1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2001
AMDOCS LIMITED
Suite 5, Tower Hill House Le Bordage
St. Peter Port, Island of Guernsey, GY1 3QT Channel Islands
Amdocs, Inc.
1390 Timberlake Manor Parkway, Chesterfield, Missouri 63017
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F)
Form 20 F X FORM 40 F
----- -----
(Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of
1934.)
YES NO X
----- -----
2
AMDOCS LIMITED
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
FOR THE QUARTER ENDED JUNE 30, 2001
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statement of Changes in
Shareholders' Equity
Consolidated Statements of Cash Flows
Notes to Unaudited Consolidated Financial
Statements
Item 2. Operating and Financial Review and Prospects
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 6-K
SIGNATURES
EXHIBIT INDEX
1
3
AMDOCS LIMITED
CONSOLIDATED BALANCE SHEETS
(in U.S. dollars, unless otherwise stated)
(in thousands, except per share data)
AS OF
-----------------------------
JUNE 30, SEPTEMBER 30,
2001 2000
------------- --------------
(UNAUDITED)
-----------
ASSETS
Current assets:
Cash and cash equivalents $ 829,413 $ 402,300
Short-term interest-bearing investments 214,767 --
Accounts receivable, including unbilled of $22,598 and $4,203, less
allowances of $4,307 and $6,868, respectively (*) 329,333 263,100
Deferred income taxes and taxes receivable 34,021 35,179
Prepaid expenses and other current assets 39,291 34,327
------------ ------------
Total current assets 1,446,825 734,906
Equipment, vehicles and leasehold improvements, net 167,257 128,081
Deferred income taxes 23,199 13,900
Goodwill and other intangible assets, net 842,680 1,011,053
Other noncurrent assets 62,802 47,145
------------ ------------
Total assets $ 2,542,763 $ 1,935,085
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 139,940 $ 128,249
Accrued personnel costs 87,972 70,196
Short-term financing arrangements -- 20,000
Deferred revenue 147,029 133,546
Short-term portion of capital lease obligations 9,522 8,713
Deferred income taxes and taxes payable 67,278 55,197
------------- -------------
Total current liabilities 451,741 415,901
Convertible notes and long-term portion of capital lease obligations 523,183 23,417
Deferred income taxes 7,812 11,191
Other noncurrent liabilities 66,874 53,804
------------- -------------
Total liabilities 1,049,610 504,313
------------- -------------
Shareholders' equity:
Preferred Shares - Authorized 25,000 shares; Pounds 0.01 par value; 0 shares
issued and outstanding -- --
Ordinary Shares - Authorized 550,000 shares; Pounds 0.01 par value; 222,486
and 221,165 outstanding, respectively 3,558 3,539
Additional paid-in capital 1,803,597 1,784,816
Accumulated other comprehensive income (loss) (2,535) 1,159
Unearned compensation (370) (1,164)
Accumulated deficit (311,097) (357,578)
------------- -------------
Total shareholders' equity 1,493,153 1,430,772
------------- -------------
Total liabilities and shareholders' equity $ 2,542,763 $ 1,935,085
============= =============
(*) See Note 2.
See accompanying notes
2
4
AMDOCS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Revenue:
License (*) $ 48,504 $ 32,663 $ 129,870 $ 89,606
Service (*) 355,503 264,339 988,593 713,647
---------- ---------- ---------- ----------
404,007 297,002 1,118,463 803,253
---------- ---------- ---------- ----------
Operating expenses:
Cost of license 1,772 1,715 4,725 4,346
Cost of service (*) 220,834 167,686 618,776 462,425
Research and development 28,003 20,275 76,734 52,958
Selling, general and administrative (*) 52,727 37,321 144,344 97,868
Amortization of goodwill and purchased
intangible assets 55,807 54,070 164,131 56,870
In-process research and development
expenses and other indirect
acquisition related costs -- 55,741 -- 75,617
---------- ---------- ---------- ----------
359,143 336,808 1,008,710 750,084
---------- ---------- ---------- ----------
Operating income (loss) 44,864 (39,806) 109,753 53,169
Interest income and other, net 5,228 3,355 15,885 6,018
---------- ---------- ---------- ----------
Income (loss) before income taxes 50,092 (36,451) 125,638 59,187
Income taxes 31,600 30,708 79,157 66,202
---------- ---------- ---------- ----------
Net income (loss) $ 18,492 $ (67,159) $ 46,481 $ (7,015)
========== ========== ========== ==========
Basic earnings (loss) per share $ 0.08 $ (0.31) $ 0.21 $ (0.03)
========== ========== ========== ==========
Diluted earnings (loss) per share $ 0.08 $ (0.31) $ 0.20 $ (0.03)
========== ========== ========== ==========
Basic weighted average number of shares
Outstanding 222,349 219,962 221,814 208,706
========== ========== ========== ==========
Diluted weighted average number of
shares outstanding 226,942 219,962 226,961 208,706
========== ========== ========== ==========
(*) See Note 2.
See accompanying notes
3
5
AMDOCS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
(in thousands)
ORDINARY SHARES ACCUMULATED
----------------------- ADDITIONAL OTHER TOTAL
PAID-IN COMPREHENSIVE UNEARNED ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT CAPITAL INCOME (LOSS) COMPENSATION DEFICIT EQUITY
------ ------ ------- ------------- ------------ ------- ------
Balance as of
September 30, 2000 221,165 $3,539 $1,784,816 $ 1,159 $ (1,164) $ (357,578) $1,430,772
Net income -- -- -- -- -- 46,481 46,481
Employee stock
options exercised 1,321 19 12,799 -- -- -- 12,818
Tax benefit of stock
options exercised -- -- 5,841 -- -- -- 5,841
Unrealized other
comprehensive loss,
net of $1,583 tax -- -- -- (3,694) -- -- (3,694)
Stock options granted -- -- 141 -- -- -- 141
Amortization of
unearned compensation -- -- -- -- 794 -- 794
------ ------ ---------- -------- -------- ---------- ----------
Balance as of
June 30, 2001 222,486 $3,558 $1,803,597 $ (2,535) $ (370) $ (311,097) $1,493,153
======= ====== ========== ========= ========= =========== ==========
See accompanying notes
4
6
AMDOCS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
NINE MONTHS ENDED JUNE 30,
2001 2000
----------- ------------
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) $ 46,481 $ (7,015)
Reconciliation of net income to net cash provided by
operating activities:
Depreciation and amortization 209,472 88,142
Adjustment to the basis of investments 6,750 --
In-process research and development expenses -- 70,430
Loss on sale of equipment 217 163
Deferred income taxes 2,894 5
Tax benefit of stock options exercised 5,841 --
Unrealized other comprehensive income (loss) (5,277) 5,304
Net changes in operating assets and liabilities:
Accounts receivable (66,233) (48,585)
Prepaid expenses and other current assets (4,964) (10,438)
Other noncurrent assets (6,274) (6,687)
Accounts payable and accrued expenses 28,177 21,768
Deferred revenue 13,483 17,486
Income taxes payable (751) 39,614
Other noncurrent liabilities 13,070 16,409
----------- -----------
Net cash provided by operating activities 242,886 186,596
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of equipment, vehicles and leasehold
improvements 2,157 1,007
Payments for purchase of equipment, vehicles, leasehold
improvements (71,701) (42,320)
Purchase of short-term interest-bearing investments, net (214,767) (7,880)
Investment in noncurrent assets (4,669) --
Net cash acquired in acquisition -- 67,803
----------- -----------
Net cash provided by (used in) investing activities (288,980) 18,610
------------ -----------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from employee stock options exercised 12,818 19,844
Payments under short-term finance arrangements (20,000) (284,464)
Net proceeds from issue of long term convertible notes 488,000 --
Borrowings under short-term finance arrangements -- 282,083
Principal payments on capital lease obligations (7,611) (4,871)
----------- -----------
Net cash provided by financing activities 473,207 12,592
----------- -----------
Net increase in cash and cash equivalents 427,113 217,798
Cash and cash equivalents at beginning of period 402,300 85,174
----------- -----------
Cash and cash equivalents at end of period $ 829,413 $ 302,972
=========== ===========
SUPPLEMENTARY CASH FLOW INFORMATION
Cash paid for:
Income taxes, net of refunds $ 65,741 $ 24,234
Interest 2,149 1,988
NON CASH INVESTING AND FINANCING ACTIVITIES
Capital lease obligations of $8,185 and $2,516 were incurred during the nine
months ended June 30, 2001 and 2000, respectively, when the Company (as
hereinafter defined) entered into lease agreements for the purchase of fixed
assets.
See accompanying notes
5
7
AMDOCS LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Amdocs Limited ("Amdocs" or the "Company") is a leading provider of
software products and services to the communications industry. The Company
and its subsidiaries operate in one business segment, providing business
support systems and related services for the communications industry. The
Company designs, develops, markets, supports and operates information
system solutions to communications companies throughout the world.
The unaudited consolidated financial statements of the Company have been
prepared in accordance with accounting principles generally accepted in the
United States. In the opinion of management, all adjustments considered
necessary for a fair presentation of the unaudited interim consolidated
financial statements have been included herein and are of a normal
recurring nature.
The preparation of financial statements during interim periods requires
management to make numerous estimates and assumptions that impact the
reported amounts of assets, liabilities, revenue and expenses. Estimates
and assumptions are reviewed periodically and the effect of revisions is
reflected in the results of operations of the interim periods in which
changes are determined to be necessary.
The results of operations for the interim periods presented herein are not
necessarily indicative of the results to be expected for the full year.
These statements do not include all information and footnotes necessary for
a complete presentation of financial position, results of operations and
cash flows in conformity with generally accepted accounting principles.
These statements should be read in conjunction with the Company's
consolidated financial statements for the year ended September 30, 2000 set
forth in the Company's Annual Report on Form 20-F/A filed with the
Securities and Exchange Commission.
Certain amounts in prior periods' financial statements have been
reclassified to conform to the current period's presentation.
2. Related-Party Transactions
The following related party balances are included in the balance sheet:
AS OF
-----------------------------
JUNE 30, SEPTEMBER 30,
2001 2000
---- ----
Accounts receivable $ 57,537 $ 27,116
The following related party transactions are included in the statement of
operations for the following periods:
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- ----------------------
2001 2000 2001 2000
--------- --------- --------- --------
Revenue:
License $ 9,256 $ 1,707 $ 22,567 $ 8,737
Service 61,159 36,671 170,937 102,650
Operating expenses:
Cost of service 1,187 785 2,476 2,413
Selling, general and administrative 144 140 575 538
6
8
AMDOCS LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
3. Comprehensive Income
Comprehensive income represents the change in shareholders' equity during a
period from transactions and other events and circumstances from nonowner
sources. It includes all changes in equity except those resulting from
investments by owners and distributions to owners.
The following table sets forth the reconciliation from net income to
comprehensive income for the periods set forth below:
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ----------------------------
2001 2000 2001 2000
--------- --------- --------- ----------
Net income (loss) $ 18,492 $ (67,159) $ 46,481 $ (7,015)
Other comprehensive income:
Unrealized income (loss) on derivative
instruments, net of tax 2,821 (2,677) (3,865) 3,693
Unrealized income (loss) on short-term
interest-bearing investments, net of
tax (344) 20 171 20
--------- --------- --------- ---------
Comprehensive income (loss) $ 20,969 $ (69,816) $ 42,787 $ (3,302)
========= ========= ========= =========
4. Income Taxes
The provision for income taxes for the following periods consisted of:
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ---------------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Current $ 26,129 $ 35,728 $ 76,263 $ 66,197
Deferred 5,471 (5,020) 2,894 5
--------- --------- --------- ---------
$ 31,600 $ 30,708 $ 79,157 $ 66,202
========= ========= ========= =========
The effective income tax rate varied from the statutory Guernsey tax rate
as follows for the periods set forth below:
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
---------------- -----------------
2001 2000 2001 2000
---- ---- ---- ----
Statutory Guernsey tax rate 20% 20% 20% 20%
Guernsey tax-exempt status (20) (20) (20) (20)
Foreign taxes 30 30 30 30
Effect of acquisitions-related costs 33 129 33 19
---- --- ---- ----
Effective income tax rate 63% 159% 63% 49%
==== === ==== ====
As a Guernsey corporation with tax-exempt status, the Company's overall
effective tax rate is attributable solely to foreign taxes and has
historically approximated 30%. In conjunction with acquisitions, the
Company has incurred indirect acquisition-related costs, as well as
non-cash charges related to the amortization of purchased intangible assets
and in-process research and development. Since a significant portion of
such costs and charges are not deductible for tax purposes, the effective
tax rate is adversely affected during the period such charges are recorded.
Excluding the impact of these items, the Company's overall effective tax
rate would have remained approximately 30% for the three- and nine-month
periods ended June 30, 2001 and 2000. For the nine-month period ended June
30, 2001 and 2000, the Company's blended effective tax rate (calculated
based on income before income taxes, excluding the impact in fiscal year
2000 of non-recurring charges for in-process research and development and
indirect acquisition-related costs) was 63% and 49%, respectively.
7
9
AMDOCS LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
5. Earnings per Share
The following table sets forth the computation of basic and diluted
earnings per share:
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Numerator:
Net income (loss) $ 18,492 $ (67,159) $ 46,481 $ (7,015)
========== ========== ========== ==========
Denominator:
Denominator for basic earnings (loss) per share-
weighted average number of shares
outstanding 222,349 219,962 221,814 208,706
Effect of dilutive stock options granted 4,593 (*) -- 5,147 (*) --
---------- ----------- ---------- -----------
Denominator for dilutive earnings per
share - adjusted weighted average shares and
assumed conversions 226,942 219,962 226,961 208,706
========== ========== ========== ==========
Basic earnings (loss) per share $ 0.08 $ (0.31) $ 0.21 $ (0.03)
========== ========== ========== ==========
Diluted earnings (loss) per share $ 0.08 $ (0.31) $ 0.20 $ (0.03)
========== ========== ========== ==========
(*) Due to net loss, potentially issuable shares are excluded from the
computation of diluted average number of shares outstanding.
6. Investment
In January 2001 the Company and Bell Canada formed Certen Inc. ("Certen")
to provide customer care and billing solutions to Bell Canada and some of
its affiliated companies.
Certen is owned 90% by Bell Canada and 10% by the Company. Commencing on
the 30-month anniversary of the transaction, a convertible note issued by
Certen to the Company is convertible into an additional 35% ownership
interest in Certen. The relative ownership interests of the shareholders
might further be changed through a series of contractual conditions,
commencing on the 30-month anniversary of the transaction.
The Company will provide the customer care and billing software required by
Certen, including customization, installation, maintenance and other
services.
7. Convertible Notes
In May 2001 the Company issued to qualified institutional buyers $500,000
aggregate principal amount of 2% Convertible Notes due June 1, 2008 (the
"Notes"). The Company will pay interest on the Notes semi-annually on June
1 and December 1 of each year, commencing on December 1, 2001. The Notes
are senior unsecured obligations of the Company and rank equal in right of
payment with all existing and future senior unsecured indebtedness of the
Company; are convertible, at the option of the holders, into ordinary
shares at a conversion rate of 10.8587 shares per one thousand dollars
principal amount of Notes, subject to adjustment in certain events; are
convertible at any time before the maturity date, unless the Company has
previously redeemed or repurchased the Notes; are subject to redemption at
any time on or after June 1, 2006, all or in part, at the option of the
Company, at a redemption price of 100% of the principal amount plus accrued
and unpaid interest; and are subject to repurchase, at the holders' option,
on June 1, 2004 and June 1, 2006, at a repurchase price equal to 100% of
the principal amount plus accrued and unpaid interest, if any, on such
repurchase date. The Company may choose to pay the repurchase price in
ordinary shares or a combination of cash and ordinary shares.
8
10
AMDOCS LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
8. Adjustment to the Basis of Investments
In the third quarter of fiscal 2001 the Company recorded pretax charges of
$6,750 to adjust the carrying value of four investments, accounted for by
the Company under the cost method. The Company continues to monitor the
economic and financial aspects of its remaining interests in these
investments.
9. New Accounting Standard
In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, "Business Combinations", and No.
142, "Goodwill and Other Intangible Assets", effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill and
intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance with
the Statements. Other intangible assets will continue to be amortized over
their useful lives.
As a result of the effective date of the new rules, the Company has the
option of applying the new standard on accounting for goodwill and other
intangible assets beginning either in the quarter ended on December 31,
2001 or December 31, 2002. Subsequent to the adoption of the new rules, the
Company will perform the first of the required impairment tests of goodwill
and intangible assets recorded as of the date of adoption and has not
yet determined what the effect of these tests will be on the Company's
earnings and financial position. The Company recorded $50,587, and $151,762
of goodwill amortization during the three and nine months ended June 30,
2001, respectively.
9
11
ITEM 2. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
FORWARD LOOKING STATEMENTS
Some of the information in this section contains forward looking statements
that involve substantial risks and uncertainties. You can identify these
statements by forward looking words such as "expect", "anticipate", "believe",
"seek", "estimate" and similar words. Statements that we make in this section
that are not statements of historical fact also may be forward looking
statements. Forward looking statements are not guarantees of our future
performance, and involve risks, uncertainties and assumptions that may cause our
actual results to differ materially from the expectations we describe in our
forward looking statements. There may be events in the future that we are not
accurately able to predict, or over which we have no control. You should not
place undue reliance on forward looking statements. We do not promise to notify
you if we learn that our assumptions or projections are wrong for any reason. We
disclaim any obligation to update our forward looking statements.
INTRODUCTION
In this section, we discuss the general financial condition and the results
of operations for Amdocs and its subsidiaries including:
- what factors affect our business,
- what our revenue and costs were in the nine months and three months
ended June 30, 2001 and 2000,
- why those revenue and costs were different from period to period,
- the sources of our revenue,
- how all of this affects our overall financial condition,
- what our expenditures were in the nine months and three months ended
June 30, 2001 and 2000, and
- the sources of our cash to pay for future capital expenditures.
In this section, we also analyze and explain the nine months to nine months
and three months to three months changes in the specific line items in our
consolidated statements of operations. This section should be read in
conjunction with our consolidated financial statements.
OVERVIEW OF BUSINESS AND TREND INFORMATION
We are a leading provider of software products and services to the
communications industry. Our Business Support Systems ("BSS") consist of
families of customized software products and services designed to meet the
mission-critical needs of specific communications market sectors. We provide
primarily Customer Care and Billing, CRM or Customer Relationship Management,
and Order Management Systems (collectively, "CC&B Systems") for communications
service providers. Our systems support a wide range of communications services,
including wireline, wireless, broadband, electronic and mobile commerce and
Internet Protocol ("IP") services. We also support companies that offer multiple
service packages, commonly referred to as convergent services. In addition, we
provide a full range of Directory Sales and Publishing Systems ("Directory
Systems") to publishers of both traditional printed yellow page and white page
directories and electronic Internet directories. Due to the complexity of BSS
projects and the expertise required for system support, we also provide
extensive customization, implementation, system integration, ongoing support,
system enhancement, maintenance and outsourcing services.
In the future, we may consider, as part of our strategy, acquisitions and
other initiatives, in order to offer new products or services or otherwise
enhance our market position or strategic strength.
We derive our revenue principally from:
- the initial sale of our products and related services, including
license fees and customization, implementation and integration
services, and
- recurring revenue from ongoing maintenance, support, outsourcing and
other related services provided to our customers and, to a lesser
degree, from incremental license fees resulting from increases in the
number of a customer's subscribers.
10
12
License revenue is primarily recognized as work is performed, using the
percentage of completion method of accounting. Service revenue that involves
significant ongoing obligations, including fees for customization,
implementation and initial support services, is also recognized as work is
performed, under the percentage of completion method of accounting. In
outsourcing contracts, revenue from the operation and maintenance of customers'
billing systems is recognized in the period in which the bills are produced.
Revenue from ongoing support services is recognized as work is performed.
Revenue from third party hardware and software sales is recognized upon
installation and delivery, respectively. Maintenance revenue is recognized
ratably over the term of the maintenance agreement. As a result of our
percentage of completion accounting method, the size and timing of customer
projects and our progress in completing such projects may significantly affect
our annual and quarterly operating results.
Our business is subject to the effects of general global economic
conditions and, in particular, market conditions in the communications
industry. Recently, these conditions have reduced the high growth that the
communications industry had experienced over the past several years. As a
result, the market value, financial results and prospects, and capital spending
levels of many communications companies have declined or degraded.
As a result of the current slowdown in the growth of the global
communications market, we have recently experienced a lengthening in our sales
cycle, which means that the time between our initial contact with a prospective
customer and the signing of a sales contract has increased. Our sales cycle
currently ranges from between six to twelve months. We believe that such
lengthening of our sales cycle timing could reduce growth in our revenue.
The current general economic downturn and its impact on the communications
industry may result in slower revenue growth rates for us than had been achieved
in recent quarters.
License and service fee revenue from the sale of CC&B Systems amounted to
$1,001.8 million and $703.1 million in the nine months ended June 30, 2001 and
2000, respectively, representing 89.6% and 87.5%, respectively, of our total
revenue for such periods. License and service fee revenue from the sale of CC&B
Systems amounted to $364.1 million and $264.4 million in the three months ended
June 30, 2001 and 2000, respectively, representing 90.1% and 89.0%,
respectively, of our total revenue for such periods.
We believe that the demand for CC&B Systems will increase due to, among
other key factors:
- the long term growth and globalization of the communications market,
- intensifying competition among communications carriers,
- the proliferation of new communications products and services,
especially IP and data services, and
- a shift from in-house management to vendor solutions and outsourcing.
- rapid technological changes, such as the introduction of wireless
Internet services via GPRS (General Packet Radio Services) and UMTS
(Universal Mobile Telecommunications System) technology,
We also believe that a key driver of demand is the continuing trend for
communications service providers to offer to their subscribers multiple service
packages, commonly referred to as convergent services (combinations of voice,
broadband, electronic and mobile commerce and IP services).
Another significant current market trend impacting our business is the long
term growth of the IP services market. The emergence and expansion of IP
services in both wireline and mobile environments create significant
opportunities for companies like us that offer CC&B Systems. Specifically, the
continued long term development of this market permits us to offer our CC&B
Systems to new customers and to enhance our offerings to existing customers to
facilitate their entry into the IP services market.
In addition, we believe that our CC&B solutions can enable communications
providers to improve productivity and reduce costs.
We believe that we are a leading provider of Directory Systems in most of
the markets that we serve.
License and service fee revenue from the sale of Directory Systems totaled
$116.7 million and $100.2 million in the nine months ended June 30, 2001 and
2000, respectively, accounting for 10.4% and 12.5%, respectively, of our total
revenue for such periods. License and service fee revenue from the sale of
Directory Systems totaled $39.9 million and $32.6 million in the three months
ended June 30, 2001 and 2000, respectively, accounting for 9.9% and 11.0%,
respectively, of our total revenue for such periods.
We expect that the demand for our Directory Systems will remain relatively
stable in future periods and that the contribution to
11
13
total revenue, as a percentage of revenue, of license and service fees from
Directory Systems services will continue to decrease over time.
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES
Our research and development activities involve the development of new
software modules and product offerings in response to an identified market
demand, either in conjunction with a customer project or as part of our product
development program. We also expend additional amounts on applied research and
software development activities to keep abreast of new technologies in the
communications and IP market. Research and development expenditures amounted to
$76.7 million and $53.0 million in the nine months ended June 30, 2001 and 2000,
respectively, representing 6.9% and 6.6% of our revenue in these periods,
respectively. Research and development expenditures amounted to $28.0 million
and $20.3 million in the three months ended June 30, 2001 and 2000,
respectively, representing 6.9% and 6.8% of our revenue in these periods,
respectively. In the next several years we intend to continue to make
substantial investments in our research and development activities.
We regard significant portions of our software products and systems as
proprietary and rely on a combination of statutory and common law copyright,
trademark and trade secret laws, customer licensing agreements, employee and
third-party nondisclosure agreements and other methods to protect our
proprietary rights. We generally enter into confidentiality agreements with our
employees, consultants, customers and potential customers and limit access to,
and distribution of, our proprietary information. We believe that the
sophistication and complexity of our BSS offerings make it very difficult to
copy such information or to subject such information to unauthorized use. We
maintain sole ownership of our products.
INVESTMENT
In January 2001 we formed Certen Inc. ("Certen") with Bell Canada to
provide customer care and billing solutions to Bell Canada and some of its
affiliated companies. Certen is owned 90% by Bell Canada and 10% by us.
Commencing on the 30-month anniversary of the transaction, a convertible note
issued by Certen to us is convertible into an additional 35% ownership interest
in Certen. The relative ownership interests of the shareholders might further be
changed through a series of contractual conditions, commencing on the 30-month
anniversary of the transaction. We will provide the customer care and billing
software required by Certen, including customization, installation, maintenance
and other services.
CONVERTIBLE NOTES
In May 2001 we issued to qualified institutional buyers $500.0 million
aggregate principal amount of 2% Convertible Notes due June 1, 2008 (the
"Notes"). We will pay interest on the Notes semi-annually on June 1 and December
1 of each year, commencing on December 1, 2001. The Notes are senior unsecured
obligations of the Company and rank equal in right of payment with all our
existing and future senior unsecured indebtedness; are convertible, at the
option of the holders, into ordinary shares at a conversion rate of 10.8587
shares per $1,000 principal amount of Notes, subject to adjustment in certain
events; are convertible at any time before the maturity date, unless we have
previously redeemed or repurchased the Notes; are subject to redemption at any
time on or after June 1, 2006, all or in part, at our option, at a redemption
price of 100% of the principal amount plus accrued and unpaid interest; and are
subject to repurchase, at the holders' option, on June 1, 2004 and June 1, 2006,
at a repurchase price equal to 100% of the principal amount plus accrued and
unpaid interest, if any, on such repurchase date. We may choose to pay the
repurchase price in ordinary shares or a combination of cash and ordinary
shares.
ADJUSTMENT TO THE BASIS OF INVESTMENTS
In the third quarter of fiscal 2001 we recorded pretax charges of $6.8
million to adjust the carrying value of four investments, accounted for by us
under the cost method. We continue to monitor the economic and financial aspects
of our remaining interests in these investments.
12
14
Results of Operations
The following table sets forth for the nine and three months ended June 30,
2001 and 2000, respectively, certain items in our consolidated statements of
operations reflected as a percentage of total revenue:
NINE MONTHS ENDED
JUNE 30,
----------------------------------------------
PRO FORMA (*) AS REPORTED
------------------- -------------------
2001 2000 2001 2000
------- ------ ------ ------
Revenue:
License 11.6% 11.2% 11.6% 11.2%
Service 88.4 88.8 88.4 88.8
------ ------ ------ ------
100.0 100.0 100.0 100.0
------ ------ ------ ------
Operating expenses:
Cost of license 0.4 0.5 0.4 0.5
Cost of service 55.3 57.6 55.3 57.6
Research and development 6.9 6.6 6.9 6.6
Selling, general and
administrative 12.9 12.2 12.9 12.2
Amortization of goodwill and
purchased intangible assets -- -- 14.7 7.1
In-process research and
development and other
indirect acquisition related
Costs -- -- -- 9.4
------ ------ ------ ------
75.5 76.9 90.2 93.4
------ ------ ------ ------
Operating income 24.5 23.1 9.8 6.6
Interest income and other, net 1.4 0.8 1.4 0.7
------ ------ ------ ------
Income before income taxes 25.9 23.9 11.2 7.3
Income taxes 7.8 7.2 7.1 8.2
------ ------ ------ ------
Net income (loss) 18.1% 16.7% 4.1% (0.9%)
====== ====== ====== ======
(*) The Company acquired International Telecommunications Data Services, Inc.
("ITDS") and Solect Technology Group Inc. ("Solect") in fiscal year 2000.
The pro forma financial information excludes purchased in-process research
and development charges and other indirect acquisition related costs,
amortization of goodwill and purchased intangible assets and related tax
effects attributable to the acquisitions of ITDS and Solect (collectively,
the "ITDS and Solect acquisition related charges").
13
15
THREE MONTHS ENDED
JUNE 30,
-----------------------------------------
PRO FORMA (*) AS REPORTED
--------------------- ------------------
2001 2000 2001 2000
------- ------- ------ ------
Revenue:
License 12.0% 11.0% 12.0% 11.0%
Service 88.0 89.0 88.0 89.0
------- ------ ------ ------
100.0 100.0 100.0 100.0
------- ------ ------ ------
Operating expenses:
Cost of license 0.4 0.6 0.4 0.6
Cost of service 54.7 56.5 54.7 56.5
Research and development 6.9 6.8 6.9 6.8
Selling, general and
administrative 13.1 12.5 13.1 12.5
Amortization of goodwill and
purchased intangible assets -- -- 13.8 18.2
In-process research and
development and other
indirect acquisition related
costs -- -- -- 18.8
------- ------ ------ ------
75.1 76.4 88.9 113.4
------- ------ ------ ------
Operating income (loss) 24.9 23.6 11.1 (13.4)
Interest income and other, net 1.3 1.1 1.3 1.1
------- ------ ------ ------
Income (loss) before income taxes 26.2 24.7 12.4 (12.3)
Income taxes 7.9 7.4 7.8 10.3
------ ------ ------ ------
Net income (loss) 18.3% 17.3% 4.6% (22.6%)
====== ====== ====== ======
(*) The pro forma financial information excludes ITDS and Solect
acquisition related charges.
NINE MONTHS ENDED JUNE 30, 2001 AND 2000
Revenue. Revenue for the nine months ended June 30, 2001 was $1,118.5
million, an increase of $315.2 million, or 39.2%, over the nine months ended
June 30, 2000. The increase in revenue was due to the continued growth in the
demand for our CC&B Systems solutions in our traditional target markets of
high-end and mid-tier communications companies. License revenue increased from
$89.6 million in the nine months ended June 30, 2000 to $129.9 million during
the nine months ended June 30, 2001, an increase of 44.9%, and service revenue
increased 38.5% from $713.6 million in the nine months ended June 30, 2000 to
$988.6 million in the nine months ended June 30, 2001. Total CC&B Systems
revenue for the nine months ended June 30, 2001 was $1,001.8 million, an
increase of $298.7 million, or 42.5%, over the nine months ended June 30, 2000.
In the nine months ended June 30, 2001, the demand for our CC&B Systems was
primarily driven by the need for communications companies to upgrade their
customer care, billing and order management systems in response to growth in
their subscriber base, increased competition in the subscriber markets, and the
need to offer convergent and IP services. Revenue from Directory Systems was
$116.7 million for the nine months ended June 30, 2001, an increase of $16.5
million, or 16.5%, over the nine months ended June 30, 2000. The increase is
attributable primarily to extensions of agreements with and additional services
rendered to existing customers.
In the nine months ended June 30, 2001, revenue from customers in North
America, Europe and the rest of the world accounted for 52.7%, 36.8% and 10.5%,
respectively, compared to 45.6%, 41.7% and 12.7%, respectively, for the nine
months ended June 30, 2000. The growth in North America was attributable
primarily to revenue we gained from forming or expanding relationships with new
or existing customers in North America in the nine months ended June 30, 2001.
Cost of License. Cost of license for the nine months ended June 30, 2001
was $4.7 million, an increase of $0.4 million, or 8.7%, over the cost of license
for the nine months ended June 30, 2000. Cost of license includes amortization
of purchased computer software and intellectual property rights. The increase in
cost of license was attributable primarily to new purchases of computer software
and the related amortization.
14
16
Cost of Service. Cost of service for the nine months ended June 30, 2001
was $618.8 million, an increase of $156.4 million, or 33.8%, over the cost of
service of $462.4 million for the nine months ended June 30, 2000. As a
percentage of revenue, cost of service decreased to 55.3% in the nine months
ended June 30, 2001 from 57.6% in the nine months ended June 30, 2000. The
decrease in cost of service as a percentage of revenue is primarily due to
increases in our operational efficiency in the nine months ended June 30, 2001.
Research and Development. Research and development expense was primarily
comprised of compensation expense attributed to research and development
activities, either in conjunction with customer projects or as part of our
product development program. In the nine months ended June 30, 2001, research
and development expense was $76.7 million, or 6.9% of revenue, compared with
$53.0 million, or 6.6% of revenue, in the nine months ended June 30, 2000. The
increase represents ongoing expenditures primarily for CC&B Systems.
Selling, General and Administrative. Selling, general and administrative
expense was primarily comprised of compensation expense and increased by 47.5%
to $144.3 million, or 12.9% of revenue, in the nine months ended June 30, 2001,
from $97.9 million, or 12.2% of revenue, in the nine months ended June 30, 2000.
The increase is attributable primarily to increases in our selling and marketing
efforts in the nine months ended June 30, 2001.
Amortization of Goodwill and Purchased Intangible Assets. Amortization of
goodwill and purchased intangible assets for the nine months ended June 30, 2001
was $164.1 million, compared to $56.9 million in the nine months ended June 30,
2000. Amortization of goodwill and purchased intangible relates to the
acquisitions of ITDS and Solect.
In-process Research and Development and Other Indirect Acquisition Related
Costs. In-process research and development and other indirect acquisition
related costs were last incurred in the nine months ended June 30, 2000 and
consisted primarily of a one-time charge of $75.6 million related to the
acquisitions of ITDS and Solect.
Operating Income. Operating income in the nine months ended June 30, 2001
was $109.8 million, compared to $53.2 million in the nine months ended June 30,
2000, an increase of 106%, primarily due to a one-time charge for write-off of
purchased in-process research and development related to the acquisitions of
ITDS and Solect in the nine months ended June 30, 2000. Pro forma operating
income for the nine months ended June 30, 2001, excluding ITDS and Solect
acquisition related charges, was $273.9 million, or 24.5% of revenue, compared
to $185.7 million, or 23.1% of revenue, for the nine months ended June 30, 2000,
an increase of 47.5%.
Interest Income and Other, Net. In the nine months ended June 30, 2001,
interest income and other, net, was $15.9 million, an increase of $9.9 million
over the nine months ended June 30, 2000. The increase in interest income and
other, net, is primarily attributed to the increase in our cash equivalents and
short-term interest-bearing investments partially offset by overall interest
rate declines.
Income Taxes. Income taxes in the nine months ended June 30, 2001 were
$79.2 million on income before income taxes of $125.6 million. Our effective tax
rate in the nine months ended June 30, 2001 was 63%, resulting from the non-cash
amortization of goodwill related to the ITDS and Solect acquisitions, much of
which is not tax deductible. In the nine months ended June 30, 2000, income
taxes were $66.2 million on income before taxes of $59.2 million. In the nine
months ended June 30, 2000, the effective tax rate (calculated based on the
income taxes out of the income before income taxes, excluding non recurring
charges for write-offs of purchased in-process research and development and
other indirect acquisition related costs) was 49%. The pro forma effective tax
rate for each of the nine months ended June 30, 2001 and 2000, excluding ITDS
and Solect acquisition related charges, was 30%. See discussion below -
"Effective Tax Rate".
Net Income (Loss). Net income was $46.5 million in the nine months ended
June 30, 2001, compared to a net loss of $7.0 million in the nine months ended
June 30, 2000. Pro forma net income in the nine months ended June 30, 2001,
excluding ITDS and Solect acquisition related charges, increased by 51.2% over
the nine months ended June 30, 2000, reaching $202.8 million, representing 18.1%
of revenue.
Diluted Earnings (Loss) per Share. Diluted earnings per share were $0.20
for the nine months ended June 30, 2001, compared to a loss of $0.03 per diluted
share in the nine months ended June 30, 2000. Pro forma diluted earnings per
share in the nine months ended June 30, 2001, excluding ITDS and Solect
acquisition related charges, increased by 41.3% from the nine months ended June
30, 2000, reaching $0.89 per diluted share.
15
17
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
Revenue. Revenue for the three months ended June 30, 2001 was $404.0
million, an increase of $107.0 million, or 36.0%, over the three months ended
June 30, 2000. The increase in revenue was due to the continued growth in the
demand for our CC&B Systems solutions in our traditional target markets of
high-end and mid-tier communications companies. License revenue increased from
$32.7 million in the three months ended June 30, 2000 to $48.5 million during
the three months ended June 30, 2001, an increase of 48.5%, and service revenue
increased 34.5% from $264.3 million in the three months ended June 30, 2000 to
$355.5 million in the three months ended June 30, 2001. Total CC&B Systems
revenue for the three months ended June 30, 2001 was $364.1 million, an increase
of $99.7 million, or 37.7%, over the three months ended June 30, 2000. In the
three months ended June 30, 2001, the demand for our CC&B Systems was primarily
driven by the need for communications companies to upgrade their customer care,
billing and order management systems in response to growth in their subscriber
base, increased competition in the subscriber markets, and the need to offer
convergent and IP services. Revenue from Directory Systems was $39.9 million for
the three months ended June 30, 2001, an increase of $7.3 million, or 22.4%,
over the three months ended June 30, 2000. The increase was attributable
primarily to extensions of agreements with and additional services rendered to
existing customers.
In the three months ended June 30, 2001, revenue from customers in North
America, Europe and the rest of the world accounted for 51.5%, 38.1% and 10.4%,
respectively, compared to 45.3%, 42.4% and 12.3%, respectively, for the three
months ended June 30, 2000. The growth in North America was attributable
primarily to revenue we gained from forming or expanding relationships with new
or existing customers in North America in the three months ended June 30, 2001.
Cost of License. Cost of license for the three months ended June 30, 2001
was $1.8 million, an increase of $0.1 million, or 3.3%, over the cost of license
for the three months ended June 30, 2000. Cost of license includes amortization
of purchased computer software and intellectual property rights. The increase in
cost of license was attributable primarily to new purchases of computer software
and the related amortization.
Cost of Service. Cost of service for the three months ended June 30, 2001
was $220.8 million, an increase of $53.1 million, or 31.7%, over the cost of
service of $167.7 million for the three months ended June 30, 2000. As a
percentage of revenue, cost of service decreased to 54.7% in the three months
ended June 30, 2001 from 56.5% in the three months ended June 30, 2000. The
decrease in cost of service as a percentage of revenue is primarily due to
increases in our operational efficiency in the three months ended June 30, 2001.
Research and Development. Research and development expense was primarily
comprised of compensation expense attributed to research and development
activities, either in conjunction with customer projects or as part of our
product development program. In the three months ended June 30, 2001, research
and development expense was $28.0 million, or 6.9% of revenue, compared with
$20.3 million, or 6.8% of revenue, in the three months ended June 30, 2000. The
increase represents ongoing expenditures primarily for CC&B Systems.
Selling, General and Administrative. Selling, general and administrative
expense was primarily comprised of compensation expense and increased by 41.3%
to $52.7 million, or 13.1% of revenue, in the three months ended June 30, 2001
from $37.3 million, or 12.5% of revenue, in the three months ended June 30,
2000. The increase was attributable primarily to the increase in our selling and
marketing efforts in the three months ended June 30, 2001.
Amortization of Goodwill and Purchased Intangible Assets. Amortization of
goodwill and purchased intangible assets for the three months ended June 30,
2001 was $55.8 million, compared to $54.1 million in the three months ended June
30, 2000. Amortization of goodwill and purchased intangible assets related to
the acquisitions of ITDS and Solect.
In-process Research and Development and Other Indirect Acquisition Related
Costs. In-process research and development and other indirect acquisition
related costs were incurred only in the three months ended June 30, 2000 and
consisted of a one time charge of $55.7 million related to the acquisition of
Solect.
Operating Income (Loss). Operating income in the three months ended June
30, 2001, was $44.9 million, compared to an operating loss of $39.8 million in
the three months ended June 30, 2000, an increase of $84.7 million, primarily
due to a one-time charge for write-off of purchased in-process research and
development related to the acquisition of Solect in the three months ended June
30, 2000, and due to increases in our operational efficiency in the three months
ended June 30, 2001. Pro forma operating income for the three months ended June
30, 2001, excluding ITDS and Solect acquisition related charges, was $100.7
million, or 24.9% of revenue, compared to $70.0 million, or 23.6% of revenue,
for the three months ended June 30, 2000, an increase of 43.8%.
Interest Income and Other, Net. In the three months ended June 30, 2001,
interest income and other, net, was $5.2 million, an increase of $1.9 million
over the three months ended June 30, 2000. The increase in interest income and
other, net, was primarily attributed to the increase in our cash equivalents and
short-term interest-bearing investments partially offset by overall interest
rate declines.
16
18
Income Taxes. Income taxes in the three months ended June 30, 2001 were
$31.6 million on income before income taxes of $50.1 million. In the three
months ended June 30, 2000, income taxes were $30.7 million on a loss before
taxes of $36.5 million. Our effective tax rate in the three months ended June
30, 2001 was 63%, resulting from the non-cash amortization of goodwill related
to the acquisitions of ITDS and Solect, much of which is not tax deductible. The
pro forma effective tax rate for each of the three months ended June 30, 2001
and 2000, excluding ITDS and Solect acquisition related charges, was 30%. See
discussion below - "Effective Tax Rate".
Net Income (Loss). Net income was $18.5 million in the three months ended
June 30, 2001, compared to a loss of $67.2 million in the three months ended
June 30, 2000. Pro forma net income in the three months ended June 30, 2001,
excluding ITDS and Solect acquisition related charges, increased by 44.4% over
the three months ended June 30, 2000, reaching $74.1 million, representing 18.3%
of revenue.
Diluted Earnings (Loss) per Share. Diluted earnings per share were $0.08
for the three months ended June 30, 2001, compared to a loss of $0.31 per
diluted share in the three months ended June 30, 2000. Pro forma diluted
earnings per share in the three months ended June 30, 2001, excluding ITDS and
Solect acquisition related charges, increased by 43.5% from the three months
ended June 30, 2000, reaching $0.33 per diluted share.
LIQUIDITY AND CAPITAL RESOURCES
Cash, cash equivalents and short-term interest-bearing investments totaled
$1,044.2 million as of June 30, 2001, compared to $402.3 million as of September
30, 2000. The increase is primarily attributable to net proceeds from the
issuance of the Notes and cash flows from operations. Net cash provided by
operating activities amounted to $242.9 million and $186.6 million for the nine
months ended June 30, 2001 and 2000, respectively. The increase in cash flows
from operations was due to increased net income before depreciation and
amortization offset by increases in working capital, principally from accounts
receivable. A significant portion of our cash flow from operations during the
nine months ended June 30, 2001 was used to invest in cash equivalents and
short-term interest-bearing investments. We currently intend to retain our
future earnings to support the further expansion of our business.
As of June 30, 2001, we had positive working capital of $995.1 million,
compared to positive working capital of $319.0 million as of September 30, 2000.
The increase is attributable primarily to cash generated from the issuance of
the Notes and operating activities. We believe that current cash balances, cash
generated from operations and our current lines of credit will provide
sufficient resources to meet our needs in the near future.
All of the Notes were outstanding as of June 30, 2001, representing an
aggregate principal amount of $500.0 million owed by us to qualified
institutional buyers. See discussion above - "Convertible Notes".
As of June 30, 2001, we had short-term revolving lines of credit totaling
$41.0 million from various banks or bank groups, none of which was outstanding.
We had utilized approximately $22.7 million of revolving credit facilities
to support outstanding letters of credit or bank guarantees as of June 30, 2001.
We had outstanding long-term obligations of $32.7 million in connection
with leasing arrangements as of June 30, 2001. Currently, our capital
expenditures consist primarily of computer equipment and vehicles and are funded
principally by operating cash flows and capital leasing arrangements. We do not
anticipate any change to this policy in the foreseeable future.
NET DEFERRED TAX ASSETS
As of June 30, 2001, deferred tax assets of $26.3 million, derived
primarily from carry-forward net operating losses relating to Solect
pre-acquisition losses, were offset by valuation allowances due to the
uncertainty of realizing any tax benefit for such losses. Upon the subsequent
realization of any such net operating losses, the valuation allowance will be
released, resulting primarily in an offsetting reduction of the goodwill
recorded in the Solect acquisition.
17
19
EFFECTIVE TAX RATE
Our overall effective tax rate has historically been approximately 30% due
to the corporate income tax rates in the various countries in which we operate
and the relative magnitude of our business in those countries. Our consolidated
effective tax rate (calculated based on the income taxes out of the income
before income taxes, excluding the impact in fiscal year 2000 of non recurring
charges for write-offs of purchased in-process research and development and
other indirect acquisition related costs) for the nine months ended June 30,
2001 was 63%, compared to 49% in the nine months ended June 30, 2000. This
higher effective tax rate was attributable to amortization of goodwill related
to our acquisitions of ITDS and Solect, much of which is not tax deductible.
Excluding the impact of the ITDS and Solect acquisition related charges, the
effective tax rate for the nine months ended June 30, 2001 was 30%.
CURRENCY FLUCTUATIONS
Approximately 90% of our revenue is in U.S. dollars or linked to the dollar
and therefore the dollar is our functional currency. Approximately 60% of our
operating expenses are paid in dollars or linked to dollars. Other significant
currencies in which we receive revenue or pay expenses are Australian dollars,
British pounds, Canadian dollars, the European Monetary Union currency ("euro")
and Israeli shekels. Historically, the effect of fluctuations in currency
exchange rates has had a minimal impact on our operations. If we expand our
operations outside of the United States, our exposure to fluctuations in
currency exchange rates could increase. In managing our foreign exchange risk,
we enter from time to time into various foreign exchange contracts. As of June
30, 2001, we had hedged most of our significant exposures in currencies other
than the dollar.
18
20
ITEM 6. EXHIBITS AND REPORTS ON FORM 6-K.
(a) Exhibits
EXHIBIT NO. DESCRIPTION
99.1 Amdocs Limited Press Release dated July 24, 2001.
(b) Reports on Form 6-K.
The Company filed the following reports on Form 6-K during the three months
ended June 30, 2001:
(1) Form 6-K dated May 10, 2001.
(2) Form 6-K dated May 24, 2001.
(3) Form 6-K dated May 31, 2001.
19
21
SIGNATURES
Pursuant to the requirements 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.
Amdocs Limited
/s/ Thomas G. O'Brien
---------------------------------
Thomas G. O'Brien
Treasurer and Secretary
Authorized U.S. Representative
Date: August 9, 2001
20
22
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
--------------- ----------------------------------
99.1 Amdocs Limited Press Release dated July 24, 2001.
21