View:
Room 4561
April 20, 2006
Mr. Dov Baharav
Chief Executive Officer
Amdocs Limited
1390 Timberlake Manor Parkway
Chesterfield, MO 63017
Re: Amdocs Limited
Form 20-F for Fiscal Year Ended September 30, 2005
Filed December 28, 2005
Form 6-K filed January 19, 2006
File No. 001-14840
Dear Mr. Baharav:
We have reviewed the above referenced filings and have the
following comments. Please note that we have limited our review
to
the matters addressed in the comments below. We may ask you to
provide us with supplemental information so we may better
understand
your disclosure. Please be as detailed as necessary in your
explanation. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 20-F for the Fiscal Year Ended September 30, 2005
Financial Statements
Note 3 - Acquisitions, page F-17
Certen
1. We note your disclosure regarding a revision to the purchase
price
allocation recorded during 2005 that resulted in a decrease in
goodwill. Describe for us the facts and circumstances that led
you
to record the purchase price adjustment. As part of your
response,
describe, in reasonable detail, the nature and amount of the items
underlying this revision. Additionally, explain your basis for
concluding that it was appropriate to revise the purchase price
allocation for the identified items. Explain how you considered
the
guidance of SFAS 141, pars. 40 and 41.
DST Innovis
2. We note your acquisition of DST Innovis on July 1, 2005 and the
related purchase price allocation. Describe for us, in reasonable
detail, the nature and terms of the "Printing and mailing
obligation". Tell us how this amount was determined. Explain
when,
and under what circumstances, the liability associated with this
obligation will be reversed. Explain why this obligation was
considered to be part of the purchase price allocation.
3. Explain to us your basis for your conclusion that 15 years is
an
appropriate amortization period for the acquired customer
arrangements. Describe for us any objective, reliable evidence
that
supports your conclusion.
Longshine
4. Tell us whether you acquired a direct, 100% ownership interest
in
Longshine Information Technology as a result of the August 3, 2005
purchase transaction. If not, explain the structure and extent of
your ownership interest.
Note 8 - Goodwill and Intangible Assets, Net, page F-25
5. We note the disclosure relating to where the amortization
expense
of identified intangible assets is included within the statement
of
operations. Tell us where the amortization expense of each of the
identified intangible assets recorded in conjunction with the
XACCT,
the Innovis and the Longshine acquisitions is reflected.
Note 12 - Convertible Notes, page F-29
6. Please explain to us in thorough detail how you have applied
the
guidance in EITF Issue 00-19 in evaluating whether the conversion
features of the Convertible Senior Notes issued in March 2004
include
embedded derivatives that you should account for at fair value
under
SFAS 133. For further guidance see pages 30 through 32 in the
Division of Corporation Finance Current Accounting and Disclosure
Issues Guide at
http://www.sec.gov/divisions/corpfin/acctdis120105.pdfin.
7. Further, explain to us in greater detail the nature of
negotiated
agreements whereby the Board of Directors gave approval for the
repurchase of Ordinary Shares sold short by the purchasers of the
Notes (i.e. these agreements appear to have been entered into
concurrently with the sale of the Notes) in order to offset the
dilutive effect of the potential shares issuable upon conversion.
Form 6-K filed January 19, 2006
8. We note the non-GAAP information included in your press release
furnished in the Form 6-K filed January 19, 2006. Your non-GAAP
presentation does not appear consistent with our guidance and
requirements on such presentation. Following are such
inconsistencies in greater detail:
* Your disclosure does not clearly identify those measures which
have
been presented on a non-GAAP basis. However, the presentation
includes numerous non-GAAP measures including, but not limited to,
non-GAAP cost of services, various non-GAAP operating expense
items,
non-GAAP operating income, non-GAAP income before income taxes,
non-
GAAP net income and non-GAP earnings per share. Note that each
line
item, sub-total or total, for which an adjustment has been made
represents a separate non-GAAP measure that must be separately
identified and addressed in the accompanying disclosure. See
Items
10(e)(1)(i)(C), 10(e)(1)(i)(D) and 10(e)(2) of Regulation S-K.
* As each of the non-GAAP measures excludes items that are
considered
recurring in nature, you must meet the burden of demonstrating the
usefulness of each measure and clearly disclose why each non-GAAP
measures is useful when these items are excluded. See Question 8
of
the June 13, 2003 FAQs.
* We note no substantive disclosure that addresses the disclosures
in
Question 8 of the FAQ. For example, the disclosure does not
explain
the manner in which management uses each measure and the economic
substance behind that decision, why it is useful to an investor to
segregate business combination accounting and acquisition related
expenses from GAAP results, or how your presentation enables an
investor to compare results to periods prior to acquisitions.
Further, you do not describe the material limitations associated
with
each measure or the manner in which you compensate for such
limitations.
9. We note your presentation of consolidated statements of income
excluding certain charges. In view of the nature, content and
format
of the presentation, we question whether it complies with Item
100(b)
of Regulation G. In this regard we note the following:
* Presentation of a full non-GAAP Statement of Operations may
create
the unwarranted impression that the presentation is based on a
comprehensive set of accounting rules or principles; and,
* The presentation includes the revenue streams from acquired
entities but excludes material costs of acquiring those revenue
streams.
As appropriate, please amend your filing and respond to these
comments within 10 business days or tell us when you will provide
us
with a response. Please submit all correspondence and
supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T. You
may wish to provide us with marked copies of any amendment to
expedite our review. Please furnish a cover letter with any
amendment that keys your responses to our comments and provides
any
requested information. Detailed cover letters greatly facilitate
our
review. Please understand that we may have additional comments
after
reviewing any amendment and your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Marc Thomas, Senior Staff Accountant at (202)
551-3452 or me at (202) 551-3489 if you have questions regarding
these comments.
Sincerely,
Brad Skinner
Accounting Branch Chief
Mr. Dov Baharav
Amdocs Limited
April 20, 2006
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