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

For more information, contact:

Katharine Boyce

Acxiom Investor Relations

501-342-1321

investor.relations@acxiom.com

 EACXM

ACXIOM ANNOUNCES THIRD QUARTER RESULTS

Strong Momentum for Acxiom Audience Operating System™

Increasing EPS Guidance for the Year

LITTLE ROCK, Ark. – January 29, 2014 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its third quarter ended December 31, 2013.

Total revenue for the third quarter was $278 million, up 2 percent from $273 million for the third quarter of fiscal 2013. Income from operations for the quarter was $20 million compared to $27 million for the prior-year period. Excluding unusual items, operating income was $29 million, up 10 percent from $27 million for the same period last year. Marketing and Data Services revenue for the third quarter increased 6 percent to $207 million compared to $195 million for the third quarter of last year. IT Infrastructure Management revenue was $62 million in the recent quarter, down 11 percent as expected from $70 million in the same period last year. Earnings per diluted share attributable to Acxiom stockholders were flat at $0.19. Excluding unusual items, diluted earnings per share were $0.25, up from $0.19 a year ago.  Included in the current quarter is a tax-related adjustment which positively impacted both earnings-per-share measures by roughly $0.04 per share.

Operating cash flow was up 48 percent to $195 million for the trailing twelve-month period compared to $133 million for the same period a year ago. Free cash flow to equity was up 136 percent to $103 million for the trailing twelve-month period compared to $44 million for the same prior-year period. Free cash flow to equity for the prior-year trailing twelve-month period excludes $73 million in proceeds from the sale of the company’s background screening business. Free cash flow to equity is a non-GAAP financial measure.A reconciliation to the comparable GAAP measure, operating cash flow, is attached.

A schedule outlining the impact of unusual items on the current and prior-year results is attached.

“We are thrilled with the progress made since our release of the Acxiom Audience Operating System,” said Acxiom CEO Scott Howe. “After just four months since launch, we now have more than 30 customers that are implementing or testing one or more aspects of AOS™.”

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Third Quarter Highlights:

·   Acxiom and Starcom MediaVest Group (SMG) are entering into a partnership by which SMG becomes the first agency to license Acxiom Audience Operating System (AOS) and bring it to market. SMG is the largest media agency in the world.

·   Acxiom signed seven new AOS agreements during the quarter with customers in several key industries including: Financial Services, Insurance, Telecommunications and Retail.

·   Acxiom increased its share repurchase authorization from $200 million to $250 million. The company repurchased approximately 400,000 shares for $13.8 million during the quarter. Since inception of the share repurchase program in August 2011, the company has repurchased 12.3 million shares, or approximately 15 percent of the outstanding common stock, for $193 million.

·   Subsequent to quarter end, Acxiom was named “Supplier of the Year” By Media Magazine, one of the industry’s most respected publications, for its contributions to the industry with its recent launches of AOS and AboutTheData.com™.

·   On November 6th, Acxiom announced its plans to reduce its annual cost base by roughly $20 to $30 million over the next 6 to 12 months. The company is well underway on this initiative, and to date has taken steps to realize approximately $15 million in annualized cost reductions.

Segment Results:

·   Marketing and Data Services: Revenue for the third quarter was $207 million, up from $195 million for the same period a year ago. U.S. revenue increased 6 percent to $175 million in the current quarter compared to $165 million for the third quarter of last year. Income from operations for the third quarter was $23 million, up from $18 million for the prior-year period. Operating margin was 11 percent as compared to 9 percent for the third quarter of last year.

·   IT Infrastructure Management: Revenue for the third quarter decreased as expected by 11 percent to $62 million compared to $70 million for the same period a year ago. Income from operations for the recent quarter was $6 million compared to $10 million for the prior-year period. Operating margin was approximately 10 percent, down from 14 percent in the third quarter of last year.

·   Other Services: Revenue for the third quarter was $9 million, up from $8 million in the comparable prior-year period. Operating margin improved to approximately 6 percent compared to a loss in the third quarter of last year.

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. Our guidance excludes unusual items. Acxiom’s estimates for fiscal 2014 are as follows:

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·   As previously disclosed, we expect revenue for the fiscal year to be down slightly compared to $1.099 billion in fiscal 2013. The small revenue decrease is primarily driven by an expected decline in IT Infrastructure Management revenues.

·   We now expect earnings per diluted share attributable to Acxiom stockholders to be as much as $0.82. This is an increase from our previous guidance of roughly flat compared to the prior-year period.

Conference Call

Acxiom will hold a conference call at 4:00 p.m. CST 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/FY14_Q3_Financials for the detailed financial information we typically attach to our earnings releases.

About Acxiom

Acxiom is an enterprise data, analytics and software-as-a-service company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. 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 and earnings per share for fiscal 2014, statements regarding cost base reductions, and statements regarding new customers and new product launches and capabilities. 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; 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

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continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions 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 anticipated 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 unusual charges may be incurred; 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, 2013, which was filed with the Securities and Exchange Commission on May 29, 2013.

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.

To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.

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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
	December 31,
							$				%
	2013			2012			Variance			Variance
Revenue:
Marketing and data services		206,662			195,146			11,516			5.9	%
IT Infrastructure management services		62,099			69,916			(7,817	)		(11.2	%)
Other services		9,112			8,040			1,072			13.3	%
Total revenue		277,873			273,102			4,771			1.7	%
Operating costs and expenses:
Cost of revenue		210,053			208,848			(1,205	)		(0.6	%)
Selling, general and administrative		43,383			37,482			(5,901	)		(15.7	%)
Gains, losses and other items, net		4,657			(126	)		4,783			3796.0	%
Total operating costs and expenses		258,093			246,204			(11,889	)		(4.8	%)
Income from operations		19,780			26,898			(7,118	)		(26.5	%)
% Margin		7.1	%		9.8	%
Other income (expense):
Interest expense		(3,114	)		(3,178	)		64			2.0	%
Other, net		1,484			565			919			162.7	%
Total other expense		(1,630	)		(2,613	)		983			37.6	%
Earnings before income taxes		18,150			24,285			(6,135	)		(25.3	%)
Income taxes		3,083			9,836			6,753			68.7	%
Net earnings		15,067			14,449			618			4.3	%
Less: Net loss attributable to noncontrolling interest		-			(76	)		76			100.0	%
Net earnings attributable to Acxiom		15,067			14,525			542			3.7	%
Basic earnings per share:
Net earnings		0.20			0.19			0.01			5.3	%
Net earnings attributable to Acxiom stockholders		0.20			0.20			0.00			0.0	%
Diluted earnings per share:
Net earnings		0.19			0.19			0.00			0.0	%
Net earnings attributable to Acxiom stockholders		0.19			0.19			0.00			0.0	%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Nine Months Ended
	December 31,
							$				%
	2013			2012			Variance			Variance
Revenue:
Marketing and data services		595,407			586,230			9,177			1.6	%
IT Infrastructure management services		198,309			210,267			(11,958	)		(5.7	%)
Other services		26,621			25,731			890			3.5	%
Total revenue		820,337			822,228			(1,891	)		(0.2	%)
Operating costs and expenses:
Cost of revenue		621,953			627,323			5,370			0.9	%
Selling, general and administrative		123,857			112,309			(11,548	)		(10.3	%)
Gains, losses and other items, net		11,044			66			(10,978	)		(16633.3	%)
Total operating costs and expenses		756,854			739,698			(17,156	)		(2.3	%)
Income from operations		63,483			82,530			(19,047	)		(23.1	%)
% Margin		7.7	%		10.0	%
Other income (expense):
Interest expense		(9,113	)		(9,735	)		622			6.4	%
Other, net		1,238			(36	)		1,274			3538.9	%
Total other expense		(7,875	)		(9,771	)		1,896			19.4	%
Earnings before income taxes		55,608			72,759			(17,151	)		(23.6	%)
Income taxes		17,582			28,739			11,157			38.8	%
Net earnings		38,026			44,020			(5,994	)		(13.6	%)
Less: Net loss attributable to noncontrolling interest		(60	)		(349	)		289			82.8	%
Net earnings attributable to Acxiom		38,086			44,369			(6,283	)		(14.2	%)
Basic earnings per share:
Net earnings		0.51			0.59			(0.08	)		(13.6	%)
Net earnings attributable to Acxiom stockholders		0.51			0.59			(0.08	)		(13.6	%)
Diluted earnings per share:
Net earnings		0.50			0.57			(0.07	)		(12.3	%)
Net earnings attributable to Acxiom stockholders		0.50			0.58			(0.08	)		(13.8	%)

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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 Nine Months Ended
	December 31,						December 31,
	2013			2012			2013			2012
Earnings before income taxes		18,150			24,285			55,608			72,759
Income taxes		3,083			9,836			17,582			28,739
Net earnings		15,067			14,449			38,026			44,020
Less: Net loss attributable to noncontrolling interest		-			(76	)		(60	)		(349	)
Net earnings attributable to Acxiom		15,067			14,525			38,086			44,369
Earnings per share attributable to Acxiom stockholders:
Basic		0.20			0.20			0.51			0.59
Diluted		0.19			0.19			0.50			0.58
Unusual items:
Business separation expenses		4,897			-			7,083			-
Legal settlement accruals		1,000			-			4,200			-
Restructuring charges and other adjustments		3,657			(126	)		6,844			66
Gain on investment		(2,567	)		-			(2,567	)		-
Total unusual items		6,987			(126	)		15,560			66
Earnings before income taxes and excluding unusual items		25,137			24,159			71,168			72,825
Income taxes		5,690			9,786			23,575			28,763
Non-GAAP net earnings		19,447			14,373			47,593			44,062
Less: Net gain (loss) attributable to noncontrolling interest		-			(76	)		(60	)		(349	)
Non-GAAP net earnings attributable to Acxiom		19,447			14,449			47,653			44,411
Non-GAAP earnings per share attributable to Acxiom stockholders:
Basic		0.26			0.19			0.64			0.59
Diluted		0.25			0.19			0.62			0.58
Diluted weighted average shares		77,839			75,878			76,456			76,987

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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 Nine Months Ended
	December 31,					December 31,
	2013		2012			2013		2012
Income from operations		19,780		26,898			63,483		82,530
Unusual items		9,554		(126	)		18,127		66
Income from operations before unusual items		29,334		26,772			81,610		82,596

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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
	December 31,		December 31,
	2013		2012
Basic earnings per share:
Numerator - net earnings		15,067		14,449
Denominator - weighted-average shares outstanding		75,009		74,103
Basic earnings per share		0.20		0.19
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		15,067		14,525
Denominator - weighted-average shares outstanding		75,009		74,103
Basic earnings per share - net earnings  attributable to Acxiom stockholders		0.20		0.20
Diluted earnings per share:
Numerator - net earnings		15,067		14,449
Denominator - weighted-average shares outstanding		75,009		74,103
Dilutive effect of common stock options, warrants and restricted stock		2,830		1,775
		77,839		75,878
Diluted earnings per share		0.19		0.19
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		15,067		14,525
Denominator - weighted-average shares outstanding		75,009		74,103
Dilutive effect of common stock options, warrants, and restricted stock		2,830		1,775
		77,839		75,878
Diluted earnings per share - net earnings attributable to Acxiom stockholders		0.19		0.19

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
	For the Nine Months Ended
	December 31,		December 31,
	2013		2012
Basic earnings per share:
Numerator - net earnings		38,026		44,020
Denominator - weighted-average shares outstanding		74,155		75,195
Basic earnings per share		0.51		0.59
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		38,086		44,369
Denominator - weighted-average shares outstanding		74,155		75,195
Basic earnings per share - net earnings attributable to Acxiom stockholders		0.51		0.59
Diluted earnings per share:
Numerator - net earnings		38,026		44,020
Denominator - weighted-average shares outstanding		74,155		75,195
Dilutive effect of common stock options, warrants and restricted stock		2,301		1,792
		76,456		76,987
Diluted earnings per share		0.50		0.57
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		38,086		44,369
Denominator - weighted-average shares outstanding		74,155		75,195
Dilutive effect of common stock options, warrants, and restricted stock		2,301		1,792
		76,456		76,987
Diluted earnings per share - net earnings attributable to Acxiom stockholders		0.50		0.58

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	December 31,			December 31,
Revenue:	2013			2012
Marketing and data services		206,662			195,146
IT Infrastructure management services		62,099			69,916
Other services		9,112			8,040
Total revenue		277,873			273,102
Income from operations:
Marketing and data services		22,518			18,186
IT Infrastructure management services		6,316			9,622
Other services		500			(1,036	)
Corporate		(9,554	)		126
Total income from operations		19,780			26,898
Margin:
Marketing and data services		10.9	%		9.3	%
IT Infrastructure management services		10.2	%		13.8	%
Other services		5.5	%		-12.9	%
Total margin		7.1	%		9.8	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Nine Months Ended
	December 31,			December 31,
Revenue:	2013			2012
Marketing and data services		595,407			586,230
IT Infrastructure management services		198,309			210,267
Other services		26,621			25,731
Total revenue		820,337			822,228
Income from operations:
Marketing and data services		51,189			59,151
IT Infrastructure management services		29,044			26,973
Other services		1,377			(3,528	)
Corporate		(18,127	)		(66	)
Total income from operations		63,483			82,530
Margin:
Marketing and data services		8.6	%		10.1	%
IT Infrastructure management services		14.6	%		12.8	%
Other services		5.2	%		-13.7	%
Total margin		7.7	%		10.0	%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
	December 31,			March 31,						$		%
	2013			2013			Variance			Variance
Assets
Current assets:
Cash and cash equivalents		380,908			222,974			157,934			70.8	%
Trade accounts receivable, net		168,931			159,882			9,049			5.7	%
Deferred income taxes		14,055			13,496			559			4.1	%
Refundable income taxes		-			5,809			(5,809	)		(100.0	%)
Other current assets		53,405			58,935			(5,530	)		(9.4	%)
Total current assets		617,299			461,096			156,203			33.9	%
Property and equipment		846,950			822,439			24,511			3.0	%
Less - accumulated depreciation and amortization		632,172			591,687			40,485			6.8	%
Property and equipment, net		214,778			230,752			(15,974	)		(6.9	%)
Software, net of accumulated amortization		37,063			24,471			12,592			51.5	%
Goodwill		380,591			381,129			(538	)		(0.1	%)
Purchased software licenses, net of accumulated amortization		19,509			23,604			(4,095	)		(17.3	%)
Deferred costs, net		24,564			42,971			(18,407	)		(42.8	%)
Data acquisition costs		8,142			10,631			(2,489	)		(23.4	%)
Other assets, net		11,935			13,052			(1,117	)		(8.6	%)
		1,313,881			1,187,706			126,175			10.6	%
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt		25,636			16,105			9,531			59.2	%
Trade accounts payable		23,562			35,786			(12,224	)		(34.2	%)
Accrued payroll and related expenses		51,287			62,390			(11,103	)		(17.8	%)
Other accrued expenses		75,394			68,270			7,124			10.4	%
Deferred revenue		50,149			41,388			8,761			21.2	%
Income taxes		1,719			637			1,082			169.9	%
Total current liabilities		227,747			224,576			3,171			1.4	%
Long-term debt		297,703			237,400			60,303			25.4	%
Deferred income taxes		91,823			94,918			(3,095	)		(3.3	%)
Other liabilities		11,253			11,444			(191	)		(1.7	%)
Stockholders' equity:
Common stock		12,527			12,134			393			3.2	%
Additional paid-in capital		964,906			885,184			79,722			9.0	%
Retained earnings		632,052			593,966			38,086			6.4	%
Accumulated other comprehensive income		13,197			11,423			1,774			15.5	%
Treasury stock, at cost		(937,327	)		(882,959	)		(54,368	)		(6.2	%)
Total Acxiom stockholders' equity		685,355			619,748			65,607			10.6	%
Noncontrolling interest		-			(380	)		380			100.0	%
Total equity		685,355			619,368			65,987			10.7	%
		1,313,881			1,187,706			126,175			10.6	%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	December 31,
	2013			2012
Cash flows from operating activities:
Net earnings		15,067			14,449
Non-cash operating activities:
Depreciation and amortization		25,608			29,363
Gain on disposal or impairment of assets		(2,567	)		-
Loss on early extinguishment of debt		664			-
Deferred income taxes		(3,138	)		(2,962	)
Non-cash stock compensation expense		3,455			3,103
Changes in operating assets and liabilities:
Accounts receivable		7,395			(15,867	)
Other assets		6,646			5,492
Deferred costs		(89	)		(326	)
Accounts payable and other liabilities		8,114			5,525
Deferred revenue		2,617			(234	)
Net cash provided by operating activities		63,772			38,543
Cash flows from investing activities:
Capitalized software		(5,495	)		(5,443	)
Capital expenditures		(6,700	)		(10,260	)
Data acquisition costs		(1,786	)		(2,766	)
Payments from investments		3,633			-
Net cash used by investing activities		(10,348	)		(18,469	)
Cash flows from financing activities:
Proceeds from debt		300,000			-
Payments of debt		(220,934	)		(6,252	)
Fees for debt refinancing		(4,370	)		-
Sale of common stock		50,547			2,128
Acquisition of treasury stock		(13,826	)		(18,256	)
Acquisition of NCI		(600	)		-
Net cash used by financing activities		110,817			(22,380	)
Effect of exchange rate changes on cash		51			122
Net change in cash and cash equivalents		164,292			(2,184	)
Cash and cash equivalents at beginning of period		216,616			188,404
Cash and cash equivalents at end of period		380,908			186,220
Supplemental cash flow information:
Cash paid during the period for:
Interest		3,281			3,178
Income taxes		4,766			12,104
Payments on capital leases and installment payment arrangements		1,675			4,002
Payments on software and data license liabilities		-			78
Other debt payments, excluding line of credit		4,259			2,172
Prepayment of debt		215,000			-

14

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Nine Months Ended
	December 31,
	2013			2012
Cash flows from operating activities:
Net earnings		38,026			44,020
Non-cash operating activities:
Depreciation and amortization		76,127			89,594
Loss (gain) on disposal or impairment of assets		(2,567	)		25
Loss on early extinguishment of debt		664			-
Deferred income taxes		(3,666	)		(6,428	)
Non-cash stock compensation expense		10,344			8,906
Changes in operating assets and liabilities:
Accounts receivable		1,531			(13,925	)
Other assets		6,791			756
Deferred costs		(89	)		(1,600	)
Accounts payable and other liabilities		(12,553	)		(32,607	)
Deferred revenue		6,534			(12,830	)
Net cash provided by operating activities		121,142			75,911
Cash flows from investing activities:
Capitalized software		(19,109	)		(13,190	)
Capital expenditures		(24,889	)		(21,976	)
Data acquisition costs		(4,660	)		(6,464	)
Payments from investments		3,633			-
Net cash used by investing activities		(45,025	)		(41,630	)
Cash flows from financing activities:
Proceeds from debt		300,000			-
Payments of debt		(230,167	)		(19,790	)
Fees for debt refinancing		(4,370	)		-
Sale of common stock		69,106			7,863
Acquisition of treasury stock		(52,663	)		(65,356	)
Acquisition of NCI		(600	)		-
Contingent consideration paid for prior acquisitions		-			(287	)
Net cash used by financing activities		81,306			(77,570	)
Effect of exchange rate changes on cash		511			(139	)
Net change in cash and cash equivalents		157,934			(43,428	)
Cash and cash equivalents at beginning of period		222,974			229,648
Cash and cash equivalents at end of period		380,908			186,220
Supplemental cash flow information:
Cash paid during the period for:
Interest		9,267			9,678
Income taxes		15,774			48,268
Payments on capital leases and installment payment arrangements		6,914			12,948
Payments on software and data license liabilities		-			337
Other debt payments, excluding line of credit		8,253			6,505
Prepayment of debt		215,000			-
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease
and installment payment arrangements		-			2,157

15

ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
	06/30/12			09/30/12			12/31/12			03/31/13			YTD FY2013			06/30/13			09/30/13			12/31/13			YTD FY2014			TTM 12/31/12			TTM 12/31/13
Net cash provided (used) by operating activities		(1,867	)		39,235			38,543			74,221			150,132			16,849			40,521			63,772			121,142			132,354			195,363
Less:
Disposition of operations		-			-			-			-			-			-			-			-			-			73,468			-
Payments for investments		-			-			-			-			-			-			-			3,633			3,633			-			3,633
Capitalized software		(3,673	)		(4,074	)		(5,443	)		(6,689	)		(19,879	)		(5,954	)		(7,660	)		(5,495	)		(19,109	)		(15,285	)		(25,798	)
Capital expenditures		(3,538	)		(8,178	)		(10,260	)		(16,515	)		(38,491	)		(8,920	)		(9,269	)		(6,700	)		(24,889	)		(34,420	)		(41,404	)
Data acquisition costs		(2,302	)		(1,396	)		(2,766	)		(2,106	)		(8,570	)		(1,961	)		(913	)		(1,786	)		(4,660	)		(10,227	)		(6,766	)
Payments on capital leases and installment payment arrangements		(4,562	)		(4,384	)		(4,002	)		(3,566	)		(16,514	)		(2,900	)		(2,339	)		(1,675	)		(6,914	)		(17,592	)		(10,480	)
Other required debt payments		(2,294	)		(2,298	)		(2,250	)		(3,515	)		(10,357	)		(1,990	)		(2,004	)		(4,259	)		(8,253	)		(11,306	)		(11,768	)
Total		(18,236	)		18,905			13,822			41,830			56,321			(4,876	)		18,336			47,490			60,950			116,992			102,780

16

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
																												Q3 FY14 to Q3 FY13
	06/30/12			09/30/12			12/31/12			03/31/13			YTD FY2013			06/30/13			09/30/13			12/31/13			YTD FY2014			%			$
Revenue:
Marketing and data services		192,482			198,602			195,146			202,510			788,740			187,793			200,952			206,662			595,407			5.9	%	11,516
IT Infrastructure management services		70,290			70,061			69,916			65,202			275,469			69,385			66,825			62,099			198,309			-11.2	%	(7,817	)
Other services		8,887			8,804			8,040			9,419			35,150			9,015			8,494			9,112			26,621			13.3	%	1,072
Total revenue		271,659			277,467			273,102			277,131			1,099,359			266,193			276,271			277,873			820,337			1.7	%	4,771
Operating costs and expenses:
Cost of revenue		209,311			209,164			208,848			213,317			840,640			204,506			207,394			210,053			621,953			0.6	%	1,205
Selling, general and administrative		36,764			38,063			37,482			41,681			153,990			37,615			42,859			43,383			123,857			15.7	%	5,901
Gains, losses and other items, net		160			32			(126	)		1,944			2,010			-			6,387			4,657			11,044			-3796.0	%	4,783
Total operating costs and expenses		246,235			247,259			246,204			256,942			996,640			242,121			256,640			258,093			756,854			4.8	%	11,889
Income from operations		25,424			30,208			26,898			20,189			102,719			24,072			19,631			19,780			63,483			-26.5	%	(7,118	)
% Margin		9.4	%		10.9	%		9.8	%		7.3	%		9.3	%		9.0	%		7.1	%		7.1	%		7.7	%
Other expense
Interest expense		(3,240	)		(3,317	)		(3,178	)		(2,959	)		(12,694	)		(3,019	)		(2,980	)		(3,114	)		(9,113	)		-2.0	%	64
Other, net		(547	)		(54	)		565			188			152			104			(350	)		1,484			1,238			162.7	%	919
Total other expense		(3,787	)		(3,371	)		(2,613	)		(2,771	)		(12,542	)		(2,915	)		(3,330	)		(1,630	)		(7,875	)		-37.6	%	983
Earnings before income taxes		21,637			26,837			24,285			17,418			90,177			21,157			16,301			18,150			55,608			-25.3	%	(6,135	)
Income taxes		8,438			10,465			9,836			4,319			33,058			8,062			6,437			3,083			17,582			-68.7	%	(6,753	)
Net earnings		13,199			16,372			14,449			13,099			57,119			13,095			9,864			15,067			38,026			4.3	%	618
Less: Net gain (loss) attributable
to noncontrolling interest		(134	)		(139	)		(76	)		(139	)		(488	)		(85	)		25			-			(60	)		-100.0	%	76
Net earnings attributable to Acxiom		13,333			16,511			14,525			13,238			57,607			13,180			9,839			15,067			38,086			3.7	%	542
Diluted earnings per share - net earnings attributable
to Acxiom stockholders		0.17			0.21			0.19			0.18			0.75			0.17			0.13			0.19			0.50			0.0	%	0.00

17

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
																												Q3 FY14 to Q3 FY13
	06/30/12			09/30/12			12/31/12			03/31/13			YTD FY2013			06/30/13			09/30/13			12/31/13			YTD FY2014			%			$
Revenue:
Marketing and data services		192,482			198,602			195,146			202,510			788,740			187,793			200,952			206,662			595,407			6	%	11,516
IT Infrastructure management services		70,290			70,061			69,916			65,202			275,469			69,385			66,825			62,099			198,309			-11	%	(7,817	)
Other services		8,887			8,804			8,040			9,419			35,150			9,015			8,494			9,112			26,621			13	%	1,072
Total revenue		271,659			277,467			273,102			277,131			1,099,359			266,193			276,271			277,873			820,337			2	%	4,771
Marketing and data services		18,703			22,262			18,186			20,866			80,017			12,657			16,014			22,518			51,189			24	%	4,332
IT Infrastructure management services		8,831			8,520			9,622			2,357			29,330			10,761			11,967			6,316			29,044			-34	%	(3,306	)
Other services		(1,950	)		(542	)		(1,036	)		(1,090	)		(4,618	)		654			223			500			1,377			-148	%	1,536
Corporate		(160	)		(32	)		126			(1,944	)		(2,010	)		-			(8,573	)		(9,554	)		(18,127	)		-7683	%	(9,680	)
Total income from operations		25,424			30,208			26,898			20,189			102,719			24,072			19,631			19,780			63,483			-26	%	(7,118	)
Margin:
Marketing and data services		9.7	%		11.2	%		9.3	%		10.3	%		10.1	%		6.7	%		8.0	%		10.9	%		8.6	%
IT Infrastructure management services		12.6	%		12.2	%		13.8	%		3.6	%		10.6	%		15.5	%		17.9	%		10.2	%		14.6	%
Other services		-21.9	%		-6.2	%		-12.9	%		-11.6	%		-13.1	%		7.3	%		2.6	%		5.5	%		5.2	%
Total		9.4	%		10.9	%		9.8	%		7.3	%		9.3	%		9.0	%		7.1	%		7.1	%		7.7	%

18