1 annual report 2009 connected World
2 SERVICE PROVIDERS RELY ON AMDOCS.
3 EVEN IN TIMES OF GLOBAL ECONOMIC CRISIS, OUR SINGULAR INDUSTRY FOCUS AND DEEP CUSTOMER RELATIONSHIPS GIVE US STABILITY; OUR BUSINESS MODEL, STRENGTH. WE CONTINUALLY INVEST IN INNOVATION, DELIVERING VALUE TODAY AND BUILDING TOWARD THE VISION OF THE CONNECTED WORLD. Amdocs Annual Report 2009
4 DOV BAHARAV President and CEO, Amdocs Management Limited; Director, Amdocs Limited BRUCE K. ANDERSON Chairman of the Board, Amdocs Limited DEAR FELLOW SHAREHOLDERS: Fiscal year 2009 will be remembered for one of the worst global financial crises in nearly a century. Amdocs, like most companies, felt the effects. However, the strength of our business model and our ability to make difficult, but well-thought-out decisions kept us stable as our industry experienced a slowdown. Seeking to improve our cost structure and operating margin, and protect our cash position, we created a leaner, more efficient organization. Understanding our customers need to tighten their belts, we directed research and development to helping them operate more efficiently and cost-effectively. We also invested in our focus areas broadband cable and satellite, fast-growing emerging markets, managed services, operationalsupport systems and the digital economy each of which helps to diversify our business, and provide multiple areas of opportunity for the future. And we expanded our existing customer relationships and gained new ones. So, against the challenging revenue dynamics of 2009, we not only weathered the storm, but are emerging, we feel, a much stronger competitor, ready to grow again.
5 STABILITY & STRENGTH Against the challenging revenue dynamics of 2009, we not only weathered the storm, but are emerging, we feel, a much stronger competitor, ready to grow again. Amdocs Annual Report 2009
6 value By offering a complete range of business- and operational-support systems (BSS and OSS), and comprehensive portfolio of consulting, systems integration and managed services, we can bring a depth of value to our customers that other vendors cannot. Maintaining financial stability in a difficult year Fiscal 2009, perhaps more than any year in Amdocs history, revealed the strength of the fundamental way we do business. Our business model, unique among our competitors, combines software products and services with a singular focus on the communications, media and entertainment industry. Our customers are some of the industry s largest, most powerful and innovative players, many of which have worked with Amdocs for years. We feel that, by offering a complete range of business- and operational-support systems (BSS and OSS), and comprehensive portfolio of consulting, systems integration and managed services, we can bring a depth of value to them that other vendors cannot. Our capital strategy is designed to ensure that we have sufficient cash on hand to be viewed as a viable vendor, sizeable enough to compete with larger-cap rivals. And our reputation for delivery remains a point of pride. Amdocs is known for completing projects on time and within budget, which we believe is an important predictor of success in a year of intense scrutiny of capital expenditures.
7 We believe that, by staying true to these core elements of our business, we give service providers the confidence to choose Amdocs. This was especially important in fiscal 2009, when we won expanded engagements with many existing customers, such as AT&T (United States), Vodafone D2 (Germany), J:COM (Japan) and Rogers Communications (Canada), and first-time contracts with new customers such as AAPT (Australia), Clearwire (United States), Hubei Telecom (an independent provincial division of China Telecom), Instituto Costarricense de Electricidad (Costa Rica) and others. Under the economic conditions of the past year, we feel these business expansions and new engagements speak volumes about our customers perception of Amdocs as a stable, trustworthy partner. Responding to needs for greater efficiency Although service providers continued to invest in their frontand back-office systems in 2009, it was at a slower pace and with, we felt, greater focus on efficient, cost-effective operations than on large-scale transformation. Even as we down-scaled the business to gain efficiencies of our own, we worked to ensure that the Amdocs CES (customer experience systems) Portfolio addressed the efficiency needs of our customers. In 2009, we brought to market innovations that help our customers streamline and optimize some of their most important functions. We introduced operational product packs (pre-packaged applications for network rollouts and fulfillment of Internet Protocol [IP]-based services); advances in lower-cost web-based self-service applications such as e-billing; customer management applications designed to improve the sales performance of service providers brick-and-mortar retail stores; and support for our customers cloud-based communications applications Amdocs Annual Report 2009
8 for their corporate customers. We also made generally available our super-fast turbo charging, designed to greatly improve rating and charging performance and, because it runs on low-cost servers, reduce hardware and software costs. As the industry displayed greater appetite for efficiency investments, Amdocs delivered. Managed services, which we also refer to as strategic sourcing, is another way we help service providers manage their costs and ready for the future. Managed services reduces the overhead (such as staffing and facilities) required to run business and network applications, streamlines customers systems and ensures they are optimally maintained. Our customers also can modernize and accelerate their operations, with the complete set of our CES offerings available in a managed-services model. Innovation In 2009, we brought to market innovations that help our customers streamline and optimize some of their most important functions. As the industry displayed greater appetite for efficiency investments, Amdocs delivered.
9 For Amdocs, these relatively long engagements yield significant recurring revenue and strong relationships with the companies we support. Industry leaders like Clearwire (United States), T-Mobile UK and MetroPCS (United States) chose Amdocs for managed services in fiscal We believe this will remain a solid source of both near-term and long-term income for Amdocs. Building our presence in high-growth markets While we worked hard to address the economic considerations that drove many of our customers purchasing decisions over the past 12 months, we also invested and will continue to invest in areas that we believe will fuel future growth. These include emerging markets, OSS and the applications that underpin the digital economy. focus Amdocs is one of the few companies whose software spans the OSS-BSS spectrum and supports all networks, including both the Long-Term Evolution (LTE) and WiMAX standards for 4G, a driver of the digital economy. We expect the growth in the emerging markets of India, China and Asia Pacific, Central and Latin America, and Eastern Europe to continue to outpace that of established geographies. By making available a range of offerings from a full telco-ina-box solution to packaged products to fully customizable software and by building critical on-the-ground market insight and business connections in these high-growth markets, Amdocs won new business in These wins license and service agreements spanning the CES Portfolio expanded our footprint in places like Angola (Movicel), Costa Rica (Instituto Costarricense de Electricidad), Kazakhstan (the Republic of Kazakhstan and Kazakhtelecom) and Vietnam (Vietnam Telecom National). Service providers average annual spending on OSS continues to grow as their network demands mount and they plan for or roll out new technologies, such as fourth-generation (4G) Amdocs Annual Report 2009
10 networks, fiber to the premise (FTTP), tru2way (a cable standard for self-service activation via the set-top box) and others. Although no OSS vendor commands more than five-percent market share, we believe we are well-positioned to grow in this market. Amdocs is one of the few companies whose software spans the OSS-BSS spectrum and supports all networks, including the Long-Term Evolution (LTE) and WiMAX standards for 4G, a driver of the digital economy. In 2009, we earned high marks from industry-watchers for our OSS applications and new wins China Mobile, Vodafone D2 (Germany), Telenor Sweden and others. vision We see the emergence of ubiquitous connectivity: a world of more than a trillion network-connected devices with service providers, empowered by Amdocs software and services, at its center. Amdocs also has been laying the foundation for enabling service providers to play a pivotal role in the digital economy. We acquired digital commerce leader Qpass in 2006, and in 2009, bought ChangingWorlds, a provider of personalization and mobile portal solutions. These assets form the foundation of Amdocs Interactive, which earned new business in 2009 with Verizon (United States), Telefónica Europe and other providers in Asia-Pacific and Latin America. We believe service providers will continue investing in our Interactive solutions, considering them investments not only in revenue acquisition in the digital economy, but in their relevance in a completely connected world. Looking ahead: The connected world As the curtains close on fiscal 2009, we look ahead with cautious optimism. We serve an industry that is still growing and evolving. We anticipate more accommodating market conditions in fiscal And longer term, we see the emergence of ubiquitous connectivity: a world of more than a trillion network-connected devices with service providers, empowered by Amdocs software and services, at its center. We recognize, however, that although this vision may be tantalizing for service providers, getting there may not be easy. The network capacity demands and charging challenges that a trillion network connections represent are, themselves, daunting. Plus, the cost pressures that erupted over the last year will likely linger, signifying continued, intense scrutiny of capital spending requests. We believe our work this year, helping service providers to streamline their operations, lower their costs and transition to faster, higher-capacity networks, will go a long way toward easing the advance of our connected world.
11 But we won t rest there. We will maintain our business model and seek to accelerate our growth engines cable and satellite, managed services, emerging markets, OSS and Amdocs Interactive. We will continue to invest in research and development to drive innovation to support these engines. And we will strive to achieve new levels of cost-efficiency, in our own operations and our customers. Having made tough, but crucial decisions during the downturn, we face fiscal 2010 in a stronger position, ready to grow again in an industry that is both fundamentally healthy and strategically poised for an invigorating, connected future. DOV BAHARAV President and CEO, Amdocs Management Limited; Director, Amdocs Limited BRUCE K. ANDERSON Chairman of the Board, Amdocs Limited December 7, 2009 Amdocs Annual Report 2009
12 FINANCIAL HIGHLIGHTS (all data in millions, except per share data) Total Revenue $ 2,863 $ 3,162 $ 2,836 Operating Income (1) $ 367 $ 406 $ 357 Net Income (1)(2) $ 326 $ 379 $ 365 Diluted Earnings Per Share (1)(2) $ 1.58 $ 1.74 $ 1.65 revenue ($ millions) Operating Income (1) ($ millions) Net income (1)(2) ($ millions) 3, % 400 3,000 2,500 2,000 1,500 1,000 2,836 3,162 2, % % 12.8% 2.7% % 12.6% % % % % % Operating Income Operating income as a percentage of Revenue Diluted EPS (1)(2) Cash Balances (3) ($ millions) Net Cash provided by Operating Activities ($ millions) 2.0 1, ,200 1, ,179 1,244 1, Selected Quarterly Data Quarterly Revenue ($ millions) q1 / 08 q2 / 08 q3 / 08 q4 / 08 q1 / 09 q2 / 09 q3 / 09 q4 / 09 (1) Includes amortization of purchased intangible assets, equity-based compensation expense, write-off of purchased in-process research and development, restructuring charges and in 2007 other acquisition related income. (2) Includes related tax effect. (3) Includes short-term interest-bearing investments.
13 BUSINESS OVERVIEW founded 1982 stock Amdocs stock is traded on the New York Stock Exchange under the symbol DOX. Amdocs went public in June revenue $2.86 billion in fiscal year 2009 customers Amdocs customer base includes services companies in more than 60 countries worldwide. global presence > Workforce of approximately 17,000 in more than 60 countries > Production and operating centers in Canada, China, Cyprus, India, Ireland, Israel and the USA market position Amdocs is the market leader in customer experience systems innovation, enabling world-leading service providers to deliver an integrated, innovative and intentional customer experience at every point of service. Amdocs provides solutions that deliver customer experience excellence, combining the software, service and expertise to help our customers execute their strategies and achieve service, operational and financial excellence. products Amdocs products span business- and operational-support systems or what we call customer experience systems. They are production-ready, carrier-class software applications, proven to scale to support the largest global service providers and their millions of end-customers. Our main product areas are: > Revenue Management > Customer Management > Service and Resource Management (OSS) > Personalized Portal and Value-Added Services > Portfolio Management Amdocs CES Portfolio The Amdocs CES Portfolio builds on Amdocs market leadership and delivers significant progress toward the Amdocs CES Blueprint, enabling service providers to embark on their transformations immediately and with any approach, either holistically or modularly. services Amdocs offers a wide array of services to advise, transform and optimize business and technology processes while lowering risk. Amdocs services include consulting and technology, product support and managed services. DEMONSTRATED LEADERSHIP 2009 > Amdocs BSS Pack (Market Contribution Award by Telecom World magazine) > Best billing/oss solution (CIPCA) > #1 vendor in rating & charging and other core billing (Stratecast Partners) > Amdocs OSS best product of the year (BillingChina magazine) > #1 in overall billing (Stratecast Partners) > Amdocs ABM excellent project of the year (BillingChina magazine) > A leader in global outsourcing, telecommunications category (International Association of Outsourcing Professionals Global Outsourcing 100 list, published by FORTUNE magazine) > #1 telecom operations management systems vendor (Gartner) > Top 15 software product Amdocs CES 7.5 (ISM, Inc.) > Gold market innovation category for ORBIT (Yellow Pages Association) > Silver global community relations program (Yellow Pages Association) > #1 vendor in worldwide OSS and billing (IDC) 2008 > Best BSS supplier (UPC Broadband Vendor Award) > #1 telecom operations management systems vendor (Gartner) > Amdocs Product Support rated outstanding (Service and Support Professionals Association ) > #1 vendor in worldwide billing (IDC) > One to Watch Enterprise Suite CRM Category (CRM magazine) > Top 15 software product - Amdocs CRM CES 7.5 (ISM, Inc.) > A leader in global outsourcing, telecommunications category (International Association of Outsourcing Professionals Global Outsourcing 100 list, published by FORTUNE magazine) > #1 vendor in billing and customer care (OSS Observer) > #1 vendor in billing (OSS Observer) > Most advanced billing software of the year (BillingChina magazine) > Most applicable solution of 2007 for the telecommunications industry - Amdocs business intelligence solution (China Center for Information Industry Development) Amdocs Annual Report
14 SELECT B.V. 012 Smile.Communications Ltd A. Sutter Telefonbuchverlag GmbH AAPT Acer Group Advanced Info Service Alestra ALLTEL Corporation America Movil American Family Insurance Group Ameriprise Financial, Inc. Antel Anuncios en Directorios S.A. de C.V. Applifone Co., Ltd. AT&T Advertising Solutions AT&T Interactive AT&T Mobility B.Mobile Communications Sdn Bhd Bakcell Beijing Mobile Communication Company Ltd Beijing Unicom Belgacom Bell Canada Bell Mobility Inc. Best Bezeq International Ltd. BEZEQ Boost Mobile, LLC BT plc Cable & Wireless Cell C Cellcom Cellcom Guinea S.A. Cellcom Israel Ltd. Cellcom Liberia CenturyLink China Mobile Ltd China Telecom Corporation China United Telecommunications Corp Claro Brazil Claro (Telet S.A.) Claro (Tess S.A.) Clearwire Corporation Comcast Corporation Compania Dominicana de Telefonos CompuCom Systems, Inc CortalConsors CSL New World Mobility De Gule Sider A/S De Telefoongids BV debitel Defensie Telematica Organisatie Deutsche Telekom AG DGI DIRECTV Dish Network Dumrath & Fassnacht KG Eagle Mobile Econet Wireless International Ltd Effortel eircom Elion Enterprises Elisa Enel S.p.A. E-Plus Mobilfunk Equant NV Ericsson Esto Es ONO S.A.U. Excelcomindo Far EasTone Fastweb SpA Fiserv ISS Get Guangdong Mobile H&R Block, Inc. Hebei Unicom HeNan Unicom Hot Telecom HSBC Bank plc Hubei Telecom Hutchison 3G UK Instituto Costarricense de Electricidad Idearc Inc. Intelig Interoute Telecommunications Ltd J:COM (Jupiter Telecom) JiangXi Telecom Josef Keller GmbH & Co. Verlags KG Kazakhtelecom KDDI KPN Kyivstar LendingTree, Inc. LiaoNing Unicom Maxis Communications Meteor Mobile MetroPCS, Inc. Mobilkom Austria MobilTel Movicel NetCom Netia Neuf Cegetel Nordjyske Medier A/S NTL Group Ltd NuVox Communications, Inc. O2 Ireland O2 UK OPENREACH PagesJaunes Groupe Paginas Amarelas, SA Pannon Partner Communications Co. Ltd Pelephone Communications Ltd. Prudential Insurance Co. of America R. H. Donnelley Corporation Reliance Communications Republic of Kazakhstan Roche Diagnostics Rogers Communications Inc. RomTelecom SEAT Pagine Gialle S.p.A. Sensis Societe Francaise de Radiotelephone ShangHai Telecom ShanXi Telecom Si.Mobil SingTel Optus Slovak Telekom SmartTrust Sonaecom Sprint Nextel Corporation Sunrise Telecom Svyazinvest Tata Communications Ltd. TDC A/S Tele2 Telecommunication GmbH Telefonica de Espana Telefonica Europe Telefonica O2 CR Telefonica O2 Germany Telefonica O2 Slovakia Telefonica S.A. Teleinfo Media Co. Ltd Telekom Austria Telemar / Oi Telenor Denmark Telenor Sverige AB Telia Mobile TeliaSonera Sweden Telindus Group NV Telkom SA Ltd. Telstra TelstraClear TELUS Communications Inc. TELUS Mobility Inc. Teracom AB Tigo Tigo Sri Lanka Time dotcom Bhd Tiscali SpA T-Mobile Austria T-Mobile Croatia T-Mobile Czech Republic T-Mobile Deutschland AG T-Mobile Hungary T-Mobile International UK Limited T-Mobile Netherlands T-Mobile UK T-Mobile USA Togo Telecom Transatel Trudon (Pty) Ltd Truvo U-Com Burundi UPC Broadband Holding B.V. US Cellular Corporation Verizon Communications Inc. Verizon Wireless Inc. Verlag Heinz Heise GmbH & Co. KG Vimpelcom Virgin Media Vodafone D2 Vodafone Greece Vodafone Hungary Vodafone Ireland Vodafone Italy Vodafone Netherlands Vodafone Portugal Vodafone Romania Vodafone Spain Vodafone UK Vietnam Telecom National Wind XinJiang Telecom Yell Publicidad Yorkshire Water Ltd. Ziggo
15 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 20-F n REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2009 OR n TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR n SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report... For the transition period from to. Commission File Number AMDOCS LIMITED (Exact name of Registrant as specified in its charter) Guernsey (Jurisdiction of incorporation or organization) Suite 5, Tower Hill House Le Bordage St. Peter Port, Guernsey, GY1 3QT Amdocs, Inc Timberlake Manor Parkway, Chesterfield, Missouri (Address of principal executive offices) Thomas G. O Brien Amdocs, Inc Timberlake Manor Parkway, Chesterfield, Missouri Telephone: (Name, Telephone, and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Name of exchange on which registered Ordinary Shares, par value 0.01 New York Stock Exchange Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer s classes of capital or common stock as of the close of the period covered by the Annual Report. Ordinary Shares, par value 0.01 (Title of class) 205,079,239(1) (Number of shares) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No n If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of Yes n No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No n Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No n Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.(Check one): Large accelerated filer Accelerated filer n Non-accelerated filer n Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP International Financial Reporting Standards as issued n Other n by the International Accounting Standards Board If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes n No (1) Net of 37,387,598 shares held in treasury. Does not include (a) 21,321,437 ordinary shares reserved for issuance upon exercise of stock options granted under our stock option plan or by companies we have acquired, and (b) 23,655 ordinary shares reserved for issuance upon conversion of outstanding convertible debt securities.
16 AMDOCS LIMITED FORM 20-F ANNUAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 INDEX PART I Item 1. Identity of Directors, Senior Management and Advisers... 3 Item 2. Offer Statistics and Expected Timetable Item 3. Key Information... 3 Item 4. Information on the Company Item 5. Operating and Financial Review and Prospects Item 6. Directors, Senior Management and Employees Item 7. Major Shareholders and Related Party Transactions Item 8. Financial Information Item 9. The Offer and Listing Item 10. Additional Information Item 11. Quantitative and Qualitative Disclosures about Market Risk Item 12. Description of Securities Other than Equity Securities PART II Item 13. Defaults, Dividend Arrearages and Delinquencies Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds Item 15. Controls and Procedures Item 16A. Audit Committee Financial Expert Item 16B. Code of Ethics Item 16C. Principal Accountant Fees and Services Item 16D. Exemptions from the Listing Standards for Audit Committees Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers PART III Item 17. Financial Statements Item 18. Financial Statements Item 19. Exhibits Index to Consolidated Financial Statements... F-1 1
17 Unless the context otherwise requires, all references in this Annual Report on Form 20-F to Amdocs, we, our, us and the Company refer to Amdocs Limited and its consolidated subsidiaries and their respective predecessors. Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, and are expressed in U.S. dollars. References to dollars or $ are to U.S. dollars. Our fiscal year ends on September 30 of each year. References to any specific fiscal year refer to the year ended September 30 of the calendar year specified. We own, have rights to or use trademarks or trade names in conjunction with the sale of our products and services, including, without limitation, each of the following: Amdocs TM, Clarify TM, Cramer TM, CES TM, Intentional Customer Experience TM, OpenMarket TM, Qpass TM, JacobsRimell TM and ChangingWorlds TM. Forward Looking Statements This Annual Report on Form 20-F contains forward-looking statements (within the meaning of the U.S. federal securities laws) that involve substantial risks and uncertainties. You can identify these forwardlooking statements by words such as expect, anticipate, believe, seek, estimate, project, forecast, continue, potential, should, would, could, intend and may, and other words that convey uncertainty of future events or outcome. Statements that we make in this Annual Report that are not statements of historical fact also may be forward-looking statements. Forward-looking statements are not guarantees of future performance, and involve risks, uncertainties and assumptions that may cause our actual results to differ materially from the expectations that we describe in our forward-looking statements. There may be events in the future that we are not accurately able to predict, or over which we have no control. You should not place undue reliance on forward-looking statements. We do not promise to notify you if we learn that our assumptions or projections are wrong for any reason. We disclaim any obligation to update our forward-looking statements, except where applicable law may otherwise require us to do so. Important factors that may affect these projections or expectations include, but are not limited to: changes in the overall economy; changes in competition in markets in which we operate; changes in the demand for our products and services; the loss of a significant customer; consolidation within the industries in which our customers operate; changes in the telecommunications regulatory environment; changes in technology that impact both the markets we serve and the types of products and services we offer; financial difficulties of our customers; losses of key personnel; difficulties in completing or integrating acquisitions; litigation and regulatory proceedings; and acts of war or terrorism. For a discussion of these important factors, please read the information set forth below under the caption Risk Factors. 2
18 PART I Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable. Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable. Item 3. KEY INFORMATION Selected Financial Data Our historical consolidated financial statements are prepared in accordance with U.S. GAAP, and presented in U.S. dollars. The selected historical consolidated financial information set forth below has been derived from our historical consolidated financial statements for the years presented. Historical information as of and for the five years ended September 30, 2009 is derived from our consolidated financial statements, which have been audited by Ernst & Young LLP, our independent registered public accounting firm. You should read the information presented below in conjunction with those statements. The information presented below is qualified by the more detailed historical consolidated financial statements, the notes thereto and the discussion under Operating and Financial Review and Prospects included elsewhere in this Annual Report (in thousands, except per share data) Statement of Operations Data: Revenue... $2,862,607 $3,162,096 $2,836,173 $2,480,050 $2,038,621 Operating income , , , , ,492 Net income , , , , ,636 Basic earnings per share Diluted earnings per share Dividends declared per share Balance Sheet Data: Cash, cash equivalents and short-term interest-bearing investments... $1,173,041 $1,244,378 $1,179,280 $ 979,381 $1,145,563 Total assets... 4,328,417 4,579,063 4,345,350 3,962,828 3,202,468 Long-term obligations Convertible Senior Notes(1).... 1, , , , ,272 Long-term portion of capital lease obligations Shareholders equity.... 3,213,053 2,805,191 2,600,243 2,154,165 1,656,452 (1) During fiscal 2009, using proceeds from our revolving credit facility, we purchased $449.0 million aggregate principal amount of our 0.50% convertible notes at an average price of 99.5% of the principal amount, excluding accrued interest and transaction fees. As of September 30, 2009, $1.0 million principal amount of the notes remain as our obligations, due in 2024, in accordance with their terms. 3
19 Additional Ordinary Shares Paid-In Shares Amount Capital (in thousands) Treasury Stock Statement of Changes in Shareholders Equity Data: Balance as of September 30, ,182 $3,644 $1,870,922 $(602,392) Employee stock options exercised... 5, ,853 Tax benefit of stock options exercised/cancelled... 7,619 Issuance of restricted stock, net of forfeitures Issuance of restricted stock and stock options related to acquisitions, net... 4,634 Equity-based compensation expense related to employees... 46,178 Reclassification of unearned compensation to additional paid in capital... (962) Equity-based compensation expense related to non-employee stock options Balance as of September 30, ,793 $3,763 $2,035,309 $(602,392) Employee stock options exercised... 3, ,576 Tax benefit of stock options exercised/cancelled... 3,965 Repurchase of shares... (1,411) (49,837) Issuance of restricted stock, net of forfeitures Issuance of stock options related to acquisitions, net Equity-based compensation expense related to employees... 53,587 Equity-based compensation expense related to non-employee stock options Balance as of September 30, ,762 $3,850 $2,168,234 $(652,229) Employee stock options exercised... 2, ,527 Tax benefit of stock options exercised/cancelled... 1,549 Repurchase of shares... (8,370) (255,051) Issuance of restricted stock, net of forfeitures Equity-based compensation expense related to employees... 57,490 Balance as of September 30, ,916 $3,900 $2,264,800 $(907,280) Employee stock options exercised... 1, ,863 Tax benefit of stock options exercised/cancelled... (1,484) Repurchase of shares... (468) (12,594) Issuance of restricted stock, net of forfeitures Equity-based compensation expense related to employees... 42,911 Balance as of September 30, ,079 $3,930 $2,334,090 $(919,874) 4
20 Risk Factors We are exposed to general global economic and market conditions, particularly those impacting the communications industry. Developments in the communications industry, such as the impact of general global economic conditions, industry consolidation, emergence of new competitors, commoditization of voice services and changes in the regulatory environment, at times have had, and could continue to have, a material adverse effect on our existing or potential customers. In the past, these conditions reduced the high growth rates that the communications industry had previously experienced, and caused the market value, financial results and prospects and capital spending levels of many communications companies to decline or degrade. During previous economic downturns, the communications industry experienced significant financial pressures that caused many in the industry to cut expenses and limit investment in capital intensive projects and, in some cases, led to restructurings and bankruptcies. Although we are unable to determine what its full effects will be, the current worldwide economic turmoil has had, and may have further, adverse consequences for our customers and our business. During adverse conditions in the business environment for communications companies, service providers often need to control operating expenses and capital investment budgets, which can adversely affect our business. For example, the recent business climate for communications companies has resulted in slowed customer buying decisions and price pressures that have increased pressure on our ability to generate revenue. These adverse market conditions have had a negative impact on our business by decreasing our new customer engagements and the size of initial spending commitments under those engagements, as well as decreasing the level of discretionary spending with existing customers. In addition, the slowdown in the buying decisions of service providers has extended our sales cycle period and limits our ability to forecast our flow of new contracts. If such adverse business conditions continue or arise again in the future, our business may be harmed. If we fail to adapt to changing market conditions and cannot compete successfully with existing or new competitors, our business could be harmed. We may be unable to compete successfully with existing or new competitors. Our failure to adapt to changing market conditions and to compete successfully with established or new competitors could have a material adverse effect on our results of operations and financial condition. We face intense competition for the software products and services that we sell, including competition for managed services we provide to customers under long-term service agreements. These managed services include services such as management of datacenter operations and IT infrastructure, application management and ongoing support, systems modernization and consolidation and management of end-to-end business processes for billing and customer care operations. The market for communications information systems is highly competitive and fragmented, and we expect competition to continue to increase. We compete with independent software and service providers and with the in-house IT and network departments of communications companies. Our main competitors include firms that provide IT services (including consulting, systems integration and managed services), software vendors that sell products for particular aspects of a total information system, software vendors that specialize in systems for particular communications services (such as Internet, wireline and wireless services, cable, satellite and service bureaus) and network equipment providers that offer software systems in combination with the sale of network equipment. Since our 2006 acquisition of Qpass Inc., which we refer to as Qpass, we also compete with companies that provide digital commerce software and solutions. We believe that our ability to compete depends on a number of factors, including: the development by others of software products that are competitive with our products and services, the price at which others offer competitive software and services, the ability of competitors to deliver projects at a level of quality that rivals our own, 5