Sequentially, corporate costs decreased to $12.1 million, or 4.0% of revenues, in the fourth quarter of 2012, from $15.3 million, or 5.5% of revenues, in the third quarter of 2012, with the bulk of the transaction costs related to the Alpine Access acquisition occurring in the third quarter of 2012. On a non-GAAP basis, corporate costs decreased to $11.4 million, or 3.7% of revenues, from $11.9 million in the third quarter, or 4.2% of revenues, with the decrease due principally to lower variable incentive compensation (see Exhibit 7 for reconciliation).
Interest & Other Expense and Taxes
Interest and other expense for the fourth quarter of 2012 was $0.8 million versus interest and other income of $0.3 million in the comparable quarter last year, with the $1.1 million swing due to a combination of a subsidiary liquidation associated with the previously announced strategic actions in the EMEA region and realized and unrealized foreign currency transaction losses.
The Company's effective tax rate in the fourth quarter 2012 was 11.0% versus 46.2% in the same period last year and below the estimated 18% provided in the Company's November 2012 business outlook. The lower effective tax rate comparably and relative to the business outlook was driven principally by transaction and integration costs related to the Alpine Access acquisition, which lowered pre-tax income in a higher tax-rate jurisdiction.On a non-GAAP basis, the fourth quarter 2012 effective tax rate from continuing operations was 18.0% compared to 42.0% in the same period last year and below the estimated 23% provided in the Company's November 2012 business outlook. The decrease versus the year-ago period and relative to the November 2012 business outlook was due mainly to a shift in the geographic mix of earnings to lower tax rate jurisdictions. 2012 Financial Highlights
- 2012 revenues of $1,127.7 million from continuing operations decreased $41.6 million, or 3.6%, from 2011; excluding the $40.6 million in revenue contribution from the Alpine Access acquisition and on a constant currency basis, revenues from continuing operations decreased 6.1% comparably as increased demand within the financial services, healthcare and travel verticals was more than offset by end-of-life client programs and the effect of strategic actions (the previously announced and planned exit from Ireland and South Africa and capacity rationalization in Amsterdam, as well as capacity rationalization related to the integration of the ICT acquisition), revenues from both of which were included in the prior year
- 2012 operating margin from continuing operations was 4.2% versus 5.6% on a comparable basis in 2011; on a non-GAAP basis, 2012 operating margin from continuing operations was 6.1% versus 7.1% for 2011, due to a combination of lower revenues driven by previously discussed end-of-life client programs and strategic actions and the corresponding operating inefficiencies, unfavorable foreign currency movements, higher legal and professional services fees as well as investments in facility upgrades and transfers (see Exhibit 8 for reconciliation)
- 2012 diluted earnings per share from continuing operations was $0.93 versus $1.15 in 2011 and above the Company's November 2012 business outlook earnings per share range of $0.80 to $0.85. The decrease in the Company's 2012 diluted earnings per share from continuing operations on a comparable basis was due to a combination of transaction and integration costs related to the Alpine Access acquisition, unfavorable foreign exchange movements, investments in facility upgrades and transfers and end-of-life of client programs, which was partially offset by a lower effective tax rate and share count
- On a non-GAAP basis (see Exhibit 8 for reconciliation), 2012 diluted earnings per share from continuing operations was $1.27 compared to $1.40 in 2011 and compared to a non-GAAP diluted earnings per share range of $1.17 to $1.22 provided in the Company's November 2012 business outlook. The decrease in the Company's 2012 non-GAAP diluted earnings per share from continuing operations relative to 2011 was due principally to the above mentioned factors; the increase in non-GAAP diluted earnings per share relative to the November 2012 business outlook was due largely to higher capacity utilization and a lower comparable tax rate
- 2012 loss per share from discontinued operations, net of taxes, was ($0.27) versus ($0.09) in 2011 due principally to the loss on the sale of the Company's Spanish operations in 2012 versus operating losses net of taxes from the Company's operations in Spain in 2011
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