Pactera Announces Fourth Quarter and Full Year 2012 Financial Results

    Pactera Announces Fourth Quarter and Full Year 2012 Financial Results

PR Newswire

BEIJING, Feb. 27, 2013

BEIJING, Feb. 27, 2013 /PRNewswire/ -- Pactera Technology International Ltd.
(Nasdaq: PACT) ("Pactera" or the "Company"), a global consulting and
technology services provider strategically headquartered in China, today
reported its unaudited financial results for the fourth quarter and full year
2012 ended December 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20130118/CN37843LOGO )

On November 9, 2012, HiSoft Technology International Limited ("HiSoft") and
VanceInfo Technology Inc. ("VanceInfo") completed the merger of equals to form
Pactera. In the fourth quarter of 2012, Pactera's financial statements
consolidated the operating results and financial position of the former
HiSoft's results for the whole fourth quarter and VanceInfo's results for the
period from November 9, 2012 to December 31, 2012. As a result, the financial
results we reported for the fourth quarter and full year 2012 are not
comparable to those of prior corresponding periods due to the merger.

Fourth Quarter and Full Year 2012 Financial and Operational Highlights

  oNet revenues for the fourth quarter of 2012 were $142.2 million.
  oPro forma net revenues[1] for the fourth quarter of 2012 were $179.3
    million, an increase of 17.9% from $152.1 million for the corresponding
    period in 2011.
  oDiluted net loss per ADS for the fourth quarter of 2012 was $0.22.
  oNon-GAAP diluted net income per ADS[2] for the fourth quarter of 2012 was
    $0.24.
  oNet revenues for the full year 2012 were $359.0 million.
  oPro forma net revenues for the full year 2012 were $673.3 million, an
    increase of 34.1% from $502.1 million in 2011.
  oDiluted net income per ADS for the full year 2012 was $0.05.
  oNon-GAAP diluted net income per ADS for the full year 2012 was $0.91.
  oTotal full-time regular employees as of December 31, 2012 were 23,270
    including 20,834 billable professionals.

[1] Pro forma net revenues of the Company for the fourth quarter and full year
2011 and 2012 assume that the merger occurred at the beginning of each such
period. The pro forma financial information is provided for information
purpose only and does not purport to present what the actual results of
operations would have been had the transaction actually occurred at the
beginning of each period indicated nor does it purport to present the actual
results of operations for any future period or financial position for any
future date. Please refer to the accompanying tables at the end of the
earnings release.


[2] Non-GAAP gross margin, non-GAAP operating income, non-GAAP net income,
non-GAAP basic and diluted net income per ADS and corresponding margins
presented in this press release exclude share-based compensation expense,
amortization of acquired intangible assets and land use right, merger-related
transaction and integration costs, and change in fair value of contingent
consideration payable for business acquisition and compensation expenses
related to acquisition. The non-GAAP measures and related reconciliations to
GAAP measures are described in the accompanying section of "About Non-GAAP
Financial Measures" and the accompanying tables of "Reconciliations of
Non-GAAP Financial Measures to Comparable GAAP Measures" and "Reconciliations
of Forward-Looking Guidance for Non-GAAP Financial Measures to Comparable GAAP
Measures" at the end of the news release.

"We are pleased with our results for the fourth quarter and full year 2012.
During the quarter, we successfully achieved our revenue target while also
making solid progress with our operational integration and business
reorganization," said Mr. Tiak Koon Loh, Chief Executive Officer of Pactera.
"Pro forma net revenues in 2012 were up 34.1% year over year. Our BFSI
business continued its strong growth momentum with a 62.7% year-over-year
increase in pro forma net revenues, positioning us to become the leading IT
service provider in this vertical in China. Demand in Greater China remains
robust, reflected by our 49.7% growth in pro forma net revenues in the region
during 2012.

"Looking forward to 2013, we will remain focused on completing our integration
efforts to fully realize the targeted synergies. We will continue to deliver
value to our clients and grow our business in a profitable and sustainable
manner," added Mr. Loh.

Fourth Quarter 2012 Financial Results

Net Revenues

Net revenues were $142.2 million for the fourth quarter of 2012 as compared to
$64.9 million for the fourth quarter of 2011.

Pro forma net revenues of the Company for the fourth quarter of 2012 were
$179.3 million, an increase of 17.9% from $152.1 million for the corresponding
period in 2011. The year-over-year growth in pro forma net revenues was driven
by strong demand of IT services and key geographic markets.

Net Revenues by Service Line

Pactera has two service lines: Information Technology ("IT") services and
research and development ("R&D") services. Pactera divides IT services into
two categories: consulting and packaged solution services ("CPS") and
application development, testing and maintenance services ("ADM").

Net revenues from IT services were $87.7 million for the fourth quarter of
2012. Net revenues from R&D services were $54.5 million for the fourth quarter
of 2012.

Net Revenues by Services Line

                   Three Months Ended Three Months Ended

                   December 31, 2012  December 31, 2011
                   ($ in thousands, except percentages)
IT Services        87,738    61.7%    39,700    61.1%
CPS                31,849    22.4%    13,640    21.0%
ADM                55,889    39.3%    26,060    40.1%
R&D Services       54,464    38.3%    25,236    38.9%
Total Net Revenues 142,202   100.0%   64,936    100.0%

Pro forma net revenues from IT services were $110.4 million for the fourth
quarter of 2012, an increase of 33.2% from $82.9 million for the corresponding
period in 2011, which is primarily due to our expanded service offerings and
client portfolio.

Pro forma net revenues from R&D services were $68.9 million for the fourth
quarter of 2012, compared to $69.2 million for the corresponding period in
2011.

Pro forma Net Revenues by Service Line
(Please refer to the reconciliation table at the end of the earnings release.)

                     Three Months Ended Three Months Ended Year-over-Year  %
                     December 31, 2012  December 31, 2011  Change
                     ($ in thousands, except percentages)
IT Services          110,433   61.6%    82,936    54.5%    33.2%
CPS                  36,264    20.2%    29,239    19.2%    24.0%
ADM                  74,169    41.4%    53,697    35.3%    38.1%
R&D Services         68,911    38.4%    69,188    45.5%    (0.4)%
TotalNetRevenues 179,344   100.0%   152,124   100.0%   17.9%

Net Revenues by Geographic Markets

Based on the location of clients' headquarters, net revenues from clients
headquartered in the United States were $55.4 million in the fourth quarter of
2012, followed by $53.8 million from clients headquartered in Greater China,
$16.6 million in Japan, $10.3 million in Europe and $6.1 million in Asia
South.

Net Revenues based on Location of Clients' Headquarters

                     Three Months Ended Three Months Ended

                     December 31, 2012  December 31, 2011
                     ($ in thousands, except percentages)
United States        55,361    38.9%    30,324    46.7%
Greater China        53,848    37.9%    13,197    20.3%
Japan                16,615    11.7%    13,323    20.5%
Europe               10,262    7.2%     4,851     7.5%
Asia South           6,116     4.3%     3,241     5.0%
Total Net Revenues 142,202   100.0%   64,936    100.0%

Pro forma net revenues from clients headquartered in Greater China were $72.0
million or 40.1% of pro forma net revenues for the fourth quarter of 2012,
followed by 37.5% from the United States, 10.4% from Japan, 7.7% from Europe
and 4.3% from Asia South.

Pro Forma Net Revenues based on Location of Clients' Headquarters
(Please refer to the reconciliation table at the end of the earnings release.)

                     Three Months Ended Three Months Ended Year-over-Year %
                     December 31, 2012  December 31, 2011  Change
                     ($ in thousands, except percentages)
Greater China        71,989    40.1%    53,739    35.3%    34.0%
United States        67,264    37.5%    61,712    40.6%    9.0%
Japan                18,611    10.4%    16,200    10.6%    14.9%
Europe               13,721    7.7%     15,837    10.4%    (13.4)%
Asia South           7,759     4.3%     4,636     3.1%     67.4%
TotalNetRevenues 179,344   100.0%   152,124   100.0%   17.9%

Measuring Pactera's net revenues based on the location of contract signing
entity, Greater China accounted for 57.9% of net revenues in the fourth
quarter of 2012, while the United States accounted for 20.3%, Japan accounted
for 11.1%, Asia South accounted for 9.2% and Europe accounted for 1.5%.

Measuring Pactera's pro forma net revenues based on the location of contract
signing entity, Greater China accounted for 59.8% of pro forma net revenues in
the fourth quarter of 2012, while the United States accounted for 20.7%, Japan
accounted for 9.9%, Asia South accounted for 8.2% and Europe accounted for
1.4%.

Net Revenues by Industry

Pactera classifies its clients into four industry segments: High Technology
("High Tech"), Banking, Financial Services and Insurance ("BFSI"),
Telecommunications ("Telecom"), and other industry segments including
manufacturing, retail, distribution, travel and transportation and public
services ("Others").

Net Revenues by Industry

                     Three Months Ended Three Months Ended

                     December 31, 2012  December 31, 2011
                     ($ in thousands, except percentages)
High Tech            56,463    39.7%    28,941    44.6%
BFSI                 39,894    28.1%    18,849    29.0%
Telecom              23,858    16.8%    4,769     7.3%
Others               21,987    15.4%    12,377    19.1%
Total Net Revenues 142,202   100.0%   64,936    100.0%

Pro Forma Net Revenues by Industry
(Please refer to the reconciliation table at the end of the earnings release.)

                      Three Months Ended Three Months Ended Year-over-Year  %
                      December 31, 2012  December 31, 2011  Change
                      ($ in thousands, except percentages)
High Tech             69,066     38.5%   59,531    39.1%    16.0%
BFSI                  47,435     26.4%   32,224    21.2%    47.2%
Telecom               35,174     19.6%   36,699    24.1%    (4.2)%
Others                27,669     15.5%   23,670    15.6%    16.9%
Totalnetrevenues 179,344    100%    152,124   100.0%   17.9%

Largest Clients

Net revenues from Pactera's top five and top ten clients accounted for 30.7%
and 39.6% of net revenues, respectively, during the fourth quarter of 2012,
compared to 31.6% and 45.2%, respectively, for the corresponding period in
2011.

Pro forma net revenues from Pactera's top five and top ten clients accounted
for 32.2% and 41.2% of pro forma net revenues, respectively, during the fourth
quarter of 2012, compared to 39.0% and 48.6%, respectively, for the
corresponding period in 2011.

Gross Profit and Gross Margin

Gross profit was $47.6 million for the fourth quarter of 2012, compared to
$23.5 million for the corresponding period in 2011. During the fourth quarter
of 2012, gross margin was 33.5%, as compared to 36.2% for the fourth quarter
of 2011.

Operating Expenses

Total operating expenses were $65.2 million for the fourth quarter of 2012
compared to $16.8 million for the corresponding period in 2011. Operating
expenses in the fourth quarter of 2012 reflect $5.5 million in trademark
intangible asset write-down due to the corporate re-branding and $19.8 million
in other merger related expenses including professional fees, severance costs,
and facilities and system integration expenses.

Operating Income and Operating Margin

Operating loss for the fourth quarter of 2012 was $17.5 million, compared to
an operating income of $6.7 million for the corresponding period in 2011.
Non-GAAP operating income for the fourth quarter in 2012 was $15.3 million, as
compared to $9.7 million in the corresponding period in 2011.

Operating margin was negative 12.3% for the fourth quarter of 2012, compared
to 10.3% for the same period in 2011. Non-GAAP operating margin was 10.8% for
the fourth quarter of 2012, compared to 14.9% for the corresponding period in
2011.

Net Income and Net Income per ADS

Net loss attributable to Pactera was $14.5 million for the fourth quarter of
2012, compared to a net income of $6.8 million for the corresponding period in
2011. Diluted net loss per ADS was $0.22 for the fourth quarter of 2012, as
compared to diluted net income per ADS of $0.16 in the corresponding period of
2011.

Non-GAAP net income was $16.4 million for the fourth quarter of 2012, compared
to $9.8 million for the same period in 2011. Non-GAAP diluted net income per
ADS was $0.24 in the fourth quarter of 2012, compared to $0.23 in the
corresponding period of 2011.

Cash Flow and DSO

As of December 31, 2012, Pactera had cash and cash equivalents, restricted
cash, term deposits and short-term investment totaling $210.1 million.
Operating cash flow for the fourth quarter of 2012 was a net inflow of
approximately $33.3 million. Days sales outstanding ("DSO") was 119 days for
the quarter.

Full Year 2012 Financial Results

Net Revenues

Net revenues were $359.0 million for the full year 2012 as compared to $219.0
million for the full year 2011.

Pro forma net revenues of the Company for the full year 2012 were $673.3
million, an increase of 34.1% from $502.1 million for the corresponding period
in 2011.

Net Revenues by Service Line

Net revenues from IT services were $214.9 million for the full year 2012. Net
revenues from R&D services were $144.2 million for the full year 2012.

Net Revenues by Services Line

                      Twelve Months Ended Twelve Months Ended
                      December 31, 2012   December 31, 2011
                      ($ in thousands, except percentages)
IT Services           214,858    59.8%    126,105    57.6%
CPS                   79,605     22.1%    37,567     17.2%
ADM                   135,253    37.7%    88,538     40.4%
R&D Services          144,173    40.2%    92,884     42.4%
Total Net Revenues 359,031    100.0%   218,989    100.0%

Pro forma net revenues from IT services were $381.5 million for the full year
2012, an increase of 46.3% from $260.7 million in 2011. Pro forma net revenues
from R&D services were $291.8 million for the full year 2012, compared to
$241.4 million in 2011.

Pro forma Net Revenues by Service Line
(Please refer to the reconciliation table at the end of the earnings release)

                      TwelveMonthsEnded Twelve Months     Year-over-Year  %
                      December 31, 2012   Ended             Change
                                          December 31, 2011
                      ($ in thousands, except percentages)
IT Services           381,476    56.7%    260,680   51.9%   46.3%
CPS                   118,209    17.6%    85,351    17.0%   38.5%
ADM                   263,267    39.1%    175,329   34.9%   50.2%
R&D Services          291,790    43.3%    241,446   48.1%   20.9%
TotalNetRevenues 673,266    100.0%   502,126   100.0%  34.1%

Net Revenues by Geographic Markets

Based on the location of clients' headquarters, net revenues from clients
headquartered in the United States were $155.0 million in the full year 2012,
followed by $104.2 million from clients headquartered in Greater China, $58.0
million in Japan, $24.4 million in Europe and $17.5 million in Asia South.

Net Revenues based on Location of Clients' Headquarters

                      Twelve Months Ended Twelve Months Ended
                      December 31, 2012   December 31, 2011
                      ($ in thousands, except percentages)
United States         154,969    43.2%    107,925    49.3%
Greater China         104,222    29.0%    39,410     18.0%
Japan                 58,010     16.2%    40,724     18.6%
Europe                24,375     6.8%     18,793     8.6%
Asia South            17,455     4.8%     12,137     5.5%
Total Net Revenues 359,031    100.0%   218,989    100.0%

Pro forma net revenues from clients headquartered in the United States were
$261.1 million or 38.8% of pro forma net revenues for the full year 2012,
followed by 38.2% from Greater China, 10.7% from Japan, 8.4% from Europe and
3.9% from Asia South.

Pro Forma Net Revenues based on Location of Clients' Headquarters
(Please refer to the reconciliation table at the end of the earnings release)

                      Twelve Months Ended Twelve Months     Year-over-Year %
                      December 31, 2012   Ended             Change
                                          December 31, 2011
                      ($ in thousands, except percentages)
United States         261,070    38.8%    203,242   40.5%   28.5%
Greater China         257,481    38.2%    172,052   34.3%   49.7%
Japan                 72,050     10.7%    50,167    10.0%   43.6%
Europe                56,728     8.4%     61,231    12.2%   (7.4)%
Asia South            25,937     3.9%     15,434    3.0%    68.1%
TotalNetRevenues 673,266    100.0%   502,126   100.0%  34.1%

Measuring Pactera's net revenues based on the location of contract signing
entity, Greater China accounted for 48.0% of net revenues in thefull year
2012, while the United States accounted for 21.0%, Japan accounted for 16.7%,
Asia South accounted for 12.6% and Europe accounted for 1.7%.

Measuring Pactera's pro forma net revenues based on the location of contract
signing entity, Greater China accounted for 57.1% of pro forma net revenues in
the full year 2012, while the United States accounted for 22.8%, Japan
accounted for 10.3%, Asia South accounted for 8.2% and Europe accounted for
1.6%.

Net Revenues by Industry

Net Revenues by Industry

                      Twelve Months Ended Twelve Months Ended

                      December 31, 2012   December 31, 2011
                      ($ in thousands, except percentages)
High Tech             153,099    42.6%    105,447    48.2%
BFSI                  102,328    28.5%    60,893     27.8%
Telecom               41,366     11.5%    14,653     6.7%
Others                62,238     17.4%    37,996     17.3%
Total Net Revenues 359,031    100.0%   218,989    100.0%

Pro Forma Net Revenues by Industry
(Please refer to the reconciliation table at the end of the earnings release)

                      Twelve Months Ended Twelve Months      Year-over-Year %
                      December 31, 2012   Ended December 31, Change
                                          2011
                      ($ in thousands, except percentages)
High Tech             259,517    38.5%    200,837   40.0%    29.2%
BFSI                  157,592    23.4%    96,886    19.3%    62.7%
Telecom               151,996    22.6%    127,436   25.4%    19.3%
Others                104,161    15.5%    76,967    15.3%    35.3%
Totalnetrevenues 673,266    100.0%   502,126   100.0%   34.1%

Largest Clients

Net revenues from Pactera's top five and top ten clients accounted for 31.0%
and 41.7% of net revenues, respectively, during the full year 2012, compared
to 34.8% and 50.1%, respectively, in 2011.

Pro forma net revenues from Pactera's top five and top ten clients accounted
for 36.1% and 45.5% of pro forma net revenues, respectively, during the full
year 2012, compared to 40.0% and 50.6%, respectively, in 2011.

Gross Profit and Gross Margin

Gross profit was $124.4 million for the full year 2012, compared to $76.6
million in 2011. During the full year 2012, gross margin was 34.7%, as
compared to 35.0% for the full year 2011.

Operating Expenses

Total operating expenses were $123.5million for the full year 2012 compared to
$59.4 million in 2011. Operating expenses in the full year 2012 reflect $5.5
million in trademark intangible asset write-down due to the corporate
re-branding as a result of the merger and $22.2 million in other merger
related expenses including professional fees, severance costs, and facilities
and system integration expenses.

Operating Income and Operating Margin

Operating income for the full year 2012 was $0.9 million, compared to an
operating income of $17.2 million in 2011. Non-GAAP operating income for the
full year 2012 was $45.4 million, as compared to $27.8 million in 2011.

Operating margin was 0.3% for the full year 2012, compared to 7.9% in 2011.
Non-GAAP operating margin was 12.6% for the full year 2012, compared to 12.7%
in 2011.

Provision for Income Taxes

Provision for income taxes was $1.2 million for the full year 2012, compared
to $1.7million in 2011. The effective income tax rate was 26.8%. Excluding
non-deductible merger related transaction costs for Cayman Island tax
purposes, the effective tax rate would have been 13.0% for the year.

Net Income and Net Income per ADS

Net income attributable to Pactera was $2.6 million for the full year 2012,
compared to $17.9 million for 2011. Diluted net income per ADS was $0.05 for
the full year 2012, as compared to diluted net income per ADS of $0.42 for
2011.

Non-GAAP net income was $45.0 million for the full year 2012, compared to
$28.5 million for 2011. Non-GAAP diluted net income per ADS was $0.91 for the
full year 2012, compared to $0.66 for 2011.

Cash Flow

Operating cash flow for the full year 2012 was a net inflow of approximately
$36.3 million.

Recent Development

Share Repurchase Program

On December 21, 2012, the Company announced that the Board of Directors
approved a share repurchase program, under which Pactera had been authorized,
but is not obligated, to repurchase up to $30 million worth of outstanding
American Depositary Shares (the "ADSs") representing the common shares of
Pactera from time to time over the next 12 months. As of February 26, 2013,
348,535 ADS had been repurchased through open market transactions.

Potential Business Transfer Relating to Our Large Telecom Customer

As previously disclosed, one of the Company's major clients formed two joint
ventures specializing in the software outsourcing business with the Company's
competitors. The customer is now shifting some of its outsourcing business
from various vendors to these joint ventures. Recently in 2013, this customer
informed the Company of its plan to move some business from the Company to
these joint ventures, and the Company intends to fully cooperate in this
process. The details are still being discussed between the parties, which may
include orderly transfer of certain project teams to the joint ventures in the
first half of 2013. In 2012, Pactera and, prior to the completion of the
merger, HiSoft and VanceInfo, generated approximately $96 million of net
revenues from this customer, which was the largest customer as measured by net
revenues. The Company now expects net revenues from this customer to decline
by at least 40% in 2013.

Outlook for Pactera's First Quarter and Full Year 2013

For the first quarter of 2013, based on current market and operating
conditions and current book orders, Pactera expects:

  oNet revenues to be at least US$158.0 million, compared to $151.6 million
    in the first quarter 2012 on a pro forma basis. Excluding the revenues
    from our large telecom customer in both periods, this represents an
    increase of at least 10% from the first quarter 2012. Please refer to
    Recent Development section of this release for further discussion.
  oNon-GAAP diluted net income per ADS to be at least $0.12, estimated based
    on 88.3 million weighted average equivalent ADSs outstanding.

For the full year 2013, based on current market and operating conditions,
Pactera expects:

  oExcluding the revenues from our large telecom customer for both 2012 and
    2013, net revenues to be at least US$675 million, representing an increase
    of at least 17% from the 2012 pro forma revenues of $577 million. Based on
    our current visibility, we estimate net revenues with our large telecom
    customer to be approximately $48 million to $58 million, which would
    result in a total net revenue for the Company to be between $723 million
    and $733 million in 2013, compared to $673 million in 2012 on a pro forma
    basis. Please refer to Recent Development section of this release for
    further discussion.
  oNon-GAAP diluted net income per ADS to be in the range of $0.75 to $0.80,
    estimated based on 89.5 million weighted average equivalent ADSs
    outstanding.

These estimates are based on current market and operating conditions, are
subject to change, and may be influenced positively or negatively by factors
outside the Company's control, including but not limited to macroeconomic
events in the markets in which the Company operates. See "Safe Harbor
Statement" below for additional information regarding forward-looking
statements.

Conference Call

The Company will host a corresponding conference call and live webcast to
discuss the results at 7:00 AM Eastern Standard Time (EST) on Wednesday,
February 27, 2013 (8:00 PM Beijing/Hong Kong time). Please dial-in five
minutes prior to the call to register and receive further instruction.

The dial-in details for the live conference call are as below:

- U.S. Toll Free Dial-in Number: + 1.855.500.8701
- International Dial-in Number: + 65.6723.9385
- Hong Kong Dial-in Number: + 852.3051.2745
Passcode: 96031141

The conference call will be available live via webcast on the Investors
section of Pactera's website at http://ir.pactera.com. The archive replay will
be available on Pactera's website shortly after the call.

A dial-in replay of the conference call will be available until March 6, 2013:
- U.S. Toll Free Dial-in Number: + 1.855.452.5696
- International Dial-in Number: + 61.2.8199.0299
Passcode: 96031141

About Pactera

Pactera Technology International Ltd. (NASDAQ: PACT), formed by a merger of
equals between HiSoft Technology International Limited and VanceInfo
Technologies Inc., is a global consulting and technology services provider
strategically headquartered in China. Pactera provides world-class business /
IT consulting, solutions, and outsourcing services to a wide range of leading
multinational firms through a globally integrated network of onsite and
offsite delivery locations in China, the United States, Europe, Australia,
Japan, Singapore and Malaysia. Pactera's comprehensive services include
business and technology advisory, enterprise application services, business
intelligence, application development & maintenance, mobility, cloud
computing, infrastructure management, software product engineering &
globalization, and business process outsourcing.

For more information about Pactera, please visit www.pactera.com.

Safe Harbor Statement

This news release contains forward-looking statements. These statements
constitute "forward-looking" statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, and as defined in the U.S.
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates,"
"target," "going forward," "outlook" and similar statements. Such statements
are based upon management's current expectations and current market and
operating conditions, and relate to events that involve known or unknown
risks, uncertainties and other factors, all of which are difficult to predict
and many of which are beyond Pactera's control, which may cause Pactera's
actual results, performance or achievements to differ materially from those in
the forward-looking statements. Potential risks and uncertainties include, but
are not limited to, the Company's dependence on a limited number of clients
for a significant portion of its revenues, uncertainty relating to its
clients' forming or plan to form joint venture with the Company's competitors,
the economic slowdown in its principal geographic markets, the quality and
portfolio of its service lines and industry expertise, and the availability of
a large talent pool in China and inflation of qualified professionals' wages,
as well as the PRC government's investment in infrastructure construction and
adoption of various incentives in the IT service industry. Further information
regarding these and other risks, uncertainties or factors is included in
Pactera's filings with the U.S. Securities and Exchange Commission. All
information provided in this news release is as of the date of this news
release, and Pactera does not undertake any obligation to update any
forward-looking statement as a result of new information, future events or
otherwise, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Pactera's consolidated financial results presented in accordance
with GAAP, Pactera uses the following measures defined as non-GAAP financial
measures by the SEC: non-GAAP income from operations, non-GAAP net income and
non-GAAP diluted EPS and related margins which exclude share-based
compensation expense, amortization of acquired intangible assets and land use
right, merger-related costs, change in fair value of contingent consideration
payable for business acquisition, and compensation expenses related to
acquisition. The non-GAAP income from operations, net income and diluted EPS
for prior periods have been reclassified so that the presentations are
consistent. The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for or superior to
the financial information prepared and presented in accordance with GAAP or as
being comparable to results reported or forecasted by other companies. For
more information on these non-GAAP financial measures, please see the tables
captioned "Reconciliations of non-GAAP Financial Measures to Comparable GAAP
Measures" and "Reconciliations of Forward-Looking Guidance for non-GAAP
Financial Measures to Comparable GAAP Measures" set forth at the end of this
news release.

Pactera believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance by excluding certain
expenses and expenditures that may not be indicative of its operating
performance. The Company believes that both management and investors benefit
from referring to these non-GAAP financial measures in assessing the Company's
performance and when planning and forecasting future periods. A limitation of
using non-GAAP net income and non-GAAP diluted EPS is that these non-GAAP
measures exclude the share-based compensation charges, amortization of
acquired intangible assets and land use right, merger-related transaction and
integration costs, and change in fair value of contingent consideration
payable for business acquisition that have been and will continue to be, for
the foreseeable future, a significant recurring expense in the business.
Management compensates for these limitations by providing specific information
regarding the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables have more details on the reconciliations between GAAP
financial measures that are comparable to non-GAAP financial measures. The
reconciliations of the forward-looking guidance for non-GAAP financial
measures to the most directly comparable GAAP financial measures in the
accompanying table include all information reasonably available to Pactera at
the date of this news release.

   PACTERA TECHNOLOGY INTERNATIONAL LIMITED
   Condensed Consolidated Balance Sheets (Unaudited)
   (US dollars in thousands, except share data)
                    December31,2012    December 31, 2011
   ASSETS
   Current Assets
   Cash and cash    143,714              113,856
   equivalents
   Restricted cash  6,112                1,222
   Term deposits    58,485               21,681
   Short-term       1,765                -
   investment
   Accounts         230,693              61,413
   receivable, net
   Other current    37,435               7,135
   assets
   Total current    478,204              205,307
   assets
   Property, plant
   and equipment,   67,607               13,774
   net
   Goodwill and
   intangible       157,962              52,546
   assets, net
   Other long-term  33,833               1,552
   assets
   Total assets     737,606              273,179
   LIABILITIES AND STOCKHOLDERS'
   EQUITY
   Current          163,152              51,029
   liabilities
   Other            32,130               12,260
   liabilities
   Total            195,282              63,289
   liabilities
   Total
   shareholder's    542,324              209,890
   equity
   Total
   liabilities and  737,606              273,179
   equity
                    -                    -
                    -                    -
   Note:
   As of December 31,2012, there were 88,312,068 ordinary
   shares (88,312,068 ADSs) issued and outstanding.
   As of December 31,2011, there were 42,720,067 ordinary
   shares (42,720,067 ADSs) issued and outstanding,
   Effective on November 9, 2012, the Company adjusted the
   ratio of its ADSs to ordinary shares that
   effectively resulted in a 1:1.3622 split for its ADSs.
   All number of shares and earnings per ADS figures in
   this
   announcement give effect to the forgoing ADS to share
   ratio change.
 

 PACTERA TECHNOLOGY INTERNATIONAL LIMITED
 Condensed Consolidated Statements of Operations (Unaudited)
 (US dollars in thousands, except for share, per share data)
                             Three months ended       Year ended December
                             December 31,             31,
                             2012         2011        2012        2011
 Net revenues                142,202      64,936      359,031     218,989
 Cost of revenues            (94,589)     (41,402)    (234,602)   (142,427)
 Gross profit                47,613       23,534      124,429     76,562
 Operating expenses          (65,152)     (16,832)    (123,514)   (59,351)
 (Loss) Income from          (17,539)     6,702       915         17,211
 operations
 Other income               709          832         3,597       2,905
 Net (loss) income before    (16,830)     7,534       4,512       20,116
 income tax expenses
 Income tax benefit         2,359        (459)       (1,210)     (1,718)
 (expenses)
 (Loss) income before
 earning in equity method    (14,471)     7,075       3,302       18,398
 investment
 Earning in equity method    23           -           23          -
 investment
 (Loss) income after earning (14,448)     7,075       3,325       18,398
 in equity method investment
 Add: Net profit
 attributable to             (69)         (278)       (735)       (497)
 noncontrolling interest
 Net (loss) income
 attributable to
 PacteraTechnology           (14,517)     6,797       2,590       17,901
 International Limited
 Net (loss) income per share
 Basic                       (0.22)       0.17        0.05        0.44
 Diluted                     (0.22)       0.16        0.05        0.42
 Weighted average shares
 used in calculating net
 income per common share
 Basic                       66,234,854   41,021,197  47,547,307  40,596,429
 Diluted                     66,234,854   42,946,070  49,444,160  42,956,291
 Net (loss) income per ADS
 Basic                       (0.22)       0.17        0.05        0.44
 Diluted                     (0.22)       0.16        0.05        0.42
 Weighted average ADS used
 in calculating net
 income per ADS
 Basic                       66,234,854   41,021,197  47,547,307  40,596,429
 Diluted                     66,234,854   42,946,070  49,444,160  42,956,291
 Effective on November 9, 2012, the Company adjusted the ratio of its ADSs to
 ordinary shares that effectively resulted in a 1:1.3622 split for its
 ADSs. All number of shares and earnings per ADS figures in this announcement
 give effect to the forgoing ADS to share ratio change.





             PACTERA TECHNOLOGY INTERNATIONAL LIMITED
             Condensed Consolidated Statements of Comprehensive Income (Unaudited)
             (US dollars in thousands, except for share, per share data)
                                                            Three months     Year ended
                                                            ended December   December 31,
                                                            31,
                                                            2012      2011   2012   2011
 Net (loss) income                                          (14,448)  7,075  3,325  18,398
 Other comprehensive income, net of tax:
             Change in cumulative foreign exchange          946       1,862  2,460  5,738
             translation adjustment
 Comprehensive(loss)income (13,502)  8,937  5,785  24,136
 Less: Comprehensive income attributable to noncontrolling
 interest                                                   (69)      (295)  (742)  (547)
 Comprehensive income attributable to Pactera
 Technology International Limited                           (13,571)  8,642  5,043  23,589





PACTERA TECHNOLOGY INTERNATIONAL LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in U.S. dollars in thousands)
                                     Three months ended   Year ended December
                                     December 31,         31,
                                     2012        2011     2012       2011
 Cash flows from operating
 activities:
  Net (loss) income                  (14,448)    7,075    3,325      18,398
  Adjustments to reconcile net income to net cash (used
  in) provided by operating activities:
      (Reversal) Provision for       4,851       (163)    4,821      477
      doubtful accounts
      (Gain) loss on disposal of     155         (1)      103        37
      property, plant and equipment
      Depreciation                   2,709       1,317    6,850      4,400
      Change in fair value of
      foreign-currency forward       43          (67)     20         (28)
      contract
      Amortization of intangible     2,295       1,044    6,058      2,677
      assets
      Amortization of land use right 71          -        71         -
      Impairment of Intangible       5,515       -        5,515      -
      Asssets
      Non-cash interest income       -           -        -          (34)
      Share-based compensation       5,841       1,559    11,064     5,656
      expenses
      Changes in fair value of       (776)       384      (659)      1,824
      contingent consideration
      Earnings in investment         (23)        -        (23)       -
  Changes in operating assets and
  liabilities:
      Accounts receivable            10,523      627      (11,946)   (12,405)
      Other current assets           757         1,416    (1,374)    (2,565)
      Other assets                   237         (66)     (697)      2,170
      Accounts payable               (938)       1,981    (3,459)    216
      Other liabilities              16,478      803      16,656     3,500
 Net cash provided by operating      33,290      15,909   36,325     24,323
 activities
 Cash flows from investing
 activities:
  Term deposits                      (7,232)     10,675   (1,908)    (21,681)
  Sort-term investment               (1,764)     -        (1,764)    -
  Purchase of property, plant and    (2,219)     (1,785)  (5,600)    (7,691)
  equipment
  Purchase of buliding and land use  (9,126)     -        (15,633)   -
  right
  Restricted cash                    (2,234)     (54)     (3,022)    (836)
  Cash received from merger with     31,717      -        31,717     -
  VanceInfo
  Deferred and contingent
  consideration paid for business    (2,321)     (2,109)  (9,554)    (7,716)
  acquisitions
  Payment on success fee related to  -           -        -          (450)
  business acquisition
 Net cash provided by (used in)      6,821       6,727    (5,764)    (38,374)
 investing activities
 Cash flows from financing
 activities:
  Repayment of bank loan             (1)         -        (477)      (40,000)
  Cash received from non-controlling -           -        -          909
  Proceeds from issuance of common
  share                              589         634      1,988      5,291
  under employee option plan
  Deferred and contingent
  consideration paid for business    -           (2,150)  (3,047)    (11,710)
  acquisitions
  Payment of principal amount under  -           -        -          (136)
  capital lease obligations
 Net cash provided by (used in)     588         (1,516)  (1,536)    (45,646)
 financing activities
 Effect of exchange rate changes     528         1,063    833        3,660
 Net increase (decrease) in cash and 41,227      22,183   29,858     (56,037)
 cash equivalents
 Cash and cash equivalents at        102,487     91,673   113,856    169,893
 beginning of period
 Cash and cash equivalents at end of 143,714     113,856  143,714    113,856
 period





 PACTERA TECHNOLOGY INTERNATIONAL LIMITED
 Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures
 (US dollars in thousands, except per share data and percentages)
                    Three months ended December 31,  Year ended December 31,
                    2012            2011             2012         2011
 GAAP operating     (17,539)        6,702            915          17,211
 (loss) income
 GAAP operating     -12.3%          10.3%            0.3%         7.9%
 (loss) margin
 Adjustments:
 - Share-based     5,841           1,559            11,064       5,656
 compensation
 - Amortization of
 acquired           2,295           1,044            6,058        2,677
 intangible assets
 - Write-down of
 trademarks due to  5,515           -                5,515        -
 re-branding
 - Change in fair
 value of
 contingent         (776)           384              (659)        1,824
 consideration
 payable for M&A
 - Success fee
 related to         -               -                -            450
 business
 acquisition
 - Compensation
 expenses           87              -                174          -
 related to
 acquisition
 - Merger related  19,827          -                22,215       -
 costs
 - Land use right
 amortization       71              -                71           -
 expense
 Non-GAAP operating 15,321          9,689            45,353       27,818
 income
 Non-GAAP operating 10.8%           14.9%            12.6%        12.7%
 margin
 GAAP net (loss)    (14,517)        6,797            2,590        17,901
 income
 GAAP net (loss)    -10.2%          10.5%            0.7%         8.2%
 margin
 Adjustments:
 - Share-based     5,841           1,559            11,064       5,656
 compensation
 - Write-down of
 trademarks due to  2,295           1,044            6,058        2,677
 re-branding
 - Write down of   5,515           -                5,515        -
 intangible assets
 - Change in fair
 value of
 contingent         (776)           384              (659)        1,824
 consideration
 payable for M&A
 - Success fee
 related to         -               -                -            450
 business
 acquisition
 - Compensation
 expenses           87              -                174          -
 related to
 acquisition
 - Merger related
 costs, net of tax  17,837          -                20,225       -
 effect
 - Land use right
 amortization       71              -                71           -
 expense
 Non-GAAP net       16,353          9,784            45,038       28,508
 income
 Non-GAAP net       11.5%           15.1%            12.5%        13.0%
 margin
 Non-GAAP net
 income per ADS
 Basic              0.25            0.24             0.95         0.70
 Diluted            0.24            0.23             0.91         0.66
 Weighted average
 ADS used in
 calculating
 Non-GAAP net
 income per ADS
 Basic              66,234,854      41,021,197       47,547,307   40,596,429
 Diluted            68,514,064      42,946,070       49,444,160   42,956,291
 GAAP net (loss)
 income per ADS
 Basic              (0.22)          0.17             0.05         0.44
 Adjustments:
 - Share-based     0.09            0.04             0.23         0.14
 compensation
 - Amortization of
 acquired           0.04            0.02             0.13         0.07
 intangible assets
 - Write-down of
 trademarks due to  0.08            -                0.12         -
 re-branding
 - Change in fair
 value of
 contingent         (0.01)          0.01             (0.01)       0.04
 consideration
 payable for M&A
 - Success fee
 related to         -               -                -            0.01
 business
 acquisition
 - Compensation
 expenses           -               -                -            -
 related to
 acquisition
 - Merger related
 costs, net of tax  0.27            -                0.43         -
 effect
 - Land use right  -               -                -            -
 Non-GAAP net
 income per ADS
 Basic              0.25            0.24             0.95         0.70
 GAAP net (loss)
 income per ADS
 Diluted            (0.22)          0.16             0.05         0.42
 Adjustments:
 - Share-based     0.09            0.04             0.22         0.13
 compensation
 - Amortization of
 acquired           0.03            0.02             0.13         0.06
 intangible assets
 - Write-down of
 trademarks due to  0.08            -                0.11         -
 re-branding
 - Change in fair
 value of
 contingent         (0.01)          0.01             (0.01)       0.04
 consideration
 payable for M&A
 - Success fee
 related to         -               -                -            0.01
 business
 acquisition
 - Compensation
 expenses           -               -                -            -
 related to
 acquisition
 - Merger related
 costs, net of tax  0.27            -                0.41         -
 effect
 - Land use right  -               -                -            -
 Non-GAAP net
 income per ADS
 Diluted            0.24            0.23             0.91         0.66
 

 Effective on November 9, 2012, the Company adjusted the ratio of its ADSs
 to ordinary shares that effectively resulted in a 1:1.3622 split for its
 ADSs. All number of shares and earnings per ADS figures in this
 announcement give effect to the forgoing ADS to share ratio change.

 





            Unauditedhistorical      Unauditedhistorical                                Unauditedhistorical      Unauditedhistorical
            consolidatednetrevenues consolidatednetrevenues UnauditedProforma       consolidatednetrevenues consolidatednetrevenues UnauditedProforma
            of Pactera for thethree  of VanceInfo for the     consolidatednetrevenues of the former HiSoft for of VanceInfo for the     consolidatednetrevenues
            months ended December 31, period from October 1,    for the three months      the three months ended    three months ended        for the three months
            2012                      2012 to November 8,       ended December 31, 2012   December 31, 2011         December 31, 2011         ended December 31, 2011
                                      2012
 Proforma
 Net
 Revenue
 by
 Service
 Lines
 IT         87,738                    22,695                    110,433                   39,700                    43,236                    82,936
 Services
 - CPS     31,849                    4,415                     36,264                    13,640                    15,599                    29,239
 - ADM     55,889                    18,280                    74,169                    26,060                    27,637                    53,697
 R&D        54,464                    14,447                    68,911                    25,236                    43,952                    69,188
 Services
 Total      142,202                   37,142                    179,344                   64,936                    87,188                    152,124
 Proforma
 Net
 Revenue
 by
 Industry
 High Tech  56,463                    12,603                    69,066                    28,941                    30,590                    59,531
 BFSI       39,894                    7,541                     47,435                    18,849                    13,375                    32,224
 Telecom    23,858                    11,316                    35,174                    4,769                     31,930                    36,699
 Others     21,987                    5,682                     27,669                    12,377                    11,293                    23,670
 Total      142,202                   37,142                    179,344                   64,936                    87,188                    152,124
 Proforma Net Revenue by Location of
 Client's Headquarter
 United     55,361                    11,903                    67,264                    30,324                    31,388                    61,712
 States
 Europe     10,262                    3,459                     13,721                    4,851                     10,986                    15,837
 Japan      16,615                    1,996                     18,611                    13,323                    2,877                     16,200
 Greater    53,848                    18,141                    71,989                    13,197                    40,542                    53,739
 China
 Asia       6,116                     1,643                     7,759                     3,241                     1,395                     4,636
 South
 Total      142,202                   37,142                    179,344                   64,936                    87,188                    152,124
 Note:
 The accompanying unaudited pro forma net revenues for the three months ended December 31, 2012 and 2011 and the year ended December 31, 2012 and 2011 is prepared
 based on the assumption that the merger of HiSoft and VanceInfo was consummated on January 1, 2011. No adjustment has been made to unaudited historical consolidated
 net revenues to give effect to such pro forma event. The unaudited pro forma net revenues are being provided for information purposes only as Pactera believes that
 such data provide meaningful supplemental information for investors to compare the performance of Pactera with the pre-merger HiSoft and VanceInfo for the
 corresponding periods. Such data do not purport to represent what the actual consolidated results of operations or the consolidated balance sheet of the combined
 company would have been had the merger occurred on the dates assumed, nor are they necessarily indicative of the combined company's future consolidated results of
 operations.

 For the pro forma net revenues for the three months ended December 31, 2012, it combined the unaudited historical consolidated net revenues of Pactera for the three
 months ended December 31, 2012 and the unaudited historical consolidated net revenues of VanceInfo for the period from October 1, 2012 to November 8, 2012 (period
 prior to the consummation of the merger). The unaudited historical consolidated net revenues of Pactera for the three months ended December 31, 2012 combine the
 unaudited historical consolidated net revenues of the former HiSoft for the three months ended December 31, 2012 and the unaudited historical consolidated net
 revenues of VanceInfo for the period from November 9, 2012 to December 31, 2012.





            Unauditedhistorical Unauditedhistorical                                Unauditedhistorical      Unauditedhistorical
            consolidated net     consolidatednetrevenues UnauditedProforma       consolidatednetrevenues consolidatednetrevenues UnauditedProforma
            revenues of          of VanceInfo for the     consolidatednetrevenues of the former HiSoft for  of VanceInfo for the     consolidatednetrevenues
            Pacterafortheyear period from January 1,    for the year ended        the year ended December   year ended December 31,   for the year ended
            December 31, 2012    2012 to November 8,       December 31, 2012         31, 2011                  2011                      December 31, 2011
                                 2012
 Proforma
 Net
 Revenue
 by
 Service
 Lines
 IT         214,858              166,618                   381,476                   126,105                   134,575                   260,680
 Services
 - CPS     79,605               38,604                    118,209                   37,567                    47,784                    85,351
 - ADM     135,253              128,014                   263,267                   88,538                    86,791                    175,329
 R&D        144,173              147,617                   291,790                   92,884                    148,562                   241,446
 Services
 Total      359,031              314,235                   673,266                   218,989                   283,137                   502,126
 Proforma
 Net
 Revenue
 by
 Industry
 High Tech  153,099              106,418                   259,517                   105,447                   95,390                    200,837
 BFSI       102,328              55,264                    157,592                   60,893                    35,993                    96,886
 Telecom    41,366               110,630                   151,996                   14,653                    112,783                   127,436
 Others     62,238               41,923                    104,161                   37,996                    38,971                    76,967
 Total      359,031              314,235                   673,266                   218,989                   283,137                   502,126
 Proforma Net Revenue by
 Location of Client's
 Headquarter
 United     154,969              106,101                   261,070                   107,925                   95,317                    203,242
 States
 Europe     24,375               32,353                    56,728                    18,793                    42,438                    61,231
 Japan      58,010               14,040                    72,050                    40,724                    9,443                     50,167
 Greater    104,222              153,259                   257,481                   39,410                    132,642                   172,052
 China
 Asia       17,455               8,482                     25,937                    12,137                    3,297                     15,434
 South
 Total      359,031              314,235                   673,266                   218,989                   283,137                   502,126
 Note:
 The accompanying unaudited pro forma net revenues for the three months ended December 31, 2012 and 2011 and the year ended December 31, 2012 and 2011 is prepared
 based on the assumption that the merger of HiSoft and VanceInfo was consummated on January 1, 2011. No adjustment has been made to unaudited historical
 consolidated net revenues to give effect to such pro forma event. The unaudited pro forma net revenues are being provided for information purposes only as
 Pactera believes that such data provide meaningful supplemental information for investors to compare the performance of Pactera with the pre-merger HiSoft and
 VanceInfo for the corresponding periods. Such data do not purport to represent what the actual consolidated results of operations or the consolidated balance
 sheet of the combined company would have been had the merger occurred on the dates assumed, nor are they necessarily indicative of the combined company's future
 consolidated results of operations.
 
 For the pro forma net revenues for the three months ended December 31, 2012, it combined the unaudited historical consolidated net revenues of Pactera for the
 three months ended December 31, 2012 and the unaudited historical consolidated net revenues of VanceInfo for the period from October 1, 2012 to November 8, 2012
 (period prior to the consummation of the merger). The unaudited historical consolidated net revenues of Pactera for the three months ended December 31, 2012
 combine the unaudited historical consolidated net revenues of the former HiSoft for the three months ended December 31, 2012 and the unaudited historical
 consolidated net revenues of VanceInfo for the period from November 9, 2012 to December 31, 2012.



For further information, please contact:

Sheryl Zhang
Investor Relations
Pactera Technology International Ltd.
Tel: +86-10-8282-5330
E-mail: ir@pactera.com

------------------------------------------------------------------------------

SOURCE Pactera Technology International Ltd.

Website: http://ir.pactera.com
Website: http://www.pactera.com