8-KRegulation FD

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Regulation FD Disclosure (Dec 14, 2020)

Filed December 14, 2020For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation announced a significant enhancement to its shareholder return strategy. On December 10, 2020, the Board of Directors approved an increase of $2 billion to the company's existing stock repurchase program, raising the total authorization to $9.5 billion. This move signals strong confidence from management in the company's financial health and its ability to generate substantial free cash flow. The expanded program, which has no expiration date, provides Cognizant with considerable flexibility to return capital to shareholders. Following this increase, Cognizant had approximately $2.9 billion available for repurchases. The company intends to execute these repurchases opportunistically through various methods, including open market transactions and privately negotiated deals, subject to market conditions and corporate needs. This initiative underscores Cognizant's commitment to enhancing shareholder value, supplementing potential future dividend payments and strategic investments.

Key Highlights

  • 1Cognizant's Board of Directors approved a $2 billion increase to its stock repurchase program.
  • 2The total authorized amount for stock repurchases is now $9.5 billion.
  • 3The expanded repurchase program does not have an expiration date.
  • 4Approximately $2.9 billion remained available for repurchase following the authorization increase.
  • 5Repurchases can be executed through various methods, including open market and privately negotiated transactions.
  • 6The company has the flexibility to make repurchases within the requirements of Rule 10b-18 and may utilize Rule 10b-18 plans.
  • 7This action reflects management's confidence in the company's financial strength and commitment to returning capital to shareholders.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose the Board of Directors' approval of a $2 billion increase to Cognizant's stock repurchase program, bringing the total authorization to $9.5 billion. This action is intended to further enhance shareholder value by enabling the company to buy back its own stock.

Following the increase approved on December 10, 2020, Cognizant had approximately $2.9 billion available for stock repurchases under the new, expanded authorization of $9.5 billion.

No, the stock repurchase program, as expanded, does not have a specific expiration date. This provides Cognizant with ongoing flexibility to manage its capital returns to shareholders.

The company plans to make repurchases opportunistically, depending on market conditions and its corporate needs. These repurchases may occur through open market transactions, privately negotiated deals, or other methods, and will be conducted in compliance with relevant SEC rules like Rule 10b-18.