Washington,
☐ | 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 |
2020
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐
Title of Each Class | Trading Symbol | Name of Exchange on Which Registered | ||
Ordinary Shares, par value £0.01 | DOX | Nasdaq Global Select Market |
Ordinary Shares, par value £0.01 | 131,535,692 | |
(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 |
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 |
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
(in thousands, except share data) | ||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||
Revenue | $ | 4,169,039 | $ | 4,086,669 | $ | 3,974,837 | $ | 3,867,155 | $ | 3,718,229 | ||||||||||
Operating income | 594,758 | 569,746 | 428,307 | 517,333 | 483,141 | |||||||||||||||
Net income | 497,840 | 479,446 | 354,396 | 436,826 | 409,331 | |||||||||||||||
Basic earnings per share | 3.73 | 3.49 | 2.49 | 2.99 | 2.74 | |||||||||||||||
Diluted earnings per share | 3.71 | 3.47 | 2.47 | 2.96 | 2.71 | |||||||||||||||
Dividends declared per share(1) | 1.2675 | 1.105 | 0.970 | 0.855 | 0.755 |
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Cash, cash equivalents and short-term interest-bearing investments | $ | 983,940 | $ | 471,632 | $ | 519,216 | $ | 979,608 | $ | 1,095,723 | ||||||||||
Total assets | 6,341,621 | 5,292,826 | 5,347,815 | 5,279,380 | 5,331,355 | |||||||||||||||
Short-term and Long-term obligations | 750,000 | — | — | — | — | |||||||||||||||
Equity | 3,665,155 | 3,542,466 | 3,492,042 | 3,574,070 | 3,453,561 |
(1) | In the fourth quarter of fiscal 2012, we instituted a discretionary quarterly cash dividend |
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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 | ) | ||||||||
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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 | — | ||||||||||||
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Balance as of September 30, 2017 | 144,391 | $ | 4,410 | $ | 3,458,887 | $ | (4,365,124 | ) | ||||||||
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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 | — | ||||||||||||
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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 | — | ||||||||||||
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Balance as of September 30, 2019 | 134,773 | $ | 4,452 | $ | 3,667,662 | $ | (5,182,409 | ) | ||||||||
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Ordinary Shares | Additional Paid-In Capital | Treasury Stock | ||||||||||||||
Shares | Amount | |||||||||||||||
(in thousands) | ||||||||||||||||
Statement of Changes in Shareholders’ Equity Data: | ||||||||||||||||
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 | ) | ||||||||
Employee stock options exercised | 1,871 | 24 | 97,819 | — | ||||||||||||
Repurchase of shares(1) | (5,668 | ) | — | — | (360,912 | ) | ||||||||||
Issuance of restricted stock, net of forfeitures | 559 | 7 | — | — | ||||||||||||
Equity-based compensation expense related to employees | — | — | 42,434 | — | ||||||||||||
Balance as of September 30, 2020 | 131,535 | $ | 4,483 | $ | 3,807,915 | $ | (5,543,321 | ) | ||||||||
(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 |
We believe that our ability to compete with other vendors as well as with
related services and we have invested a great deal of time and resources in protecting the integrity and security of our products, services and the internal and external data that we manage. Despite our efforts to implement security measures, we cannot guarantee that our systems are fully protected from vulnerabilities related toIncreasing sophisticationCybersecurity threats are constantly expanding and frequencyevolving, thereby increasing the difficulty of cybersecurity incidents could mean thatdetecting and defending against them. For example, we might not discover a security breach or a loss of information for a significant amount of time after the breach, and might not be able to anticipate attacks or implement sufficient mitigating measures. Such cybersecurity incidents could include, but are not limited to, an attempt to gain unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. “Phishing” and other types of attempts to obtain unauthorized information or access are often sophisticated and difficult to detect or defeat. In addition, security measures in our products and services may be penetrated or bypassed by computer hackers and others who may gain unauthorized access to our or our customers’ or partners’ software, hardware, cloud offerings, networks, data or systems. These actors may use a wide variety of methods, which may include developing and deploying malicious software to attack our products and services and gain access to our networks and datacenters, using social engineering techniques or acting in a coordinated manner to launch distributed denial of service or other coordinated attacks. This is also true for third party data, products or services incorporated into our own. Data may also be accessed or modified improperly as a result of customer, partner or employee error or malfeasance and third parties may attempt to fraudulently induce customers, partners, employees or suppliers into disclosing sensitive information such as user names, passwords or other information in order to gain access to our data or IT systems or our customers’ or partners’ data or IT systems. Our exposure to cyber security and data privacy breach incidents may increase due to a large number of employees working remotely. Any of the foregoing occurrences could create system disruptions and cause shutdowns or denials of service or compromise data, including personal or confidential information, of us, our partners or our customers.
changing privacy and data protection requirements may cause us to incur substantial costs or require us to change our business practices. Additionally, new local privacy laws have been enacted recently as part of an overall trend, including in the Philippines U.S.A and Brazil. In the United States, there have been proposals for federal privacy legislation and state-level privacy laws have also recently been enacted, including the California Consumer Privacy Act. Noncompliance with our legal obligations relating to privacy and data protection could result in penalties, fines, legal proceedings by governmental entities or others, loss of reputation, legal claims by individuals and customers and significant legal and financial exposure and could affect our ability to retain and attract customers. In addition, Guernsey has introduced legislation similar in form to the GDPR, the Data Protection (Bailiwick of Guernsey) Law, 2017 (as amended) which will apply globally in a similar fashion as the GDPR to our activities conducted from and within Guernsey.
acquisitionsactivities will enhance our products and services or strengthen our competitive position, and they may adversely affect our results of operations.
In addition, the ongoing COVID-19 pandemic and the related potential for a prolonged downturn in the economy may impact our ability to grow acquired entities, which could result in reduction of their valuations. We cannot assure you that the acquisitions we have completed, strategic partnerships or alliances that we established, or any future acquisitions, partnerships or alliances that we may make, will enhance our products and services or strengthen our competitive position. Due to the multiple risks and difficulties associated with any acquisition,such activities, there can be no assurance that we will be successful in achieving our expected strategic, operating, and financial goals for any such acquisition.
acquisition partnerships or alliances.
operations, meet our commitments and compete for new customer contracts. In particular, wage costs in lower-cost markets where we have historically added personnel, such as India, are increasing and we may need to increase the levels of our employee compensation more rapidly than in the past to remain competitive.
pandemic.
our revenue as projects are performed, progress may vary significantly from project to project, and we believe that variations in quarterly revenue are sometimes attributable to the timing of initial order placements. Due to the relatively fixed nature of certain of our costs, a decline of revenue in any quarter could result in lower profitability for that quarter. In addition, fluctuations in our quarterly operating results could cause significant fluctuations in the market price of our ordinary shares.
For example,
hedging is prohibitively expensive. We cannot assure you that we will be able to effectively limit all of our exposure to currency exchange rate fluctuations.
The
and trademark laws offer only limited protection. In addition, the laws of some foreign countries do not protect our proprietary technology or allow enforcement of confidentiality covenants to the same extent as the laws of the United States.
risk, including the risk of counterclaims that allege that we infringe, misappropriate or otherwise violate the intellectual property of another party, regardless of whether we are successful in such proceedings.
problems, these provisions may not effectively protect us against such claims in all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages caused to them arising from the use of our products and services, even if our liability is limited by a license or other agreement. Claims and liabilities arising from customer problems could also damage our reputation, adversely affecting our business, results of operations and financial condition and the ability to obtain “Errors and Omissions” insurance.
provisional amounts we have recorded, and those adjustments may materially impact our provision for income taxes in the period in which the adjustments are made.
The executive offices of our principal subsidiary in the United States are located at 1390 Timberlake Manor Parkway, Chesterfield, Missouri 63017, and the telephone number at that location is
In August 2020, we acquired Openet, a provider of 5G charging, policy and cloud technologies, to extend our portfolio with open and network-centric technologies to help service providers differentiate in the 5G era. In November 2020, we signed an agreement for the divestiture of OpenMarket, an Amdocs subsidiary, for approximately $300 million in cash, as part of our strategy to divest a
methodologies such as cloud, microservices, DevOps, open source, bimodal operations, Site Reliability Engineering (SRE) and increasing amounts of automation through standard information technology (IT) tools, open APIs and artificial intelligence. As a result, our offerings enable service providers to efficiently and cost-effectively introduce new products and services, process orders, monetize data and content, support new business models and generally enhance their understanding of their customers. Our technology,further transform into digital service providers,the cloud, enhance their entertainment offerings, deploy and manage existing and next-generation networks, and serve their customers across all channels. In order to fulfill our responsibilities to our customers, we sometimes engage third-party vendors and system integrators providing complementary products and services, including hardware and software.
capabilities.
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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 Continued Expansion into New Geographies and Emerging Markets. |
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amdocsONE
In the second quarter of fiscal 2018, we relaunched our business offerings, as amdocsONE. amdocsONEkey competitive differentiators. Our existing and prospective customers in these markets vary dramatically, with some service providers serving subscriber bases already numbering in the hundreds of millions and others introducing communications services to communities for the first time. We believe this shift in focus to customer experience and on increasing bandwidth and providing content helps to create the wide spectrum of emerging market service providers that require offerings ranging from relatively
As part of amdocsONE, we offerincludes a comprehensive line of services designed to address every stage of a service provider’s lifecycle, from planning, delivery and implementation to ongoing support.support and operations. Our services include
amdocsONE consists of a combination of software and services that address service providers’ business and operational needs.
Therelationship, addressing key service provider business imperatives addressedimperatives:
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into existing and next generation networks, including 5G and edge-computing systems. software and services is designed to help service providers plan, build, launch, manage and optimize their mobile networks. Vendor and technology agnostic, this offering affords service providers the analytics and services capabilities needed to maximize network investments, accelerate and automate the roll out and upgrade of network technologies, and optimize network performance and capacity. |
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managing specific business operations processes, adopting DevOps, migrating applications to the cloud and orchestrating large-scale transformation projects. We also provide
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environments ranging from on premise to public cloud.
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IBM, as well as startup companies.
A1 Bulgaria | ||
A1 Telekom Austria | ||
Red Carpet Home Cinema | ||
Airtel Africa | Rostelecom | |
Altice France | Safaricom | |
Altice USA | ||
Astro | ||
AT&T | ||
AT&T Mexico | ||
Bell Canada | ||
Bharat Sanchar Nigam Limited | ||
Botswana Telecommunications Corporation | ||
BT | ||
Cable & Wireless | Telefónica | |
Capita Business Services | Telefónica | |
Cellcom | ||
CenturyLink | ||
Charter Communications | ||
Claro Brasil | ||
Claro Chile | ||
Claro Dominican Republic | ||
Claro Puerto Rico | ||
Comcast | ||
Deutsche Telekom | ||
EE | TIM Brasil | |
Elisa | T-Mobile US |
Eros Now | ||
FarEasTone | ||
UPC Broadband | ||
US Cellular | ||
UTS | ||
VEON | ||
KCOM | ||
Virgin Media | ||
Vodacom | ||
Kyivstar | Vodafone Germany | |
Vodafone Hungary | ||
Magyar Telekom | Vodafone Idea | |
Maxis | Vodafone Ireland | |
Vodafone Italy | ||
MTS | Vodafone Qatar | |
Vodafone Romania | ||
Vodafone Spain | ||
Vodafone Turkey | ||
Orange Liberia | Vodafone UK | |
Orange | VodafoneZiggo | |
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 | % |
2020 | 2019 | 2018 | ||||||||||
North America | 65.3 | % | 63.2 | % | 64.2 | % | ||||||
Europe | 14.7 | % | 14.7 | % | 14.4 | % | ||||||
Rest of the World | 20.0 | % | 22.1 | % | 21.4 | % |
Location | Area (Sq. Feet) | |||
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amdocsONE
In November 2020, we signed an agreement for the divestiture of OpenMarket, an Amdocs subsidiary, as part of our strategy to divest a
digital service providers within the framework of a hybrid IT environment, which requires them to rapidly introduce new cloud-native applications while still operating legacy systems.
success. However, an increase or a decrease in our total revenue would not necessarily result in a proportional increase or decrease in the levels of our research and development expenditures, which could affect our operating margin.
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 | — | |||||||||
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86.1 | 89.2 | 86.6 | ||||||||||
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Operating income | 13.9 | 10.8 | 13.4 | |||||||||
Interest and other expense, net | 0.0 | 0.2 | 0.1 | |||||||||
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Income before income taxes | 13.9 | 10.6 | 13.3 | |||||||||
Income taxes | 2.2 | 1.7 | 2.0 | |||||||||
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Net income | 11.7 | % | 8.9 | % | 11.3 | % | ||||||
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Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Revenue | 100 | % | 100 | % | 100 | % | ||||||
Operating expenses: | ||||||||||||
Cost of revenue | 66.1 | 64.9 | 65.3 | |||||||||
Research and development | 6.8 | 6.7 | 7.0 | |||||||||
Selling, general and administrative | 11.0 | 12.1 | 12.1 | |||||||||
Amortization of purchased intangible assets and other | 1.9 | 2.4 | 2.7 | |||||||||
Non-recurring charges | — | — | 2.1 | |||||||||
85.7 | 86.1 | 89.2 | ||||||||||
Operating income | 14.3 | 13.9 | 10.8 | |||||||||
Interest and other expense, net | 0.3 | 0.0 | 0.2 | |||||||||
Income before income taxes | 14.0 | 13.9 | 10.6 | |||||||||
Income taxes | 2.1 | 2.2 | 1.7 | |||||||||
Net income | 11.9 | % | 11.7 | % | 8.9 | % | ||||||
Year Ended September 30, | Increase (Decrease) | |||||||||||||||
2020 | 2019 | Amount | % | |||||||||||||
(In thousands) | ||||||||||||||||
Revenue | $ | 4,169,039 | $ | 4,086,669 | $ | 82,370 | 2.0 | % | ||||||||
Operating expenses: | ||||||||||||||||
Cost of revenue | 2,755,563 | 2,653,172 | 102,391 | 3.9 | ||||||||||||
Research and development | 282,042 | 273,936 | 8,106 | 3.0 | ||||||||||||
Selling, general and administrative | 458,539 | 492,457 | (33,918 | ) | (6.9 | ) | ||||||||||
Amortization of purchased intangible assets and other | 78,137 | 97,358 | (19,221 | ) | (19.7 | ) | ||||||||||
3,574,281 | 3,516,923 | 57,358 | 1.6 | |||||||||||||
Operating income | 594,758 | 569,746 | 25,012 | 4.4 | ||||||||||||
Interest and other expense, net | 11,436 | 1,859 | 9,577 | 515.2 | ||||||||||||
Income before income taxes | 583,322 | 567,887 | 15,435 | 2.7 | ||||||||||||
Income taxes | 85,482 | 88,441 | (2,959 | ) | (3.3 | ) | ||||||||||
Net income | $ | 497,840 | $ | 479,446 | $ | 18,394 | 3.8 | % | ||||||||
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 | ) | ||||||||||
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3,516,923 | 3,546,530 | (29,607 | ) | (0.8 | ) | |||||||||||
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Operating income | 569,746 | 428,307 | 141,439 | 33.0 | ||||||||||||
Interest and other expense, net | 1,859 | 6,766 | (4,907 | ) | (72.5 | ) | ||||||||||
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Income before income taxes | 567,887 | 421,541 | 146,346 | 34.7 | ||||||||||||
Income taxes | 88,441 | 67,145 | 21,296 | 31.7 | ||||||||||||
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Net income | $ | 479,446 | $ | 354,396 | $ | 125,050 | 35.3 | % | ||||||||
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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 | % | ||||||||
the increase in net income as well as to the decrease in the diluted weighted average number of shares outstanding which resulted from share repurchases. Please see also Note 2021 to our consolidated financial statements.
Fiscal Years Ended September 30, 2018 and 2017
The following is a tabular presentation of our results of operations for the fiscal year ended September 30, 2018, compared to the fiscal year ended September 30, 2017. Following the table is a discussion and analysis of our business and results of operations for these fiscal years.
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 | ||||||||||||
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3,546,530 | 3,349,822 | 196,708 | 5.9 | |||||||||||||
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Operating income | 428,307 | 517,333 | (89,026 | ) | (17.2 | ) | ||||||||||
Interest and other (expense) income, net | (6,766 | ) | (4,421 | ) | (2,345 | ) | 53.0 | |||||||||
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Income before income taxes | 421,541 | 512,912 | (91,371 | ) | (17.8 | ) | ||||||||||
Income taxes | 67,145 | 76,086 | (8,941 | ) | (11.8 | ) | ||||||||||
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Net income | $ | 354,396 | $ | 436,826 | $ | (82,430 | ) | (18.9 | )% | |||||||
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Revenue. Revenue increased by $107.7 million, or 2.8%, to $3,974.8 million in fiscal year 2018, from $3,867.2 million in fiscal year 2017. The majority of increase in revenue, which was net of a revenue decrease from the sale of directory systems, was attributable to increased activity in Europe, and to a lesser extent in the rest of the world. The 2.8% increase in revenue, was positively affected by activity related to acquisitions in fiscal year 2018, as well as approximately half percent from foreign exchange fluctuations.
Revenue attributable to the sale of amdocsONE increased by $121.0 million, or 3.2%, to $3,930.1 million in fiscal year 2018, from $3,809.1 million in fiscal year 2017. The majority of increase in revenue was attributable to increased activity in Europe, and to a lesser extent in the rest of the world. Revenue resulting from the sale of amdocsONE represented 98.9% and 98.5% of our total revenue in fiscal years 2018 and 2017, respectively.
Revenue attributable to the sale of directory systems decreased by $13.4 million, or 23.1%, to $44.7 million in fiscal year 2018, from $58.1 million in fiscal year 2017. This decrease was primarily attributable to continued slowness in the directory systems market and we anticipate revenue from the sale of directory systems will continue to decline in fiscal year 2019. Revenue from the sale of directory systems represented 1.1% and 1.5% of our total revenue in fiscal years 2018 and 2017, respectively.
In fiscal year 2018, revenue from customers in North America, Europe and the rest of the world accounted for 64.2%, 14.4% and 21.4%, respectively, of total revenue, compared to 65.9%, 12.6% and 21.5%, respectively, in fiscal year 2017. Revenue from customers in North America slightly increased in fiscal year 2018, while total revenue increased at a higher rate, which resulted in a decrease of revenue from customers in North America as a percentage of total revenue. The decrease in the percentage of revenue from customers in North America was primarily attributable to lower activity with AT&T. The decrease was partially offset by higher revenue from
other key customers in North America as we support the continuous digital transformation of the region’s communications, Pay TV and media companies and by activities related to fiscal year 2018 acquisitions. The increase in revenue from customers in Europe was primarily attributable to higher revenue from development and modernization activities, while we expand our presence in this region, as well as to positive foreign exchange fluctuations.
Revenue from customers in the rest of the world increased in fiscal year 2018, while total revenue increased at a higher rate, which resulted in similar level of revenue from customers in the rest of the world as a percentage of total revenue. The increase in revenue from customers in the rest of the world was driven by increased activity in Asia-Pacific as a result of our progress with new and existing customers which was partially offset by lower revenue from other regions within the rest of the world.
Cost of Revenue. Cost of revenue consists primarily of costs associated with providing services to customers, including compensation expense and costs of third-party products, as well as fee and royalty payments to software suppliers. Cost of revenue increased by $87.6 million, or 3.5%, to $2,595.3 million in fiscal year 2018, from $2,507.7 million in fiscal year 2017. As a percentage of revenue, cost of revenue increased to 65.3% in fiscal year 2018 from 64.8% in fiscal year 2017. The decrease in the gross margin in fiscal year 2018 compared to fiscal year 2017 was primarily attributable to a loss resulting from changes in certain acquisition-related liabilities measured at fair value recognized in fiscal year 2018 as well as to an opposite effect in fiscal year 2017 of a gain resulting from changes in certain acquisition-related liabilities measured at fair value recognized.
Excluding the changes in certain acquisition-related liabilities measured at fair value mentioned above, we were able to maintain our gross margin in fiscal year 2018.
Research and Development. Research and development expense is primarily comprised of compensation expense. Research and development expense increased by $17.5 million, or 6.8%, to $276.6 million in fiscal year 2018, from $259.1 million in fiscal year 2017. Research and development expense increased as a percentage of revenue from 6.7% in fiscal year 2017, to 7.0% in fiscal year 2018. We continue to expand our digital offering as well as our media offering, invest in our network related innovation and in developing cloud native offering. Our research and development efforts are a key element of our strategy and are essential to our success, and we intend to maintain our commitment to research and development. An increase or a decrease in our revenue would not necessarily result in a proportional increase or decrease in the levels of our research and development expenditures, which could affect our operating margin. Please see “Research and Development, Patents and Licenses.”
Selling, General and Administrative. Selling, general and administrative expense, which is primarily comprised of compensation expense, increased by $8.3 million, or 1.8%, to $481.1 million in fiscal year 2018, from $472.8 million in fiscal year 2017. Selling, general and administrative expense decreased as a percentage of revenue from 12.2% in fiscal year 2017, to 12.1% in fiscal year 2018. Selling, general and administrative expense may fluctuate from time to time, depending upon such factors as changes in our workforce and sales efforts and the results of any operational efficiency programs that we may undertake.
Amortization of Purchased Intangible Assets and Other. Amortization of purchased intangible assets and other decreased by $1.8 million, or 1.6%, to $108.5 million in fiscal year 2018, from $110.3 million in fiscal year 2017. The decrease in amortization of purchased intangible assets and other was primarily attributable to a decrease in amortization caused by fully amortized intangible assets partially offset by increase of amortization of intangible assets due to the acquisitions completed in fiscal year 2018.
Non-recurring Charges.Non-recurring charges for fiscal year 2018 were $85.1 million, while there were no such charges in the fiscal year 2017. Thenon-recurring charges include a loss incurred to settle a long-running legal dispute and restructuring charges which were primarily associated with recently completed acquisitions and
internal business realignment actions in North America. Please see Note 10 to our consolidated financial statements.
Operating Income. Operating income decreased by $89.0 million, or 17.2%, to $428.3 million in fiscal year 2018, from $517.3 million in fiscal year 2017. Operating income decreased as a percentage of revenue, from 13.4% in fiscal year 2017 to 10.8% in fiscal year 2018. The decrease in operating income as a percentage of revenue was attributable mainly to operating expenses, particularly tonon-recurring charges recognized in fiscal year 2018. Negative foreign exchange impacts on our operating income which resulted from negative impact on our operating expenses, were partially offset by positive foreign exchange impacts on our revenue.
Interest and Other (Expense) Income, Net. Interest and other (expense) income, net, changed from a net loss of $4.4 million in fiscal year 2017 to a net loss of $6.8 million in fiscal year 2018. This change in interest and other (expense) income, net, was primarily attributable to foreign exchange impacts.
Income Taxes. Income taxes for fiscal year 2018 were $67.1 million onpre-tax income of $421.5 million, resulting in an effective tax rate of 15.9%, compared to 14.8% in fiscal year 2017. Our effective tax rate may fluctuate between periods as a result of discrete items that may affect a particular period. Please see Note 11 to our consolidated financial statements.
Net Income. Net income decreased by $82.4 million, or 18.9%, to $354.4 million in fiscal year 2018, from $436.8 million in fiscal year 2017. The decrease in net income was primarily attributable tonon-recurring charges recognized in fiscal year 2018.
Diluted Earnings Per Share. Diluted earnings per share decreased by $0.49, or 16.6%, to $2.47 in fiscal year 2018, from $2.96 in fiscal year 2017. The decrease in diluted earnings per share was primarily attributable tonon-recurring charges, partially offset by the decrease in the diluted weighted average number of shares outstanding, which resulted from share repurchases. Please see also Note 20 to our consolidated financial statements.
non-GAAPfinancial measures with similar names used by other companies. flow and normalized free cash flow should only be reviewed in conjunction with the corresponding GAAP measures. We believe that theforegoing non-GAAP financial measures,free cash flow, when used in conjunction with the corresponding GAAP measure provideprovides useful information to investors and management relating to the amount of cash generated by the Company’s business operations.
Our policy is to retain sufficient cash balances in order to support our growth.
As a general long-term guideline, we expect to retain a portion of our free cash flow to support the growth of our business, including possible mergers and acquisitions. In fiscal year 2020, we plan to return to shareholders roughly 100% of our normalized free cash flow (i.e. before capital expenditures associated with the multiyear development of our new campus in Israel and other items), subject to financial performance, outlook and liquidity, the size of possible mergers and acquisitions activity, financial market conditions and prevailing industry condition, (see also Note 2 to our consolidated financial statements) through our ongoing share repurchase and dividend program. While having this plan in mind, our actual share repurchase activity and payment of future dividends, if any, may vary quarterly or annually.
the Revolving Credit Facility.
Acquisitions.
Expenditures.Expenditures$128.1$205.5 million and included proceeds, of mainly $9.7 million relating to refund of betterment levy in fiscal year 2019.2020. Our fiscal year 20192020 capital expenditures were mainly attributable to investments in our operating facilities and our development centers around the world. Regarding our expected investment in our new campus in Israel, please see Note 2 to our consolidated financial statements.
As of September 30, 2020, we had remaining authority to repurchase up to $678.3 million of our outstanding ordinary shares under the November 2019 plan.
Declaration Date | Dividends Per Ordinary Share | Record Date | Total Amount (In millions) | Payment Date | ||||||||
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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 | ||||||
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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 | ||||||
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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 | ||||||
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:
Declaration Date | Dividends Per Ordinary Share | Record Date | Total Amount (In millions) | Payment Date | ||||||||
August 5, 2020 | $ | 0.3275 | September 30, 2020 | $ | 43.1 | October 23, 2020 | ||||||
May 7, 2020 | $ | 0.3275 | June 30, 2020 | $ | 43.6 | July 24, 2020 | ||||||
February 4, 2020 | $ | 0.3275 | March 31, 2020 | $ | 43.7 | April 24, 2020 | ||||||
November 12, 2019 | $ | 0.285 | December 31, 2019 | $ | 38.4 | January 24, 2020 | ||||||
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 | ||||||
2021.
Directors will have the authority to reduce the quarterly dividend or discontinue the dividend program should it determine that doing so is in the best interests of our shareholders or is necessary pursuant to Guernsey law, any increase to the per share amount or frequency of the dividend would require shareholder approval.
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 | |||||||||||||||
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Total | $ | 440.5 | $ | 131.2 | $ | 183.4 | $ | 46.9 | $ | 79.0 | ||||||||||
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Contractual Obligations | Total | Less Than 1 Year | 1-3 Years | 4-5 Years | More Than 5 Years | |||||||||||||||
Long-term and Short-term debt and accrued interests | $ | 754.9 | $ | 104.9 | — | — | $ | 650.0 | ||||||||||||
Pension funding | 11.3 | 1.2 | 3.4 | 2.3 | 4.4 | |||||||||||||||
Purchase obligations | 174.8 | 72.5 | 87.3 | 15.0 | — | |||||||||||||||
Non-cancelable operating leases | 344.2 | 70.5 | 138.5 | 50.4 | 84.8 | |||||||||||||||
Construction of the new campus (see below) | 232.0 | 135.0 | 97.0 | — | — | |||||||||||||||
Total | $ | 1,517.2 | $ | 384.1 | $ | 326.2 | $ | 67.7 | $ | 739.2 | ||||||||||
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent. Actual results could differ materially from the estimates under different assumptions or conditions.
Significant
In accordance with business combinations accounting, we allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, as well as to
2018.
assets or the strategy of our overall business, significant negative industry or economic trends and significant decline in our share price for a sustained period. If the sum of expected future cash flows (undiscounted and without interest charges) of the long-lived assets is less than the carrying amount of such assets, an impairment would be recognized, and the assets would be written down to their estimated fair values, based on expected future discounted cash flows. There was no impairment of long-lived assets in fiscal years 2020, 2019 2018 or 2017.
2018.
Name | Age | Position | ||||
Robert A. Minicucci(1)(2)(3) | Chairman of the Board | |||||
Adrian Gardner(1) | Director and Chairman of the Audit Committee | |||||
James S. Kahan(3) | �� | Director and Chairman of the Nominating and Corporate Governance Committee | ||||
Richard T.C. LeFave(1)(2) | Director | |||||
Giora Yaron(4) | Director and Chairman of the Technology and Innovation Committee | |||||
Rafael de la Vega(2) | Director and Chairman of the Management Resources and Compensation Committee | |||||
Eli Gelman(4) | Director | |||||
John A. MacDonald(2)(4) | Director | |||||
Yvette Kanouff(4) | 55 | Director | ||||
Shuky Sheffer | Director, President and Chief Executive Officer | |||||
Tamar Rapaport-Dagim | Chief Financial Officer and Chief Operating Officer | |||||
Rajat Raheja | Division President, Amdocs Development Center India Pvt. Ltd. | |||||
Matthew Smith | 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 |
private equity firms. From 2014 to September 2016, Mr. Gardner served as Chief Financial Officer of International Personal Finance plc, an international home credit business. Mr. Gardner was Chief Financial Officer and a director of RSM Tenon Group PLC, a London-based accounting and advisory firm from 2011 until the acquisition in 2013 of its operating subsidiaries by Baker Tilly UK Holdings Limited, since renamed RSM UK Limited. Mr. Gardner was Chief Financial Officer of PA Consulting Group, a London-based business consulting firm from 2007 to 2011. Mr. Gardner was Chief Financial Officer and a director of ProStrakan Group plc, a pharmaceuticals company based in the United Kingdom and listed on the London Stock Exchange, from 2002 until 2007. Prior to joining ProStrakan, he was a Managing Director of Lazard LLC, based in London,
Julian A. Brodsky has been a director of Amdocs since 2003. Since 2011, Mr. Brodsky has served as a senior advisor to Comcast Corporation. Mr. Brodsky served as a director of Comcast Corporation from 1969 to 2011, and as Vice Chairman of Comcast Corporation from 1989 to 2011. From 1999 to 2004, Mr. Brodsky was Chairman of Comcast Ventures (formerly Comcast Interactive Capital, LP), a venture fund affiliated with Comcast. He is a director of RBB Fund, Inc. Mr. Brodsky brings to our Board of Directors deep and extensive knowledge of business in general and of the cable industry in particular gained through his longstanding executive leadership roles at Comcast, as well as financial expertise in capital markets, accounting and tax matters gained through his experience as Chief Financial Officer of Comcast and as a practicing CPA.
changes from a variety of data bases to a unified platform for real-time Big Data Analytics. Since 2010,Dr. Yaron is an active investor in various companies including, Salto, Afforata, Vulcan Security, Aqua Security, CyberPion and ArgonSec. Dr. Yaron has beenserved as the chairman of The Executive Council of Tel Aviv University an institution of higher education between 2010-2019 and a director of Ramot, which is the Tel Aviv University’s technology transfer company until 2015. Dr. Yaron has served on the advisory board of Rafael Advanced Defense Systems, Ltd., a developer of high-tech defense systems, since 2008, and on the advisory board of the Israeli Ministry of Defense since 2011. Dr. Yaron served from 1996 to 2006 as a member of the Board of Directors of Mercury Interactive, a publicly-traded IT optimization software company acquired by Hewlett-Packard, including as chairman from 2004 to 2006. We believe that Dr. Yaron’s qualifications to sit on our Board of Directors include his experience as an entrepreneur and the various leadership positions he has held on the boards of directors of software and technology companies.
Baroness Ariane de Rothschild has been a director of Amdocs since January 2018. Since January 2015, she has served as the Chairwoman of the Executive Committee of Edmond de Rothschild Group. Since 2009, Baroness de Rothschild has served as the vice-president of Edmond de Rothschild Group’s supervisory board and has also served as the vice-president of the Edmond de Rothschild Holding SA since 1999. Baroness de Rothschild now holds various board positions across Holding Benjamin & Edmond de Rothschild Pregny, Compagnie Benjamin de Rothschild Conseil S.A., Siaci Saint-Honoré Insurance Broker, and Barons and Baronne Associés. We believe Baroness de Rothschild’s qualifications to sit on our Board of Directors include her strong financial and banking expertise and her international business experience.
of Rogers Communications Inc. and BookJane Inc. From 2003 to 2008, Mr. MacDonald served as the President, Enterprise Division of MTS Allstream. Before that, between 2002 to 2003, Mr. MacDonald was a President and Chief Operating Officer AT&T Canada. AT&T Canada was
Directors was the Nasdaq closing price of our shares on the last trading day preceding the grant date. We also reimburse all of our
Eleven
promulgated by the SEC, and that each member of the Audit Committee is financially literate as required by the rules of Nasdaq. In particular, we believe that the professional experiences of Messrs. Gardner, LeFave and Minicucci provide important insights into their work on the Audit Committee. For example, we believe Mr. Gardner’s extensive experience as an accountant, technology investment banker and chief financial officer enables him to make valuable contributions to the Committee. In addition, we believe that Mr. LeFave’s experience as a seasoned Fortune 500 CIO and CISO for over 5 years provides a foundation of cyber awareness to the Audit Committee and also believe that Mr. LeFave’s post-graduate training at Harvard Business SchoolHBS in Audit Committee, and Board compensation best practices providesand recently completed HBS Corporate Director Certificate provide valuable contributions to the Committee. Similarly, we believe that Mr. Minucucci’sMinicucci’s experience as chief financial officer to a public company and treasurer of another public company have provided him with strong business acumen and strategic and financial expertise that benefits the Committee. The Audit Committee written charter is available on our website at
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 | |||||||||
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22,944 | 22,755 | 22,664 | ||||||||||
Management and Administration | 1,572 | 1,626 | 1,573 | |||||||||
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Total Workforce | 24,516 | 24,381 | 24,237 | |||||||||
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Fiscal Year, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Software and Information Technology, Sales and Marketing | ||||||||||||
Americas | 5,522 | 5,409 | 5,598 | |||||||||
EMEA | 5,957 | 6,063 | 6,306 | |||||||||
APAC | 12,815 | 11,472 | 10,851 | |||||||||
24,294 | 22,944 | 22,755 | ||||||||||
Management and Administration | 1,581 | 1,572 | 1,626 | |||||||||
Total Workforce | 25,875 | 24,516 | 24,381 | |||||||||
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 | % |
Name | Shares Beneficially Owned | Percentage Ownership | ||||||
FMR LLC(1) | 15,971,485 | 12.2 | % | |||||
Janus Henderson Group plc(2) | 7,541,445 | 5.8 | % | |||||
All directors and officers as a group (13 persons)(3) | 2,074,527 | 1.6 | % |
(1) | Based on a Schedule 13G/A filed by FMR LLC, or FMR, with the SEC on February |
(2) | Based on a Schedule 13G/A filed by Janus Henderson Group plc, or Janus Henderson, with the SEC on February sub-adviser to the Managed Portfolios, Janus Capital may be deemed to be the beneficial owner of sub-adviser to the Managed Portfolios, Intech may be deemed to be the beneficial owner of |
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, |
(3) | Includes options held by such directors and executive officers that are exercisable within 60 days after December |
In fiscal year 2020, we paid Mr. Brodsky $255,000 in equity and $80,000 in cash. The agreement with Mr. Brodsky will expire on January 31, 2021.
Since
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2018.
Benefits
ordinary shares. Such capital gain or loss will be long-term capital gain or loss if the U.S. holder has held the ordinary shares for more than one year at the time of the disposition. In the case of a U.S. holder that is an individual, trust or estate, long-term capital gains realized upon a disposition of the ordinary shares generally will be subject to a preferential U.S. federal income tax rate. Gains realized by a U.S. holder on a sale, exchange or other disposition of ordinary shares generally will be treated as U.S. source income for U.S. foreign tax credit purposes.
The deductibility of capital losses is subject to limitations.
available to the public on the SEC’s website at
Notional Value* | Fair Value of Derivatives | |||||||
Foreign exchange contracts (in millions) | $ | 1,103 | $ | 7.9 |
Notional Value* | Fair Value of Derivatives | |||||||
Foreign exchange contracts (in millions) | $ | 1,220 | $ | 20.6 |
(*) | 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. |
2019.
2019.
2019.
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 | ||||||||||
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Total | 6,655,823 | $ | 59.79 | 6,655,823 | $ | 239,171,042 | ||||||||||
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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) | ||||||||||||
10/1/19-10/31/19 | 349,599 | $ | 65.76 | 349,599 | $ | 216,182,714 | ||||||||||
11/1/19-11/30/19 | 296,733 | $ | 67.40 | 296,733 | $ | 996,183,385 | ||||||||||
12/1/19-12/31/19 | 662,269 | $ | 70.99 | 662,269 | $ | 949,171,077 | ||||||||||
01/1/20-01/31/20 | 358,021 | $ | 73.32 | 358,021 | $ | 922,921,938 | ||||||||||
02/1/20-02/29/20 | 411,341 | $ | 73.02 | 411,341 | $ | 892,884,731 | ||||||||||
03/1/20-03/31/20 | 1,093,501 | $ | 58.27 | 1,093,501 | $ | 829,171,117 | ||||||||||
04/1/20-04/30/20 | 355,694 | $ | 59.04 | 355,694 | $ | 808,171,772 | ||||||||||
05/1/20-05/31/20 | 318,639 | $ | 62.76 | 318,639 | $ | 788,172,482 | ||||||||||
06/1/20-06/30/20 | 301,222 | $ | 63.08 | 301,222 | $ | 769,171,166 | ||||||||||
07/1/20-07/31/20 | 402,900 | $ | 59.80 | 402,900 | $ | 745,077,821 | ||||||||||
08/1/20-08/31/20 | 500,030 | $ | 60.93 | 500,030 | $ | 714,609,201 | ||||||||||
09/1/20-09/30/20 | 618,016 | $ | 58.68 | 618,016 | $ | 678,343,867 | ||||||||||
Total | 5,667,965 | $ | 63.66 | 5,667,965 | $ | 678,343,867 | ||||||||||
(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. |
2019
2018
2018
2018
2018
Exhibit No. | Description | |
100.1 | The following financial information from Amdocs Limited’s Annual Report on Form 20-F for the year ended September 30, | |
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. |
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 | ||||
Revenue recognition for projects | ||
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 | ||
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 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 | |
Uncertain Tax Positions | ||
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, 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 the 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. |
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 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 |
As of September 30, | ||||||||
2019 | 2018 | |||||||
ASSETS |
| |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 471,632 | $ | 418,783 | ||||
Short-term interest-bearing investments | — | 100,433 | ||||||
Accounts receivable, net | 987,858 | 971,502 | ||||||
Prepaid expenses and other current assets | 216,084 | 229,999 | ||||||
|
|
|
| |||||
Total current assets | 1,675,574 | 1,720,717 | ||||||
Property and equipment, net | 525,314 | 496,585 | ||||||
Goodwill | 2,462,835 | 2,444,895 | ||||||
Intangible assets, net | 205,162 | 265,249 | ||||||
Other noncurrent assets | 423,941 | 420,369 | ||||||
|
|
|
| |||||
Total assets | $ | 5,292,826 | $ | 5,347,815 | ||||
|
|
|
| |||||
LIABILITIES AND EQUITY |
| |||||||
Current liabilities: | ||||||||
Accounts payable | $ | 176,508 | $ | 194,738 | ||||
Accrued expenses and other current liabilities | 647,657 | 706,637 | ||||||
Accrued personnel costs | 265,583 | 261,168 | ||||||
Deferred revenue | 118,182 | 132,414 | ||||||
|
|
|
| |||||
Total current liabilities | 1,207,930 | 1,294,957 | ||||||
Deferred income taxes and taxes payable | 207,508 | 224,572 | ||||||
Other noncurrent liabilities | 334,922 | 336,244 | ||||||
|
|
|
| |||||
Total liabilities | 1,750,360 | 1,855,773 | ||||||
|
|
|
| |||||
Equity: | ||||||||
Amdocs Limited Shareholders’ equity: | ||||||||
Preferred Shares — Authorized 25,000 shares; £0.01 par value; 0 shares issued and outstanding | — | — | ||||||
Ordinary Shares — Authorized 700,000 shares; £0.01 par value; 277,148 and 275,896 issued and 134,773 and 140,177 outstanding, in 2019 and 2018, respectively | 4,452 | 4,436 | ||||||
Additionalpaid-in capital | 3,667,662 | 3,587,625 | ||||||
Treasury stock, at cost — 142,375 and 135,719 ordinary shares in 2019 and 2018, respectively | (5,182,409 | ) | (4,784,352 | ) | ||||
Accumulated other comprehensive (loss) income | (2,547 | ) | (32,731 | ) | ||||
Retained earnings | 5,012,799 | 4,673,901 | ||||||
|
|
|
| |||||
Total Amdocs Limited shareholders’ equity | 3,499,957 | 3,448,879 | ||||||
Noncontrolling interests | 42,509 | 43,163 | ||||||
|
|
|
| |||||
Total equity | 3,542,466 | 3,492,042 | ||||||
|
|
|
| |||||
Total liabilities and equity | $ | 5,292,826 | $ | 5,347,815 | ||||
|
|
|
|
As of September 30, | ||||||||
2020 | 2019 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 983,188 | $ | 471,632 | ||||
Short-term interest-bearing investments | 752 | — | ||||||
Accounts receivable, net | 861,033 | 987,858 | ||||||
Prepaid expenses and other current assets | 229,604 | 216,084 | ||||||
Total current assets | 2,074,577 | 1,675,574 | ||||||
Property and equipment, net | 607,951 | 525,314 | ||||||
Lease assets | 295,494 | — | ||||||
Goodwill | 2,578,645 | 2,462,835 | ||||||
Intangible assets, net | 296,334 | 205,162 | ||||||
Other noncurrent assets | 488,620 | 423,941 | ||||||
Total assets | $ | 6,341,621 | $ | 5,292,826 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 110,142 | $ | 176,508 | ||||
Accrued expenses and other current liabilities | 593,608 | 647,657 | ||||||
Accrued personnel costs | 226,509 | 265,583 | ||||||
Short-term financing arrangements | 100,000 | — | ||||||
Lease liabilities | 59,100 | — | ||||||
Deferred revenue | 126,841 | 118,182 | ||||||
Total current liabilities | 1,216,200 | 1,207,930 | ||||||
Deferred income taxes and taxes payable | 258,487 | 207,508 | ||||||
Lease liabilities | 230,076 | — | ||||||
Long-term debt, net of unamortized debt issuance costs | 644,023 | — | ||||||
Other noncurrent liabilities | 327,680 | 334,922 | ||||||
Total liabilities | 2,676,466 | 1,750,360 | ||||||
Equity: | ||||||||
Amdocs Limited Shareholders’ equity: | ||||||||
Preferred Shares — Authorized 25,000 shares; £0.01 par value; 0 shares issued and outstanding | — | — | ||||||
Ordinary Shares — Authorized 700,000 shares; £0.01 par value; 279,578 and 277,148 issued and 131,535 and 134,773 outstanding, in 2020 and 2019, respectively | 4,483 | 4,452 | ||||||
Additional paid-in capital | 3,807,915 | 3,667,662 | ||||||
Treasury stock, at cost — 148,043 and 142,375 ordinary shares in 2020 and 2019, respectively | (5,543,321 | ) | (5,182,409 | ) | ||||
Accumulated other comprehensive income (loss) | 11,662 | (2,547 | ) | |||||
Retained earnings | 5,341,907 | 5,012,799 | ||||||
Total Amdocs Limited shareholders’ equity | 3,622,646 | 3,499,957 | ||||||
Noncontrolling interests | 42,509 | 42,509 | ||||||
Total equity | 3,665,155 | 3,542,466 | ||||||
Total liabilities and equity | $ | 6,341,621 | $ | 5,292,826 | ||||
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, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Revenue | $ | 4,169,039 | $ | 4,086,669 | $ | 3,974,837 | ||||||
Operating expenses: | ||||||||||||
Cost of revenue | 2,755,563 | 2,653,172 | 2,595,276 | |||||||||
Research and development | 282,042 | 273,936 | 276,615 | |||||||||
Selling, general and administrative | 458,539 | 492,457 | 481,093 | |||||||||
Amortization of purchased intangible assets and other | 78,137 | 97,358 | 108,489 | |||||||||
Non-recurring charges | — | — | 85,057 | |||||||||
3,574,281 | 3,516,923 | 3,546,530 | ||||||||||
Operating income | 594,758 | 569,746 | 428,307 | |||||||||
Interest and other expense, net | 11,436 | 1,859 | 6,766 | |||||||||
Income before income taxes | 583,322 | 567,887 | 421,541 | |||||||||
Income taxes | 85,482 | 88,441 | 67,145 | |||||||||
Net income | $ | 497,840 | $ | 479,446 | $ | 354,396 | ||||||
Basic earnings per share | $ | 3.73 | $ | 3.49 | $ | 2.49 | ||||||
Diluted earnings per share | $ | 3.71 | $ | 3.47 | $ | 2.47 | ||||||
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 ofavailable-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 | ||||||
|
|
|
|
|
|
Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Net income | $ | 497,840 | $ | 479,446 | $ | 354,396 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Net change in fair value of cash flow hedges(1) | 14,891 | 30,553 | (51,116 | ) | ||||||||
Net change in fair value of available-for-sale securities(2) | (2 | ) | 1,592 | (1,182 | ) | |||||||
Net actuarial (loss) gain on defined benefit plan(3) | (680 | ) | (1,961 | ) | 777 | |||||||
Other comprehensive income (loss), net of tax | 14,209 | 30,184 | (51,521 | ) | ||||||||
Comprehensive income | $ | 512,049 | $ | 509,630 | $ | 302,875 | ||||||
(1) | Net of tax (expense) benefit of |
(2) | Net of immaterial amount of tax benefit |
(3) | Net of tax (expense) benefit (11), $1,080 |
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 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss)(1) | Retained Earnings | Total Amdocs Limited Shareholders’ Equity | Non- controlling interests(2) | Total Equity | |||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||
Comprehensive income: | — | |||||||||||||||||||||||||||||||||||
Net income(2) | — | — | — | — | — | 497,840 | 497,840 | — | 497,840 | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 14,209 | — | 14,209 | — | 14,209 | |||||||||||||||||||||||||||
Comprehensive income | 512,049 | — | 512,049 | |||||||||||||||||||||||||||||||||
Employee stock options exercised | 1,871 | 24 | 97,819 | — | — | — | 97,843 | — | 97,843 | |||||||||||||||||||||||||||
Repurchase of shares | (5,668 | ) | — | — | (360,912 | ) | — | — | (360,912 | ) | — | (360,912 | ) | |||||||||||||||||||||||
Cash dividends declared ($1.2675 per ordinary share) | — | — | — | — | — | (168,732 | ) | (168,732 | ) | — | (168,732 | ) | ||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures | 559 | 7 | — | — | — | — | 7 | — | 7 | |||||||||||||||||||||||||||
Equity-based compensation expense related to employees | — | — | 42,434 | — | — | — | 42,434 | — | 42,434 | |||||||||||||||||||||||||||
Balance as of September 30, 2020 | 131,535 | $ | 4,483 | $ | 3,807,915 | $ | (5,543,321 | ) | $ | 11,662 | $ | 5,341,907 | $ | 3,622,646 | $ | 42,509 | $ | 3,665,155 | ||||||||||||||||||
(1) | As of September 30, 2020, 2019 $18,836, $3,945 |
(2) | In fiscal years 2020, 2019 and 2018, all of the Company’s net income is attributable to Amdocs Limited as the net income attributable to theNon-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 ASUNo. 2014-09 (ASC 606) and decrease of $3,860 to retained earnings due to adoption of ASUNo. 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 |
Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Cash Flow from Operating Activities: | ||||||||||||
Net income | $ | 497,840 | $ | 479,446 | $ | 354,396 | ||||||
Reconciliation of net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 198,409 | 205,772 | 211,224 | |||||||||
Amortization of debt issuance cost | 144 | — | — | |||||||||
Equity-based compensation expense | 42,434 | 38,550 | 47,476 | |||||||||
Deferred income taxes | 30,239 | (13,950 | ) | 25,098 | ||||||||
Loss from short-term interest-bearing investments | 0 | 737 | 1,324 | |||||||||
Net changes in operating assets and liabilities, net of amounts acquired: | ||||||||||||
Accounts receivable, net | 134,584 | 6,589 | (66,451 | ) | ||||||||
Prepaid expenses and other current assets | (10,815 | ) | 25,907 | (18,736 | ) | |||||||
Other noncurrent assets | (23,329 | ) | (1,635 | ) | 9,674 | |||||||
Lease assets and liabilities, net | (7,881 | ) | — | — | ||||||||
Accounts payable, accrued expenses and accrued personnel | (190,354 | ) | (60,042 | ) | 25,348 | |||||||
Deferred revenue | (15,184 | ) | (37,855 | ) | 7,650 | |||||||
Income taxes payable, net | (9,281 | ) | 6,025 | (31,036 | ) | |||||||
Other noncurrent liabilities | 11,330 | 6,833 | (8,718 | ) | ||||||||
Net cash provided by operating activities | 658,136 | 656,377 | 557,249 | |||||||||
Cash Flow from Investing Activities: | ||||||||||||
Purchase of property and equipment, net(1) | (205,510 | ) | (128,086 | ) | (231,146 | ) | ||||||
Proceeds from sale of short-term interest-bearing investments | 0 | 101,287 | 303,090 | |||||||||
Purchase of short-term interest-bearing investments | (753 | ) | — | (76,037 | ) | |||||||
Net cash paid for business and intangible assets acquisitions | (249,358 | ) | (60,572 | ) | (355,142 | ) | ||||||
Other | (6,104 | ) | 615 | (3,157 | ) | |||||||
Net cash used in investing activities | (461,725 | ) | (86,756 | ) | (362,392 | ) | ||||||
Cash Flow from Financing Activities: | ||||||||||||
Borrowings under financing arrangements | 450,000 | — | 120,000 | |||||||||
Payments under financing arrangements | (350,000 | ) | — | (120,000 | ) | |||||||
Proceeds from issuance of debt, net | 643,919 | — | — | |||||||||
Repurchase of shares | (360,912 | ) | (398,057 | ) | (419,228 | ) | ||||||
Proceeds from employee stock option exercises | 97,850 | 41,483 | 81,280 | |||||||||
Payments of dividends | (164,061 | ) | (147,616 | ) | (134,292 | ) | ||||||
Investment by noncontrolling interests, net(1) | 0 | (4,776 | ) | 47,013 | ||||||||
Payment of contingent consideration from a business acquisition | (1,411 | ) | (7,470 | ) | — | |||||||
Excess tax benefit from equity-based compensation and other | (240 | ) | (336 | ) | (458 | ) | ||||||
Net cash provided by (used in) financing activities | 315,145 | (516,772 | ) | (425,685 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 511,556 | 52,849 | (230,828 | ) | ||||||||
Cash and cash equivalents at beginning of year | 471,632 | 418,783 | 649,611 | |||||||||
Cash and cash equivalents at end of year | $ | 983,188 | $ | 471,632 | $ | 418,783 | ||||||
Supplementary Cash Flow Information | ||||||||||||
Interest and Income Taxes Paid | ||||||||||||
Cash paid for: | ||||||||||||
Income taxes, net of refunds | $ | 45,398 | $ | 75,790 | $ | 55,938 | ||||||
Interest(2) | 5,392 | 7,348 | 2,009 |
(1) | The amounts under “Purchase of property and equipment, net”, include proceeds of property and equipment of $194, $151 and $459 for the year ended September 30from sale, 2020 , 2019 and 2018 , respectively, and 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) |
(2) | The amounts under “Interest” |
cloud offering.
dollars.
The
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
quarterly) or upon achievement of contractual milestones. In cases where timing of revenue recognition significantly differs from the timing of invoicing, the Company is consideringconsiders whether a significant financing component exists. The Company elected to use the practical expedient in assessing the financing component in contracts where the time between cash collection and performance is less than one year.
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
Company had one customer with an accounts receivable balance of more than 10% of total accounts receivable, amounting to 19%, which was lower than its respective portion of total revenue.
In August 2017, the FASB issued ASU pursuantNovember 2018,March 2020, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU2020, and early adoption is permitted.2020. The Company currently expects that adoption of this ASU will not have a material impact on its consolidated financial statements.2020, and early adoption is permitted.2020. The Company currently expects that adoption of this ASU will not have a material impact on its consolidated financial statements.2020, and early adoption is permitted with specific limitations.2020. The Company currently expects that adoption of this ASU may result in changes to its financial statements disclosure andbut will not have a material impact on its consolidated financial statements.post retirementpost-retirement benefit plans. This ASU will be effective for the Company on October 1, 2020, and early adoption is permitted.2020. The Company expects that the adoption of this ASU will not have a material impact on its consolidated financial statements.AMDOCS LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollar and share amounts in thousands, except per share data)In June 2018, the FASB issued ASUNo. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting”. The ASU aligns the measurement and classification for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. This ASU will be effective for the Company on October 1, 2019, and early adoption is permitted with certain limitations. The Company expects that the adoption of this ASU will not have a material impact on its consolidated financial statements.2020, and earlier adoption by one year is permitted.2020. The Company currently expects that adoption of this ASU will not have a material impact on its consolidated financial statements.2020, and earlier adoption by one year is permitted.2020. The Company is currently evaluatingexpects that the impact of adoption of this ASU will not have a material impact on its consolidated financial statements. “Leases”This ASU, will be effective for the Company on October 1, 2019. The Company will adopt this ASU using a modified retrospective method. The Company is finalizing the implementation of this new standard including analyzing its lease contracts and evaluating changes to system, business processes and controls needed to support recognition, including currencies exposures and disclosure. The Company expects its leases designated as operating leases will be reported on the consolidated balance sheet upon adoption, asAs of October 1, 2019, the Company adopted this ASU using the modified retrospective transition approach. Prior period amounts were not adjusted. The Company elected the package of practical expedients which will increase its total assetsdoes not require reassessment of prior conclusions related to identifying leases, lease classification or initial direct costs. The Company also elected the practical expedient not to separateliabilities in total amount of approximately $260 millioninstead to $310 million. In addition,account for each separate lease component and thematerial portion of the Company’s leases are denominated in currencies other than the functional currency, the associatedsingle lease liabilities will be remeasured using the current exchange rate in the future reporting periods, which may result, if not fully hedged, in foreign exchange gains or losses.component for its real estate and vehicle leases. The Company currently expects that the adoption of this ASU willdid not have a material impact on its consolidated statement of income and on its consolidated statement of cash flow.AdoptionNew Accounting StandardsIn December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB No. 118”) in response to the new tax legislation in the United States (The Tax Cuts and Jobs Act or ��The Act”). The Act, which was enacted on December 22, 2017, reduces the US federal corporate tax rate from 35% to 21%, which requires the payment of aone-time transition tax on earnings of certain foreign subsidiaries and creates new taxes on certain foreign sourced earnings. The guidance provided in SAB No.118 allowed the Company to record provisional amounts of income tax effects of the Act during aone-year measurement period. As of December 31, 2018, the Company has completed its accounting for the tax effects of enactment of the Act and made a reasonable estimate of the effects on its existing deferred tax balances and theone-time transition tax. There was no material impactadopting this ASU on the Company’s consolidated financial statements, see alsoConsolidated
September 30, 2019
to ASC 842 1116 to the consolidated financial statements.statements for further details.AMDOCS LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollar and share amounts in thousands, except per share data)January 2017,June 2018, the FASB issued ASU2017-01,2018-07,Clarifying the Definition of a Businessrevisesaligns the measurement and narrowsclassification for share-based payments todefinition of a business and provides a framework that gives entities a basisguidance for making reasonable judgments about whether a transaction involves an asset or a business.share-based payments to employees, with certain exceptions. The Company prospectively adopted this ASU effective October 1, 2018.2019. As of the date of the adoption there was no impact on the Company’s consolidated financial statements.In October 2016, the FASB issued ASUNo. 2016-16,“Intra-Entity Transfers of Assets Other Than Inventory” The ASU requires the Company to recognize the income tax consequences of intra-entity transfers, other than inventory, when the transfer occurs. The Company adopted this ASU as of October 1, 2018, using the modified retrospective transition approach, which resulted in a cumulative adjustment of $3,860 decrease of the retained earnings.In August 2016, the FASB issued ASUNo. 2016-15, “Classification of Certain Cash Receipts and Cash Payments”.TheASU intends to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The Company retrospectively adopted this ASU effective October 1, 2018, which resulted in the classification of certain cash payments of contingent consideration in financing activities on the Company’s consolidated statement of cash flow during the year ended September 30, 2019. There was no such impact during the year ended September 30, 2018.In January 2016, the FASB issued ASUNo. 2016-01, “Financial Instruments — Overall”. The ASU updates certain aspects of recognition and measurement of financial assets and financial liabilities. The ASU affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The Company prospectively adopted this ASU effective October 1, 2018. There was no material impact on the Company’s consolidated financial statements, see also Note 5 to the consolidated financial statements.In May 2014, the FASB issued ASUNo. 2014-09, or ASC 606, “Revenue from Contracts with Customers”. The ASU on revenue from contracts with customers, or the new revenue standard, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. Prior to the adoption of ASC 606 the Company developed a transition plan, including changes to policies, processes and internal controls, as well as system enhancements to generate the information necessary for new disclosure requirements and recently completed an assessment to identify the potential areas of impact that this new revenue recognition standard will have on its consolidated financial statement and internal control environment. As part of the assessment, the Company reviewed a representative sample of its contracts across its various customers and geographies to identify potential differences that could result from applying the requirements of the new standard. As of October 1, 2018, the Company adopted this ASU using the modified retrospective transition approach. This method was applied to contracts that were not complete as of the date of adoption.The cumulative impact of adopting ASC 606, which was immaterial, was a net increase in the opening balance of retained earnings as of October 1, 2018, of $14,294, net of tax, from total amount of $4,673,901 to $4,688,195. The impact was primarily related to (i) the removal of the limitation on contingent revenue, as revenue allocated to satisfied performance obligations is no longer restricted to the amount that is not contingent upon the satisfaction of additional performance obligations (ii) the change of definition of contract term to represent the period for which enforceable rights and obligations exist, and (iii) the capitalization and amortization of certain sales commissions in accordance with ASC 606.
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
The following table depicts the impact of adoption as of October 1, 2018, on the Company’s consolidated balance sheet:
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 |
The impact of adopting the new standard for the year ended September 30, 2019, was an increase of approximately $26,096 to revenue, most of which was recorded against Account receivable — unbilled and decrease of approximately $11,051 to cost of revenue most of which was recorded against Accrued expenses and other current liabilities.
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
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, 2020 | September 30, 2019 | |||||||
Accounts receivable — billed and $36,121 of September 30, 2020 and 2019, respectively) | $ | 685,485 | $ | 760,797 | ||||
Accounts receivable — unbilled (current) | $ | 175,548 | $ | 227,061 | ||||
Accounts receivable — unbilled (non-current) | $ | 42,089 | $ | 16,987 | ||||
Total Accounts receivable — unbilled | $ | 217,637 | $ | 244,048 | ||||
Deferred revenue (current) | $ | (126,841 | ) | $ | (118,182 | ) | ||
Deferred revenue (non-current) | $ | (16,529 | ) | $ | (23,785 | ) | ||
Total Deferred revenue | $ | (143,370 | ) | $ | (141,967 | ) |
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
As of September 30, 2019 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Available-for-sale securities: | ||||||||||||||||
Money market funds | $ | 69,370 | $ | — | $ | — | $ | 69,370 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totalavailable-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 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Totalavailable-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 | |||||||
|
|
|
|
|
|
|
|
2019:
As of September 30, 2020 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Available-for-sale securities: | ||||||||||||||||
Money market funds | $ | 558,633 | $ | — | $ | — | $ | 558,633 | ||||||||
Corporate bonds | — | 752 | — | 752 | ||||||||||||
Total available-for-sale securities | 558,633 | 752 | — | 559,385 | ||||||||||||
Equity Investments | — | — | 24,211 | 24,211 | ||||||||||||
Derivative financial instruments, net | — | 20,636 | — | 20,636 | ||||||||||||
Other liabilities | — | — | (19,641 | ) | (19,641 | ) | ||||||||||
Total | $ | 558,633 | $ | 21,388 | $ | 4,570 | $ | 584,591 | ||||||||
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 Investments | — | — | 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 | |||||||
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
prices that are corroborated by observable market data and other observable market information. The Company’s
The increase in Level 3 assets is as a result of changes in the fair value was recorded in the consolidated statement of income.
In Fiscal year 2020, the Company didn’t have any sale of
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 | ||||||||
|
|
|
|
|
|
|
|
As of September 30, 2020 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Money market funds | $ | 558,633 | $ | 0 | $ | 0 | $ | 558,633 | ||||||||
Corporate bonds | 754 | 0 | 2 | 752 | ||||||||||||
Total(1) | $ | 559,387 | $ | 0 | $ | 2 | $ | 559,385 | ||||||||
(1) |
|
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 | ||||||||
|
|
|
|
|
|
|
|
As of September 30, 2019 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Money market funds | $ | 69,370 | $ | 0 | $ | 0 | $ | 69,370 | ||||||||
Total(1) | $ | 69,370 | $ | 0 | $ | 0 | $ | 69,370 | ||||||||
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
(1) |
|
2018. Realized gains and losses on
Market Value | ||||
Due within one year | $ | 69,370 | ||
|
|
Market Value | ||||
Due within one year | $ | 558,633 | ||
1 to 2 years | 0 | |||
2 to 3 years | 752 | |||
3 to 4 years | 0 | |||
Thereafter | 0 | |||
$ | 559,385 | |||
Notional Value* | ||||
Foreign exchange contracts | $ | 1,103,169 |
Notional | ||||
Foreign exchange contracts | $ | 1,220,000 |
(*) | 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 | ) | |||
|
|
|
|
As of September 30, | ||||||||
2020 | 2019 | |||||||
Derivatives designated as hedging instruments | ||||||||
Prepaid expenses and other current assets | $ | 21,153 | $ | 9,344 | ||||
Other noncurrent assets | 1,317 | 585 | ||||||
Accrued expenses and other current liabilities | (2,089 | ) | (2,977 | ) | ||||
Other noncurrent liabilities | 0 | (2,072 | ) | |||||
20,381 | 4,880 | |||||||
Derivatives not designated as hedging instruments | ||||||||
Prepaid expenses and other current assets | 3,068 | 5,086 | ||||||
Accrued expenses and other current liabilities | (2,813 | ) | (2,076 | ) | ||||
255 | 3,010 | |||||||
Net fair value | $ | 20,636 | $ | 7,890 | ||||
(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 | |||||
|
|
|
|
|
|
Gains (Losses) Reclassified from Other Comprehensive Income (Loss) (Effective Portion) Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Line item in consolidated statements of income: | ||||||||||||
Revenue | $ | 834 | $ | 19 | $ | (1,129 | ) | |||||
Cost of revenue | 4,166 | (8,627 | ) | 15,877 | ||||||||
Research and development | 1,646 | (2,059 | ) | 3,127 | ||||||||
Selling, general and administrative | 2,500 | (2,309 | ) | 3,462 | ||||||||
Total | $ | 9,146 | $ | (12,976 | ) | $ | 21,337 | |||||
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 | |||||
|
|
|
|
|
|
Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Net unrealized gain (loss) on cash flow hedges, net of tax, beginning of period | $ | 3,945 | $ | (26,608 | ) | $ | 24,508 | |||||
Changes in fair value of cash flow hedges, net of tax | 21,903 | 19,228 | (31,908 | ) | ||||||||
Reclassification of (gain) loss into earnings, net of tax | (7,012 | ) | 11,325 | (19,208 | ) | |||||||
Net unrealized gain (loss) on cash flow hedges, net of tax, end of period | $ | 18,836 | $ | 3,945 | $ | (26,608 | ) | |||||
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 | ) | |||||
|
|
|
|
|
|
(Losses) Gains Recognized in Income Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Line item in statements of income: | ||||||||||||
Cost of revenue | $ | (718 | ) | $ | 401 | $ | (4,577 | ) | ||||
Research and development | (341 | ) | 14 | (736 | ) | |||||||
Selling, general and administrative | (559 | ) | 294 | (950 | ) | |||||||
Interest and other expense, net | 255 | 5,845 | 7,038 | |||||||||
Income taxes | (679 | ) | (528 | ) | 1,581 | |||||||
Total | $ | (2,042 | ) | $ | 6,026 | $ | 2,356 | |||||
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 September 30, | ||||||||
2020 | 2019 | |||||||
Computers, related equipment and software | $ | 1,163,807 | $ | 1,109,465 | ||||
Building and land(1) | 177,255 | 109,446 | ||||||
Leasehold improvements | 234,777 | 230,817 | ||||||
Furniture, fixtures and other | 51,831 | 47,813 | ||||||
Property and equipment, gross | 1,627,670 | 1,497,541 | ||||||
Less accumulated depreciation | (1,019,719 | ) | (972,227 | ) | ||||
Property and equipment, net | $ | 607,951 | $ | 525,314 | ||||
(1) | For more details, see also note 2. |
In fiscal year 2018, the Company purchased a land and capitalized costs related to the new building, see also Note 2.
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 | ||
|
|
As of September 30, 2018 | $ | 2,444,895 | ||
Goodwill resulting from acquisitions(1) | 17,484 | |||
Other | 456 | |||
As of September 30, 2019 | $ | 2,462,835 | ||
Goodwill resulting from acquisitions(2) | 118,628 | |||
Other | (2,818 | ) | ||
As of September 30, 2020 | $ | 2,578,645 | ||
(1) | Mainly relates to the allocating the total purchase price forT TS , based on estimated fair values, the Company recorded |
and $1,300 of trade mark to be amortizedover four years. | |
(2) | Mainly relates to the acquisition of Openet. In allocating the total preliminary purchase price for Openet, based on estimated fair values, the Company recorded $102,898 of goodwill, $40,409 of customer relationships to be amortized over approximately eight years, $53,614 of core technology to be amortized over approximately five years and $2,594 of trade mark to be amortized over two years. |
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
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 | |||||
|
|
|
|
|
|
|
Gross | Accumulated Amortization | Net | ||||||||||
September 30, 2020 | ||||||||||||
Core technology | $ | 896,814 | $ | (735,534 | ) | $ | 161,280 | |||||
Customer relationships | 642,575 | (517,670 | ) | 124,905 | ||||||||
Other | 47,540 | (37,391 | ) | 10,149 | ||||||||
Total | $ | 1,586,929 | $ | (1,290,595 | ) | $ | 296,334 | |||||
September 30, 2019 | ||||||||||||
Core technology | $ | 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 | |||||
Amount | ||||
Fiscal year: | ||||
2021 | $ | 78,345 | ||
2022 | 63,819 | |||
2023 | 46,672 | |||
2024 | 38,954 | |||
2025 | 34,534 | |||
Thereafter | 34,010 | |||
Total | $ | 296,334 | ||
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 | ||||||
|
|
|
|
|
|
Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Current | $ | 55,243 | $ | 102,391 | $ | 42,047 | ||||||
Deferred | 30,239 | (13,950 | ) | 25,098 | ||||||||
Income taxes | $ | 85,482 | $ | 88,441 | $ | 67,145 | ||||||
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 | ||||
|
|
|
|
As of September 30, | ||||||||
2020 | 2019 | |||||||
Deferred tax assets: | ||||||||
Deferred revenue | $ | 25,252 | $ | 30,659 | ||||
Employee compensation and benefits | 75,689 | 76,327 | ||||||
Intangible assets, computer software and intellectual property | 18,705 | 11,805 | ||||||
Tax credits, net capital and operating loss carryforwards | 142,718 | 153,062 | ||||||
Lease liabilities | 71,204 | — | ||||||
Other | 52,611 | 73,249 | ||||||
Total deferred tax assets | 386,179 | 345,102 | ||||||
Valuation allowances | (69,455 | ) | (85,533 | ) | ||||
Total deferred tax assets, net | 316,724 | 259,569 | ||||||
Deferred tax liabilities: | ||||||||
Anticipated withholdings on subsidiaries’ earnings | (81,489 | ) | (70,961 | ) | ||||
Intangible assets, computer software and intellectual property | (114,772 | ) | (104,926 | ) | ||||
Lease assets | (69,215 | ) | — | |||||
Other | (90,825 | ) | (81,736 | ) | ||||
Total deferred tax liabilities | (356,301 | ) | (257,623 | ) | ||||
Net deferred tax (liabilities) assets | $ | (39,577 | ) | $ | 1,946 | |||
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 | % | ||||||
|
|
|
|
|
|
Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Statutory Guernsey tax rate | 0 | % | 0 | % | 0 | % | ||||||
Foreign taxes(1) | 14.7 | 15.6 | 15.9 | |||||||||
Effective income tax rate | 14.7 | % | 15.6 | % | 15.9 | % | ||||||
(1) |
|
(1) | Foreign taxes for the year ended Sep 30, 2019: |
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
Foreign taxes for the year ended Sep 30, 2018:
(1) | Foreign taxes for the year ended Sep 30, 2018: |
During fiscal year 2018, the net increase in valuation allowances was $18,154, which related to the uncertainty of realizing tax benefits primarily for tax credits, net capital and operating loss carryforwards related to certain of the Company’s subsidiaries. As of September 30, 2018, the Company had tax credits, net capital and operating loss carryforwards of $894,997 of which $322,816 have expiration dates through 2038, and the remainder do not expire.
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
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 | ||||||
|
|
|
|
|
|
Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Balance at beginning of fiscal year | $ | 169,322 | $ | 187,646 | $ | 193,024 | ||||||
Additions based on tax positions related to the current year | 23,154 | 19,530 | 20,329 | |||||||||
Additions | 23,292 | 27,558 | 6,743 | |||||||||
Reductions for tax positions of prior years | (15,214 | ) | (2,578 | ) | (10,548 | ) | ||||||
Settlements with tax authorities(1) | (29,400 | ) | (37,672 | ) | (3,880 | ) | ||||||
Lapse of statute of limitations | (2,968 | ) | (25,162 | ) | (18,022 | ) | ||||||
Balance at end of fiscal year | $ | 168,186 | $ | 169,322 | $ | 187,646 | ||||||
(1) | The changes in the year ended September 30, |
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
had remaining authority to repurchase up to $239,171$678,344 of its outstanding ordinary shares under the November 20172019 plan. On November 12, 2019, the Company’s Board of Directors adopted another share repurchase plan for the repurchase of up to an additional $800,000 of Company’s outstanding ordinary shares which brings the unused authorization as of September 30, 2019 to $1,039,171. The November 2019 plan authorizations have no expiration date and permit the Company to purchase its ordinary shares in open market or privately negotiated transactions at times and prices that it considers appropriate.
the Revolving Credit Facility.
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 | |||||
|
|
|
|
As of September 30, | ||||||||
2020 | 2019 | |||||||
Ongoing accrued expenses | $ | 217,133 | $ | 259,661 | ||||
Project-related provisions | 121,658 | 140,701 | ||||||
Taxes payable | 25,739 | 28,335 | ||||||
Dividends payable(1) | 43,084 | 38,413 | ||||||
Derivative instruments(2) | 4,902 | 5,053 | ||||||
Other | 181,092 | 175,494 | ||||||
$ | 593,608 | $ | 647,657 | |||||
(1) | The amounts payable as a result of the August |
(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, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Interest income | $ | (4,233 | ) | $ | (6,225 | ) | $ | (6,602 | ) | |||
Interest expense(1) | 10,427 | 3,911 | 2,764 | |||||||||
Foreign exchange loss | 3,382 | 7,860 | 6,173 | |||||||||
Other, net | 1,860 | (3,687 | ) | 4,431 | ||||||||
$ | 11,436 | $ | 1,859 | $ | 6,766 | |||||||
(1) | For further details, see Note 13 to the consolidated financial statements. |
Note 15 — Interest and other expense, net
Interest and other expense, net, consists of the following:
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 | ) | ||||
|
|
|
|
|
|
Note 16 — Contingencies and Commitments
Commitments
Year ended September 30, 2020 | ||||
Total net lease cost(*) | $ | 91,025 |
(*) | Variable lease cost is immaterial |
Year ended September 30, 2020 | |||||
Lease liability payments | $ | 88,272 | |||
Lease assets obtained in exchange for liabilities | $ | 87,820 |
As of September 30, 2020 | ||||
Weighted average remaining lease term—Operating leases | 6.8 Years | |||
Weighted average discount rate—Operating leases | 3.5 | % |
For the year ended September 30, | ||||
2021 | $ | 70,485 | ||
2022 | 63,315 | |||
2023 | 41,799 | |||
2024 | 33,343 | |||
2025 | 28,088 | |||
Thereafter | 107,216 | |||
Total lease payments | $ | 344,246 | ||
Less: imputed interest | (55,070 | ) | ||
Present value of lease liabilities | $ | 289,176 | ||
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 | |||
Commitments
Since
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
claims, and the proceedings continued. The District Court scheduled a tentative jury trial date for late October 2018. The Company filed a motion for summary judgment with the District Court during fiscal year 2018 and the District Court partially granted the motion with respect to two trade secrets. In
2018.
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
2018.
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 | |||||
|
|
Number of Share Options | Weighted Average Exercise Price | |||||||
Outstanding as of October 1, 2019 | 6,837 | $ | 56.65 | |||||
Granted | 1,133 | 69.53 | ||||||
Exercised | (1,871 | ) | 52.28 | |||||
Forfeited | (383 | ) | 62.33 | |||||
Outstanding as of September 30, 2020(1) | 5,716 | $ | 60.26 | |||||
Exercisable as of September 30, 2020(1) | 2,401 | $ | 54.72 | |||||
(1) | As of September 30, |
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
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 | |||||
|
|
2020:
Number of Shares | Weighted Average Grant Date Fair Value | |||||||
Outstanding as of October 1, 2019 | 937 | $ | 61.70 | |||||
Granted | 659 | 70.03 | ||||||
Vested | (425 | ) | 61.72 | |||||
Forfeited | (74 | ) | 63.61 | |||||
Outstanding as of September 30, 2020 | 1,097 | $ | 66.57 | |||||
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 | |||||||||
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| |||||||
Total | $ | 38,550 | $ | 47,476 | $ | 44,539 | ||||||
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Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Cost of revenue | $ | 20,005 | $ | 19,879 | $ | 18,253 | ||||||
Research and development | 3,058 | 2,714 | 3,476 | |||||||||
Selling, general and administrative | 19,371 | 15,957 | 25,747 | |||||||||
Total | $ | 42,434 | $ | 38,550 | $ | 47,476 | ||||||
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 |
Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Risk-free interest rate(1) | 1.41 | % | 2.64 | % | 2.30 | % | ||||||
Expected life of stock options(2) | 4.50 | 4.50 | 4.50 | |||||||||
Expected volatility(3) | 17.3 | % | 17.8 | % | 15.0 | % | ||||||
Expected dividend yield(4) | 1.75 | % | 1.82 | % | 1.51 | % | ||||||
Fair value per option | $ | 8.85 | $ | 9.13 | $ | 8.70 |
(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. |
AMDOCS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollar and share amounts in thousands, except per share data)
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 | ||||||
|
2018:
Declaration Date | Dividends Per Ordinary Share | Record Date | Total Amount | Payment Date | ||||||||||||
August 5, 2020 | $ | 0.3275 | September 30, 2020 | $ | 43,084 | October 23, 2020 | ||||||||||
May 7, 2020 | $ | 0.3275 | June 30, 2020 | $ | 43,568 | July 24, 2020 | ||||||||||
February 4, 2020 | $ | 0.3275 | March 31, 2020 | $ | 43,723 | April 24, 2020 | ||||||||||
November 12, 2019 | $ | 0.285 | December 31, 2019 | $ | 38,357 | January 24, 2020 | ||||||||||
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 | ||||||||||
22, 2021.
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 | ) | ||||||
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Numerator for basic earnings per common share | $ | 476,151 | $ | 351,746 | $ | 433,309 | ||||||
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| |||||||
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 | ) | ||||||
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Numerator for diluted earnings per common share | $ | 476,163 | $ | 351,760 | $ | 433,333 | ||||||
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| |||||||
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 | ) | ||||||
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| |||||||
Weighted average number of common shares — basic | 136,474 | 141,357 | 144,841 | |||||||||
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Effect of dilutive stock options granted | 691 | 1,282 | 1,414 | |||||||||
Weighted average number of common shares — diluted | 137,165 | 142,639 | 146,255 | |||||||||
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| |||||||
Basic earnings per common share | $ | 3.49 | $ | 2.49 | $ | 2.99 | ||||||
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Diluted earnings per common share | $ | 3.47 | $ | 2.47 | $ | 2.96 | ||||||
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Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Numerator: | ||||||||||||
Net income | $ | 497,840 | $ | 479,446 | $ | 354,396 | ||||||
Net income and dividends attributable to participating restricted shares | (3,663 | ) | (3,295 | ) | (2,650 | ) | ||||||
Numerator for basic earnings per common share | $ | 494,177 | $ | 476,151 | $ | 351,746 | ||||||
Undistributed income allocated to participating restricted shares | 2,417 | 2,252 | 1,617 | |||||||||
Undistributed income reallocated to participating restricted shares | (2,406 | ) | (2,240 | ) | (1,603 | ) | ||||||
Numerator for diluted earnings per common share | $ | 494,188 | $ | 476,163 | $ | 351,760 | ||||||
Denominator: | ||||||||||||
Weighted average number of shares outstanding — basic | 133,590 | 137,418 | 142,422 | |||||||||
Weighted average number of participating restricted shares | (983 | ) | (944 | ) | (1,065 | ) | ||||||
Weighted average number of common shares — basic | 132,607 | 136,474 | 141,357 | |||||||||
Effect of dilutive stock options granted | 642 | 691 | 1,282 | |||||||||
Weighted average number of common shares — diluted | 133,249 | 137,165 | 142,639 | |||||||||
Basic earnings per common share | $ | 3.73 | $ | 3.49 | $ | 2.49 | ||||||
Diluted earnings per common share | $ | 3.71 | $ | 3.47 | $ | 2.47 | ||||||
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 | |||||||||
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| |||||||
Total | $ | 4,086,669 | $ | 3,974,837 | $ | 3,867,155 | ||||||
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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 | ||||||
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| |||||
Total | $ | 525,314 | $ | 496,585 | ||||
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Year Ended September 30, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Revenue | ||||||||||||
North America (mainly United States) | $ | 2,720,911 | $ | 2,582,719 | $ | 2,550,234 | ||||||
Europe | 613,751 | 598,731 | 572,196 | |||||||||
Rest of the world | 834,377 | 905,219 | 852,407 | |||||||||
Total | $ | 4,169,039 | $ | 4,086,669 | $ | 3,974,837 | ||||||
As of September 30, | ||||||||
2020 | 2019 | |||||||
Long-lived Assets(1) | ||||||||
Europe | $ | 211,292 | $ | 206,086 | ||||
North America | 104,918 | 95,876 | ||||||
Rest of the world: | ||||||||
Israel ( 2) | 237,561 | 168,493 | ||||||
India | 38,706 | 36,546 | ||||||
Others | 15,474 | 18,313 | ||||||
Total | $ | 607,951 | $ | 525,314 | ||||
(1) | Property and equipment, net. |
Managed services arrangements Others Total Year Ended September 30, 2019 2018 2017 $ 2,246,279 $ 2,051,589 $ 2,005,382 1,840,390 1,923,248 1,861,773 $ 4,086,669 $ 3,974,837 $ 3,867,155 $ $ $ $ $ $ Company had onefollowing table summarizes the percentage of sales to significant customer AT&T,groups which accounted for at least ten10 percent of its total revenue in each of fiscal years 2020, 2019 2018 and 2017. The percentage2018.
* | Represents an amount of less than 10%. |
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 |
September 30, | June 30, | March 31, | December 31, | |||||||||||||
2020 | ||||||||||||||||
Revenue | $ | 1,052,948 | $ | 1,026,201 | $ | 1,047,933 | $ | 1,041,957 | ||||||||
Operating income | 146,938 | 147,531 | 156,712 | 143,577 | ||||||||||||
Net income | 134,463 | 120,407 | 127,038 | 115,932 | ||||||||||||
Basic earnings per share | 1.02 | 0.90 | 0.95 | 0.86 | ||||||||||||
Diluted earnings per share | 1.01 | 0.90 | 0.94 | 0.85 | ||||||||||||
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 |
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) | ||||
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| |||||
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 | ) | ||||
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|
| |||||
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) | ||||
|
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|
| |||||
Balance as of September 30, 2019 | $ | 36,121 | $ | 85,533 | ||||
|
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|
|
Accounts Receivable Allowances | Valuation Allowances on Net Deferred Tax Assets | |||||||
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 | )(2) | (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 | )(4) | (34,211 | )(3) | ||||
Balance as of September 30, 2019 | 36,121 | 85,533 | ||||||
Charged to costs and expenses | 18,465 | 8,521 | ||||||
Charged to other accounts | (3,523 | ) | 1,005 | (1) | ||||
Deductions | (27,644 | )(6) | (25,604 | )(5) | ||||
Balance as of September 30, 2020 | $ | 23,419 | $ | 69,455 | ||||
(1) | Includes valuation allowances on deferred tax assets incurred in connection with an acquisition. |
(2) |
|
|
$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. |
(3) | $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. |
(4) | $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. |
F-47
(5) | $2,283 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) | $4,969 of accounts receivable allowances were written off against the related accounts receivables, $7,089 were written off against deferred revenue and the remaining deductions in the accounts receivable allowances were released to earnings . |