WilmerHale
Robert A. Schwed
+1 212 937 7276(t)
+1 212 230 8888(f)
robert.schwed@wilmerhale.com
July 26, 2006
Via EDGAR
- ---------
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, DC 20549
Attention: Marc Thomas
Re: AMDOCS LIMITED
Form 20-F for Fiscal Year Ended September 30, 2005
Filed December 28, 2005
Form 6-K filed April 27, 2006
Form 6-K filed May 17, 2006
File No. 001-14840
------------------
Ladies and Gentlemen:
On behalf of our client Amdocs Limited (the "Company"), we are submitting the
following responses of the Company to a comment of the staff (the "Staff") of
the Securities and Exchange Commission (the "Commission") set forth in a letter
dated July 18, 2006, from Mr. Brad Skinner, Accounting Branch Chief of the
Commission. The comment letter relates to the Company's Annual Report on Form
20-F for the fiscal year ended September 30, 2005 filed December 28, 2005 (the
"Form 20-F"), the Company's Report of Foreign Private Issuer on Form 6-K
furnished April 27, 2006 (the "April Form 6-K") and the Company's Report of
Foreign Private Issuer on Form 6-K furnished May 17, 2006 (the "May Form 6-K").
As Jason Kropp of this firm discussed with Mr. Thomas, we believe that the
references in the Staff's letter to the Form 20-F and the May Form 6-K were in
error and that the Staff intended to refer to the Company's Report of Foreign
Private Issuer on Form 6-K furnished January 19, 2006 (the "January Form 6-K").
For convenient reference, we have included below the Staff's comment set forth
in the comment letter. The response is based on information provided to us by
representatives of the Company.
Please note that, on July 20, 2006, after receiving the Staff's letter, the
Company furnished a Report of Foreign Private Issuer on Form 6-K (the "July Form
6-K"), to which it attached as Exhibit 99.1 a press release (the "Earnings
Release") announcing the Company's financial results for the fiscal quarter
ended June 30, 2006. As described below, the Company took into consideration the
Staff's most recent comments in finalizing the Earnings Release and the July
Form 6-K, and the Company believes that it has addressed the Staff's comments in
the Earnings Release and the July Form 6-K. For convenient reference, we have
attached the Earnings Release as Exhibit A.
WilmerHale
Securities and Exchange Commission
July 26, 2006
Page 2
The Company carefully considered the desirability and appropriateness of
amending one or more of its past Reports of Foreign Private Issuer on Form 6-K
in order to reflect the "revised practices" described herein with respect to the
presentation of a non-GAAP operating statement. The Company continues to believe
that any such amendments would, on the whole, be more confusing than useful to
investors and others. It has been several months since the January Form 6-K and
April Form 6-K were furnished, and only days since the July Form 6-K, and
management believes it is highly unlikely that analysts, individual investors
and others would alter or reconsider their evaluation of the Company or an
investment in the Company's ordinary shares as a result of an amendment of past
filings to the effect described herein.
Management agrees that the Company's revised non-GAAP practices will improve
disclosures for investors in the future, but believes retrospective application
of those practices would not disclose any meaningful differences and may confuse
many investors who would assume that the amendments were made to disclose
significant adverse changes. The Company therefore respectfully submits that the
goal of improved disclosure regarding non-GAAP data will be served best by
continuing to implement the revised practices in all future filings, as it has
done in the July Form 6-K. In light of this, and because the Company continues
to believe that the amendments to past filings that would be required to address
the Staff's comment relate to matters that are not individually or in the
aggregate material to investors, the Company has not amended the January Form
6-K or the April Form 6-K.
Accordingly, and as it believes it has done with the July Form 6-K, the Company
requests that the Staff permit the Company to address the Staff's comment in
future filings under the Securities Exchange Act of 1934, as amended.
Form 6-K filed April 27, 2006
- -----------------------------
1. We have reviewed your response to your comment number 9 from our letter
dated April 20, 2006 concerning the non-GAAP operating statement columnar
format. We continue to have the concerns previously expressed over how
investors might view that information due to the format in which it has
been presented. As noted in our prior comment, we believe the non-GAAP
operating statement columnar format may create the unwarranted impression
to investors that the non-GAAP operating statement has been prepared
under a comprehensive set of accounting rules or principles while also
conveying undue prominence to a statement based on non-GAAP measures.
Consequently, we believe is should be removed. As a substitute for this
presentation format, you may consider presenting only individual non-GAAP
measures (i.e., line items, subtotals, etc.) provided each one complies
with Item 10 of Reg. S-K and the Division of Corporation Finance's
Frequently Asked Questions Regarding Use of Non-GAAP Financial Measures,
Question 8.
Response: The Company acknowledges the Staff's comment with respect to
the Company's use of non-GAAP operating statement columnar
format. In light of this comment, the Company has considered
and revised this presentation format in a manner that the
Company believes addresses the Staff's concern. As described
above, the Company implemented this revised practice in
connection with the July Form 6-K.
* * *
WilmerHale
Securities and Exchange Commission
July 26, 2006
Page 3
Please do not hesitate to contact the undersigned (212-937-7276) or Mr. Kropp
(617-526-6421) with any questions regarding this response letter.
Sincerely,
/s/ Robert A. Schwed
Robert A. Schwed
Exhibit A
---------
AMDOCS LIMITED REPORTS 23% GROWTH IN REVENUE TO A RECORD $626
MILLION FOR THE THIRD QUARTER OF FISCAL 2006
32% GROWTH IN DILUTED NON-GAAP EARNINGS PER SHARE TO $0.49;
DILUTED GAAP EARNINGS PER SHARE OF $0.39
Key highlights:
- Third quarter revenue grew 23% to $626 million
- 32% increase in third quarter diluted non-GAAP EPS, excluding
acquisition-related costs and equity-based compensation expense, net
of related tax effects, to $0.49; Exceeds guidance of $0.46
- Diluted GAAP EPS of $0.39
- Free cash flow of $94 million for the quarter
- Qpass acquisition positions Amdocs as the leader in the emerging
digital content market
- After the quarter, Amdocs announced that it signed an agreement to
acquire Cramer Systems Group Ltd., a leading provider of operations
support systems (OSS) software and solutions, for approximately $375
million in cash, net of cash on hand
- Fourth quarter fiscal 2006 guidance: Expected revenue of approximately
$657 million and diluted non-GAAP EPS of $0.49, excluding
acquisition-related costs and approximately $0.04-$0.05 per share of
equity-based compensation expense, net of related tax effects. Diluted
GAAP EPS is expected to be approximately $0.41-$0.42. This guidance
excludes any potential impact of the pending acquisition of Cramer
- Preliminary fiscal 2007 guidance: Expected revenue of approximately
$2.880 - $2.980 billion and diluted non-GAAP EPS of $2.06 - $2.16,
which exclude acquisition-related costs and approximately $0.19-$0.22
per share of equity-based compensation expense, net of related tax
effects. This guidance includes the expected impact of the pending
acquisition of Cramer. Amdocs expects to provide guidance for 2007
diluted GAAP EPS after the purchase price accounting for the
acquisition is completed
ST. LOUIS, MO - JULY 19, 2006 - Amdocs Limited (NYSE: DOX) today reported that
for the quarter ended June 30, 2006, revenue was $626.4 million, an increase of
23.5% from last year's third quarter. Excluding acquisition-related costs, which
include amortization of purchased intangible assets and the write-off of
in-process research and development and
excluding equity-based compensation expense, net of related tax effects, of
$20.6 million, net income on a non-GAAP basis was $106.2 million, or $0.49 per
diluted share, compared to non-GAAP net income, excluding $1.7 million of
acquisition-related costs net of related tax effects, of $78.8 million, or $0.37
per diluted share, in the third quarter of fiscal 2005. The Company's net income
was $85.6 million, or $0.39 per diluted share, compared to net income of $77.1
million, or $0.36 per diluted share, in the third quarter of fiscal 2005. Free
cash flow, defined as cash flow from operations less net capital expenditures
and principal payments on capital leases, was $94 million in the quarter.
"We are pleased to again report record revenues and increasing profitability,"
said Dov Baharav, chief executive officer of Amdocs Management Limited. "We see
demand in the market, which continues to be driven by service providers' need to
address competition, consolidation and convergence. We have strengthened our
presence in the digital content area with our acquisition of Qpass and we are
expanding our OSS activities with our pending acquisition of Cramer. Amdocs is
positioned as the only vendor that can provide an end-to-end solution, from
business support systems -- or BSS -- to OSS, for the leading services
providers. This will put us in the leading position to benefit from the growth
opportunities as service providers transform their organizations in order to
offer new products and services. We are confident that our success in 2006 will
continue as we look towards fiscal 2007."
During the third quarter, Amdocs new business included 11 key wins, across
geographies and lines of business. Amdocs expanded its relationship with Rogers
Communications, which will install Amdocs CRM across its cable, wireless and
telecom lines of business as part of a rollout of an integrated customer
management strategy. In Australia, Telstra has selected Amdocs as one of the key
vendors for an OSS transformational program. In the United States, Amdocs was
awarded several projects related to assisting customers in their consolidation
and integration of acquisitions. In broadband cable and satellite, a customer
has signed a contract extension. Several other customers, including some new
logos, have chosen Amdocs for CRM, Amdocs Partner Management and mediation
projects.
FINANCIAL OUTLOOK
Amdocs expects that revenue for the fourth quarter of fiscal 2006 will be
approximately $657 million. Diluted earnings per share on a non-GAAP basis for
the fourth quarter are
expected to be $0.49, excluding acquisition-related costs and the impact of
approximately $0.04-$0.05 per share of equity-based compensation expense, net of
related tax effects. Diluted GAAP EPS is expected to be approximately
$0.41-$0.42. This guidance excludes any potential impact of the pending
acquisition of Cramer. Amdocs expects that it may incur a one-time charge in its
fourth fiscal quarter to account for certain costs related to the Cramer
acquisition.
Preliminary fiscal 2007 guidance: Expected revenue of approximately
$2.880-$2.980 billion and diluted non-GAAP EPS of $2.06-$2.16, which excludes
acquisition-related costs and approximately $0.19-$0.22 per share of
equity-based compensation expense, net of related tax effects. This guidance
includes the expected impact of the pending acquisition of Cramer. Amdocs
expects to provide guidance for diluted GAAP EPS after the purchase price
accounting for the acquisition is completed.
Amdocs will host a conference call on July 19, 2006 at 5 p.m. Eastern Time to
discuss the Company's third quarter results. The call will be carried live on
the Internet via www.InvestorCalendar.com and the Amdocs website,
www.amdocs.com.
NON-GAAP FINANCIAL MEASURES
This release includes non-GAAP diluted earnings per share and other non-GAAP
line items from the Non-GAAP Consolidated Statements of Income, including
non-GAAP cost of service, non-GAAP research and development, non-GAAP selling,
general and administrative, non-GAAP operating income, non-GAAP income before
income taxes, non-GAAP income taxes and non-GAAP net income. These non-GAAP
measures exclude the following items:
- amortization of purchased intangible assets;
- In-process research and development write-off;
- equity-based compensation expense; and
- tax effects related to the above.
These non-GAAP financial measures are not in accordance with, or an alternative
for, generally accepted accounting principles and may be different from non-GAAP
financial measures used by other companies. In addition, these non-GAAP
financial measures and the Non-GAAP Consolidated Statements of Income are not
based on any comprehensive
set of accounting rules or principles. Amdocs believes that non-GAAP financial
measures have limitations in that they do not reflect all of the amounts
associated with Amdocs' results of operations as determined in accordance with
GAAP and that these measures should only be used to evaluate Amdocs' results of
operations in conjunction with the corresponding GAAP measures.
Amdocs believes that the presentation of non-GAAP diluted earnings per share and
other non-GAAP line items from the Non-GAAP Consolidated Statements of Income,
including non-GAAP cost of service, non-GAAP research and development, non-GAAP
selling, general and administrative, non-GAAP operating income, non-GAAP income
before income taxes, non-GAAP income taxes and non-GAAP net income, when shown
in conjunction with the corresponding GAAP measures, provides useful information
to investors and management regarding financial and business trends relating to
its financial condition and results of operations.
For its internal budgeting process and in monitoring the results of the
business, Amdocs' management uses financial statements that do not include
amortization of purchased intangible assets, in-process research and development
write-off, equity-based compensation expense, and related tax effects. Amdocs'
management also uses the foregoing non-GAAP financial measures, in addition to
the corresponding GAAP measures, in reviewing the financial results of Amdocs.
In addition, Amdocs believes that significant groups of investors exclude these
non-cash expenses in reviewing its results and those of its competitors, because
the amounts of the expenses between companies can vary greatly depending on the
assumptions used by an individual company in determining the amounts of the
expenses.
Amdocs further believes that, where the adjustments used in calculating non-GAAP
diluted earnings per share are based on specific, identified amounts that impact
different line items in the Consolidated Statements of Income (including cost of
service, research and development, selling, general and administrative,
operating income, income before income taxes, income taxes and net income), it
is useful to investors to understand how these specific line items in the
Consolidated Statements of Income are affected by these adjustments.
ABOUT AMDOCS
Amdocs combines innovative software and services with deep business knowledge to
accelerate implementation of integrated customer management by the world's
leading service providers. By delivering a comprehensive portfolio of software
and services that
spans the customer lifecycle, Amdocs enables service companies to deliver an
intentional customer experience(TM), which results in stronger, more profitable
customer relationships. Service providers also benefit from a rapid return on
investment, lower total cost of ownership and improved operational efficiencies.
A global company with revenue of more than $2 billion in fiscal 2005, Amdocs has
over 14,000 employees and serves customers in more than 50 countries around the
world. For more information, visit Amdocs at www.amdocs.com.
This press release includes information that constitutes forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995, including statements about Amdocs growth and
business results in future quarters. Although we believe the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, we can give no assurance that our expectations will be obtained or
that any deviations will not be material. Such statements involve risks and
uncertainties that may cause future results to differ from those anticipated.
These risks include, but are not limited to, the effects of general economic
conditions, Amdocs ability to grow in the business markets that it serves,
Amdocs ability to successfully integrate acquired businesses, adverse effects of
market competition, rapid technological shifts that may render the Company's
products and services obsolete, potential loss of a major customer, our ability
to develop long-term relationships with our customers, and risks associated with
operating businesses in the international market. Amdocs may elect to update
these forward-looking statements at some point in the future; however, the
Company specifically disclaims any obligation to do so. These and other risks
are discussed at greater length in the Company's filings with the Securities and
Exchange Commission, including in our Annual Report on Form 20-F, filed on
December 28, 2005 and our quarterly 6-K furnished on February 15 and May 15,
2006.
CONTACT:
Thomas G. O'Brien
Treasurer and Vice President of Investor Relations
Amdocs Limited
314-212-8328
E-mail: dox_info@amdocs.com
AMDOCS LIMITED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -----------------------
2006(1) 2005 2006(2) 2005
-------- -------- ---------- ----------
Revenue:
License $ 23,220 $ 27,199 $ 85,172 $ 74,909
Service 603,228 480,156 1,729,433 1,390,394
-------- -------- ---------- ----------
626,448 507,355 1,814,605 1,465,303
Operating expenses:
Cost of license 995 1,125 2,973 3,278
Cost of service 402,626 324,249 1,165,010 929,487
Research and development 46,455 31,393 131,392 97,567
Selling, general and
administrative 74,940 56,448 227,289 166,000
Amortization of purchased
intangible assets 8,547 2,078 23,588 7,875
In-process research and
development 8,415 -- 8,415 --
-------- -------- ---------- ----------
541,978 415,293 1,558,667 1,204,207
-------- -------- ---------- ----------
Operating income 84,470 92,062 255,938 261,096
Interest income and other, net 14,938 4,305 33,659 14,944
-------- -------- ---------- ----------
Income before income taxes 99,408 96,367 289,597 276,040
Income taxes 13,823 19,270 46,916 55,203
-------- -------- ---------- ----------
Net income $ 85,585 $ 77,097 $ 242,681 $ 220,837
======== ======== ========== ==========
Basic earnings per share $ 0.42 $ 0.38 $ 1.20 $ 1.10
======== ======== ========== ==========
Diluted earnings per share(3) $ 0.39 $ 0.36 $ 1.13 $ 1.03
======== ======== ========== ==========
Basic weighted average number of
shares outstanding 204,404 200,494 202,474 201,453
======== ======== ========== ==========
Diluted weighted average number
of shares outstanding 220,109 216,570 217,633 217,608
======== ======== ========== ==========
(1) The three months ended June 30, 2006 include equity-based compensation
pre-tax expense of $10,948, which was classified as follows: $4,165 to Cost
of service, $1,232 to Research and development and $5,551 to Selling,
general and administrative.
(2) The nine months ended June 30, 2006 include equity-based compensation
pre-tax expense of $31,948, which was classified as follows: $12,237 to
Cost of service, $3,041 to Research and development and $16,670 to Selling,
general and administrative.
(3) To reflect the impact of assumed conversion of the convertible notes, $985
and $2,964, representing interest expense and amortization of issuance
costs, were added back to net income for the three and nine months ended
June 30, 2006, respectively, and $988 and $2,955 were added back to net
income for the three and nine months ended June 30, 2005, respectively, for
the purpose of computing diluted earnings per share.
AMDOCS LIMITED
SELECTED FINANCIAL METRICS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -----------------------
2006 2005 2006 2005
-------- -------- ---------- ----------
Revenue $626,448 $507,355 $1,814,605 $1,465,303
Non-GAAP operating income 112,380 94,140 319,889 268,971
Non-GAAP net income 106,169 78,756 291,678 227,132
Non-GAAP diluted earnings per
share $ 0.49 $ 0.37 $ 1.35 $ 1.06
Diluted weighted average number
of shares outstanding 220,109 216,570 217,633 217,608
AMDOCS LIMITED
RECONCILIATION OF SELECTED FINANCIAL METRICS FROM GAAP TO NON-GAAP
(IN THOUSANDS)
THREE MONTHS ENDED
JUNE 30, 2006
-----------------------------------------------------------------------------
RECONCILIATION ITEMS
-------------------------------------------------------
AMORTIZATION
OF PURCHASED IN-PROCESS EQUITY BASED
INTANGIBLE RESEARCH AND COMPENSATION
GAAP ASSETS DEVELOPMENT EXPENSE TAX EFFECT NON-GAAP
-------- ------------ ------------ ------------ ---------- --------
Operating expenses:
Cost of license $ 995 $ -- $ -- $ -- $ -- $ 995
Cost of service 402,626 -- -- (4,165) -- 398,461
Research and
development 46,455 -- -- (1,232) -- 45,223
Selling, general and
administrative 74,940 -- -- (5,551) -- 69,389
Amortization of
purchased intangible
assets 8,547 (8,547) -- -- -- --
In-process research and
development 8,415 -- (8,415) -- -- --
-------- ------- ------- -------- ------- --------
Total operating expenses 541,978 (8,547) (8,415) (10,948) -- 514,068
-------- ------- ------- -------- ------- --------
Operating income 84,470 8,547 8,415 10,948 -- 112,380
-------- ------- ------- -------- ------- --------
Income taxes 13,823 -- -- -- 7,326 21,149
-------- ------- ------- -------- ------- --------
Net income $ 85,585 $ 8,547 $ 8,415 $ 10,948 $(7,326) $106,169
-------- ------- ------- -------- ------- --------
AMDOCS LIMITED
RECONCILIATION OF SELECTED FINANCIAL METRICS FROM GAAP TO NON-GAAP (CONT'D)
(IN THOUSANDS)
THREE MONTHS ENDED
JUNE 30, 2005
-----------------------------------------------
RECONCILIATION ITEMS
-------------------------
AMORTIZATION
OF PURCHASED
INTANGIBLE
GAAP ASSETS TAX EFFECT NON-GAAP
-------- ------------ ---------- --------
Operating expenses:
Cost of license $ 1,125 $ -- $ -- $ 1,125
Cost of service 324,249 -- -- 324,249
Research and
development 31,393 -- -- 31,393
Selling, general and
administrative 56,448 -- -- 56,448
Amortization of
purchased intangible
assets 2,078 (2,078) -- --
In-process research and
development -- -- -- --
-------- ------- ----- --------
Total operating expenses 415,293 (2,078) -- 413,215
-------- ------- ----- --------
Operating income 92,062 2,078 -- 94,140
-------- ------- ----- --------
Income taxes 19,270 -- 419 19,689
-------- ------- ----- --------
Net income $ 77,097 $ 2,078 $(419) $ 78,756
-------- ------- ----- --------
AMDOCS LIMITED
RECONCILIATION OF SELECTED FINANCIAL METRICS FROM GAAP TO NON-GAAP
(IN THOUSANDS)
NINE MONTHS ENDED
JUNE 30, 2006
---------------------------------------------------------------------------------
RECONCILIATION ITEMS
-------------------------------------------------------
AMORTIZATION
OF PURCHASED IN-PROCESS EQUITY BASED
INTANGIBLE RESEARCH AND COMPENSATION
GAAP ASSETS DEVELOPMENT EXPENSE TAX EFFECT NON-GAAP
---------- ------------ ------------ ------------ ---------- ----------
Operating expenses:
Cost of license $ 2,973 $ -- $ -- $ -- $ -- $ 2,973
Cost of service 1,165,010 -- -- (12,237) -- 1,152,773
Research and
development 131,392 -- -- (3,041) -- 128,351
Selling, general and
administrative 227,289 -- -- (16,670) -- 210,619
Amortization of
purchased intangible
assets 23,588 (23,588) -- -- -- --
In-process research and
development 8,415 -- (8,415) -- -- --
---------- --------- ------- -------- -------- ----------
Total operating expenses 1,558,667 (23,588) (8,415) (31,948) -- 1,494,716
---------- --------- ------- -------- -------- ----------
Operating income 255,938 23,588 8,415 31,948 -- 319,889
---------- --------- ------- -------- -------- ----------
Income taxes 46,916 -- -- -- 14,954 61,870
---------- --------- ------- -------- -------- ----------
Net income $ 242,681 $ 23,588 $ 8,415 $ 31,948 $(14,954) $ 291,678
---------- --------- ------- -------- -------- ----------
AMDOCS LIMITED
RECONCILIATION OF SELECTED FINANCIAL METRICS FROM GAAP TO NON-GAAP (CONT'D)
(IN THOUSANDS)
NINE MONTHS ENDED
JUNE 30, 2005
---------------------------------------------------
RECONCILIATION ITEMS
-------------------------
AMORTIZATION
OF PURCHASED
INTANGIBLE
GAAP ASSETS TAX EFFECT NON-GAAP
---------- ------------ ---------- ----------
Operating expenses:
Cost of license $ 3,278 $ -- $ -- $ 3,278
Cost of service 929,487 -- -- 929,487
Research and
development 97,567 -- -- 97,567
Selling, general and
administrative 166,000 -- -- 166,000
Amortization of
purchased intangible
assets 7,875 (7,875) -- --
In-process research
and development -- -- -- --
---------- ------- ------- ----------
Total operating expenses 1,204,207 (7,875) -- 1,196,332
---------- ------- ------- ----------
Operating income 261,096 7,875 -- 268,971
---------- ------- ------- ----------
Income taxes 55,203 -- 1,580 56,783
---------- ------- ------- ----------
Net income $ 220,837 $ 7,875 $(1,580) $ 227,132
---------- ------- ------- ----------
AMDOCS LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
AS OF
------------------------
JUNE 30, SEPTEMBER
2006 30, 2005
----------- ----------
(Unaudited) (Audited)
ASSETS
Current assets
Cash, cash equivalents and short-term interest-bearing investments $1,207,552 $1,145,563
Accounts receivable, net, including unbilled of $43,925 and
$28,994, respectively 414,154 304,237
Deferred income taxes and taxes receivable 77,653 101,162
Prepaid expenses and other current assets 81,793 76,780
---------- ----------
Total current assets 1,781,152 1,627,742
Equipment, vehicles and leasehold improvements, net 184,878 181,812
Goodwill and other intangible assets, net 1,411,561 1,129,258
Other noncurrent assets 318,740 263,656
---------- ----------
Total assets $3,696,331 $3,202,468
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accruals $ 512,636 $ 462,276
Short-term portion of capital lease obligations and other financing
arrangements 1,938 8,480
Deferred revenue 243,381 216,770
Deferred income taxes and taxes payable 175,210 171,377
---------- ----------
Total current liabilities 933,165 858,903
0.50% Convertible notes 450,000 450,000
Noncurrent liabilities and other 282,279 237,113
Shareholders' equity 2,030,887 1,656,452
---------- ----------
Total liabilities and shareholders' equity $3,696,331 $3,202,468
========== ==========
