected.**

Our success is dependent, in large part, on our ability to keep our supply of skilled employees, including project managers, IT engineers and senior technical personnel, in particular those with experience in key digital areas, in balance with client demand around the world and on our ability to attract and retain senior management with the knowledge and skills to lead our business globally. In 2021 and most of 2022, we, and we believe the IT industry as a whole, experienced unprecedented attrition. As a result, we hired over a hundred thousand new employees in each of 2021 and 2022. Correspondingly, we have needed to reskill, retain, integrate and motivate our large workforce with diverse skills and expertise in order to serve client demands across the globe, respond quickly to rapid and ongoing technological, industry and macroeconomic developments and grow and manage our business. The rate of attrition began to decrease in the second half of 2022, but if such attrition levels do not continue to decrease or if they increase again in the future, it could materially adversely affect our business. We also must continue to maintain a senior leadership team that, among other things, is effective in executing on our strategic goals and growing our digital business. The loss of senior executives, or the failure to attract, integrate and retain new senior executives as the needs of our business require, could have a material adverse effect on our business and results of operations.

Competition for skilled labor is intense and, in some jurisdictions in which we operate and in key digital areas, there are more open positions than qualified persons to fill these positions. We compete for employees not only with other companies in our industry but also with companies in other industries, such as software services, engineering services and financial services companies. Our business has experienced and may continue to experience significant employee attrition, which has caused us to incur increased costs to hire new employees with the desired skills. While we strive to adjust pricing to reduce the impact of compensation increases on our operating margin, we may not be successful in recovering these increases, which could adversely affect our profitability and operating margin. Costs associated with recruiting and training employees are significant. If we are unable to hire or deploy employees with the needed skillsets or if we are unable to adequately equip our employees with the skills needed, this could materially adversely affect our business.

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| **Cognizant** | 15 | **December 31, 2022 Form 10-K** |

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Additionally, if we are unable to offer our employees a value proposition that is competitive and appealing, it could have an adverse effect on engagement and retention, which may materially adversely affect our business.

**Many of our contracts with clients are short-term, and our business, results of operations and financial condition could be adversely affected if our clients terminate their contracts on short notice.**

Consistent with industry practice, many of our contracts with clients are short-term or can be terminated by our clients with short notice and without significant early termination cost. Even if not terminated, clients may be able to delay, reduce or eliminate spending on the services and solutions we provide, choose not to retain us for additional stages of a project, try to renegotiate the terms of a contract or cancel or delay additional planned work. Terminations and such other events may result from factors that are beyond our control and unrelated to our work product or the progress of the project, including the business, financial or labor conditions of a client, changes in ownership, management or the strategy of a client or economic or market conditions generally or specific to a client's industry. When contracts are terminated or spending delayed, we lose the anticipated revenues and might not be able to eliminate our associated costs in a timely manner. In particular, the loss of a significant client or a few significant clients could materially reduce revenues for the Company as a whole or for a particular business segment. In addition, our operating margins in subsequent periods could be lower than expected. If we are unable to replace the lost revenues with other work on terms we find acceptable or effectively eliminate costs, our business, results of operations and financial condition could be adversely affected.

**We face challenges related to growing our business organically as well as inorganically through acquisitions, and we may not be able to achieve our targeted growth rates.**

Achievement of our targeted growth rates requires continued significant organic growth of our business as well as inorganic growth through acquisitions. To achieve such growth, we must, among other things, continue to significantly expand our global operations, in particular with respect to digital, and scale our infrastructure to support such business growth and ensure that our service offerings remain responsive to market demand. Continued business growth increases the complexity of our business and places significant strain on our management, employees, operations, systems, delivery, financial resources, and internal financial control and reporting functions, which we will have to continue to develop and improve to sustain such growth. Our ability to successfully manage change associated with the various business transformation initiatives is critical for the overall strategy execution. We must continually recruit and train new employees, retain and reskill, as necessary, existing sales, technical, finance, marketing and management employees with the knowledge, skills and experience that our business model requires and effectively manage our employees worldwide to support our culture, values, strategies and goals.

Additionally, we expect to continue pursuing strategic and targeted acquisitions and investments to enhance our offerings of services and solutions or to enable us to expand our talent, experience and capabilities in key digital areas or in particular geographies or industries. We may not be successful in identifying suitable opportunities, completing targeted transactions or achieving the desired results in the timeframe we expect or at all, such opportunities may divert our management's time and focus away from our core business and realizing the desired results of a particular transaction may depend upon competition, market trends, additional costs or investments and the actions of suppliers or other third parties. We may face challenges in effectively integrating acquired businesses into our ongoing operations and in assimilating and retaining employees of those businesses into our culture and organizational structure, and these risks may be magnified by the size and number of transactions we execute.

If we are unable to manage our growth effectively, complete acquisitions of the number, magnitude and nature we have targeted, or successfully integrate any acquired businesses into our operations, we may not be able to achieve our targeted growth rates or improve our market share, profitability or competitive position generally or in specific markets or services.

**We may not be able to achieve our profitability goals and maintain our capital return strategy.** 

Our goals for profitability and capital return rely upon a number of assumptions, including our ability to improve the efficiency of our operations and make successful investments to grow and further develop our business. Our profitability depends on the efficiency with which we run our operations (including changes in our internal organizational structure) and the cost of our operations, especially the compensation and benefits costs of our employees. We have incurred, and may continue to incur, substantial costs related to implementing our strategy to optimize such costs, and we may not realize the ultimate cost savings that we expect. We may not be able to efficiently utilize our employees if increased regulation, policy changes or administrative burdens of immigration, work visas or client worksite placement prevents us from deploying our employees on a timely basis, or at all, to fulfill the needs of our clients. Our utilization rates are further affected by a number of factors, including our ability to transition employees from completed projects to new assignments, hire and assimilate new employees, forecast demand for our services and thereby maintain an appropriate headcount in each of our geographies and workforce and manage attrition, and our need to devote time and resources to training, professional development and other typically non-chargeable activities. Increases in wages and other costs, including as a result of attrition, may also put pressure on our

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| **Cognizant** | 16 | **December 31, 2022 Form 10-K** |

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profitability. Our profitability is also impacted by our ability to accurately estimate, attain and sustain revenues from client engagements, margins and cash flows over contract periods and general economic and political conditions.

With respect to capital return, our ability and decisions to pay dividends and repurchase shares depend on a variety of factors, including the cash flow generated from operations, our cash and investment balances, our net income, our overall liquidity position, potential alternative uses of cash, such as acquisitions, and anticipated future economic conditions and financial results. Failure to carry out our capital return strategy may adversely impact our reputation with shareholders and shareholders' perception of our business and the trading price of our common stock.

**Pandemics, epidemics or other outbreaks of disease have had and may in the future have a material adverse impact upon our business, liquidity, results of operations and financial condition.**

The COVID-19 pandemic had, and any future pandemic, epidemic or other outbreak of disease may have, widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets and business practices by, among other things, causing significant loss of life, curtailing congregation of people and disrupting communications and travel. This or other similar events may have a material adverse impact upon, our business, liquidity, results of operations and financial condition, including as a result of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Reduced client demand for services* – The vast majority of our business is with clients in the United States, the United Kingdom and other countries in Europe, all regions that were significantly impacted by the COVID-19 pandemic and could be impacted by other future pandemics, epidemics or other outbreaks of disease. Such outbreaks could reduce demand for our services, particularly in regions or industries that are significantly impacted by such events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Delivery challenges* – Due to the closures of many of our clients' facilities, including as a result of various orders from national, state or local governments, we faced challenges in delivering services to our clients and satisfying contractually agreed upon service levels during the COVID-19 pandemic and could face such closures in future pandemics, epidemics or other outbreaks of disease. The COVID-19 pandemic, particularly in India, but also in the Philippines and other countries where we have near-shore or offshore delivery operations for clients, as well as our in-country offices and offices of clients where our employees may normally work, impacted our ability to deliver services to clients. A similar future pandemic, epidemic or other outbreak of disease, or a future security incident during such circumstances, could materially impair our ability to deliver services to clients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Increased strain on employees and management* – The significant challenges presented by a pandemic, such as the potentially life-threatening health risks to employees and their loved ones and the unavailability of various services our employees may rely upon, such as childcare, were and may in future pandemics, epidemics or other outbreaks of disease be a cause of employee morale concerns and may adversely impact employee productivity. Addressing these employee morale and productivity concerns as well as other significant challenges presented by such events, including various business continuity measures demands significant management time and attention.

The ultimate extent to which any future pandemics, epidemics or other outbreaks of disease impact our business, liquidity, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the severity of the disease to which the pandemic, epidemic or other outbreak relates; delivery, adoption and effectiveness of vaccines or other treatments for the disease, including any variants; the duration and extent of the event and waves of infection; travel restrictions and social distancing; the duration and extent of business closures and business disruptions; and the effectiveness of actions taken to contain, treat and prevent the disease. If we or our clients experience prolonged shutdowns or other business disruptions, our business, liquidity, results of operations, financial condition and the trading price of our common stock may be materially adversely affected, and our ability to access the capital markets may be limited. Further, any future pandemic, epidemic or other outbreak of disease, and the volatile regional and global economic conditions stemming from such an event, could precipitate or aggravate the other risk factors that we identify in this report, any of which could have a material adverse impact to our business.

**Fluctuations in foreign currency exchange rates, or the failure of our hedging strategies to mitigate such fluctuations, can adversely impact our profitability, results of operations and financial condition.**

Fluctuations in foreign currency exchange rates can also have adverse effects on our revenues, income from operations and net income when items denominated in other currencies are translated or remeasured into U.S. dollars for presentation of our consolidated financial statements. We have entered into foreign exchange forward contracts intended to partially offset the impact of the movement of the exchange rates on future operating costs and to mitigate foreign currency risk on foreign currency denominated net monetary assets. However, the hedging strategies that we have implemented, or may in the future implement, to mitigate foreign currency exchange rate risks may not reduce or completely offset our exposure to foreign exchange rate fluctuations and may expose our business to unexpected market, operational and counterparty credit risks. We are

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| **Cognizant** | 17 | **December 31, 2022 Form 10-K** |

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particularly susceptible to wage and cost pressures in India and the exchange rate of the Indian rupee relative to the currencies of our client contracts due to the fact that the substantial majority of our employees are in India while our contracts with clients are typically in the local currency of the country where our clients are located.

**Our failure to meet specified service levels or milestones required by certain of our client contracts may result in our client contracts being less profitable, potential liability for penalties or damages or reputational harm.**

Many of our client contracts include clauses that tie our compensation to the achievement of agreed-upon performance standards or milestones. Failure to satisfy these requirements could significantly reduce our fees under the contracts, increase the cost to us of meeting performance standards or milestones, delay expected payments, subject us to potential damage claims under the contract terms or harm our reputation. The use of new technologies in our offerings can expose us to additional risks if those technologies fail to work as predicted, which could lead to cost overruns, project delays, financial penalties, or damage to our reputation. Clients also often have the right to terminate a contract and pursue damages claims for serious or repeated failure to meet these service commitments. Some of our contracts provide that a portion of our compensation depends on performance measures such as cost-savings, revenue enhancement, benefits produced, business goals attained and adherence to schedule. These goals can be complex and may depend on our clients' actual levels of business activity or may be based on assumptions that are later determined not to be achievable or accurate. As such, these provisions may increase the variability in revenues and margins earned on those contracts and have in the past resulted, and could in the future result, in significant losses on such contracts. Further, if we do not accurately estimate the effort, costs or timing for meeting our contractual commitments or completing engagements to a client's satisfaction, our contracts could have delivery inefficiencies and be less profitable than expected or unprofitable.

**We face intense and evolving competition and our service offerings must keep pace with significant technological advances in the rapidly changing markets we compete in.**

The markets we serve and operate in are highly competitive, subject to rapid change and characterized by a large number of participants, as described in "<u>[Part I, Item 1. Business-Competition](#i3254ddb0bbd740dd900dc699f73182d2_16)</u>." We compete on the basis of reputation and experience, strategic advisory capabilities, digital services capabilities, performance and reliability, responsiveness to customer needs, financial stability, corporate governance and competitive pricing of services. The less we are able to differentiate our services and solutions and/or clearly convey the value of our services and solutions, the more difficulty we have in winning new work in sufficient volumes and at our target pricing and overall economics. In addition to large, global competitors, we face competition in many geographic markets from numerous smaller, local competitors that may have more experience with operations in these markets, have well-established relationships with our desired clients, or be able to provide services and solutions at lower costs or on terms more attractive to clients than we can. Consolidation activity may also result in new competitors with greater scale, a broader footprint or vertical integration that makes them more attractive to clients as a single provider of integrated products and services. In addition, concurrent use by many clients of multiple professional service providers means that we are required to be continually competitive on the quality, scope and pricing of our offerings or face a reduction or elimination of our business. Competitors may also be willing, at times, to take on more risk or price contracts lower than us in an effort to enter the market or increase market share. If we are not able to supply clients with services that they deem superior and successfully apply current business models with market level pricing while managing discounts, we may lose business to competitors and face downward pressure on gross margins and profitability. Any inability to compete effectively would materially adversely affect our business, results of operations and financial condition.

Our relationships with our third party alliance partners, who supply us with necessary components to the services and solutions we offer our clients, are also critical to our ability to provide many of our services and solutions that address client demands. There can be no assurance that we will be able to maintain such relationships or that such components will be available on the expected timelines or for anticipated prices. Among other things, such alliance partners may in the future decide to compete with us, form exclusive or more favorable arrangements with our competitors or otherwise reduce our access to their products, thereby impairing our ability to provide the services and solutions demanded by clients. Any performance failure on the part of our alliance partners, or the discontinuance by such alliance partners of services that we have relied on them to perform for our clients, could delay our performance or require us to engage alternative third parties to perform the services at our cost or to perform them ourselves, any of which could deprive us of potential revenue or adversely impact our profitability.

Our competitiveness also depends on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology to serve the evolving needs of our clients. Examples of areas of significant change include digital-, cloud- and security-related offerings, which are continually evolving, as well as developments in areas such as AI, augmented reality, automation, blockchain, IoT, quantum computing and as-a-service solutions, among others. If we do not sufficiently invest in new technologies, successfully adapt to industry developments and changing demand, and evolve and expand our business at sufficient speed and scale to keep pace with the demands of the

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| **Cognizant** | 18 | **December 31, 2022 Form 10-K** |

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markets we serve, we may be unable to develop and maintain a competitive advantage and execute on our growth strategy, which would materially adversely affect our business, results of operations and financial condition. In addition, our clients may delay spending under existing contracts and engagements or delay entering into new contracts while evaluating new technologies. Such delays can negatively impact our results of operations if we are unable to adapt our pricing or the pace and level of spending on new technologies is not sufficient to make up any shortfall. Further, as we expand into these areas, we may be exposed to operational, legal, regulatory, ethical, technological and other risks specific to such new areas, which may negatively affect our reputation and demand for our services and solutions.

**We face legal, reputational and financial risks if we fail to protect client and/or Cognizant data from security breaches and/or cyberattacks.**

In order to provide our services and solutions, we depend on global information technology networks and systems, to process, transmit, host and securely store electronic information (including our confidential information and the confidential information of our clients) and to communicate among our locations around the world and with our clients, suppliers and alliance partners (including numerous cloud service providers). Security breaches, employee malfeasance, or human or technological error create risks of shutdowns or disruptions of our operations and potential unauthorized access and/or disclosure of our or our clients' sensitive data, which in turn could jeopardize projects that are critical to our operations or the operations of our clients' businesses and have other adverse impacts on our business or the business of our clients.

In addition, the products, services and software that we provide to our clients, or the third-party components we use to provide such products, services and software, may unintentionally contain or introduce cybersecurity threats or vulnerabilities to our clients' information technology networks. Our clients may maintain their own proprietary, sensitive, or confidential information that could be compromised in a cybersecurity attack, or their systems may be disabled or disrupted as a result of such an attack. Our clients, regulators, or other third parties may attempt to hold us liable, through contractual indemnification clauses or directly, for any such losses or damages resulting from such an attack.

Like other global companies, we and our clients, suppliers, alliance partners (including numerous cloud service providers) and other vendors we interact with face threats to data and systems, including by nation state threat actors, insider threats (including inappropriate access), perpetrators of random or targeted malicious cyberattacks, computer viruses, malware, worms, bot attacks or other destructive or disruptive software and attempts to misappropriate client information and cause system failures and disruptions. For example, in April 2020, we announced a security incident involving a Maze ransomware attack. The attack resulted in unauthorized access to certain data and caused significant disruption to our business. In addition, Russia's invasion of Ukraine and associated international tensions have heightened the overall risk of cyber-threats and, while we have taken steps to mitigate such risks, those steps may not be successful.

A security compromise of our information systems, or of those of businesses with which we interact, that results in confidential information being accessed by unauthorized or improper persons, could harm our reputation and expose us to regulatory actions, up to and including criminal prosecution, client attrition due to reputational concerns or otherwise, containment and remediation expenses, and claims brought by our clients or others for breaching contractual confidentiality and security provisions or data protection laws. Monetary damages imposed on us could be significant and may impose costs in excess of insurance policy limits or not be covered by our insurance at all, and our insurers may not continue to provide coverage on reasonable terms or may disclaim coverage as to any future claims. Techniques used by bad actors to obtain unauthorized access, disable or degrade service, or sabotage systems continuously evolve and may not immediately produce signs of intrusion, and we may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, a security breach could require that we expend substantial additional resources related to the security of our information systems, diverting resources from other projects and disrupting our businesses.

Our clients, suppliers, subcontractors, and other third parties with whom we do business, including in particular cloud service providers and software vendors, generally face similar cybersecurity threats, and we must rely on the safeguards adopted by these parties. If these third parties do not have adequate safeguards or their safeguards fail, it might result in breaches of our systems or applications and unauthorized access to or disclosure of our and our clients' confidential data. In addition, we are subject to vulnerabilities in third-party technology components we use in our business and are typically not aware of such vulnerabilities until we receive notice from the third parties who have created the exposure. Due to this delay, our responses to such vulnerabilities may not be adequate or prompt enough to prevent their exploitation.

Any remediation measures that we have taken or that we may undertake in the future in response to the security incident announced in April 2020 or other security threats may be insufficient to prevent future attacks or insufficient for us to quickly recover from any future attack to efficiently continue our business operations.

We are required to comply with increasingly complex and changing data security and privacy regulations in the United States, the EU, India and in other jurisdictions in which we operate. These laws regulate the collection, use and transfer of

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|:---|:---|:---|
| **Cognizant** | 19 | **December 31, 2022 Form 10-K** |

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personal data and can include significant financial penalties for noncompliance. Recent developments, including the new EU-U.S. Trans-Atlantic Data Privacy Framework, are expected to help secure the transfer of data from the EU to the United States. However, there remains significant regulatory uncertainty for businesses transferring data globally. This uncertainty results in increased compliance costs, as well as the risk of regulatory enforcement actions, which can result in such significant financial penalties, private lawsuits, reputational damage, blockage of international data transfers, disruption to business and loss of customers.

In the United States, federal sectoral laws, such as the Health Insurance Portability and Accountability Act, and comprehensive state legislation, such as the California Consumer Privacy Act of 2018, together with its successor, the California Privacy Rights Act (the "CPRA") that went into effect on January 1, 2023, and similar legislation in several other states that is expected to take effect throughout 2023, impose or will impose extensive privacy requirements on organizations that handle personal data. Further, the regulations to implement the CPRA are expected to be finalized in 2023, and there is uncertainty regarding how the California Privacy Protection Agency will enforce the new law and regulations. Proposals for federal comprehensive privacy legislation continue and other new state comprehensive privacy laws are under consideration. The Indian Ministry of Information Technology released a new draft Digital Personal Data Protection Bill in November 2022 ("the 2022 Bill"), replacing the previously proposed Personal Data Protection Bill of 2019. The new 2022 Bill is designed to encourage growth in the technology sector; however, much detail (including on requirements for cross border transfers) has been left to subordinate legislation which will be prescribed by the executive arm of the government. As currently drafted, the bill limits penalties that can be imposed to 5 billion rupees or approximately $60 million. Other countries have enacted or are considering enacting data localization laws that require certain data to stay within their borders. We may also face audits or investigations by one or more domestic or foreign government agencies or our clients pursuant to our contractual obligations relating to our compliance with these regulations. Complying with changing regulatory requirements requires us to incur substantial costs, exposes us to potential regulatory action or litigation, and may require changes to our business practices in certain jurisdictions, any of which could materially adversely affect our business operations and operating results.

**Climate change and risks arising from the transition to a lower-carbon economy may impact our business.**

There are inherent climate-related risks everywhere that we conduct our business. Developments related to regulatory, social or market dynamics, stakeholder expectations, national and international climate change policies, the actual or perceived frequency or intensity of extreme weather events or the availability and functionality of critical infrastructure and resources, in addition to other factors resulting from such developments or that may not otherwise be known to or anticipated by us, could significantly disrupt our supply chain, our clients' operations and our ability to deliver services. Such events could significantly increase our costs and expenses and harm our revenues, cash flows and financial performance. Further, natural disasters and adverse weather events, such as droughts, wildfires, storms, sea-level rise and flooding, occurring more frequently, with less predictability or with greater intensity, could cause community disruptions and impact our employees' abilities to commute or to work from home safely and effectively. For example, we have substantial global delivery operations in Chennai, India, a city that has experienced severe rains and related flooding. Our exposure to these economic and other risks from climate change could be exacerbated if government or market action to address climate change and its effects is insufficient or unsuccessful.

Failure or perception of failure to achieve our stated goal to lower or negate our greenhouse gas emissions or to mitigate climate risk to our business, or perception of a failure to act responsibly with respect to the environment, could lead to adverse publicity, adverse effects on our business or damage to our reputation.

In addition, governmental bodies, investors, clients, businesses, employees and potential employees are increasingly focused on ESG issues, including climate change, diversity and inclusion, human rights and supply-chain issues, which has resulted and may in the future continue to result in the adoption of new laws and regulations, reporting requirements and changing bid and buying practices. Further, we are expected to become increasingly subject to laws, regulations and international treaties relating to climate change, such as carbon pricing or product energy efficiency requirements. As these new laws, regulations, treaties and similar initiatives and programs are adopted and implemented, we will be required to comply or potentially face market access limitations, enforcement actions, civil suits or sanctions, including fines. If new laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet such obligations. If we fail to comply with new laws, regulations, treaties, or reporting requirements or keep pace with ESG trends and developments or fail to meet the expectations of our clients and investors, our reputation and business could be adversely impacted.

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|:---|:---|:---|
| **Cognizant** | 20 | **December 31, 2022 Form 10-K** |

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**If our risk management, business continuity and disaster recovery plans are not effective and our global delivery capabilities are impacted, our business and results of operations may be materially adversely affected and we may suffer harm to our reputation.** 

Our business model is dependent on our global delivery capabilities, which include coordination between our delivery centers in India, our other global and regional delivery centers, the offices of our clients and our associates worldwide. System failures, outages and operational disruptions may be caused by factors outside of our control, such as hostilities (including the ongoing conflict between Russia and Ukraine), political unrest, terrorist attacks, cybersecurity incidents, power or water shortages or telecommunications failures, natural or man-made disasters or other catastrophic events (including extreme weather conditions and other events that may be caused or exacerbated by climate change), and public health emergencies, epidemics and pandemics, affecting the geographies where our people, equipment and clients are located. Our risk management, business continuity and disaster recovery plans may not be effective at predicting or mitigating the effects of such disruptions, particularly in the case of catastrophic events or longer term, increasingly severe developments that occur as a result of climate change. Even if our operations are unaffected or recover quickly from any such events, if our clients cannot timely resume their own operations due to a catastrophic event, they may reduce or terminate our services, which may adversely affect our results of operations. Any such disruption may result in lost revenues, a loss of clients, liabilities relating to disruptions in service, expenditures to repair or replace damaged property and reputational damage, and could demand significant management time and attention, any of which would have an adverse effect on our business, results of operations and financial condition.

**Legal, Regulatory and Legislative Risks**

**A substantial portion of our employees in the United States, United Kingdom, EU and other jurisdictions rely on visas to work in those areas such that any restrictions on such visas or immigration more generally or increased costs of obtaining such visas or increases in the wages we are required to pay employees on visas may affect our ability to compete for and provide services to clients in these jurisdictions, which could materially adversely affect our business, results of operations and financial condition.**

A substantial portion of our employees in the United States and in many other jurisdictions, including countries in Europe, rely upon temporary work authorization or work permits, which makes our business particularly vulnerable to changes and variations in immigration laws and regulations, including written changes and policy changes to the manner in which the laws and regulations are interpreted or enforced, and potential enforcement actions and penalties that might cause us to lose access to such visas. The political environment in the United States, the United Kingdom and other countries in recent years has included significant support for anti-immigrant legislation and administrative changes. Many of these recent changes have resulted in, and various proposed changes may result in, increased difficulty in obtaining timely visas that could impact our ability to staff projects, including as a result of visa application rejections and delays in processing applications, and significantly increased costs for us in obtaining visas or as a result of prevailing wage requirements for our employees on visas. The current U.S. administration has continued to explore visa and immigration reform and there continues to be political support for potential new laws and regulations relating to visas or immigration and the implementation of these or similar measures in the future may have a material adverse impact on companies like ours that have a substantial percentage of our employees on visas. Our principal operating subsidiary in the United States utilizes a high number of skilled workers holding H-1B and L-1 visas and, as a result, may be subject to increased costs if any such laws, regulations, policy changes or executive orders go into effect. In the EU, many countries continue to implement new regulations to move into compliance with the EU Directive of 2014 to harmonize immigration rules for intracompany transferees in most EU member states and to facilitate the transfer of managers, specialists and graduate trainees both into and within the region. The changes have had significant impact on mobility programs and have led to new notification and documentation requirements for companies sending employees to EU countries. Recent changes or any additional adverse revisions to immigration laws and regulations in the jurisdictions in which we operate may cause us delays, staffing shortages, additional costs or an inability to bid for or fulfill projects for clients, any of which could have a material adverse effect on our business, results of operations and financial condition.

**Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could impair our ability to serve our clients and materially adversely affect our business, results of operations and financial condition.** 

The practice of outsourcing services to organizations operating in other countries is a topic of political discussion in the United States, which is our largest market, as well as other regions in which we have clients. For example, in the United States, measures aimed at limiting or restricting the performance of services from an offshore location or imposing burdens on U.S. companies that utilize such services have been put forward for consideration at both the federal and state levels to address concerns over the perceived association between offshore outsourcing and the loss of jobs domestically. If any such measure is enacted in the United States or another region in which we have clients, our ability to provide services to our clients could be impaired.

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| **Cognizant** | 21 | **December 31, 2022 Form 10-K** |

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In addition, from time to time there has been publicity about purported negative experiences associated with offshore outsourcing, such as alleged domestic job loss and theft and misappropriation of sensitive client data, particularly involving service providers in India. Current or prospective clients may elect to perform certain services themselves or may be discouraged from utilizing global service delivery providers like us due to negative perceptions that may be associated with using global service delivery models or firms. Any slowdown or reversal of existing industry trends toward global service delivery would seriously harm our ability to compete effectively with competitors that provide the majority of their services from within the country in which our clients operate.

**We are subject to numerous and evolving legal and regulatory requirements and client expectations in the many jurisdictions in which we operate, and violations of, unfavorable changes in or an inability to meet such requirements or expectations could harm our business.**

We provide services to clients and have operations in many parts of the world and in a wide variety of different industries, subjecting us to numerous, and sometimes conflicting, laws and regulations on matters as diverse as trade controls and sanctions, immigration (including temporary work authorizations or work permits), content requirements, trade restrictions, tariffs, taxation, antitrust laws, anti-money laundering and anti-corruption laws (including the FCPA and the U.K. Bribery Act), the environment, including climate change regulation and reporting requirements, government affairs, internal and disclosure control obligations, data privacy, intellectual property, employment and labor relations and human rights. We face significant regulatory compliance costs and risks as a result of the size and breadth of our business. For example, we may experience increased costs in 2023 and future years for employment and post-employment benefits in India as a result of the issuance of the Code on Social Security, 2020, which enhanced social security coverage (a portion of which is paid by the employer) and extended such benefits to all workers.

We are also subject to a wide range of potential enforcement actions, audits or investigations regarding our compliance with these laws or regulations in the conduct of our business, and any finding of a violation could subject us to a wide range of civil or criminal penalties, including fines, debarment, or suspension or disqualification from government contracting, prohibitions or restrictions on doing business in one or more jurisdictions, loss of clients and business, legal claims by clients and unfavorable publicity or damage to our reputation. We could also face significant compliance and operational burdens and incur significant costs in our efforts to comply with or rectify non-compliance with these laws or regulations. Such burdens or costs may result in an adverse effect on our financial condition and results of operations.

We commit significant financial and managerial resources to comply with our internal control over financial reporting requirements, but we have in the past identified and may in the future identify material weaknesses or significant deficiencies in our internal control over financial reporting that cause us to incur incremental remediation costs in order to maintain adequate controls. For example, we had to spend significant resources on conducting an internal investigation and cooperating with investigations by the DOJ and the SEC, both concluded in 2019, focused on whether certain payments relating to Company-owned facilities in India were made in violation of the FCPA and other applicable laws.

Our employees, subcontractors, vendors, agents, alliance partners, the companies we acquire and their employees, vendors and agents, and other third parties with which we associate, could take actions that violate policies or procedures designed to promote legal and regulatory compliance or applicable anticorruption laws or regulations. Violations of these laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines or penalties, disgorgement of profits and suspension or disqualification from work, including U.S. federal contracting, any of which could materially adversely affect our business, including our results of operations and our reputation.

**Changes in tax laws or in their interpretation or enforcement, failure by us to adapt our corporate structure and intercompany arrangements or adverse outcomes of tax audits, investigations or proceedings could have a material adverse effect on our effective tax rate, results of operations and financial condition.**

The interpretation of tax laws and regulations in the many jurisdictions in which we operate and the related tax accounting principles are complex and require considerable judgment to determine our income taxes and other tax liabilities worldwide. Tax laws and regulations affecting us and our clients, including applicable tax rates, and the interpretation and enforcement of such laws and regulations are subject to change as a result of economic, political and other factors, and any such changes or changes in tax accounting principles could increase our effective worldwide income tax rate and have a material adverse effect on our net income, cash flows and financial condition. We routinely review and update our corporate structure and intercompany arrangements, including transfer pricing policies, consistent with applicable laws and regulations, to align with our evolving business operations across the numerous jurisdictions, such as the United States, India and the United Kingdom, in which we operate. Failure to successfully adapt our corporate structure and intercompany arrangements to align with our

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| **Cognizant** | 22 | **December 31, 2022 Form 10-K** |

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evolving business operations may increase our worldwide effective tax rate and have a material adverse effect on our earnings, cash flows and financial condition.

Our worldwide effective income tax rate may increase or our financial condition may be materially impacted as a result of developments, changes in interpretations and assumptions made, additional guidance that may be issued and ongoing and future actions the Company has or may take with respect to our corporate structure and intercompany arrangements. For example, our effective income tax rate and financial condition could be materially affected by the adoption and implementation of the Base Erosion and Profit Shifting project of the Organisation for Economic Cooperation and Development (OECD), composed of governments of various countries, many of which we do business in. Additionally, our cash flows could be materially affected by the issuance of additional interpretive guidance by the U.S. Treasury regarding the capitalization and amortization of research and experimental expenses for tax purposes, as more fully described in <u>[Note 11](#i3254ddb0bbd740dd900dc699f73182d2_196)</u> to the consolidated financial statements. While we currently do not believe that the Inflation Reduction Act of 2022 will have a material impact on us, any additional regulatory guidance which may be issued under this act may have a material impact on our tax rate and financial results.

Additionally, we are subject to routine tax audits, investigations and proceedings in various jurisdictions. Tax authorities have disagreed, and may in the future disagree, with our judgments, and are taking increasingly aggressive positions, including with respect to our intercompany transactions. For example, we are currently involved in an ongoing dispute with the ITD in which the ITD asserts that we owe additional taxes for two transactions by which CTS India repurchased shares from its shareholders, as more fully described in <u>[Note 11](#i3254ddb0bbd740dd900dc699f73182d2_196)</u> to the consolidated financial statements. We may not accurately predict the outcomes of these audits, investigations and proceedings and the amounts ultimately paid upon their resolution could be materially different from the amounts previously included in our income tax provision. Adverse outcomes in any such audits, investigations or proceedings could increase our tax exposure and cause us to incur increased expense, which could materially adversely affect our results of operations and financial condition.

**Our business subjects us to considerable potential exposure to litigation and legal claims and could be materially adversely affected if we incur legal liability.**

We are subject to, and may become a party to, a variety of litigation or other claims and suits that arise from time to time in the conduct of our business. Our business is subject to the risk of litigation involving current and former employees, clients, alliance partners, subcontractors, suppliers, competitors, shareholders, government agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, regulatory actions or other litigation. While we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as deductibles and caps on amounts recoverable.

Our client engagements expose us to significant potential legal liability and litigation expense if we fail to meet our contractual obligations or otherwise breach obligations to third parties or if our subcontractors breach or dispute the terms of our agreements with them and impede our ability to meet our obligations to our clients. For example, third parties could claim that we or our clients, whom we typically contractually agree to indemnify with respect to the services and solutions we provide, infringe upon their IP rights. Any such claims of IP infringement could harm our reputation, cause us to incur substantial costs in defending ourselves, expose us to considerable legal liability or prevent us from offering some services or solutions in the future. We may have to engage in legal action to protect our own IP rights, and enforcing our rights may require considerable time, money and oversight, and existing laws in the various countries in which we provide services or solutions may offer only limited protection.

We also face considerable potential legal liability from a variety of other sources. Our acquisition activities have in the past and may in the future be subject to litigation or other claims, including claims from employees, clients, stockholders, or other third parties. We have also been the subject of a number of putative securities class action complaints and putative shareholder derivative complaints relating to the matters that were the subject of our now concluded internal investigation into potential violations of the FCPA and other applicable laws, and may be subject to such legal actions for these or other matters in the future. See "<u>[Part I, Item 3. Legal Proceedings](#i3254ddb0bbd740dd900dc699f73182d2_28)</u>" for more information. We establish reserves for these and other matters when a loss is considered probable and the amount can be reasonably estimated; however, the estimation of legal reserves and possible losses involves significant judgment and may not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation, and the actual losses arising from particular matters may exceed our estimates and materially adversely affect our results of operations.

**Item 1B**. **Unresolved Staff Comments**

None.

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| **Cognizant** | 23 | **December 31, 2022 Form 10-K** |

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**Item 2. Properties** 

We have operations in major metro areas across nearly 50 countries around the world, with our worldwide headquarters located in a leased facility in Teaneck, New Jersey in the United States. We utilize a global delivery model with delivery centers worldwide, including in-country, regional and global delivery centers. We have over 28 million square feet of owned and leased facilities for our delivery centers. Our largest delivery center presence is in India, representing 87% of our total delivery centers on a square-foot basis, with the largest presence in Chennai (10 million square feet), Hyderabad (4 million square feet), Pune (3 million square feet), Kolkata (3 million square feet) and Bangalore (2 million square feet). We also have a significant number of delivery centers in other countries, including the United States, Philippines, Germany, Canada, Mexico and countries throughout Europe. In addition, we have sales and marketing offices, innovation labs, and digital design and consulting centers in major business markets, including New York, London, Paris, Melbourne, and Singapore, among others, which are used to support our clients across all four of our reportable business segments.

We believe our current facilities are adequate to support our operations in the immediate future, and that we will be able to obtain suitable additional facilities on commercially reasonable terms as needed.

**Item 3. Legal Proceedings**

See <u>[Note 15](#i3254ddb0bbd740dd900dc699f73182d2_208)</u> to our consolidated financial statements.

**Item 4. Mine Safety Disclosures**

Not applicable.

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| **Cognizant** | 24 | **December 31, 2022 Form 10-K** |

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**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

Our Class A common stock trades on the Nasdaq Stock Market under the symbol "CTSH." As of December 31, 2022, the number of holders of record of our Class A common stock was 106 and the approximate number of beneficial holders of our Class A common stock was 501,800.

**Cash Dividends**

During 2022, we paid quarterly cash dividends of $0.27 per share, or $1.08 per share in total for the year. In February 2023, our Board of Directors approved a cash dividend of $0.29 per share with a record date of February 17, 2023 and a payment date of February 28, 2023. We intend to continue to pay quarterly cash dividends in accordance with our capital allocation framework. Future dividend payments depend on a variety of factors, including our cash flow generated from operations, cash and investment balances, net income, overall liquidity position, potential alternative uses of cash, such as acquisitions, and anticipated future economic conditions and financial results.

**Issuer Purchases of Equity Securities**

Our stock repurchase program, as amended in November 2022, allows for the repurchase of up to $11.5 billion, excluding fees and expenses, of our Class A common stock through open market purchases, including under a 10b5-1 Plan or in private transactions, including through ASR agreements entered into with financial institutions, in accordance with applicable federal securities laws. The repurchase program does not have an expiration date. The timing of repurchases and the exact number of shares to be purchased are determined by management, in its discretion, or pursuant to a 10b5-1 Plan, and will depend upon market conditions and other factors.

During the three months ended December 31, 2022, we repurchased $300 million of our Class A common stock under our stock repurchase program. The following table sets out the stock repurchase activity under our stock repurchase program during the fourth quarter of 2022 and the approximate dollar value of shares that may yet be purchased under the program as of December 31, 2022.

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|:---|:---|:---|:---|:---|
| **Month** | **Total Number<br>of Shares<br>Purchased** | **Average<br>Price Paid<br>per Share** | **Total Number of<br>Shares Purchased<br>as Part of Publicly<br>Announced<br>Plans or<br>Programs** | **Approximate<br>Dollar Value of Shares<br>that May Yet Be<br>Purchased under the<br>Plans or Programs<br>(in millions)** |
| October 1, 2022 - October 31, 2022 |  | $— |  | $1075 |
| November 1, 2022 - November 30, 2022 | 2759018 | 58.24 | 2759018 | 2914 |
| December 1, 2022 - December 31, 2022 | 2397159 | 58.12 | 2397159 | 2775 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 5156177 | $58.18 | 5156177 |  |

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We regularly purchase shares in connection with our stock-based compensation plans as shares of our Class A common stock are tendered by employees for payment of applicable statutory tax withholdings. For the three months ended December 31, 2022, we purchased 0.2 million shares at an aggregate cost of $15 million in connection with employee tax withholding obligations.

**Recent Sales of Unregistered Securities**

None.

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| **Cognizant** | 25 | **December 31, 2022 Form 10-K** |

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**Performance Graph**

The following graph compares the cumulative total stockholder return on our Class A common stock with the cumulative total return on the S&P 500 Index and the S&P 500 Information Technology Index for the period beginning December 31, 2017 and ending on the last day of our last completed fiscal year. The stock performance shown on the graph below is not indicative of future price performance.

**COMPARISON OF CUMULATIVE TOTAL RETURN**<sup>(1)(2)</sup>

**Among Cognizant, the S&P 500 Index and the S&P 500 Information Technology Index**

![ctsh-20221231_g3.jpg](ctsh-20221231_g3.jpg)

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|:---|:---|:---|:---|:---|:---|:---|
| **Company / Index** | **Base<br>Period<br>12/31/17** | **12/31/18** | **12/31/19** | **12/31/20** | **12/31/21** | **12/31/22** |
| Cognizant Technology Solutions Corp | $100 | $90.34 | $89.37 | $119.69 | $131.22 | $85.90 |
| S&P 500 Index | 100 | 95.62 | 125.72 | 148.85 | 191.58 | 156.88 |
| S&P 500 Information Technology Index | 100 | 99.71 | 149.86 | 215.63 | 290.08 | 208.30 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1)Graph assumes $100 invested on December 31, 2017 in our Class A common stock, the S&P 500 Index and the S&P 500 Information Technology Index.

&nbsp;&nbsp;&nbsp;&nbsp;(2)Cumulative total return assumes reinvestment of dividends.

**Item 6. [Reserved]**

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| **Cognizant** | 26 | **December 31, 2022 Form 10-K** |

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**Item 7.&nbsp;&nbsp;&nbsp;&nbsp; Management's Discussion and Analysis of Financial Condition and Results of Operations**

**Executive Summary**

Cognizant is one of the world's leading professional services companies, engineering modern businesses and delivering strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in a fast-changing world. We tailor our services and solutions to specific industries with an integrated global delivery model that employs client service and delivery teams based at client locations and dedicated global and regional delivery centers. Our services include digital services and solutions, consulting, application development, systems integration, quality engineering and assurance, application maintenance, infrastructure and security as well as business process services and automation. Digital services continue to be an important part of our portfolio, aligning with our clients' focus on becoming data-enabled, customer-centric and differentiated businesses.

**2022 Financial Results**

Revenues

Income from Operations

Operating Margin

Diluted EPS

![ctsh-20221231_g4.jpg](ctsh-20221231_g4.jpg)![ctsh-20221231_g5.jpg](ctsh-20221231_g5.jpg)![ctsh-20221231_g6.jpg](ctsh-20221231_g6.jpg)![ctsh-20221231_g7.jpg](ctsh-20221231_g7.jpg)

GAAP Adjusted<sup>1</sup>

GAAP Adjusted<sup>1</sup>

GAAP Adjusted<sup>1</sup>

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| | | | |
|:---|:---|:---|:---|
| Revenue up $921 million or 5.0% from 2021; 7.5% in constant currency<sup>1</sup> | Income from Operations up $142 million or 5.0% from 2021<br>Adjusted Income from Operations<sup>1</sup> up $122 million or 4.3% from 2021 | Operating margin flat compared to 2021<br>Adjusted Operating Margin<sup>1</sup> down 10 basis points from 2021 | Diluted EPS up $0.36 or 8.9% from 2021<br>Adjusted Diluted EPS<sup>1</sup> up $0.28 or 6.8% from 2021 |
| Revenue up $921 million or 5.0% from 2021; 7.5% in constant currency<sup>1</sup> | Income from Operations up $142 million or 5.0% from 2021<br>Adjusted Income from Operations<sup>1</sup> up $122 million or 4.3% from 2021 | Operating margin flat compared to 2021<br>Adjusted Operating Margin<sup>1</sup> down 10 basis points from 2021 | Diluted EPS up $0.36 or 8.9% from 2021<br>Adjusted Diluted EPS<sup>1</sup> up $0.28 or 6.8% from 2021 |
| Revenue up $921 million or 5.0% from 2021; 7.5% in constant currency<sup>1</sup> | Income from Operations up $142 million or 5.0% from 2021<br>Adjusted Income from Operations<sup>1</sup> up $122 million or 4.3% from 2021 | Operating margin flat compared to 2021<br>Adjusted Operating Margin<sup>1</sup> down 10 basis points from 2021 | Diluted EPS up $0.36 or 8.9% from 2021<br>Adjusted Diluted EPS<sup>1</sup> up $0.28 or 6.8% from 2021 |
| Revenue up $921 million or 5.0% from 2021; 7.5% in constant currency<sup>1</sup> | Income from Operations up $142 million or 5.0% from 2021<br>Adjusted Income from Operations<sup>1</sup> up $122 million or 4.3% from 2021 | Operating margin flat compared to 2021<br>Adjusted Operating Margin<sup>1</sup> down 10 basis points from 2021 | Diluted EPS up $0.36 or 8.9% from 2021<br>Adjusted Diluted EPS<sup>1</sup> up $0.28 or 6.8% from 2021 |

---

During the year ended December 31, 2022, revenues increased by $921 million as compared to the year ended December 31, 2021, representing growth of 5.0%, or 7.5% on a constant currency basis<sup>1</sup>. Our recently completed acquisitions contributed 100 basis points to revenue growth while the previously disclosed sale of the Samlink subsidiary, which was completed on February 1, 2022, negatively impacted revenue growth by 60 basis points.

Revenue growth was strongest in our Communications, Media and Technology and Products and Resources segments. Revenues in our Financial Services segment reflect the negative impact of the previously disclosed sale of the Samlink subsidiary, which was completed on February 1, 2022. For further details, see the "Revenues - Reportable Business Segments" section within the <u>[Results of Operations](#i3254ddb0bbd740dd900dc699f73182d2_58)</u>.

Revenue growth was driven by our clients' continued adoption and integration of digital technologies as well as pricing improvements but was negatively impacted by challenges attracting and retaining personnel and slowing demand for our services through the second half of 2022. For the year ended December 31, 2022, our attrition, including both voluntary and involuntary, was 31.7% as compared to 30.8% for the year ended December 31, 2021. For the three months ended December 31, 2022, our annualized attrition rate, including both voluntary and involuntary, was 25.3% as compared to 34.6% for the three months ended December 31, 2021. Attrition and hiring challenges have also resulted in increased cost of delivery.

<sup>1</sup> Adjusted Income From Operations, Adjusted Operating Margin, Adjusted Diluted EPS and constant currency revenue growth are not measurements of financial performance prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more information and reconciliations to the most directly comparable GAAP financial measures.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 27 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Our operating margin and Adjusted Operating Margin<sup>2</sup> were each 15.3% for the year ended December 31, 2022. Our 2022 operating margin was positively impacted by economies of scale that allowed us to leverage our cost structure over a larger organization, delivery efficiencies, pricing improvements and the depreciation of the Indian rupee against the U.S. dollar, partially offset by increased compensation costs for our delivery personnel (including employees and subcontractors) as well as a 30 basis point negative impact due to the impairment of certain capitalized costs related to a large volume-based contract with a Health Sciences client. Our 2021 GAAP operating margin was negatively impacted by the Class Action Settlement Loss, which was excluded from our Adjusted Operating Margin<sup>2</sup> in 2021.

**Business Outlook**

See "Overview" within <u>[Part I, Item 1. Business](#i3254ddb0bbd740dd900dc699f73182d2_16)</u> for information on our four strategic priorities.

We expect clients to continue to contend with industry-specific changes driven by evolving digital technologies, uncertainty in the regulatory environment, industry consolidation and convergence as well as international trade policies and other macroeconomic factors, including the increasing uncertainty related to the global economy, which could affect their demand for our services.

As a global professional services company, we compete on the basis of the knowledge, experience, insights, skills and talent of our employees and the value they can provide to our clients. Our success is dependent, in large part, on our ability to keep our supply of skilled employees, in particular those with experience in key digital areas, in balance with client demand. Competition for skilled employees in the current labor market is intense and in 2021 and 2022, we experienced significantly elevated voluntary attrition. We saw improvement in our annualized attrition rate for the three months ended December 31, 2022 and we expect our annualized attrition rate for the first quarter of 2023 to be lower than our full year 2022 rate. Attrition can be difficult to predict as it is impacted by both macroeconomic and internal factors. Challenges attracting and retaining personnel have negatively impacted and may continue to negatively impact cost of delivery and our ability to satisfy client demand. Further, our ongoing and anticipated future efforts with respect to recruitment, talent management and employee engagement may not be successful and may continue to result in increased compensation costs. While we strive to adjust pricing to reduce the impact of compensation increases on our operating margin, we may not be successful in fully recovering these increases, which could adversely affect our profitability.

The invasion of Ukraine by Russia and the sanctions and other measures being imposed in response to this conflict have increased the level of economic and political uncertainty worldwide. We do not have employees, facilities or significant operations in either Russia or Ukraine and revenues generated from clients in both countries were immaterial in both 2021 and 2022. However, the continuation of the hostilities or the expansion of the current conflict's scope into surrounding geographic areas could impact us or our clients, vendors or subcontractors, which could in turn impact our operations and financial performance. We continue to monitor the situation closely to ensure business continuity plans are in place for neighboring countries where we have a presence.

Our future results may be affected by potential tax law changes and other potential regulatory changes, including possible U.S. corporate income tax reform and potentially increased costs for employment and post-employment benefits in India as a result of the Code on Social Security, 2020. For additional information, see <u>[Part I, Item 1A. Risk Factors.](#i3254ddb0bbd740dd900dc699f73182d2_19)</u>

<sup>2</sup> Adjusted Operating Margin is not a measurement of financial performance prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more information and reconciliation to the most directly comparable GAAP financial measures.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 28 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Results of Operations**

*For a discussion of our results of operations for the year ended December 31, 2020, including a year-to-year comparison between 2021 and 2020, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report Form 10-K for the year ended December 31, 2021.*

**The Year Ended December 31, 2022 Compared to The Year Ended December 31, 2021** 

The following table sets forth certain financial data for the years ended December 31:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | | **Increase / Decrease** |
|<br>**(Dollars in millions, except per share data)** | **2022** | **% of**<br>**Revenues** | **2021** | **% of**<br>**Revenues** | $**%** |
| Revenues | $19428 | 100.0 | $18507 | 100.0 | 5.0 |
| Cost of revenues<sup>(a)</sup> | 12448 | 64.1 | 11604 | 62.7 | 7.3 |
| Selling, general and administrative expenses<sup>(a)</sup> | 3443 | 17.7 | 3503 | 18.9 | (1.7) |
| Depreciation and amortization expense | 569 | 2.9 | 574 | 3.1 | (0.9) |
| &nbsp;&nbsp;&nbsp;Income from operations | 2968 | 15.3 | 2826 | 15.3 | 5.0 |
| Other income (expense), net | 48 |  | 1 |  | \* |
| &nbsp;&nbsp;&nbsp;Income before provision for income taxes | 3016 | 15.5 | 2827 | 15.3 | 6.7 |
| Provision for income taxes | (730) |  | (693) |  | 5.3 |
| Income (loss) from equity method investments | 4 |  | 3 |  | 33.3 |
| &nbsp;&nbsp;&nbsp;Net income | $2290 | 11.8 | $2137 | 11.5 | 7.2 |
| Diluted EPS | $4.41 |  | $4.05 |  | 8.9 |
| *Other Financial Information* <sup>3</sup> |  |  |  |  |  |
| Adjusted Income From Operations and Adjusted Operating Margin | $2968 | 15.3 | $2846 | 15.4 | 4.3 |
| Adjusted Diluted EPS | $4.40 |  | $4.12 |  | 6.8 |

---

(a)&nbsp;&nbsp;&nbsp;&nbsp;Exclusive of depreciation and amortization expense&nbsp;&nbsp;&nbsp;&nbsp;

\*&nbsp;&nbsp;&nbsp;&nbsp;Not meaningful

***Revenues - Overall***

During 2022, revenues increased by $921 million as compared to 2021, representing growth of 5.0%, or 7.5% on a constant currency basis<sup>3</sup>. Our recently completed acquisitions contributed 100 basis points to revenue growth while the previously disclosed sale of the Samlink subsidiary, which was completed on February 1, 2022, negatively impacted revenue growth by 60 basis points. Revenue growth was driven by our clients' continued adoption and integration of digital technologies as well as pricing improvements but was negatively impacted by challenges attracting and retaining personnel and slowing demand for our services through the second half of 2022. Revenues from clients added during 2022 were $172 million.

<sup>3</sup> Adjusted Income From Operations, Adjusted Operating Margin, Adjusted Diluted EPS and constant currency revenue growth are not measurements of financial performance prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 29 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

***Revenues - Reportable Business Segments***

The following charts set forth revenues and change in revenues by reportable business segment and geography for the year ended December 31, 2022 as compared to the year ended December 31, 2021:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Financial Services** | **Financial Services** | **Financial Services** | **Health Sciences** | **Health Sciences** | **Health Sciences** |
| | | **Increase / (Decrease)** | **Increase / (Decrease)** | | **Increase / (Decrease)** | **Increase / (Decrease)** |
| **Dollars in millions** | **Revenues** | $**%** | **CC %**<sup>4</sup> | **Revenues** | $**%** | **CC %**<sup>4</sup> |
| North America | $4312 | 2.6 | 2.8 | $4853 | 6.2 | 6.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;United Kingdom | 599 | 9.5 | 18.6 | 171 | 1.8 | 10.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Continental Europe | 590 | (20.8) | (13.0) | 483 | 1.3 | 10.0 |
| Europe - Total | 1189 | (8.0) | 0.4 | 654 | 1.4 | 10.1 |
| Rest of World | 571 | 2.9 | 8.4 | 124 | 2.5 | 11.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6072 | 0.3 | 2.8 | $5631 | 5.5 | 6.8 |
|  | **Products and Resources** | **Products and Resources** | **Products and Resources** | **Communications, Media and Technology** | **Communications, Media and Technology** | **Communications, Media and Technology** |
|  |  | **Increase / (Decrease)** | **Increase / (Decrease)** |  | **Increase / (Decrease)** | **Increase / (Decrease)** |
| **Dollars in millions** | **Revenues** | $**%** | **CC %**<sup>4</sup> | **Revenues** | $**%** | **CC %**<sup>4</sup> |
| North America | $3078 | 4.8 | 5.0 | $2192 | 13.9 | 14.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;United Kingdom | 521 | 10.6 | 22.7 | 519 | 13.8 | 26.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Continental Europe | 585 | 8.5 | 21.1 | 137 | (13.3) | (2.6) |
| Europe - Total | 1106 | 9.5 | 21.8 | 656 | 6.8 | 18.8 |
| Rest of World | 382 | 16.1 | 20.8 | 311 | 2.0 | 9.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $4566 | 6.8 | 10.2 | $3159 | 11.1 | 14.6 |

---

***Financial Services*** *- revenues increased 0.3%, or 2.8% on a constant currency basis*<sup>4</sup><br>

![ctsh-20221231_g8.jpg](ctsh-20221231_g8.jpg)

---

| | | |
|:---|:---|:---|
| Banking | 🡻 | $97M |
| Insurance | 🡹 | $118M |

---

Revenue growth reflected the growing demand for digital services among U.S. regional banks, public sector clients in the United Kingdom and insurance clients. The previously disclosed sale of the Samlink subsidiary, which was completed on February 1, 2022, negatively impacted revenue growth in this segment by 170 basis points, or $104 million. Revenues from clients added since December 31, 2021 were $26 million.<sup>4</sup>

***Health Sciences*** *- revenues increased 5.5%, or 6.8% on a constant currency basis*<sup>4</sup><br>

Effective in the second quarter of 2022, we combined the healthcare operating segment with the life sciences operating segment and renamed our Healthcare reportable business segment to Health Sciences. See <u>[Note 1](#i3254ddb0bbd740dd900dc699f73182d2_220)[8](#i3254ddb0bbd740dd900dc699f73182d2_220)</u> to our consolidated financial statements for additional information.

Revenue growth was driven by increased demand for digital services among healthcare and pharmaceutical clients. Revenues from clients added since December 31, 2021 were $23 million. ![ctsh-20221231_g9.jpg](ctsh-20221231_g9.jpg)

---

| | |
|:---|:---|
| 🡹 | $294M |

---

<sup>4</sup> Constant currency revenue growth is not a measurement of financial performance prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more information.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 30 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

***Products and Resources*** *- revenues increased 6.8%, or 10.2% on a constant currency basis*<sup>5</sup><br>

![ctsh-20221231_g10.jpg](ctsh-20221231_g10.jpg)

---

| | |
|:---|:---|
| Manufacturing, Logistics, Energy and Utilities | $151M |
| Retail and Consumer Goods | $78M |
| Travel and Hospitality | $61M |

---

Revenue growth in this segment was primarily driven by demand for our digital services among automotive, logistics, utilities, consumer goods and travel and hospitality clients. Revenue growth in this segment included approximately 200 basis points related to recently completed acquisitions. Revenues from clients added since December 31, 2021 were $54 million.<sup>5</sup>

***Communications, Media and Technology*** *- revenues increased 11.1%, or 14.6% on a constant currency basis*<sup>5</sup><br>

In 2022, we combined the communications and media operating segment with the technology operating segment. See <u>[Note 1](#i3254ddb0bbd740dd900dc699f73182d2_220)[8](#i3254ddb0bbd740dd900dc699f73182d2_220)</u> to our consolidated financial statements for additional information.

Revenues in this segment reflected growing demand from our technology clients for services related to digital content, primarily driven by the largest clients in this segment, as well as demand for personalized user experiences and data modernization. Revenues from clients added since December 31, 2021 were $69 million.![ctsh-20221231_g11.jpg](ctsh-20221231_g11.jpg)

---

| | |
|:---|:---|
| 🡹 | $316M |

---

***Revenues - Geographic Markets***

Revenues of $19,428 million by geographic market were as follows for the year ended December 31, 2022:

![ctsh-20221231_g12.jpg](ctsh-20221231_g12.jpg)

---

| | | |
|:---|:---|:---|
| **2022 as compared to 2021** | **Increase / (Decrease)** | **Increase / (Decrease)** |
| **(Dollars in millions)** | $**%** | **CC %**<sup>5</sup> |
| North America | 5.9 | 6.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;United Kingdom | 10.2 | 21.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Continental Europe | (6.5) | 3.1 |
| Europe - Total | 1.2 | 11.4 |
| Rest of World | 6.0 | 12.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 5.0 | 7.5 |

---

North America continues to be our largest market, representing 74.3% of total revenues for the year ended December 31, 2022. Outside of our North America region, revenues were negatively impacted by foreign currency exchange rate movements. Constant currency revenue growth in the United Kingdom was strong among Communications, Media and Technology clients, Products and Resources clients and Financial Services clients, including certain public sector clients. Constant currency revenue growth in the Continental Europe region was driven by growth in the German market, which benefited from an acquisition that closed in the first half of 2021 and strong demand from our pharmaceutical clients, partially offset by a negative 540 basis point, or $104 million, impact from the previously disclosed sale of the Samlink subsidiary, which was completed on February 1, 2022. Constant currency revenue growth in the Rest of World region was primarily driven by the Australian market, which benefited from an acquisition that closed in the first half of 2021.

<sup>5</sup> Constant currency revenue growth is not a measurement of financial performance prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more information.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 31 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

***Cost of Revenues (Exclusive of Depreciation and Amortization Expense)***

![ctsh-20221231_g13.jpg](ctsh-20221231_g13.jpg)

---

| | |
|:---|:---|
| 🡹 | $844M |
| 🡹 | 1.4% as a % of revenue |
| ⚪ % of Revenues | ⚪ % of Revenues |

---

Our cost of revenues consists primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, project-related immigration and travel for technical personnel, subcontracting and equipment costs relating to revenues. The increase, as a percentage of revenues, was due to higher compensation costs for delivery personnel (including employees and subcontractors) as well as a 30 basis point negative impact due to the impairment of certain capitalized costs related to a large volume-based contract with a Health Sciences client, partially offset by delivery efficiencies and the depreciation of the Indian rupee against the U.S. dollar. Challenges attracting and retaining highly qualified personnel have resulted in higher compensation costs.

***SG&A Expenses (Exclusive of Depreciation and Amortization Expense)***<br>

SG&A expenses consist primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, immigration, travel, marketing, communications, management, finance, administrative and occupancy costs. The decrease, as a percentage of revenues, was primarily due to economies of scale that allowed us to leverage our cost structure over a larger organization, the beneficial impact of foreign currency exchange rate movements and the optimization of non-strategic SG&A expenses.

![ctsh-20221231_g14.jpg](ctsh-20221231_g14.jpg)

---

| | |
|:---|:---|
| 🡻 | $60M |
| 🡻 | 1.2% as a % of revenue |
| ⚪ % of Revenues | ⚪ % of Revenues |

---

***Depreciation and Amortization Expense***

Depreciation and amortization expense decreased by 0.2%, as a percentage of revenue in 2022 as compared to 2021 primarily due to scale, as the expense remained relatively flat while revenues increased.

***Operating Margin and Adjusted Operating Margin***<sup>6</sup> ***- Overall***<br>

![ctsh-20221231_g15.jpg](ctsh-20221231_g15.jpg)![ctsh-20221231_g16.jpg](ctsh-20221231_g16.jpg)Our 2022 operating margin was positively impacted by economies of scale that allowed us to leverage our cost structure over a larger organization, delivery efficiencies and the depreciation of the Indian rupee against the U.S. dollar, partially offset by increased compensation costs for our delivery personnel (including employees and subcontractors) as well as a 30 basis point negative impact due to the impairment of certain capitalized costs related to a large volume-based contract with a Health Sciences client. Our 2021 GAAP operating margin was negatively impacted by the Class Action Settlement Loss, which was excluded from our Adjusted Operating Margin<sup>6</sup> in 2021. 

<sup>6</sup> Adjusted Income From Operations and Adjusted Operating Margin are not measurements of financial performance prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 32 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

A predominant portion of our costs in India are denominated in the Indian rupee, representing approximately 23.5% of our global operating costs during the year ended December 31, 2022. These costs are subject to foreign currency exchange rate fluctuations, which have an impact on our results of operations. We enter into foreign exchange derivative contracts to hedge certain Indian rupee denominated payments in India. These hedges are intended to mitigate the volatility of the changes in the exchange rate between the U.S. dollar and the Indian rupee. Net of the impact of the hedges, the depreciation of the Indian rupee contributed 73 basis points to the improvement in our operating margin for the year ended December 31, 2022 as compared to December 31, 2021.

Excluding the impact of applicable designated cash flow hedges, the depreciation of the Indian rupee against the U.S. dollar positively impacted our operating margin by approximately 115 basis points in 2022, while in 2021 the appreciation of the Indian rupee against the U.S. dollar negatively impacted our operating margin by approximately 5 basis points. Each additional 1.0% change in exchange rate between the Indian rupee and the U.S. dollar will have the effect of moving our operating margin by approximately 18 basis points (excluding the impact of our cash flow hedges). In 2022, the settlement of our cash flow hedges negatively impacted our operating margin by approximately 7 basis points, compared to a positive impact of 35 basis points in 2021.

We finished the year ended December 31, 2022 with approximately 355,300 employees as compared to 330,600 employees for the year ended December 31, 2021. Annualized attrition, including both voluntary and involuntary, was approximately 25.3% for the three months ended December 31, 2022. Attrition, including both voluntary and involuntary, was approximately 31.7% for the year ended December 31, 2022.

![ctsh-20221231_g17.jpg](ctsh-20221231_g17.jpg)

\* Annualized attrition

***Segment Operating Profit***

In 2022, we made certain changes to the internal measurement of segment operating profit for the purpose of evaluating segment performance and resource allocation. The primary reason for the change was to charge to the segments the costs that they directly manage and control. Specifically, segment operating profit now includes costs related to non-delivery personnel that support consulting services, which were previously included in "unallocated costs." We have reported 2022 segment operating profits using the new allocation methodology and have recast the 2021 results to conform to the new methodology. Segment operating profit and operating margin percentage were as follows:

![ctsh-20221231_g18.jpg](ctsh-20221231_g18.jpg)![ctsh-20221231_g19.jpg](ctsh-20221231_g19.jpg)![ctsh-20221231_g20.jpg](ctsh-20221231_g20.jpg)![ctsh-20221231_g21.jpg](ctsh-20221231_g21.jpg)

---

| | | |
|:---|:---|:---|
| Segment operating profit | % | Segment operating margin |

---

In 2022, segment operating margins benefited from delivery efficiencies and the depreciation of the Indian rupee against the U.S. dollar offset by increased compensation costs for delivery personnel (including employees and subcontractors). The 2022 Health Sciences segment operating margin was negatively affected by the impairment of certain capitalized costs related to a large volume-based contract with a Health Sciences client, investments to support revenue growth and elevated pricing pressure.

Total segment operating profit was as follows for the year ended December 31:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(Dollars in millions)** | **2022** | **% of Revenues** | **2021** | **% of Revenues** | **Increase** |
| Total segment operating profit | $5746 | 29.6 | $5460 | 29.5 | $286 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: unallocated costs | 2778 | 14.3 | 2634 | 14.2 | 144 |
| Income from operations | $2968 | 15.3 | $2826 | 15.3 | $142 |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | 33 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

***Other Income (Expense), Net***

Total other income (expense), net consists primarily of foreign currency exchange gains and losses, interest income and interest expense. The following table sets forth total other income (expense), net for the years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **Increase / Decrease** |
| Foreign currency exchange (losses) | $(16) | $(33) | $17 |
| Gains on foreign exchange forward contracts not designated as hedging instruments | 23 | 13 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange gains (losses), net | 7 | (20) | 27 |
| Interest income | 59 | 30 | 29 |
| Interest expense | (19) | (9) | (10) |
| Other, net | 1 |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | $48 | $1 | $47 |

---

The foreign currency exchange losses were attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries. The gains on foreign exchange forward contracts not designated as hedging instruments related to the realized and unrealized gains and losses on contracts entered into to offset our foreign currency exposures. As of December 31, 2022, the notional value of our undesignated hedges was $1,433 million. The increase in interest income and interest expense was each primarily attributable to higher interest rates in the current period.

***Provision for Income Taxes***

![ctsh-20221231_g22.jpg](ctsh-20221231_g22.jpg)

---

| | |
|:---|:---|
| 🡹 | $37M |
| ⚪ Effective Income Tax Rate 🡻 0.3% | ⚪ Effective Income Tax Rate 🡻 0.3% |

---

The effective income tax rate in 2022 decreased as compared to the 2021 period primarily due to higher discrete tax benefits in 2022, such as the recognition in the third quarter of 2022 of an income tax benefit of $36 million related to a specific uncertain tax position that was previously unrecognized in our prior-year consolidated financial statements and the impact of depreciation of the Indian rupee against the U.S. dollar on our undistributed foreign earnings, partially offset by changes in the geographic mix of taxable income. See <u>[Note 11](#i3254ddb0bbd740dd900dc699f73182d2_196)</u> to our consolidated financial statements for additional information.

***Net Income***

The increase in net income was primarily driven by higher income from operations. ![ctsh-20221231_g23.jpg](ctsh-20221231_g23.jpg)

---

| | |
|:---|:---|
| 🡹 | $153M |
| ⚪ % of Revenues | ⚪ % of Revenues |

---

**Non-GAAP Financial Measures**&nbsp;&nbsp;&nbsp;&nbsp;

Portions of our disclosure include non-GAAP financial measures. 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. In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to the corresponding GAAP measures set forth below should be carefully evaluated.

Our non-GAAP financial measures Adjusted Operating Margin and Adjusted Income From Operations exclude unusual items, such as the Class Action Litigation Settlement in 2021. Our non-GAAP financial measure Adjusted Diluted EPS excludes unusual items, such as the Class Action Litigation Settlement in 2021 and the effect of recognition in the third quarter of 2022 of an income tax benefit related to a specific uncertain tax position that was previously unrecognized in our prior-year consolidated financial statements, net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments. The income tax impact of each item excluded from Adjusted Diluted EPS is calculated by applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred. Constant currency revenue growth is

---

| | | |
|:---|:---|:---|
| **Cognizant** | 34 | **December 31, 2022 Form 10-K** |

---

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defined as revenues for a given period restated at the comparative period's foreign currency exchange rates measured against the comparative period's reported revenues. Free cash flow is defined as cash flows from operating activities net of purchases of property and equipment.

We believe providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into our operating results. For internal management reporting and budgeting purposes, we use various GAAP and non-GAAP financial measures for financial and operational decision-making, to evaluate period-to-period comparisons, to determine portions of the compensation for executive officers and for making comparisons of our operating results to those of our competitors. We believe that the presentation of non-GAAP financial measures, which exclude certain costs, read in conjunction with out reported GAAP results and reconciliations to the most comparable GAAP measure, as applicable, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.

A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and may exclude costs that are recurring such as net non-operating foreign currency exchange gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure, as applicable, for the years ended December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(Dollars in millions, except per share data)** | **2022** | **% of<br>Revenues** | **2021** | **% of<br>Revenues** |
| GAAP income from operations and operating margin | $2968 | 15.3% | $2826 | 15.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class Action Settlement Loss <sup>(1)</sup> |  |  | 20 | 0.1 |
| Adjusted Income From Operations and Adjusted Operating Margin | $2968 | 15.3% | $2846 | 15.4% |
| GAAP diluted EPS | $4.41 |  | $4.05 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of above adjustments, pre-tax |  |  | 0.04 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of non-operating foreign currency exchange losses (gains), pre-tax <sup>(2)</sup> | (0.01) |  | 0.03 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax effect of above adjustments <sup>(3)</sup> | 0.07 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of recognition of income tax benefit related to an uncertain tax position <sup>(4)</sup> | (0.07) |  |  |  |
| Adjusted Diluted EPS | $4.40 |  | $4.12 |  |
| Net cash provided by operating activities | $2568 |  | $2495 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (332) |  | (279) |  |
| Free cash flow | $2236 |  | $2216 |  |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;During 2021, we recorded a Class Action Settlement Loss in "Selling, general and administrative expenses" in our consolidated financial statements. For further information, see "Note 15 - Commitments and Contingencies" in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in "Foreign currency exchange gains (losses), net" in our consolidated statements of operations.

(3)&nbsp;&nbsp;&nbsp;&nbsp;Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income for the years ended December 31:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Non-GAAP income tax benefit (expense) related to: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Class Action Settlement Loss | $— | $6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange gains and losses | (39) | (5) |

---

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| | | |
|:---|:---|:---|
| **Cognizant** | 35 | **December 31, 2022 Form 10-K** |

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The effective tax rate related to non-operating foreign currency exchange gains and losses varies depending on the jurisdictions in which such income and expenses are generated and the statutory rates applicable in those jurisdictions. As such, the income tax effect of non-operating foreign currency exchange gains and losses shown in the above table may not appear proportionate to the net pre-tax foreign currency exchange gains and losses reported in our consolidated statements of operations.

(4)&nbsp;&nbsp;&nbsp;&nbsp;During the three months ended September 30, 2022, we recognized an income tax benefit of $36 million related to a specific uncertain tax position that was previously unrecognized in our prior-year consolidated financial statements. The recognition of the benefit in the third quarter of 2022 was based on management's reassessment regarding whether this unrecognized tax benefit met the more-likely-than-not threshold in light of the lapse in the statute of limitations as to a portion of such benefit.

**Liquidity and Capital Resources**

Cash generated from operations has historically been our primary source of liquidity to fund operations and investments to grow our business. As of December 31, 2022, we had cash, cash equivalents and short-term investments of $2,501 million. Additionally, as of December 31, 2022, we had available capacity under our credit facilities of approximately $2,000 million.

The following table provides a summary of our cash flows for the years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **Increase / Decrease** |
| Net cash provided by (used in): |  |  |  |
| Operating activities | $2568 | $2495 | $73 |
| Investing activities | (106) | (2164) | 2058 |
| Financing activities | (1939) | (1203) | (736) |
| *Other Cash Flow Information*<sup>7</sup> |  |  |  |
| Free cash flow | 2236 | 2216 | 20 |

---

**Operating activities**<sup>7</sup>

The increase in cash provided by operating activities in 2022 compared to 2021 was primarily driven by higher income from operations.

We monitor turnover, aging and the collection of trade accounts receivable by client. Our DSO calculation includes trade accounts receivable, net of allowance for credit losses, and contract assets, reduced by the uncollected portion of our deferred revenue. DSO was 74 days as of December 31, 2022 and 69 days as of December 31, 2021.

**Investing activities**

The decrease in cash used in investing activities in 2022 compared to 2021 was primarily driven by net maturities of investments in 2022 as compared to net purchases of investments in 2021 as well as lower payments for business combinations in 2022.

**Financing activities**

The increase in cash used in financing activities in 2022 compared to 2021 was primarily driven by higher repurchases of common stock.

In October 2022, we completed a debt refinancing and entered into the New Credit Agreement with a commercial bank syndicate providing for a $650 million New Term Loan and a $1,850 million unsecured revolving credit facility, which are each due to mature in October 2027. The Credit Agreement was terminated upon the closing of the New Credit Agreement and the proceeds from the New Term Loan were used primarily to repay our outstanding Term Loan balance. We are required under the New Credit Agreement to make scheduled quarterly principal payments on the New Term Loan beginning in December 2023. See <u>[Note 10](#i3254ddb0bbd740dd900dc699f73182d2_193)</u> to our consolidated financial statements. We believe that we currently meet all conditions set forth in the New Credit Agreement to borrow thereunder, and we are not aware of any conditions that would prevent us from borrowing part or all of the remaining available capacity under the revolving credit facility as of December 31, 2022 and through the date of this filing. As of December 31, 2022, we had no outstanding balance on our revolving credit facility.

<sup>7</sup> Free cash flow is not a measurement of financial performance prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more information.

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| | | |
|:---|:---|:---|
| **Cognizant** | 36 | **December 31, 2022 Form 10-K** |

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In March 2022, our India subsidiary renewed its one-year 13 billion Indian rupee ($157 million at the December 31, 2022 exchange rate) working capital facility, which requires us to repay any balances drawn down within 90 days from the date of disbursement. There is a 1.0% prepayment penalty applicable to payments made within 30 days of disbursement. This working capital facility contains affirmative and negative covenants and is renewable annually. As of December 31, 2022, there was no balance outstanding under the working capital facility.

**Capital Allocation Framework**

![ctsh-20221231_g24.jpg](ctsh-20221231_g24.jpg)

---

| |
|:---|
| Acquisitions |
| Share repurchases |
| Dividend payments |

---

Our capital allocation framework anticipates the deployment of approximately 50% of our free cash flow<sup>8</sup> for acquisitions, 25% for share repurchases and 25% for dividend payments. We review our capital allocation on an ongoing basis, considering our financial performance and liquidity position, investments required to execute our strategic plans and initiatives, acquisition opportunities, the economic outlook, regulatory changes and other relevant factors. As these factors may change over time, the actual amounts expended on stock repurchase activity, dividends, and acquisitions, if any, during any particular period cannot be predicted and may fluctuate from time to time.

**Other Liquidity and Capital Resources Information** 

We seek to ensure that our worldwide cash is available in the locations in which it is needed. As part of our ongoing liquidity assessments, we regularly monitor the mix of our domestic and international cash flows and cash balances. We evaluate on an ongoing basis what portion of the non-U.S. cash, cash equivalents and short-term investments is needed locally to execute our strategic plans and what amount is available for repatriation back to the United States.

We expect operating cash flows, cash and short-term investment balances, together with the available capacity under our revolving credit facilities, to be sufficient to meet our operating requirements, including purchase commitments, tax payments, including Tax Reform Act transition tax payments, and servicing our debt for the next twelve months. Our Tax Reform Act transition tax payments are due in annual installments of $94 million, $126 million and $157 million for the years 2023, 2024 and 2025, respectively. In 2022, our Tax Reform Act transition tax payment was $50 million. We also have purchase commitments of approximately $350 million that will be paid over the next three years, of which approximately $150 million will be paid during the next twelve months. See <u>[Note 7](#i3254ddb0bbd740dd900dc699f73182d2_184)</u> to our consolidated financial statements for a description of our operating lease obligations.

Provisions enacted in the Tax Reform Act in December 2017 related to the capitalization of research and experimental expenditures became effective on January 1, 2022. These provisions require us to capitalize research and experimental expenditures and amortize them for tax purposes over five or fifteen years, depending on where the research is conducted. Previously these expenses could be deducted in the year incurred. The implementation of these provisions has increased our income taxes payable in the United States for the 2022 tax year by approximately $300 million. The incremental tax amount related to the 2022 mandatory capitalization of research and experimental expenditures had not been paid as of December 31, 2022, and will be paid on or before April 15, 2023. We estimate an additional similar amount of cash taxes to be paid in 2023 related to the capitalization of 2023 research and experimental expenditures. The capitalized expenses are recorded as a deferred tax asset and do not significantly impact our effective income tax rate.

The ability to expand and grow our business in accordance with current plans, make acquisitions, meet long-term capital requirements beyond a twelve-month period and execute our capital return plan will depend on many factors, including the rate, if any, at which cash flow increases, our ability and willingness to pay for acquisitions with capital stock and the availability of public and private debt, including the ability to extend the maturity of or refinance our existing debt, and equity financing. We cannot be certain that additional financing, if required, will be available on terms and conditions acceptable to us, if at all.

<sup>8</sup> Free cash flow is not a measurement of financial performance prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more information.

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| | | |
|:---|:---|:---|
| **Cognizant** | 37 | **December 31, 2022 Form 10-K** |

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**Critical Accounting Estimates**

Management's discussion and analysis of our financial condition and results of operations is based on our accompanying consolidated financial statements that have been prepared in accordance with GAAP. We base our estimates on historical experience, current trends and on various other assumptions that are believed to be relevant at the time our consolidated financial statements are prepared. We evaluate our estimates on a continuous basis. However, the actual amounts may differ from the estimates used in the preparation of our consolidated financial statements.

We believe the following accounting estimates are the most critical to aid in fully understanding and evaluating our consolidated financial statements as they require the most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. Changes to these estimates could have a material effect on our results of operations and financial condition. Our significant accounting policies are described in <u>[Note 1](#i3254ddb0bbd740dd900dc699f73182d2_163)</u> to our consolidated financial statements.

*Revenue Recognition*. Revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract's total labor cost to-date bears to the total expected labor costs. Revenues related to fixed-price application maintenance, quality engineering and assurance and business process services are recognized using the cost-to-cost method, if the right to invoice is not representative of the value being delivered. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information. Such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known. Net changes in estimates of such future costs were immaterial to the consolidated results of operations for the periods presented.

*Income Taxes.* Determining the consolidated provision for income taxes, deferred income tax assets (and related valuation allowance, if any) and liabilities requires significant judgment. We are required to calculate and provide for income taxes in each of the jurisdictions where we operate. Changes in the geographic mix of income before taxes or estimated level of annual pre-tax income can affect our overall effective income tax rate. In addition, transactions between our affiliated entities are arranged in accordance with applicable transfer pricing laws, regulations and relevant guidelines. As a result, and due to the interpretive nature of certain aspects of these laws and guidelines, we have pending applications for APAs before the taxing authorities in some of our most significant jurisdictions. It could take years for the relevant taxing authorities to negotiate and conclude these applications. The consolidated provision for income taxes may change period to period based on changes in facts and circumstances, such as settlements of income tax audits, the expiration of the applicable statute of limitations or finalization of our applications for APAs.

Our provision for income taxes also includes the impact of reserves established for uncertain income tax positions, as well as the related interest, which may require us to apply judgment to complex issues and may require an extended period of time to resolve. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final outcome of these matters will not differ from our recorded amounts. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of the applicable statute of limitations. To the extent that the final outcome of these matters differs from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made.

*Business Combinations, Goodwill and Intangible Assets*. Goodwill and intangible assets, including indefinite-lived intangible assets, arise from the accounting for business combinations. We account for business combinations using the acquisition method which requires us to estimate the fair value of identifiable assets acquired, liabilities assumed, including any contingent consideration, and any noncontrolling interest in the acquiree to properly allocate purchase price to the individual assets acquired and liabilities assumed. The allocation of the purchase price utilizes estimates and assumptions in determining the fair values of identifiable assets acquired and liabilities assumed, especially with respect to intangible assets, including the timing and amount of forecasted revenues and cash flows, anticipated growth rates, client attrition rates and the discount rate reflecting the risk inherent in future cash flows.

At each acquisition date, we allocate goodwill and intangible assets to our reporting units based on how we expect each reporting unit to benefit from the respective business combination. Our seven industry-based operating segments are our reporting units. We exercise judgment to allocate goodwill to the reporting units expected to benefit from each business combination. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, regulatory environment, established business plans, operating performance indicators or competition. Evaluation of goodwill for impairment requires

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| | | |
|:---|:---|:---|
| **Cognizant** | 38 | **December 31, 2022 Form 10-K** |

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judgment, including the identification of reporting units, assignment of assets, liabilities and goodwill to reporting units and determination of the fair value of each reporting unit.

We estimate the fair value of our reporting units using a combination of an income approach, utilizing a discounted cash flow analysis, and a market approach, using market multiples. Under the income approach, we estimate projected future cash flows, the timing of such cash flows and long-term growth rates, and determine the appropriate discount rate that reflects the risk inherent in the projected future cash flows. The discount rate used is based on a market participant weighted-average cost of capital and may be adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected future cash flows. Under the market approach, we estimate fair value based on market multiples of revenues and earnings derived from comparable publicly-traded companies with characteristics similar to the reporting unit. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.

Based on our most recent evaluation of goodwill performed during the fourth quarter of 2022, we concluded that the goodwill in each of our reporting units was not at risk of impairment. As of December 31, 2022, our goodwill balance was $5,710 million.

We review our finite-lived assets, including our finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The carrying amount may not be recoverable when the sum of undiscounted expected future cash flows is less than the carrying amount of such asset groups. The impairment loss is determined as the amount by which the carrying amount of the asset group exceeds its fair value. Assessing the fair value of asset groups involves significant estimates and assumptions including estimation of future cash flows, the timing of such cash flows and discount rates reflecting the risk inherent in future cash flows.

**Recently Adopted and New Accounting Pronouncements**

See <u>[Note 1](#i3254ddb0bbd740dd900dc699f73182d2_163)</u> to our consolidated financial statements for additional information.

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| | | |
|:---|:---|:---|
| **Cognizant** | 39 | **December 31, 2022 Form 10-K** |

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**Item 7A. Quantitative and Qualitative Disclosures about Market Risk**

**Foreign Currency Risk**

We are exposed to foreign currency exchange rate risk in the ordinary course of doing business as we transact or hold a portion of our funds in foreign currencies. Accordingly, we periodically evaluate the need for hedging strategies, including the use of derivative financial instruments, to mitigate the effect of foreign currency exchange rate fluctuations and expect to continue to use such instruments in the future to reduce foreign currency exposure to changes in the value of certain foreign currencies. All hedging transactions are authorized and executed pursuant to regularly reviewed policies and procedures.

Revenues from our clients in the United Kingdom, Continental Europe and Rest of World represented 9.3%, 9.2% and 7.1%, respectively, of our 2022 revenues, and are typically denominated in currencies other than the U.S. dollar. Accordingly, our revenues may be affected by fluctuations in the exchange rates, primarily the British pound and the Euro, as compared to the U.S. dollar.

A predominant portion of our costs in India are denominated in the Indian rupee, representing 23.5% of our global operating costs during 2022, and are subject to foreign currency exchange rate fluctuations. These foreign currency exchange rate fluctuations have an impact on our results of operations.

We have entered into a series of foreign exchange forward contracts that are designated as cash flow hedges of certain Indian rupee denominated payments in India. These U.S. dollar / Indian rupee hedges are intended to partially offset the impact of movement of exchange rates on future operating costs. As of December 31, 2022, the notional value and weighted average contract rates of these contracts by year of maturity were as follows:

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| | | |
|:---|:---|:---|
| | **Notional Value <br>(in millions)** | **Weighted Average Contract Rate (Indian rupee to U.S. dollar)** |
| 2023 | $1865 | 81.3 |
| 2024 | 1010 | 84.3 |
| Total | $2875 | 82.3 |

---

As of December 31, 2022, the net unrealized loss on our outstanding foreign exchange forward contracts designated as cash flow hedges was $68 million. Based upon a sensitivity analysis at December 31, 2022, which estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange forward contracts designated as cash flow hedges of approximately $267 million.

A portion of our balance sheet is exposed to foreign currency exchange rate fluctuations, which may result in non-operating foreign currency exchange gains or losses upon remeasurement. In 2022, we reported foreign currency exchange losses, exclusive of hedging gains, of approximately $16 million, which were primarily attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries. We use foreign exchange forward contracts that are scheduled to mature in the first quarter of 2023 to provide an economic hedge against balance sheet exposure to certain monetary assets and liabilities denominated in currencies other than the functional currency of the subsidiary. At December 31, 2022, the notional value of these outstanding contracts was $1,433 million and the net unrealized loss was $1 million. Based upon a sensitivity analysis of our foreign exchange forward contracts at December 31, 2022, which estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange forward contracts not designated as hedges of approximately $79 million.

**Interest Rate Risk**

In October 2022, we completed a debt refinancing and entered into the New Credit Agreement with a commercial bank syndicate providing for a $650 million New Term Loan and a $1,850 million unsecured revolving credit facility, which are due to mature in October 2027. The New Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the New Credit Agreement), plus, in each case, an Applicable Margin (as defined in the New Credit Agreement). The New Term Loan is a Term Benchmark loan. Thus, our debt exposes us to market risk from changes in interest rates. We performed a sensitivity analysis to determine the effect of interest rate fluctuations on our interest expense. A 100 basis point change in interest rates, with all other variables held constant, would have an immaterial effect on our reported interest expense.

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|:---|:---|:---|
| **Cognizant** | 40 | **December 31, 2022 Form 10-K** |

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We have $1,238 million of cash equivalents and $310 million of short-term investments as of December 31, 2022. Our cash equivalents consist of commercial paper, money market funds and time deposits. Our short-term investments consist primarily of certificates of deposits and commercial paper, classified as either available-for-sale or held-to-maturity, and time deposits. Our investments are exposed to fluctuations in interest rates, which may affect our interest income and the fair market value of our investments. As of December 31, 2022, a 100 basis point change in interest rates, with all other variables held constant, would have an immaterial effect on the fair value of our available-for-sale and held-to-maturity securities.

Information provided by the sensitivity analysis of foreign currency risk and interest rate risk does not necessarily represent the actual changes that would occur under normal market conditions.

**Item 8. Financial Statements and Supplementary Data**

The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. A list of the financial statements filed herewith is found in Part IV, "<u>[Item 15. Exhibits, Financial Statements and Financial Statement Schedule.](#i3254ddb0bbd740dd900dc699f73182d2_124)</u>"

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures**

Our management, under the supervision and with the participation of our chief executive officer and our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of December 31, 2022. Based on this evaluation, our chief executive officer and our chief financial officer concluded that, as of December 31, 2022, our disclosure controls and procedures were effective.

**Changes in Internal Control over Financial Reporting**

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the fiscal quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Management's Responsibility for Financial Statements**

Our management is responsible for the integrity and objectivity of all information presented in this annual report. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and include amounts based on management's best estimates and judgments. Management believes the consolidated financial statements fairly reflect the form and substance of transactions and that the financial statements fairly represent the Company's financial position and results of operations.

The Audit Committee of the Board of Directors, which is composed solely of independent directors, meets regularly with the Company's independent registered public accounting firm and representatives of management to review accounting, financial reporting, internal control and audit matters, as well as the nature and extent of the audit effort.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 41 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Management's Report on Internal Control Over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended, and is a process designed by, or under the supervision of, our chief executive and chief financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Our management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2022. In making this assessment, the Company's management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in *Internal Control-Integrated Framework (2013)*.

Based on its evaluation, our management has concluded that, as of December 31, 2022, our internal control over financial reporting was effective. PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements included in this annual report, has issued an attestation report on our internal control over financial reporting, as stated in their report which is included on page F-2.

**Inherent Limitations of Internal Controls**

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

**Item 9B. Other Information**

None.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections** 

Not applicable.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 42 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance**

The information relating to our executive officers in response to this item is contained in part under the caption "Information About Our Executive Officers" in <u>[Part I](#i3254ddb0bbd740dd900dc699f73182d2_13)</u> of this Annual Report on Form 10-K.

We have adopted a written code of ethics, entitled "Code of Ethics," that applies to all of our directors, executive officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. We make available our code of ethics free of charge through our website which is located at *www.cognizant.com*. We intend to post on our website all disclosures that are required by law or Nasdaq Stock Market listing standards concerning any amendments to, or waivers from, any provision of our code of ethics.

The remaining information required by this item will be included under the caption "Corporate governance" in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, which will be filed with the SEC pursuant to Regulation 14A not later than 120 days after the end of the fiscal year ended December 31, 2022 and is incorporated herein by reference to such proxy statement.

**Item 11. Executive Compensation**

The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference to such proxy statement.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference to such proxy statement.

**Item 13. Certain Relationships and Related Transactions, and Director Independence**

The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference to such proxy statement.

**Item 14. Principal Accountant Fees and Services**

The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference to such proxy statement.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 43 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**PART IV**

**Item 15. Exhibits, Financial Statement Schedules**

---

| | |
|:---|:---|
| (a) | &nbsp;&nbsp;&nbsp;&nbsp;(1) Consolidated Financial Statements.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reference is made to the Index to Consolidated Financial Statements on Page F-1. |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(2) Consolidated Financial Statement Schedule.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reference is made to the Index to Financial Statement Schedule on Page F-1. |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(3) Exhibits. |

---

Schedules other than as listed above are omitted as not required or inapplicable or because the required information is provided in the consolidated financial statements, including the notes thereto.

**EXHIBIT INDEX**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | |
|<br>**<u>Number</u>** |<br>**Exhibit Description** | **Form** | **File No.** | **Exhibit** | **Date** |<br>**Filed or Furnished<br>Herewith** |
| &nbsp;&nbsp;3.1 | <u>[Restated Certificate of Incorporation, dated June 5, 2018](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000019/a31-ctshrestatedcoiconform.htm)</u> | 8-K | 000-24429 | 3.1 | 6/7/2018 |  |
| &nbsp;&nbsp;3.2 | <u>[Amended and Restated Bylaws, as adopted on September](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000032/amendedbylawsclean.htm)[14](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000032/amendedbylawsclean.htm)[, 2018](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000032/amendedbylawsclean.htm)</u> | 8-K | 000-24429 | 3.1 | 9/20/2018 |  |
| &nbsp;&nbsp;4.1 | <u>[Specimen Certificate for shares of Class A common stock](http://www.sec.gov/Archives/edgar/data/1058290/000095012303000753/y65565a4exv4w2.htm)</u> | S-4/A | 333-101216 | 4.2 | 1/30/2003 |  |
| &nbsp;&nbsp;4.2 | <u>[Description of Capital Stock](http://www.sec.gov/Archives/edgar/data/1058290/000105829020000008/ctshexhibit4212312019.htm)</u> | 10-K | 000-24429 | 4.2 | 2/14/2020 |  |
| &nbsp;&nbsp;10.1† | <u>[Form of Indemnification Agreement for Directors and Officers](http://www.sec.gov/Archives/edgar/data/1058290/000119312513324493/d579434dex101.htm)</u> | 10-Q | 000-24429 | 10.1 | 8/7/2013 |  |
| &nbsp;&nbsp;10.2† | <u>[Form of Amended and Restated Executive Employment and Non-Disclosure, Non-Competition, and Invention Assignment Agreement, between the Company and each of the following](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000009/ctshexhibit10312312017.htm)[current or former](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000009/ctshexhibit10312312017.htm)[Executive Officers: Brian Humphries, Jan Siegmund, Becky Schmitt, Robert Telesmanic, Balu Ganesh Ayyar,](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000009/ctshexhibit10312312017.htm)[Ursula Morgenstern](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000009/ctshexhibit10312312017.htm)[and John Kim](http://www.sec.gov/Archives/edgar/data/1058290/000105829018000009/ctshexhibit10312312017.htm)</u> | 10-K | 000-24429 | 10.3 | 2/27/2018 |  |
| 10.3† | <u>[2022 Form of Executive Employment and Non-Disclosure, Non-Competition and Invention Assignment Agreement, to be entered into between the Company and certain Executive Officers](http://www.sec.gov/Archives/edgar/data/1058290/000105829022000241/ctshexhibit1016302022.htm)</u> | 10-Q | 000-24429 | 10.1 | 7/28/2022 |  |
| 10.4† | <u>[UK Form of Executive Employment and Non-Disclosure, Non-Competition and Invention Assignment Agreement, entered into between the Company and the following Executive Officer: Robert Walker](http://www.sec.gov/Archives/edgar/data/1058290/000105829022000241/ctshexhibit1026302022.htm)</u> | 10-Q | 000-24429 | 10.2 | 7/28/2022 |  |
| 10.5† | <u>[Executive Employment and Non-Disclosure, Non-Competition and Invention Assignment Agreement, entered into between the Company and Ravi Kumar Singisetti, dated effective January 12, 2023](http://www.sec.gov/Archives/edgar/data/1058290/000105829023000008/exhibit1021923.htm)</u> | 8-K | 000-24429 | 10.2 | 1/12/2023 |  |
| 10.6† | <u>[Letter Agreement, dated as of December 9, 2022, by and between the Company and Brian Humphries regarding Base Pay Denomination Adjustment](ctshexhibit10612312022.htm)</u> |  |  |  |  | Filed |
| 10.7† | <u>[Letter Agreement, dated as of January 9, 2023, by and among Cognizant Worldwide Limited, the Company and Brian Humphries amendment Employment Agreement](http://www.sec.gov/Archives/edgar/data/1058290/000105829023000008/exhibit1031923.htm)</u> | 8-K | 000-24429 | 10.3 | 1/12/2023 |  |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | 44 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | |
|<br>**<u>Number</u>** |<br>**Exhibit Description** | **Form** | **File No.** | **Exhibit** | **Date** |<br>**Filed or Furnished<br>Herewith** |
| 10.8† | <u>[Offer Letter, by and between the Company and Brian Humphries, acknowledged and agreed November 30, 2018](http://www.sec.gov/Archives/edgar/data/1058290/000105829019000009/ctshexhibit10412312018.htm)</u> | 10-K | 000-24429 | 10.4 | 2/19/2019 |  |
| 10.9† | <u>[Offer Letter, by and between the Company and Jan Siegmund, acknowledged and agreed July 8, 2020](http://www.sec.gov/Archives/edgar/data/1058290/000120677420002232/ctsh3788061-ex101.htm)</u> | 8-K | 000-24429 | 10.1 | 7/29/2020 |  |
| &nbsp;&nbsp;10.10† | <u>[Offer Letter, by and between the Company and Becky Schmitt, acknowledged and agreed November 26, 2019](http://www.sec.gov/Archives/edgar/data/1058290/000105829021000031/ctshexhibit10612312020.htm)</u> | 10-K | 000-24429 | 10.6 | 2/12/2021 |  |
| &nbsp;&nbsp;10.11† | <u>[Offer Letter, by and between the Company and Rajesh Nambiar, acknowledged and agreed September 16, 2020](http://www.sec.gov/Archives/edgar/data/1058290/000105829022000023/ctshexhibit10612312021.htm)</u> | 10-K | 000-24429 | 10.6 | 2/16/2022 |  |
| 10.12† | <u>[Offer Letter, by and between the Company and Ravi Kumar Singisetti, acknowledged and agreed January 9, 2023](http://www.sec.gov/Archives/edgar/data/1058290/000105829023000008/exhibit1011923.htm)</u> | 8-K | 000-24429 | 10.1 | 1/12/2023 |  |
| 10.13† | <u>[General Release and Severance Agreement between the Company and Gregory Hyttenrauch, dated as of July 26, 2022](http://www.sec.gov/Archives/edgar/data/1058290/000105829022000241/ctshexhibit1036302022.htm)</u> | 10-Q | 000-24429 | 10.3 | 7/28/2022 |  |
| 10.14† | <u>[General Release between the Company and Ursula Morgenstern, dated as of June 30, 2020](ctshexhibit101412312022.htm)</u> |  |  |  |  | Filed |
| 10.15† | <u>[Non-Employee Director Compensation Guidelines (effective as of June 7, 2022)](ctshexhibit101512312022.htm)</u> |  |  |  |  | Filed |
| 10.16† | <u>[2004 Employee Stock Purchase Plan (as amended and restated effective as of January 1, 2022)](http://www.sec.gov/Archives/edgar/data/1058290/000105829022000023/ctshexhibit10712312021.htm)</u> | 10-K | 000-24429 | 10.7 | 2/16/2022 |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| 10.17† | <u>[Cognizant Technology Solutions Corporation Amended and Restated 2009 Incentive Compensation Plan, effective March 9, 2015](http://www.sec.gov/Archives/edgar/data/1058290/000105829015000012/ctshexhibit1013-31x2015.htm)</u> | 10-Q | 000-24429 | 10.1 | 5/4/2015 |
| 10.18† | <u>[Form of Cognizant Technology Solutions Corporation Stock Option Agreement](http://www.sec.gov/Archives/edgar/data/1058290/000119312509144583/dex101.htm)</u> | 8-K | 000-24429 | 10.1 | 7/6/2009 |
| 10.19† | <u>[Form of Cognizant Technology Solutions Corporation Notice of Grant of Stock Option](http://www.sec.gov/Archives/edgar/data/1058290/000119312509144583/dex102.htm)</u> | 8-K | 000-24429 | 10.2 | 7/6/2009 |
| 10.20† | <u>[Form of Cognizant Technology Solutions Corporation Restricted Stock Unit Award Agreement Time-Based Vesting](http://www.sec.gov/Archives/edgar/data/1058290/000119312509144583/dex103.htm)</u> | 8-K | 000-24429 | 10.3 | 7/6/2009 |
| 10.21† | <u>[Form of Cognizant Technology Solutions Corporation Notice of Award of Restricted Stock Units Time-Based Vesting](http://www.sec.gov/Archives/edgar/data/1058290/000119312509144583/dex104.htm)</u> | 8-K | 000-24429 | 10.4 | 7/6/2009 |
| 10.22† | <u>[Form of Cognizant Technology Solutions Corporation Restricted Stock Unit Award Agreement Performance-Based Vesting](http://www.sec.gov/Archives/edgar/data/1058290/000119312509144583/dex105.htm)</u> | 8-K | 000-24429 | 10.5 | 7/6/2009 |
| 10.23† | <u>[Form of Cognizant Technology Solutions Corporation Notice of Award of Restricted Stock Units Performance-Based Vesting](http://www.sec.gov/Archives/edgar/data/1058290/000119312509144583/dex106.htm)</u> | 8-K | 000-24429 | 10.6 | 7/6/2009 |
| 10.24† | <u>[Form of Restricted Stock Unit Award Agreement Non-Employee Director Deferred Issuance](http://www.sec.gov/Archives/edgar/data/1058290/000119312509144583/dex107.htm)</u> | 8-K | 000-24429 | 10.7 | 7/6/2009 |
| 10.25† | <u>[Form of Cognizant Technology Solutions Corporation Notice of Award of Restricted Stock Units Non-Employee Director Deferred Issuance](http://www.sec.gov/Archives/edgar/data/1058290/000119312509144583/dex108.htm)</u> | 8-K | 000-24429 | 10.8 | 7/6/2009 |
| 10.26† | <u>[Cognizant Technology Solutions Corporation 2017 Incentive Award Plan](http://www.sec.gov/Archives/edgar/data/1058290/000105829017000023/a8-kexhibit101x2017incenti.htm)</u> | 8-K | 000-24429 | 10.1 | 6/7/2017 |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | 45 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | |
|<br>**<u>Number</u>** |<br>**Exhibit Description** | **Form** | **File No.** | **Exhibit** | **Date** |<br>**Filed or Furnished<br>Herewith** |
| 10.27† | <u>[Form of Restricted Stock Unit Award Grant Notice](http://www.sec.gov/Archives/edgar/data/1058290/000105829017000029/ctshexhibit1026-30x2017.htm)</u> | 10-Q | 000-24429 | 10.2 | 8/3/2017 |  |
| 10.28† | <u>[Form of Performance-Based Restricted Stock Unit Award Grant Notice](http://www.sec.gov/Archives/edgar/data/1058290/000105829017000029/ctshexhibit1036-30x2017.htm)</u> | 10-Q | 000-24429 | 10.3 | 8/3/2017 |  |
| 10.29† | <u>[Form of Restricted Stock Unit Award Grant Notice](http://www.sec.gov/Archives/edgar/data/1058290/000105829017000029/ctshexhibit1046-30x2017.htm)</u> | 10-Q | 000-24429 | 10.4 | 8/3/2017 |  |
| 10.30† | <u>[Form of Stock Option Grant Notice and Stock Option Agreement](http://www.sec.gov/Archives/edgar/data/1058290/000105829017000029/ctshexhibit1056-30x2017.htm)</u> | 10-Q | 000-24429 | 10.5 | 8/3/2017 |  |
| 10.31† | <u>[Form of Restricted Stock Unit Award Grant Notice (March 5, 2020 form)](http://www.sec.gov/Archives/edgar/data/1058290/000105829020000033/ctshexhibit1013312020.htm)</u> | 10-Q | 000-24429 | 10.1 | 5/8/2020 |  |
| 10.32† | <u>[Form of Performance-Based Restricted Stock Unit Award Grant Notice (March 5, 2020 form)](http://www.sec.gov/Archives/edgar/data/1058290/000105829020000033/ctshexhibit1023312020.htm)</u> | 10-Q | 000-24429 | 10.2 | 5/8/2020 |  |
| 10.33† | <u>[Credit Agreement, dated as of October 6, 2022, among Cognizant Technology Solutions Corporation, Cognizant Worldwide Limited, certain financial institutions party thereto and JPMorgan Chase Bank, N.A., as administrative agent](http://www.sec.gov/Archives/edgar/data/1058290/000105829022000310/exhibit101.htm)</u> | 8-K | 000-24429 | 10.1 | 10/7/2022 |  |
| 10.34† | <u>[Retirement, Death and Disability Policy](http://www.sec.gov/Archives/edgar/data/1058290/000105829020000048/ctshexhibit1016302020.htm)</u> | 10-Q | 000-24429 | 10.1 | 7/30/2020 |  |
| 21.1 | <u>[List of subsidiaries of the Company](ctshexhibit21112312022.htm)</u> |  |  |  |  | Filed |
| 23.1 | <u>[Consent of PricewaterhouseCoopers LLP](ctshexhibit23112312022.htm)</u> |  |  |  |  | Filed |
| 31.1 | <u>[Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)](ctshexhibit31112312022.htm)</u> |  |  |  |  | Filed |
| 31.2 | <u>[Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)](ctshexhibit31212312022.htm)</u> |  |  |  |  | Filed |
| 32.1 | <u>[Certification Pursuant to 18 U.S.C. Section 1350 (Chief Executive Officer)](ctshexhibit32112312022.htm)</u> |  |  |  |  | Furnished |
| 32.2 | <u>[Certification Pursuant to 18 U.S.C. Section 1350 (Chief Financial Officer)](ctshexhibit32212312022.htm)</u> |  |  |  |  | Furnished |
| &nbsp;&nbsp;101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |  |  |  |  | Filed |
| &nbsp;&nbsp;101.SCH | Inline XBRL Taxonomy Extension Schema Document |  |  |  |  | Filed |
| &nbsp;&nbsp;101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |  | Filed |
| &nbsp;&nbsp;101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |  | Filed |
| &nbsp;&nbsp;101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  |  | Filed |
| &nbsp;&nbsp;101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |  | Filed |
| &nbsp;&nbsp;104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |  |  |  | Filed |

---

† A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(a)(3) of Form 10-K.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 46 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Item 16. Form 10-K Summary**

None.

---

| | | |
|:---|:---|:---|
| **Cognizant** | 47 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION | COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION |
| By: | &nbsp;&nbsp;&nbsp;&nbsp;/S/&nbsp;&nbsp;&nbsp;&nbsp;RAVI KUMAR S |
|  | **Ravi Kumar S,** |
|  | **Chief Executive Officer** |
|  | **(Principal Executive Officer)** |
| Date: | **February 15, 2023** |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **<u>Signature</u>** | **<u>Title</u>** | **<u>Date</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;&nbsp;&nbsp;&nbsp;RAVI KUMAR S | Chief Executive Officer and Director<br>(Principal Executive Officer) | February 15, 2023 |
| **Ravi Kumar S** | Chief Executive Officer and Director<br>(Principal Executive Officer) | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;JAN SIEGMUND | Chief Financial Officer<br>(Principal Financial Officer) | February 15, 2023 |
| **Jan Siegmund** | Chief Financial Officer<br>(Principal Financial Officer) | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;ROBERT TELESMANIC | Senior Vice President, Controller and Chief Accounting Officer<br>(Principal Accounting Officer) | February 15, 2023 |
| **Robert Telesmanic** | Senior Vice President, Controller and Chief Accounting Officer<br>(Principal Accounting Officer) | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;STEPHEN J. ROHLEDER  | Chair of the Board and Director | February 15, 2023 |
| **Stephen J. Rohleder** | Chair of the Board and Director | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;ZEIN ABDALLA | Director | February 15, 2023 |
| **Zein Abdalla** |  | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;VINITA BALI | Director | February 15, 2023 |
| **Vinita Bali** |  | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;MAUREEN BREAKIRON-EVANS | Director | February 15, 2023 |
| **Maureen Breakiron-Evans** |  | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;ARCHANA DESKUS | Director | February 15, 2023 |
| **Archana Deskus** |  | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;JOHN M. DINEEN | Director | February 15, 2023 |
| **John M. Dineen** |  | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;LEO S. MACKAY, JR. | Director | February 15, 2023 |
| **Leo S. Mackay, Jr.** |  | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;MICHAEL PATSALOS-FOX | Director | February 15, 2023 |
| **Michael Patsalos-Fox** |  | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;JOSEPH M. VELLI | Director | February 15, 2023 |
| **Joseph M. Velli** |  | February 15, 2023 |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;SANDRA S. WIJNBERG | Director | February 15, 2023 |
| **Sandra S. Wijnberg** |  | February 15, 2023 |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | 48 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

**AND FINANCIAL STATEMENT SCHEDULE**

---

| | |
|:---|:---|
| | **Page** |
| Consolidated Financial Statements: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Report of Independent Registered Public Accounting Firm (PCAOB ID No.](#i3254ddb0bbd740dd900dc699f73182d2_139)238[)](#i3254ddb0bbd740dd900dc699f73182d2_139)</u> | <u>[F-](#i3254ddb0bbd740dd900dc699f73182d2_139)[2](#i3254ddb0bbd740dd900dc699f73182d2_139)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Financial Position as of December 31, 2022 and 2021](#i3254ddb0bbd740dd900dc699f73182d2_142)</u> | <u>[F-](#i3254ddb0bbd740dd900dc699f73182d2_142)[4](#i3254ddb0bbd740dd900dc699f73182d2_142)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020](#i3254ddb0bbd740dd900dc699f73182d2_148)</u> | <u>[F-](#i3254ddb0bbd740dd900dc699f73182d2_148)[5](#i3254ddb0bbd740dd900dc699f73182d2_148)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020](#i3254ddb0bbd740dd900dc699f73182d2_151)</u> | <u>[F-](#i3254ddb0bbd740dd900dc699f73182d2_151)[6](#i3254ddb0bbd740dd900dc699f73182d2_151)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Stockholders' Equity for the years ended December 31, 2022, 2021 and 2020](#i3254ddb0bbd740dd900dc699f73182d2_154)</u> | <u>[F-](#i3254ddb0bbd740dd900dc699f73182d2_154)[7](#i3254ddb0bbd740dd900dc699f73182d2_154)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020](#i3254ddb0bbd740dd900dc699f73182d2_157)</u> | <u>[F-](#i3254ddb0bbd740dd900dc699f73182d2_157)[8](#i3254ddb0bbd740dd900dc699f73182d2_157)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Notes to Consolidated Financial Statements](#i3254ddb0bbd740dd900dc699f73182d2_160)</u> | <u>[F-](#i3254ddb0bbd740dd900dc699f73182d2_160)[9](#i3254ddb0bbd740dd900dc699f73182d2_160)</u> |
| Financial Statement Schedule: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Schedule of Valuation and Qualifying Accounts for the years ended December 31, 2022, 2021 and 2020](#i3254ddb0bbd740dd900dc699f73182d2_229)</u> | <u>[F-](#i3254ddb0bbd740dd900dc699f73182d2_229)[40](#i3254ddb0bbd740dd900dc699f73182d2_229)</u> |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-1 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Report of Independent Registered Public Accounting Firm**

To the Board of Directors and Stockholders of Cognizant Technology Solutions Corporation

***Opinions on the Financial Statements and Internal Control over Financial Reporting***

We have audited the accompanying consolidated statements of financial position of Cognizant Technology Solutions Corporation and its subsidiaries (the "Company") as of December 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive income, of stockholders' equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

***Basis for Opinions***

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

***Definition and Limitations of Internal Control over Financial Reporting***

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-2 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

***Critical Audit Matters***

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

*Revenue Recognition – Expected Labor Costs to Complete for Certain Fixed-Price Contracts*

As described in Notes 1 and 2 to the consolidated financial statements, fixed-price contracts comprised $8.3 billion of the Company's total revenues for the year ended December 31, 2022, which includes performance obligations where control is transferred over time. For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided. Management recognizes revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract's total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information. Revenues related to fixed-price application maintenance, testing and business process services are recognized based on management's right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If management's invoicing is not consistent with the value delivered, revenues are recognized as the service is performed based on the cost-to-cost method described above.

The principal considerations for our determination that performing procedures relating to revenue recognition – expected labor costs to complete for certain fixed-price contracts is a critical audit matter are the significant judgment by management when developing the estimated total expected labor costs to complete fixed-price contracts and the significant auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence relating to management's estimate of total expected labor costs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the development of the estimated total expected labor costs to complete fixed-price contracts. These procedures also included, among others, evaluating and testing management's process for developing the estimated total expected labor costs for a sample of contracts, which included evaluating the reasonableness of the total expected labor cost assumptions used by management. Evaluating the reasonableness of the assumptions related to the total expected labor costs involved assessing management's ability to reasonably develop total expected labor costs by (i) performing a comparison of actual labor costs incurred with expected labor costs for similar completed projects and (ii) evaluating the timely identification of circumstances that may warrant a modification to previous labor cost estimates, including actual labor costs in excess of estimates.

/s/ PricewaterhouseCoopers LLP

New York, New York

February 15, 2023

We have served as the Company's auditor since 1997.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-3 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION**

**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
|<br>**(in millions, except par values)** | **2022** | **2021** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $2191 | $1792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term investments | 310 | 927 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable, net | 3796 | 3557 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 969 | 1066 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 7266 | 7342 |
| Property and equipment, net | 1101 | 1171 |
| Operating lease assets, net | 876 | 933 |
| Goodwill | 5710 | 5620 |
| Intangible assets, net | 1168 | 1218 |
| Deferred income tax assets, net | 642 | 404 |
| Long-term investments | 427 | 463 |
| Other noncurrent assets | 662 | 701 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $17852 | $17852 |
| **Liabilities and Stockholders' Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $360 | $361 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 398 | 403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term debt | 8 | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | 174 | 195 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 2407 | 2532 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 3347 | 3529 |
| Deferred revenue, noncurrent | 19 | 40 |
| Operating lease liabilities, noncurrent | 714 | 783 |
| Deferred income tax liabilities, net | 180 | 218 |
| Long-term debt | 638 | 626 |
| Long-term income taxes payable | 283 | 378 |
| Other noncurrent liabilities | 362 | 287 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 5543 | 5861 |
| Commitments and contingencies (See <u>[Note 15](#i3254ddb0bbd740dd900dc699f73182d2_208)</u>) |  |  |
| Stockholders' equity: |  |  |
| Preferred stock, $0.10 par value, 15 shares authorized, none issued |  |  |
| Class A common stock, $0.01 par value, 1,000 shares authorized, 509 and 525 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 5 | 5 |
| Additional paid-in capital | 15 | 27 |
| Retained earnings | 12588 | 11922 |
| Accumulated other comprehensive income (loss) | (299) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 12309 | 11991 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $17852 | $17852 |

---

The accompanying notes are an integral part of the consolidated financial statements.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-4 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|<br>**(in millions, except per share data)** | **2022** | **2021** | **2020** |
| Revenues | $19428 | $18507 | $16652 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenues (exclusive of depreciation and amortization expense shown separately below) | 12448 | 11604 | 10671 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative expenses | 3443 | 3503 | 3100 |
| &nbsp;&nbsp;&nbsp;Restructuring charges |  |  | 215 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 569 | 574 | 552 |
| Income from operations | 2968 | 2826 | 2114 |
| Other income (expense), net: |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 59 | 30 | 119 |
| &nbsp;&nbsp;&nbsp;Interest expense | (19) | (9) | (24) |
| &nbsp;&nbsp;&nbsp;Foreign currency exchange gains (losses), net | 7 | (20) | (116) |
| &nbsp;&nbsp;&nbsp;Other, net | 1 |  | 3 |
| Total other income (expense), net | 48 | 1 | (18) |
| Income before provision for income taxes | 3016 | 2827 | 2096 |
| Provision for income taxes | (730) | (693) | (704) |
| Income (loss) from equity method investments | 4 | 3 |  |
| Net income | $2290 | $2137 | $1392 |
| Basic earnings per share | $4.42 | $4.06 | $2.58 |
| Diluted earnings per share | $4.41 | $4.05 | $2.57 |
| Weighted average number of common shares outstanding—Basic | 518 | 527 | 540 |
| &nbsp;&nbsp;&nbsp;Dilutive effect of shares issuable under stock-based compensation plans | 1 | 1 | 1 |
| Weighted average number of common shares outstanding—Diluted | 519 | 528 | 541 |

---

The accompanying notes are an integral part of the consolidated financial statements.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-5 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|<br>**(in millions)** | **2022** | **2021** | **2020** |
| Net income | $2290 | $2137 | $1392 |
| Change in Accumulated other comprehensive income (loss), net of tax: |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | (228) | (75) | 119 |
| &nbsp;&nbsp;Unrealized gains and losses on cash flow hedges | (108) | 2 | 29 |
| Other comprehensive income (loss) | (336) | (73) | 148 |
| Comprehensive income | $1954 | $2064 | $1540 |

---

The accompanying notes are an integral part of the consolidated financial statements.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-6 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in millions, except per share data)** | **Class A Common Stock** | **Class A Common Stock** | **Additional<br>Paid-in<br>Capital** | **Retained<br>Earnings** | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total** |
| **(in millions, except per share data)** | **Shares&nbsp;&nbsp;&nbsp;&nbsp;** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Retained<br>Earnings** | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total** |
| Balance, December 31, 2019 | 548 | $5 | $33 | $11022 | $(38) | $11022 |
| Cumulative effect of changes in accounting principle <sup>(1)</sup> |  |  |  | 1 |  | 1 |
| Net income |  |  |  | 1392 |  | 1392 |
| Other comprehensive income (loss) |  |  |  |  | 148 | 148 |
| Common stock issued, stock-based compensation plans | 6 |  | 142 |  |  | 142 |
| Stock-based compensation expense |  |  | 232 |  |  | 232 |
| Repurchases of common stock | (24) |  | (375) | (1246) |  | (1621) |
| Dividends declared, $0.88 per share |  |  |  | (480) |  | (480) |
| Balance, December 31, 2020 | 530 | 5 | 32 | 10689 | 110 | 10836 |
| Net income |  |  |  | 2137 |  | 2137 |
| Other comprehensive income (loss) |  |  |  |  | (73) | (73) |
| Common stock issued, stock-based compensation plans | 5 |  | 130 |  |  | 130 |
| Stock-based compensation expense |  |  | 246 |  |  | 246 |
| Repurchases of common stock | (10) |  | (381) | (394) |  | (775) |
| Dividends declared, $0.96 per share |  |  |  | (510) |  | (510) |
| Balance, December 31, 2021 | 525 | 5 | 27 | 11922 | 37 | 11991 |
| Net income |  |  |  | 2290 |  | 2290 |
| Other comprehensive income (loss) |  |  |  |  | (336) | (336) |
| Common stock issued, stock-based compensation plans | 4 |  | 86 |  |  | 86 |
| Stock-based compensation expense |  |  | 261 |  |  | 261 |
| Repurchases of common stock | (20) |  | (359) | (1059) |  | (1418) |
| Dividends declared, $1.08 per share |  |  |  | (565) |  | (565) |
| Balance, December 31, 2022 | 509 | $5 | $15 | $12588 | $(299) | $12309 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Reflects the adoption of the Credit Loss Standard on January 1, 2020.

The accompanying notes are an integral part of the consolidated financial statements.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-7 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|<br>**(in millions)** | **2022** | **2021** | **2020** |
| Cash flows from operating activities: |  |  |  |
| Net income | $2290 | $2137 | $1392 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 569 | 574 | 559 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (273) | 27 | 184 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 261 | 246 | 232 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 45 | (1) | 119 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable | (238) | (407) | 264 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current and noncurrent assets | 343 | 348 | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (11) | (35) | 109 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue, current and noncurrent | (26) | 19 | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current and noncurrent liabilities | (392) | (413) | 302 |
| Net cash provided by operating activities | 2568 | 2495 | 3299 |
| Cash flows from investing activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (332) | (279) | (398) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of available-for-sale investment securities | (1227) | (430) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturity of available-for-sale investment securities | 1315 | 120 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of held-to-maturity investment securities | (44) | (203) | (202) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturity of held-to-maturity investment securities | 54 | 180 | 467 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of other investments | (546) | (1660) | (531) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturity or sale of other investments | 1013 | 1078 | 549 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of businesses | 28 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments for business combinations, net of cash acquired | (367) | (970) | (1123) |
| Net cash (used in) investing activities | (106) | (2164) | (1238) |
| Cash flows from financing activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock under stock-based compensation plans | 86 | 130 | 142 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchases of common stock | (1422) | (771) | (1621) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of Term Loan borrowings and finance lease and earnout obligations | (686) | (53) | (50) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from debt refinancing | 650 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt issuance costs | (3) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from borrowing under the revolving credit facility |  |  | 1740 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of notes outstanding under the revolving credit facility |  |  | (1740) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid | (564) | (509) | (480) |
| Net cash (used in) financing activities | (1939) | (1203) | (2009) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (21) | (16) | (17) |
| Increase (decrease) in cash, cash equivalents and restricted cash | 502 | (888) | 35 |
| Cash and cash equivalents, beginning of year | 1792 | 2680 | 2645 |
| Cash, cash equivalents and restricted cash, end of year | $2294 | $1792 | $2680 |
| Supplemental information: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes during the year | $813 | $625 | $745 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash interest paid during the year | $15 | $7 | $25 |

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The accompanying notes are an integral part of the consolidated financial statements.

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|:---|:---|:---|
| **Cognizant** | F-8 | **December 31, 2022 Form 10-K** |

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**COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Dollars in millions, except share data)**

**Note 1 — Business Description and Summary of Significant Accounting Policies**

The terms "Cognizant," "we," "our," "us" and "the Company" refer to Cognizant Technology Solutions Corporation and its subsidiaries unless the context indicates otherwise.

*Description of Business.* We are one of the world's leading professional services companies, engineering modern businesses and delivering strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in a fast-changing world. We tailor our services and solutions to specific industries with an integrated global delivery model that employs client service and delivery teams based at client locations and dedicated global and regional delivery centers. Our services include digital services and solutions, consulting, application development, systems integration, quality engineering and assurance, application maintenance, infrastructure and security as well as business process services and automation. Digital services continue to be an important part of our portfolio, aligning with our clients' focus on becoming data-enabled, customer-centric and differentiated businesses.

*Basis of Presentation, Principles of Consolidation and Use of Estimates.* The consolidated financial statements are presented in accordance with GAAP and reflect the consolidated financial position, results of operations, comprehensive income and cash flows of our consolidated subsidiaries for all periods presented. All intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying disclosures. We evaluate our estimates on a continuous basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying consolidated financial statements.

*Cash and Cash Equivalents and Investments.* Cash and cash equivalents consist of all cash balances, including money market funds, certificates of deposits and commercial paper that have a maturity, at the date of purchase, of 90 days or less.

We determine the appropriate classification of our investments in marketable securities at the date of purchase and reevaluate such designation at each balance sheet date. We classify and account for our marketable debt securities as either available-for-sale or held-to-maturity. After consideration of our risk versus reward objectives, as well as our liquidity requirements, we may sell our available-for-sale securities prior to their stated maturities. We classify these marketable securities with maturities at the date of purchase beyond 90 days as short-term investments based on their highly liquid nature and because such marketable securities represent an investment of cash that is available for current operations. Available-for-sale securities are reported at fair value with changes in unrealized gains and losses recorded as a separate component of "Accumulated other comprehensive income (loss)" on the consolidated statements of financial position until realized. We determine the cost of the securities sold based on the specific identification method. Our held-to-maturity investment securities are financial instruments that we have the intent and ability to hold to maturity and we classify these securities with maturities less than one year as short-term investments. Any held-to-maturity investment securities with maturities beyond one year from the balance sheet date are classified as long-term investments. Held-to-maturity securities are reported at amortized cost. Interest and amortization of premiums and discounts for debt securities are included in interest income.

For available-for-sale debt securities, if we do not intend to sell the security or it is not more likely than not that we will be required to sell the security before recovery of our amortized cost, we evaluate qualitative criteria, such as the financial health of and specific prospects for the issuer, to determine whether we do not expect to recover the amortized cost basis of the security. We also evaluate quantitative criteria including determining whether there has been an adverse change in expected future cash flows. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to contain an expected credit loss, and we record the difference between the security's amortized cost basis and its recoverable amount in earnings as an allowance for credit loss and the difference between the security's recoverable amount and fair value in other comprehensive income. If we intend to sell the security or it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, the security is considered impaired, and we recognize the entire difference between the security's amortized cost basis and its fair value in earnings.

On initial recognition and on an ongoing basis, we evaluate our held-to-maturity investment securities for expected credit losses collectively when they share similar risk characteristics or individually, when the risk characteristics are different. The allowance for expected credit losses is determined using our historical loss experience. We monitor the credit ratings of the

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| **Cognizant** | F-9 | **December 31, 2022 Form 10-K** |

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securities in our portfolio to evaluate the need for any changes to the allowance. An increase or a decrease in the allowance for expected credit losses is recorded through income as a credit loss expense or a reversal thereof. The allowance for expected credit losses is presented as a deduction from the amortized cost. A held-to-maturity investment security is written off when deemed uncollectible.

*Financial Assets and Liabilities.* Cash and certain cash equivalents, time deposits, trade receivables, accounts payable and other accrued liabilities are short-term in nature and, accordingly, their carrying values approximate fair value.

*Property and Equipment.* Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the asset. Deposits paid towards acquisition of long-lived assets and the cost of assets not put in use by the balance sheet date are disclosed under the caption "Capital work-in-progress" in <u>[Note 6](#i3254ddb0bbd740dd900dc699f73182d2_181)</u>.

*Leases.* Our lease asset classes primarily consist of operating leases for office space, data centers and IT equipment. At inception of a contract, we determine whether a contract contains a lease, and if a lease is identified, whether it is an operating or finance lease. In determining whether a contract contains a lease we consider whether (1) we have the right to obtain substantially all of the economic benefits from the use of the asset throughout the term of the contract, (2) we have the right to direct how and for what purpose the asset is used throughout the term of the contract and (3) we have the right to operate the asset throughout the term of the contract without the lessor having the right to change the terms of the contract. Some of our lease agreements contain both lease and non-lease components that we account for as a single lease component for all of our lease asset classes.

Our ROU lease assets represent our right to use an underlying asset for the lease term and may include any advance lease payments made and any initial direct costs and exclude lease incentives. Our lease liabilities represent our obligation to make lease payments arising from the terms of the lease. ROU lease assets and lease liabilities are recognized at the commencement of the lease and are calculated using the present value of lease payments over the lease term. Typically, our lease agreements do not provide sufficient detail to determine the rate implicit in the lease. Therefore, we use our estimated country-specific incremental borrowing rate based on information available at the commencement date of the lease to calculate the present value of the lease payments. In estimating our country-specific incremental borrowing rates, we consider market rates of comparable collateralized borrowings for similar terms. Our lease terms may include the option to extend or terminate the lease before the end of the contractual lease term. Our ROU lease assets and lease liabilities include these options when it is reasonably certain that they will be exercised.

A portion of our real estate lease costs is subject to annual changes in the CPI. Changes in CPI subsequent to the lease commencement are treated as variable lease payments and are recognized in the period in which the obligation for those payments is incurred. Other variable lease costs primarily relate to adjustments for common area maintenance, utilities, property tax and lease concessions. These variable costs are recognized in the period in which the obligation is incurred.

We elect not to recognize ROU assets and lease liabilities for short-term leases with a term equal to or less than 12 months. We recognize the lease payments in our income statement on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Both ROU assets and finance lease assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the related asset group may not be recoverable.

*Internal Use Software.* We capitalize certain costs that are incurred to purchase, develop and implement internal-use software during the application development phase, which primarily include coding, testing and certain data conversion activities. Capitalized costs are amortized on a straight-line basis over the useful life of the software. Costs incurred in performing planning and post-implementation activities are expensed as incurred.

*Cloud Computing Arrangements.* We defer certain implementation costs that are incurred when implementing cloud computing service or software-as-a-service arrangements, which primarily include efforts associated with configuration and development activities. Once the service is ready for use, deferred costs are expensed over the term of the arrangement and recognized in income from operations.

*Software to be Sold, Leased or Marketed.* We capitalize costs incurred after technological feasibility is reached but before software is available for general release to clients, which primarily include coding and testing activities. Once the product is ready for general release, capitalized costs are amortized over the useful life of the software.

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|:---|:---|:---|
| **Cognizant** | F-10 | **December 31, 2022 Form 10-K** |

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*Business Combinations.* We account for business combinations using the acquisition method, which requires the identification of the acquirer, the determination of the acquisition date and the allocation of the purchase price paid by the acquirer to the identifiable tangible and intangible assets acquired, the liabilities assumed, including any contingent consideration and any noncontrolling interest in the acquiree at their acquisition date fair values. Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets. Identifiable intangible assets with finite lives are amortized over their expected useful lives. Acquisition-related costs are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in our consolidated financial statements from the acquisition date.

*Equity Method Investments.* Equity investments that give us the ability to exercise significant influence, but not control, over an investee are accounted for using the equity method of accounting and recorded in the caption "Long-term investments" on our consolidated statements of financial position. Equity method investments are initially recorded at cost. We periodically review the carrying value of our equity method investments to determine if there has been an other-than-temporary decline in the carrying value. The investment balance is increased to reflect contributions and our share of earnings and decreased to reflect our share of losses, distributions and other-than-temporary impairments. Our proportionate share of the net income or loss of the investee is recorded in the caption "Income (loss) from equity method investments" on our consolidated statements of operations.

*Long-lived Assets and Finite-lived Intangible Assets.* We review long-lived assets and certain finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The carrying amount may not be recoverable when the sum of undiscounted expected future cash flows is less than the carrying amount of such asset groups. The impairment loss is determined as the amount by which the carrying amount of the asset group exceeds its fair value. Intangible assets consist primarily of customer relationships and developed technology, which are being amortized on a straight-line basis over their estimated useful lives.

*Goodwill and Indefinite-lived Intangible Assets.* At each acquisition date, we allocate goodwill and intangible assets to our reporting units based on how we expect each reporting unit to benefit from the respective business combination. Our seven industry-based operating segments are our reporting units. We evaluate goodwill and indefinite-lived intangible assets for impairment at least annually, or as circumstances warrant. Goodwill is evaluated at the reporting unit level by comparing the fair value of the reporting unit with its carrying amount including goodwill. An impairment of goodwill exists if the carrying amount of the reporting unit exceeds its fair value. The impairment loss is the amount by which the carrying amount exceeds the reporting unit's fair value, limited to the total amount of goodwill allocated to that reporting unit. For indefinite-lived intangible assets, if our qualitative assessment indicates that it is more-likely-than-not that an indefinite-lived intangible asset is impaired, we test the assets for impairment by comparing the fair value of such assets to their carrying value. If an impairment is indicated, a write down to the fair value of indefinite-lived intangible asset is recorded.

*Stock Repurchase Program.* Under the Board of Directors authorized stock repurchase program, the Company is authorized to repurchase its Class A common stock through open market purchases, including under a 10b5-1 Plan, or in private transactions, including through ASR agreements entered into with financial institutions, in accordance with applicable federal securities laws. We account for the repurchased shares as constructively retired. Shares are returned to the status of authorized and unissued shares at the time of repurchase or in the periods they are delivered if repurchased under an ASR. To reflect share repurchases in the consolidated statements of financial position, we (1) reduce common stock for the par value of the shares, (2) reduce additional paid-in capital for the amount in excess of par during the period in which the shares are repurchased and (3) record any residual amount in excess of available additional paid-in capital to retained earnings. Upfront payments related to ASRs are accounted for as a reduction to stockholders' equity in the consolidated statements of financial position in the period the payments are made.

*Revenue Recognition.* We recognize revenues as we transfer control of deliverables (products, solutions and services) to our clients in an amount reflecting the consideration to which we expect to be entitled. To recognize revenues, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. We account for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectibility of consideration is probable. We apply judgment in determining the customer's ability and intention to pay based on a variety of factors including the customer's historical payment experience.

For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided.

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| **Cognizant** | F-11 | **December 31, 2022 Form 10-K** |

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Revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract's total labor cost to date bears to the total expected labor costs. Revenues related to fixed-price application maintenance, quality engineering and assurance as well as business process services are recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with the value delivered, revenues are recognized as the service is performed based on the cost-to-cost method described above. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information. Such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate.

Revenues related to fixed-price hosting and infrastructure and security services are recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with the value delivered, revenues are recognized on a straight-line basis unless revenues are earned and obligations are fulfilled in a different pattern. The revenue recognition method applied to the types of contracts described above provides the most faithful depiction of performance towards satisfaction of our performance obligations; for example, the cost-to-cost method is used when the value of services provided to the customer is best represented by the costs expended to deliver those services.

Revenues related to our time-and-materials, transaction-based or volume-based contracts are recognized over the period the services are provided either using an output method such as labor hours, or a method that is otherwise consistent with the way in which value is delivered to the customer.

Revenues related to our non-hosted software license arrangements that do not require significant modification or customization of the underlying software are recognized when the software is delivered as control is transferred at a point in time. For software license arrangements that require significant functionality enhancements or modification of the software, revenues for the software license and related services are recognized as the services are performed in accordance with the methods applicable to application development and systems integration services described above. In software hosting arrangements, the rights provided to the customer, such as ownership of a license, contract termination provisions and the feasibility of the client to operate the software, are considered in determining whether the arrangement includes a license or a service. Sales and usage-based fees promised in exchange for licenses of intellectual property are not recognized as revenue until the uncertainty related to the variable amounts is resolved. Revenues related to software maintenance and support are generally recognized on a straight-line basis over the contract period.

Incentive revenues, volume discounts, or any other form of variable consideration is estimated using either the sum of probability weighted amounts in a range of possible consideration amounts (expected value) or the single most likely amount in a range of possible consideration amounts (most likely amount), depending on which method better predicts the amount of consideration to which we may be entitled. We include in the transaction price variable consideration only to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether and when to include estimated amounts in the transaction price may involve judgment and are based largely on an assessment of our anticipated performance and all information that is reasonably available to us.

Revenues also include the reimbursement of out-of-pocket expenses. Our warranties generally provide a customer with assurance that the related deliverable will function as the parties intended because it complies with agreed-upon specifications and are therefore not considered an additional performance obligation in the contract.

We may enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we typically estimate standalone selling price by using the expected cost plus a margin approach. We typically establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change.

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| **Cognizant** | F-12 | **December 31, 2022 Form 10-K** |

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We assess the timing of the transfer of goods or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, we do not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component is deemed to exist. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our services, not to receive or provide financing from or to customers. We do not consider set up or transition fees paid upfront by our customers to represent a financing component, as such fees are required to encourage customer commitment to the project and protect us from early termination of the contract.

Our contracts may be modified to add, remove or change existing performance obligations. The accounting for modifications to our contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price. Services added to our application development and systems integration service contracts are typically not distinct, while services added to our other contracts, including application maintenance, quality engineering and assurance as well as business process services contracts, are typically distinct.

From time to time, we may enter into arrangements with third party suppliers to resell products or services. In such cases, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). In doing so, we evaluate whether we control the good or service before it is transferred to the customer. If we control the good or service before it is transferred to the customer, we are the principal; if not, we are the agent. Determining whether we control the good or service before it is transferred to the customer may require judgment.

*Trade Accounts Receivable, Contract Assets and Contract Liabilities.* We classify our right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e., only the passage of time is required before payment is due). For example, we recognize a receivable for revenues related to our time and materials and transaction or volume-based contracts when earned regardless of whether amounts have been billed. We present such receivables in "Trade accounts receivable, net" in our consolidated statements of financial position at their net estimated realizable value. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are presented in "Other current assets" in our consolidated statements of financial position and primarily relate to unbilled amounts on fixed-price contracts utilizing the cost-to-cost method of revenue recognition. Our contract liabilities, or deferred revenue, consist of advance payments from clients and billings in excess of revenues recognized. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize the revenues.

Our contract assets and contract liabilities are reported on a net basis by contract at the end of each reporting period. The difference between the opening and closing balances of our contract assets and contract liabilities primarily results from the timing difference between our performance obligations and the client's payment. We receive payments from clients based on the terms established in our contracts, which vary from contract to contract.

*Allowance for Credit Losses*. We calculate expected credit losses for our trade accounts receivable and contract assets. Expected credit losses include losses expected based on known credit issues with specific customers as well as a general expected credit loss allowance based on relevant information, including historical loss rates, current conditions, and reasonable economic forecasts that affect collectibility. We update our allowance for credit losses on a quarterly basis with changes in the allowance recognized in income from operations.

*Costs to Fulfill.* Recurring operating costs for contracts with customers are recognized as incurred. Certain eligible, nonrecurring costs (i.e., set-up or transition costs) are capitalized when such costs (1) relate directly to the contract, (2) generate or enhance resources of the Company that will be used in satisfying the performance obligation in the future, and (3) are expected to be recovered. These costs are expensed ratably over the estimated life of the customer relationship, including expected contract renewals. In determining the estimated life of the customer relationship, we evaluate the average contract term on a portfolio basis by nature of the services to be provided, and apply judgment in evaluating the rate of technological and industry change. Capitalized amounts are monitored regularly for impairment. Impairment losses are recorded when projected remaining consideration that has not already been recognized as revenue less costs related to the services being provided are not sufficient to recover the carrying amount of the capitalized costs to fulfill. Costs to fulfill are recorded in "Other noncurrent assets" in our consolidated statements of financial position and the amortization expense of costs to fulfill is included in "Cost of revenues" in our consolidated statements of operations.

*Stock-Based Compensation.* Stock-based compensation expense for awards of equity instruments to employees and non-employee directors is determined based on the grant date fair value of those awards. We recognize these compensation costs net

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| **Cognizant** | F-13 | **December 31, 2022 Form 10-K** |

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of an estimated forfeiture rate over the requisite service period of the award. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. Stock-based compensation expense relating to RSUs is recognized on a straight-line basis as shares vest over the requisite service period. Stock-based compensation costs for PSUs are recognized on a graded-vesting basis over the vesting period based on the most probable outcome of the performance conditions. If the minimum performance targets are not met, no compensation cost is recognized and any recognized compensation cost is reversed, except for awards subject to a market condition. The fair value of RSUs and PSUs is determined based on the number of stock units granted and the quoted price of our stock at the date of grant. The fair value of PSUs granted subject to a market condition is determined using a Monte Carlo valuation model.

*Foreign Currency.* The assets and liabilities of our foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at current exchange rates while revenues and expenses are translated at average monthly exchange rates. The resulting translation adjustments are recorded in the caption "Accumulated other comprehensive income (loss)" on the consolidated statements of financial position.

Foreign currency transactions and balances are those that are denominated in a currency other than the entity's functional currency. An entity's functional currency is the currency of the primary economic environment in which it operates. The U.S. dollar is the functional currency for some of our foreign subsidiaries. For these subsidiaries, transactions and balances denominated in the local currency are foreign currency transactions. Foreign currency transactions and balances related to non-monetary assets and liabilities are remeasured to the functional currency of the entity at historical exchange rates while monetary assets and liabilities are remeasured to the functional currency of the entity at current exchange rates. Foreign currency exchange gains or losses from remeasurement are included in the caption "Foreign currency exchange gain (losses), net" on our consolidated statements of operations together with gains or losses on our undesignated foreign currency hedges.

*Derivative Financial Instruments.* Derivative financial instruments are recorded on our consolidated statements of financial position as either an asset or liability measured at its fair value as of the reporting date. Our derivative financial instruments consist primarily of foreign exchange forward and option contracts. For derivative financial instruments to qualify for hedge accounting, the following criteria must be met: (1) the hedging instrument must be designated as a hedge; (2) the hedged exposure must be specifically identifiable and must expose us to risk; and (3) it must be expected that a change in fair value of the hedging instrument and an opposite change in the fair value of the hedged exposure will have a high degree of correlation. Changes in our derivatives' fair values are recognized in net income unless specific hedge accounting and documentation criteria are met (i.e., the instruments are designated and accounted for as hedges). We record the effective portion of the unrealized gains and losses on our derivative financial instruments that are designated as cash flow hedges in the caption "Accumulated other comprehensive income (loss)" in the consolidated statements of financial position. Any ineffectiveness or excluded portion of a designated cash flow hedge is recognized in net income. Upon occurrence of the hedged transaction, the gains and losses on the derivative are recognized in net income.

*Income Taxes.* We provide for income taxes utilizing the asset and liability method of accounting. Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. If it is determined that it is more likely than not that future tax benefits associated with a deferred income tax asset will not be realized, a valuation allowance is provided. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date.

Our provision for income taxes also includes the impact of provisions established for uncertain income tax positions, as well as any related penalties and interest. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of the applicable statute of limitations. To the extent that the final outcome of these matters differs from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made.

*Earnings Per Share.* Basic EPS is computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS includes all potential dilutive common stock in the weighted average shares outstanding. We excluded less than 1 million of anti-dilutive shares in each of 2022, 2021 and 2020 from our diluted EPS calculation. We include PSUs in the dilutive common shares when they become contingently issuable per the authoritative guidance and exclude them when they are not contingently issuable.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-14 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Recently Adopted Accounting Pronouncements**

---

| | | | |
|:---|:---|:---|:---|
| **Date Issued and Topic** | **Date Adopted and Method** | **Description** | **Impact** |
| June 2016<br>Financial Instruments-Credit Losses | January 1, 2020<br>Modified Retrospective | The standard requires the measurement and recognition of expected credit losses using the current expected credit loss model for financial assets held at amortized cost, which includes the Company's trade accounts receivable, certain financial instruments and contract assets. It replaces the existing incurred loss impairment model with an expected loss methodology. The recorded credit losses are adjusted each period for changes in expected lifetime credit losses. The standard requires a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective. | As a result of the adoption, we recorded an increase to our opening retained earnings and "Trade accounts receivable, net" of $1 million each.  |

---

**Note 2 — Revenues**

**Disaggregation of Revenues**

The tables below present disaggregated revenues from contracts with clients by client location, service line and contract type for each of our reportable business segments. We believe this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors. Our consulting and technology services include consulting, application development, systems integration, quality engineering and assurance services as well as software solutions and related services while our outsourcing services include application maintenance, infrastructure and security as well as business process services. Revenues are attributed to geographic regions based upon client location, which is the client's billing address. Substantially all revenues in our North America region relate to clients in the United States.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
| **(in millions)** | **FS** | **HS** | **P&R** | **CMT** | **Total** |
| Revenues |  |  |  |  |  |
| Geography: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;North America | $4312 | $4853 | $3078 | $2192 | $14435 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;United Kingdom | 599 | 171 | 521 | 519 | 1810 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Continental Europe | 590 | 483 | 585 | 137 | 1795 |
| &nbsp;&nbsp;&nbsp;Europe - Total | 1189 | 654 | 1106 | 656 | 3605 |
| &nbsp;&nbsp;&nbsp;Rest of World | 571 | 124 | 382 | 311 | 1388 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6072 | $5631 | $4566 | $3159 | $19428 |
| Service line: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consulting and technology services | $4207 | $3226 | $3017 | $1775 | $12225 |
| &nbsp;&nbsp;&nbsp;Outsourcing services | 1865 | 2405 | 1549 | 1384 | 7203 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6072 | $5631 | $4566 | $3159 | $19428 |
| Type of contract: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Time and materials | $3516 | $2010 | $1856 | $1797 | $9179 |
| &nbsp;&nbsp;&nbsp;Fixed-price | 2265 | 2471 | 2357 | 1206 | 8299 |
| &nbsp;&nbsp;&nbsp;Transaction or volume-based | 291 | 1150 | 353 | 156 | 1950 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6072 | $5631 | $4566 | $3159 | $19428 |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-15 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
| **(in millions)** | **FS** | **HS** | **P&R** | **CMT** | **Total** |
| Revenues |  |  |  |  |  |
| Geography: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;North America | $4204 | $4571 | $2937 | $1924 | $13636 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;United Kingdom | 547 | 168 | 471 | 456 | 1642 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Continental Europe | 745 | 477 | 539 | 158 | 1919 |
| &nbsp;&nbsp;&nbsp;Europe - Total | 1292 | 645 | 1010 | 614 | 3561 |
| &nbsp;&nbsp;&nbsp;Rest of World | 555 | 121 | 329 | 305 | 1310 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6051 | $5337 | $4276 | $2843 | $18507 |
| Service line: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consulting and technology services | $4079 | $3090 | $2725 | $1693 | $11587 |
| &nbsp;&nbsp;&nbsp;Outsourcing services | 1972 | 2247 | 1551 | 1150 | 6920 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6051 | $5337 | $4276 | $2843 | $18507 |
| Type of contract: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Time and materials | $3613 | $2063 | $1785 | $1679 | $9140 |
| &nbsp;&nbsp;&nbsp;Fixed-price | 2063 | 2157 | 2085 | 1032 | 7337 |
| &nbsp;&nbsp;&nbsp;Transaction or volume-based | 375 | 1117 | 406 | 132 | 2030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6051 | $5337 | $4276 | $2843 | $18507 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** |
| **(in millions)** | **FS** | **HS** | **P&R** | **CMT** | **Total** |
| Revenues |  |  |  |  |  |
| Geography: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;North America | $4013 | $4181 | $2650 | $1737 | $12581 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;United Kingdom | 463 | 157 | 371 | 344 | 1335 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Continental Europe | 629 | 434 | 413 | 177 | 1653 |
| &nbsp;&nbsp;&nbsp;Europe - Total | 1092 | 591 | 784 | 521 | 2988 |
| &nbsp;&nbsp;&nbsp;Rest of World | 516 | 80 | 262 | 225 | 1083 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $5621 | $4852 | $3696 | $2483 | $16652 |
| Service line: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consulting and technology services | $3691 | $2786 | $2249 | $1456 | $10182 |
| &nbsp;&nbsp;&nbsp;Outsourcing services | 1930 | 2066 | 1447 | 1027 | 6470 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $5621 | $4852 | $3696 | $2483 | $16652 |
| Type of contract: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Time and materials | $3548 | $1950 | $1548 | $1515 | $8561 |
| &nbsp;&nbsp;&nbsp;Fixed-price | 1736 | 1777 | 1741 | 871 | 6125 |
| &nbsp;&nbsp;&nbsp;Transaction or volume-based | 337 | 1125 | 407 | 97 | 1966 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $5621 | $4852 | $3696 | $2483 | $16652 |

---

In 2020, we made an offer to settle and exit a large customer engagement of our Samlink subsidiary. In connection with our settlement offer, we recorded a reduction of revenues of $118 million and additional expenses of $33 million, primarily related to the impairment of long-lived assets. The $118 million reduction in revenue impacted our Financial Services segment within Continental Europe, consulting and technology services and fixed-price contracts. In 2021, the settlement agreements became final and we additionally entered into an agreement to sell the Samlink subsidiary. The sale of our Samlink subsidiary closed on February 1, 2022.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-16 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Costs to Fulfill**

The following table shows significant movements in the capitalized costs to fulfill:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Beginning balance | $394 | $467 |
| &nbsp;&nbsp;&nbsp;&nbsp;Costs capitalized | 39 | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization expense | (109) | (118) |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment charges <sup>(1)</sup> | (59) | (11) |
| Ending balance | $265 | $394 |

---

(1) The impairment charges in 2022 are related to costs to fulfill a large volume-based contract with a Health Sciences client. In 2021, the impairment charges relate to various clients across multiple business segments.

Costs to obtain contracts were immaterial for the periods disclosed.

**Contract Balances**

A contract asset is a right to consideration that is conditional upon factors other than the passage of time. The table below shows significant movements in contract assets:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Beginning balance | $310 | $315 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenues recognized during the period but not billed | 308 | 275 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts reclassified to trade accounts receivable | (285) | (280) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of foreign currency exchange movements | (7) |  |
| Ending balance | $326 | $310 |

---

Contract liabilities, or deferred revenue, consist of advance payments and billings in excess of revenues recognized. The table below shows significant movements in the deferred revenue balances (current and noncurrent):

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Beginning balance | $443 | $419 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts billed but not recognized as revenues | 397 | 413 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenues recognized related to the beginning balance of deferred revenue | (416) | (389) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of foreign currency exchange movements | (7) |  |
| Ending balance | $417 | $443 |

---

Revenues recognized during the year ended December 31, 2022 for performance obligations satisfied or partially satisfied in previous periods were immaterial.

**Remaining Performance Obligations**

As of December 31, 2022, the aggregate amount of transaction price allocated to remaining performance obligations, was $3,361 million, of which approximately 55% is expected to be recognized as revenues within 2 years and 75% is expected to be recognized as revenues within 5 years. Disclosure is not required for performance obligations that meet any of the following criteria:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)contracts with a duration of one year or less as determined under ASC Topic 606 "Revenue from Contracts with Customers,"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)contracts for which we recognize revenues based on the right to invoice for services performed,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-17 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)variable consideration in the form of a sales-based or usage based royalty promised in exchange for a license of intellectual property.

Many of our performance obligations meet one or more of these exemptions and therefore are not included in the remaining performance obligation amount disclosed above.

**Trade Accounts Receivable and Allowance for Credit Losses**

The following table presents the activity in the allowance for credit losses for the trade accounts receivable:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| Beginning balance | $50 | $57 | $67 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impact of adoption of the Credit Loss Standard |  |  | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit loss expense | 9 | 6 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Write-offs charged against the allowance | (16) | (13) | (17) |
| Ending balance | $43 | $50 | $57 |

---

**Note 3 — Business Combinations**

Acquisitions completed during each of the three years ended December 31, 2022, 2021 and 2020 were not individually or in the aggregate material to our operations. Accordingly, pro forma results have not been presented. We have allocated the purchase price related to these transactions to tangible and intangible assets acquired and liabilities assumed, including goodwill, based on their estimated fair values. The primary items that generated goodwill are the value of the acquired assembled workforces and synergies between the acquired companies and us, neither of which qualify as an identifiable intangible asset.

**2022**

In 2022, we acquired 100% ownership in each of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• AustinCSI, a digital transformation consultancy specializing in enterprise cloud and data analytics advisory services, acquired to complement our technology and industry expertise (acquired December 15, 2022); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Utegration, a full service consulting and solutions provider specializing in SAP technology and SAP-certified products for the energy and utilities sectors, acquired to expand and strengthen our industry expertise in our SAP practice (acquired December 19, 2022).

The allocations of preliminary purchase price to the fair value of the assets acquired and liabilities assumed were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(dollars in millions)** | **AustinCSI** | **Utegration** | **Total** | **Weighted Average Useful Life** |
| Cash | $— | $5 | $5 |  |
| Trade accounts receivable | 9 | 21 | 30 |  |
| Property and equipment and other assets | 4 | 15 | 19 |  |
| Non-deductible goodwill |  | 23 | 23 |  |
| Tax-deductible goodwill | 83 | 87 | 170 |  |
| Customer relationship assets | 69 | 83 | 152 | 11.1 years |
| Other intangible assets |  | 1 | 1 | 3.1 years |
| Current liabilities | (3) | (17) | (20) |  |
| Noncurrent liabilities | (1) | (4) | (5) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase price | $161 | $214 | $375 |  |

---

For the year ended December 31, 2022, revenues from acquisitions completed in 2022, since the dates of acquisition, were immaterial. For acquisitions completed in 2022, the allocation of purchase price is preliminary and will be finalized as soon as practicable within the measurement period, but in no event later than one year following the date of acquisition.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-18 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**2021**

In 2021, we acquired 100% ownership in each of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Linium, a cloud transformation consultancy group specializing in the ServiceNow platform and solutions for smart digital enterprise workflows, acquired to broaden our enterprise service management capabilities (acquired January 31, 2021);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Magenic, a provider of agile software and cloud development, DevOps, experience design and advisory services across a range of industries, acquired to enhance our global software engineering expertise (acquired February 1, 2021);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Servian, an Australia-based enterprise transformation consultancy specializing in data analytics, AI, digital services, experience design and cloud, acquired to enhance our digital portfolio and market presence in Australia and New Zealand (acquired April 1, 2021);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ESG Mobility, a digital automotive engineering research and development provider for connected, autonomous and electric vehicles, acquired to expand our digital engineering expertise, particularly in connected vehicles (acquired June 1, 2021);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• TQS, a global industrial data and intelligence company, acquired to accelerate our growth in IoT, data and analytics (acquired July 30, 2021);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hunter, a provider of digital engineering and project management services, acquired to extend our talent network in key markets, expanding our digital engineering resources in the United States (acquired August 16, 2021); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Devbridge, a software consultancy and product development company, acquired to expand our software product engineering capabilities and global delivery footprint (acquired December 9, 2021).

The allocations of purchase price to the fair value of the assets acquired and liabilities assumed were as follows:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **(dollars in millions)** | **Devbridge** | **Servian** | **Magenic** | **ESG Mobility** | **Linium** | **Other** | **Total** | **Weighted Average Useful Life** |
| Cash | $7 | $4 | $13 | $28 | $— | $2 | $54 |  |
| Trade accounts receivable | 12 | 15 | 17 | 30 | 5 | 12 | 91 |  |
| Property and equipment and other assets | 5 | 6 | 4 | 8 | 1 | 4 | 28 |  |
| Operating lease assets, net | 11 | 5 | 10 | 27 |  | 1 | 54 |  |
| Non-deductible goodwill | 41 | 184 | 10 | 26 |  | 18 | 279 |  |
| Tax-deductible goodwill | 140 |  | 137 | 24 | 57 | 10 | 368 |  |
| Customer relationship assets | 72 | 77 | 90 | 77 | 24 | 32 | 372 | 9.8 years |
| Other intangible assets |  | 2 | 1 |  |  |  | 3 | 3.8 years |
| Current liabilities | (11) | (12) | (29) | (22) | (2) | (7) | (83) |  |
| Noncurrent liabilities | (9) | (29) | (7) | (66) |  | (6) | (117) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase price, inclusive of contingent consideration | $268 | $252 | $246 | $132 | $85 | $66 | $1049 |  |

---

For the year ended December 31, 2021, revenues from acquisitions completed in 2021, since the dates of acquisition, were $301 million.

**Note 4 — Restructuring Charges**

During 2020, we incurred costs related to both our realignment program and our 2020 Fit for Growth Plan. Our realignment program, which began in 2017, targeted improved client focus, cost structure and the efficiency and effectiveness of our delivery while continuing to drive revenue growth. Our 2020 Fit for Growth Plan, which began in the fourth quarter of 2019, simplified our organizational model and optimized our cost structure in order to partially fund the investments required to execute on our strategy and advance our growth agenda and included our decision to exit certain content-related services that were not in line with our strategic vision for the Company. The total costs related to our realignment program and our 2020 Fit for Growth Plan are reported in "Restructuring charges" in our consolidated statements of operations. We do not allocate these charges to individual segments in internal management reports used by the chief operating decision maker. Accordingly, such expenses are included in our segment reporting as "unallocated costs." See <u>[Note 18](#i3254ddb0bbd740dd900dc699f73182d2_220)</u>.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-19 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

During 2020, we incurred $42 million of certain employee retention costs and professional fees related to our realignment program and $173 million of employee separation, employee retention and facility exit costs and other charges related to our 2020 Fit for Growth Plan. We did not incur any costs related to these plans during 2022 or 2021 and had no accrued employee separation costs related to these plans as of December 31, 2022.

**Note 5 — Investments**

Our investments were as follows as of December 31:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Short-term investments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity investment security | $10 | $26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale investment securities | 225 | 310 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Held-to-maturity investment securities | 24 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits | 51 | 554 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total short-term investments | $310 | $927 |

---

---

| | | |
|:---|:---|:---|
| Long-term investments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other investments | $70 | $66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted time deposits <sup>(1)</sup> | 357 | 397 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long-term investments | $427 | $463 |

---

(1)See <u>[Note 11](#i3254ddb0bbd740dd900dc699f73182d2_196)</u>.

**Equity Investment Security**

Our equity investment security is a U.S. dollar denominated investment in a fixed income mutual fund. During 2022, we sold $15 million of our investment in the fund. Realized and unrealized gains and losses were immaterial for the years ended December 31, 2022, 2021 and 2020.

**Available-for-Sale Investment Securities**

Our available-for-sale investment securities consist of highly rated U.S. dollar denominated investments in certificates of deposit and commercial paper maturing within one year. As of December 31, 2022, the amortized cost and fair value of the available-for-sale investments were each $225 million. As of December 31, 2021, the amortized cost and fair value of the available-for-sale investments were each $310 million. Unrealized losses were immaterial as of December 31, 2022 and 2021. There were no realized gains or losses related to the available-for-sale investment securities during the years ended December 31, 2022, 2021 and 2020. There were no sales of available-for-sale investment securities during the years ended December 31, 2022, 2021 and 2020.

**Held-to-Maturity Investment Securities**

Our held-to-maturity investment securities consist of Indian rupee denominated investments primarily in commercial paper and international corporate bonds. Our investment guidelines are to purchase securities that are investment grade at the time of acquisition. The basis for the measurement of fair value of our held-to-maturity investments is Level 2 in the fair value hierarchy.

The amortized cost and fair value of corporate debt securities as of December 31, 2022 and 2021 were each $12 million and $17 million, respectively. The amortized cost and fair value of commercial paper securities as of December 31, 2022 and 2021 were each $12 million and $20 million, respectively.

As of December 31, 2022, corporate debt securities in the amount of $12 million and commercial paper in the amount of $12 million were in an unrealized loss position. The total unrealized loss was less than $1 million and none of the securities had been in an unrealized loss position for longer than 12 months. As of December 31, 2021, $17 million of corporate debt securities and $10 million of commercial paper were in an unrealized loss position. The total unrealized loss was less than $1 million and none of the securities had been in an unrealized loss position for longer than 12 months.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-20 | **December 31, 2022 Form 10-K** |

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The securities in our portfolio are highly rated and short-term in nature. As of December 31, 2022, our corporate debt securities were rated AA+ or better and our commercial paper securities were rated A-1+ by CRISIL, an Indian subsidiary of S&P Global, or ICRA, the Indian affiliate of Moody's.

**Other Investments**

As of December 31, 2022 and 2021, we had equity method investments of $68 million and $63 million, respectively, primarily related to an investment in the technology sector. As of December 31, 2022 and 2021, we had equity securities without a readily determinable fair value of $2 million and $3 million, respectively.

**Note 6 — Property and Equipment, net**

Property and equipment were as follows as of December 31:

---

| | | | |
|:---|:---|:---|:---|
| | **Estimated Useful Life** | **2022** | **2021** |
| | (in years) | **(in millions)** | **(in millions)** |
| Buildings | 30 | $771 | $777 |
| Computer equipment | 3 – 5 | 729 | 638 |
| Computer software | 3 – 8 | 1033 | 926 |
| Furniture and equipment | 5 – 9 | 768 | 772 |
| Land |  | 7 | 7 |
| Capital work-in-progress |  | 111 | 116 |
| Leasehold improvements | Shorter of the lease term or<br>the life of the asset | 398 | 431 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sub-total |  | 3817 | 3667 |
| Accumulated depreciation and amortization |  | (2716) | (2496) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net |  | $1101 | $1171 |

---

Depreciation and amortization expense related to property and equipment was $385 million, $392 million and $407 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The gross amount of property and equipment recorded under finance leases was $17 million and $24 million as of December 31, 2022 and 2021, respectively. Accumulated amortization for our ROU finance lease assets was $9 million and $17 million as of December 31, 2022 and 2021, respectively. Amortization expense related to our ROU finance lease assets was $4 million, $7 million and $7 million for the years ended December 31, 2022, 2021 and 2020 respectively.

The gross amount of property and equipment recorded for software to be sold, leased or marketed reported in the caption "Computer software" above was $241 million and $201 million as of December 31, 2022 and 2021, respectively. Accumulated amortization for software to be sold, leased or marketed was $143 million and $106 million as of December 31, 2022 and 2021, respectively. Amortization expense for software to be sold, leased or marketed recorded as property and equipment was $37 million, $33 million and $30 million for the years ended December 31, 2022, 2021 and 2020, respectively.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-21 | **December 31, 2022 Form 10-K** |

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**Note 7 — Leases**

The following table provides information on the components of our operating and finance leases included in our consolidated statement of financial position as of December 31:

---

| | | | |
|:---|:---|:---|:---|
| **Leases** | **Location on Statement of Financial Position** | **2022** | **2021** |
| **Assets** | | **(in millions)** | **(in millions)** |
| &nbsp;&nbsp;&nbsp;&nbsp;ROU operating lease assets | Operating lease assets, net | $876 | $933 |
| &nbsp;&nbsp;&nbsp;&nbsp;ROU finance lease assets | Property and equipment, net | 8 | 7 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Total | $884 | $940 |
| **Liabilities** |  |  |  |
| Current |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease | Operating lease liabilities | $174 | $195 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance lease | Accrued expenses and other current liabilities | 5 | 8 |
| Noncurrent |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease | Operating lease liabilities, noncurrent | 714 | 783 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance lease | Other noncurrent liabilities | 8 | 5 |
|  | Total | $901 | $991 |

---

For the years ended December 31, 2022, 2021 and 2020, our operating lease costs were $256 million, $293 million and $302 million, respectively, including variable lease costs of $17 million, $10 million and $14 million, respectively. Our short-term lease rental expense was $21 million, $22 million and $20 million for the years ended December 31, 2022, 2021 and 2020, respectively. Lease interest expense related to our finance leases for years ended December 31, 2022, 2021 and 2020 was immaterial.

The following table provides information on the weighted average remaining lease term and weighted average discount rate for our operating leases as of December 31:

---

| | | |
|:---|:---|:---|
| **Operating Lease Term and Discount Rate** | **2022** | **2021** |
| Weighted average remaining lease term | 6.2 years | 6.5 years |
| Weighted average discount rate | 5.4% | 5.4% |

---

The following table provides supplemental cash flow and non-cash information related to our operating leases as of December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| Cash paid for amounts included in the measurement of operating lease liabilities | $241 | $274 | $271 |
| ROU assets obtained in exchange for operating lease liabilities | 164 | 100 | 273 |

---

Cash paid for amounts included in the measurement of finance lease liabilities and ROU assets obtained in exchange for finance lease liabilities were each immaterial for the years ended December 31, 2022, 2021 and 2020.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-22 | **December 31, 2022 Form 10-K** |

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The following table provides the schedule of maturities of our operating lease liabilities and a reconciliation of the undiscounted cash flows to the operating lease liabilities recognized in the statement of financial position as of December 31:

---

| | |
|:---|:---|
| **(in millions)** | **2022** |
| 2023 | $215 |
| 2024 | 180 |
| 2025 | 155 |
| 2026 | 129 |
| 2027 | 108 |
| Thereafter | 267 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating lease payments | 1054 |
| Interest | (166) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating lease liabilities | $888 |

---

As of December 31, 2022, additional obligations related to operating leases whose lease term had yet to commence were immaterial.

**Note 8 — Goodwill and Intangible Assets, net**

Changes in goodwill by our reportable business segments were as follows for the years ended December 31, 2022 and 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Segment** | **January 1, 2022** | **Goodwill Additions and Adjustments** | **Foreign Currency Translation Adjustments** | **December 31, 2022** |
| | **(in millions)** | **(in millions)** | **(in millions)** | **(in millions)** |
| Financial Services | $1109 | $5 | $(41) | $1073 |
| Health Sciences | 2831 | 2 | (14) | 2819 |
| Products and Resources | 967 | 127 | (32) | 1062 |
| Communications, Media and Technology | 713 | 59 | (16) | 756 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total goodwill | $5620 | $193 | $(103) | $5710 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Segment** | **January 1, 2021** | **Goodwill Additions and Adjustments** | **Foreign Currency Translation Adjustments** | **December 31, 2021** |
| | **(in millions)** | **(in millions)** | **(in millions)** | **(in millions)** |
| Financial Services | $932 | $198 | $(21) | $1109 |
| Health Sciences | 2755 | 84 | (8) | 2831 |
| Products and Resources | 780 | 200 | (13) | 967 |
| Communications, Media and Technology | 564 | 156 | (7) | 713 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total goodwill | $5031 | $638 | $(49) | $5620 |

---

Based on our most recent goodwill impairment assessment performed as of October 31, 2022, we concluded that the goodwill in each of our reporting units was not at risk of impairment. We have not recognized any impairment losses on our goodwill.

Components of intangible assets were as follows as of December 31:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2022** | **2022** | **2022** | **2021** | **2021** | **2021** |
| **(in millions)** | **Gross Carrying<br>Amount** | **Accumulated<br>Amortization** | **Net Carrying<br>Amount** | **Gross Carrying<br>Amount** | **Accumulated<br>Amortization** | **Net Carrying<br>Amount** |
| Customer relationships | $1803 | $(738) | $1065 | $1679 | $(610) | $1069 |
| Developed technology | 383 | (369) | 14 | 385 | (330) | 55 |
| Indefinite lived trademarks | 72 |  | 72 | 72 |  | 72 |
| Finite lived trademarks and other | 81 | (64) | 17 | 81 | (59) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total intangible assets | $2339 | $(1171) | $1168 | $2217 | $(999) | $1218 |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-23 | **December 31, 2022 Form 10-K** |

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Other than certain trademarks with indefinite lives, our intangible assets have finite lives and, as such, are subject to amortization. Amortization of intangible assets totaled $184 million, $182 million and $152 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The following table provides the estimated amortization expense related to our existing intangible assets for the next five years.

---

| | |
|:---|:---|
| **(in millions)** | **Estimated Amortization** |
| 2023 | $155 |
| 2024 | 150 |
| 2025 | 147 |
| 2026 | 144 |
| 2027 | 136 |

---

**Note 9 — Accrued Expenses and Other Current Liabilities**

Accrued expenses and other current liabilities were as follows as of December 31:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Compensation and benefits | $1446 | $1601 |
| Customer volume and other incentives | 222 | 242 |
| Income taxes | 217 | 74 |
| Professional fees | 165 | 220 |
| Other | 357 | 395 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total accrued expenses and other current liabilities | $2407 | $2532 |

---

**Note 10 — Debt**

In 2018, we entered into a Credit Agreement providing for a $750 million Term Loan and a $1,750 million unsecured revolving credit facility, which were due to mature in November 2023. In October 2022, we completed a debt refinancing and entered into a new credit agreement with a commercial bank syndicate ("New Credit Agreement") providing for a $650 million unsecured term loan ("New Term Loan") and a $1,850 million unsecured revolving credit facility, which are each due to mature in October 2027. The Credit Agreement was terminated upon the closing of the New Credit Agreement and the proceeds from the New Term Loan were used primarily to repay our outstanding Term Loan balance.

The New Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the New Credit Agreement), plus, in each case, an Applicable Margin (as defined in the New Credit Agreement). Initially, the Applicable Margin is 0.875% with respect to Term Benchmark loans and RFR loans and 0.00% with respect to ABR loans. Subsequently, the Applicable Margin with respect to Term Benchmark loans and RFR loans will be determined quarterly and may range from 0.75% to 1.125%, depending on our public debt ratings, or, if we have not received public debt ratings, from 0.875% to 1.125%, depending on our Leverage Ratio, which is the ratio of indebtedness for borrowed money to Consolidated EBITDA, as defined in the New Credit Agreement. The New Term Loan is a Term Benchmark loan.

We are required under the New Credit Agreement to make scheduled quarterly principal payments on the New Term Loan beginning in December 2023. The New Credit Agreement contains customary affirmative and negative covenants as well as a financial covenant. The financial covenant is tested at the end of each fiscal quarter and requires us to maintain a Leverage Ratio not in excess of 3.50:1.00, or for a period of up to four quarters following certain material acquisitions, 3.75:1.00. We were in compliance with all debt covenants and representations of the Credit Agreement as of December 31, 2022.

In March 2022, our India subsidiary renewed its one-year 13 billion Indian rupee ($157 million at the December 31, 2022 exchange rate) working capital facility, which requires us to repay any balances within 90 days from the date of disbursement. There is a 1.0% prepayment penalty applicable to payments made within 30 days of disbursement. This working capital facility contains affirmative and negative covenants and is renewable annually. As of December 31, 2022, we have not borrowed funds under this facility.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-24 | **December 31, 2022 Form 10-K** |

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**Short-term Debt**

As of December 31, 2022 and 2021, we had $8 million and $38 million of short-term debt related to current maturities of our term loan, with a weighted average interest rate of 5.2% and 1.0%, respectively.

**Long-term Debt**

The following summarizes our long-term debt balances as of December 31:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Term loan | $650 | $666 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Current maturities | (8) | (38) |
| &nbsp;&nbsp;&nbsp;Unamortized deferred financing costs | (4) | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt, net of current maturities | $638 | $626 |

---

The following represents the schedule of maturities of our New Term Loan:

---

| | |
|:---|:---|
| **Year** | **Amounts (in millions)** |
| 2023 | $8 |
| 2024 | 33 |
| 2025 | 33 |
| 2026 | 33 |
| 2027 | 543 |
| Total | $650 |

---

**Note 11 — Income Taxes**

Income before provision for income taxes shown below is based on the geographic location to which such income was attributed for years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| United States | $975 | $818 | $814 |
| Foreign | 2041 | 2009 | 1282 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before provision for income taxes | $3016 | $2827 | $2096 |

---

The provision for income taxes consisted of the following components for the years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| Current: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal and state | $492 | $210 | $137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign | 511 | 456 | 383 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current provision | 1003 | 666 | 520 |
| Deferred: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal and state | (240) | (50) | (77) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign | (33) | 77 | 261 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred (benefit) provision | (273) | 27 | 184 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total provision for income taxes | $730 | $693 | $704 |

---

In the third quarter of 2020, we reversed our indefinite reinvestment assertion on Indian earnings accumulated in prior years and recorded a $140 million Tax on Accumulated Indian Earnings. The recorded income tax expense reflects the India

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| | | |
|:---|:---|:---|
| **Cognizant** | F-25 | **December 31, 2022 Form 10-K** |

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withholding tax on unrepatriated Indian earnings, which were $5.2 billion as of December 31, 2019, net of applicable U.S. foreign tax credits.

We are involved in two separate ongoing disputes with the ITD in connection with previously disclosed share repurchase transactions undertaken by CTS India in 2013 and 2016 to repurchase shares from its shareholders (non-Indian Cognizant entities) valued at $523 million and $2.8 billion, respectively.

The 2016 transaction was undertaken pursuant to a plan approved by the High Court in Chennai, India, and resulted in the payment of $135 million in Indian income taxes - an amount we believe includes all the applicable taxes owed for this transaction under Indian law. In March 2018, the ITD asserted that it is owed an additional 33 billion Indian rupees ($399 million at the December 31, 2022 exchange rate) on the 2016 transaction. We deposited 5 billion Indian rupees, representing 15% of the disputed tax amount related to the 2016 transaction, with the ITD. As of December 31, 2022 and 2021, the deposit with the ITD was $60 million and $67 million, respectively, presented in "Other noncurrent assets." Additionally, certain time deposits of CTS India were placed under lien in favor of the ITD, representing the remainder of the disputed tax amount. As of December 31, 2022 and 2021, the balance of deposits under lien was 30 billion Indian rupees, including previously earned interest, or $357 million and $397 million, respectively, as presented in "Long-term investments." The dispute in relation to the 2013 share repurchase transaction is also in litigation. At this time, the ITD has not made specific demands with regards to the 2013 transaction.

In April 2020, we received a formal assessment from the ITD on the 2016 transaction, which was consistent with the ITD's previous assertions. In June 2020, we filed an appeal against this assessment to the CITA. In March 2022, we received a negative decision from the CITA. The matter is currently pending before the Income Tax Appellate Tribunal.

We continue to believe we have paid all applicable taxes owed on both the 2016 and the 2013 transactions and we continue to defend our positions with respect to both matters. Accordingly, we have not recorded any reserves for these matters as of December 31, 2022.

The reconciliation between the U.S. federal statutory rate and our effective income tax rate were as follows for the years ended December 31:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(Dollars in millions)** | **2022** | **%** | **2021** | **%** | **2020** | **%** |
| Tax expense, at U.S. federal statutory rate | $633 | 21.0 | $594 | 21.0 | $440 | 21.0 |
| State and local income taxes, net of federal benefit | 63 | 2.1 | 50 | 1.8 | 52 | 2.5 |
| Non-taxable income for Indian tax purposes | (6) | (0.2) | (36) | (1.3) | (48) | (2.3) |
| Rate differential on foreign earnings | 98 | 3.2 | 137 | 4.8 | 178 | 8.5 |
| Recognition of benefits related to uncertain tax positions | (43) | (1.4) | (14) | (0.5) |  |  |
| Credits and other incentives | (17) | (0.6) | (42) | (1.5) | (51) | (2.4) |
| Reversal of indefinite reinvestment assertion |  |  |  |  | 140 | 6.6 |
| Other | 2 | 0.1 | 4 | 0.2 | (7) | (0.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total provision for income taxes | $730 | 24.2 | $693 | 24.5 | $704 | 33.6 |

---

Our Indian subsidiaries are primarily export-oriented and, through March 31, 2022, benefited from certain income tax holiday benefits granted by the government of India for export activities conducted within SEZs. In December 2019, India enacted the India Tax Law, which enables Indian companies to elect to be taxed at a lower income tax rate of 25.17%, as compared to the otherwise applicable income tax rate of 34.94%. Once a company elects into the lower income tax rate, a company may not benefit from any income tax holidays associated with SEZs and certain other tax incentives and carryforwards, and may not reverse its election. We elected into the new tax regime starting with the India fiscal year beginning on April 1, 2022. For the years ended December 31, 2022, 2021 and 2020, the effect of the income tax holidays granted by the Indian government was to reduce the overall income tax provision and increase net income by $6 million, $36 million and $48 million, respectively, and increase diluted EPS by $0.01, $0.07 and $0.09, respectively.

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| | | |
|:---|:---|:---|
| **Cognizant** | F-26 | **December 31, 2022 Form 10-K** |

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The significant components of deferred income tax assets and liabilities recorded on the consolidated statements of financial position were as follows as of December 31:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Deferred income tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net operating losses | $46 | $52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue recognition | 37 | 116 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation and benefits | 159 | 230 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit carryforwards | 16 | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses not currently deductible | 498 | 121 |
|  | 756 | 546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: valuation allowance | (41) | (46) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax assets, net | 715 | 500 |
| Deferred income tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 194 | 202 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred costs | 48 | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 11 | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax liabilities | 253 | 314 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred income tax assets | $462 | $186 |

---

At December 31, 2022, we had foreign and U.S. net operating loss carryforwards of approximately $103 million and $96 million, respectively. We have recorded valuation allowances on certain net operating loss carryforwards.

Provisions enacted in the Tax Reform Act in December 2017 related to the capitalization of research and experimental expenditures became effective on January 1, 2022. These provisions require us to capitalize research and experimental expenditures and amortize them for tax purposes over five or fifteen years, depending on where the research is conducted. Previously these expenses could be deducted in the year incurred. The implementation of these provisions has increased our deferred tax asset and income taxes payable in the United States for the 2022 tax year by approximately $300 million. The capitalized expenses do not significantly impact our effective tax rate.

We conduct business globally and file income tax returns in the United States, including federal and state, as well as various foreign jurisdictions. Tax years that remain subject to examination by the IRS are 2017 and onward, and years that remain subject to examination by state authorities vary by state. Years under examination by foreign tax authorities are 2001 and onward. In addition, transactions between our affiliated entities are arranged in accordance with applicable transfer pricing laws, regulations and relevant guidelines. As a result, and due to the interpretive nature of certain aspects of these laws and guidelines, we have pending applications for APAs before the taxing authorities in some of our most significant jurisdictions.

We record incremental tax expense, based upon the more-likely-than-not standard, for any uncertain tax positions. In addition, when applicable, we adjust the previously recorded income tax expense to reflect examination results when the position is effectively settled or otherwise resolved. Our ongoing evaluations of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can result in adjustments that increase or decrease our effective income tax rate, as well as impact our operating results. The specific timing of when the resolution of each tax position will be reached is uncertain.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-27 | **December 31, 2022 Form 10-K** |

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Changes in unrecognized income tax benefits were as follows for the years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| Balance, beginning of year | $194 | $193 | $152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions based on tax positions related to the current year | 53 | 34 | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions for tax positions of prior years | 65 | 16 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions for tax positions of acquired subsidiaries |  | 12 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reductions for tax positions due to lapse of statutes of limitations | (43) | (17) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Settlements |  | (43) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange movement |  | (1) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance, end of year | $269 | $194 | $193 |

---

In the third quarter of 2022, we recognized an income tax benefit of $36 million related to a specific uncertain tax position that was previously unrecognized in our prior year consolidated financial statements. The recognition of the benefit in the third quarter of 2022 was based on management's reassessment regarding whether this unrecognized tax benefit met the more-likely-than-not threshold in light of the lapse in the statute of limitations as to a portion of such benefit. In 2021, we reached an agreement with the IRS, which settled tax years 2012 through 2016. As a result of this settlement, in the first quarter of 2021, we recorded a $14 million discrete benefit to the provision for income taxes.

The unrecognized income tax benefits would affect our effective income tax rate, if recognized. While the Company believes uncertain tax positions may be settled or resolved within the next twelve months, it is difficult to estimate the income tax impact of these potential resolutions at this time. We recognize accrued interest and any penalties associated with uncertain tax positions as part of our provision for income taxes. The total amount of accrued interest and penalties at December 31, 2022 and 2021 was $33 million and $30 million, respectively, and relates to U.S. and foreign tax matters. The total amount of interest and penalties recorded in the provision for income taxes in each of 2022, 2021 and 2020 was immaterial.

**Note 12 — Derivative Financial Instruments**

In the normal course of business, we use foreign exchange forward and option contracts to manage foreign currency exchange rate risk. Derivatives may give rise to credit risk from the possible non-performance by counterparties. Credit risk is limited to the fair value of those contracts that are favorable to us. We have limited our credit risk by limiting the amount of credit exposure with any one financial institution and conducting ongoing evaluation of the creditworthiness of the financial institutions with which we do business. In addition, all the assets and liabilities related to the foreign exchange derivative contracts set forth in the below table are subject to master netting arrangements, such as the International Swaps and Derivatives Association Master Agreement, with each individual counterparty. These master netting arrangements generally provide for net settlement of all outstanding contracts with the counterparty in the case of an event of default or a termination event. We have presented all the assets and liabilities related to the foreign exchange derivative contracts, as applicable, on a gross basis, with no offsets, in our consolidated statements of financial position. There is no financial collateral (including cash collateral) posted or received by us related to the foreign exchange derivative contracts.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-28 | **December 31, 2022 Form 10-K** |

---

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The following table provides information on the location and fair values of derivative financial instruments included in our consolidated statements of financial position as of December 31:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in millions)** | | **2022** | **2022** | **2021** | **2021** |
| **Designation of Derivatives** | **Location on Statement of<br>Financial Position** | **Assets** | **Liabilities** | **Assets** | **Liabilities** |
| Foreign exchange forward and option contracts – Designated as cash flow hedging instruments | Other current assets | $1 | $— | $51 | $— |
|  | Other noncurrent assets | 1 |  | 15 |  |
|  | Accrued expenses and other current liabilities |  | 53 |  |  |
|  | Other noncurrent liabilities |  | 17 |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 2 | 70 | 66 |  |
| Foreign exchange forward contracts - Not designated as hedging instruments | Other current assets | 4 |  | 3 |  |
|  | Accrued expenses and other current liabilities |  | 5 |  | 7 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 4 | 5 | 3 | 7 |
| Total |  | $6 | $75 | $69 | $7 |

---

**Cash Flow Hedges**

We have entered into a series of foreign exchange derivative contracts that are designated as cash flow hedges of Indian rupee denominated payments in India. These contracts are intended to partially offset the impact of movement of the Indian rupee against the U.S. dollar on future operating costs and are scheduled to mature each month during 2023 and 2024. The changes in fair value of these contracts are initially reported in "Accumulated other comprehensive income (loss)" in our consolidated statements of financial position and are subsequently reclassified to earnings within "Cost of revenues" and "Selling, general and administrative expenses" in our consolidated statements of operations in the same period that the forecasted Indian rupee denominated payments are recorded in earnings. As of December 31, 2022, we estimate that $40 million, net of tax, of the net losses related to derivatives designated as cash flow hedges reported in the caption "Accumulated other comprehensive income (loss)" in our consolidated statements of financial position is expected to be reclassified into earnings within the next 12 months.

The notional value of our outstanding contracts by year of maturity was as follows as of December 31:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| 2022 | $— | $1643 |
| 2023 | 1865 | 880 |
| 2024 | 1010 |  |
| Total notional value of contracts outstanding <sup>(1)</sup> | $2875 | $2523 |

---

(1)Includes $78 million notional value of option contracts as of December 31, 2021, with the remaining notional value related to forward contracts. There were no option contracts outstanding as of December 31, 2022.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-29 | **December 31, 2022 Form 10-K** |

---

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<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The following table provides information on the location and amounts of pre-tax losses and gains on our cash flow hedges for the year ended December 31:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in millions)** | **Change in<br>Derivative Losses and Gains Recognized<br>in Accumulated Other<br>Comprehensive Income (Loss)<br>(effective portion)** | **Change in<br>Derivative Losses and Gains Recognized<br>in Accumulated Other<br>Comprehensive Income (Loss)<br>(effective portion)** | **Location of Net (Losses) and<br>Gains Reclassified<br>from Accumulated Other<br>Comprehensive Income (Loss)<br>into Income<br>(effective portion)** | **Net (Losses) and Gains Reclassified<br>from Accumulated Other<br>Comprehensive Income (Loss)<br>into Income<br>(effective portion)** | **Net (Losses) and Gains Reclassified<br>from Accumulated Other<br>Comprehensive Income (Loss)<br>into Income<br>(effective portion)** |
|  | **2022** | **2021** |  | **2022** | **2021** |
| Foreign exchange forward and option contracts – Designated as cash flow hedging instruments | $(153) | $67 | Cost of revenues | $(13) | $55 |
|  |  |  | SG&A expenses | (1) | 8 |
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;Total | $(14) | $63 |

---

The activity related to the change in net unrealized gains and losses on the cash flow hedges included in "Accumulated other comprehensive income (loss)" in our consolidated statements of stockholders' equity is presented in <u>[Note 14](#i3254ddb0bbd740dd900dc699f73182d2_205)</u>.

**Other Derivatives**

We use foreign exchange forward contracts to provide an economic hedge against balance sheet exposures to certain monetary assets and liabilities denominated in currencies other than the functional currency of our foreign subsidiaries. We entered into foreign exchange forward contracts that are scheduled to mature in the first quarter of 2023. Realized gains or losses and changes in the estimated fair value of these derivative financial instruments are recorded in the caption "Foreign currency exchange gains (losses), net" in our consolidated statements of operations.

Additional information related to our outstanding foreign exchange forward contracts not designated as hedging instruments was as follows as of December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2022** | **2021** | **2021** |
|  | **Notional** | **Fair Value** | **Notional** | **Fair Value** |
| Contracts outstanding | $1433 | $(1) | $847 | $(4) |

---

The following table provides information on the location and amounts of realized and unrealized pre-tax gains on our other derivative financial instruments for the year ended December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **Location of Net Gains<br>on Derivative Instruments** | **Amount of Net Gains<br>on Derivative Instruments** | **Amount of Net Gains<br>on Derivative Instruments** |
|  |  | **2022** | **2021** |
| Foreign exchange forward contracts - Not designated as hedging instruments | Foreign currency exchange gains (losses), net | $23 | $13 |

---

The related cash flow impacts of all of the derivative activities are reflected as cash flows from operating activities.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-30 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Note 13 — Fair Value Measurements**

We measure our cash equivalents, certain investments, contingent consideration liabilities and foreign exchange forward and option contracts at fair value. Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions.

The fair value hierarchy consists of the following three levels:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in millions)** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Cash equivalents: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Money market funds | $367 | $— | $— | $367 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits |  | 359 |  | 359 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial paper |  | 512 |  | 512 |
| Short-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits |  | 51 |  | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity investment security | 10 |  |  | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale investment securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificates of deposit and commercial paper |  | 225 |  | 225 |
| Other current assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange forward contracts |  | 5 |  | 5 |
| Long-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted time deposits <sup>(1)</sup> |  | 357 |  | 357 |
| Other noncurrent assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange forward contracts |  | 1 |  | 1 |
| Accrued expenses and other current liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange forward contracts |  | (58) |  | (58) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration liabilities |  |  | (9) | (9) |
| Other noncurrent liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange forward contracts |  | (17) |  | (17) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration liabilities |  |  | (13) | (13) |

---

(1) See <u>[Note 11](#i3254ddb0bbd740dd900dc699f73182d2_196)</u>.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-31 | **December 31, 2022 Form 10-K** |

---

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The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in millions)** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Cash equivalents: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Money market funds | $507 | $— | $— | $507 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits |  | 4 |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial paper |  | 266 |  | 266 |
| Short-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits |  | 554 |  | 554 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity investment security | 26 |  |  | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale investment securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial paper |  | 310 |  | 310 |
| Other current assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange forward and option contracts |  | 54 |  | 54 |
| Long-term investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted time deposits <sup>(1)</sup> |  | 397 |  | 397 |
| Other noncurrent assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange forward contracts |  | 15 |  | 15 |
| Accrued expenses and other current liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange forward contracts |  | (7) |  | (7) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration liabilities |  |  | (14) | (14) |
| Other noncurrent liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration liabilities |  |  | (21) | (21) |

---

(1)See <u>[Note 11](#i3254ddb0bbd740dd900dc699f73182d2_196)</u>

The following table summarizes the changes in Level 3 contingent consideration liabilities:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **2022** | **2021** |
| Beginning balance | $35 | $54 |
| &nbsp;&nbsp;&nbsp;Initial measurement recognized at acquisition | 1 | 24 |
| &nbsp;&nbsp;&nbsp;Change in fair value recognized in SG&A expenses | (1) | (30) |
| &nbsp;&nbsp;&nbsp;Payments and other adjustments | (13) | (13) |
| Ending balance | $22 | $35 |

---

We measure the fair value of money market funds based on quoted prices in active markets for identical assets and measure the fair value of our equity investment security based on the published daily net asset value at which investors can freely subscribe to or redeem from the fund. The fair value of certificates of deposit and commercial paper is measured based on relevant trade data, dealer quotes, or model-driven valuations using significant inputs derived from or corroborated by observable market data, such as yield curves and credit spreads. The carrying value of the time deposits approximated fair value as of December 31, 2022 and 2021.

We estimate the fair value of each foreign exchange forward contract by using a present value of expected cash flows model. This model calculates the difference between the current market forward price and the contracted forward price for each foreign exchange forward contract and applies the difference in the rates to each outstanding contract. The market forward rates include a discount and credit risk factor. We estimate the fair value of each foreign exchange option contract by using a variant of the Black-Scholes model. This model uses present value techniques and reflects the time value and intrinsic value based on

observable market rates.

We estimate the fair value of contingent consideration liabilities associated with acquisitions using a variation of the income approach, which utilizes one or more significant inputs that are unobservable. This approach calculates the fair value of such liabilities based on the probability-weighted expected performance of the acquired entity against the target performance metric, discounted to present value when appropriate.

During the years ended December 31, 2022, 2021 and 2020 there were no transfers among Level 1, Level 2 or Level 3 financial assets and liabilities.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-32 | **December 31, 2022 Form 10-K** |

---

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<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Note 14 — Accumulated Other Comprehensive Income (Loss)**

Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the year ended December 31, 2022:

---

| | | | |
|:---|:---|:---|:---|
| | **2022** | **2022** | **2022** |
| **(in millions)** | **Before Tax<br>Amount** | **Tax<br>Effect** | **Net of Tax<br>Amount** |
| Foreign currency translation adjustments: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | $(22) | $2 | $(20) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in foreign currency translation adjustments | (234) | 6 | (228) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ending balance | $(256) | $8 | $(248) |
| Unrealized gains (losses) on cash flow hedges: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | $71 | $(14) | $57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized losses arising during the period | (153) | 34 | (119) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassifications of net losses to: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of revenues | 13 | (3) | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SG&A expenses | 1 |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change | (139) | 31 | (108) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ending balance | $(68) | $17 | $(51) |
| Accumulated other comprehensive income (loss): |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | $49 | $(12) | $37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) | (373) | 37 | (336) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ending balance | $(324) | $25 | $(299) |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-33 | **December 31, 2022 Form 10-K** |

---

------

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Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the years ended December 31, 2021 and 2020:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2021** | **2021** | **2021** | **2020** | **2020** | **2020** |
| **(in millions)** | **Before Tax<br>Amount** | **Tax<br>Effect** | **Net of Tax<br>Amount** | **Before Tax<br>Amount** | **Tax<br>Effect** | **Net of Tax<br>Amount** |
| Foreign currency translation adjustments: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | $56 | $(1) | $55 | $(63) | $(1) | $(64) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in foreign currency translation adjustments | (78) | 3 | (75) | 119 |  | 119 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ending balance | $(22) | $2 | $(20) | $56 | $(1) | $55 |
| Unrealized gains on cash flow hedges: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | $67 | $(12) | $55 | $31 | $(5) | $26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized gains arising during the period | 67 | (13) | 54 | 39 | (8) | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassifications of net (gains) to: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of revenues | (55) | 10 | (45) | (3) | 1 | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SG&A expenses | (8) | 1 | (7) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change | 4 | (2) | 2 | 36 | (7) | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ending balance | $71 | $(14) | $57 | $67 | $(12) | $55 |
| Accumulated other comprehensive income (loss): |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning balance | $123 | $(13) | $110 | $(32) | $(6) | $(38) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) | (74) | 1 | (73) | 155 | (7) | 148 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ending balance | $49 | $(12) | $37 | $123 | $(13) | $110 |

---

**Note 15 — Commitments and Contingencies**

We are involved in various claims and legal proceedings arising in the ordinary course of business. We accrue a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, we do not record a liability, but instead disclose the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. While we do not expect that the ultimate resolution of any existing claims and proceedings (other than the specific matters described below, if decided adversely), individually or in the aggregate, will have a material adverse effect on our financial position, an unfavorable outcome in some or all of these proceedings could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future.

On January 15, 2015, Syntel sued TriZetto and Cognizant in the USDC-SDNY. Syntel's complaint alleged breach of contract against TriZetto, and tortious interference and misappropriation of trade secrets against Cognizant and TriZetto, stemming from Cognizant's hiring of certain former Syntel employees. Cognizant and TriZetto countersued on March 23, 2015, for breach of contract, misappropriation of trade secrets and tortious interference, based on Syntel's misuse of TriZetto confidential information and abandonment of contractual obligations. Cognizant and TriZetto subsequently added federal Defend Trade Secrets Act and copyright infringement claims for Syntel's misuse of TriZetto's proprietary technology. The parties' claims were narrowed by the court and the case was tried before a jury, which on October 27, 2020, returned a verdict in favor of Cognizant in the amount of $855 million, including $570 million in punitive damages. On April 20, 2021, the USDC-SDNY issued a post-trial order that, among other things, affirmed the jury's award of $285 million in actual damages, but reduced the award of punitive damages from $570 million to $285 million, thereby reducing the overall damages award from $855 million to $570 million. The USDC-SDNY subsequently issued a final judgment consistent with the April 20<sup>th</sup> order. On May 26, 2021, Syntel filed a notice of appeal to the Second Circuit, and on June 3, 2021 the USDC-SDNY stayed execution of judgment pending appeal. We will not record the gain in our financial statements until it becomes realizable.

On February 28, 2019, a ruling of the SCI interpreting the India Defined Contribution Obligation altered historical understandings of the obligation, extending it to cover additional portions of the employee's income. As a result, the ongoing contributions of our affected employees and the Company were required to be increased. In the first quarter of 2019, we

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-34 | **December 31, 2022 Form 10-K** |

---

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accrued $117 million with respect to prior periods, assuming retroactive application of the SCI's ruling, in "Selling, general and administrative expenses" in our consolidated statement of operations. There is significant uncertainty as to how the liability should be calculated as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current and former employees and whether interest and penalties may be assessed. Since the ruling, a variety of trade associations and industry groups have advocated to the Indian government, highlighting the harm to the information technology sector, other industries and job growth in India that would result from a retroactive application of the ruling. It is possible the Indian government will review the matter and there is a substantial question as to whether the Indian government will apply the SCI's ruling on a retroactive basis. As such, the ultimate amount of our obligation may be materially different from the amount accrued.

On October 31, 2016, November 15, 2016 and November 18, 2016, three putative shareholder derivative complaints were filed in New Jersey Superior Court, Bergen County, naming us, all of our then current directors and certain of our current and former officers at that time as defendants. These actions were consolidated in an order dated January 24, 2017. The complaints assert claims for breach of fiduciary duty, corporate waste, unjust enrichment, abuse of control, mismanagement, and/or insider selling by defendants. On April 26, 2017, the New Jersey Superior Court deferred further proceedings by dismissing the consolidated putative shareholder derivative litigation without prejudice but permitting the parties to file a motion to vacate the dismissal in the future.

On February 22, 2017, April 7, 2017, May 10, 2017 and March 11, 2019, four additional putative shareholder derivative complaints were filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as defendants. These actions were consolidated in an order dated May 14, 2019. On August 3, 2020, lead plaintiffs filed a consolidated amended complaint. The consolidated amended compliant asserts claims similar to those in the previously-filed putative shareholder derivative actions. On February 14, 2022, we and certain of our current and former directors and officers moved to dismiss the consolidated amended complaint. On September 27, 2022, the USDC-NJ granted those motions and dismissed the consolidated amended complaint in its entirety with prejudice. Plaintiffs filed a notice of appeal on October 27, 2022.

On June 1, 2021, an eighth putative shareholder derivative complaint was filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as defendants. The complaint asserts claims similar to those in the previously-filed putative shareholder derivative actions. On March 31, 2022, we and certain of our current and former directors and officers moved to dismiss the complaint. On November 30, 2022, the USDC-NJ denied without prejudice those motions. The USDC-NJ ordered the parties to conduct limited discovery related to the issue of whether our board of directors wrongfully refused the plaintiff's earlier litigation demand and, after the conclusion of such limited discovery, to file targeted motions for summary judgment on the issue of wrongful refusal.

We are presently unable to predict the duration, scope or result of the putative shareholder derivative actions. Although the Company continues to defend the putative shareholder derivative actions vigorously, these lawsuits are subject to inherent uncertainties, the actual cost of such litigation will depend upon many unknown factors and the outcome of the litigation is necessarily uncertain.

We have indemnification and expense advancement obligations pursuant to our bylaws and indemnification agreements with respect to certain current and former members of senior management and the Company's board of directors. In connection with the matters that were the subject of our previously disclosed internal investigation, the DOJ and SEC investigations and the related litigation, we have received and expect to continue to receive requests under such indemnification agreements and our bylaws to provide funds for legal fees and other expenses. There are no amounts remaining available to us under applicable insurance policies for our ongoing indemnification and advancement obligations with respect to certain of our current and former officers and directors or incremental legal fees and other expenses related to the above matters.

See <u>[Note 11](#i3254ddb0bbd740dd900dc699f73182d2_196)</u> for information relating to the ITD Dispute.

Many of our engagements involve projects that are critical to the operations of our clients' business and provide benefits that are difficult to quantify. Any failure in a client's systems or our failure to meet our contractual obligations to our clients, including any breach involving a client's confidential information or sensitive data, or our obligations under applicable laws or regulations could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to contractually limit our liability for damages arising from negligent acts, errors, mistakes, or omissions in rendering our services, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances or will otherwise protect us from liability for damages. Although we have general liability insurance coverage, including coverage for errors or omissions, we retain a significant portion of risk through our insurance deductibles and there can be no assurance that such coverage will cover all types of claims, continue to be available on reasonable terms or will be

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-35 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. The successful assertion of one or more large claims against us that exceed or are not covered by our insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, results of operations, financial position and cash flows for a particular period.

In the normal course of business and in conjunction with certain client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients or other parties with whom we conduct business with respect to certain matters. These arrangements can include provisions whereby we agree to hold the indemnified party and certain of their affiliated entities harmless with respect to third-party claims related to such matters as our breach of certain representations or covenants, our intellectual property infringement, our gross negligence or willful misconduct or certain other claims made against certain parties. Payments by us under any of these arrangements are generally conditioned on the client making a claim and providing us with full control over the defense and settlement of such claim. It is not possible to determine the maximum potential liability under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Historically, we have not made material payments under these indemnification agreements and therefore they have not had a material impact on our operating results, financial position, or cash flows. However, if events arise requiring us to make payment for indemnification claims under our indemnification obligations in contracts we have entered, such payments could have a material adverse effect on our business, results of operations, financial position and cash flows for a particular period.

**Note 16 — Employee Benefits**

We contribute to defined contribution plans, including 401(k) savings and supplemental retirement plans in the United States. Total expenses for our contributions to these plans, excluding the India plans described below, were $172 million, $135 million and $118 million for the years ended December 31, 2022, 2021 and 2020, respectively.

In addition, we maintain employee benefit plans that cover substantially all India-based employees. The employees' provident fund, pension and family pension plans are statutorily defined contribution retirement benefit plans. Under the plans, employees contribute up to 12.0% of their eligible compensation, which is matched by an equal contribution by the Company. For these plans, we recognized a contribution expense of $143 million, $121 million and $98 million for the years ended December 31, 2022, 2021 and 2020, respectively.

We also maintain a gratuity plan in India that is a statutory post-employment benefit plan providing defined lump sum benefits. We make annual contributions to the employees' gratuity fund established with a government-owned insurance corporation to fund a portion of the estimated obligation. Our liability for the gratuity plan reflected the undiscounted benefit obligation payable as of the balance sheet date, which was based upon the employees' salary and years of service. As of December 31, 2022 and 2021, the amount accrued under the gratuity plan was $99 million and $118 million, which is net of fund assets of $206 million and $212 million, respectively. Expense recognized by us was $45 million, $70 million and $35 million for the years ended December 31, 2022, 2021 and 2020, respectively.

**Note 17 — Stock-Based Compensation Plans**

The Company's 2017 Incentive Plan and the Purchase Plan provide for the issuance of up to 48.8 million shares (plus any shares underlying outstanding awards that are forfeited under the 2009 Incentive Plan) and 40.0 million shares, respectively, of Class A common stock to eligible employees. The 2017 Incentive Plan does not affect any awards outstanding under the 2009 Incentive Plan. As of December 31, 2022, we have 17.3 million and 2.6 million shares available for grant under the 2017 Incentive Plan and the Purchase Plan, respectively.

The allocation of total stock-based compensation expense between cost of revenues and selling, general and administrative expenses as well as the related income tax benefit were as follows for the three years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| Cost of revenues | $33 | $49 | $51 |
| SG&A expenses | 228 | 197 | 181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stock-based compensation expense | $261 | $246 | $232 |
| Income tax benefit | $59 | $59 | $48 |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-36 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Restricted Stock Units and Performance Stock Units**

We granted RSUs that vest in quarterly or annual installments over periods of up to four years to employees, including our executive officers. A summary of the activity for RSUs granted under our stock-based compensation plans as of December 31, 2022 and changes during the year then ended is presented below:

---

| | | |
|:---|:---|:---|
| | **Number of<br>Units<br>(in millions)** | **Weighted Average<br>Grant Date<br>Fair Value<br>(in dollars)** |
| Unvested at January 1, 2022 | 3.9 | $70.11 |
| Granted | 3.1 | 78.20 |
| Vested | (2.9) | 72.19 |
| Forfeited | (0.7) | 76.07 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unvested at December 31, 2022 | 3.4 | $74.54 |

---

The weighted-average grant date fair value of RSUs granted in 2022, 2021 and 2020 was $78.20, $74.66 and $61.85, respectively. As of December 31, 2022, $182 million of total remaining unrecognized stock-based compensation cost related to RSUs is expected to be recognized over the weighted-average remaining requisite service period of 1.6 years.

We granted PSUs that vest over periods up to four years to employees, including our executive officers. The vesting of PSUs is contingent on meeting certain financial performance targets, market conditions and continued service. A summary of the activity for PSUs granted under our stock-based compensation plans as of December 31, 2022 and changes during the year then ended is presented below. The presentation reflects the number of PSUs at the maximum performance milestones.

---

| | | |
|:---|:---|:---|
| | **Number of<br>Units<br>(in millions)** | **Weighted Average<br>Grant Date<br>Fair Value<br>(in dollars)** |
| Unvested at January 1, 2022 | 2.3 | $67.55 |
| Granted | 1.0 | 90.92 |
| Vested | (0.1) | 60.37 |
| Forfeited | (0.4) | 75.83 |
| Adjustment at the conclusion of the performance measurement period | (0.4) | 63.88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unvested at December 31, 2022 | 2.4 | $76.93 |

---

The weighted-average grant date fair value of PSUs granted in 2022, 2021 and 2020 was $90.92, $73.38 and $62.00, respectively. As of December 31, 2022, $35 million of the total remaining unrecognized stock-based compensation cost related to PSUs is expected to be recognized over the weighted-average remaining requisite service period of 1.0 year.

All RSUs and PSUs have dividend equivalent rights, which entitle holders to the same dividend value per share as holders of common stock. Dividend equivalent rights are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs and PSUs and are accumulated and paid when the underlying shares vest.

**Purchase Plan**

Beginning in 2022, the Purchase Plan provides for eligible employees to purchase shares of Class A common stock at a price equal to 95% of the fair market value per share of our Class A common stock on the last date of the purchase period. This plan has been deemed non-compensatory and, therefore, no compensation expense has been recorded. During the year ended December 31, 2022, we issued 1.3 million shares of Class A common stock under the Purchase Plan.

For the years ended December 31, 2021 and 2020, the Purchase Plan provided for eligible employees to purchase shares of Class A common stock at a price of 90% of the lesser of: (a) the fair market value of a share of Class A common stock on the first date of the purchase period or (b) the fair market value of a share of Class A common stock on the last date of the purchase period. Stock-based compensation expense for the Purchase Plan was recognized over the vesting period of three months on a straight-line basis. The fair values of the options granted under the Purchase Plan were estimated at the date of grant during the years ended December 31, 2021 and 2020 based upon the following assumptions, and were as follows:

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-37 | **December 31, 2022 Form 10-K** |

---

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<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| | **2021** | **2020** |
| Dividend yield | 1.3% | 1.1% |
| Weighted average volatility factor | 27.5% | 35.9% |
| Weighted average risk-free interest rate | 0.03% | 0.6% |
| Weighted average expected life (in years) | 0.25 | 0.25 |
| Weighted average grant date fair value | $11.72 | $9.38 |

---

**Note 18 — Segment Information**

We have seven industry-based operating segments, which are aggregated into four reportable business segments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Financial Services, which consists of the banking and insurance operating segments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Health Sciences (previously referred to as Healthcare), which consists of a single operating segment of the same name;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Products and Resources, which consists of the retail and consumer goods; manufacturing, logistics, energy, and utilities; and travel and hospitality operating segments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Communications, Media and Technology, which consists of a single operating segment of the same name.

Our segments are industry-based, and as such, we report revenue from clients in the segment with which our clients are most closely aligned. Our client partners, account executives and client relationship managers are aligned in accordance with the specific industries they serve. Our chief operating decision maker evaluates the Company's performance and allocates resources based on segment revenues and operating profit. Segment operating profit is defined as income from operations before unallocated costs. Generally, operating expenses for each operating segment have similar characteristics and are subject to the same factors, pressures and challenges. However, the economic environment and its effects on industries served by the operating segments may affect revenues and operating expenses to differing degrees.

In 2022, we made certain changes to the internal measurement of segment operating profits for the purpose of evaluating

segment performance and resource allocation. The primary reason for the change was to charge to the segments the costs that they directly manage and control. Specifically, segment operating profit now includes costs related to non-delivery personnel that support consulting services, which were previously included in "unallocated costs." We have reported 2022 segment operating profits using the new allocation methodology and have recast the 2021 and 2020 results to conform to the new methodology.

Additionally, we made the following changes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We renamed the Healthcare reportable business segment as Health Sciences. This segment, which was previously comprised of two operating segments, (i) healthcare and (ii) life sciences, is now comprised of one operating segment - health sciences.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Communications, Media and Technology reportable business segment, which was previously comprised of two operating segments, (i) communications and media and (ii) technology, is now comprised of one operating segment - communications, media and technology.

These changes reflect how these segments are managed and reported to the chief operating decision maker but did not affect the reportable business segments' financial results.

Expenses included in segment operating profit consist principally of direct selling and delivery costs as well as a per employee charge for use of our global delivery centers and infrastructure. Certain SG&A expenses, the excess or shortfall of incentive-based compensation for commercial and delivery employees as compared to target, a portion of depreciation and amortization and the impact of the settlements of our cash flow hedges, and for 2020, restructuring costs, COVID-19 Charges and costs related to the ransomware attack, are not allocated to individual segments in internal management reports used by the chief operating decision maker. Accordingly, such expenses are excluded from segment operating profit and are included below as "unallocated costs" and adjusted against our total income from operations. Additionally, management has determined that it is not practical to allocate identifiable assets by segment, since such assets are used interchangeably among the segments.

For revenues by reportable business segment and geographic area see <u>[Note 2](#i3254ddb0bbd740dd900dc699f73182d2_166)</u>.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-38 | **December 31, 2022 Form 10-K** |

---

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<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Segment operating profits by reportable business segment were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| Financial Services | $1771 | $1707 | $1419 |
| Health Sciences | 1515 | 1527 | 1357 |
| Products and Resources | 1448 | 1301 | 1058 |
| Communications, Media and Technology | 1012 | 925 | 780 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total segment operating profit | 5746 | 5460 | 4614 |
| Less: unallocated costs | 2778 | 2634 | 2500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from operations | $2968 | $2826 | $2114 |

---

**Geographic Area Information**

Long-lived assets by geographic area are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| Long-lived Assets:<sup>(1)</sup> |  |  |  |
| North America<sup>(2)</sup> | $354 | $377 | $399 |
| Europe | 86 | 75 | 88 |
| Rest of World<sup>(3)</sup> | 661 | 719 | 764 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $1101 | $1171 | $1251 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Long-lived assets include property and equipment, net of accumulated depreciation and amortization.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Substantially all relates to the United States.

(3)&nbsp;&nbsp;&nbsp;&nbsp;Substantially all relates to India.

**Note 19 — Subsequent Events**

**Dividend**

On February 1, 2023, our Board of Directors approved the Company's declaration of a $0.29 per share dividend with a record date of February 17, 2023 and a payment date of February 28, 2023.

**Acquisitions**

In January 2023, we completed the acquisition of the professional services and application management practices of OneSource Virtual, a leading provider of Workday services, solutions and products, for a purchase price of $103 million. This acquisition complements our existing finance and HR advisory implementation services with Workday, expanding our capabilities in consulting, deployment, and post-deployment support across North America and the United Kingdom. On December 30, 2022, $103 million was placed in an escrow account in advance of the closing date of January 1, 2023. This balance was deemed to be restricted cash as of December 31, 2022 and was presented in "Other noncurrent assets" in our consolidated statement of financial position.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated statements of financial position to the amounts shown in the consolidated statements of cash flows as of December 31:

---

| | | | |
|:---|:---|:---|:---|
| **(in millions)** | **2022** | **2021** | **2020** |
| Cash and cash equivalents | $2191 | $1792 | $2680 |
| Restricted cash | 103 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cash, cash equivalents and restricted cash | $2294 | $1792 | $2680 |

---

In January 2023, we entered into an agreement to acquire Mobica, an IoT software engineering services provider, for a preliminary purchase price of approximately $335 million. This acquisition will expand our IoT embedded software engineering capabilities and will provide clients with a deeper and broader array of end-to-end support to enable digital transformation. The transaction is expected to close in the first quarter of 2023, subject to satisfaction of customary closing conditions.

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-39 | **December 31, 2022 Form 10-K** |

---

------

<u>[**Table of Contents**](#i3254ddb0bbd740dd900dc699f73182d2_7)</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Cognizant Technology Solutions Corporation**

**Valuation and Qualifying Accounts**

**For the Years Ended December 31, 2022, 2021 and 2020** 

**(in millions)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Description** | **Balance at<br>Beginning of<br>Period** | **Charged to<br>Costs and<br>Expenses** | **Charged to<br>Other<br>Accounts** | **Deductions<br>/Other** | **Balance at<br>End of<br>Period** |
| | **(in millions)** | **(in millions)** | **(in millions)** | **(in millions)** | **(in millions)** |
| Warranty accrual: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | $39 | $41 | $— | $39 | $41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 | $32 | $36 | $3 | $32 | $39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2020 | $33 | $32 | $— | $33 | $32 |
| Valuation allowance—deferred income tax assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2022 | $46 | $3 | $— | $8 | $41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2021 | $29 | $17 | $— | $— | $46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2020 | $24 | $5 | $— | $— | $29 |

---

---

| | | |
|:---|:---|:---|
| **Cognizant** | F-40 | **December 31, 2022 Form 10-K** |

---

## Exhibit 10.6

**Exhibit 10.6**

![cognizant.jpg](cognizant.jpg)

December 9, 2022

Brian Humphries

Re: Base pay denomination adjustment

Dear Brian,

As previously discussed, this letter confirms that your base salary will be denominated and paid in Swiss francs (CHF) commencing effective as of January 1, 2023. In connection with this, your annual base salary, which was previously 925,000 GBP, will be 1,150,000 CHF effective as of January 1, 2023. Your target annual bonus will remain 200% of your base salary.

Please indicate your acknowledgement and acceptance of this by signing and returning this letter to my attention.

Sincerely,

---

| |
|:---|
| /s/ Michael Patsalos-Fox |
| Michael Patsalos-Fox<br>Chair of the Board of Directors |

---

Acknowledged and Agreed:

---

| | |
|:---|:---|
| /s/ Brian Humphries | /s/ Brian Humphries |
| Brian Humphries | Brian Humphries |
| Date: | December 9, 2022 |

---

## Exhibit 10.14

**Exhibit 10.14**

**GENERAL RELEASE**

This General Release of Claims, including its Schedules and Appendices (this "***Release***") is made by and between Ursula Morgenstern ("***Employee***"), of Cognizant Technology Solutions Corporation (the "***Company***") and the "***Releasees***" (as defined below), as of the date of Employee's execution of this Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Release by Employee</u>. In exchange for the payments and benefits set forth in Section 9(a) of the Executive Employment and Non-Disclosure, Non-Competition and Invention Assignment Agreement between the Employee and Cognizant Worldwide Limited ("**CWW**") dated 12 July 2020 (the "**Executive Agreement**") and for other good and valuable consideration (the "**Severance**"), the receipt and adequacy of which are hereby acknowledged, in executing this general release and the UK settlement agreement set out in Schedule One of this Release, Employee agrees to release and discharge CWW, the Company and the Company's affiliated, related, parent and subsidiary corporations, as well as their respective past and present parents, subsidiaries, affiliates, associates, members, stockholders, employee benefit plans, attorneys, agents, representatives, partners, joint venturers, predecessors, successors, assigns, insurers, owners, employees, officers, directors and all persons acting by, through, under, or in concert with them, or any of them (hereinafter the "***Releasees***") from any and all manner of claims, actions, causes of action, in law or in equity, demands, rights, or damages of any kind or nature which she may now have, or ever have, whether known or unknown, fixed or contingent, including any claims, causes of action or demands of any nature (hereinafter called "***Claims***"), that Employee now has or may hereafter have against the Releasees by reason of any and all acts, omissions, events or facts occurring or existing prior to Employee's execution of this Release which arise in connection with or relate to Employee's employment with CWW or termination therefrom. The Claims released hereunder specifically include, but are not limited to, any claims for fraud; breach of contract; breach of implied covenant of good faith and fair dealing; inducement of breach; interference with contract; wrongful or unlawful discharge or demotion; violation of public policy; sexual or any other type of assault and battery; invasion of privacy; intentional or negligent infliction of emotional distress; intentional or negligent misrepresentation; conspiracy; failure to pay wages, benefits, vacation pay, severance pay, commissions, equity, attorneys' fees, or other compensation of any sort; failure to accommodate disability, including pregnancy; discrimination or harassment on the basis of pregnancy, race, color, sex, gender, national origin, ancestry, religion, disability, handicap, medical condition, marital status, sexual orientation or any other protected category; any claim under the Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq. ("***ADEA***"); the Older Workers' Protection Benefit Act of 1990; Title VII of the Civil Rights Act of 1964, as amended, by the Civil Rights Act of 1991, 42 U.S.C. § 2000 et seq.; Equal Pay Act, as amended, 29 U.S.C. § 206(d); the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq.; the False Claims Act, 31 U.S.C. § 3729 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; the Worker Adjustment and Retraining Notification Act, as amended, 29 U.S.C. § 2101 et seq.; the Fair Labor Standards Act, 29 U.S.C. § 215 et seq.; and any federal, state or local laws of similar effect.

<u>Claims Not Released</u>. This Release shall not apply to: the Company's or CWW's obligations to provide the Severance (as set out in Appendix 3 of Schedule One of this Release); Employee's right to indemnification under any applicable indemnification agreement with the Company, the Company's governing documents or applicable law and under any applicable directors' and officers' or other third party liability insurance policy(ies); Employee's right to assert claims for workers' compensation or unemployment benefits; Employee's right to bring to the attention of the Equal Employment Opportunity Commission ("***EEOC***") claims of discrimination (<u>provided</u>, <u>however</u>, that Employee releases his or her right to secure any damages for alleged discriminatory treatment); any right to communicate directly with, cooperate with, or provide information to, any federal, state or local government regulator; any right to file an unfair labor practice charge under the National Labor Relations Act ("***NLRA***"); Employee's vested rights under any retirement or welfare benefit plan of the Company; Employee's rights in his or her capacity as an equity holder of the Company; or any other rights that may not be waived by an employee under applicable law.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Older Worker's Benefit Protection Act</u>*.* In accordance with the Older Worker's Benefit Protection Act, Employee is hereby advised as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Employee has read this Release and understands its terms and effect, including the fact that Employee is agreeing to release and forever discharge the Company and each of the Releasees from any Claims released in this Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Employee understands that, by entering into this Release, Employee does not waive any Claims that may arise after the date of Employee's execution of this Release, including without limitation any rights or claims that Employee may have to secure enforcement of the terms and conditions of this Release including payment of the Severance (as defined in Appendix 3 of Schedule One).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Employee has signed this Release voluntarily and knowingly in exchange for the consideration described in this Release, which Employee acknowledges is adequate and satisfactory to Employee and in addition to any other benefits to which Employee is otherwise entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Company advises Employee to consult with an attorney prior to executing this

Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Employee has twenty-one (21) days to review and decide whether or not to sign this Release. If Employee signs this Release prior to the expiration of such period, Employee acknowledges that Employee has done so voluntarily, had sufficient time to consider the Release, to consult with counsel and that Employee does not desire additional time and hereby waives the remainder of the twenty-one (21) period. In the event of any changes to this Release, whether or not material, Employee waives the restarting of the twenty-one (21) day period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Employee has seven (7) days after signing this Release to revoke this Release and this Release will become effective upon the expiration of that revocation period. If Employee revokes this Release during such seven (7)-day period, this Release will be null and void and of no force or effect on either the Company or Employee and Employee will not be entitled to any of the payments or benefits which are expressly conditioned upon the execution and non-revocation of this Release.

If Employee wishes to revoke this Release, Employee shall deliver written notice stating his or her intent to revoke this Release to John Kim, Executive Vice President, General Counsel and Chief Corporate Affairs Officer of the Company (or such other individual as the Company may nominate), at the Company at the address set forth in the Offer Letter from the Company to Employee dated 11 July 2020, on or before 5:00 p.m. on the seventh (7th) day after the date on which Employee signs this Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Representations</u>. Employee represents and warrants that there has been no assignment or other transfer of any interest in any Claim which she may have against Releasees, or any of them, and Employee agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys' fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against Employee under this indemnity. Employee agrees that if she hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then Employee agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys' fees incurred by Releasees in defending or otherwise responding to said suit or Claim.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>No Actions</u>. Employee represents and warrants to the Company that Employee has no pending actions, Claims or charges of any kind provided, however, that Employee shall not be obligated to pay the Releasees' attorneys' fees to the extent such fees are attributable to: (i) claims under the ADEA or a challenge to the validity of the release of claims under the ADEA; or (ii) Employee's right to file a charge with the EEOC; however, Employee hereby waives any right to any damages or individual relief resulting from any such charge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Exceptions</u>. Notwithstanding anything in this Release to the contrary, nothing contained in this Release shall prohibit Employee (or Employee's attorney) from (i) filing a charge with, reporting possible violations of federal law or regulation to, participating in any investigation by, or cooperating with the U.S. Securities and Exchange Commission ("***SEC***"), the Financial Industry Regulatory Authority, the EEOC, the NLRB, the Occupational Safety and Health Administration, the U.S. Commodity Futures Trading Commission, the U.S. Department of Justice or any other securities regulatory agency, self-regulatory authority or federal, state or local regulatory authority (collectively, "***Government Agencies***"), or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation, (ii) communicating directly with, cooperating with, or providing information (including trade secrets) in confidence to any Government Agencies for the purpose of reporting or investigating a suspected violation of law, or from providing such information to Employee's attorney or in a sealed complaint or other document filed in a lawsuit or other governmental proceeding, and/or (iii) receiving an award for information provided to any Government Agency. Pursuant to 18 USC Section 1833(b), Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (x) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (y) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, nothing in this Release is intended to or shall preclude Employee from providing truthful testimony in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law. If Employee is required to provide testimony, then unless otherwise directed or requested by a Governmental Agency or law enforcement, Employee shall notify the Company in writing as promptly as practicable after receiving any such request of the anticipated testimony and at least ten (10) days prior to providing such testimony (or, if such notice is not possible under the circumstances, with as much prior notice as is possible) to afford the Company a reasonable opportunity to challenge the subpoena, court order or similar legal process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*No Admission.* Employee understands and agrees that neither the payment of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*Severability*. If any sentence, phrase, section, subsection or portion of this Release is found to be illegal or unenforceable, such action shall not affect the validity or enforceability of the remaining sentences, phrases, sections, subsections or portions of this Release, which shall remain fully valid and enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)*Construction of Agreement*. Employee has been represented by, or had the opportunity to be represented by, counsel in connection with the negotiation and execution of this Release.

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Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Release.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)*Entire Agreement/Integration*. This Release together with the Settlement Agreement in Schedule One and Appendices, and the terms of the Executive Agreement that continue to apply after the termination of the employment, constitutes the entire agreement between Employee and the Company concerning the subject matter hereof. No covenants, agreements, representations, or warranties of any kind, other than those set forth herein, have been made to any party hereto with respect to this Release. All prior discussions and negotiations have been and are merged and integrated into, and are superseded by, this Release. No amendments to this Release will be valid unless written and signed by Employee and an authorized representative of the Company.

**Sign only on or within twenty-one (21) days after June 30, 2022.**

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| | |
|:---|:---|
| Ursula Morgenstern | Ursula Morgenstern |
| /s/ Ursula Morgenstern | /s/ Ursula Morgenstern |
| Date: | June 30, 2022 |

---

------

**<u>SCHEDULE ONE</u>**

This agreement is dated June 30, 2022

**Parties**

(1)COGNIZANT WORLDWIDE LIMITED incorporated and registered in England and Wales with company number 07195160 whose registered office is at One Kingdom Street London W2 6BD (**CWW / we / us**)

(2)COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION incorporated in the United States of America of 300 Frank W. Burr Blvd. Suite 36, 6<sup>th</sup> Floor, Teaneck NJ 07666, USA (the "**Company**")

(3)URSULA MORGENSTERN of Flat G3 The Glasshouse, 3 Royal Oak Yard, London SE13GE, United Kingdom **(Employee / you)**

**BACKGROUND**

(A)Your employment with us shall terminate on 30 June 2022.

(B)The parties intend this agreement to be an effective waiver of any such claims and to satisfy the conditions relating to settlement agreements in the relevant legislation.

(C)We enter into this agreement for ourselves and as agent and trustee for all Group Companies and we are authorised to do so.

**Agreed terms**

**1. Interpretation**

The following definitions and rules of interpretation apply in this agreement.

1.1Definitions:

**Adviser**: Angharad Harris of Keystone Law.

**Executive Agreement:** the Executive Employment, Non-Disclosure, Non-Competition and Invention Assignment Agreement between you and CWW dated 12 July 2020.

**Group Company**: CWW, its subsidiaries or holding companies from time to time and any subsidiary of any holding company from time to time.

**Holding company**: has the meaning given in [clause](#i056305939eaa45de8288fcda5f10d7c4_1)1.6.

**Subsidiary**: has the meaning in [clause](#i056305939eaa45de8288fcda5f10d7c4_1)1.6.

1.2The headings in this Schedule are inserted for convenience only and shall not affect its construction.

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1.3A reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension, or re-enactment and includes any subordinate legislation for the time being in force made under it.

1.4Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular.

1.5The Appendices shall form part of this Schedule One and shall have effect as if set out in full in the body of this Schedule One. Any reference to this agreement or this Schedule one includes the Appendices.

1.6A reference to a holding company or a subsidiary means a holding company or a subsidiary (as the case may be) as defined in section 1159 of the Companies Act 2006 and a company shall be treated, for the purposes only of the membership requirement contained in sections 1159(1)(b) and (c), as a member of another company even if its shares in that other company are registered in the name of (a) another person (or its nominee), whether by way of security or in connection with the taking of security, or (b) as a nominee.

**2. Arrangements on termination**

2.1Your employment with us shall terminate on 30 June 2022 (**Termination Date**).

2.2We shall pay you your salary and benefits up to the Termination Date as specified in the Executive Agreement.

2.3We shall make a payment to you in respect of 8 days' accrued but untaken holiday up to and including the Termination Date.

2.4The payments and benefits in this [Clause](#i056305939eaa45de8288fcda5f10d7c4_1)2 and as specified in the Executive Agreement shall be subject to the income tax, withholding tax and National Insurance or social security contributions that we are obliged by law to pay or deduct in any jurisdiction.

2.5You confirm that you have submitted all outstanding expenses claims in the usual way and we shall reimburse you for any expenses properly incurred before the Termination Date in the usual way.

**3. Termination payment**

3.1Subject to and conditional on you complying with the terms of this agreement, (including, without limitation, the provision by you of a letter from the Adviser dated on or after the date of this agreement in the form set out in Appendix 2), the Executive Agreement and the terms of the Release (as defined in Section 13 of the Executive Agreement), CWW shall pay (or shall procure payment by the Company or other relevant Group Company) of such sums and at such times as are specified in Sections 9(a) of the Executive Agreement, subject to the terms of that agreement and as are set out in Appendix 3 to this agreement (the "**Termination Payment**"). We will pay (or procure the payment of) the Termination Payment less all required deductions by a Group Company for

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withholding tax and National Insurance contributions or other social security payments in any jurisdiction in which they are due.

3.2You shall be responsible for any further withholding tax and employee's National Insurance or other social security contributions due in respect of the Termination Payment and shall indemnify us or the relevant Group Company in respect of such liability in accordance with [clause](#i056305939eaa45de8288fcda5f10d7c4_1)5 of this Schedule One.

**4. Waiver of claims**

4.1You agree that the terms of this agreement are offered by us and the Company without any admission of liability on our or the Company's part and are in full and final settlement of all and any claims or rights of action that you have or may have against us, the Company or any other Group Company or its or their officers, employees or workers arising out of your employment with us (or any other Group Company) or its termination, whether under common law, contract, statute or otherwise, whether such claims are, or could be, known to the parties or in their contemplation at the date of this agreement in any jurisdiction and including, but not limited to any claim for breach of contract or wrongful dismissal, unfair dismissal or any of the claims specified in Appendix 1 of this Schedule One (each of which is waived by this clause).

4.2The waiver in [clause](#i056305939eaa45de8288fcda5f10d7c4_1)4.1 shall not apply to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)claims in respect of personal injury of which you are not aware and could not reasonably be expected to be aware at the date of this agreement (other than claims under discrimination legislation);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)any claims in relation to accrued entitlements under any pension scheme; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)enforcing the terms of this agreement.

4.3You warrant that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)before entering into this agreement you received independent advice from the Adviser as to the terms and effect of this agreement and, in particular, on its effect on your ability to pursue the claims specified in clause 4.1 above and Appendix 1 to this Schedule One;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)the Adviser has confirmed to you that they are a solicitor holding a current practising certificate and that there is in force a policy of insurance covering the risk of a claim by you in respect of any loss arising in consequence of their advice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)the Adviser shall sign and deliver to us a letter in the form attached as Appendix 2 to this agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)before receiving the advice you disclosed to the Adviser all facts and circumstances that may give rise to a claim by you against any Group Company or its officers, employees or workers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)the only claims that you have or may have against any Group Company or its officers, employees or workers (whether at the time of entering into this agreement or in the future)

------

relating to your employment with us or any other Group Company or its termination are specified in [clause](#i056305939eaa45de8288fcda5f10d7c4_1)4.1; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)You are not aware of any facts or circumstances that may give rise to any claim against any Group Company or its officers, employees or workers other than those claims specified in [clause](#i056305939eaa45de8288fcda5f10d7c4_1)4.1.

You acknowledge that we acted in reliance on these warranties when entering into this agreement.

4.4You acknowledge that the conditions relating to settlement agreements under section 147(3) of the Equality Act 2010, section 288(2B) of the Trade Union and Labour Relations (Consolidation) Act 1992, section 203(3) of the Employment Rights Act 1996, regulation 35(3) of the Working Time Regulations 1998, section 49(4) of the National Minimum Wage Act 1998, regulation 41(4) of the Transnational Information and Consultation etc. Regulations 1999, regulation 9 of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, regulation 10 of the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, regulation 40(4) of the Information and Consultation of Employees Regulations 2004, paragraph 13 of the Schedule to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006, regulation 62 of the Companies (Cross Border Mergers) Regulations 2007 and section 58 of the Pensions Act 2008 have been satisfied.

4.5The waiver in [clause](#i056305939eaa45de8288fcda5f10d7c4_1)4.1 shall have effect irrespective of whether or not, at the date of this agreement, you are or could be aware of such claims or have such claims in your express contemplation (including such claims of which you become aware after the date of this agreement in whole or in part as a result of new legislation or the development of common law or equity).

4.6You agree that, except for the payments and benefits provided for in this agreement (including those set out in Appendix 3), and subject to the waiver in [clause](#i056305939eaa45de8288fcda5f10d7c4_1)4.1, you shall not be eligible for any further payment from any Group Company relating to your employment or its termination and except as set out in Sections 9(a) (which is subject to the Executive Agreement) you expressly waive any right or claim that you have or may have to payment of bonuses, any benefit or award programme, under any share plan operated by any Group Company or any stand-alone share incentive arrangement, or to any other benefit, payment or award you may have received had your employment not terminated.

**5. Employee indemnities**

5.1You shall indemnify us on a continuing basis in respect of any income tax, withholding taxes or National Insurance or social security contributions (save for employers' National Insurance contributions) due in respect of the payments and benefits in clauses 2 and 3 of this agreement (and any related interest, penalties, costs and expenses) due in any jurisdiction but excluding tax which is deducted at source by the Company and any interest and penalties arising as a result of the Company's failure to account for such tax. We shall give you reasonable notice of any demand for tax which may lead to liabilities on you under this indemnity and shall provide you with reasonable access to any documentation you may reasonably require to dispute such a claim (provided that

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nothing in this clause shall prevent us from complying with its legal obligations with regard to HM Revenue and Customs or other competent body).

5.2If you breach any material provision of this agreement or pursue a claim against any Group Company arising out of your employment or its termination other than those excluded under [clause](#i056305939eaa45de8288fcda5f10d7c4_1)4, you agree to indemnify any Group Company for any losses suffered as a result thereof, including all reasonable legal and professional fees incurred.

**6. Resignation from offices**

You acknowledge that you have resigned from your position as Director of the Company and shall resign immediately from any other office, trusteeship or position that you hold in or on any Group Company's behalf. The Company and any applicable Group Company will maintain for so long as it maintains a policy in respect of its directors generally, directors and officers' liability insurance in respect of the period during which you were a director of the Company and/or any Group Company, at no less than the level of cover for other individuals who were directors of the Company at the Termination Date.

**7. Third party rights**

Except as expressly provided elsewhere in this Schedule One, no person other than you and any Group Company shall have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement.

**8. Governing law** 

This Schedule One and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.

**9. Jurisdiction**

Each party irrevocably agrees that the courts of England and Wales shall have non-exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Schedule One or its subject matter or formation (including non-contractual disputes or claims).

**10. Counterparts**

This agreement may be executed and delivered in any number of counterparts, each of which, when executed, shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement.

This agreement has been entered into on the date stated at the beginning of it.

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**<u>Appendix 1</u>**

**<u>Claims</u>**

1.1in relation to the right to a written statement of reasons for dismissal, under section 93 of the Employment Rights Act 1996;

1.2for a statutory redundancy payment, under section 163 of the Employment Rights Act 1996;

1.3in relation to an unlawful deduction from wages or unlawful payment, under section 23 of the Employment Rights Act 1996;

1.4for unlawful detriment, under section 48 of the Employment Rights Act 1996 or section 56 of the Pensions Act 2008

1.5in relation to written employment particulars and itemised pay statements, under section 11 of the Employment Rights Act 1996;

1.6in relation to guarantee payments, under section 34 of the Employment Rights Act 1996;

1.7in relation to suspension from work, under section 70 of the Employment Rights Act 1996;

1.8in relation to parental leave, under section 80 of the Employment Rights Act 1996;

1.9in relation to a request for flexible working, under section 80H of the Employment Rights Act 1996;

1.10in relation to time off work, under sections 51, 54, 57, 57B, 57ZC, 57ZF, 57ZH, 57ZM, 57ZQ, 60, 63 and 63C of the Employment Rights Act 1996;

1.11in relation to working time or holiday pay, under regulation 30 of the Working Time Regulations 1998;

1.12in relation to the national minimum wage, under sections 11, 18, 19D and 24 of the National Minimum Wage Act 1998;

1.13for equal pay or equality of terms under sections 120 and 127 of the Equality Act 2010 and/or section 2 of the Equal Pay Act 1970;

1.14for pregnancy or maternity discrimination, direct or indirect discrimination, harassment or victimisation related to sex, marital or civil partnership status, pregnancy or maternity or gender reassignment under section 120 of the Equality Act 2010 and/or direct or indirect discrimination,

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harassment or victimisation related to sex, marital or civil partnership status, gender reassignment, pregnancy or maternity under section 63 of the Sex Discrimination Act 1975;

1.15for direct or indirect discrimination, harassment or victimisation related to race under section 120 of the Equality Act 2010 and/or direct or indirect discrimination, harassment or victimisation related to race, colour, nationality or ethnic or national origin, under section 54 of the Race Relations Act 1976;

1.16for direct or indirect discrimination, harassment or victimisation related to disability, discrimination arising from disability, or failure to make adjustments under section 120 of the Equality Act 2010 and/or direct discrimination, harassment or victimisation related to disability, disability-related discrimination or failure to make adjustments under section 17A of the Disability Discrimination Act 1995;

1.17for direct or indirect discrimination, harassment or victimisation related to religion or belief under section 120 of the Equality Act 2010 and/or under regulation 28 of the Employment Equality (Religion or Belief) Regulations 2003;

1.18for direct or indirect discrimination, harassment or victimisation related to sexual orientation, under section 120 of the Equality Act 2010 and/or under regulation 28 of the Employment Equality (Sexual Orientation) Regulations 2003;

1.19for direct or indirect discrimination, harassment or victimisation related to age, under section 120 of the Equality Act 2010 and/or under regulation 36 of the Employment Equality (Age) Regulations 2006;

1.20for less favourable treatment on the grounds of part-time status, under regulation 8 of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000;

1.21for less favourable treatment on the grounds of fixed-term status, under regulation 7 of the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002;

1.22under regulations 27 and 32 of the Transnational Information and Consultation of Employees Regulations 1999;

1.23under regulations 29 and 33 of the Information and Consultation of Employees Regulations 2004;

1.24under regulations 45 and 51 of the Companies (Cross-Border Mergers) Regulations 2007;

1.25under paragraphs 4 and 8 of the Schedule to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006;

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1.26under sections 68A, 87, 137, 145A, 145B, 146, 168, 168A, 169, 170, 174 and 192 of the Trade Union and Labour Relations (Consolidation) Act 1992;

1.27in relation to the obligations to elect appropriate representatives or any entitlement to compensation, under the Transfer of Undertakings (Protection of Employment) Regulations 2006;

1.28in relation to the right to be accompanied under section 11 of the Employment Relations Act 1999;

1.29in relation to refusal of employment, refusal of employment agency services and detriment under regulations 5, 6 and 9 of the Employment Relations Act 1999 (Blacklists) Regulations 2010;

1.30in relation to the right to request time off for study or training under section 63I of the Employment Rights Act 1996;

1.31in relation to the right to equal treatment, access to collective facilities and amenities, access to employment vacancies and the right not to be subjected to a detriment under regulations 5, 12, 13 and 17(2) of the Agency Workers Regulations 2010;

1.32in relation to the right to a written statement and the right not to be unfairly dismissed or subjected to detriment under regulations 4 and 5 of the Agency Workers (Amendment) Regulations 2019;

1.33in relation to personal injury, of which you are or ought reasonably to be aware at the date of this agreement;

1.34for harassment under the Protection from Harassment Act 1997;

1.35for failure to comply with obligations under the Human Rights Act 1998;

1.36for failure to comply with obligations under the Data Protection Act 1998, the Data Protection Act 2018 or the General Data Protection Regulation ((EU) 2016/679);

1.37arising as a consequence of the United Kingdom's membership of the European Union; and

1.38in relation to the right not to be subjected to a detriment under regulation 3 of the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015.

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**<u>Appendix 2: Adviser's certificate</u>**

![keystonelaw.jpg](keystonelaw.jpg)

For the attention of Becky Schmitt

June 30, 2022

To whom it may concern,

I am writing in connection with the agreement between my client, Ursula Morgenstern, Cognizant Worldwide Limited and Cognizant Technology Solutions Corporation (Company) [of today's date **OR** dated [DATE]] (Agreement) to confirm that:

1. I, Angharad Harris of Keystone Law, whose address is 48 Chancery Lane, London, WC2A 4JF, am a Solicitor of the Senior Courts of England and Wales who holds a current practising certificate.

2. I have given Ursula Morgenstern legal advice on the terms and effect of the agreement and, in particular, its effect on my client's ability to pursue the claims specified in clause 4 and Appendix 1 of the agreement.

3. I gave the advice to Ursula Morgenstern as a relevant independent adviser within the meaning of the above acts and regulations referred to at [clause](#i056305939eaa45de8288fcda5f10d7c4_1)4.4 of the agreement.

4. There is now in force (and was in force at the time I gave the advice referred to above) a policy of insurance or an indemnity provided for members of a profession or professional body covering the risk of claim by my client in respect of loss arising in consequence of the advice I have given them.

Yours faithfully,

---

| |
|:---|
| /s/ Angharad Harris |
| Angharad Harris |
| June 30, 2022 |

---

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**<u>Appendix 3: Termination Payment/Benefit</u>**

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| | | | |
|:---|:---|:---|:---|
| | **Type of Payment/Benefit** | **Amount of payment/benefit** | **Date of payment/transfer of benefit** |
| 1. | Pay in lieu of notice | £245,000 | One off payment to be paid by us within 35 days after the Termination Date or the receipt by us of a signed copy of this agreement, a signed copy of the Release and the provision by you of a letter from the Adviser dated on or after the date of this agreement in the form set out in Appendix 2. |
| 2. | Private Health Care Cover for six months and payment in lieu for 12 months | The total cost of providing COBRA healthcare coverage for 18 months would be US$9,601.20, based on a COBRA cost of $533.40 per month for 18 months (the "**COBRA Cost**"). The cost of the UK private health care insurance global coverage is £164.22 a month and for six months the total cost would be £985.32 = US$1,209.48 (using an exchange rate of 1GBP =1.22751 US$). It has been agreed that you will continue to be covered under the current UK private health care insurance scheme under the global coverage terms until 31 December 2022 and the sum of US$1,209.48 will be deducted from the COBRA Cost leaving a residual balance to pay to you of US$8391.72 (the "**COBRA Residual Balance**"). | The Residual Balance will be paid by us as a one off payment within 35 days after the Termination Date or the receipt by us of a signed copy of this agreement, a signed copy of the Release and the provision by you of a letter from the Adviser dated on or after the date of this agreement in the form set out in Appendix 2. |
| 3. | 12 months' base pay | £490,000 | The total payment will be paid in 12 equal monthly instalments commencing no later than 35 days after the Termination Date and in accordance with our normal payroll practices. |

---

------

4. 12 months' incentive (after adjustment to deduct the sum paid as a payment in lieu of notice as reference in 1 above) £245,000 One off payment to be paid by us within 35 days after the Termination Date or the receipt by us of a signed copy of this agreement, a signed copy of the Release and the provision by you of a letter from the Adviser dated on or after the date of this agreement in the form set out in Appendix 2.

5. Equity Awards 15,822 shares in Cognizant Technology Solutions Corporation (the **Shares**") will become fully vested and exercisable The Shares will vest as soon as reasonably practicable following the Termination Date and the shares will be transferred directly into your share dealing account.

In the event of any conflicts between the terms of this Agreement and the Release, the terms of the Release will take precedence.

------

---

| | |
|:---|:---|
| Signed by Jan Siegmund, for and on behalf of COGNIZANT WORLDWIDE LIMITED<br>Signed by Jan Siegmund, for and on behalf of COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION | <u>/s/ Jan Siegmund</u><br>Director<br><u>/s/ Jan Siegmund</u><br>Chief Financial Officer |
| Signed by Ursula Morgenstern | <u>/s/ Ursula Morgenstern</u> |

---

## Exhibit 10.15

**Exhibit 10.15**

**Cognizant Technology Solutions Corporation**

**Non-Employee Director Compensation Guidelines**

*(As Amended May 18, 2022 effective as of the*

*date of the 2022 Annual Meeting of Shareholders)*

---

| | | |
|:---|:---|:---|
| Annual Cash Retainer for service on the Board: | $100,000\* | $100,000\* |
| Additional Annual Cash Retainer for serving as Chair of the Board: | $150,000\* | $150,000\* |
| Additional Annual Cash Retainer for serving as Member or Chair of a committee of the Board: | Committee Member | &nbsp;&nbsp;Committee Chair\*\* |
| &nbsp;&nbsp;&nbsp;&nbsp;Audit Committee | $20,000\* | &nbsp;&nbsp;$35,000\* |
| &nbsp;&nbsp;&nbsp;&nbsp;Compensation and Human Capital Committee | $15,000\* | &nbsp;&nbsp;$25,000\* |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance and Strategy Committee | $15,000\* | &nbsp;&nbsp;$20,000\* |
| &nbsp;&nbsp;&nbsp;&nbsp;Governance and Sustainability Committee | $10,000\* | &nbsp;&nbsp;$20,000\* |
| Stock Elections (in lieu of Cash Retainers): | Directors may elect to have all or a portion of the Annual Cash Retainers and Additional Annual Cash Retainers (together, "Cash Retainers") to which they become entitled paid in fully vested Class A Common Stock ("Common Stock") in lieu of cash. Any election to receive Cash Retainers in shares must be made on or prior to the date of the Annual Meeting of Shareholders ("Annual Meeting") immediately preceding the director year (i.e., the period from one Annual Meeting to the next Annual Meeting) with respect to which such Cash Retainers will be paid; provided, however, that a director that is newly elected to the Board (whether or not at an Annual Meeting) shall be entitled for a period of thirty (30) days following such director's initial election to the Board to make a Stock Election for such director's initial director year or partial director year of service, as applicable (each such deadline, as applicable, a "Due Date"). If a director is subject to tax withholding as a non-U.S. person with regards to Cash Retainers, a Stock Election will apply only with respect to the portion of the Cash Retainers to which the director is entitled after such tax withholding. The Stock Election made with respect to a director year shall be irrevocable after the applicable Due Date with respect to such director year. The number of shares of Common Stock granted will be determined by dividing the amount of the applicable Cash Retainer by the closing price of the Common Stock on the later of (i) the date the director becomes entitled to the Cash Retainer or (i) the Due Date (in each case rounded down to nearest whole share). Notwithstanding the foregoing, a director may not make a Stock Election during a Company trading blackout period or when the director is otherwise in possession of material non-public information (in any event, a "Closed Window"). | Directors may elect to have all or a portion of the Annual Cash Retainers and Additional Annual Cash Retainers (together, "Cash Retainers") to which they become entitled paid in fully vested Class A Common Stock ("Common Stock") in lieu of cash. Any election to receive Cash Retainers in shares must be made on or prior to the date of the Annual Meeting of Shareholders ("Annual Meeting") immediately preceding the director year (i.e., the period from one Annual Meeting to the next Annual Meeting) with respect to which such Cash Retainers will be paid; provided, however, that a director that is newly elected to the Board (whether or not at an Annual Meeting) shall be entitled for a period of thirty (30) days following such director's initial election to the Board to make a Stock Election for such director's initial director year or partial director year of service, as applicable (each such deadline, as applicable, a "Due Date"). If a director is subject to tax withholding as a non-U.S. person with regards to Cash Retainers, a Stock Election will apply only with respect to the portion of the Cash Retainers to which the director is entitled after such tax withholding. The Stock Election made with respect to a director year shall be irrevocable after the applicable Due Date with respect to such director year. The number of shares of Common Stock granted will be determined by dividing the amount of the applicable Cash Retainer by the closing price of the Common Stock on the later of (i) the date the director becomes entitled to the Cash Retainer or (i) the Due Date (in each case rounded down to nearest whole share). Notwithstanding the foregoing, a director may not make a Stock Election during a Company trading blackout period or when the director is otherwise in possession of material non-public information (in any event, a "Closed Window"). |

---

------

---

| | | |
|:---|:---|:---|
| Annual RSU Award: | Board Member | &nbsp;&nbsp;Board Chair\*\* |
| Annual RSU Award: | $210,000\* | &nbsp;&nbsp;$260,000\* |
| Annual RSU Award: | Annual restricted stock unit ("<u>RSU</u>") awards are granted as of the date of the Annual Meeting or the date a new director joins the Board. The number of RSUs granted will be determined by dividing the amount set out above by the closing price of the Common Stock on the date of the Annual Meeting or the date a new director joins the board, as applicable (rounded down to nearest whole share). 100% of the restricted stock units vest on the 1<sup>st</sup> anniversary of the date of the award. | Annual restricted stock unit ("<u>RSU</u>") awards are granted as of the date of the Annual Meeting or the date a new director joins the Board. The number of RSUs granted will be determined by dividing the amount set out above by the closing price of the Common Stock on the date of the Annual Meeting or the date a new director joins the board, as applicable (rounded down to nearest whole share). 100% of the restricted stock units vest on the 1<sup>st</sup> anniversary of the date of the award. |
| Retirement: | Upon a director's retirement while in good standing, the Board's intent is to accelerate the vesting of such director's outstanding equity awards, and may do so in its discretion. | Upon a director's retirement while in good standing, the Board's intent is to accelerate the vesting of such director's outstanding equity awards, and may do so in its discretion. |
| Payment Deferral Elections | Cash Retainers, Annual RSU awards and Common Stock received in lieu of Cash Retainers may be eligible for payment deferral elections in accordance with applicable tax laws and, for Annual RSU awards, the Cognizant Technology Solutions Corporation 2017 Incentive Award Plan. | Cash Retainers, Annual RSU awards and Common Stock received in lieu of Cash Retainers may be eligible for payment deferral elections in accordance with applicable tax laws and, for Annual RSU awards, the Cognizant Technology Solutions Corporation 2017 Incentive Award Plan. |
| \* Indicates that this compensation element will be paid on a *pro rata* basis for new members of the Board of Directors or a committee or a new Chair of the Board or a committee in the initial year of service, calculated based on the length of service during the twelve-month period following the Company's most recent Annual Meeting. In addition, each of the indicated cash retainers is paid in advance on an annual basis following the Annual Meeting (or if not elected at an Annual Meeting, within 30 days after election to the Board of Directors), *provide*d, that payments may be delayed in the discretion of the Board (but in no event beyond the end of the calendar year in which they would otherwise be payable) to accommodate Stock Elections delayed by a Closed Window | \* Indicates that this compensation element will be paid on a *pro rata* basis for new members of the Board of Directors or a committee or a new Chair of the Board or a committee in the initial year of service, calculated based on the length of service during the twelve-month period following the Company's most recent Annual Meeting. In addition, each of the indicated cash retainers is paid in advance on an annual basis following the Annual Meeting (or if not elected at an Annual Meeting, within 30 days after election to the Board of Directors), *provide*d, that payments may be delayed in the discretion of the Board (but in no event beyond the end of the calendar year in which they would otherwise be payable) to accommodate Stock Elections delayed by a Closed Window | \* Indicates that this compensation element will be paid on a *pro rata* basis for new members of the Board of Directors or a committee or a new Chair of the Board or a committee in the initial year of service, calculated based on the length of service during the twelve-month period following the Company's most recent Annual Meeting. In addition, each of the indicated cash retainers is paid in advance on an annual basis following the Annual Meeting (or if not elected at an Annual Meeting, within 30 days after election to the Board of Directors), *provide*d, that payments may be delayed in the discretion of the Board (but in no event beyond the end of the calendar year in which they would otherwise be payable) to accommodate Stock Elections delayed by a Closed Window |
| \*\* Committee chairs and the Board chair receive the chair retainer/award and not the member retainer/award. | \*\* Committee chairs and the Board chair receive the chair retainer/award and not the member retainer/award. | \*\* Committee chairs and the Board chair receive the chair retainer/award and not the member retainer/award. |

---

## Exhibit 21.1

LIST OF SUBSIDIARIES OF THE COMPANY

**EXHIBIT 21.1** 

The following is a list of subsidiaries of the Company as of December 31, 2022:

---

| | |
|:---|:---|
| **<u>Name of the entity</u>** | **<u>Jurisdiction</u>** |
| Cognizant Technology Solutions de Argentina S.R.L. | Argentina |
| Softvision SAS | Argentina |
| Cognizant Technology Solutions Australia Pty Ltd | Australia |
| Collaborative Solutions Asia-Pacific Pty Ltd | Australia |
| Collaborative Solutions Australia Pty Ltd | Australia |
| Contino Pty Ltd | Australia |
| Odecee Pty Limited | Australia |
| Odecee Unit Trust | Australia |
| SAASFOCUS PTY LTD | Australia |
| Servian Group (Holdings) Pty Ltd | Australia |
| Servian Managed Services Pty Ltd | Australia |
| Servian Pty Ltd | Australia |
| Servian (Victoria) Pty Ltd | Australia |
| Softvision Australia Pty Ltd | Australia |
| SVN BidCo Pty Ltd | Australia |
| SVN HoldCo Pty Ltd | Australia |
| Vibrato Pty Ltd | Australia |
| Cognizant Technology Solutions Austria GmbH | Austria |
| Cognizant Technology Solutions Belgium SA | Belgium |
| Cognizant Servicos de Tecnologia e Software do Brasil Ltda | Brazil |
| Cognizant Technology Solutions Bulgaria EOOD | Bulgaria |
| Cognizant Technology Solutions (Québec) Inc. | Canada |
| Cognizant Technology Solutions Canada, Inc. | Canada |
| Collaborative Technology Solutions Canada ULC | Canada |
| Devbridge Canada ULC | Canada |
| Softvision Canada, ULC OA Momentus Software | Canada |
| Utegration Canada, Inc. | Canada |
| Cognizant Technology Solutions de Chile SpA | Chile |
| Cognizant Mobility (Shanghai) Co., Ltd. | China |
| Cognizant Technology Solutions (Dalian) Co., Ltd. | China |
| Cognizant Technology Solutions (Shanghai) Co, Ltd. | China |
| ZT Automation Limited | China |
| Cognizant Technology Solutions Colombia S.A.S. | Colombia |
| Cognizant Technology Solutions de Costa Rica Sociedad de Responsabilidad Limitada | Costa Rica |
| Cognizant Technology Solutions s.r.o. | Czech Republic |
| Cognizant Technology Solutions Denmark ApS | Denmark |
| Cognizant El Salvador, Sociedad Anonima de Capital Variable | El Salvador |
| Cognizant Technology Solutions Finland Oy | Finland |
| Samlink Technology Solutions Finland Oy | Finland |
| Cognizant Business Consulting SAS | France |
| Cognizant France SAS | France |

---

------

---

| | |
|:---|:---|
| **<u>Name of the entity</u>** | **<u>Jurisdiction</u>** |
| Cognizant Horizon Financial Services | France |
| Cognizant Technology Solutions France SAS | France |
| Cognizant Deutschland GmbH | Germany |
| Cognizant Energy and Financial Services Consulting GmbH | Germany |
| Cognizant Mobility GmbH | Germany |
| Cognizant Technology Solutions GmbH | Germany |
| Netcentric Deutschland GmbH | Germany |
| ServiceXpert Gesellschaft fur Service Informationssysteme mbH | Germany |
| Cognizant Technology Solutions Guatemala Limitada | Guatemala |
| Cognizant Technology Solutions Hong Kong Limited | Hong Kong |
| Cognizant Technology Solutions Hungary Kft. | Hungary |
| Cognizant Technology Solutions India Private Limited | India |
| Collabie Solutions India Private Limited | India |
| GSoft Services Private Limited | India |
| Software Paradigms (India) Financial Services Private Limited | India |
| Software Paradigms Infotech Private Limited | India |
| TQS Integration Private Limited | India |
| Utegration India Private Limited | India |
| Ygyan Consulting Private Limited | India |
| Cognizant Technology Solutions Ireland Limited | Ireland |
| Collaborative Solutions EMEA Limited | Ireland |
| LZ Lifescience Limited | Ireland |
| Merit Software Holdings Limited | Ireland |
| Merit Software Limited | Ireland |
| Target Environmental Health & Safety Limited | Ireland |
| Vedsul Limited | Ireland |
| Cognizant Technology Solutions Italia, S.p.A. | Italy |
| Cognizant Japan KK | Japan |
| Cognizant Business Services Limited | Jersey |
| Cognizant Technology Solutions Jersey Limited | Jersey |
| Cognizant Technology Solutions Lithuania, UAB | Lithuania |
| Devbridge LT, UAB | Lithuania |
| Cognizant Technology Solutions Luxembourg S.à r.l | Luxembourg |
| CogDev Malaysia SDN. BHD. | Malaysia |
| Cognizant Oil and Gas Consulting Services Malaysia SDN. BHD. | Malaysia |
| Cognizant (Mauritius) Ltd. | Mauritius |
| Cognizant Technology Solutions de Mexico, S.A. de C.V. | Mexico |
| Idea Couture Latin America, S.A.P.I. de C.V. | Mexico |
| Cognizant Consulting SARL | Morocco |
| SPI Nepal Private Limited | Nepal |
| Cognizant Technology Solutions Benelux B.V. | Netherlands |
| Inawisdom Europe B.V. | Netherlands |
| Cognizant Technology Solutions New Zealand Limited | New Zealand |
| Collaborative Solutions New Zealand Limited | New Zealand |
| Enterprise IT Limited | New Zealand |

---

------

---

| | |
|:---|:---|
| **<u>Name of the entity</u>** | **<u>Jurisdiction</u>** |
| Servian New Zealand Limited | New Zealand |
| Cognizant Accounting Services Norway AS | Norway |
| Cognizant Business Services Norway AS | Norway |
| Cognizant Oil and Gas Consulting Services Norway AS | Norway |
| Cognizant Technology Solutions Norway AS | Norway |
| Cognizant Technology Solutions Philippines, Inc. | Philippines |
| Collaborative Solutions INC. | Philippines |
| Magenic Manila, Inc. | Philippines |
| MediCall Philippines, Inc. | Philippines |
| Cognizant Technology Solutions Poland sp. zo. o | Poland |
| Devbridge PL sp. zo. o | Poland |
| Cognizant Technology Solutions Portugal, Unipessoal LDA | Portugal |
| Cognizant Mobility Romania S.R.L. | Romania |
| Cognizant Technology Solutions Romania S.R.L. | Romania |
| Netcentric Eastern Europe S.R.L. | Romania |
| Cognizant Technology Solutions Saudi LLC | Saudi Arabia |
| Cognizant Technology Solutions Asia Pacific Pte. Ltd. | Singapore |
| Servian Singapore Pte. Ltd. | Singapore |
| Cognizant Technology Solutions Slovakia, s.r.o. | Slovakia |
| Cognizant Technology Solutions South Africa (Proprietary) Limited | South Africa |
| New Signature SA (Pty) Ltd | South Africa |
| Cognizant Technology Solutions Spain, S.L. | Spain |
| Netcentric Ibérica SLU | Spain |
| TQS Integration España SLU | Spain |
| CogDev Solutions AB | Sweden |
| Cognizant Technology Solutions Sweden AB | Sweden |
| Cognizant Technology Solutions AG | Switzerland |
| Enterprise Services AG | Switzerland |
| Netcentric AG | Switzerland |
| TQS Integration AG | Switzerland |
| Cognizant Technology Solutions (Thailand) Co., Ltd. | Thailand |
| Cognizant (GB) Limited | United Kingdom |
| Cognizant Business Services UK Limited | United Kingdom |
| Cognizant Holdings UK Limited | United Kingdom |
| Cognizant Oil and Gas Consulting Services UK Ltd | United Kingdom |
| Cognizant Technology Solutions Global Services Limited | United Kingdom |
| Cognizant Worldwide Limited | United Kingdom |
| Cognizant UK Finance Limited | United Kingdom |
| Collaborative Solutions Europe Limited | United Kingdom |
| Contino Solutions Limited | United Kingdom |
| Devbridge UK Ltd | United Kingdom |
| Head London Limited | United Kingdom |
| Inawisdom Ltd | United Kingdom |
| Merit Research Limited | United Kingdom |
| Netcentric UK Ltd | United Kingdom |

---

------

---

| | |
|:---|:---|
| **<u>Name of the entity</u>** | **<u>Jurisdiction</u>** |
| New Signature UK Limited | United Kingdom |
| Rivereo Technologies Limited | United Kingdom |
| Servian Consulting Limited | United Kingdom |
| Softvision U.K. Limited | United Kingdom |
| TQS Integration UK Limited | United Kingdom |
| UK BSI Holdings Limited | United Kingdom |
| Zentek Engineering (UK) Limited | United Kingdom |
| Zone Limited | United Kingdom |
| Austin CSI, LLC | United States |
| Avectus Healthcare Solutions, LLC | United States |
| BHS Hospital Services, Inc. | United States |
| BHS India Holdings, Inc. | United States |
| BHS India Holdings, LLC | United States |
| BHS Physician Services, Inc. | United States |
| Cognizant Business Services Corporation | United States |
| Cognizant Domestic Holdings Corporation | United States |
| Cognizant Healthcare Services, LLC | United States |
| Cognizant International Holdings Corporation | United States |
| Cognizant Mobility, Inc. | United States |
| Cognizant Mortgage Services Corporation | United States |
| Cognizant Oil and Gas Consulting Services U.S. Inc. | United States |
| Cognizant Resources LLC | United States |
| Cognizant Technology Solutions Holdings LLC | United States |
| Cognizant Technology Solutions Overseas Corporation | United States |
| Cognizant Technology Solutions Lincoln Holdings, LLC | United States |
| Cognizant Technology Solutions Services, LLC | United States |
| Cognizant Technology Solutions U.S. Corporation | United States |
| Cognizant TriZetto Software Group, Inc. | United States |
| Collaborative Solutions APJ, LLC | United States |
| Collaborative Solutions Holdings, LLC | United States |
| Collaborative Solutions MidCo, LLC | United States |
| Collaborative Solutions Northern Holdings, LLC | United States |
| collaborative solutions, LLC | United States |
| CSS Investment LLC | United States |
| Devbridge Group LLC | United States |
| LZ Lifescience US Inc. | United States |
| MediCall | United States |
| Prospective Payment Specialists, Inc. | United States |
| Receivables Outsourcing, LLC | United States |
| RLH III UTE ALTERNATIVE COMPANY LLC | United States |
| ROI Access Management Services, LLC | United States |
| ROI Holding Company, LLC | United States |
| Softvision Consulting, LLC | United States |
| Tin Roof Software, LLC | United States |
| TMG Health, Inc. | United States |

---

------

---

| | |
|:---|:---|
| **<u>Name of the entity</u>** | **<u>Jurisdiction</u>** |
| TriZetto Provider Solutions, LLC | United States |
| Utegration, LLC | United States |
| Zentek Automation US Inc. | United States |

---

## Exhibit 23.1

**EXHIBIT 23.1** 

<u>Consent of Independent Registered Public Accounting Firm</u>

&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-226015, 333-218543 and 333-160450) of Cognizant Technology Solutions Corporation of our report dated February 15, 2023, relating to the financial statements and financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

New York, New York

February 15, 2023

## Exhibit 31.1

**EXHIBIT 31.1** 

CERTIFICATION

I, Ravi Kumar S, certify that:

1. I have reviewed this Annual Report on Form 10-K of Cognizant Technology Solutions Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: | February 15, 2023 | /s/ RAVI KUMAR S |
| | | Ravi Kumar S<br>Chief Executive Officer <br>(Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

CERTIFICATION

I, Jan Siegmund, certify that:

1. I have reviewed this Annual Report on Form 10-K of Cognizant Technology Solutions Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: | February 15, 2023 | /s/ JAN SIEGMUND |
| | | Jan Siegmund<br>Chief Financial Officer <br>(Principal Financial Officer) |

---

## Exhibit 32.1

**EXHIBIT 32.1** 

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002\*** 

In connection with the Annual Report on Form 10-K of Cognizant Technology Solutions Corporation (the "Company") for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Ravi Kumar S, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Dated: | February 15, 2023 | /s/ RAVI KUMAR S |
| | | Ravi Kumar S<br>Chief Executive Officer <br>(Principal Executive Officer) |

---

_____________________

\*A signed original of this written statement required by Section 906 has been provided to Cognizant Technology Solutions Corporation and will be retained by Cognizant Technology Solutions Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002\*** 

In connection with the Annual Report on Form 10-K of Cognizant Technology Solutions Corporation (the "Company") for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Jan Siegmund, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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|:---|:---|:---|
| Dated: | February 15, 2023 | /s/ JAN SIEGMUND |
| | | Jan Siegmund<br>Chief Financial Officer <br>(Principal Financial Officer) |

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\*A signed original of this written statement required by Section 906 has been provided to Cognizant Technology Solutions Corporation and will be retained by Cognizant Technology Solutions Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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