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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Amdocs Ltd | NASDAQ:DOX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 81.05 | 76.90 | 82.01 | 0 | 09:51:25 |
☐
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of Each Class
|
Name of Exchange on Which Registered
|
|
Ordinary Shares, par value £0.01
|
Nasdaq Global Select Market
|
Ordinary Shares, par value £0.01
|
134,773,123(1)
|
|
(Title of class)
|
(Number of shares)
|
U.S. GAAP
☒
|
International Financial Reporting Standards as issued
by the International Accounting Standards Board
☐
|
Other
☐
|
(1) | Net of 142,374,728 shares held in treasury. Does not include 6,941,175 ordinary shares reserved for issuance upon exercise of stock options and vesting of restricted stock units granted under our stock option plan or by companies we have acquired. |
|
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Page
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1
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Item 1.
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1
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Item 2.
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1
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|||||
Item 3.
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1
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|||||
Item 4.
|
16
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|||||
Item 4A.
|
29
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|||||
Item 5.
|
29
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|||||
Item 6.
|
46
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|||||
Item 7.
|
53
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|||||
Item 8.
|
54
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|||||
Item 9.
|
55
|
|||||
Item 10.
|
55
|
|||||
Item 11.
|
65
|
|||||
Item 12.
|
66
|
|||||
66
|
||||||
Item 13.
|
66
|
|||||
Item 14.
|
66
|
|||||
Item 15.
|
66
|
|||||
Item 16A.
|
67
|
|||||
Item 16B.
|
67
|
|||||
Item 16C.
|
67
|
|||||
Item 16D.
|
68
|
|||||
Item 16E.
|
68
|
|||||
Item 16G.
|
69
|
|||||
Item 16H.
|
69
|
|||||
69
|
||||||
Item 17.
|
69
|
|||||
Item 18.
|
69
|
|||||
Item 19.
|
69
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(in thousands, except share data)
|
|||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$ |
4,086,669
|
$ |
3,974,837
|
$ |
3,867,155
|
$ |
3,718,229
|
$ |
3,643,538
|
||||||||||
Operating income
|
569,746
|
428,307
|
517,333
|
483,141
|
515,948
|
|||||||||||||||
Net income
|
479,446
|
354,396
|
436,826
|
409,331
|
446,163
|
|||||||||||||||
Basic earnings per share
|
3.49
|
2.49
|
2.99
|
2.74
|
2.89
|
|||||||||||||||
Diluted earnings per share
|
3.47
|
2.47
|
2.96
|
2.71
|
2.85
|
|||||||||||||||
Dividends declared per share(1)
|
1.105
|
0.970
|
0.855
|
0.755
|
0.665
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(in thousands)
|
|||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash, cash equivalents and short-term interest-bearing investments
|
$ |
471,632
|
$ |
519,216
|
$ |
979,608
|
$ |
1,095,723
|
$ |
1,354,012
|
||||||||||
Total assets
|
5,292,826
|
5,347,815
|
5,279,380
|
5,331,355
|
5,324,652
|
|||||||||||||||
Long-term obligations
|
|
|
|
|
|
|||||||||||||||
Convertible senior notes(2)
|
—
|
—
|
—
|
—
|
571
|
|||||||||||||||
Equity
|
3,542,466
|
3,492,042
|
3,574,070
|
3,453,561
|
3,406,842
|
(1) | In the fourth quarter of fiscal 2012, we instituted a discretionary quarterly cash dividend program in the amount of $0.13 per share, with the first payment in the first quarter of fiscal 2013. In January 2014, January 2015, February 2016, January 2017, January 2018 and January 2019, our shareholders approved increases in the rate of the quarterly cash dividend to $0.155 per share, $0.17 per share, $0.195 per share, $0.22 per share, $0.25 and $0.285, respectively. In November 2019, our Board of Directors approved, subject to shareholders approval at the January 2020 annual general shareholders meeting, an increase in the rate of the quarterly cash dividend to $0.3275 per share. |
(2) | On September 6, 2016 (the “Redemption Date”), we redeemed all of our outstanding convertible notes due 2024 at a redemption price of 100% of the principal amount of the notes, plus accrued and unpaid interest up to, but excluding, the Redemption Date. |
|
Ordinary Shares
|
Additional
Paid-In
Capital |
|
Treasury
Stock |
|
|||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
Statement of Changes in Shareholders’ Equity Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance as of September 30, 2016
|
147,134
|
$ |
4,377
|
$ |
3,322,789
|
$ |
(4,024,527
|
) | ||||||||
Employee stock options exercised
|
2,220
|
28
|
87,948
|
—
|
||||||||||||
Repurchase of shares(1)
|
(5,519
|
) |
—
|
—
|
(340,597
|
) | ||||||||||
Tax benefit from equity-based awards
|
—
|
—
|
3,611
|
—
|
||||||||||||
Issuance of restricted stock, net of forfeitures
|
556
|
5
|
—
|
—
|
||||||||||||
Equity-based compensation expense related to employees
|
—
|
—
|
44,539
|
—
|
||||||||||||
Balance as of September 30, 2017
|
144,391
|
$ |
4,410
|
$ |
3,458,887
|
$ |
(4,365,124
|
) | ||||||||
Employee stock options exercised
|
1,800
|
24
|
81,262
|
—
|
||||||||||||
Repurchase of shares(1)
|
(6,337
|
) |
—
|
—
|
(419,228
|
) | ||||||||||
Issuance of restricted stock, net of forfeitures
|
323
|
2
|
—
|
—
|
||||||||||||
Equity-based compensation expense related to employees
|
—
|
—
|
47,476
|
—
|
||||||||||||
Balance as of September 30, 2018
|
140,177
|
$ |
4,436
|
$ |
3,587,625
|
$ |
(4,784,352
|
) | ||||||||
Employee stock options exercised
|
874
|
11
|
41,487
|
—
|
||||||||||||
Repurchase of shares(1)
|
(6,656
|
) |
—
|
—
|
(398,057
|
) | ||||||||||
Issuance of restricted stock, net of forfeitures
|
378
|
5
|
—
|
—
|
||||||||||||
Equity-based compensation expense related to employees
|
—
|
—
|
38,550
|
—
|
||||||||||||
Balance as of September 30, 2019
|
134,773
|
$ |
4,452
|
$ |
3,667,662
|
$ |
(5,182,409
|
) | ||||||||
(1) | From time to time, our Board of Directors can adopt share repurchase plans authorizing the repurchase of our outstanding ordinary shares. On November 8, 2017, our Board of Directors adopted another share repurchase plan for the repurchase of up to an additional $800.0 million of our outstanding ordinary shares with no expiration date. In April 2018, we completed the repurchase of the remaining authorized amount of ordinary shares under the February, 2016 plan and began executing repurchases under the November 2017 plan. In fiscal year 2019, we repurchased approximately 6.7 million ordinary shares at an average price of $59.79 per share (excluding broker and transaction fees). The November 2017 plan permits us to purchase our ordinary shares in open market or privately negotiated transactions at times and prices that we consider appropriate. As of September 30, 2019, we had remaining authority to repurchase up to $239.2 million of our outstanding ordinary shares under the November 2017 plan. On November 12, 2019, our Board of Directors adopted another share repurchase plan for the repurchase of up to an additional $800.0 million of our outstanding ordinary shares with no expiration date which brings the unused authorization as of September 30, 2019 to $1,039.2 million. The authorizations permit us to purchase our ordinary shares in open market or privately negotiated transactions at times and prices that we consider appropriate. |
• | the development by others of software products and services that are competitive with our products and services, |
• | the price at which others offer competitive software and services, |
• | the ability of competitors to deliver projects at a level of quality that rivals our own, |
• | the responsiveness of our competitors to customer needs, and |
• | the ability of our competitors to hire, retain and motivate key personnel. |
• | the size, timing and pace of progress of significant customer projects license and service fees, and sales of partners software and hardware, |
• | delays in or cancellations of significant projects and activities by customers, |
• | changes in operating expenses, |
• | increased competition, |
• | changes in our strategy, |
• | personnel changes, |
• | foreign currency exchange rate fluctuations, |
• | penetration of new markets, regions, customers and domains, and |
• | general economic and political conditions. |
• |
lack of acceptance of
non-localized
products or services and other related services,
|
• | difficulties in complying with varied legal and regulatory requirements across jurisdictions, including those applicable to employees and the terms of employment, |
• | difficulties in staffing and managing foreign operations, |
• | longer payment cycles, |
• | difficulties in collecting accounts receivable, converting local currencies or withholding taxes, |
• | capital restrictions that limit the repatriation of earnings, |
• | trade barriers, |
• | challenges in complying with complex foreign and U.S. laws and regulations, including communication, trade sanctions, export controls, and privacy regulations, |
• | political instability and threats of terrorism, |
• | currency exchange rate fluctuations, |
• | hyper inflation, |
• | foreign ownership restrictions, |
• | regulations on the transfer of funds to and from foreign countries, |
• | the lack of well-established or reliable legal systems in some countries, |
• | variations in effective income tax rates and tax policies among countries where we conduct business; and |
• | the timing and manner of the United Kingdom exiting the European Union, as and when it occurs. |
• | market conditions in the industry and the economy as a whole, |
• | variations in our quarterly operating results, |
• | changes in our backlog levels, |
• | announcements of technological innovations by us or our competitors, |
• | announcements by any of our key customers, |
• | introductions of new products and services or new pricing policies by us or our competitors, |
• | trends in the communications, media or software industries, including industry consolidation, |
• | acquisitions or strategic alliances by us or others in our industry, |
• | changes in estimates of our performance or recommendations by financial analysts, institutions and other market professionals |
• | changes in our shareholder base, and |
• | political developments in the Middle East or other areas of the world. |
• |
Focus on the Communications and Media Industry
know-how
and capability necessary to deliver the technologically advanced, large-scale, specifications-intensive solutions required by the leading wireless, wireline, broadband, cable and satellite companies as well as provide targeted point solutions for service providers of all sizes. These strengths have enabled us to diversify our customer base and expand our offering domains and may continue to provide us with opportunities to expand within other vertical segment markets.
|
• |
Target Industry Leaders
|
able to remain at the forefront of developments in the industry. We believe that the development of this customer base has helped position us as a market leader. |
• |
Continued Expansion into New Geographies and Emerging Markets.
low-cost
systems with
pre-packaged
services that can be implemented rapidly, to more robust services, to complete customer experience solutions.
|
• |
Provide Customers with an Open and Dynamic Portfolio.
API-first
and microservices-based approach to enable third-party integration. We believe that our ability to provide a broad, open, dynamic and modular portfolio helps position us as a strategic partner for our customers as they continue to transform into digital service providers and provides us with multiple avenues for strengthening and expanding our ongoing customer relationships.
|
• |
Expand Our Managed Services Capabilities
in-house
IT departments or by other vendors. Our mandate can extend across the service provider’s entire IT and network environment and encompass key business process operational needs. Many of these projects involve what we call managed transformations: a multi-year project in which we modernize legacy systems while operating them, and then continue to provide managed services once the transformation is complete. Our customers receive predictable service levels based on agreed-upon key performance indicators, as well as improved efficiencies and long-term savings over the
day-to-day
costs of operating and maintaining these systems, as well as an improved
end-user
experience, so they can focus on their own internal strengths and strategy to grow their business, leaving system concerns to us. Managed services also benefit us, as they can be a source of predictable revenue and long-term relationships.
|
• |
Develop and Maintain Long-Term Customer Relationships
|
• |
Consumer experience and monetization:
5G-ready,
cloud-native monetization offerings enable service providers to launch new types of multi-play, multi-partner offers, with the flexible payment methods needed to capture new revenues in the digital economy.
|
• |
Media and digital services:
|
• |
Enterprise and connected society:
lead-to-order
solution facilitates, secures and helps process opportunities into orders. Our configure-price-quote systems supports generating accurate and validated quotes and once the customer order is placed, our
zero-touch
ordering and fulfillment solutions eliminate manual handling and order fallouts. When the order relates to connectivity, our solutions boost the time to activation – whether for traditional connectivity such as fiber, mobile such as eSIM, or new generation connectivity such as
SD-WAN.
Our NFV/SDN offering includes a large partner ecosystem of virtual network functions (VNFs) and provides upsell opportunities with services such as security, web filtering or vCPE. Our full business enablement suite for enterprise customers also includes functions such as white-label billing, settlement or partner management as well as a large portfolio of competencies to support migration to cloud-native, microservices-based environments.
|
• |
Open cloud networks:
|
• |
New domains and disruptions:
|
• |
Services and hybrid operations:
|
• |
Managed Services
non-Amdocs,
third-party software.
|
• |
Digital Business Operations
end-to-end
visibility over any business process regardless of underlying silos. We aim to improve customer experience, decrease handling time, reduce OPEX and shorten time to introduce digital channels and new services.
|
• |
Quality Engineering Services
end-user
experience, leveraging our advanced automation, intelligence and machine learning tools that form part of our 36ONE platform.
|
• |
Cloud
Services
AI-driven
analytics. This provides customers with the ability to better leverage their data, with more users having access to more data, thereby enabling greater value to be achieved through analytics.
|
• |
Consulting Services
top-level
technology strategy consulting services for both Amdocs and
non-Amdocs
systems. Our consultants understand the service provider’s environment and bring with them the experience we accumulated when modernizing our own Amdocs product lines and
re-skilling
our people to master hybrids of the legacy and the new. Using expertise from recent acquisitions, we also provide experts in specific niches, such as the marketing consultancy practice acquired in the Pontis acquisition, the user experience (UX) experts from projekt202 and the digital software engineering and platform development experts from Kenzan.
|
• |
Integration Services
back-end
and third-party systems. We also offer a unique integration platform as a service (IPaaS) solution, which is a cloud, hybrid or
on-premise
integration platform built specifically for the unique challenges of the communications and media industry, enabling modernization with minimal impact on the systems of record and other legacy systems.
|
• |
Data & Intelligence Services
|
• |
Design led
design-led
principles and methodologies across software applications to ensure improved and optimized customer experiences.
|
• |
API enabled
|
• |
Cloud flexibility
on-premise
cloud environments.
|
• |
Microservices
|
• |
Scalability
|
• |
Reliability.
|
• |
Modularity
|
• |
Upgradability and Backwards Compatibility
|
• |
Virtualization
|
• |
Open Source Software
|
• |
Service-Oriented Architecture.
|
A1 Bulgaria
|
POST Luxembourg
|
|
A1 Telekom Austria
|
Proximus
|
|
Airtel
|
Red Carpet Home Cinema
|
|
Altice SFR
|
Reliance Communications
|
|
Altice USA
|
Rogers Communications
|
|
America Movil
|
Rostelecom
|
|
Astro
|
Safaricom
|
|
AT&T
|
Sensis
|
|
AT&T Mexico
|
Singtel
|
|
Bell Canada
|
Sky Italia
|
|
Bharat Sanchar Nigam Limited
|
Smart
|
|
Botswana Telecommunications Corporation
|
Sprint
|
|
BT
|
Sunrise Telecom
|
|
Cable & Wireless
|
Telefónica Argentina
|
|
Capita Business Services
|
Telefónica Brasil (Vivo)
|
|
Cellcom
|
Telefónica Chile
|
|
CenturyLink
|
Telefónica Peru
|
|
Charter Communications
|
Telefónica SA
|
|
Claro Brasil
|
Telenet
|
|
Claro Chile
|
Telia Norway
|
|
Claro Dominican Republic
|
Telia Sweden
|
|
Claro Puerto Rico
|
Telkom South Africa
|
|
Comcast
|
Telkomsel
|
|
Deutsche Telekom
|
Telstra
|
|
Digital TV Cable
|
TELUS Communications
|
Dish Network
|
Three Ireland (Hutchison) Limited
|
|
EE
|
TIM
|
|
Elisa
|
TIM Brasil
|
|
EPIX (an MGM company)
|
T-Mobile US
|
|
Eros Now
|
True Corporation
|
|
FarEasTone
|
Turner
|
|
Foxtel
|
UPC Broadband
|
|
Globe Telecom
|
US Cellular
|
|
J:COM
|
UTS
|
|
Kazakhtelecom
|
VEON
|
|
Kcell
|
Verizon
|
|
KCOM
|
Viacom
|
|
KPN
|
Virgin Media
|
|
KT Corporation
|
Vodafone Germany
|
|
Kyivstar
|
Vodafone Hungary
|
|
M1
|
Vodafone Idea
|
|
Magyar Telekom
|
Vodafone Ireland
|
|
Maxis
|
Vodafone Italy
|
|
MTS
|
Vodafone Qatar
|
|
NFL Digital Media
|
Vodafone Romania
|
|
Oi
|
Vodafone Spain
|
|
Optus
|
Vodafone UK
|
|
Orange Belgium
|
VodafoneZiggo
|
|
Orange Spain
|
Warner Bros
|
|
PLDT
|
XL Axiata
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
North America
|
63.2
|
% |
64.2
|
% |
65.9
|
% | ||||||
Europe
|
14.7
|
% |
14.4
|
% |
12.6
|
% | ||||||
Rest of the World
|
22.1
|
% |
21.4
|
% |
21.5
|
% |
• | providers of BSS/OSS and customer relationship management (CRM)/digital systems, including CSG International, Optiva, Oracle, Pegasystems, Salesforce, Vlocity and SAP; |
• | system integrators and providers of IT services, such as Accenture, Cognizant, DXC Technology, IBM Global Services, Infosys, Tata Consultancy Services, Tech Mahindra and Wipro (some of whom we also cooperate with in certain opportunities and projects); |
• | network equipment providers such as Ericsson, Huawei, Nokia Networks, and NEC and its subsidiary Netcracker (some of whom we also cooperate with in certain opportunities and projects and some of whom have also moved into the BSS/OSS space); |
• |
niche domain players, often
start-up
companies, who compete against particular parts of our portfolio, such as Matrixx, Openet in charging; Hansen (Sigma) in catalog; Aria, Stripe, Zuora in subscription billing; Forgerock and Okta in identity management; Deluxe Entertainment and iNDemand in Media.
|
• |
applying our over
35-year
heritage to the development and delivery of products and professional services that enable our customers to overcome their challenges and achieve service differentiation by providing a personalized and intelligent customer experience, shaping the quality of network experience and simplifying the complexity of the operating environment,
|
• | continuing to design and develop solutions targeted specifically to the communications and media industry, |
• | innovating and enabling our customers to adopt new business models that will improve their ability to drive new revenues, and compete and win in a changing market, |
• | providing high-availability, high-quality, reliable, scalable, integrated and modular applications, leveraging cloud technology, artificial intelligence and new software development and deployment options, |
• | providing flexible and tailored IT and business process outsourcing solutions and delivery models, and |
• |
offering customers
end-to-end
accountability from a single vendor.
|
Location
|
Area
(Sq. Feet) |
|
||
United States:
|
|
|||
Champaign, IL
|
111,267
|
|||
St. Louis, MO
|
56,215
|
|||
Burbank, CA
|
56,005
|
|||
Seattle, WA
|
27,157
|
|||
Eldorado Hills, CA
|
9,817
|
|||
Others
|
264,878
|
|||
Total
|
525,339
|
|||
Israel:
|
|
|||
Ra’anana
|
901,327
|
|||
Sderot
|
143,192
|
|||
Nazareth
|
25,919
|
|||
Others
|
5,436
|
|||
Total
|
1,075,874
|
|||
Canada:
|
|
|||
Montreal
|
60,274
|
|||
Toronto
|
44,470
|
|||
Ottawa
|
40,422
|
|||
Total
|
145,166
|
|||
Cyprus (Limassol)
|
110,868
|
|||
India:
|
|
|||
Pune
|
892,178
|
|||
Delhi
|
204,062
|
|||
Mumbai
|
4,400
|
|||
Total
|
1,100,640
|
|||
Philippines
|
103,135
|
|||
United Kingdom
|
75,875
|
|||
Mexico
|
70,934
|
|||
Other locations (21 countries)
|
201,109
|
|||
Total
|
3,408,940
|
|||
• | Transformation within the communications and media industry, including: |
• | continued transformation of service providers to digital service providers, |
• | increasing use of communications and content services, |
• | widespread access to content, information and applications, |
• | continued growth in Latin America and Southeast Asia, |
• | expansion into new lines of business, |
• | consolidation among service providers in established markets, often including companies with multinational operations, |
• |
increased competition, including from
non-traditional
players,
|
• | continued bundling and blending of communications and entertainment, and |
• | continued commoditization and pricing pressure. |
• | Technology advances, such as: |
• |
wide-scale foundational technology changes including the leveraging of open-source, cloud-enabled and cloud-native operating infrastructure, microservices-based architecture,
API-based
ecosystems, and aggressive digital modernization transformations,
|
• |
evolving service provider business models and opportunities like OTT partnerships, content development and offerings, advertising, enterprise and small- or
medium-sized
business modernization, and innovative consumer bundling solutions,
|
• | network evolution in order to support growing technology needs associated with Internet of Things (IoT), autonomous vehicles and augmented and virtual reality, |
• |
new communications technologies such as 5G wireless technology, eSIM, long range (LoRa), Narrowband IoT
(NB-IOT,
network functions virtualization (NFV), network automation and edge computing,
|
• | emerging initiatives like artificial intelligence, including machine learning (ML) and natural language processing (NLP) and blockchain. |
• | Customer focus, such as: |
• | the need for service providers to personalize the customer’s experience and provide contextual and personalized engagements at all points in their omni-channel customer journey, |
• | increasing customer expectations for new, innovative services and applications that are personally relevant and that can be accessed anytime, anywhere and from any device, and |
• | the ever-increasing expectations for service and support, including proactive multi-modal customer care and commerce. |
• | The need for operational efficiency, including: |
• |
the shift from
in-house
management to vendor solutions,
|
• | business needs of service providers to reduce costs and lower total cost of ownership of software systems while retaining high-value customers in a highly competitive environment, |
• | automating, introducing artificial intelligence, and integrating business processes that span service providers’ business systems and network solutions, |
• | implementing and integrating new next-generation networks (and retiring legacy networks) to deploy new technologies, and |
• | transforming fragmented legacy OSS to introduce new services in a timely and cost-effective manner. |
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Revenue
|
100
|
% |
100
|
% |
100
|
% | ||||||
Operating expenses:
|
|
|
|
|||||||||
Cost of revenue
|
64.9
|
65.3
|
64.8
|
|||||||||
Research and development
|
6.7
|
7.0
|
6.7
|
|||||||||
Selling, general and administrative
|
12.1
|
12.1
|
12.2
|
|||||||||
Amortization of purchased intangible assets and other
|
2.4
|
2.7
|
2.9
|
|||||||||
Non-recurring
charges
|
—
|
2.1
|
—
|
|||||||||
|
86.1
|
89.2
|
86.6
|
|||||||||
Operating income
|
13.9
|
10.8
|
13.4
|
|||||||||
Interest and other expense, net
|
0.0
|
0.2
|
0.1
|
|||||||||
Income before income taxes
|
13.9
|
10.6
|
13.3
|
|||||||||
Income taxes
|
2.2
|
1.7
|
2.0
|
|||||||||
Net income
|
11.7
|
% |
8.9
|
% |
11.3
|
% | ||||||
|
Year Ended September 30,
|
Increase (Decrease)
|
||||||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|
||||||||
|
(In thousands)
|
|||||||||||||||
Revenue
|
$ |
4,086,669
|
$ |
3,974,837
|
$ |
111,832
|
2.8
|
% | ||||||||
Operating expenses:
|
|
|
|
|
||||||||||||
Cost of revenue
|
2,653,172
|
2,595,276
|
57,896
|
2.2
|
||||||||||||
Research and development
|
273,936
|
276,615
|
(2,679
|
) |
(1.0
|
) | ||||||||||
Selling, general and administrative
|
492,457
|
481,093
|
11,364
|
2.4
|
||||||||||||
Amortization of purchased intangible assets and other
|
97,358
|
108,489
|
(11,131
|
) |
(10.3
|
) | ||||||||||
Non-recurring
charges
|
—
|
85,057
|
(85,057
|
) |
(100
|
) | ||||||||||
|
3,516,923
|
3,546,530
|
(29,607
|
) |
(0.8
|
) | ||||||||||
Operating income
|
569,746
|
428,307
|
141,439
|
33.0
|
||||||||||||
Interest and other expense, net
|
1,859
|
6,766
|
(4,907
|
) |
(72.5
|
) | ||||||||||
Income before income taxes
|
567,887
|
421,541
|
146,346
|
34.7
|
||||||||||||
Income taxes
|
88,441
|
67,145
|
21,296
|
31.7
|
||||||||||||
Net income
|
$ |
479,446
|
$ |
354,396
|
$ |
125,050
|
35.3
|
% | ||||||||
|
Year Ended September 30,
|
Increase (Decrease)
|
||||||||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|
||||||||
|
(In thousands)
|
|||||||||||||||
Revenue
|
$ |
3,974,837
|
$ |
3,867,155
|
$ |
107,682
|
2.8
|
% | ||||||||
Operating expenses:
|
|
|
|
|
||||||||||||
Cost of revenue
|
2,595,276
|
2,507,656
|
87,620
|
3.5
|
||||||||||||
Research and development
|
276,615
|
259,097
|
17,518
|
6.8
|
||||||||||||
Selling, general and administrative
|
481,093
|
472,778
|
8,315
|
1.8
|
||||||||||||
Amortization of purchased intangible assets and other
|
108,489
|
110,291
|
(1,802
|
) |
(1.6
|
) | ||||||||||
Non-recurring
charges
|
85,057
|
—
|
85,057
|
100
|
||||||||||||
|
3,546,530
|
3,349,822
|
196,708
|
5.9
|
||||||||||||
Operating income
|
428,307
|
517,333
|
(89,026
|
) |
(17.2
|
) | ||||||||||
Interest and other (expense) income, net
|
(6,766
|
) |
(4,421
|
) |
(2,345
|
) |
53.0
|
|||||||||
Income before income taxes
|
421,541
|
512,912
|
(91,371
|
) |
(17.8
|
) | ||||||||||
Income taxes
|
67,145
|
76,086
|
(8,941
|
) |
(11.8
|
) | ||||||||||
Net income
|
$ |
354,396
|
$ |
436,826
|
$ |
(82,430
|
) |
(18.9
|
)% | |||||||
Declaration Date
|
Dividends Per
Ordinary Share
|
|
Record Date
|
|
Total Amount
(In millions)
|
|
Payment Date
|
|
||||||||
August 7, 2019
|
$ |
0.285
|
September 30, 2019
|
$ |
38.4
|
October 25, 2019
|
||||||||||
May 14, 2019
|
$ |
0.285
|
June 28, 2019
|
$ |
38.7
|
July 19, 2019
|
||||||||||
February 5, 2019
|
$ |
0.285
|
March 29, 2019
|
$ |
39.1
|
April 19, 2019
|
||||||||||
November 8, 2018
|
$ |
0.250
|
December 31, 2018
|
$ |
34.8
|
January 18, 2019
|
||||||||||
July 31, 2018
|
$ |
0.250
|
September 28, 2018
|
$ |
35.0
|
October 19, 2018
|
||||||||||
May 10, 2018
|
$ |
0.250
|
June 29, 2018
|
$ |
35.4
|
July 20, 2018
|
||||||||||
January 30, 2018
|
$ |
0.250
|
March 30, 2018
|
$ |
35.6
|
April 20, 2018
|
||||||||||
November 8, 2017
|
$ |
0.220
|
December 29, 2017
|
$ |
31.6
|
January 19, 2018
|
||||||||||
August 2, 2017
|
$ |
0.220
|
September 29, 2017
|
$ |
31.7
|
October 23, 2017
|
||||||||||
May 9, 2017
|
$ |
0.220
|
June 30, 2017
|
$ |
32.0
|
July 14, 2017
|
||||||||||
February 1, 2017
|
$ |
0.220
|
March 31, 2017
|
$ |
32.2
|
April 14, 2017
|
||||||||||
November 8, 2016
|
$ |
0.195
|
December 30, 2016
|
$ |
28.6
|
January 13, 2017
|
||||||||||
|
Payments Due by Period
|
|||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
1 Year |
|
1-3
Years |
|
4-5
Years |
|
More Than
5 Years |
|
||||||||||
Pension funding
|
$ |
12.4
|
$ |
1.3
|
$ |
3.8
|
$ |
2.5
|
$ |
4.8
|
||||||||||
Purchase obligations
|
96.5
|
60.9
|
35.2
|
0.4
|
—
|
|||||||||||||||
Non-cancelable
operating leases
|
331.6
|
69.0
|
144.4
|
44.0
|
74.2
|
|||||||||||||||
Total
|
$ |
440.5
|
$ |
131.2
|
$ |
183.4
|
$ |
46.9
|
$ |
79.0
|
||||||||||
• | Revenue recognition and contract accounting |
• | Tax accounting |
• | Business combinations |
• | Goodwill, intangible assets and long-lived assets-impairment assessment |
• | Derivative and hedge accounting |
• | Accounts receivable reserves |
• | the initial sales of licenses to use our products and related services, including modification, implementation, integration and customization services, |
• | providing managed services in our domain expertise and other related services, and |
• | recurring revenue from ongoing support, maintenance and enhancements provided to our customers, and from incremental license fees resulting from increases in a customer’s business volume. |
Name
|
Age
|
|
Position
|
|||
Robert A. Minicucci(1)(2)
|
67
|
Chairman of the Board
|
||||
Adrian Gardner(1)
|
57
|
Director and Chairman of the Audit Committee
|
||||
Julian A. Brodsky(3)
|
86
|
Director
|
||||
James S. Kahan(3)
|
72
|
Director and Chairman of the Nominating and Corporate Governance Committee
|
||||
Richard T.C. LeFave(1)(2)(4)
|
67
|
Director
|
||||
Giora Yaron(4)
|
71
|
Director and Chairman of the Technology and Innovation Committee
|
||||
Ariane de Rothschild(3)
|
54
|
Director
|
||||
Rafael de la Vega(2)
|
68
|
Director and Chairman of the Management Resources and Compensation Committee
|
||||
Eli Gelman(4)
|
61
|
Director
|
||||
John A. MacDonald(2)(4)
|
66
|
Director
|
||||
Shuky Sheffer
|
59
|
Director, President and Chief Executive Officer
|
||||
Tamar Rapaport-Dagim
|
48
|
Chief Financial Officer and Chief Operating Officer
|
||||
Rajat Raheja
|
50
|
Division President, Amdocs Development Center India Pvt. Ltd.
|
||||
Matthew Smith
|
47
|
Secretary; Head of Investor Relations
|
(1) | Member of the Audit Committee |
(2) | Member of the Management Resources and Compensation Committee |
(3) | Member of the Nominating and Corporate Governance Committee |
(4) | Member of the Technology and Innovation Committee |
|
Fiscal Year,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Software and Information Technology, Sales and Marketing
|
|
|
|
|||||||||
Americas
|
5,409
|
5,598
|
5,606
|
|||||||||
EMEA
|
6,063
|
6,306
|
6,408
|
|||||||||
APAC
|
11,472
|
10,851
|
10,650
|
|||||||||
|
22,944
|
22,755
|
22,664
|
|||||||||
Management and Administration
|
1,572
|
1,626
|
1,573
|
|||||||||
Total Workforce
|
24,516
|
24,381
|
24,237
|
|||||||||
Name
|
Shares
Beneficially Owned |
|
Percentage
Ownership |
|
||||
FMR LLC(1)
|
18,209,168
|
13.5
|
% | |||||
Janus Henderson Group plc(2)
|
7,616,644
|
5.7
|
% | |||||
All directors and officers as a group (14 persons)(3)
|
2,413,335
|
1.8
|
% |
(1) | Based on a Schedule 13G/A filed by FMR LLC, or FMR, with the SEC on February 13, 2019, as of December 31, 2018, FMR had sole power to vote or direct the vote over 1,444,363 shares and sole power to dispose or direct the disposition of 18,209,168 shares. Edward C. Johnson 3d is a Director and the Chairman of FMR and Abigail P. Johnson is a Director, the Vice Chairman, the Chief Executive Officer and the President of FMR. Members of the family of Edward C. Johnson 3d, including Abigail P. Johnson, directly or through trusts, own approximately 49% of the voting power of FMR. The address of FMR is 245 Summer Street, Boston, Massachusetts 02210. |
(2) |
Based on a Schedule 13G/A filed by Janus Henderson Group plc, or Janus Henderson, with the SEC on February 11, 2019, as of December 31, 2018, Janus had an indirect 97.11% ownership stake in IntechInvestment Management LLC (“Intech”) and a 100% ownership stake in Janus Capital Management LLC (“Janus Capital”), Perkins Investment Management LLC (“Perkins”), Geneva Capital Management LLC (“Geneva”), Henderson Global Investors Limited (“HGIL”), Janus Henderson Investors Australia Institutional Funds Management Limited (“HGIAIFML”) and Henderson Global Investors North America Inc. (“HGINA”), (each an “Asset Manager” and collectively as the “Asset Managers”). Due to the above ownership structure, holdings for the Asset Managers are aggregated for purposes of this filing. Each Asset Manager is an investment adviser registered or authorized in its relevant jurisdiction and each furnishing investment advice to various fund, individual and/or institutional clients (collectively referred to herein as “Managed Portfolios”). As a result of its role as investment adviser or
sub-adviser
to the Managed Portfolios, Janus Capital may be deemed to be the beneficial owner of 7,482,934 shares or 5.3% of the shares outstanding of Amdocs Common Stock held by such Managed Portfolios. However, Janus Capital does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the Managed Portfolios and disclaims any ownership associated with such rights. As a result of its role as investment adviser or
sub-adviser
to the Managed Portfolios, Intech may be deemed to be the beneficial owner of 18,831 shares or 0.0% of the shares outstanding of Amdocs Common Stock held by such Managed Portfolios. However, Intech does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the Managed Portfolios and disclaims any ownership associated with such rights. As a result of its role as investment adviser or
sub-adviser
to the Managed Portfolios, JCIL may be deemed to be the beneficial owner of 95,600 shares or 0.1% of the shares outstanding of Amdocs Common Stock held by such Managed Portfolios. However, JCIL does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the Managed Portfolios and disclaims any ownership associated with such rights. The address of Janus Henderson is 201 Bishopsgate EC2M 3AE, United Kingdom.
|
(3) | Includes options held by such directors and executive officers that are exercisable within 60 days after December 5, 2019. As of such date, none of our directors or executive officers beneficially owned 1% or more of our outstanding ordinary shares. |
• |
Issue
|
• |
Authorization to Issue Preferred Shares
|
• |
Relative Rights
|
• |
Liquidation
winding-up
of Amdocs Limited, the holders of preferred shares are entitled to a preference with respect to payment over the holders of any shares ranking junior to the preferred in liquidation at the rate fixed in any resolution or resolutions adopted by the directors in such case plus an amount equal to all dividends accumulated to the date of final distribution to such holders. Except as provided in the resolution or resolutions providing for the issue of any series of preferred shares, the holders of preferred shares are entitled to no further payment. If upon any liquidation our assets are insufficient to pay in full the amount stated above, then such assets shall be distributed among the holders of preferred shares ratably in accordance with the respective amount such holder would have received if all amounts had been paid in full.
|
• |
Voting Rights
|
• |
Dividends
non-voting
shares are entitled to share equally, share for share, in such dividends except that if
|
dividends are declared that are payable in voting ordinary shares or
non-voting
ordinary shares, dividends must be declared that are payable at the same rate in both classes of shares.
|
• |
Conversion of Non-Voting Ordinary Shares into Voting Ordinary Shares
non-voting
ordinary shares from the original holder thereof to any third party not affiliated with such original holder,
non-voting
ordinary shares are redesignated in our books as voting ordinary shares and automatically convert into the same number of voting ordinary shares.
|
• |
Liquidation
winding-up,
any assets remaining after creditors and the holders of any preferred shares have been paid in full shall be distributed to the holders of voting ordinary shares and
non-voting
ordinary shares equally share for share.
|
• |
Voting Rights
non-voting
ordinary shares are not entitled to any voting rights.
|
• |
Preferences
non-voting
ordinary shares are subject to all the powers, rights, privileges, preferences and priorities of the preferred shares as are set out in the Articles.
|
• | fines imposed in criminal proceedings; |
• | regulatory fines; |
• | expenses incurred in defending criminal proceedings resulting in a conviction; |
• | expenses incurred in defending civil proceedings brought by Amdocs Limited or an affiliated company in which judgment is rendered against the director; and |
• | expenses incurred in unsuccessfully seeking judicial relief from claims of a breach of duty. |
|
Notional Value*
|
|
Fair Value of
Derivatives |
|
||||
Foreign exchange contracts (in millions)
|
$ |
1,103
|
$ |
7.9
|
(*) | Gross notional amounts do not quantify risk or represent assets or liabilities of the Company, but are used in the calculation of settlements under the contracts. |
Period
|
(a)
Total Number of Shares Purchased |
|
(b)
Average Price Paid per Share(1) |
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(2) |
|
||||||||
10/1/18-10/31/18
|
408,629
|
$ |
63.34
|
408,629
|
$ |
611,244,191
|
||||||||||
11/1/18-11/30/18
|
549,168
|
$ |
64.82
|
549,168
|
$ |
575,645,377
|
||||||||||
12/1/18-12/31/18
|
621,986
|
$ |
60.57
|
621,986
|
$ |
537,969,723
|
||||||||||
01/1/19-01/31/19
|
512,003
|
$ |
57.81
|
512,003
|
$ |
508,370,524
|
||||||||||
02/1/19-02/28/19
|
631,061
|
$ |
55.96
|
631,061
|
$ |
473,057,105
|
||||||||||
03/1/19-03/31/19
|
1,002,877
|
$ |
54.93
|
1,002,877
|
$ |
417,970,342
|
||||||||||
04/1/19-04/30/19
|
423,146
|
$ |
54.35
|
423,146
|
$ |
394,971,008
|
||||||||||
05/1/19-05/31/19
|
463,771
|
$ |
57.21
|
463,771
|
$ |
368,437,600
|
||||||||||
06/1/19-06/30/19
|
644,541
|
$ |
60.92
|
644,541
|
$ |
329,170,948
|
||||||||||
07/1/19-07/31/19
|
347,700
|
$ |
63.13
|
347,700
|
$ |
307,221,984
|
||||||||||
08/1/19-08/31/19
|
561,900
|
$ |
63.85
|
561,900
|
$ |
271,343,972
|
||||||||||
09/1/19-09/30/19
|
489,041
|
$ |
65.79
|
489,041
|
$ |
239,171,042
|
||||||||||
Total
|
6,655,823
|
$ |
59.79
|
6,655,823
|
$ |
239,171,042
|
||||||||||
(1) | Excludes broker and transaction fees. |
(2) | On November 8, 2017, our Board of Directors adopted a share repurchase plan authorizing the repurchase of up to $800.0 million of our outstanding ordinary shares and on November 12, 2019, adopted another share repurchase plan for the repurchase of up to an additional $800.0 million of our outstanding ordinary shares. The authorizations have no expiration date and permit us to purchase our ordinary shares in open market or privately negotiated transactions at times and prices that we consider appropriate. |
Exhibit
No. |
|
Description
|
||
1.1
|
||||
1.2
|
||||
2*
|
||||
4.a.1†
|
||||
4.a.2†
|
||||
4.a.3†*
|
||||
4.a.4†*
|
||||
4.b
|
||||
4.c
|
||||
8*
|
||||
12.1*
|
||||
12.2*
|
||||
13.1*
|
||||
13.2*
|
||||
14.1*
|
||||
100.1
|
The following financial information from Amdocs Limited’s Annual Report on Form
20-F
for the year ended September 30, 2019, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets as of September 30, 2019 and 2018, (ii) Consolidated Statements of Income for the years ended September 30, 2019, 2018 and 2017, (iii) Consolidated Statements of Comprehensive Income for the years ended September 30, 2019, 2018 and 2017, (iv) Consolidated Statements of Changes in Equity for the fiscal years ended September 30, 2019, 2018 and 2017, (v) the Consolidated Statements of Cash Flows for the years ended September 30, 2019, 2018 and 2017, and (vi) Notes to Consolidated Financial Statements
|
|||
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
† | Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission. |
* | Previously filed. |
AMDOCS LIMITED
|
||
By:
|
/s/ Matthew E. Smith
|
|
|
Name: Matthew E. Smith
|
|
|
Title:
Secretary and Authorized Signatory
|
|
Page
|
|
||
Audited Consolidated Financial Statements
|
|
|
|
|
F-
2
|
||||
F-
3
|
||||
F-
8
|
||||
F-
9
|
||||
F-
10
|
||||
F-
11
|
||||
F-
12
|
||||
F-
13
|
||||
Financial Statement Schedule
|
|
|
|
|
F-
47
|
• | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
• | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
• | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
|
Revenue recognition for projects
|
|
Description of
the Matter
|
As discussed in Note 2 to the consolidated financial statements, the Company’s software solutions usually require significant customization, modification, implementation and
|
|
integration. As a result, a significant portion of the Company’s project revenue is recognized over time, based on the percentage that incurred labor effort to date bears to total projected labor effort.
Auditing the recognition of the Company’s project revenue was especially subjective and complex because of the significant estimation required by management to determine the total projected labor effort to complete a project. Determining the estimate of labor effort requires the knowledge of project-specific circumstances, including the specific terms and conditions of the contract, remaining performance obligations, changes to the project schedule, and complexity of the project. Changes in this estimate can have a material effect on when revenue is recognized.
|
|
How We
Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the projected labor effort estimation process. For example, for a sample of projects, we tested controls over management’s review of the initial estimate of total projected labor effort to complete the project, as well as the ongoing evaluation of those estimates. Additionally, for a sample of completed projects, we tested the retrospective review controls performed by management to assess the reasonableness of the estimated labor effort throughout the life of the project.
Our audit procedures included, among others, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in management’s estimate. For example, for a sample of contracts, we tested management’s estimate of total projected labor effort through a combination of analytical procedures, such as comparison of the estimated labor effort period over period and inspection of contracts to understand the specific terms and conditions as well as the remaining obligations in the contract. For selected contracts, we also met with various executives throughout the organization, including project managers, to obtain an understanding of project status and other factors considered in developing the estimate of remaining labor effort including project challenges, completed milestones, customer change orders and delays. In addition, we performed a retrospective review of actual labor effort incurred compared to previously estimated projected labor effort to evaluate the Company’s historical ability to accurately estimate expected labor effort.
|
|
|
Uncertain Tax Positions
|
|
Description of
the Matter
|
As discussed in Notes 2 and 11 to the consolidated financial statements, the Company operates in a multinational tax environment and is subject to tax treaty arrangements and transfer pricing guidelines for intercompany transactions. The Company uses significant judgment to (1) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (2) measure the amount of tax benefit that qualifies for recognition. As of September 30, 2019, the total amount of unrecognized tax benefits for uncertain tax positions was $169.3 million.
Auditing management’s analysis of the Company’s uncertain tax positions was especially subjective and complex due to the significant judgments made by management to determine the provisions for tax uncertainties. These provisions are based on interpretations of complex tax laws and legal rulings across various jurisdictions in which the Company operates and determination of arm’s length pricing for certain intercompany transactions. The assumptions underlying the provisions for uncertain tax positions include the potential tax exposure resulting from management’s interpretations and the determination of the cumulative probability that the uncertain tax position will be upheld upon regulatory examination.
|
How We
Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to assess and review their uncertain tax positions. For example, we tested the controls over the review of assumptions used in the estimation calculation such as the Company’s review over existing and potential tax controversies and tax audit results, and the computation of the impact to uncertain tax positions and tax reserves.
We involved our tax professionals to assist us with obtaining an understanding of the Company’s tax structure, assessing the Company’s compliance with tax laws, related developments in administrative rulings and court cases, identifying tax law changes in jurisdictions that may impact the Company’s unrecognized tax benefits and assessing the technical merits of the Company’s tax positions. We inspected the Company’s correspondence with the relevant tax authorities and evaluated the income tax opinions. Our audit procedures also included, among others, evaluating the assumptions the Company used to develop its uncertain tax positions and related unrecognized income tax benefit amounts by jurisdiction and testing the completeness and accuracy of the underlying data used by the Company to calculate its uncertain tax positions. For certain tax positions related to intercompany transactions, we assessed the assumptions and pricing method used in setting arm’s length prices and the documentation to support the pricing. We also evaluated the adequacy of the Company’s financial statement disclosures related to these tax matters.
|
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Revenue
|
$ |
4,086,669
|
$ |
3,974,837
|
$ |
3,867,155
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Cost of revenue
|
2,653,172
|
2,595,276
|
2,507,656
|
|||||||||
Research and development
|
273,936
|
276,615
|
259,097
|
|||||||||
Selling, general and administrative
|
492,457
|
481,093
|
472,778
|
|||||||||
Amortization of purchased intangible assets and other
|
97,358
|
108,489
|
110,291
|
|||||||||
Non-recurring
charges
|
—
|
85,057
|
—
|
|||||||||
|
3,516,923
|
3,546,530
|
3,349,822
|
|||||||||
Operating income
|
569,746
|
428,307
|
517,333
|
|||||||||
Interest and other expense, net
|
1,859
|
6,766
|
4,421
|
|||||||||
Income before income taxes
|
567,887
|
421,541
|
512,912
|
|||||||||
Income taxes
|
88,441
|
67,145
|
76,086
|
|||||||||
Net income
|
$ |
479,446
|
$ |
354,396
|
$ |
436,826
|
||||||
Basic earnings per share
|
$ |
3.49
|
$ |
2.49
|
$ |
2.99
|
||||||
Diluted earnings per share
|
$ |
3.47
|
$ |
2.47
|
$ |
2.96
|
||||||
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Net income
|
$ |
479,446
|
$ |
354,396
|
$ |
436,826
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|||||||||
Net change in fair value of cash flow hedges(1)
|
30,553
|
(51,116
|
) |
11,994
|
||||||||
Net change in fair value of
available-for-sale
securities(2)
|
1,592
|
(1,182
|
) |
(978
|
) | |||||||
Net actuarial (loss) gain on defined benefit plan(3)
|
(1,961
|
) |
777
|
1,679
|
||||||||
Other comprehensive income (loss), net of tax
|
30,184
|
(51,521
|
) |
12,695
|
||||||||
Comprehensive income
|
$ |
509,630
|
$ |
302,875
|
$ |
449,521
|
||||||
(1) | Net of tax (expense) benefit of $(2,458), $4,482 and $651 for the fiscal years ended September 30, 2019, 2018 and 2017, respectively. |
(2) | Net of tax benefit (expense) of $0, $9 and $(4) for the fiscal years ended September 30, 2019, 2018 and 2017, respectively. |
(3) | Net of tax benefit (expense) of $1,080, $(254) and $(697) for the fiscal years ended September 30, 2019, 2018 and 2017, respectively. |
|
Ordinary Shares
|
Additional
Paid-in
Capital |
|
Treasury
Stock
|
|
Accumulated
Other Comprehensive (Loss)
Income(1)
|
|
Retained
Earnings |
|
Total
Amdocs
Limited Shareholders’ Equity |
|
Non-
controlling
interests(2) |
|
Total
Equity
|
|
|||||||||||||||||||||
Shares
|
|
Amount
|
|
|||||||||||||||||||||||||||||||||
Balance as of September 30, 2016
|
147,134
|
$ |
4,377
|
$ |
3,322,789
|
$ |
(4,024,527
|
) | $ |
6,095
|
$ |
4,144,827
|
$ |
3,453,561
|
$ |
—
|
$ |
3,453,561
|
||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
436,826
|
436,826
|
—
|
436,826
|
|||||||||||||||||||||||||||
Other comprehensive income
|
—
|
—
|
—
|
—
|
12,695
|
—
|
12,695
|
—
|
12,695
|
|||||||||||||||||||||||||||
Comprehensive income
|
|
|
|
|
|
|
449,521
|
—
|
449,521
|
|||||||||||||||||||||||||||
Employee stock options exercised
|
2,220
|
28
|
87,948
|
—
|
—
|
—
|
87,976
|
—
|
87,976
|
|||||||||||||||||||||||||||
Repurchase of shares
|
(5,519
|
) |
—
|
—
|
(340,597
|
) |
—
|
—
|
(340,597
|
) |
—
|
(340,597
|
) | |||||||||||||||||||||||
Tax benefit from equity-based awards
|
—
|
—
|
3,611
|
—
|
—
|
—
|
3,611
|
—
|
3,611
|
|||||||||||||||||||||||||||
Cash dividends declared ($0.855 per ordinary share)
|
—
|
—
|
—
|
—
|
—
|
(124,546
|
) |
(124,546
|
) |
—
|
(124,546
|
) | ||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures
|
556
|
5
|
—
|
—
|
—
|
—
|
5
|
—
|
5
|
|||||||||||||||||||||||||||
Equity-based compensation expense related to employees
|
—
|
—
|
44,539
|
—
|
—
|
—
|
44,539
|
—
|
44,539
|
|||||||||||||||||||||||||||
Balance as of September 30, 2017
|
144,391
|
$ |
4,410
|
$ |
3,458,887
|
$ |
(4,365,124
|
) | $ |
18,790
|
$ |
4,457,107
|
$ |
3,574,070
|
$ |
—
|
$ |
3,574,070
|
||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net income(2)
|
—
|
—
|
—
|
—
|
—
|
354,396
|
354,396
|
—
|
354,396
|
|||||||||||||||||||||||||||
Other comprehensive loss
|
—
|
—
|
—
|
—
|
(51,521
|
) |
—
|
(51,521
|
) |
—
|
(51,521
|
) | ||||||||||||||||||||||||
Comprehensive income
|
|
|
|
|
|
|
302,875
|
—
|
302,875
|
|||||||||||||||||||||||||||
Employee stock options exercised
|
1,800
|
24
|
81,262
|
—
|
—
|
—
|
81,286
|
—
|
81,286
|
|||||||||||||||||||||||||||
Repurchase of shares
|
(6,337
|
) |
—
|
—
|
(419,228
|
) |
—
|
—
|
(419,228
|
) |
—
|
(419,228
|
) | |||||||||||||||||||||||
Cash dividends declared ($0.970 per ordinary share)
|
—
|
—
|
—
|
—
|
—
|
(137,602
|
) |
(137,602
|
) |
—
|
(137,602
|
) | ||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures
|
323
|
2
|
—
|
—
|
—
|
—
|
2
|
—
|
2
|
|||||||||||||||||||||||||||
Equity-based compensation expense related to employees
|
—
|
—
|
47,476
|
—
|
—
|
—
|
47,476
|
—
|
47,476
|
|||||||||||||||||||||||||||
Changes in Noncontrolling interests
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
43,163
|
43,163
|
|||||||||||||||||||||||||||
Balance as of September 30, 2018
|
140,177
|
$ |
4,436
|
$ |
3,587,625
|
$ |
(4,784,352
|
) | $ |
(32,731
|
) | $ |
4,673,901
|
$ |
3,448,879
|
$ |
43,163
|
$ |
3,492,042
|
|||||||||||||||||
Cumulative effect adjustment(3)
|
—
|
—
|
—
|
—
|
—
|
10,434
|
10,434
|
—
|
10,434
|
|||||||||||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net income(2)
|
—
|
—
|
—
|
—
|
—
|
479,446
|
479,446
|
—
|
479,446
|
|||||||||||||||||||||||||||
Other comprehensive income
|
—
|
—
|
—
|
—
|
30,184
|
—
|
30,184
|
—
|
30,184
|
|||||||||||||||||||||||||||
Comprehensive income
|
|
|
|
|
|
|
509,630
|
—
|
509,630
|
|||||||||||||||||||||||||||
Employee stock options exercised
|
874
|
11
|
41,487
|
—
|
—
|
—
|
41,498
|
—
|
41,498
|
|||||||||||||||||||||||||||
Repurchase of shares
|
(6,656
|
) |
—
|
—
|
(398,057
|
) |
—
|
—
|
(398,057
|
) |
—
|
(398,057
|
) | |||||||||||||||||||||||
Cash dividends declared ($1.105 per ordinary share)
|
—
|
—
|
—
|
—
|
—
|
(150,982
|
) |
(150,982
|
) |
—
|
(150,982
|
) | ||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures
|
378
|
5
|
—
|
—
|
—
|
—
|
5
|
—
|
5
|
|||||||||||||||||||||||||||
Equity-based compensation expense related to employees
|
—
|
—
|
38,550
|
—
|
—
|
—
|
38,550
|
—
|
38,550
|
|||||||||||||||||||||||||||
Changes in Noncontrolling interests
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(654
|
) |
(654
|
) | |||||||||||||||||||||||||
Balance as of September 30, 2019
|
134,773
|
$ |
4,452
|
$ |
3,667,662
|
$ |
(5,182,409
|
) | $ |
(2,547
|
) | $ |
5,012,799
|
$ |
3,499,957
|
$ |
42,509
|
$ |
3,542,466
|
|||||||||||||||||
(1) | As of September 30, 2019, 2018 and 2017, accumulated other comprehensive (loss) income is comprised of unrealized gain (loss) on derivatives, net of tax, of $3,945, $(26,608) and $24,508 , unrealized loss on short-term interest-bearing investments, net of tax, of $0, $(1,592) and $(410) and unrealized loss on defined benefit plan, net of tax, of $(6,492), $(4,531) and $(5,308). |
(2) |
In fiscal years 2019 and 2018, all of the Company’s net income is attributable to Amdocs Limited as the net income attributable to the
Non-controlling
interests is negligible.
|
(3) |
The Cumulative effect adjustments as of October 1, 2018 include an increase of $14,294 to retained earnings due to the impact of adoptions of ASU No.
2014-09
(ASC 606) and decrease of $3,860 to retained earnings due to adoption of ASU No.
2016-16.
|
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Cash Flow from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|||
Net income
|
$ |
479,446
|
$ |
354,396
|
$ |
436,826
|
||||||
Reconciliation of net income to net cash provided by operating activities:
|
|
|
|
|||||||||
Depreciation and amortization
|
205,772
|
211,224
|
214,885
|
|||||||||
Equity-based compensation expense
|
38,550
|
47,476
|
44,539
|
|||||||||
Deferred income taxes
|
(13,950
|
) |
25,098
|
6,551
|
||||||||
Excess tax benefit from equity-based compensation
|
—
|
—
|
(4,666
|
) | ||||||||
Loss from short-term interest-bearing investments
|
737
|
1,324
|
9
|
|||||||||
Net changes in operating assets and liabilities, net of amounts acquired:
|
|
|
|
|||||||||
Accounts receivable, net
|
6,589
|
(66,451
|
) |
(41,075
|
) | |||||||
Prepaid expenses and other current assets
|
25,907
|
(18,736
|
) |
11,002
|
||||||||
Other noncurrent assets
|
(1,635
|
) |
9,674
|
(52,667
|
) | |||||||
Accounts payable, accrued expenses and accrued personnel
|
(60,042
|
) |
25,348
|
72,049
|
||||||||
Deferred revenue
|
(37,855
|
) |
7,650
|
(50,230
|
) | |||||||
Income taxes payable, net
|
6,025
|
(31,036
|
) |
(15,145
|
) | |||||||
Other noncurrent liabilities
|
6,833
|
(8,718
|
) |
14,034
|
||||||||
Net cash provided by operating activities
|
656,377
|
557,249
|
636,112
|
|||||||||
Cash Flow from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|||
Purchase of property and equipment, net(1)
|
(128,086
|
) |
(231,146
|
) |
(133,392
|
) | ||||||
Proceeds from sale of short-term interest-bearing investments
|
101,287
|
303,090
|
278,066
|
|||||||||
Purchase of short-term interest-bearing investments
|
—
|
(76,037
|
) |
(281,983
|
) | |||||||
Net cash paid for acquisitions
|
(60,572
|
) |
(355,142
|
) |
(18,064
|
) | ||||||
Other
|
615
|
(3,157
|
) |
(29,940
|
) | |||||||
Net cash used in investing activities
|
(86,756
|
) |
(362,392
|
) |
(185,313
|
) | ||||||
Cash Flow from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|||
Borrowings under financing arrangements
|
—
|
120,000
|
200,000
|
|||||||||
Payments under financing arrangements
|
—
|
(120,000
|
) |
(400,000
|
) | |||||||
Repurchase of shares
|
(398,057
|
) |
(419,228
|
) |
(340,597
|
) | ||||||
Proceeds from employee stock option exercises
|
41,483
|
81,280
|
87,586
|
|||||||||
Payments of dividends
|
(147,616
|
) |
(134,292
|
) |
(121,503
|
) | ||||||
Investment by noncontrolling interests, net(1)
|
(4,776
|
) |
47,013
|
—
|
||||||||
Payment of contingent consideration from a business acquisition
|
(7,470
|
) |
—
|
—
|
||||||||
Excess tax benefit from equity-based compensation and other
|
(336
|
) |
(458
|
) |
4,666
|
|||||||
Net cash used in financing activities
|
(516,772
|
) |
(425,685
|
) |
(569,848
|
) | ||||||
Net increase (decrease) in cash and cash equivalents
|
52,849
|
(230,828
|
) |
(119,049
|
) | |||||||
Cash and cash equivalents at beginning of year
|
418,783
|
649,611
|
768,660
|
|||||||||
Cash and cash equivalents at end of year
|
$ |
471,632
|
$ |
418,783
|
$ |
649,611
|
||||||
Supplementary Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|||
Interest and Income Taxes Paid
|
|
|
|
|||||||||
Cash paid for:
|
|
|
|
|||||||||
Income taxes, net of refunds
|
$ |
75,790
|
$ |
55,938
|
$ |
67,544
|
||||||
Interest(2)
|
7,348
|
2,009
|
1,145
|
(1) | The amounts under “Purchase of property and equipment, net”, include proceeds of $9,676 relating to refund of betterment levy for the year ended September 30, 2019 ($4,776 of which was a refund to the noncontrolling interest), proceeds from sale of property and equipment of $151, $459 and $57 for the year ended September 30, 2019, 2018 and 2017, respectively. |
(2) | The amounts under “Interest”, include payments of interest to financial institution, tax authorities and other. |
|
As of October 1, 2018
|
|||||||||||
|
Balance as of
September 30, 2018 |
|
Adjustments due
to ASC 606 |
|
Balance as of
October 1, 2018 |
|
||||||
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|||
Account receivable — unbilled
|
$ |
263,997
|
$ |
10,039
|
$ |
274,036
|
||||||
Prepaid expenses and other current assets
|
229,999
|
(971
|
) |
229,028
|
||||||||
Other noncurrent assets
|
420,369
|
15,636
|
436,005
|
|||||||||
Deferred revenue (current)
|
132,414
|
14,048
|
146,462
|
|||||||||
Accrued expenses and other current liabilities
|
706,637
|
(14,062
|
) |
692,575
|
||||||||
Deferred income taxes and taxes payable
|
224,572
|
10,424
|
234,996
|
|||||||||
Retained Earnings
|
4,673,901
|
14,294
|
4,688,195
|
|
As of
|
|||||||||||
|
September 30,
2018 |
|
October 1,
2018 (as adjusted) |
|
September 30,
2019 |
|
||||||
Accounts receivable — billed (net of allowances for doubtful accounts of $21,211 as of September 30 and October 1, 2018 and $36,121 as of September 30, 2019)
|
$ |
707,505
|
$ |
707,505
|
$ |
760,797
|
||||||
Accounts receivable — unbilled (current)
|
$ |
263,997
|
$ |
274,036
|
$ |
227,061
|
||||||
Accounts receivable — unbilled
(non-current)
|
$ |
15,686
|
$ |
13,185
|
$ |
16,987
|
||||||
Total Accounts receivable — unbilled
|
$ |
279,683
|
$ |
287,221
|
$ |
244,048
|
||||||
Deferred revenue (current)
|
$ |
(132,414
|
) | $ |
(146,462
|
) | $ |
(118,182
|
) | |||
Deferred revenue
(non-current)
|
$ |
(27,977
|
) | $ |
(27,977
|
) | $ |
(23,785
|
) | |||
Total Deferred revenue
|
$ |
(160,391
|
) | $ |
(174,439
|
) | $ |
(141,967
|
) |
|
As of September 30, 2019
|
|||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||
Available-for-sale
securities:
|
|
|
|
|
||||||||||||
Money market funds
|
$ |
69,370
|
$ |
—
|
$ |
—
|
$ |
69,370
|
||||||||
Total
available-for-sale
securities
|
69,370
|
—
|
—
|
69,370
|
||||||||||||
Equity Investment
|
—
|
—
|
18,008
|
18,008
|
||||||||||||
Derivative financial instruments, net
|
—
|
7,890
|
—
|
7,890
|
||||||||||||
Other liabilities
|
—
|
—
|
(29,805
|
) |
(29,805
|
) | ||||||||||
Total
|
$ |
69,370
|
$ |
7,890
|
$ |
(11,797
|
) | $ |
65,463
|
|||||||
|
As of September 30, 2018
|
|||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||
Available-for-sale
securities:
|
|
|
|
|
||||||||||||
Corporate bonds
|
$ |
—
|
$ |
47,531
|
$ |
—
|
$ |
47,531
|
||||||||
Money market funds
|
30,883
|
—
|
—
|
30,883
|
||||||||||||
U.S. government treasuries
|
23,258
|
—
|
—
|
23,258
|
||||||||||||
U.S. agency securities
|
—
|
16,033
|
—
|
16,033
|
||||||||||||
Asset backed obligations
|
—
|
9,177
|
—
|
9,177
|
||||||||||||
Supranational and sovereign debt
|
—
|
4,434
|
—
|
4,434
|
||||||||||||
Total
available-for-sale
securities
|
54,141
|
77,175
|
—
|
131,316
|
||||||||||||
Derivative financial instruments, net
|
—
|
(27,842
|
) |
—
|
(27,842
|
) | ||||||||||
Other liabilities
|
—
|
—
|
(37,954
|
) |
(37,954
|
) | ||||||||||
Total
|
$ |
54,141
|
$ |
49,333
|
$ |
(37,954
|
) | $ |
65,520
|
|||||||
|
As of September 30, 2019
|
|||||||||||||||
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
|
||||||||
Money market funds
|
$ |
69,370
|
$ |
—
|
$ |
—
|
$ |
69,370
|
||||||||
Total(1)
|
$ |
69,370
|
$ |
—
|
$ |
—
|
$ |
69,370
|
||||||||
(1) |
Available-for-sale
securities with maturities longer than 90 days from the date of acquisition were classified as short-term interest-bearing investments and
available-for-sale
securities with maturities of 90 days or less from the date of acquisition were included in cash and cash equivalents on the Company’s balance sheet. As of September 30, 2019, all the securities were classified as cash and cash equivalents.
|
|
As of September 30, 2018
|
|||||||||||||||
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
|
||||||||
Corporate bonds
|
$ |
48,252
|
$ |
—
|
$ |
721
|
$ |
47,531
|
||||||||
Money market funds
|
30,883
|
—
|
—
|
30,883
|
||||||||||||
U.S. government treasuries
|
23,656
|
—
|
398
|
23,258
|
||||||||||||
U.S. agency securities
|
16,297
|
—
|
264
|
16,033
|
||||||||||||
Asset backed obligations
|
9,312
|
—
|
135
|
9,177
|
||||||||||||
Supranational and sovereign debt
|
4,508
|
—
|
74
|
4,434
|
||||||||||||
Total(1)
|
$ |
132,908
|
$ |
—
|
$ |
1,592
|
$ |
131,316
|
||||||||
(1) |
Available-for-sale
securities with maturities longer than 90 days from the date of acquisition were classified as short-term interest-bearing investments and
available-for-sale
securities with maturities of 90 days or less from the date of acquisition were included in cash and cash equivalents on the Company’s balance sheet. As of September 30, 2018, $100,433 of securities were classified as short-term interest-bearing investments and $30,883 of securities were classified as cash and cash equivalents.
|
|
Market Value
|
|
||
Due within one year
|
$ |
69,370
|
||
|
Notional Value*
|
|
||
Foreign exchange contracts
|
$ |
1,103,169
|
(*) | Gross notional amounts do not quantify risk or represent assets or liabilities of the Company but are used in the calculation of settlements under the contracts. |
|
As of September 30,
|
|||||||
|
2019
|
|
2018
|
|
||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
||
Prepaid expenses and other current assets
|
$ |
9,344
|
$ |
221
|
||||
Other noncurrent assets
|
585
|
25
|
||||||
Accrued expenses and other current liabilities
|
(2,977
|
) |
(17,681
|
) | ||||
Other noncurrent liabilities
|
(2,072
|
) |
(10,030
|
) | ||||
|
4,880
|
(27,465
|
) | |||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
||
Prepaid expenses and other current assets
|
5,086
|
2,758
|
||||||
Accrued expenses and other current liabilities
|
(2,076
|
) |
(3,135
|
) | ||||
|
3,010
|
(377
|
) | |||||
Net fair value
|
$ |
7,890
|
$ |
(27,842
|
) | |||
|
(Losses) Gains Reclassified from
Other Comprehensive Income (Loss) (Effective Portion) Year Ended September 30, |
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Line item in consolidated statements of income:
|
|
|
|
|||||||||
Revenue
|
$ |
19
|
$ |
(1,129
|
) | $ |
(1,021
|
) | ||||
Cost of revenue
|
(8,627
|
) |
15,877
|
21,783
|
||||||||
Research and development
|
(2,059
|
) |
3,127
|
4,282
|
||||||||
Selling, general and administrative
|
(2,309
|
) |
3,462
|
3,305
|
||||||||
Total
|
$ |
(12,976
|
) | $ |
21,337
|
$ |
28,349
|
|||||
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Net unrealized (loss) gain on cash flow hedges, net of tax, beginning of period
|
$ |
(26,608
|
) | $ |
24,508
|
$ |
12,514
|
|||||
Changes in fair value of cash flow hedges, net of tax
|
19,228
|
(31,908
|
) |
36,765
|
||||||||
Reclassification of loss (gain) into earnings, net of tax
|
11,325
|
(19,208
|
) |
(24,771
|
) | |||||||
Net unrealized gain (loss) on cash flow hedges, net of tax, end of period
|
$ |
3,945
|
$ |
(26,608
|
) | $ |
24,508
|
|||||
|
Gains (Losses)
Recognized in Income Year Ended September 30, |
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Line item in statements of income:
|
|
|
|
|||||||||
Cost of revenue
|
$ |
401
|
$ |
(4,577
|
) | $ |
4,639
|
|||||
Research and development
|
14
|
(736
|
) |
957
|
||||||||
Selling, general and administrative
|
294
|
(950
|
) |
1,723
|
||||||||
Interest and other income (expense), net
|
5,845
|
7,038
|
(10,514
|
) | ||||||||
Income taxes
|
(528
|
) |
1,581
|
(1,653
|
) | |||||||
Total
|
$ |
6,026
|
$ |
2,356
|
$ |
(4,848
|
) | |||||
|
As of September 30,
|
|||||||
|
2019
|
|
2018
|
|
||||
Computers, related equipment and software
|
$ |
1,109,465
|
$ |
1,027,825
|
||||
Building and land
|
109,446
|
97,782
|
||||||
Leasehold improvements
|
230,817
|
222,812
|
||||||
Furniture, fixtures and other
|
47,813
|
43,518
|
||||||
Property and equipment, gross
|
1,497,541
|
1,391,937
|
||||||
Less accumulated depreciation
|
(972,227
|
) |
(895,352
|
) | ||||
Property and equipment, net
|
$ |
525,314
|
$ |
496,585
|
||||
As of October 1, 2017
|
$ |
2,221,209
|
||
Goodwill resulting from acquisitions(1)
|
227,283
|
|||
Other
|
(3,597
|
) | ||
As of September 30, 2018
|
$ |
2,444,895
|
||
Goodwill resulting from acquisitions(2)
|
17,484
|
|||
Other
|
456
|
|||
As of September 30, 2019
|
$ |
2,462,835
|
||
(1) | Mainly relates to the acquisitions of Vubiquity, projekt202 and UXP. In allocating the total purchase price for Vubiquity, based on estimated fair values, the Company recorded $148,184 of goodwill, $38,630 of customer relationships to be amortized over approximately nine years, $45,692 of core technology to be amortized over approximately five years, $10,104 of trade mark to be amortized over eight years. In allocating the total purchase price of projekt202, based on estimated fair values, the Company recorded $34,390 of goodwill and $19,835 of customer relationships to be amortized over four years. In allocating the total purchase price of UXP, based on estimated fair values, the Company recorded $40,629 of goodwill, $31,552 of core technology to be amortized over five years and $6,552 of customer relationships to be amortized over approximately five years. |
(2) | Mainly relates to the acquisitions of TTS. In allocating the total preliminary purchase price for TTS, based on estimated fair values, the Company recorded $10,032 of goodwill, $29,500 of customer relationships to be amortized over approximately six years, $2,100 of core technology to be amortized over approximately six years and $1,300 of trade mark to be amortized over four years. |
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
|
||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|||
Core technology(1)
|
$ |
775,479
|
$ |
(690,961
|
) | $ |
84,518
|
|||||
Customer relationships
|
594,555
|
(483,313
|
) |
111,242
|
||||||||
Other
|
44,946
|
(35,544
|
) |
9,402
|
||||||||
Total
|
$ |
1,414,980
|
$ |
(1,209,818
|
) | $ |
205,162
|
|||||
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|||
Core technology(1)
|
$ |
773,380
|
$ |
(628,932
|
) | $ |
144,448
|
|||||
Customer relationships
|
563,656
|
(453,137
|
) |
110,519
|
||||||||
Other
|
43,646
|
(33,364
|
) |
10,282
|
||||||||
Total
|
$ |
1,380,682
|
$ |
(1,115,433
|
) | $ |
265,249
|
|||||
(1) | Amounts previously presented separately as Intellectual property rights and purchased computer software are included in Core Technology as the nature of the intangible is consistent with the Core technology category. The asset was fully amortized as of 2019 and 2018, and consisted of gross asset of $51,996 and accumulated amortization of $51,996. |
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Cost of revenue
|
$ |
180
|
$ |
572
|
$ |
1,405
|
||||||
Amortization of definite-lived purchased intangible assets
|
94,205
|
105,213
|
108,453
|
|||||||||
Total
|
$ |
94,385
|
$ |
105,785
|
$ |
109,858
|
||||||
|
Amount
|
|
||
Fiscal year:
|
|
|
|
|
2020
|
$ |
70,138
|
||
2021
|
47,114
|
|||
2022
|
34,940
|
|||
2023
|
18,904
|
|||
2024
|
11,186
|
|||
Thereafter
|
22,880
|
|||
Total
|
$ |
205,162
|
||
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Current
|
$ |
102,391
|
$ |
42,047
|
$ |
69,535
|
||||||
Deferred
|
(13,950
|
) |
25,098
|
6,551
|
||||||||
Income taxes
|
$ |
88,441
|
$ |
67,145
|
$ |
76,086
|
||||||
|
As of September 30,
|
|||||||
|
2019
|
|
2018
|
|
||||
Deferred tax assets:
|
|
|
||||||
Deferred revenue
|
$ |
30,659
|
$ |
30,596
|
||||
Employee compensation and benefits
|
76,327
|
72,218
|
||||||
Intangible assets, computer software and intellectual property
|
11,805
|
9,793
|
||||||
Tax credits, net capital and operating loss carryforwards
|
153,062
|
184,450
|
||||||
Other
|
73,249
|
49,732
|
||||||
Total deferred tax assets
|
345,102
|
346,789
|
||||||
Valuation allowances
|
(85,533
|
) |
(112,727
|
) | ||||
Total deferred tax assets, net
|
259,569
|
234,062
|
||||||
Deferred tax liabilities:
|
|
|
||||||
Anticipated withholdings on subsidiaries’ earnings
|
(70,961
|
) |
(68,394
|
) | ||||
Intangible assets, computer software and intellectual property
|
(104,926
|
) |
(114,094
|
) | ||||
Other
|
(81,736
|
) |
(31,750
|
) | ||||
Total deferred tax liabilities
|
(257,623
|
) |
(214,238
|
) | ||||
Net deferred tax assets
|
$ |
1,946
|
$ |
19,824
|
||||
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Statutory Guernsey tax rate
|
0
|
% |
0
|
% |
0
|
% | ||||||
Foreign taxes(1)
|
15.6
|
15.9
|
14.8
|
|||||||||
Effective income tax rate
|
15.6
|
% |
15.9
|
% |
14.8
|
% | ||||||
(1) |
Foreign taxes for the year ended Sep 30, 2019:
|
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Balance at beginning of fiscal year
|
$ |
187,646
|
$ |
193,024
|
$ |
196,668
|
||||||
Additions based on tax positions related to the current year
|
19,530
|
20,329
|
22,319
|
|||||||||
Additions (reduction) for tax positions of prior years
|
24,980
|
(3,805
|
) |
12,261
|
||||||||
Settlements with tax authorities(1)
|
(37,672
|
) |
(3,880
|
) |
(9,450
|
) | ||||||
Lapse of statute of limitations
|
(25,162
|
) |
(18,022
|
) |
(28,774
|
) | ||||||
Balance at end of fiscal year
|
$ |
169,322
|
$ |
187,646
|
$ |
193,024
|
||||||
(1) | The changes in the year ended September 30, 2019, in the balance of the Company’s gross unrecognized tax benefits that relate to settlements with tax authorities is $37,672, the vast majority of which was offset by income tax payments and increase in Tax Payables and Deferred Tax Liabilities. |
|
As of September 30,
|
|||||||
|
2019
|
|
2018
|
|
||||
Ongoing accrued expenses
|
$ |
259,661
|
$ |
256,012
|
||||
Project-related provisions
|
140,701
|
155,739
|
||||||
Taxes payable
|
28,335
|
27,843
|
||||||
Dividends payable(1)
|
38,413
|
35,046
|
||||||
Derivative instruments(2)
|
5,053
|
20,821
|
||||||
Other
|
175,494
|
211,176
|
||||||
|
$ |
647,657
|
$ |
706,637
|
||||
(1) | The amounts payable as a result of the August 7, 2019 and the July 31, 2018 dividend declarations. See Note 19 to the consolidated financial statements. |
(2) | Includes derivatives that are designated as hedging instruments and derivatives that are not designated as hedging instruments. See Note 7 to the consolidated financial statements. |
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Interest income
|
$ |
6,225
|
$ |
6,602
|
$ |
7,972
|
||||||
Interest expense
|
(3,911
|
) |
(2,764
|
) |
(1,600
|
) | ||||||
Foreign exchange loss
|
(7,860
|
) |
(6,173
|
) |
(8,246
|
) | ||||||
Other, net
|
3,687
|
(4,431
|
) |
(2,547
|
) | |||||||
|
$ |
(1,859
|
) | $ |
(6,766
|
) | $ |
(4,421
|
) | |||
For the year ended September 30,
|
|
|
||
2020
|
$ |
69,043
|
||
2021
|
60,544
|
|||
2022
|
51,863
|
|||
2023
|
31,951
|
|||
2024
|
24,350
|
|||
Thereafter
|
93,845
|
|||
|
$ |
331,596
|
||
|
Number of
Share Options |
|
Weighted Average
Exercise Price |
|
||||
Outstanding as of October 1, 2018
|
6,418
|
$ |
54.76
|
|||||
Granted
|
1,975
|
60.04
|
||||||
Exercised
|
(874
|
) |
47.41
|
|||||
Forfeited
|
(682
|
) |
60.52
|
|||||
Outstanding as of September 30, 2019(1)
|
6,837
|
$ |
56.65
|
|||||
Exercisable as of September 30, 2019(1)
|
2,899
|
$ |
50.60
|
|||||
(1) | As of September 30, 2019, the weighted average remaining contractual life of outstanding and exercisable options was 7.24 and 5.63 years, respectively. |
|
Number of
Shares |
|
Weighted Average
Grant Date Fair Value |
|
||||
Outstanding as of October 1, 2018
|
1,022
|
$ |
60.68
|
|||||
Granted
|
521
|
61.65
|
||||||
Vested
|
(459
|
) |
59.32
|
|||||
Forfeited
|
(147
|
) |
61.86
|
|||||
Outstanding as of September 30, 2019
|
937
|
$ |
61.70
|
|||||
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Cost of revenue
|
$ |
19,879
|
$ |
18,253
|
$ |
19,215
|
||||||
Research and development
|
2,714
|
3,476
|
3,536
|
|||||||||
Selling, general and administrative
|
15,957
|
25,747
|
21,788
|
|||||||||
Total
|
$ |
38,550
|
$ |
47,476
|
$ |
44,539
|
||||||
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Risk-free interest rate(1)
|
2.64
|
% |
2.30
|
% |
1.63
|
% | ||||||
Expected life of stock options(2)
|
4.50
|
4.50
|
4.50
|
|||||||||
Expected volatility(3)
|
17.8
|
% |
15.0
|
% |
16.2
|
% | ||||||
Expected dividend yield(4)
|
1.82
|
% |
1.51
|
% |
1.47
|
% | ||||||
Fair value per option
|
$ |
9.13
|
$ |
8.70
|
$ |
7.62
|
(1) | Risk-free interest rate is based upon U.S. Treasury yield curve appropriate for the term of the Company’s employee stock options. |
(2) | Expected life of stock options is based upon historical experience. |
(3) | Expected volatility is based on blended volatility. |
(4) | Expected dividend yield is based on the Company’s history and future expectation of dividend payouts. |
Declaration Date
|
Dividends Per
Ordinary Share |
|
Record Date
|
|
Total Amount
|
|
Payment Date
|
|
||||||||
August 7, 2019
|
$ |
0.285
|
September 30, 2019
|
$ |
38,413
|
October 25, 2019
|
||||||||||
May 14, 2019
|
$ |
0.285
|
June 28, 2019
|
$ |
38,730
|
July 19, 2019
|
||||||||||
February 5, 2019
|
$ |
0.285
|
March 29, 2019
|
$ |
39,084
|
April 19, 2019
|
||||||||||
November 8, 2018
|
$ |
0.250
|
December 31, 2018
|
$ |
34,755
|
January 18, 2019
|
||||||||||
July 31, 2018
|
$ |
0.250
|
September 28, 2018
|
$ |
35,046
|
October 19, 2018
|
||||||||||
May 10, 2018
|
$ |
0.250
|
June 29, 2018
|
$ |
35,363
|
July 20, 2018
|
||||||||||
January 30, 2018
|
$ |
0.250
|
March 30, 2018
|
$ |
35,637
|
April 20, 2018
|
||||||||||
November 8, 2017
|
$ |
0.220
|
December 29, 2017
|
$ |
31,556
|
January 19, 2018
|
||||||||||
August 2, 2017
|
$ |
0.220
|
September 29, 2017
|
$ |
31,736
|
October 23, 2017
|
||||||||||
May 9, 2017
|
$ |
0.220
|
June 30, 2017
|
$ |
31,981
|
July 14, 2017
|
||||||||||
February 1, 2017
|
$ |
0.220
|
March 31, 2017
|
$ |
32,223
|
April 14, 2017
|
||||||||||
November 8, 2016
|
$ |
0.195
|
December 30, 2016
|
$ |
28,606
|
January 13, 2017
|
||||||||||
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Numerator:
|
|
|
|
|||||||||
Net income
|
$ |
479,446
|
$ |
354,396
|
$ |
436,826
|
||||||
Net income and dividends attributable to participating restricted shares
|
(3,295
|
) |
(2,650
|
) |
(3,517
|
) | ||||||
Numerator for basic earnings per common share
|
$ |
476,151
|
$ |
351,746
|
$ |
433,309
|
||||||
Undistributed income allocated to participating restricted shares
|
2,252
|
1,617
|
2,512
|
|||||||||
Undistributed income reallocated to participating restricted shares
|
(2,240
|
) |
(1,603
|
) |
(2,488
|
) | ||||||
Numerator for diluted earnings per common share
|
$ |
476,163
|
$ |
351,760
|
$ |
433,333
|
||||||
Denominator:
|
|
|
|
|||||||||
Weighted average number of shares outstanding — basic
|
137,418
|
142,422
|
146,017
|
|||||||||
Weighted average number of participating restricted shares
|
(944
|
) |
(1,065
|
) |
(1,176
|
) | ||||||
Weighted average number of common shares — basic
|
136,474
|
141,357
|
144,841
|
|||||||||
Effect of dilutive stock options granted
|
691
|
1,282
|
1,414
|
|||||||||
Weighted average number of common shares — diluted
|
137,165
|
142,639
|
146,255
|
|||||||||
Basic earnings per common share
|
$ |
3.49
|
$ |
2.49
|
$ |
2.99
|
||||||
Diluted earnings per common share
|
$ |
3.47
|
$ |
2.47
|
$ |
2.96
|
||||||
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|||
North America (mainly United States)
|
$ |
2,582,719
|
$ |
2,550,234
|
$ |
2,546,290
|
||||||
Europe
|
598,731
|
572,196
|
488,932
|
|||||||||
Rest of the world
|
905,219
|
852,407
|
831,933
|
|||||||||
Total
|
$ |
4,086,669
|
$ |
3,974,837
|
$ |
3,867,155
|
||||||
|
As of September 30,
|
|||||||
|
2019
|
|
2018
|
|
||||
Long-lived Assets(1)
|
|
|
|
|
|
|
||
Europe
|
$ |
206,086
|
$ |
187,884
|
||||
North America
|
95,876
|
88,251
|
||||||
Rest of the world:
|
|
|
||||||
Israel
|
168,493
|
161,726
|
||||||
India
|
36,546
|
37,239
|
||||||
Others
|
18,313
|
21,485
|
||||||
Total
|
$ |
525,314
|
$ |
496,585
|
||||
(1) | Property and equipment, net. |
|
Year Ended September 30,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Managed services arrangements
|
$ |
2,246,279
|
$ |
2,051,589
|
$ |
2,005,382
|
||||||
Others
|
1,840,390
|
1,923,248
|
1,861,773
|
|||||||||
Total
|
$ |
4,086,669
|
$ |
3,974,837
|
$ |
3,867,155
|
||||||
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue
|
$ |
1,030,253
|
$ |
1,024,704
|
$ |
1,019,657
|
$ |
1,012,055
|
||||||||
Operating income
|
144,154
|
142,320
|
150,175
|
133,097
|
||||||||||||
Net income
|
122,027
|
131,448
|
124,279
|
101,692
|
||||||||||||
Basic earnings per share
|
0.90
|
0.96
|
0.90
|
0.73
|
||||||||||||
Diluted earnings per share
|
0.90
|
0.96
|
0.90
|
0.72
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue
|
$ |
1,002,588
|
$ |
1,002,198
|
$ |
992,340
|
$ |
977,711
|
||||||||
Operating income
|
68,819
|
105,518
|
131,827
|
122,143
|
||||||||||||
Net income
|
44,266
|
91,530
|
101,727
|
116,873
|
||||||||||||
Basic earnings per share
|
0.31
|
0.64
|
0.71
|
0.81
|
||||||||||||
Diluted earnings per share
|
0.31
|
0.64
|
0.70
|
0.80
|
|
Accounts Receivable
Allowances |
|
Valuation Allowances on
Net Deferred Tax Assets |
|
||||
Balance as of September 30, 2016
|
$ |
39,512
|
$ |
96,870
|
||||
Charged to costs and expenses
|
17,282
|
16,425
|
||||||
Charged to other accounts
|
1,985
|
5,000
|
(1) | |||||
Deductions
|
(30,053
|
)(3) |
(23,722
|
)(2) | ||||
Balance as of September 30, 2017
|
28,726
|
94,573
|
||||||
Charged to costs and expenses
|
6,134
|
18,173
|
||||||
Charged to other accounts
|
1,226
|
6,121
|
(1) | |||||
Deductions
|
(14,875
|
)(4) |
(6,140
|
) | ||||
Balance as of September 30, 2018
|
21,211
|
112,727
|
||||||
Charged to costs and expenses
|
22,260
|
1,009
|
||||||
Charged to other accounts
|
2,406
|
6,008
|
(1) | |||||
Deductions
|
(9,756
|
)(6) |
(34,211
|
)(5) | ||||
Balance as of September 30, 2019
|
$ |
36,121
|
$ |
85,533
|
||||
(1) | Includes valuation allowances on deferred tax assets incurred in connection with an acquisition. |
(2) | $2,416 of valuation allowances on deferred tax assets were written off against the related deferred tax assets, and the remaining deductions in the valuation allowances on net deferred tax assets were released to earnings. |
(3) | $3,008 of accounts receivable allowances were written off against the related accounts receivables, $5,291 of accounts receivable allowances were netted against deferred revenue, and the remaining deductions in the accounts receivable allowances were released to earnings. |
(4) | $6,659 of accounts receivable allowances were written off against the related accounts receivables, and the remaining deductions in the accounts receivable allowances were released to earnings. |
(5) | $7,588 of valuation allowances on deferred tax assets were written off against the related deferred tax assets, and the remaining deductions in the valuation allowances on net deferred tax assets were released to earnings. |
(6) | $3,539 of accounts receivable allowances were written off against the related accounts receivables, and the remaining deductions in the accounts receivable allowances were released to earnings. |
1 Year Amdocs Chart |
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