LiveRamp (RAMP) 8-K Acxiom Announces Second Quarter Results

For more information, contact:

Katharine Boyce

Acxiom Investor Relations

501-342-1321

investor.relations@acxiom.com

EACXM

ACXIOM ANNOUNCES SECOND QUARTER RESULTS

Earnings per share up 40 percent; 11 percent excluding unusual items;

Two Acxiom clients named Marketer of the Year by the

Direct Marketing Association

LITTLE ROCK, Ark. – October 25, 2012 — Acxiom® Corporation (Nasdaq: ACXM), a recognized leader in marketing services and technology, today announced financial results for its second quarter ended September 30, 2012.

Revenue from continuing operations was $277 million, down 3 percent compared to $286 million for the second quarter last year. Income from continuing operations increased 12 percent to $30 million in the current quarter, compared to $27 million in the prior year. Marketing and data services segment revenue was roughly flat at $194 million, compared to $196 million; U.S. marketing and data services revenue was up 2 percent to $166 million, compared to $162 million. IT infrastructure management segment revenue decreased 5 percent to $70 million in the current quarter compared to $74 million. Earnings per diluted share attributable to Acxiom stockholders were up 40 percent in the current quarter to $0.21, compared to diluted earnings per share of $0.15. Diluted earnings per share increased 11 percent as compared to $0.19 in the prior year, excluding unusual items.

Operating cash flow was $176 million for the trailing twelve months, compared to $197 million for the comparable period a year ago. Free cash flow to equity increased 68 percent to $159 million for the trailing twelve months, compared to $95 million for the comparable period. Free cash flow to equity for the trailing twelve months included $73 million in proceeds from the sale of the company’s background screening business. Free cash flow available to equity is a non-GAAP financial measure.A reconciliation to the comparable GAAP measure, operating cash flow, is attached.

“We are encouraged by several aspects of our first half performance and direction,” said Acxiom CEO Scott Howe. “A leading indicator of our future success is the performance of our customers. We are pleased that two of our clients, United Airlines and Macy’s, were both recently named Marketer of the Year by the Direct Marketing Association. While we have much to do, particularly as it relates to our top-line growth, we are building success stories and are excited about what’s ahead for our company.”

Second Quarter Highlights:

·   0perating margin increased approximately 1.5 percentage points to 10.9 percent, as a result of improvements in the company’s IT infrastructure management segment and international operations. Excluding unusual items operating margin improved by approximately 60 basis points.

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·   Acxiom repurchased 800,000 shares for $14 million during the quarter. Since August 2011, the company has repurchased 9 million shares, or approximately 11 percent of the outstanding common stock, for $115 million. The company has remaining capacity of approximately $35 million out of the total stock repurchase authorization of $150 million.

·   In the quarter, Acxiom clients United Airlines and Macy’s were both named “Marketer of the Year” by the Direct Marketing Association. United also received the top “Innovation Award.”These awards were given for outstanding achievement in multichannel direct marketing and represent the DMA’s highest honors. United partnered with Acxiom for its MileagePlus program, whichdelivered personalized and relevant communications to its members. Acxiom worked with Macy’s to create a more complete view of each customer to enable insight-driven communications coordinated across offline and digital channels.

·   Acxiom’s Board of Directors voted to expand its membership from nine to 10 directors and appointed Richard P. Fox, a business consultant and financial expert, to the board. Fox has a strong background in public company financial and accounting matters complemented by his work with digital marketing companies.

·   Acxiom Chief Marketing Officer Tim Suther was selected by the ranking committee of ExecRank as a Top CMO for 2012. The rankings are the result of two years of research and feedback from evaluation committees and top CMOs. ExecRank evaluated over 15,000 CMOs this year to identify the top 500.

Segment Results:

·   Marketing and Data Services: Revenue for the second quarter was $194 million, roughly flat as compared to $196 million for the same period a year ago. U.S. revenue of $166 million was up 2 percent but was offset by declines internationally. Income from operations for the second quarter was $23 million, compared to $27 million in the prior period. Operating margin was 12 percent, compared to 14 percent in the previous year.

·   IT Infrastructure Management: Revenue for the second quarter decreased 5 percent to $70 million, compared to $74 million for the same period a year ago. Income from operations for the quarter was $9 million, compared to $5 million in the prior period. Operating margin was approximately 12 percent, compared to 7 percent a year ago.

·   Other Services: Revenue was $13 million as compared to $17 million in the prior year. Loss from operations was approximately $2 million, compared to $3 million in the prior-year period.

Financial Guidance

The following projections are forward looking and are subject to certain risks and uncertainties that could cause actual results to differ materially as detailed in the Forward Looking Statements section of this press release. Acxiom’s estimates for fiscal 2013 are as follows:

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·   We continue to expect revenue to be flat to slightly down versus the prior year.

·   We now expect earnings per diluted share to be roughly $0.70 as compared to our previous guidance of $0.60 to $0.65.

Conference Call

Acxiom will hold a conference call at 4:00 p.m. CDT today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.

Web Link to Financials

You may link to http://www.acxiom.com/FY13_Q2_Financials for the detailed financial information we typically attach to our earnings releases.

About Acxiom

Acxiom is a recognized leader in marketing services and technology that enable marketers to successfully manage audiences, personalize consumer experiences and create profitable customer relationships. Our superior industry-focused, consultative approach combines consumer data and analytics, databases, data integration and consulting solutions for personalized, multichannel marketing strategies. Acxiom leverages over 40 years of experience in data management to deliver high-performance, highly secure, reliable information management services. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, USA, and serves clients around the world from locations in the United States, Europe, Asia-Pacific, and South America. For more information about Acxiom, visit Acxiom.com.

Forward Looking Statements

This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue from continuing operations and earnings per share as well as statements regarding building momentum and future opportunities for growth. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients, which could lead to decreases in our operating results; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions

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might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2012, which was filed with the Securities and Exchange Commission on May 25, 2012.

With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.

We undertake no obligation to update the information contained in this press release or any other forward-looking statement.

Acxiom is a registered trademark of Acxiom Corporation.

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Three Months Ended
	September 30,
							$				%
	2012			2011			Variance			Variance
Revenue:
Marketing and data services		194,409			195,857			(1,448	)		(0.7	%)
IT Infrastructure management services		70,061			73,712			(3,651	)		(5.0	%)
Other services		12,997			16,863			(3,866	)		(22.9	%)
Total revenue		277,467			286,432			(8,965	)		(3.1	%)
Operating costs and expenses:
Cost of revenue		209,886			217,487			7,601			3.5	%
Selling, general and administrative		37,341			39,429			2,088			5.3	%
Gains, losses and other items, net		32			2,465			2,433			98.7	%
Total operating costs and expenses		247,259			259,381			12,122			4.7	%
Income from operations		30,208			27,051			3,157			11.7	%
% Margin		10.9	%		9.4	%
Other expense:
Interest expense		(3,317	)		(4,719	)		1,402			29.7	%
Other, net		(54	)		(965	)		911			94.4	%
Total other expense		(3,371	)		(5,684	)		2,313			40.7	%
Earnings from continuing operations before income taxes		26,837			21,367			5,470			25.6	%
Income taxes		10,465			9,528			(937	)		(9.8	%)
Net earnings from continuing operations		16,372			11,839			4,533			38.3	%
Earnings from discontinued operations, net of tax		-			1,138			(1,138	)		(100.0	%)
Net earnings		16,372			12,977			3,395			26.2	%
Less: Net gain (loss) attributable to noncontrolling interest		(139	)		685			(824	)		(120.3	%)
Net earnings attributable to Acxiom		16,511			12,292			4,219			34.3	%
Basic earnings per share:
Net earnings from continuing operations		0.22			0.15			0.07			46.7	%
Earnings from discontinued operations		0.00			0.01			(0.01	)		(100.0	%)
Net earnings		0.22			0.16			0.06			37.5	%
Net earnings attributable to Acxiom stockholders		0.22			0.15			0.07			46.7	%
Diluted earnings per share:
Net earnings from continuing operations		0.21			0.15			0.06			40.0	%
Earnings from discontinued operations		0.00			0.01			(0.01	)		(100.0	%)
Net earnings		0.21			0.16			0.05			31.3	%
Net earnings attributable to Acxiom stockholders		0.21			0.15			0.06			40.0	%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Six Months Ended
	September 30,
							$				%
	2012			2011			Variance			Variance
Revenue:
Marketing and data services		380,148			380,853			(705	)		(0.2	%)
IT Infrastructure management services		140,351			146,762			(6,411	)		(4.4	%)
Other services		28,627			34,861			(6,234	)		(17.9	%)
Total revenue		549,126			562,476			(13,350	)		(2.4	%)
Operating costs and expenses:
Cost of revenue		419,212			435,776			16,564			3.8	%
Selling, general and administrative		74,090			76,236			2,146			2.8	%
Gains, losses and other items, net		192			2,709			2,517			92.9	%
Total operating costs and expenses		493,494			514,721			21,227			4.1	%
Income from operations		55,632			47,755			7,877			16.5	%
% Margin		10.1	%		8.5	%
Other expense:
Interest expense		(6,557	)		(10,174	)		3,617			35.6	%
Other, net		(601	)		(1,052	)		451			42.9	%
Total other expense		(7,158	)		(11,226	)		4,068			36.2	%
Earnings from continuing operations before income taxes		48,474			36,529			11,945			32.7	%
Income taxes		18,903			15,591			(3,312	)		(21.2	%)
Net earnings from continuing operations		29,571			20,938			8,633			41.2	%
Earnings from discontinued operations, net of tax		-			2,054			(2,054	)		(100.0	%)
Net earnings		29,571			22,992			6,579			28.6	%
Less: Net loss attributable to noncontrolling interest		(273	)		(275	)		2			0.7	%
Net earnings attributable to Acxiom		29,844			23,267			6,577			28.3	%
Basic earnings per share:
Net earnings from continuing operations		0.39			0.26			0.13			50.0	%
Earnings from discontinued operations		0.00			0.03			(0.03	)		(100.0	%)
Net earnings		0.39			0.28			0.11			39.3	%
Net earnings attributable to Acxiom stockholders		0.39			0.29			0.10			34.5	%
Diluted earnings per share:
Net earnings from continuing operations		0.38			0.26			0.12			46.2	%
Earnings from discontinued operations		0.00			0.03			(0.03	)		(100.0	%)
Net earnings		0.38			0.28			0.10			35.7	%
Net earnings attributable to Acxiom stockholders		0.38			0.28			0.10			35.7	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Three Months Ended						For the Six Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Earnings from continuing operations before income taxes		26,837			21,367			48,474			36,529
Income taxes		10,465			9,528			18,903			15,591
Net earnings from continuing operations		16,372			11,839			29,571			20,938
Earnings from discontinued operations, net of tax		-			1,138			-			2,054
Net earnings		16,372			12,977			29,571			22,992
Less: Net gain (loss) attributable to noncontrolling interest		(139	)		685			(273	)		(275	)
Net earnings attributable to Acxiom		16,511			12,292			29,844			23,267
Earnings per share attributable to Acxiom stockholders:
Basic		0.22			0.15			0.39			0.29
Diluted		0.21			0.15			0.38			0.29
Unusual items:
MENA disposal		-			2,512			-			2,512
Disposal of Netherlands and Portugal operations		-			(47	)		-			(75	)
Restructuring charges and other adjustments		32			-			192			272
Total unusual items, continuing operations		32			2,465			192			2,709
Earnings from continuing operations before income taxes
and excluding unusual items		26,869			23,832			48,666			39,238
Income taxes		10,477			9,531			18,978			15,692
Non-GAAP earnings from continuing operations		16,392			14,301			29,688			23,546
Earnings from discontinued operations, net of tax		-			1,138			-			2,054
Non-GAAP net earnings		16,392			15,439			29,688			25,600
Less: Net loss attributable to noncontrolling interest		(139	)		(179	)		(273	)		(1,139	)
Non-GAAP Net earnings attributable to Acxiom		16,531			15,618			29,961			26,739
Non-GAAP earnings per share attributable to Acxiom stockholders:
Basic		0.21			0.19			0.40			0.33
Diluted		0.21			0.19			0.39			0.33
Diluted weighted average shares		77,025			81,597			77,541			81,805

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Three Months Ended				For the Six Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
Income from operations		30,208		27,051		55,632		47,755
Unusual items		32		2,465		192		2,709
Income from operations before unusual items		30,240		29,516		55,824		50,464

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
	For the Three Months Ended
	September 30,		September 30,
	2012		2011
Basic earnings per share from continuing operations:
Numerator - net earnings		16,372		11,839
Denominator - weighted-average shares outstanding		75,009		80,985
Basic earnings per share		0.22		0.15
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		16,511		12,292
Denominator - weighted-average shares outstanding		75,009		80,985
Basic earnings per share - net earnings  attributable to Acxiom stockholders		0.22		0.15
Diluted earnings per share from continuing operations:
Numerator - net earnings		16,372		11,839
Denominator - weighted-average shares outstanding		75,009		80,985
Dilutive effect of common stock options, warrants and restricted stock		2,016		612
		77,025		81,597
Diluted earnings per share from continuing operations		0.21		0.15
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		16,511		12,292
Denominator - weighted-average shares outstanding		75,009		80,985
Dilutive effect of common stock options, warrants, and restricted stock		2,016		612
		77,025		81,597
Diluted earnings per share - net earnings attributable to Acxiom stockholders		0.21		0.15

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
	For the Six Months Ended
	September 30,		September 30,
	2012		2011
Basic earnings per share from continuing operations:
Numerator - net earnings		29,571		20,938
Denominator - weighted-average shares outstanding		75,741		80,963
Basic earnings per share		0.39		0.26
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		29,844		23,267
Denominator - weighted-average shares outstanding		75,741		80,963
Basic earnings per share - net earnings attributable to Acxiom stockholders		0.39		0.29
Diluted earnings per share from continuing operations:
Numerator - net earnings		29,571		20,938
Denominator - weighted-average shares outstanding		75,741		80,963
Dilutive effect of common stock options, warrants and restricted stock		1,800		842
		77,541		81,805
Diluted earnings per share from continuing operations		0.38		0.26
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		29,844		23,267
Denominator - weighted-average shares outstanding		75,741		80,963
Dilutive effect of common stock options, warrants, and restricted stock		1,800		842
		77,541		81,805
Diluted earnings per share - net earningsattributable to Acxiom stockholders		0.38		0.28

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	September 30,			September 30,
Revenue:	2012			2011
Marketing and data services		194,409			195,857
IT Infrastructure management services		70,061			73,712
Other services		12,997			16,863
Total revenue		277,467			286,432
Income from continuing operations:
Marketing and data services		23,331			27,078
IT Infrastructure management services		8,520			5,091
Other services		(1,611	)		(2,653	)
Corporate		(32	)		(2,465	)
Total income from continuing operations		30,208			27,051
Margin:
Marketing and data services		12.0	%		13.8	%
IT Infrastructure management services		12.2	%		6.9	%
Other services		-12.4	%		-15.7	%
Total margin		10.9	%		9.4	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Six Months Ended
	September 30,			September 30,
Revenue:	2012			2011
Marketing and data services		380,148			380,853
IT Infrastructure management services		140,351			146,762
Other services		28,627			34,861
Total revenue		549,126			562,476
Income from continuing operations:
Marketing and data services		41,306			44,338
IT Infrastructure management services		17,351			9,338
Other services		(2,833	)		(3,212	)
Corporate		(192	)		(2,709	)
Total income from continuing operations		55,632			47,755
Margin:
Marketing and data services		10.9	%		11.6	%
IT Infrastructure management services		12.4	%		6.4	%
Other services		-9.9	%		-9.2	%
Total margin		10.1	%		8.5	%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
	September 30,			March 31,			$				%
	2012			2012			Variance			Variance
Assets
Current assets:
Cash and cash equivalents		188,404			229,648			(41,244	)		(18.0	%)
Trade accounts receivable, net		166,675			169,446			(2,771	)		(1.6	%)
Deferred income taxes		14,837			15,107			(270	)		(1.8	%)
Other current assets		58,990			57,804			1,186			2.1	%
Total current assets		428,906			472,005			(43,099	)		(9.1	%)
Property and equipment		805,620			913,073			(107,453	)		(11.8	%)
Less - accumulated depreciation and amortization		569,340			659,700			(90,360	)		(13.7	%)
Property and equipment, net		236,280			253,373			(17,093	)		(6.7	%)
Software, net of accumulated amortization		16,280			13,211			3,069			23.2	%
Goodwill		382,272			382,285			(13	)		(0.0	%)
Purchased software licenses, net of accumulated amortization		23,791			25,294			(1,503	)		(5.9	%)
Deferred costs, net		52,286			61,977			(9,691	)		(15.6	%)
Data acquisition costs		11,985			15,009			(3,024	)		(20.1	%)
Other assets, net		2,933			3,697			(764	)		(20.7	%)
		1,154,733			1,226,851			(72,118	)		(5.9	%)
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt		22,492			26,336			(3,844	)		(14.6	%)
Trade accounts payable		17,781			31,030			(13,249	)		(42.7	%)
Accrued payroll and related expenses		39,382			54,839			(15,457	)		(28.2	%)
Other accrued expenses		81,073			77,062			4,011			5.2	%
Deferred revenue		47,432			59,949			(12,517	)		(20.9	%)
Income taxes		2,499			16,400			(13,901	)		(84.8	%)
Total current liabilities		210,659			265,616			(54,957	)		(20.7	%)
Long-term debt		244,347			251,886			(7,539	)		(3.0	%)
Deferred income taxes		89,578			93,039			(3,461	)		(3.7	%)
Other liabilities		4,354			4,455			(101	)		(2.3	%)
Stockholders' equity:
Common stock		12,094			12,003			91			0.8	%
Additional paid-in capital		872,389			860,165			12,224			1.4	%
Retained earnings		566,203			536,359			29,844			5.6	%
Accumulated other comprehensive income		13,652			13,601			51			0.4	%
Treasury stock, at cost		(858,378	)		(810,381	)		(47,997	)		(5.9	%)
Total Acxiom stockholders' equity		605,960			611,747			(5,787	)		(0.9	%)
Noncontrolling interest		(165	)		108			(273	)		(252.8	%)
Total equity		605,795			611,855			(6,060	)		(1.0	%)
		1,154,733			1,226,851			(72,118	)		(5.9	%)

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	September 30,
	2012			2011
Cash flows from operating activities:
Net earnings		16,372			12,977
Non-cash operating activities:
Depreciation and amortization		29,236			34,959
Loss on disposal or impairment of assets		1			2,888
Deferred income taxes		(2,063	)		1,098
Non-cash stock compensation expense		3,150			2,845
Changes in operating assets and liabilities:
Accounts receivable		6,551			(6,054	)
Other assets		(3,339	)		3,925
Deferred costs		(627	)		(445	)
Accounts payable and other liabilities		(4,668	)		9,750
Deferred revenue		(5,378	)		(4,229	)
Net cash provided by operating activities		39,235			57,714
Cash flows from investing activities:
Disposition of operations		-			(1,043	)
Capitalized software		(4,074	)		(991	)
Capital expenditures		(8,178	)		(12,134	)
Data acquisition costs		(1,396	)		(1,774	)
Net cash used by investing activities		(13,648	)		(15,942	)
Cash flows from financing activities:
Payments of debt		(6,682	)		(81,463	)
Sale of common stock		3,974			2,779
Acquisition of treasury stock		(14,003	)		(34,100	)
Net cash used by financing activities		(16,711	)		(112,784	)
Effect of exchange rate changes on cash		246			(919	)
Net change in cash and cash equivalents		9,122			(71,931	)
Cash and cash equivalents at beginning of period		179,282			191,094
Cash and cash equivalents at end of period		188,404			119,163
Supplemental cash flow information:
Cash paid during the period for:
Interest		3,277			5,742
Income taxes		19,971			4,289
Payments on capital leases and installment payment arrangements		4,384			4,184
Payments on software and data license liabilities		130			124
Other debt payments		2,168			2,155
Prepayment of debt		-			75,000
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease
and installment payment arrangements		-			944

14 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Six Months Ended
	September 30,
	2012			2011
Cash flows from operating activities:
Net earnings		29,571			22,992
Non-cash operating activities:
Depreciation and amortization		60,231			70,254
Loss on disposal or impairment of assets		25			2,893
Deferred income taxes		(3,466	)		1,135
Non-cash stock compensation expense		5,803			5,200
Changes in operating assets and liabilities:
Accounts receivable		1,942			(9,676	)
Other assets		(4,736	)		(4,592	)
Deferred costs		(1,274	)		(831	)
Accounts payable and other liabilities		(38,132	)		6,071
Deferred revenue		(12,596	)		(2,978	)
Net cash provided by operating activities		37,368			90,468
Cash flows from investing activities:
Disposition of operations					(1,043	)
Capitalized software		(7,747	)		(1,520	)
Capital expenditures		(11,716	)		(24,711	)
Data acquisition costs		(3,698	)		(4,550	)
Net cash paid in acquisitions		-			(255	)
Net cash used by investing activities		(23,161	)		(32,079	)
Cash flows from financing activities:
Payments of debt		(13,538	)		(113,775	)
Sale of common stock		5,735			2,818
Acquisition of treasury stock		(47,100	)		(34,100	)
Contingent consideration paid for prior acquisitions		(287	)		(326	)
Net cash used by financing activities		(55,190	)		(145,383	)
Effect of exchange rate changes on cash		(261	)		(866	)
Net change in cash and cash equivalents		(41,244	)		(87,860	)
Cash and cash equivalents at beginning of period		229,648			207,023
Cash and cash equivalents at end of period		188,404			119,163
Supplemental cash flow information:
Cash paid during the period for:
Interest		6,500			11,331
Income taxes		36,134			5,387
Payments on capital leases and installment payment arrangements		8,946			8,978
Payments on software and data license liabilities		259			491
Other debt payments		4,333			4,306
Prepayment of debt		-			100,000
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease
and installment payment arrangements		2,157			4,691

15 

ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
	06/30/11			09/30/11			12/31/11			03/31/12			FY2012			06/30/12			09/30/12			YTD FY2013			TTM 9/30/11			TTM 9/30/12
Net cash provided (used) by operating activities		32,754			57,714			82,540			56,443			229,451			(1,867	)		39,235			37,368			196,733			176,351
Less:
Disposition of operations		-			(1,043	)		-			73,468			72,425			-			-			-			(1,043	)		73,468
Capitalized software		(529	)		(991	)		(1,647	)		(2,095	)		(5,262	)		(3,673	)		(4,074	)		(7,747	)		(3,508	)		(11,489	)
Capital expenditures		(12,577	)		(12,134	)		(14,436	)		(12,444	)		(51,591	)		(3,538	)		(8,178	)		(11,716	)		(53,246	)		(38,596	)
Data acquisition costs		(2,776	)		(1,774	)		(3,999	)		(3,763	)		(12,312	)		(2,302	)		(1,396	)		(3,698	)		(10,965	)		(11,460	)
Payments on capital leases and installment payment arrangements		(4,794	)		(4,184	)		(4,709	)		(4,644	)		(18,331	)		(4,562	)		(4,384	)		(8,946	)		(19,956	)		(18,299	)
Payments on software and data license liabilities		(367	)		(124	)		(125	)		(2,300	)		(2,916	)		(129	)		(130	)		(259	)		(4,750	)		(2,684	)
Other required debt payments		(2,151	)		(2,155	)		(2,159	)		(2,164	)		(8,629	)		(2,165	)		(2,168	)		(4,333	)		(8,603	)		(8,656	)
Total		9,560			35,309			55,465			102,501			202,835			(18,236	)		18,905			669			94,662			158,635

16 

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
																									Q2 FY13 to Q2 FY12
	06/30/11			09/30/11			12/31/11			03/31/12			FY2012			06/30/12			09/30/12			YTD FY2013			%			$
Revenue:
Marketing and data services		184,996			195,857			187,461			203,400			771,714			185,739			194,409			380,148			-0.7	%	(1,448	)
IT Infrastructure management services		73,050			73,712			77,173			67,590			291,525			70,290			70,061			140,351			-5.0	%	(3,651	)
Other services		17,998			16,863			16,259			16,265			67,385			15,630			12,997			28,627			-22.9	%	(3,866	)
Total revenue		276,044			286,432			280,893			287,255			1,130,624			271,659			277,467			549,126			-3.1	%	(8,965	)
Operating costs and expenses:
Cost of revenue		218,289			217,487			213,925			213,788			863,489			209,326			209,886			419,212			-3.5	%	(7,601	)
Selling, general and administrative		36,807			39,429			36,318			38,577			151,131			36,749			37,341			74,090			-5.3	%	(2,088	)
Impairment of goodwill and other intangibles		-			-			17,803			-			17,803			-			-			-					0
Gains, losses and other items, net		244			2,465			(2,671	)		12,600			12,638			160			32			192			-98.7	%	(2,433	)
Total operating costs and expenses		255,340			259,381			265,375			264,965			1,045,061			246,235			247,259			493,494			4.7	%	12,122
Income from operations		20,704			27,051			15,518			22,290			85,563			25,424			30,208			55,632			11.7	%	3,157
% Margin		7.5	%		9.4	%		5.5	%		7.8	%		7.6	%		9.4	%		10.9	%		10.1	%
Other expense
Interest expense		(5,455	)		(4,719	)		(3,883	)		(3,391	)		(17,448	)		(3,240	)		(3,317	)		(6,557	)		29.7	%	1,402
Other, net		(87	)		(965	)		(98	)		(219	)		(1,369	)		(547	)		(54	)		(601	)		94.4	%	911
Total other expense		(5,542	)		(5,684	)		(3,981	)		(3,610	)		(18,817	)		(3,787	)		(3,371	)		(7,158	)		40.7	%	2,313
Earnings from continuing operations before income taxes		15,162			21,367			11,537			18,680			66,746			21,637			26,837			48,474			25.6	%	5,470
Income taxes		6,063			9,528			9,700			3,838			29,129			8,438			10,465			18,903			-9.8	%	(937	)
Net earnings from continuing operations		9,099			11,839			1,837			14,842			37,617			13,199			16,372			29,571			38.3	%	4,533
Earnings from discontinued operations, net of tax		916			1,138			814			31,031			33,899			-			-			-			-100.0	%	(1,138	)
Net earnings		10,015			12,977			2,651			45,873			71,516			13,199			16,372			29,571			26.2	%	3,395
Less: Net earnings (loss)  attributable
to noncontrolling interest		(960	)		685			(5,279	)		(193	)		(5,747	)		(134	)		(139	)		(273	)		-120.3	%	(824	)
Net earnings attributable to Acxiom		10,975			12,292			7,930			46,066			77,263			13,333			16,511			29,844			34.3	%	4,219
Diluted earnings per share - net earnings attributable
to Acxiom stockholders		0.13			0.15			0.10			0.58			0.96			0.17			0.21			0.38			40.0	%	0.06

17 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
																									Q2 FY13 to Q2 FY12
	06/30/11			09/30/11			12/31/11			03/31/12			FY2012			06/30/12			09/30/12			YTD FY2013			%			$
Revenue:
Marketing and data services		184,996			195,857			187,461			203,400			771,714			185,739			194,409			380,148			-1	%	(1,448	)
IT Infrastructure management services		73,050			73,712			77,173			67,590			291,525			70,290			70,061			140,351			-5	%	(3,651	)
Other services		17,998			16,863			16,259			16,265			67,385			15,630			12,997			28,627			-23	%	(3,866	)
Total revenue		276,044			286,432			280,893			287,255			1,130,624			271,659			277,467			549,126			-3	%	(8,965	)
Income (loss) from operations:
Marketing and data services		17,260			27,078			21,388			30,094			95,820			17,975			23,331			41,306			-14	%	(3,747	)
IT Infrastructure management services		4,247			5,091			9,795			5,855			24,988			8,831			8,520			17,351			67	%	3,429
Other services		(559	)		(2,653	)		(533	)		(1,059	)		(4,804	)		(1,222	)		(1,611	)		(2,833	)		39	%	1,042
Corporate		(244	)		(2,465	)		(15,132	)		(12,600	)		(30,441	)		(160	)		(32	)		(192	)		99	%	2,433
Total income from operations		20,704			27,051			15,518			22,290			85,563			25,424			30,208			55,632			12	%	3,157
Margin:
Marketing and data services		9.3	%		13.8	%		11.4	%		14.8	%		12.4	%		9.7	%		12.0	%		10.9	%
IT Infrastructure management services		5.8	%		6.9	%		12.7	%		8.7	%		8.6	%		12.6	%		12.2	%		12.4	%
Other services		-3.1	%		-15.7	%		-3.3	%		-6.5	%		-7.1	%		-7.8	%		-12.4	%		-9.9	%
Total		7.5	%		9.4	%		5.5	%		7.8	%		7.6	%		9.4	%		10.9	%		10.1	%

18