<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                          ---------------------------

                                   FORM 20-F

[ ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
     EXCHANGE ACT OF 1934
                                       OR

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
              FOR THE TRANSITION PERIOD FROM ________ TO ________.

                           COMMISSION FILE NUMBER 1-14840

                                 AMDOCS LIMITED
        ---------------------------------------------------------------
    (Exact name of registrant as specified in its charter and translation of
                        Registrant's name into English)

                               ISLAND OF GUERNSEY
        ---------------------------------------------------------------
                (Jurisdiction of incorporation or organization)

                      SUITE 5, TOWER HILL HOUSE LE BORDAGE
          ST. PETER PORT, ISLAND OF GUERNSEY, GY1 3QT CHANNEL ISLANDS
                                  AMDOCS, INC.
          1390 TIMBERLAKE MANOR PARKWAY, CHESTERFIELD, MISSOURI 63017
        ---------------------------------------------------------------
                    (Address of principal executive offices)

     Securities registered or to be registered pursuant to Section 12(b) of the
Act.

<Table>
<Caption>
      TITLE OF EACH CLASS              NAME OF EXCHANGE ON WHICH REGISTERED
      -------------------              ------------------------------------
<S>                                    <C>
Ordinary Shares, par value L0.01             New York Stock Exchange
</Table>

     Securities registered or to be registered pursuant to Section 12(g) of the
Act.

                                      NONE
        ---------------------------------------------------------------
                                (Title of class)

     Securities for which there is a reporting obligation pursuant to Section
15(d) of the Act.
                                      NONE
        ---------------------------------------------------------------
                                (Title of class)

     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.

<Table>
<S>                                                           <C>
Voting Ordinary Shares, par value L0.01                       213,048,394(1)
Non-Voting Ordinary Shares, par value L0.01                   2,534,988
(Title of class)                                              (Number of shares)
</Table>

---------------
(1) Net of 7,732,500 shares held in treasury and includes 75,828 shares held by
    shareholders of a company we acquired, which can be exchanged for our voting
    ordinary shares. Does not include (a) 27,129,090 ordinary shares reserved
    for issuance upon exercise of options granted under our stock option plan,
    (b) 562,887 ordinary shares reserved for issuance upon exercise of vested
    options granted by companies we have acquired, and (c) an aggregate of
    4,832,708 ordinary shares reserved for issuance upon conversion of our 2%
    Convertible Notes due June 1, 2008. As of September 30, 2002, 2,639,648
    ordinary shares remained available for future option grants under our stock
    option plan.

     Indicate by check mark whether the registrant has (1) 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 [X]               No [ ]

     Indicate by check mark which financial statement item the registrant has
selected to follow.
                     Item 17 [ ]               Item 18 [X]
<PAGE>

                                 AMDOCS LIMITED
                            ------------------------

                                   FORM 20-F

           ANNUAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002
                            ------------------------

                                     INDEX

<Table>
<S>       <C>                                                           <C>
                                  PART I

Item 1.   Identity of Directors, Senior Management and Advisors.......    3
Item 2.   Offer Statistics and Expected Timetable.....................    3
Item 3.   Key Information.............................................    3
Item 4.   Information on the Company..................................   14
Item 5.   Operating and Financial Review and Prospects................   26
Item 6.   Directors, Senior Management and Employees..................   43
Item 7.   Major Shareholders and Related Party Transactions...........   50
Item 8.   Financial Information.......................................   51
Item 9.   The Offer and Listing.......................................   52
Item 10.  Additional Information......................................   52
Item 11.  Quantitative and Qualitative Disclosures about Market
          Risk........................................................   60
Item 12.  Description of Securities Other than Equity Securities......   61

                                  PART II

Item 13.  Defaults, Dividend Arrearages and Delinquencies.............   61
Item 14.  Material Modifications to the Rights of Security Holders and
          Use of Proceeds.............................................   61
Item 15.  Controls and Procedures.....................................   61
Item 16.  [Reserved]..................................................   62

                                 PART III

Item 17.  Financial Statements........................................   62
Item 18.  Financial Statements........................................   62
Item 19.  Exhibits....................................................   62
</Table>

                                        1
<PAGE>

     Unless the context otherwise requires, all references in this annual report
to "Amdocs", "we", "our", "us" and the "Company" refer to Amdocs Limited and its
consolidated subsidiaries and their respective predecessors. References to
"dollars" or "$" are to U.S. dollars. Unless otherwise stated, all references to
ordinary shares are to both voting and non-voting ordinary shares.

     We own or have rights to trademarks or trade names that we use in
conjunction with the sale of our products, including, without limitation, each
of the following: Amdocs(TM), Ensemble(TM), AmdocsEnabler(TM) and Clarify(TM).

                           FORWARD LOOKING STATEMENTS

     This Annual Report on Form 20-F contains forward-looking statements (within
the meaning of the United States federal securities laws) that involve
substantial risks and uncertainties. You can identify these forward-looking
statements by words such as "expect", "anticipate", "believe", "seek",
"estimate", "project", "forecast", "continue", "potential", "should", "would",
"could" 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; consolidation within the industries in which our
customers operate; the loss of a significant customer; 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; 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
<PAGE>

                                     PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

     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 accounting principles generally accepted in the United States ("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, 2002 is derived from our consolidated
financial statements, which have been audited by Ernst & Young LLP, our
independent auditors. 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 and the discussion under "Operating
and Financial Review and Prospects" included elsewhere in this report.

<Table>
<Caption>
                                                     YEAR ENDED SEPTEMBER 30,
                                  --------------------------------------------------------------
                                     2002          2001          2000         1999        1998
                                  ----------    ----------    ----------    --------    --------
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                               <C>           <C>           <C>           <C>         <C>
STATEMENT OF OPERATIONS DATA:
Revenue.........................  $1,613,565    $1,533,910    $1,118,320    $626,855    $403,767
Operating income(1)(2)..........      49,161       159,281        74,124     146,998      84,895
Net (loss) income(1)(2)(3)......      (5,061)       66,386         5,978      98,543      30,107
Basic (loss) earnings per
  share.........................       (0.02)         0.30          0.03        0.50        0.19
Diluted (loss) earnings per
  share.........................       (0.02)         0.29          0.03        0.49        0.19
Dividends declared per share....          --            --            --          --        3.76
</Table>

<Table>
<Caption>
                                                       AS OF SEPTEMBER 30,
                                  --------------------------------------------------------------
                                     2002          2001          2000         1999        1998
                                  ----------    ----------    ----------    --------    --------
                                                          (IN THOUSANDS)
<S>                               <C>           <C>           <C>           <C>         <C>
BALANCE SHEET DATA:
Total assets....................  $2,540,094    $2,624,436    $1,935,085    $430,011    $239,966
Long term obligations
  2% Convertible Notes due June
     1, 2008(4).................     445,054       500,000            --          --          --
  Long-term portion of capital
     lease obligations..........      15,138        24,779        23,417      17,148       9,215
Shareholders' equity
  (deficit)(5)(6)(7)............   1,416,275     1,512,091     1,430,772     123,737     (21,889)
</Table>

                                        3
<PAGE>

<Table>
<Caption>
                                                  ORDINARY SHARES     ADDITIONAL
                                                 -----------------     PAID-IN
                                                 SHARES     AMOUNT     CAPITAL     TREASURY STOCK
                                                 -------    ------    ----------   --------------
                                                                  (IN THOUSANDS)
<S>                                              <C>        <C>       <C>          <C>
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
  DATA:
Balance as of September 30, 1998...............  196,800    $3,149    $  447,503     $      --
  Issuance of ordinary shares(5)...............    2,000        32        41,352            --
  Stock options granted, net of forfeitures....       --        --           244            --
                                                 -------    ------    ----------     ---------
Balance as of September 30, 1999...............  198,800     3,181       489,099            --
  Issuance of ordinary shares related to
     acquisitions, net(6)......................   20,307       325     1,263,330            --
  Employee stock options exercised.............    2,058        33        21,327            --
  Tax benefit of stock options exercised.......       --        --        10,825            --
  Stock options granted........................       --        --           235            --
                                                 -------    ------    ----------     ---------
Balance as of September 30, 2000...............  221,165     3,539     1,784,816            --
  Employee stock options exercised.............    1,463        21        13,946            --
  Tax benefit of stock options exercised.......       --        --         7,345            --
  Stock options granted........................       --        --           183            --
                                                 -------    ------    ----------     ---------
Balance as of September 30, 2001...............  222,628     3,560     1,806,290            --
  Employee stock options exercised.............      687        12         5,149            --
  Tax benefit of stock options exercised.......       --        --         6,808            --
  Expense related to vesting of stock
     options...................................       --        --            98            --
  Repurchase of shares(7)......................   (7,732)       --            --      (109,281)
                                                 -------    ------    ----------     ---------
Balance as of September 30, 2002...............  215,583    $3,572    $1,818,345     $(109,281)
                                                 =======    ======    ==========     =========
</Table>

---------------

(1) In fiscal 2000, we recorded nonrecurring acquisition-related charges of
    $75,617, relating to our acquisitions of International Telecommunication
    Data Systems, Inc. ("ITDS") in November 1999 and Solect Technology Group
    Inc. ("Solect") in April 2000, in stock-for-stock transactions. The
    aggregate charges related to the ITDS transaction were $19,876 and were
    incurred by us in the first quarter of fiscal 2000. The aggregate charges
    related to the Solect transaction were $55,741 and were incurred by us in
    the third quarter of fiscal 2000. These charges included write-offs of
    purchased in-process research and development and other indirect
    acquisition-related costs.

(2) In the first quarter of fiscal 2002, we recorded nonrecurring
    acquisition-related charges of in-process research and development of
    $17,400, relating to our acquisition from Nortel Networks Corporation of
    substantially all of the assets of its Clarify business ("Clarify") for
    cash. We also recorded restructuring charges of $13,311 relating to the
    consolidation of our Stamford, Connecticut data center into our Champaign,
    Illinois facility, and the resulting closure of the Stamford facility. In
    the fourth quarter of fiscal 2002, we recorded restructuring charges of
    $20,919 relating to our cost reduction program.

(3) In the fourth quarter of fiscal 2002, we recorded a gain of $6,012 relating
    to the repurchase of a portion of our convertible notes (see footnote 4
    below).

(4) In May 2001, we issued $500,000 aggregate principal amount of 2% Convertible
    Notes due June 1, 2008 (the "Notes"). On July 23, 2002, our Board of
    Directors authorized us to repurchase Notes in such amounts, at such prices
    and at such times considered appropriate. During the fourth quarter of
    fiscal 2002, we repurchased $54,946 aggregate principal amount of Notes, at
    an average price of 89% of the principal amount. As of September 30, 2002,
    $445,054 aggregate principal amount of Notes was outstanding.

(5) We completed a public offering of 2,000 ordinary shares in June 1999. The
    net proceeds to us from the offering were $41,384.

                                        4
<PAGE>

(6) An aggregate of 7,564 ordinary shares, including shares issuable upon
    exercise of vested ITDS employee options, were issued in connection with the
    ITDS acquisition, and an aggregate of 15,500 ordinary shares, including
    shares issuable upon exercise of vested Solect employee options, were issued
    in connection with the Solect acquisition.

(7) On November 6, 2001, our Board of Directors approved a twelve-month share
    repurchase program and authorized us to repurchase our ordinary shares.
    During fiscal 2002, we repurchased 7,732 ordinary shares, at an average
    price of $14.13 per share.

                                        5
<PAGE>

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, continued industry consolidation, the formation of
alliances among network operators and service providers, and changes in the
regulatory environment have had, and could continue to have, a material adverse
effect on our existing or potential customers. These conditions have reduced the
high growth rates that the communications industry had previously experienced,
and have caused the market value, financial results and prospects, and capital
spending levels of many communications companies to decline or degrade. Over the
past year, further slowdowns in customer buying decisions stemming from
financial pressure on operating expenses and overall reductions in the capital
investment budgets of many communications service providers have led to fewer
new contracts than expected, as well as smaller than expected initial spending
commitments and reduced discretionary spending under our contracts with some of
our customers. These factors, combined with the continuing general economic
slowdown, resulted in our achieving lower revenue levels than expected during
the second half of fiscal 2002. We expect these adverse economic conditions to
continue at least in the near term, making it difficult for us to resume the
growth of our revenue. Until they improve, these conditions will continue to
harm our business.

  IF WE 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.
If we fail to adapt to changing market conditions and to compete successfully
with established or new competitors, it could have a material adverse effect on
our results of operations and financial condition.

     The market for communications information systems is highly competitive and
fragmented, and we expect competition to increase. We compete with independent
providers of information systems and services and with the in-house software
departments of communications companies. Our competitors include firms that
provide comprehensive information systems, 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
and wireless services, systems integrators, service bureaus and companies that
offer software systems in combination with the sale of network equipment.

     We believe that our ability to compete depends on a number of factors,
including:

     -  the development by others of software that is competitive with our
        products and services,

     -  the price at which others offer competitive software and services,

     -  the responsiveness of our competitors to customer needs, and

     -  the ability of our competitors to hire, retain and motivate key
        personnel.

     We compete with a number of companies that have long operating histories,
large customer bases, substantial financial, technical, sales, marketing and
other resources, and strong name recognition. Current and potential competitors
have established, and may establish in the future, cooperative relationships
among themselves or with third parties to increase their ability to address the
needs of our prospective customers. In addition, our competitors have acquired,
and may continue to acquire in the future, companies that may enhance their
market offerings. Accordingly, new competitors or alliances among competitors
may emerge and rapidly acquire significant market share. As a result, our
competitors may be able to adapt more quickly than us to new or emerging
technologies and changes in customer requirements, and may be able to devote
greater resources to the promotion and sale of their products. We cannot assure
you that we will be able to compete successfully with existing or new
competitors. Failure by us to adapt to changing market conditions and to compete
successfully with established or new competitors may have a material adverse
effect on our results of operations and financial condition.

                                        6
<PAGE>

  WE MUST CONTINUALLY ENHANCE OUR PRODUCTS TO REMAIN COMPETITIVE

     We believe that our future success will depend, to a significant extent,
upon our ability to enhance our existing products and to introduce new products
and features to meet the requirements of our customers in a rapidly developing
and evolving market. We are currently devoting significant resources to refining
and expanding our base software modules and to developing Business Support
Systems products that operate in state-of-the-art computing environments. Our
present or future products may not satisfy the evolving needs of the
communications industry. If we are unable to anticipate or respond adequately to
such needs, due to resource, technological or other constraints, our business
and results of operations could be harmed.

  WE MAY SEEK TO ACQUIRE COMPANIES OR TECHNOLOGIES, WHICH COULD DISRUPT OUR
  ONGOING BUSINESS, DISTRACT OUR MANAGEMENT AND EMPLOYEES AND ADVERSELY AFFECT
  OUR RESULTS OF OPERATIONS

     We may acquire companies where we believe we can acquire new products or
services or otherwise enhance our market position or strategic strengths. We
cannot assure you that suitable acquisition candidates can be found, that
acquisitions can be consummated on favorable terms or that we will be able to
complete otherwise favorable acquisitions because of antitrust or other
regulatory concerns. If we do complete acquisitions, we cannot assure you that
they will ultimately enhance our products or strengthen our competitive
position. In addition, any acquisitions that we make could lead to difficulties
in integrating personnel and operations from the acquired businesses and in
retaining and motivating key personnel from these businesses. Acquisitions may
disrupt our ongoing operations, divert management from day-to-day
responsibilities, increase our expenses and harm our results of operations or
financial position.

  WE DEPEND ON SBC COMMUNICATIONS INC. FOR A SIGNIFICANT PORTION OF OUR REVENUE

     One of our largest groups of customers is comprised of SBC Communications
Inc. ("SBC") and its operating subsidiaries. A significant decrease in the sale
of products and services to SBC may materially adversely affect our results of
operations and financial condition. SBC, through its subsidiaries, is also one
of our largest shareholders. As of February 19, 2003, SBC beneficially owned
approximately 9.4% of our outstanding ordinary shares.

     Substantially all of our work for SBC is conducted directly with SBC's
operating subsidiaries, such as Cingular Wireless, Southwestern Bell Yellow
Pages, Southwestern Bell Communications Services and Southwestern Bell Telephone
Company. These SBC relationships accounted for, in the aggregate, 10.6%, 13.3%
and 12.6% of our total revenue in fiscal 2002, 2001 and 2000, respectively. The
revenue attributable to SBC and such subsidiaries amounted to $171.5 million,
$203.9 million and $141.0 million in fiscal 2002, 2001 and 2000, respectively.
Based on long-term agreements currently in place with certain SBC subsidiaries
and the outsourcing agreement announced in January 2003 with SBC's directory
operations, we expect that revenue attributable to SBC entities will remain a
significant percentage of our total revenue in 2003.

  OUR BUSINESS IS HIGHLY DEPENDENT ON A LIMITED NUMBER OF SIGNIFICANT CUSTOMERS

     Our business is highly dependent on a limited number of significant
customers, including SBC. The loss of any significant customer or a significant
decrease in business from any of those customers could harm our results of
operations and financial condition. Aggregate revenue derived from the multiple
business arrangements we have with each of our five largest customer groups,
excluding the SBC group, accounted for approximately 45.6% of our revenue in
fiscal 2002.

     Although we have received a substantial portion of our revenue from
recurring business with established customers, most of our major customers do
not have any obligation to purchase additional products or services from us and
generally have already acquired fully paid licenses to their installed systems.
Therefore, our customers may not continue to purchase new systems, system
enhancements or services in amounts similar to previous years or may delay
implementation of committed projects.

                                        7
<PAGE>

  OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO DEVELOP LONG-TERM
  RELATIONSHIPS WITH OUR CUSTOMERS

     We believe that our future success will depend to a significant extent on
our ability to develop long-term relationships with successful network operators
and service providers with the financial and other resources required to invest
in significant ongoing Business Support Systems. If we are unable to develop new
customer relationships, our business will be harmed. In addition, our business
and results of operations depend in part on our ability to provide high quality
services to customers that have already implemented our products. If we are
unable to meet customers' expectations in providing products or performing
services, our business and results of operations could be harmed.

  WE MAY BE EXPOSED TO THE CREDIT RISK OF CUSTOMERS THAT HAVE BEEN ADVERSELY
  AFFECTED BY WEAKENED MARKETS

     We typically sell our software and related customization, modification and
maintenance services as part of long-term projects. During the life of a
project, a customer's budgeting constraints, can impact the scope of a project
and the customer's ability to make required payments. In addition, the
creditworthiness of our customers may deteriorate over time, and we can be
adversely affected by bankruptcies or other business failures.

  THE SKILLED AND HIGHLY QUALIFIED EMPLOYEES THAT WE NEED MAY BE DIFFICULT TO
  HIRE AND RETAIN

     Our business operations depend in large part on our ability to attract,
train, motivate and retain highly skilled information technology professionals,
software programmers and communications engineers. In addition, our competitive
success will depend on our ability to attract and retain other outstanding,
highly qualified employees. Despite recent reductions in headcount, we will need
to hire sales, support, technical and other personnel this year and in the
future. We may face difficulties identifying and hiring qualified personnel and
may be unable to retain employees with the skills and experience that we
require. Our inability to hire and retain the appropriate personnel could make
it difficult for us to manage our operations and to compete for new customer
contracts.

     Our success will also depend, to a certain extent, upon the continued
active participation of a relatively small group of senior management personnel.
The loss of the services of all or some of these executives could harm our
business.

  OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE

     We have experienced fluctuations in our quarterly operating results and
anticipate that such movement may continue and could intensify. Fluctuations may
result from many factors, including:

     - the size and timing of significant customer projects and license fees,

     - delays in or cancellations of significant projects by customers,

     - changes in operating expenses,

     - increased competition,

     - changes in our strategy,

     - personnel changes,

     - foreign currency exchange rate fluctuations, and

     - general economic and political conditions.

     Generally, our license fee revenue and our service fee revenue relating to
customization and modification are recognized as work is performed, using
percentage of completion accounting. Given our reliance on a limited number of
significant customers, our quarterly results may be significantly affected by
the size and timing of customer projects and our progress in completing such
projects.

                                        8
<PAGE>

     We believe that the placement of customer orders may be concentrated in
specific quarterly periods due to the time requirements and budgetary
constraints of our customers. Although we recognize revenue as projects
progress, progress may vary significantly from project to project, and we
believe that variations in quarterly revenue are sometimes attributable to the
timing of initial order placements. Due to the relatively fixed nature of
certain of our costs, a decline of revenue in any quarter would result in lower
profitability for that quarter.

  OUR BUSINESS IS IMPACTED BY THE LENGTH OF OUR SALES CYCLE

     Our business is directly affected by the length of our sales cycle.
Information systems for communications companies are relatively complex and
their purchase generally involves a significant commitment of capital, with
attendant delays frequently associated with large capital expenditures and
procurement procedures within an organization. The purchase of these types of
products typically also requires coordination and agreement across many
departments within a potential customer's organization. Delays associated with
such timing factors could have a material adverse effect on our results of
operations and financial condition. As a result of the continued slowdown in the
growth of the global communications market, our typical sales cycle has
lengthened, which means that the average time between our initial contact with a
prospective customer and the signing of a sales contract has increased. The
lengthening of our sales cycle has and could continue in the future to reduce
growth in our revenue. In addition, the lengthening of our sales cycle
contributes to an increased cost of sales, thereby reducing our profitability.

  IF THE MARKET FOR OUR PRODUCTS DOES NOT IMPROVE, WE MAY INCUR ADDITIONAL
  RESTRUCTURING CHARGES

     In an effort to implement long-term cost reduction measures, we have
reduced our workforce and have reallocated certain personnel among different
areas of our operations. A reduction in personnel can result in significant
severance, administrative and legal expenses and may also adversely affect or
delay various sales, marketing and product development programs and activities.
If the deterioration in the communications industry continues, we may be forced
to implement additional restructuring plans to further reduce our costs, which
could result in additional restructuring charges. Additional restructuring
charges could have a material adverse effect on our financial results.

  IF WE FAIL TO SUCCESSFULLY PLAN AND MANAGE CHANGES IN THE SIZE OF OUR
  OPERATIONS OUR BUSINESS WILL SUFFER

     Over the last several years, we have both grown and contracted our
operations in order to profitably offer our products and services in a rapidly
changing market. If we are unable to manage these changes and plan and manage
any future changes in the size and scope of our operations, our business will
suffer.

     Our recent restructurings and cost reduction measures have reduced the size
of our operations. On January 31, 2003, we had 7,800 software and information
technology positions compared to 9,100 software and information technology
positions on November 30, 2001 and 7,900 such positions on November 30, 2000.
During these periods, we leased and disposed of office space and related
obligations in an effort to keep pace with the changing size of our operations.
Our recent cost reduction measures include consolidating and/or relocating
certain of our operations to different geographic locations. These activities
could lead to difficulties and significant expenses related to identifying and
moving into suitable office space and subleasing or assigning any surplus space.
We have accrued the estimated expenses that will result from our restructuring
efforts. However, if it is determined that the amount accrued is insufficient,
an additional charge could have an unfavorable impact on our financial
statements in the period this was determined.

  OUR INTERNATIONAL PRESENCE CREATES SPECIAL RISKS

     We are affected by risks associated with conducting business
internationally. We maintain development facilities in Israel, the United
States, Cyprus, Ireland and Canada, operate a support center in Brazil and have
operations in North America, Europe, Latin America and the Asia-Pacific region.
Although a majority of our revenue is derived from customers in North America
and Europe, we obtain

                                        9
<PAGE>

significant revenue from customers in the Asia-Pacific region and Latin America.
Our strategy is to continue to broaden our North American and European customer
base and to expand into new international markets. Conducting business
internationally exposes us to certain risks inherent in doing business in
international markets, including:

     - lack of acceptance of non-localized products,

     - legal and cultural differences in the conduct of business,

     - difficulties in staffing and managing foreign operations,

     - longer payment cycles,

     - difficulties in collecting accounts receivable and withholding taxes that
       limit the repatriation of earnings,

     - trade barriers,

     - immigration regulations that limit our ability to deploy our employees,

     - political instability, and

     - variations in effective income tax rates among countries where we conduct
       business.

     One or more of these factors could have a material adverse effect on our
international operations, which could harm our results of operations and
financial condition.

  POLITICAL AND ECONOMIC CONDITIONS IN THE MIDDLE EAST MAY ADVERSELY AFFECT OUR
  BUSINESS

     Of the five development centers we maintain worldwide, our largest
development center is located in five different sites throughout Israel.
Approximately half of our employees are located in Israel. As a result, we are
directly influenced by the political, economic and military conditions affecting
Israel and its neighboring region. Any major hostilities involving Israel could
have a material adverse effect on our business. We have developed contingency
plans to provide ongoing services to our customers in the event political or
military conditions disrupt our normal operations. These plans include the
transfer of some development operations within Israel to various of our other
sites both within and outside of Israel. If we have to implement these plans,
our operations would be disrupted and we would incur significant additional
expenditures, which would adversely affect our business and results of
operations.

     While Israel has entered into peace agreements with both Egypt and Jordan,
Israel has not entered into peace arrangements with any other neighboring
countries. Over the past two years there has been a significant deterioration in
Israel's relationship with the Palestinian Authority and a related increase in
violence. Efforts to resolve the problem have failed to result in an agreeable
solution. Continued violence between the Palestinian community and Israel may
have a material adverse effect on our business. In addition, our operations in
Israel may be affected by any armed conflict with Iraq. If any military action
is initiated against Iraq, the hostilities could adversely affect Israel.
Further deterioration of relations with the Palestinian Authority and/or an
Iraqi conflict might require more military reserve service by some of our
employees, which may have a material adverse effect on our business.

     In addition, our development facility in Cyprus may be adversely affected
by political conditions in that country. As a result of intercommunal strife
between the Greek and Turkish communities, Turkish troops invaded Cyprus in 1974
and continue to occupy approximately 40% of the island. Efforts to finally
resolve the problem have not yet resulted in an agreement. The European Union
("E.U.") has recently announced that Cyprus will be included in the next round
of E.U. enlargement, which is expected to be January 1, 2004. The two
communities are going through a series of intensive discussions facilitated by
the United Nations, the E.U. and the United States, which are expected to lead
to an agreement before the entry of Cyprus to the E.U. Any major hostilities
between Cyprus and Turkey or any failure of the parties to reach a peaceful
resolution may have a material adverse effect on our development facility in
Cyprus.

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<PAGE>

  FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES COULD ADVERSELY AFFECT OUR
  BUSINESS

     A significant portion of our operating costs is incurred outside the United
States. Therefore, fluctuations in exchange rates between the currencies in
which such costs are incurred and the dollar may have a material adverse effect
on our results of operations and financial condition. The cost of our operations
in Israel, as expressed in dollars, could be adversely affected by the extent to
which any increase in the rate of inflation in Israel is not offset (or is
offset with a time delay) by a devaluation of the Israeli currency in relation
to the dollar. As a result of this differential, from time to time we experience
increases in the costs of our operations in Israel, as expressed in dollars,
which could in the future have a material adverse effect on our results of
operations and financial condition.

     In addition, a portion of our revenue is not incurred in dollars or linked
to the dollar, and, therefore, fluctuations in exchange rates between the
currencies in which such revenue is incurred and the dollar may have a material
effect on our results of operations and financial condition. If more of our
customers seek contracts that are denominated in currencies such as the euro and
not the dollar, our exposure to fluctuations in currency exchange rates could
increase.

     Generally, the effects of fluctuations in foreign currency exchange rates
are mitigated by the fact that the majority of our revenue and operating costs
is in dollars or linked to the dollar and we generally hedge our currency
exposure on both a short-term and long-term basis with respect to expected
revenue and operating costs. However, we cannot assure you that we will be able
to effectively limit all of our exposure to currency exchange rate fluctuations.

     The imposition of exchange or price controls or other restrictions on the
conversion of foreign currencies could also have a material adverse effect on
our business, results of operations and financial condition.

  WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY

     Any misappropriation of our technology or the development of competitive
technology could seriously harm our business. We regard a substantial portion of
our software products and systems as proprietary and rely on a combination of
statutory and common law copyright, trademark, trade secret laws, customer
licensing agreements, employee and third party non-disclosure agreements and
other methods to protect our proprietary rights. We do not include in our
software any mechanisms to prevent or inhibit unauthorized use, but we generally
enter into confidentiality agreements with our employees, consultants,
subcontractors, customers and potential customers and limit access to, and
distribution of, our proprietary information.

     The steps we have taken to protect our proprietary rights may be
inadequate. If so, we might not be able to prevent others from using what we
regard as our technology to compete with us. Existing trade secret, copyright
and trademark laws offer only limited protection. In addition, the laws of some
foreign countries do not protect our proprietary technology to the same extent
as the laws of the United States. There is also the risk that other companies
could independently develop similar or superior technology without violating our
proprietary rights.

     If we have to resort to legal proceedings to enforce our intellectual
property rights, the proceedings could be burdensome, protracted and expensive
and could involve a high degree of risk.

  CLAIMS BY OTHERS THAT WE INFRINGE THEIR PROPRIETARY TECHNOLOGY COULD HARM OUR
  BUSINESS

     Although we have not received any complaints from third parties alleging
infringement claims, third parties could claim that our current or future
products or technology infringe their proprietary rights. We expect that
software developers will increasingly be subject to infringement claims as the
number of products and competitors providing software and services to the
communications industry increases and overlaps occur. Any claim of infringement
by a third party could cause us to incur substantial costs defending against the
claim, and could distract our management from our business. Furthermore, a party
making such a claim, if successful, could secure a judgment that requires us to
pay substantial damages. A
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<PAGE>

judgment could also include an injunction or other court order that could
prevent us from selling our products or offering our services. Any of these
events could seriously harm our business.

     If anyone asserts a claim against us relating to proprietary technology or
information, while we might seek to license their intellectual property, we
might not be able to obtain a license on commercially reasonable terms or on any
terms. In addition, any efforts to develop non-infringing technology could be
unsuccessful. Our failure to obtain the necessary licenses or other rights or to
develop non-infringing technology could prevent us from selling our products and
could therefore seriously harm our business.

  PRODUCT DEFECTS OR SOFTWARE ERRORS COULD ADVERSELY AFFECT OUR BUSINESS

     Design defects or software errors may cause delays in product introductions
or damage customer satisfaction and may have a material adverse effect on our
business, results of operations and financial condition. Our software products
are highly complex and may, from time to time, contain design defects or
software errors that may be difficult to detect and correct.

     Because our products are generally used by our customers to perform
critical business functions, design defects, software errors, misuse of our
products, incorrect data from external sources or other potential problems
within or out of our control may arise from the use of our products, and may
result in financial or other damages to our customers, for which we may be held
responsible. Although we have license agreements with our customers that contain
provisions designed to limit our exposure to potential claims and liabilities
arising from customer problems, these provisions may not effectively protect us
against such claims in all cases and in all jurisdictions. Claims and
liabilities arising from customer problems could also damage our reputation,
adversely affecting our business, results of operations and financial condition
and the ability to obtain "Errors and Omissions" insurance.

  THE TERMINATION OR REDUCTION OF CERTAIN GOVERNMENT PROGRAMS AND TAX BENEFITS
  COULD ADVERSELY AFFECT OUR OVERALL EFFECTIVE TAX RATE

     We benefit from a variety of government programs and tax benefits,
including programs and benefits in Israel, Cyprus and Ireland. Generally, these
programs contain conditions that we must meet in order to be eligible to obtain
any benefit. If we fail to meet these conditions we could be required to refund
tax benefits already received. Additionally, some of these programs and the
related tax benefits are available to us for a limited number of years, and
these benefits expire from time to time.

     Any of the following could have a material effect on our overall effective
tax rate:

     - some programs may be discontinued,

     - we may be unable to meet the requirements for continuing to qualify for
       some programs,

     - these programs and tax benefits may be unavailable at their current
       levels,

     - upon expiration of a particular benefit, we may not be eligible to
       participate in a new program or qualify for a new tax benefit that would
       offset the loss of the expiring tax benefit, or

     - we may be required to refund previously recognized tax benefits if we are
       found to be in violation of the stipulated conditions.

  WE ARE CURRENTLY A PARTY TO SECURITIES LITIGATION CLASS ACTION LAWSUITS,
  WHICH, IF DETERMINED ADVERSELY, COULD NEGATIVELY AFFECT OUR BUSINESS AND
  RESULTS OF OPERATIONS

     Beginning on June 24, 2002, a number of complaints were filed by holders of
our ordinary shares against us and four of our officers and directors, in the
United States District Courts for the Eastern District of Missouri and the
Southern District of New York. The complaints allege violations of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Each plaintiff seeks to represent a putative class of all purchasers
of our ordinary shares between July 18, 2000 (or, in some of the complaints,
July 24, 2001) and June 20, 2002. The complaints generally allege that, during

                                        12
<PAGE>

that period, we and the individual defendants made false or misleading
statements, in press releases and Securities and Exchange Commission filings,
regarding among other things our future prospects, backlog, revenue, gross
margin, acquisitions and accounting practices. Each plaintiff seeks unspecified
monetary damages and other relief against all defendants. The parties in the New
York cases have stipulated to transfer them to the Eastern District of Missouri.
The court has recently appointed a lead plaintiff. An unfavorable resolution of
these matters could materially affect our results of operations and financial
condition. We intend to defend ourself vigorously against these claims and, in
so doing, we may incur substantial costs. In addition, the litigation has been,
and may continue to be, time-consuming and costly and could divert the attention
of our management personnel. These lawsuits or any future lawsuits filed against
us could seriously harm our business.

  THE MARKET PRICE OF OUR ORDINARY SHARES HAS AND MAY CONTINUE TO FLUCTUATE
  WIDELY

     The market price of our ordinary shares has fluctuated widely and may
continue to do so. During fiscal 2002, our ordinary shares traded as high as
$39.25 per share. Prior to our June 20, 2002 announcement of the expected
decline in our revenue from projected results for the third quarter of fiscal
2002, our ordinary shares traded as low as $14.45 per share. Subsequent to that
announcement and through March 18, 2003, our ordinary shares have traded between
$5.85 and $13.95 per share. Many factors could cause the market price of our
ordinary shares to rise and fall. Some of these factors are:

     - market conditions in the industry and the economy as a whole,

     - variations in our quarterly operating results,

     - announcements of technological innovations by us or our competitors,

     - introduction of new products or new pricing policies by us or our
       competitors,

     - trends in the communications or software industries,

     - acquisitions or strategic alliances by us or others in our industry,

     - changes in estimates of our performance or recommendations by financial
       analysts, and

     - political developments in the Middle East.

     In addition, the stock market often experiences significant price and
volume fluctuations. These fluctuations particularly affect the market prices of
the securities of many high technology companies. These broad market
fluctuations could adversely affect the market price of our ordinary shares.

  FUTURE SALES BY EXISTING SHAREHOLDERS COULD DEPRESS THE MARKET PRICE OF OUR
  ORDINARY SHARES

     Sales of substantial amounts of ordinary shares in the public market, or
the perception that such sales could occur, could adversely affect prevailing
market prices for the ordinary shares. As of January 31, 2003, we had
215,775,612 ordinary shares outstanding, a substantial portion of which are
either freely tradable on the New York Stock Exchange or currently eligible for
sale pursuant to Rule 144, under the Securities Act of 1933, as amended (subject
to compliance with the volume and manner of sale limitations of Rule 144), or
pursuant to another exemption from the registration requirements of the
Securities Act.

     Our principal shareholders have the right, in certain circumstances, to
require us to register their shares under the Securities Act for resale to the
public. In addition, we have registered under the Securities Act a total of (i)
35,062,121 ordinary shares, reserved for issuance upon the exercise of options
that have been or may be granted under our stock option plans and stock option
plans assumed by us in connection with our acquisitions of International
Telecommunication Data Systems, Inc. and Solect Technology Group Inc. and (ii)
5,429,350 ordinary shares reserved for issuance upon conversion of our 2%
Convertible Notes due June 1, 2008. The right to exercise options outstanding
under these plans is subject to certain vesting requirements.

                                        13
<PAGE>

ITEM 4.  INFORMATION ON THE COMPANY

HISTORY, DEVELOPMENT AND ORGANIZATIONAL STRUCTURE OF AMDOCS

     Amdocs Limited was organized under the laws of the Island of Guernsey in
1988. Since 1995, we have been a holding company for the various subsidiaries
that conduct our business on a worldwide basis. Our global business is providing
Business Support Systems, including software and services, to major
communications companies in North America, Europe and the rest of the world. Our
registered office is located in Suite 5, Tower Hill House Le Bordage, St. Peter
Port, Island of Guernsey, GY1 3QT Channel Islands, and the telephone number at
that location is 011-44-1481-728444.

     In the United States, our main sales and development center is located in
St. Louis, Missouri. The executive offices of our principal subsidiary in the
United States are located at 1390 Timberlake Manor Parkway, Chesterfield,
Missouri 63017, and the telephone number at that location is (314) 212-8328.

     Our subsidiaries are organized under and subject to the laws of several
countries. Our principal operating wholly owned subsidiaries are Amdocs, Inc.
(United States), Amdocs (UK) Limited, Amdocs Development Limited (Cyprus),
Amdocs Management Limited (United Kingdom), Amdocs (Israel) Limited, Amdocs
Software Systems Ltd (Ireland), Amdocs Champaign, Inc. (previously ITDS
Intellicom Services, Inc.) (United States) and Amdocs Canada, Inc. (previously
Solect).

     We have pursued acquisitions in order to offer new products or services or
otherwise enhance our market position or strategic strengths. Our acquisition of
ITDS in November 1999 enabled us to expand our service offerings and enhanced
our ability to provide outsourcing solutions to our customers. (We have since
renamed ITDS, Amdocs Stamford, Inc.) Our acquisition of Solect (since renamed
Amdocs Canada, Inc.) in April 2000 enhanced our ability to serve the growing
Internet Protocol ("IP") needs of our customers, while also expanding our target
market to cover IP operators, such as Internet Service Providers ("ISPs"),
Application Service Providers ("ASPs") and broadband providers. Our acquisition
in November 2001 from Nortel Networks Corporation of substantially all of the
assets of its Clarify business, a leading provider of Customer Relationship
Management ("CRM") software to communications companies and other enterprise
sectors, has positioned us as a leading provider of CRM to the communications
industry and, through our addition of Clarify's CRM software to our product
offerings, reinforced our leadership in delivering a comprehensive portfolio of
business software applications.

     In January 2001 we formed Certen Inc. ("Certen") with Bell Canada to
provide customer care and billing solutions to Bell Canada and some of its
affiliated companies. Certen is owned 90% by Bell Canada and 10% by us. We are
providing the customer care and billing software required by Certen, including
customization, installation, maintenance and other services.

     In the future, we may consider, as part of our strategy, additional
acquisitions and other initiatives in order to offer new products or services or
otherwise enhance our market position or strategic strengths.

     In March 2002, we announced a senior management transition. Effective July
1, 2002, Dov Baharav, who previously had served as Chief Financial Officer of
Amdocs Management Limited, assumed the role of President and Chief Executive
Officer. Ron Moskovitz, who previously had served as Vice President of Finance
for Amdocs Management Limited, took over the role of Chief Financial Officer.
Mr. Baharav replaced Avinoam Naor in the positions of President and Chief
Executive Officer of Amdocs Management Limited. Mr. Naor became the Vice
Chairman of our Board of Directors.

     Under the leadership of our new management team and in response to changing
market conditions, we implemented a new organizational structure during the
fourth quarter of fiscal 2002. Our operations are now centered around two main
groups, the Offering Group and the Delivery Group. The Offering Group is
responsible for developing and marketing our Business Support Systems products
which are delivered through the Delivery Group. The Delivery Group is
responsible for project and service delivery and selling products to our
customers.

     During fiscal 2002, we took steps to reduce our costs and achieve increased
operational efficiency. In October 2001, we consolidated our Stamford,
Connecticut data center into our Champaign, Illinois facility,
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<PAGE>

and we closed the Stamford facility. In June 2002, we announced our intention to
implement a cost reduction program to reduce costs by approximately 10% in
response to a decline of our forecasted revenue for the third and fourth
quarters of fiscal 2002. As part of this program, we reduced our workforce by
approximately 1,000 positions and vacated facilities in different centers around
the world. In November 2002, we announced a series of additional measures
designed to reduce costs and improve productivity. As part of this plan, we
reduced our workforce by approximately 400 positions and vacated additional
facilities in different centers around the world. In addition, we intend to
implement other cost reduction measures, including travel cuts and reductions in
other discretionary costs.

     Our principal capital expenditures for fiscal 2002, 2001 and 2000 have been
for computer equipment, for which we spent approximately $42.8 million, $62.0
million and $35.7 million, respectively. We also lease vehicles for use by our
employees, incurring lease obligations of $2.2 million, $13.1 million and $15.7
million, respectively, in each of the last three fiscal years.

     Principal capital expenditures currently in progress consist of
approximately $11.2 million for additional computer equipment, with the bulk of
these expenditures for computer equipment to be located at our facilities in
North America and Israel.

BUSINESS OVERVIEW

     Our market focus is the communications industry, and we are a leading
provider of software products and services to major communications companies in
North America, Europe and the rest of the world. The products and services that
we provide are known as business support systems, which we refer to as "BSS".
Our BSS products consist primarily of customer care and billing, CRM and order
management systems. We refer to these products, collectively, as "CC&B Systems".
Our products also include a full range of directory sales and publishing
systems, which we refer to as "Directory Systems", for publishers of both
traditional printed yellow page and white page directories and electronic
Internet directories.

     Our CC&B Systems and Directory Systems are designed to meet the
mission-critical needs of leading communications service providers. Our BSS
products and related services are designed to manage and improve key aspects of
the business operations of communications companies, such as CRM, order
management, call rating, invoice calculation and preparation, bill formatting,
collections, partner relationship management ("PRM") and directory publishing
services. We support a wide range of communications services including wireline,
wireless, voice, data, broadband, content, electronic and mobile commerce and
Internet Protocol based services. We also support companies that offer multiple
service packages, commonly referred to as convergent services. Because of the
complexity of BSS projects and the expertise required for system support, we
also provide extensive customization, implementation, system integration,
ongoing support, system enhancement, maintenance and outsourcing services, such
as the operation of data centers and the provision of communications facility
management services, in all cases on either or a combination of a fixed or unit
charge basis to our customers.

     Since the inception of our business in 1982, we have concentrated on
providing software products and services to major communications companies. By
focusing on this market, we believe that we have been able to develop the
innovative products and the industry expertise, project management skills and
technological competencies required for the advanced, large-scale,
specifications-intensive system projects typical of leading communications
providers. Our customer base includes major North American and foreign
communications companies, including major wireline companies (such as Verizon,
BellSouth, SBC, Bell Canada, Tele Danmark and Deutsche Telekom) and wireless
companies (such as Sprint PCS, Nextel, Cingular Wireless and Vodafone Group).

  INDUSTRY BACKGROUND

     Communications Industry

     For close to 20 years, competition in the global communications industry
has increased as a result of deregulation and the development of new service
technologies. Competition in the U.S. market began to

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<PAGE>

increase in 1984 when AT&T was required to divest its local telephone operations
and many new operators began to enter the long distance market. The
Telecommunications Act of 1996 increased competition in the United States even
further by allowing new and existing local, long distance and cable companies to
offer competing services. Many companies now compete by providing multiple or
convergent services, offering combinations of local exchange, long distance,
wireless, content and electronic and mobile commerce services. Deregulation is
also creating opportunities for new ways of doing business, such as wholesaling
and reselling communications services. Internationally, privatization and
deregulation continue to encourage increased international competition and the
emergence of newly authorized communications network operators and service
providers, especially in Europe, Latin America and the Asia-Pacific region. As
markets are opened to competition, new competitors within these markets
typically compete for market share with more established carriers, initially by
providing access to service and then by providing competitive prices, by
introducing new features and services and by being more responsive to customer
needs. In parallel, the communications industry has undergone consolidation as
companies seek to broaden their global reach and expand service offerings. In
addition, global expansion by multinational companies and concurrent
technological advances are opening markets in less developed countries to
enhanced communications services and competition.

     In recent years, there has also been a large increase of new communications
technologies, including ATM, IP, xDSL, WiFi, utilization of cable television
infrastructure to provide Internet services, GPRS (General Packet Radio
Services), UMTS (Universal Mobile Telecommunications System), WAP (Wireless
Application Protocol) for wireless Internet, and intelligent networks.
Additionally, the directory publishing industry, which is currently dominated by
communications companies that are owned by or affiliated with the public
telecommunications carriers, is experiencing significant changes due to the
introduction of new technologies and distribution platforms, especially Internet
directories.

     Recent market conditions in the communications industry have reduced the
high growth that the communications industry had experienced earlier in its
history. As a result, the market value, financial results and prospects and
capital spending levels of many communications companies have declined or
degraded. If these market conditions persist, we and other vendors to the
communications industry will continue to be adversely affected.

     Information Systems

     While the demand for BSS systems has decreased as a result of the downturn
in the communications industry, many communications companies, even in the
current business environment, are seeking to improve their systems. These
communications companies are looking for systems that reduce IT and operational
costs, enhance customer management to support customer retention, support rapid
rollout of new marketing packages and advanced data services, and the ability to
provide customers with single-contact, single-invoice solutions for multiple
services (convergence or "one-stop shopping").

     As a result, communications companies require information systems that
provide the level of integration, flexibility and scalability they need to
improve operational efficiency and to differentiate themselves from their
competitors in an increasingly competitive marketplace. To save scarce capital
and operating expenditure resources, some carriers are investing in
pre-configured open-architecture software products, which require limited
customization rather than highly customized solutions.

     In order to implement efficient, flexible, cost-effective information
systems on a timely basis, many new and existing communications companies are
looking to buy CC&B Systems from external vendors, rather than developing new
systems with internal resources. Moreover, as many communications companies
strive to become more consumer-oriented, they are concentrating their efforts
and internal resources on servicing customers and expanding their service
offerings, and many are turning to third-party vendors for their information
systems. These factors create significant opportunities for vendors of CC&B
Systems and providers of outsourcing services, such as Amdocs.

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<PAGE>

  THE AMDOCS SOLUTION

     We believe that our total solutions orientation, product-driven approach
and commitment to and support of quality personnel permit us to offer our
customers effective products and services that are both highly innovative and
reliable. We believe that our success derives from a combination of the
following factors that differentiate us from most of our competitors.

     - Total Solutions Orientation.  We offer our customers total solutions that
       include both BSS products and a broad range of services, including
       customization, implementation, systems integration, maintenance, ongoing
       support and outsourcing. By providing services directly to the customer,
       we are able to effectively utilize our intricate technical knowledge of
       our BSS products in the overall execution of a project, helping to ensure
       delivery and significantly reducing project risk. Our total solutions
       approach differs from the multi-party approach commonly used in the
       market, in which products developed by a BSS software vendor are
       implemented by a third-party system integrator. We believe that our
       approach enhances our ability to provide our customers with timely,
       cost-effective, low-risk solutions at a consistent level of quality.

     - Functional and Flexible BSS Products.  Our BSS products are based on an
       open, multi-tier, client-server, rule and table-based architecture that
       provides the functionality, scalability, modularity and adaptability
       required by communications companies in today's highly competitive
       market. The flexibility of our BSS products enables our customers to
       achieve significant time-to-market advantages and reduce their dependence
       on technical and other staff.

     - Highly Skilled Personnel.  We are able to offer our customers superior
       products and services on a worldwide basis in large part because of our
       highly qualified and trained technical, sales, marketing and managerial
       personnel. We invest significantly in the ongoing training of our
       personnel in key areas such as industry knowledge, software technologies
       and management capabilities. Primarily based on the skills and knowledge
       of our employees, we believe that we have developed a reputation for
       reliably delivering quality solutions within agreed time frames and
       budgets. We have global recruitment capabilities and have development
       centers in Israel, the United States, Cyprus, Ireland and Canada.

  BUSINESS STRATEGY

     Our goal is to provide advanced information technology software products
and related customer service and support to the world's leading communications
companies. We seek to accomplish our goal by pursuing the strategies described
below.

     - Continued Focus on the Communications Industry.  We intend to continue to
       concentrate our main resources and efforts on providing strategic
       information systems to the communications industry. This strategy has
       enabled us to develop the specialized industry know-how and capability
       necessary to deliver the technologically advanced, large-scale,
       specifications-intensive information systems solutions required by the
       leading communications companies in the wireless, wireline, and
       convergent service sectors.

     - Target Industry Leaders and Promising New Entrants.  We intend to
       continue to direct our marketing efforts principally towards the major
       communications companies and new entrants that we believe have the
       potential to be market leaders. Our customer base includes major
       communications companies in North America (including SBC, Verizon, Sprint
       PCS and Nextel), Europe (including Deutsche Telekom (Germany), BT (UK),
       Vodafone Group (UK) and Telefonica (Spain)) and the Asia-Pacific region
       (Telstra (Australia)). We believe that the development of this premier
       customer base has helped position us as a market leader, while
       contributing to the core strength of our business. By targeting industry
       leaders and promising new entrants that require the most sophisticated
       information systems solutions, we believe that we are best able to ensure
       that we remain at the forefront of developments in the industry.

                                        17
<PAGE>

     - Deliver and Support Total Solutions.  Our strategy is to provide
       customers with total systems solutions consisting of our BSS products and
       our specialized services. By leveraging our product and industry
       knowledge, we believe that we can provide more effective system
       integration and implementation support services to our customers.

     - Provide Customers with a Broad Suite of Products.  We seek to provide our
       customers with a broad suite of products to meet all their BSS needs. For
       communications service providers, we seek to provide CC&B Systems across
       all lines of their business, such as wireline, mobile and data. This
       approach also means that we can support global communications service
       providers throughout their various international operations. We believe
       that our ability to provide a broad suite of products helps establish us
       as a strategic partner for our customers, and also provides us with
       multiple avenues for strengthening and expanding our ongoing customer
       relationships.

     - Maintain and Develop Long-Term Customer Relationships.  We seek to
       maintain and develop long-term, mutually beneficial relationships with
       our customers. These relationships generally involve additional product
       sales, as well as ongoing support, system enhancement and maintenance
       services. We believe that such relationships are facilitated in many
       cases by the mission-critical strategic nature of the systems provided by
       us and by the added value we provide through our specialized skills and
       knowledge. In addition, our strategy is to solidify our existing customer
       relationships by means of long-term support and maintenance contracts.

  TECHNOLOGY

     We have developed core competencies in various advanced technologies that
are used in our BSS products. By utilizing technologies such as rule and
table-based design, multi-tier architecture, object-oriented techniques, data
mining, web-enabling and open application program interfaces, we are able to
provide communications companies with the flexibility required in a highly
competitive, dynamic environment. For example, the use of rule and table-based
technologies allows communications companies to rapidly implement changes to
their marketing and customer service activities, such as new services, price
plans, discount schemes and bill formats, without the need to modify system
code. Similarly, by drawing on web-enabled, Internet technologies, we have been
able to improve access to information by remote users, both internally within a
communications company's organization and between the organization and its
subscribers. These technologies are integrated in an open, multi-tier,
service-oriented architecture. The architecture of our BSS products includes the
key characteristics described below.

     - Scalability.  Our BSS products are designed to take full advantage of the
       proven scalability of the UNIX platform, allowing progressive system
       expansion, proportional with the customer's growth in business volumes.
       Using the same software, our BSS products can support operations for
       small as well as very large service providers.

     - Modularity.  Our BSS products are comprised of sets of functional
       modules. Each module can be installed on an individual stand-alone basis,
       interfacing with the customer's existing systems, or as part of an
       integrated BSS environment. This modularity provides our customers with a
       highly flexible and cost-effective solution that is able to incrementally
       expand with the customer's growing needs and capabilities. The modular
       approach also preserves the customer's initial investment in BSS
       products, while minimizing future disruptions and the overall cost of
       system implementation.

     - Portability.  Utilization of the UNIX platform ensures that our BSS
       customers are able to choose from a variety of hardware vendors,
       including Hewlett-Packard, IBM and Sun Microsystems. Certain applications
       can also be deployed on the MVS or Windows NT platforms. The BSS products
       utilize, where applicable, Java-based design and programming to augment
       cross-platform portability.

                                        18
<PAGE>

  PRODUCTS

     Our product offerings include an extensive library of BSS software products
that we have developed to provide comprehensive information systems
functionality for communications service providers. Core elements include CRM,
order management, call rating, invoice calculation, bill formatting,
collections, PRM and directory publishing services.

     We configure individual BSS modules into families of products, which serve
as marketing packages oriented to the needs of specific customer segments. We
provide our main CC&B Systems offering in a number of versions to serve the
different needs of communications operators in the various network and business
segments, such as wireline, wireless, broadband and electronic and mobile
commerce. Our main packages include:

     - Amdocs Enabler:  compact offline and online charging product, supporting
       prepaid and postpaid billing plans, for voice and next generation
       services.

     - Amdocs Mobile:  end-to-end billing product for mobile operators, based on
       Amdocs Enabler, together with customer management, provisioning,
       resources management and financial management functions.

     - Amdocs Wireline:  end-to-end billing product for wireline operators,
       based on Amdocs Enabler, together with customer management, resource
       management and financial management functions.

     - Amdocs ClarifyCRM:  end-to-end customer management product for all
       operators, providing support for managing customer relationships,
       including service and support, sales and ordering, and marketing and
       analytics.

     We also offer our new generation, or NG, line of ADS (NG)/Family of
Products which provides comprehensive support for directory publishing
operations.

     Each individual module from the product families can be installed as an
independent stand-alone application, interfacing with the customer's legacy and
third-party systems, or as part of an integrated Amdocs solution.

     CC&B Systems

     The CC&B suites of products that we offer encompass the following key
application areas:

     - Customer Management -- provides customer account information management
       and service support, including account initiation, on-line assistance in
       choosing a price plan, installation scheduling and complaint handling.

     - Acquisition and Formatting -- provides for acquisition and formatting of
       the event records, which are created by usage of the communications
       network. The event records contain information such as the origin and
       destination of a telephone call and its duration.

     - Rating -- calculates charges for usage of communications services, such
       as postpaid and prepaid telephone calls, Internet access and data
       transfer. The rating module calculates the charges for each event based
       on the service packages and price plans applicable to each individual
       user.

     - Billing -- provides comprehensive functionality for bill preparation
       (totaling of usage and other charges, application of discounts, taxes and
       credits) and bill production.

     - Bill Formatter -- enables the flexible definition and modification of
       bill formats, according to user requests (e.g., to combine charges from
       multiple services onto a single bill or to permit certain types of
       charges to be highlighted).

     - Accounts Receivable and Collections -- provides comprehensive
       functionality for accounts receivable and collections, including invoice
       receipt, payment receipt, payment posting, financial reporting and
       automated handling of customers with outstanding debts.

                                        19
<PAGE>

     - Resource Management -- manages the carrier's inventory of telephone
       numbers and SIM cards.

     - Wireless and IP Provisioning -- manages the interface between the
       carrier's customer care and billing system and the network, transferring
       instructions regarding the provision or discontinuation of wireless and
       IP services to specified users.

     - Partner Relationship Management -- calculates, manages and reconciles
       payments for intercarrier network access, including settlement of roaming
       charges between cellular carriers, as well as management of agreements
       and settlements between carriers and their business partners.

     - Commerce Payments -- manages real-time payment and exchange of
       information between buyer and seller for next generation commerce and
       content transactions.

     The ClarifyCRM product suite that we acquired from Nortel Networks enables
us to provide a complete suite of modular applications. Our suite of CRM
products is divided into the following three main categories:

     - Sales and Ordering Solutions -- offers comprehensive sales automation,
       order negotiation and capture, and commissions management products
       supporting the broad needs of sales professionals in all sales
       situations. We provide a range of fully integrated sales automation tools
       enabling local and remote sales professionals to be more effective in
       managing sales opportunities, developing quotes, forecasting revenue and
       communicating with other sales team members. Our products manage sales
       activities in all direct and indirect channels and handle all back-office
       equipment inventory control, commission calculations and
       performance-based compensation plans.

     - Service and Support Solutions -- enables companies to maximize
       efficiencies in customer service organizations. Our products ensure that
       customer service representatives have straightforward, online access to a
       single storehouse for customer data to reduce service response times and
       increase efficiencies in contacts with a customer. Our products manage
       and track all customer interactions in all applications and contact
       channels through resolution. Customers have access to 24-hour a day
       customer care and order services through Internet and mobile portals.

     - Marketing and Analytics Solutions -- offers full sales campaign
       management, customer retention and cross-sell and up-sell functionality,
       using advanced data mining, data warehousing and predictive modeling
       techniques. Our products rely on field-proven data discovery, analysis
       and forecasting to analyze customer usage and causes of churn. Analysis
       of customer information and usage history also enables the generation of
       predictive tools for analyzing credit risk. Using our products,
       communications providers can pinpoint customer behavior trends, then take
       proactive measures to maximize return on sales and marketing, and track
       the effectiveness of sales campaigns and ongoing service offerings.

     Directory Publishing

     Our main offering in the Directory Systems area is the ADS(NG)/Family of
Products. These products provide comprehensive support for yellow page and white
page directory sales and publishing operations, as well as for Internet
directories and catalogs, including fully integrated electronic commerce
capabilities. These systems support large directory publishing operations that
employ a local sales force numbering thousands of representatives, serve
customer bases of hundreds of thousands of businesses and publish hundreds of
different directories each year. The directory line of products comprises a
series of modules, including:

     - Sales -- addresses all aspects of managing sales to advertisers,
       including preparation and management of the overall sales campaign, which
       encompasses selecting the advertisers to be targeted, allocating the
       advertisers to various sales channels (such as field sales or
       telemarketing sales), assigning the advertisers to sales representatives,
       tracking advertising sales results and calculating sales commissions.
       These modules also provide automated support for the advertising

                                        20
<PAGE>

       sales representative, including laptop-based applications for use by
       members of the sales force in the field.

     - Publishing -- supports the process of entering, proofing and extracting
       the telephone listing and advertising information that is to be published
       in a directory. These modules encompass contract processing, service
       order processing, listing information management and directory extract in
       preparation for the actual production of the directory.

     - Marketing and Information Analysis -- includes corporate data warehousing
       techniques, online analytical processing and data mining capabilities,
       oriented to the specific marketing needs of the directory publisher. For
       example, these modules can be used to identify changed patterns of
       advertisement buying behavior in certain groups of customers, or to
       perform "what if" analyses on marketing policy parameters. These modules
       are also used by management to analyze the directory market and customer
       behavior, assisting in the planning of corporate strategy and marketing
       tactics.

     - Prepress -- manages the production of advertisements that are to be
       published in a directory and also supports the fully automated pagination
       of yellow page and white page directories, including the generation of
       the final typesetting file so that printed copies of the documents can be
       produced.

     - Customer Service -- permits online support for handling customer
       inquiries and resolving customer complaints, including online correction
       of advertising data and billing adjustments.

     - Financial Management -- specifically designed for the directory
       publisher's billing, accounts receivable and collections functions.

  SERVICES

     We believe that the methodology we employ to deliver BSS products is one of
the key factors that enables us to achieve the time-frame, budget and quality
objectives of our customers' projects. Our methodology emphasizes rigorous
project management, customization, solutions implementation and integration
planning, as well as active customer participation at all stages to help
prioritize and implement time-critical information system solutions that address
the customer's individual needs.

     The extent of services provided varies from customer to customer. Some
communications service providers prefer a highly customized approach, with
extensive modifications to the BSS product and a significant level of ongoing
support. In recent years, more of our customers have chosen to implement
standard, pre-configured products with limited customization and less ongoing
support. We have invested considerable research and development efforts in
upgrading our application suite to address this market requirement.

     The process of customizing a system involves creating a tailored BSS
product to address a customer's specific technical and business requirements.
System implementation and integration activities are conducted by joint teams
from Amdocs and the customer in parallel with the customization effort.
Implementation and integration activities include project management,
development of training methods and procedures, design of work flows, hardware
planning and installation, network and system design and installation, system
conversion and documentation. In most cases, the role of Amdocs personnel is to
provide support services to the customer's own implementation and integration
team, which has primary responsibility for the task. Customers sometimes require
turn-key solutions, in which case we are able to provide full system
implementation and integration services.

     Once the system becomes operational, we are generally retained by the
customer to provide ongoing services such as maintenance, enhancement design and
development, and operational support. For substantially all of our customers,
the implementation and integration of an initial BSS product has been followed
by the sale of additional systems and modules. In recent years, we have
established long-term maintenance and support contracts with a number of our
customers. These contracts have generally involved an expansion in the scope of
support provided, while also ensuring a recurring source of revenue to us.

                                        21
<PAGE>

     Our business is conducted on a global basis. We maintain five development
facilities located in Israel, the United States, Cyprus, Ireland and Canada,
operate a support center located in Brazil and have operations in North America,
Europe, Latin America and the Asia-Pacific region. Support for implementation
and integration activities is typically performed at the customer site. Once the
system is operational or in production, we provide ongoing support and
maintenance through a combination of remote support from the development centers
and local support at the customer site.

     As part of our effort to provide comprehensive solutions to our customers,
we also offer outsourcing services to support operation of our BSS products.
These outsourcing services generally comprise a combination of functions such as
responsibility for the ongoing development and enhancement of BSS systems that
we have installed, the purchase and management of related hardware assets and
overall management of the customer's associated data centers

  SALES AND MARKETING

     Our sales and marketing activities are primarily directed at major
communications companies. As a result of the strategic importance of our
information systems to the operations of such companies, a number of
constituencies within a customer's organization are typically involved in
purchase decisions, including senior management, information systems personnel
and user groups such as the finance and marketing departments.

     We maintain sales offices in the United States, the United Kingdom, and
several other countries. Our sales activities are supported by marketing
efforts, including marketing communications, product management, market research
and strategic alliances. The management of our operating subsidiaries is closely
involved in establishing sales policies and overseeing sales activities.
Management's role includes the setting of priorities among the multiple sales
opportunities available at any point in time. Management is also responsible for
allocating sufficient resources to each project to meet our quality standards
while also adhering to the project's cost and schedule parameters.

     We also interact with other third parties in our sales activities,
including independent sales agents, information systems consultants engaged by
our customers or prospective customers and systems integrators that provide
complementary products and services to such customers. We also have value-added
reseller agreements with certain hardware and database vendors.

  CUSTOMERS

     Our target market is comprised of communications companies that require
information systems with advanced functionality and technology. The companies in
our target segment are typically market leaders or innovative, well-backed new
entrants. By working with such companies, we help ensure that we remain at the
forefront of developments in the communications industry and that our BSS
product offerings continue to address the market's most sophisticated needs. We
have an international orientation, focusing on potential customers in the
developed, industrialized countries in North America, Europe, Latin America and
the Asia-Pacific region. In addition, we offer CRM applications to selected
customers and segments outside of the communications industry.

     Our customers include global communications leaders, as well as other
leading network operators and service providers and directory publishers in the
United States and around the world. Our customers include SBC and a number of
its operating subsidiaries, such as Cingular Wireless, Southwestern Bell

                                        22
<PAGE>

Yellow Pages, Southwestern Bell Communications Services and Southwestern Bell
Telephone Company. Additional customers include:

<Table>
    <S>                                               <C>
    BCP                                               Tele Danmark
    Bell Canada                                       Telefonica
    BT                                                Telstra
    Deutsche Telekom                                  Telus
    Netcom                                            Verizon
    Nextel                                            Vodafone Group
    Rogers AT&T                                       VoiceStream
    Sprint PCS                                        Western Wireless
</Table>

     Our single largest customer group is Nextel Communications, which accounted
for, in the aggregate, 11.8%, 10.3% and 5.9% of our revenue in fiscal 2002, 2001
and 2000, respectively. Our next largest group of customers is SBC, which
accounted for 10.6%, 13.3% and 12.6% of our revenue in fiscal 2002, 2001 and
2000, respectively.

     Aggregate revenue derived from the multiple business arrangements we have
with each of our five largest customers and their subsidiaries, excluding SBC,
accounted for approximately 45.6%, 41.3% and 39.7% of our revenue in fiscal
2002, 2001 and 2000, respectively.

     The following is a summary of revenue by geographic area. Revenue is
attributed to geographic region based on the location of the customers:

<Table>
<Caption>
                                                             2002     2001     2000
                                                             -----    -----    -----
<S>                                                          <C>      <C>      <C>
North America..............................................  61.9%    53.8%    45.6%
Europe.....................................................  28.9     35.8     42.4
Rest of the World..........................................  9.2      10.4     12.0
</Table>

  COMPETITION

     The market for communications information systems is highly competitive and
fragmented, and we expect competition to increase. We compete with many
independent providers of information systems and services, including American
Management Systems, Convergys, CSG, IBM, Portal Software Inc., Saville Systems
(a subsidiary of ADC Telecommunications, Inc.), SchlumbergerSema Group and
Siebel Systems, Inc., with system integrators, such as EDS, and with internal
information systems departments of large communication companies. We expect
continued competition in the communications industry and the entrance of new
competitors into the software information systems market in the future.

     We believe that we are able to differentiate ourselves from the competition
by, among other things:

     - offering customers a total information system from a single vendor,

     - providing high quality reliable, scalable products,

     - effectively managing the timely implementation of products, and

     - responding to customer service and support needs through a skilled
       professional organization.

     We compete with a number of companies that have long operating histories,
large customer bases, substantial financial, technical, sales, marketing and
other resources, and strong name recognition. Current and potential competitors
have established, and may establish in the future, cooperative relationships
among themselves or with third parties to increase their ability to address the
needs of our prospective customers. Accordingly, new competitors or alliances
among competitors may emerge and rapidly acquire significant market share. As a
result, our competitors may be able to adapt more quickly than we can to new or
emerging technologies and changes in customer requirements, or to devote greater
resources to the promotion and sale of their products. There can be no assurance
that we will be able to compete successfully with existing or new competitors.
Failure by us to adapt to changing market conditions and to

                                        23
<PAGE>

compete successfully with established or new competitors may have a material
adverse effect on our results of operations and financial condition.

  EMPLOYEES

     We invest significant resources in training, retention and motivation of
high quality personnel. Training programs cover areas such as technology,
applications, development methodology, project methodology, programming
standards, industry background and management development. Our management
development scheme is reinforced by a divisional structure, which provides
opportunities for talented managers to gain experience in general management
roles at the division level. We also invest considerable resources in personnel
motivation, including providing various incentive plans for sales staff and high
quality employees. Our future success depends in large part upon our continuing
ability to attract and retain highly qualified managerial, technical, sales and
marketing personnel.

     See "Directors, Senior Management and Employees -- Employees" for further
details regarding our employees and our relationships with them.

  INTELLECTUAL PROPERTY

     We regard a substantial portion of our software products and systems as
proprietary and rely on a combination of statutory and common law copyright,
trademark, trade secret laws, customer licensing agreements, employee and
third-party non-disclosure agreements and other methods to protect our
proprietary rights. We do not include in our software any mechanisms to prevent
or inhibit unauthorized use, but we generally enter into confidentiality
agreements with our employees, consultants, subcontractors, customers and
potential customers and limit access to, and distribution of, our proprietary
information. While we rely on these methods to protect our technology, we
believe that factors such as the knowledge, skill and experience of our
personnel, new product developments, frequent product enhancements and the
timeliness and quality of support services are also critical to our success.

  PROPERTY, PLANTS AND EQUIPMENT

     Facilities

     We lease land and buildings for our executive offices, sales, marketing,
administrative, development and support centers. We lease an aggregate of
approximately 2,100,000 square feet worldwide, including significant leases in
the United States, Israel, Cyprus, Canada and the United Kingdom. Our aggregate

                                        24
<PAGE>

committed annual lease costs are approximately $45 million. The following table
summarizes information with respect to the principal facilities leased by us and
our subsidiaries as of February 1, 2003:

<Table>
<Caption>
                                                                  AREA
LOCATION                                                       (SQ. FEET)
--------                                                       ----------
<S>                                                            <C>
United States
  Chesterfield, MO..........................................     180,000
  San Jose, CA..............................................     132,000
  Stamford, CT(*)...........................................      81,000
  Champaign, IL.............................................     105,000
  Others....................................................      93,000
                                                               ---------
     Total..................................................     591,000

Israel
  Ra'anana..................................................     634,000
  Hod-Hasharon..............................................     201,000
  Jerusalem.................................................      32,000
  Haifa(*)..................................................     133,000
  Negev.....................................................      38,000
                                                               ---------
     Total..................................................   1,038,000

Cyprus (Limassol)...........................................     110,000
Canada (Toronto)(*).........................................     220,000
United Kingdom (London)(*)..................................      59,000
Rest of the world(**).......................................     118,000
</Table>

---------------

 (*) Includes space sublet to third parties.

(**) Includes Argentina, Australia, Brazil, Czech Republic, Denmark, France,
     Germany, Hong Kong, Hungary, Ireland, Italy, Japan, Poland, South Africa,
     Spain, Thailand and The Netherlands.

     Our leases expire on various dates between 2003 and 2012, not including
various options to extend lease terms.

     Equipment

     We develop our BSS products over a system of UNIX, MVS and Windows NT/2000
servers owned by us. We use a variety of software products in our development
centers, including products by Microsoft, Oracle, Synscsort, CA, Merant, IBM, HP
and BEA. Our data storage is based on equipment from EMC, SUN, NetApp and
Hewlett-Packard. Our development servers are connected to approximately 15,000
personal computers owned by us.

     Automatic tape libraries provide full and incremental backups of the data
used in and generated by our business. The backup tapes are kept on-site and
off-site, as appropriate, to ensure security and integrity, and are used as part
of our disaster recovery plan. The distributed development sites that we operate
worldwide are connected by a high speed redundant wide area network ("WAN"),
using telecommunication equipment manufactured by, among others, Cisco and
Nortel.

     The distributed development sites that we operate worldwide are also
connected by a high speed WAN.

                                        25
<PAGE>

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

INTRODUCTION

     In this section, we discuss the general financial condition and the results
of operations for Amdocs and its subsidiaries including:

     - the factors that affect our business,

     - our revenue and costs for the fiscal years ended September 30, 2002, 2001
       and 2000,

     - the reasons why such revenue and costs were different from year to year,

     - the sources of our revenue,

     - the impact of changes we have made to our organizational structure,

     - how all of this affects our overall financial condition,

     - our expenditures for the fiscal years ended September 30, 2002, 2001 and
       2000, and

     - the sources of our cash to pay for future capital expenditures and
       possible acquisitions.

     In this section, we also analyze and explain the annual changes in the
specific line items in our consolidated statements of operations. You should
read this section in conjunction with our consolidated financial statements,
included elsewhere in this report.

OVERVIEW OF BUSINESS AND TREND INFORMATION

     Our market focus is the communications industry, and we are a leading
provider of software products and services to that industry. Our BSS products
consist primarily of customer care and billing, customer relationship management
and order management systems. Our products also include a full range of
directory sales and publishing systems, for publishers of both traditional
printed yellow page and white page directories and electronic Internet
directories.

     Our CC&B Systems and our Directory Systems are designed to meet the
mission-critical needs of leading communications service providers. We support a
wide range of communications services, including wireline, wireless, voice,
data, broadband, content, electronic and mobile commerce and IP based services.
We also support companies that offer multiple service packages, commonly
referred to as convergent services. Because of the complexity of BSS projects
and the expertise required for system support, we also provide extensive
customization, implementation, system integration, ongoing support, system
enhancement, maintenance and outsourcing services, such as the operation of data
centers and the provision of communications facility management services, in all
cases on either or a combination of a fixed or unit charge basis to our
customers.

     As part of our strategy, we may pursue acquisitions and other initiatives
in order to offer new products or services or otherwise enhance our market
position or strategic strengths. See the discussion below under the caption
"Acquisitions".

     We derive our revenue principally from:

     - the sale of licenses for our products, including initial license fees and
       incremental license fees resulting from increases in a customer's
       business volume,

     - the sale of services related to our products, including customization,
       implementation and integration services,

     - recurring revenue from ongoing support and maintenance provided to our
       customers, and

     - providing outsourcing and other related services for our customers.

     We usually sell our software as part of an overall solution offered to a
customer, in which significant customization and modification to our software
generally is required. As a result, we generally recognize

                                        26
<PAGE>

revenue over the course of these long-term projects. Initial license fee revenue
is recognized as work is performed, using the percentage of completion method of
accounting. Subsequent license fee revenue is recognized upon completion of
specified conditions in each contract. Service revenue that involves significant
ongoing obligations, including fees for software customization, implementation
and modification, also is recognized as work is performed, under the percentage
of completion method of accounting. Revenue from software solutions that do not
require significant customization and modification is recognized upon delivery.
In outsourcing contracts, we recognize revenue from the operation and
maintenance of customers' billing systems in the period in which the bills are
produced. Revenue from ongoing support services is recognized as work is
performed. Revenue from third-party hardware and software sales is recognized
upon delivery. Maintenance revenue is recognized ratably over the term of the
maintenance agreement. As a result of a substantial portion of our revenue being
subject to the percentage of completion accounting method, the size and timing
of customer projects and our progress in completing such projects may
significantly affect our annual and quarterly operating results.

     Our business is subject to the effects of general global economic
conditions and, in particular, market conditions in the communications industry.
As a result of the slowdown in the communications industry, the market value,
financial results and prospects, and capital spending levels of communications
companies have declined or degraded.

     The persistence and worsening of the downturn in the communications
industry have significantly impacted our business. Over the past year, further
slowdowns in customer buying decisions stemming from overall reductions in the
capital investment budgets of many communications service providers have led to
fewer new contracts than we had expected, as well as smaller than expected
initial spending commitments and reduced discretionary spending under our
contracts with some of our customers. These factors, combined with the
continuing general economic slowdown, resulted in our achieving lower revenue
levels than expected during the second half of fiscal 2002.

     Due to our heavy dependence on the communications industry, we can be
adversely affected by bankruptcies or other business failures in that industry.
Failures in the communications industry could harm our business and might have a
material adverse effect on our operating results and financial condition.

     Total license and service revenue for the fiscal year ended September 30,
2002 was $1,613.6 million, compared to $1,533.9 million in fiscal 2001 and
$1,118.3 million in fiscal 2000.

     License and service fees from the sale of CC&B Systems amounted to $1,440.0
million in the year ended September 30, 2002, compared to $1,379.7 million in
fiscal 2001 and $986.5 million in fiscal 2000. In fiscal 2002, license and
service fees from the sale of CC&B Systems represented 89.2% of our total
revenue, compared to 89.9% in fiscal 2001 and 88.2% in fiscal 2000.

     We believe that we are a leading global provider of CC&B Systems. We
provide a broad set of CC&B Systems, with proven functionality and scalability,
accompanied by a comprehensive range of support services.

     We believe that demand for our CC&B Systems is driven by, among other key
factors:

     - the global penetration of communications service providers,

     - the emergence of new communications products and services, especially IP,
       data and content services,

     - technological changes, such as the introduction of wireless Internet
       services via GPRS and UMTS technology,

     - the business needs of communications service providers to reduce costs
       and retain customers, and

     - a shift from in-house management to vendor solutions.

                                        27
<PAGE>

     We also believe that additional drivers of demand are the continuing trend
for communications service providers to offer to their subscribers multiple
service packages, commonly referred to as convergent services (combinations of
voice, broadband, electronic and mobile commerce and IP services), and the
ability of our CC&B Systems to improve productivity and reduce costs of
communications providers.

     Another key to demand for our CC&B Systems is the practice by certain
communications service providers to outsource entirely their customer care and
billing functions.

     Although we are unable at this time to forecast demand for our CC&B
Systems, we could experience additional revenue softness in the future as a
result of the downturn in the communications industry. This industry-wide
downturn had a direct negative impact on our results in fiscal 2002, reducing
both the number of new contracts we have been able to obtain, and the initial
spending commitments and discretionary spending levels of some of our customers.
In the first quarter of fiscal 2003, we had total revenue of $339 million and as
of January 31, 2003, we expect that total revenue for the second quarter of
fiscal 2003 will be in the range of $333 million to $340 million. As of January
31, 2003, we have no clear indication for the second half of fiscal 2003.
Accordingly, at this point, we cannot predict whether revenue levels will
continue to deteriorate or have stabilized. However, we expect that revenue
attributable to our CC&B Systems in fiscal 2003 will be lower than in fiscal
2002.

     License and service fees from the sale of Directory Systems amounted to
$173.6 million in the year ended September 30, 2002, compared to $154.2 million
in fiscal 2001 and $131.8 million in fiscal 2000. In fiscal 2002, license and
service fees from the sale of Directory Systems represented 10.8% of our total
revenue, compared to 10.1% in fiscal 2001 and 11.8% in fiscal 2000.

     We believe that we are a leading provider of Directory Systems in most of
the markets that we serve. We anticipate that revenue levels for our Directory
Systems and related outsourcing projects for fiscal 2003 will be slightly higher
than in fiscal 2002.

SENIOR MANAGEMENT TRANSITION AND NEW ORGANIZATIONAL STRUCTURE

     In March 2002, we announced a senior management transition. Effective July
1, 2002, Dov Baharav, who previously had served as Chief Financial Officer of
Amdocs Management Limited, assumed the role of President and Chief Executive
Officer. Ron Moskovitz, who previously had served as Vice President of Finance
for Amdocs Management Limited, took over the role of Chief Financial Officer.
Mr. Baharav replaced Avinoam Naor in the positions of President and Chief
Executive Officer of Amdocs Management Limited. Mr. Naor became the Vice
Chairman of our Board of Directors.

     Under the leadership of our new management team and in response to changing
market conditions, we implemented a new organizational structure during the
fourth quarter of fiscal 2002. Our operations are now centered around two main
groups, the Offering Group and the Delivery Group. The Offering Group is
responsible for developing and marketing our BSS products, while the Delivery
Group is responsible for project and service delivery to our customers.

OPERATIONAL EFFICIENCY AND COST REDUCTION PROGRAM

     In October 2001, as part of a plan to achieve increased operational
efficiency and to more closely monitor and reduce costs, we consolidated our
Stamford, Connecticut data center into our Champaign, Illinois facility, and we
closed the Stamford facility. As a direct result of this closure, we recorded a
nonrecurring charge of $13.3 million in the first quarter of fiscal 2002,
primarily for the write-off of leasehold improvements and rent obligations, with
the remainder for employee separation costs.

     In addition, in the first quarter of fiscal 2002, as part of a general
effort to reduce costs, we have decreased our overall commitments for employee
compensation, through a lesser reliance on fixed compensation programs and a
greater reliance on discretionary arrangements.

     On June 20, 2002, we announced our intention to implement a cost reduction
program to reduce costs by approximately 10% in response to a decline of our
forecasted revenue for the third and fourth quarters

                                        28
<PAGE>

of fiscal 2002. The decline resulted from, among other factors, slowdowns in
customer buying decisions in the third quarter of fiscal 2002, stemming from
overall reductions in the capital investment budgets of many communications
service providers, leading to fewer new contracts than we had expected, as well
as smaller than expected initial spending commitments and reduced discretionary
spending under our contracts with some of our customers.

     We recorded a charge of $20.9 million in the fourth quarter of fiscal 2002,
consisting primarily of employee separation costs in connection with the
elimination of approximately 1,000 positions, with the remainder for the
write-off of leasehold improvements and rent obligations. Except for certain
lease termination costs that will be paid over the respective lease terms, we
expect to pay substantially all of the remaining accrual balance of the cost
reduction program in the first quarter of fiscal 2003.

     These charges are included in "restructuring charges, in-process research
and development and other indirect acquisition-related costs" for the year ended
September 30, 2002.

     Implementation of our cost reduction program permitted us to achieve cost
savings of approximately $18 million in the fourth quarter of fiscal 2002. We
believe that the cost reduction program will create additional quarterly cost
savings of approximately $12 million, which will achieve an overall savings of
$30 million each quarter on an ongoing basis compared to the expense level in
the third quarter of fiscal 2002. During the fourth quarter of fiscal 2002 we
notified all affected employees of their termination. However, some of these
individuals remained on our payroll as our employees through the end of the
fourth quarter. As a result, the cost savings achieved in the fourth quarter
were partial.

     For additional cost reduction measures, see the discussion below under the
caption "Subsequent Event".

ADOPTION OF NEW ACCOUNTING STANDARDS

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations" ("SFAS No. 141"), and No. 142, "Goodwill and Other Intangible
Assets" ("SFAS No. 142").

     SFAS No. 141 requires that the purchase method of accounting be used for
all business combinations initiated after June 30, 2001.

     SFAS No. 142 is effective for fiscal years beginning after December 15,
2001. Under SFAS No. 142, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but, instead, will be subject to
periodic impairment tests in accordance with the Statement. Other intangible
assets will continue to be amortized over their useful lives.

     Other intangible assets, such as workforce-in-place, will be reclassified
to goodwill, according to SFAS No. 141's new definition of intangible assets.

     Effective October 1, 2002 we adopted SFAS No. 142. Subsequent to the
adoption of the new rules, we performed the transitional tests of goodwill and
intangible assets recorded as of October 1, 2002. Thereafter, a periodic
impairment test will be performed at least annually. We operate in one business
segment, and our reporting unit is consistent with that one operating segment.
In calculating the fair value of the reporting unit, we used a discounted cash
flow methodology. There was no impairment of goodwill upon adoption of SFAS 142.
We will perform our annual impairment review during the fourth quarter of each
year commencing in the fourth quarter of fiscal 2003. We recorded goodwill and
workforce-in-place amortization of $204.6 million in fiscal 2002, $204.6 million
in fiscal 2001 and $104.3 million in fiscal 2000. See the discussion below under
the caption "Acquisitions".

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections" ("SFAS No. 145"). SFAS No. 145 eliminates previous requirements to
classify gains and losses from extinguishment of debt as extraordinary items in
earnings. Gains or losses from extinguishment of debt for fiscal years beginning
after May 15, 2002 shall not be classified as extraordinary items unless certain
provisions are met. Early adoption was encouraged. We adopted SFAS No. 145 in
the fourth quarter of fiscal 2002 in connection with the gain related to the
repurchase of our convertible notes. See the discussion below under the caption
"Convertible Notes".

                                        29
<PAGE>

ACQUISITIONS

     As part of our strategy, we may pursue acquisitions in order to offer new
products or services or otherwise enhance our market position or strategic
strengths.

     In November 1999, we acquired International Telecommunication Data Systems,
Inc. ("ITDS") in a stock-for-stock acquisition. The acquisition of ITDS, a
leading provider of solutions to communications companies for outsourcing of
billing operations, expanded the scope of our CC&B Systems offerings. We believe
that this acquisition further established our leadership in providing total
solutions to the communications industry. The total purchase price of $189.0
million consisted of the issuance of 6,461,376 ordinary shares, the grant of
options to purchase 1,102,955 ordinary shares and transaction costs. We have
since renamed ITDS, Amdocs Stamford, Inc.

     In April 2000, we acquired Solect Technology Group Inc. ("Solect") in a
stock-for-stock acquisition. The acquisition of Solect, a leading provider of
billing and customer care software to IP service providers, including wireless
and application service providers, or ASPs, expanded our IP service provider
customer base for CC&B Systems. In the acquisition, all then outstanding common
shares of Solect were exchanged for shares of a newly issued class of
exchangeable shares of Solect. The exchangeable shares entitle holders to
dividends and other rights economically equivalent to our ordinary shares,
including the right, through a voting trust, to vote at our shareholder
meetings. The exchangeable shares are exchangeable at the option of the holders
into our ordinary shares on a one-for-one basis. The total purchase price of
$1,087.7 million consisted of the issuance of 13,846,302 exchangeable shares,
the grant of options to purchase 1,653,662 ordinary shares and transaction
costs. We have since renamed Solect, Amdocs Canada, Inc.

     On November 28, 2001, we purchased from Nortel Networks Corporation
substantially all of the assets of its Clarify business ("Clarify"), a leading
provider of CRM software to communications companies and other enterprise
sectors. This acquisition positioned us as a leading provider of CRM software to
the communications industry and, through our addition of Clarify's CRM software
to our CC&B Systems offerings, reinforced our leadership in delivering a
comprehensive portfolio of business software applications. Following the
acquisition, we have continued to sell Clarify's CRM software to customers other
than communication service providers. Although these customers are not the
primary focus of our business, we believe that revenue from such customers will
slightly increase over time. The total purchase price for Clarify, as of
September 30, 2002, was $212.0 million in cash, including transaction costs of
$8.3 million. The purchase price was subject to final price adjustments that
were settled in October 2002 and resulted in an $11.3 million reduction of the
purchase price to $200.7 million in the first quarter of fiscal 2003.

     We accounted for the ITDS, Solect and Clarify acquisitions using the
purchase method of accounting. We have included the fair market value of the
assets and liabilities acquired in these transactions in our balance sheet and
the results of operations for the acquired entities in our consolidated
statements of operations as of the closing date of each acquisition. In each
case, we obtained a valuation of the intangible assets acquired. The value of
the acquired technology included both existing technology and in-process
research and development. The valuation of these items was estimated by applying
the income forecast method, which considered the present value of cash flows by
product lines. We amortized the fair value of existing technology products over
two years, commencing as of the closing date of the applicable acquisition. We
charged as an expense in-process research and development immediately following
the completion of each acquisition in accordance with FASB Interpretation No. 4,
"Applicability of FASB Statement No. 2 to Business Combinations Accounted for by
the Purchase Method", because in each case such technology had not reached
technological feasibility and had no alternative use. We are amortizing the fair
value of customer arrangements and workforce-in-place over five years in the
case of ITDS and three years in the case of Solect and Clarify. These
amortizations commenced on the closing date of the applicable acquisition.

     The excess of the purchase price over the fair value of the net assets
acquired constitutes goodwill. We began amortizing goodwill from the ITDS
acquisition over a 15-year period and from the Solect
                                        30
<PAGE>

acquisition over a five-year period, in each case commencing on the closing date
of the applicable acquisition. According to the transition provisions of SFAS
No. 142, goodwill for acquisitions completed subsequent to June 30, 2001 is not
amortized and goodwill for acquisitions completed prior to June 30, 2001 is
amortized only through September 30, 2002. See the discussion above under the
caption "Adoption of New Accounting Standards". In accordance with these
provisions, the goodwill relating to the Clarify acquisition has been not
amortized. Commencing October 1, 2002, as a result of our adoption of SFAS No.
142, we will cease amortizing goodwill related to the ITDS and Solect
acquisitions and all goodwill will be subject to periodic impairment tests. Also
effective October 1, 2002, we adopted SFAS No. 141 for acquisitions prior to
July 1, 2001, which requires us to reclassify to goodwill certain other
intangible assets, such as workforce-in-place. The amount assigned to Clarify
goodwill was subject to possible purchase price adjustments and other
contingencies, which were settled in October 2002, as discussed above.

     No further investments were made in the projects written-off in our
acquisitions.

     For more information on our acquisitions, see Note 3 to the consolidated
financial statements included in this document.

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

     Our research and development activities involve the development of new
software modules and product offerings in response to an identified market
demand, either in conjunction with a customer project or as part of our internal
product development programs. We also expend additional amounts on applied
research and software development activities to keep abreast of new technologies
in the communications markets and to provide new and enhanced functionality to
our existing product offerings. Research and development expenditures were
$124.1 million, $105.8 million and $74.9 million in the fiscal years ended
September 30, 2002, 2001 and 2000, respectively, representing 7.7%, 6.9% and
6.7%, respectively, of our revenue in these fiscal years. We believe that our
research and development efforts are a key element of our strategy and are
essential to our success. Although we intend to continue to devote resources to
research and development as required to maintain and further strengthen our
market position, our research and development budget, like all of our costs, is
sensitive to our overall financial condition. A decrease in our total revenue
could, in certain circumstances, lead to reductions in the levels of our
research and development expenditures.

     We regard significant portions of our software products and systems as
proprietary. We rely on a combination of statutory and common law copyright,
trademark and trade secret laws, customer licensing agreements, employee and
third-party nondisclosure agreements and other methods to protect our
proprietary rights. We generally enter into confidentiality agreements with our
employees, consultants, subcontractors, customers and potential customers and
limit access to, and distribution of, our proprietary information. We believe
that the sophistication and complexity of our BSS offerings make it very
difficult to copy such information or to subject such information to
unauthorized use. We maintain sole ownership of our software products.

CONVERTIBLE NOTES

     In May 2001 we issued $500.0 million aggregate principal amount of 2%
Convertible Notes due June 1, 2008 (the "Notes"). We are obligated to pay
interest on the Notes semi-annually on June 1 and December 1 of each year. The
Notes are our senior unsecured obligations and rank equal in right of payment
with all of our existing and future senior unsecured indebtedness. The Notes are
convertible, at the option of the holders at any time before the maturity date,
into our ordinary shares at a conversion rate of 10.8587 shares per $1,000
principal amount of Notes, representing a conversion price of approximately
$92.09 per share. The Notes are subject to redemption at any time on or after
June 1, 2006, in whole or in part, at our option, at a redemption price of 100%
of the principal amount plus accrued and unpaid interest. The Notes are subject
to repurchase, at the holder's option, on June 1, 2004 and June 1, 2006, at a
repurchase price equal to 100% of the principal amount plus accrued and unpaid
interest, if any, on such

                                        31
<PAGE>

repurchase date. We may choose to pay the repurchase price in cash, ordinary
shares or a combination of cash and ordinary shares.

     On July 23, 2002, our Board of Directors authorized us to repurchase Notes,
in such amounts, at such prices and at such times considered appropriate. Such
repurchases may be made on the open market, in privately negotiated transactions
or otherwise, in accordance with any applicable laws and the terms of the Notes.
As of September 30, 2002, we had repurchased $54.9 million aggregate principal
amount of the Notes, at an average price of $890 per $1,000 principal amount. We
funded these repurchases, and intend to fund any future repurchases, with
available funds. As of September 30, 2002, $445.1 million aggregate principal
amount of the Notes was outstanding.

SHARE REPURCHASE PROGRAM

     In November 2001, our Board of Directors approved a twelve-month share
repurchase program, authorizing the repurchase of up to 11 million of our
ordinary shares, or approximately 5% of our outstanding ordinary shares as of
that date. In April 2002, our Board of Directors expanded the stock repurchase
plan to authorize the purchase of up to 20 million shares, or approximately 9%
of our then outstanding ordinary shares. Under the program, from time to time
through November 2002, we were authorized to repurchase shares on the open
market, in privately negotiated transactions or otherwise, in accordance with
any applicable laws, and at times and prices as we deemed appropriate. During
2002 we repurchased 7.7 million of our ordinary shares at a weighted average
price of $14.13 per share. We funded these repurchases, and intend to fund any
future repurchases, with available funds.

INVESTMENT

     In January 2001 we formed Certen Inc. ("Certen") with Bell Canada to
provide customer care and billing solutions to Bell Canada and some of its
affiliated companies. Certen is owned 90% by Bell Canada and 10% by us.
Commencing on the 30-month anniversary of the transaction, convertible
debentures issued by Certen to us will be convertible into an additional 35%
ownership interest in Certen. Our relative ownership interests might be modified
further through the exercise of a series of contractual rights, commencing on
the 30-month anniversary of the transaction. We are providing the customer care
and billing software required by Certen, including customization, installation,
maintenance and other services. We account for our investment in Certen under
the cost method.

ADJUSTMENT TO THE BASIS OF INVESTMENTS

     In fiscal 2002, we recorded pretax charges of $5.5 million to adjust the
carrying value of two investments, accounted for by us under the cost method. In
fiscal 2001, we recorded pretax charges of $6.8 million to adjust the carrying
value of four investments, accounted for by us under the cost method. We
periodically monitor the economic and financial aspects of our interests in all
of our investments. Following these adjustments, as of September 30, 2002, our
only remaining investment accounted for under the cost method was Certen.

                                        32
<PAGE>

OPERATING RESULTS

     The following table sets forth for the fiscal years ended September 30,
2002, 2001 and 2000 certain items in our consolidated statements of operations
reflected as a percentage of total revenue:

<Table>
<Caption>
                                                  YEAR ENDED SEPTEMBER 30,
                            --------------------------------------------------------------------
                                    2002                    2001                    2000
                            --------------------    --------------------    --------------------
                              PRO          AS         PRO          AS         PRO          AS
                            FORMA(*)    REPORTED    FORMA(*)    REPORTED    FORMA(*)    REPORTED
                            --------    --------    --------    --------    --------    --------
<S>                         <C>         <C>         <C>         <C>         <C>         <C>
Revenue:
  License.................     9.5%        9.5%       11.2%       11.2%       11.2%       11.2%
  Service.................    90.5        90.5        88.8        88.8        88.8        88.8
                             -----       -----       -----       -----       -----       -----
                             100.0       100.0       100.0       100.0       100.0       100.0
                             -----       -----       -----       -----       -----       -----
Operating expenses:
  Cost of license.........     0.3         0.3         0.4         0.4         0.5         0.5
  Cost of service.........    57.5        57.5        55.3        55.3        57.2        57.2
  Research and
     development..........     7.7         7.7         6.9         6.9         6.7         6.7
  Selling, general and
     administrative.......    13.9        13.9        12.7        12.7        12.3        12.3
  Amortization of goodwill
     and purchased
     intangible assets....      --        14.4          --        14.3          --         9.9
  Restructuring charges,
     in-process research
     and development and
     other indirect
     acquisition-related
     costs................      --         3.2          --          --          --         6.8
                             -----       -----       -----       -----       -----       -----
                              79.4        97.0        75.3        89.6        76.7        93.4
                             -----       -----       -----       -----       -----       -----
Operating income..........    20.6         3.0        24.7        10.4        23.3         6.6
Interest income and other,
  net.....................     0.8         1.2         1.4         1.4         1.0         1.0
                             -----       -----       -----       -----       -----       -----
Income before income
  taxes...................    21.4         4.2        26.1        11.8        24.3         7.6
Income taxes..............     6.0         4.6         7.8         7.5         7.3         7.1
                             -----       -----       -----       -----       -----       -----
Net (loss) income.........    15.4%       (0.3)%      18.3%        4.3%       17.0%        0.5%
                             =====       =====       =====       =====       =====       =====
</Table>

---------------

(*) The above pro forma financial information regarding our operating results is
    provided as a complement to results reported in accordance with accounting
    principles generally accepted in the United States. We use this pro forma
    financial information in our internal analysis because it enables us to
    consistently analyze the critical components and results of operations and
    to have a meaningful comparison to prior years. This pro forma financial
    information excludes (i) amortization of goodwill and purchased intangible
    assets, (ii) for fiscal 2002 and 2000 only, $17.4 million and $75.6 million,
    respectively, for purchased in-process research and development and other
    indirect acquisition-related costs, attributable to our acquisitions, (iii)
    for fiscal 2002 only, $13.3 million for a nonrecurring charge related to the
    consolidation of data centers and the resulting closure of our Stamford,
    Connecticut facility, $20.9 million for restructuring charge related to the
    cost reduction program, (iv) for fiscal 2002 only, $6.0 million gain
    attributable to the repurchase of Notes and (v) all related tax effects
    attributable to the above of $23.3 million, $5.3 million and $2.6 million
    for fiscal 2002, 2001 and 2000, respectively. We refer to the items in
    clauses (i) and (ii) collectively, as the "acquisition-related charges".

  FISCAL YEARS ENDED SEPTEMBER 30, 2002 AND 2001

     Revenue.  Total revenue for the year ended September 30, 2002 was $1,613.6
million, an increase of $79.7 million, or 5.2%, over fiscal 2001. This growth
rate was significantly less than the 37.2% revenue increase we had been able to
achieve between fiscal 2000 and 2001, primarily as a result of the

                                        33
<PAGE>

pronounced decrease in our CC&B Systems revenue in the second half of fiscal
2002, partially offset by revenue attributable to our acquisition of Clarify.
While CC&B Systems revenue levels in the first six months of fiscal 2002 were
23.8% higher than revenue levels for CC&B Systems in the comparable period of
fiscal 2001, and 6.3% higher sequentially based on a comparison of our second to
our first fiscal quarters of 2002, CC&B Systems revenue declined significantly
in the second six months of fiscal 2002. The Company experienced a $130.6
million, or 16.6%, decline in revenue from our CC&B Systems between the first
half and second half of fiscal 2002 and sequential declines of $65.9 million or
16.3% and $23.0 million or 6.8%, between the second and third fiscal quarters
and third and fourth fiscal quarters of 2002, respectively.

     The recent quarterly trends in our total revenue are summarized below (in
millions):

<Table>
<Caption>
                                                    Q1        Q2        Q3        Q4
                                                  ------    ------    ------    ------
<S>                                               <C>       <C>       <C>       <C>
Fiscal 2002.....................................  $422.6    $455.3    $380.1    $355.5
Fiscal 2001.....................................  $342.2    $372.3    $404.0    $415.4
</Table>

     As of January 31, 2003 we expect that total revenue for the first half of
fiscal 2003 will be in the range of $672 million to $679 million. We are unable
at this time to forecast beyond the first half of fiscal 2003. We could
experience stabilization of revenue levels or additional revenue softness in
future quarters. However, we expect that our revenue in fiscal 2003 will be
lower than in fiscal 2002.

     License revenue decreased from $171.4 million in the year ended September
30, 2001 to $153.7 million in the year ended September 30, 2002, a decrease of
10.4%, while service revenue increased 7.2% to $1,459.9 million in the year
ended September 30, 2002 from $1,362.5 million in the year ended September 30,
2001. The decrease in license revenue and the smaller than expected growth in
service revenue are attributable primarily to the slowdown in customer buying
decisions in the second half of fiscal 2002, stemming from overall reductions in
the capital investment budgets of many communications service providers. This
reduction in investment by our customers has resulted in our obtaining fewer new
contracts than expected and smaller than expected initial spending commitments
under contracts with some of our customers. The smaller than anticipated
increase in service revenue is also attributable, in part, to reduced
discretionary spending under our contracts with some of our customers in the
second half of fiscal 2002.

     Total CC&B Systems revenue for the year ended September 30, 2002 was
$1,440.0 million, an increase of $60.3 million, or 4.4%, over fiscal 2001.
During fiscal 2002, the demand for our CC&B Systems was primarily driven by the
need for communications companies to continue to upgrade their customer care and
billing, CRM software and order management systems in response to competition in
the subscriber markets, the need to offer new data services and the need to
improve productivity and operational efficiency. In addition, demand for our
CC&B Systems was enhanced by our acquisition of Clarify, which added Clarify's
CRM software to our CC&B Systems offerings. As a result of the Clarify
acquisition, we derived a portion of our CC&B Systems revenue in fiscal 2002
from customers other than communications service providers. For the year ended
September 30, 2002, $59.9 million of our CC&B Systems revenue was attributable
to such customers. Although our business is not focused on such non-
communications service provider customers, we believe that revenue from such
customers will slightly increase over time.

     Revenue from Directory Systems was $173.6 million for the year ended
September 30, 2002, an increase of $19.3 million, or 12.5%, over fiscal 2001.
The increase is attributable primarily to extensions of agreements with and
additional services rendered to existing customers.

     In the year ended September 30, 2002, revenue from customers in North
America, Europe and the rest of the world accounted for 61.9%, 28.9% and 9.2%,
respectively, compared to 53.8%, 35.8% and 10.4%, respectively, for fiscal 2001.
The growth in North American revenue in the year ended September 30, 2002, was
attributable primarily to increased activity from existing customers.

     Cost of License.  Cost of license for the year ended September 30, 2002 was
$5.1 million, a decrease of $0.6 million, or 10.6%, over the cost of license for
fiscal 2001. Cost of license includes amortization of

                                        34
<PAGE>

purchased computer software and intellectual property rights, and is decreasing
as a result of our amortizing on a faster than straight-line basis.

     Cost of Service.  Cost of service for the year ended September 30, 2002 was
$928.3 million, an increase of $80.7 million, or 9.5%, over the cost of service
of $847.6 million for fiscal 2001. As a percentage of revenue, cost of service
increased to 57.5% in fiscal 2002 from 55.3% in fiscal 2001. The increase in
cost of service as a percentage of revenue is attributable to the decrease in
license revenue and the slight decrease in the gross margin of our service
revenue in the second half of fiscal 2002. As a result of general economic and
other factors negatively impacting our markets, we took steps to decrease our
costs. See the discussion above under the caption "Operational Efficiency and
Cost Reduction Program".

     Research and Development.  Research and development expense was primarily
comprised of compensation expense attributable to research and development
activities, either in conjunction with customer projects or as part of our
internal product development program. For the year ended September 30, 2002,
research and development expense was $124.1 million, or 7.7% of revenue,
compared with $105.8 million, or 6.9% of revenue, in fiscal 2001. The increase
in expense reflects ongoing expenditures primarily for CC&B Systems. Our
research and development budget, like all of our costs, is sensitive to our
overall financial condition. A decrease in our total revenue could, in certain
circumstances, lead to reductions in the levels of our research and development
expenditures. See the discussion above under the caption "Research and
Development, Patents and Licenses".

     Selling, General and Administrative.  Selling, general and administrative
expense was primarily comprised of compensation expense and increased by 14.3%
to $223.6 million, or 13.9% of revenue, in the year ended September 30, 2002
from $195.6 million, or 12.7% of revenue, in fiscal 2001. The increase in
selling, general and administrative expense as a percentage of revenue is
attributable primarily to the increase in our selling and marketing efforts in
fiscal 2002 and, to a lesser degree, to the reduction in our revenue growth,
which was not offset by a corresponding decrease in our selling, general and
administrative expense.

     Amortization of Goodwill and Purchased Intangible Assets.  Amortization of
goodwill and purchased intangible assets for the year ended September 30, 2002
was $231.8 million, compared to $220.0 million in fiscal 2001. The increase in
amortization expense in fiscal 2002 is due to non-goodwill related amortization
resulting from the Clarify acquisition. In accordance with SFAS No. 142,
goodwill related to Clarify, an acquisition completed after July 1, 2001, is not
amortized, but is subject to periodic impairment tests. For acquisitions
completed prior to July 1, 2001, under SFAS No. 142 amortization of goodwill and
certain other intangibles, such as workforce-in-place, will cease on October 1,
2002. In fiscal 2002 and 2001, total amortization related to such goodwill and
workforce-in-place was $204.6 million. Effective as of October 1, 2002, we
adopted SFAS No. 142 and goodwill related to our acquisitions will no longer be
amortized. Instead, any such goodwill will be subject only to the same periodic
impairment tests now applicable to Clarify-related goodwill. See the discussion
above under the caption "Acquisitions".

     Restructuring Charges, In-Process Research and Development and Other
Indirect Acquisition-Related Costs.  Restructuring charges, in-process research
and development and other indirect acquisition-related costs in fiscal 2002
consisted of a one-time charge of $17.4 million for write-off of purchased
in-process research and development resulting from the Clarify transaction, a
nonrecurring charge of $13.3 million related to the consolidation of data
centers and the resulting closure of our Stamford, Connecticut facility and a
restructuring charge of $20.9 million related to the cost reduction program we
implemented in the fourth quarter of fiscal 2002. See the discussion above under
the caption "Operational Efficiency and Cost Reduction Program".

     Operating Income.  Operating income for the year ended September 30, 2002,
was $49.2 million, compared to $159.3 million for fiscal 2001, a decrease of
69.1%. The decrease resulted primarily from the reduction in our revenue growth
in fiscal 2002, which was not offset by a corresponding decrease in our costs,
as well as from the Clarify acquisition-related charges and the restructuring
charges resulting from

                                        35
<PAGE>

the Stamford facility closing and the implementation of our cost reduction
program. Pro forma operating income for the year ended September 30, 2002,
excluding acquisition-related charges and the restructuring charges, was $332.6
million, or 20.6% of revenue, compared to $379.3 million, or 24.7% of revenue,
for fiscal 2001, a decrease of 12.3%.

     Interest Income and Other, Net.  For the year ended September 30, 2002,
interest income and other, net, was $19.3 million, a decrease of $3.0 million
from fiscal 2001. The decrease in interest income and other, net, is primarily
attributable to the full-year interest expense and amortization of debt issuance
costs related to our Notes, compared to four months of these costs in fiscal
2001. The decrease in interest income and other, net, was partially offset by
gain of $6.0 million from the repurchase of our Notes. See the discussion above
under the caption "Convertible Notes".

     Income Taxes.  Income taxes for the year ended September 30, 2002 were
$73.5 million on pretax income of $68.5 million. Our blended effective tax rate
for fiscal 2002 was 107%, resulting from the non-cash amortization of goodwill
related to acquisitions, much of which is not tax deductible. See the discussion
below under the caption "Effective Tax Rate". The pro forma effective tax rate
for the year ended September 30, 2002, excluding the acquisition-related
charges, the restructuring charges resulting from the Stamford facility closing,
the implementation of our cost reduction program and the gain from the
repurchase of our Notes, was 28%. For the year ended September 30, 2001, income
taxes were $115.2 million on income before income taxes of $181.6 million. The
blended effective tax rate for fiscal 2001 was 63% (due to non-cash amortization
of goodwill related to acquisitions, much of which is not tax deductible) and
the pro forma effective tax rate for such period, excluding acquisition-related
charges, was 30%.

     Net (Loss) Income.  We incurred a net loss of $5.1 million in the year
ended September 30, 2002, compared to net income of $66.4 million in fiscal
2001. The net loss in fiscal 2002 resulted primarily from a decrease in our
license revenue and the reduction in our revenue growth in fiscal 2002, which
was not offset by a corresponding decrease in our costs, as well as from the
Clarify acquisition-related charges and the restructuring charges resulting from
the Stamford facility closing and the implementation of the cost reduction
program. We expect that our adoption of SFAS No. 142 as of October 1, 2002 will
have a positive impact on our results of operations in fiscal 2003. As a result
of the adoption, we will no longer be required to amortize the goodwill from any
of our acquisitions made prior to July 1, 2001. Instead, any such goodwill will
be subject only to periodic impairment tests, as is the case currently for the
goodwill from the Clarify acquisition. See the discussion above under the
caption "Acquisitions". Pro forma net income for the year ended September 30,
2002, excluding the acquisition-related charges, the restructuring charges
resulting from the Stamford facility closing and the implementation of our cost
reduction program, the gain from the repurchase of our Notes and tax effects
related to these items, decreased by 11.4% from fiscal 2001, to $249.0 million,
representing 15.4% of revenue. The decrease in our pro forma net income was due
to a decrease in our revenue growth in the year ended September 30, 2002, caused
by a significant slowdown in our market in the second half of fiscal 2002, which
was not offset by a corresponding decrease in the growth of our costs.

     Set forth below is the effect of non-amortization of goodwill and
workforce-in-place (in millions, except per share data):

<Table>
<Caption>
                                                              FOR THE YEAR ENDED
                                                                 SEPTEMBER 30,
                                                              -------------------
                                                                2002       2001
                                                              --------   --------
<S>                                                           <C>        <C>
Reported net (loss) income..................................   $ (5.1)    $ 66.4
Add back: goodwill and workforce-in-place amortizations.....    204.6      204.6
Attributable tax effect.....................................     (2.7)      (2.7)
                                                               ------     ------
Adjusted net income.........................................   $196.8     $268.3
                                                               ======     ======
Adjusted basic earnings per share...........................   $ 0.89     $ 1.21
                                                               ======     ======
Adjusted diluted earnings per share.........................   $ 0.88     $ 1.18
                                                               ======     ======
</Table>

                                        36
<PAGE>

     Diluted (Loss) Earnings Per Share.  Diluted loss per share was $0.02 for
the year ended September 30, 2002, compared to diluted earnings per share of
$0.29 in fiscal 2001. Pro forma diluted earnings per share for the year ended
September 30, 2002, excluding the acquisition-related charges, the restructuring
charges resulting from the Stamford facility closing and the implementation of
the cost reduction program and the gain from the repurchase of our Notes and tax
effects related to these items, decreased by 9.7% from fiscal 2001, to $1.12 per
diluted share. Excluding acquisition-related charges, our pro forma earnings per
share in the first quarter of fiscal 2003 was $0.20, and as of January 31, 2003,
we expect that our pro forma earnings per share in the second quarter of fiscal
2003 will be in the range of $0.18 to $0.20. See the discussion above under the
caption "Operational Efficiency and Cost Reduction Program".

  FISCAL YEARS ENDED SEPTEMBER 30, 2001 AND 2000

     Revenue.  Total revenue for the year ended September 30, 2001 was $1,533.9
million, an increase of $415.6 million, or 37.2%, over fiscal 2000. The increase
in revenue was due to continued growth in the demand for our CC&B Systems
solutions in our traditional target markets of high-end and mid-tier
communications companies. License revenue increased from $124.8 million in the
year ended September 30, 2000 to $171.4 million during fiscal 2001, an increase
of 37.3%, and service revenue increased 37.1% from $993.5 million in the year
ended September 30, 2000 to $1,362.5 million in fiscal 2001.

     Total CC&B Systems revenue for the year ended September 30, 2001 was
$1,379.7 million, an increase of $393.1 million, or 39.8%, over fiscal 2000. In
the year ended September 30, 2001, the demand for our CC&B Systems was primarily
driven by the need for communications companies to upgrade their customer care
and billing, CRM and order management systems in response to competition in the
subscriber markets, the need to offer convergent and IP services, and the need
to improve productivity and operational efficiency.

     Revenue from Directory Systems was $154.2 million for the year ended
September 30, 2001, an increase of $22.5 million, or 17.1%, over fiscal 2000.
The increase was attributable primarily to extensions of agreements with and
additional services rendered to existing customers.

     In the year ended September 30, 2001, revenue from customers in North
America, Europe and the rest of the world accounted for 53.8%, 35.8% and 10.4%,
respectively, compared to 45.6%, 42.4% and 12.0%, respectively, in fiscal 2000.
The growth in North America was attributable primarily to revenue we had gained
from forming or expanding relationships with new or existing customers in fiscal
2001.

     Cost of License.  Cost of license for fiscal 2001 was $5.7 million, which
was approximately equal to the cost of license in the prior fiscal year. Cost of
license included amortization of purchased computer software and intellectual
property rights.

     Cost of Service.  Cost of service for fiscal 2001 was $847.6 million, an
increase of $207.7 million, or 32.5%, over the cost of service of $639.9 million
for the year ended September 30, 2000. As a percentage of revenue, cost of
service decreased to 55.3% in the year ended September 30, 2001 from 57.2% in
fiscal 2000. The decrease in cost of service as a percentage of revenue was
primarily due to increases in our operational efficiency in the year ended
September 30, 2001. In the second half of fiscal 2001, we adopted a plan to
increase the efficiency of our operations and lower costs by reducing
discretionary expenses. As a result of this plan, we were able to reduce the
growth rate of our costs and achieve greater operational efficiency in fiscal
2001.

     Research and Development.  Research and development expense was primarily
comprised of compensation expense attributable to research and development
activities, either in conjunction with customer projects or as part of our
internal product development programs. In the year ended September 30, 2001,
research and development expense was $105.8 million, or 6.9% of revenue,
compared with $74.9 million, or 6.7% of revenue, in the previous fiscal year.
The increase represented ongoing expenditures primarily for CC&B Systems.

                                        37
<PAGE>

     Selling, General and Administrative.  Selling, general and administrative
expense was primarily comprised of compensation expense and increased by 42.8%
to $195.6 million, or 12.7% of revenue, in the year ended September 30, 2001,
from $137.0 million, or 12.3% of revenue, in fiscal 2000. The increase was
attributable primarily to increases in our selling and marketing efforts in the
year ended September 30, 2001.

     Amortization of Goodwill and Purchased Intangible Assets.  Amortization of
goodwill and purchased intangible assets for the year ended September 30, 2001
was $220.0 million, compared to $111.2 million in fiscal 2000. Amortization of
goodwill and purchased intangible assets relates to the acquisitions of ITDS and
Solect. The increase in amortization of goodwill and purchased intangible assets
in fiscal 2001 was due to the full-year amortization period applied in fiscal
2001 compared to a shorter amortization period in fiscal 2000.

     In-process Research and Development and Other Indirect Acquisition-Related
Costs.  No in-process research and development and other indirect
acquisition-related costs were incurred in fiscal 2001. In fiscal 2000 such
costs consisted of a nonrecurring charge of $75.6 million related to the
acquisitions of ITDS and Solect.

     Operating Income.  Operating income in the year ended September 30, 2001
was $159.3 million, compared to $74.1 million in fiscal 2000, an increase of
115%, primarily due to the effect of a nonrecurring charge for write-off of
purchased in-process research and development related to the acquisitions of
ITDS and Solect in fiscal 2000. Pro forma operating income for the year ended
September 30, 2001, excluding ITDS and Solect acquisition-related charges, was
$379.3 million, or 24.7% of revenue, compared to $260.9 million, or 23.3% of
revenue, for fiscal 2000, an increase of 45.4%.

     Interest Income and Other, Net.  In the year ended September 30, 2001,
interest income and other, net, was $22.3 million, an increase of $11.6 million
over fiscal 2000. The increase in interest income and other, net, was primarily
attributable to the increase in our cash equivalents and short-term
interest-bearing investments partially offset by overall interest rate declines.

     Income Taxes.  Income taxes in the year ended September 30, 2001 were
$115.2 million on income before income taxes of $181.6 million. Our effective
tax rate in the year ended September 30, 2001 was 63%, resulting from the
non-cash amortization of goodwill related to the ITDS and Solect acquisitions,
much of which is not tax deductible. In the year ended September 30, 2000,
income taxes were $78.9 million on income before income taxes of $84.9 million.
In the year ended September 30, 2000, the effective tax rate (based on the ratio
between income taxes and income before income taxes, excluding nonrecurring
charges for write-offs of purchased in-process research and development and
other indirect acquisition-related costs) was 49%. The pro forma effective tax
rate for fiscal 2001 and 2000, excluding ITDS and Solect acquisition-related
charges, was 30%. See the discussion below under the caption "Effective Tax
Rate".

     Net Income.  Net income was $66.4 million in the year ended September 30,
2001, compared to net income of $6.0 million in the previous fiscal year. Pro
forma net income in fiscal 2001, excluding ITDS and Solect acquisition-related
charges, increased by 47.8% over fiscal 2000, reaching $281.1 million,
representing 18.3% of revenue.

     Diluted Earnings per Share.  Diluted earnings per share were $0.29 for the
year ended September 30, 2001, compared to $0.03 in fiscal 2000. Pro forma
diluted earnings per share in the year ended September 30, 2001, excluding ITDS
and Solect acquisition-related charges, increased by 40.9% from the year ended
September 30, 2000, reaching $1.24 per diluted share.

LIQUIDITY AND CAPITAL RESOURCES

     Cash, cash equivalents and short-term interest-bearing investments totaled
$1,047.8 million as of September 30, 2002, compared to $1,110.1 million as of
September 30, 2001. The decrease is attributable primarily to the use of $371.4
million in cash to acquire Clarify and to repurchase our shares and Notes, which
was partially offset by positive cash flows from operations. Net cash provided
by operating activities
                                        38
<PAGE>

amounted to $412.3 million for fiscal 2002 and $338.0 million for fiscal 2001.
The increase in cash flows from operations was primarily due to a decrease in
working capital. We currently intend to retain our future operating cash flows
to support the further expansion of our business including new outsourcing deals
and acquisitions, although we may also use a portion of our cash for future
repurchases of our outstanding securities. See the discussions above under the
captions "Share Repurchase Program" and "Convertible Notes".

     As of September 30, 2002, we had positive working capital of $938.6
million, compared to positive working capital of $1,059.9 million as of
September 30, 2001. The decrease is attributable primarily to cash paid for the
acquisition of Clarify and the implementation of our share and Notes repurchase
programs. We believe that our current cash balances, cash generated from
operations and our current lines of credit will provide sufficient resources to
meet our liquidity needs for the next fiscal year.

     As of September 30, 2002, $445.1 million aggregate principal amount of the
Notes was outstanding. In July 2002, our Board of Directors authorized us to
repurchase outstanding Notes, in such amounts, at such prices and at such times
considered appropriate by us. During the fourth quarter of fiscal 2002 we
repurchased $54.9 million aggregate principal amount of the Notes. We funded
these repurchases, and intend to fund any future repurchases, with available
funds. On June 1, 2004, the holders of our Notes may require us to redeem their
Notes. See the discussion above under the caption "Convertible Notes".

     As of September 30, 2002, we had available short-term general revolving
lines of credit totaling $40.0 million, none of which were outstanding. In
addition, as of September 30, 2002 we had credit facilities totaling $43.8
million, limited for the use of letters of credit and bank guarantees from
various banks. Outstanding letters of credit and bank guarantees as of September
30, 2002 totaled $24.5 million. These were mostly supported by a combination of
the credit facilities described above and compensating cash balances that we
maintain with the issuing banks.

     As of September 30, 2002, we had outstanding long-term obligations of $25.5
million in connection with leasing arrangements.

     The following table summarizes our contractual obligations as of September
30, 2002 and the effect such obligations are expected to have on our liquidity
and cash flows in future periods, (in millions):

<Table>
<Caption>
                                                              CASH PAYMENTS DUE BY PERIOD
                                               ---------------------------------------------------------
                                                        LESS THAN
CONTRACTUAL OBLIGATIONS                        TOTAL     1 YEAR     1-3 YEARS   4-5 YEARS   OVER 5 YEARS
-----------------------                        ------   ---------   ---------   ---------   ------------
<S>                                            <C>      <C>         <C>         <C>         <C>
Convertible notes(*).........................  $445.1     $  --      $445.1       $  --        $  --
Capital lease obligations....................    25.5      10.3        13.0         2.2           --
Non-cancelable operating leases..............   204.2      43.8        77.2        56.8         26.4
                                               ------     -----      ------       -----        -----
                                               $674.8     $54.1      $535.3       $59.0        $26.4
                                               ======     =====      ======       =====        =====
</Table>

---------------

(*) June 1, 2004 is the earliest date that the holders of Notes may require us
    to redeem their Notes. See the discussion above under the caption
    "Convertible Notes".

     Our capital expenditures were approximately $59 million in fiscal 2002.
These expenditures consisted primarily of purchases of computer equipment and,
to a lesser degree, vehicles and leasehold improvements. We funded our capital
expenditures principally from operating cash flows and capital leasing
arrangements. We do not anticipate any changes to this policy in the foreseeable
future.

     Our accounts receivable allowance for fiscal 2002 was adjusted upward by
approximately $22.1 million, from the allowance as of September 30, 2001. The
increase in our accounts receivable allowance is primarily a result of our
purchase accounting treatment of the Clarify acquisition as well as allowances
for instances where collectibility was not reasonably assured.

                                        39
<PAGE>

NET DEFERRED TAX ASSETS

     As of September 30, 2002, deferred tax assets of $10.7 million derived
primarily from carry-forward net operating losses derived by our Canadian
subsidiary were offset by valuation allowances due to the uncertainty of
realizing any tax benefit for such losses. When realization of the tax benefits
associated with such net operating losses is deemed probable, the valuation
allowance will be released. In September 2002 we have released valuation
allowances of deferred tax assets derived from carry-forward operating losses
relating to losses incurred by Solect prior to our acquisition of that company
in April 2000, resulting in an offsetting reduction of the goodwill recorded in
the Solect acquisition of approximately $9.0 million. The release of these
valuation allowances was made based on our estimation that we will be able to
realize the tax benefits associated with those net operating losses.

EFFECTIVE TAX RATE

     Our blended effective tax rate was 107% for the year ended September 30,
2002, compared to 63% for fiscal 2001. These high effective tax rates were
primarily attributable to amortization of goodwill related to our acquisitions,
much of which is not tax deductible. In the year ended September 30, 2002 our
effective tax rate was also adversely affected by the fixed non-deductible
expenditures representing a larger component of our pretax income. Our overall
pro forma effective tax rate for fiscal year 2002 was 28% compared to our
historical pro forma effective tax rate of 30%, due to the corporate income tax
rates in the various countries in which we operate and changes in the relative
magnitude of our business in those countries.

     We expect a reduction in our pro forma effective tax rate in fiscal 2003
from 28% to 25%. The reduction is due to our continued expansion into countries
with lower effective tax rates.

CRITICAL ACCOUNTING POLICIES

     Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates, assumptions and judgments that affect the reported amounts of assets,
liabilities, revenue and expenses, and related disclosure of contingent
liabilities. On a regular basis, we evaluate and may revise our estimates. We
base our estimates on historical experience and various other assumptions that
we believe to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities, that are not readily apparent. Actual results could differ
materially from the estimates under different assumptions or conditions.

     We believe that the estimates, assumptions and judgments involved in the
accounting policies described below have the greatest potential impact on our
financial statements, so we consider these to be our critical accounting
policies. These policies require that we make estimates in the preparation of
our financial statements as of a given date.

     Our critical accounting policies are as follows:

     - Revenue recognition and contract accounting

     - Doubtful accounts

     - Tax accounting

     - Derivative and hedge accounting

     - Realizability of long-lived assets

     Below, we discuss these policies further, as well as the estimates and
judgments involved. We also have other key accounting policies. We believe that,
compared to the critical accounting policies listed above, the other policies
either do not generally require us to make estimates and judgments that are as
difficult or as subjective, or it is less likely that they would have a material
impact on our reported results of operations for a given period.

                                        40
<PAGE>

  REVENUE RECOGNITION AND CONTRACT ACCOUNTING

     Our revenue recognition policy is significant because our revenue is a key
component of our results of operations. We follow very specific and detailed
guidelines, several of which are discussed above, in measuring revenue; however,
certain judgments affect the application of our revenue recognition policy.

     A significant portion of our revenue is recognized over the course of
long-term projects, under the percentage of completion method of accounting. The
percentage of completion method requires significant judgment, such as
estimations of progress-to-completion, contract revenue and contract costs.

     Our revenue recognition policy takes into consideration the
creditworthiness and past transaction history of each customer in determining
the probability of collection as a criterion of revenue recognition. This
determination requires the exercise of judgment, which affects our revenue
recognition. If we determine that collection of a fee is not reasonably assured,
we defer the revenue recognition until the time collection becomes reasonably
assured, which is generally upon receipt of cash.

     For arrangements with multiple obligations, we allocate revenue to each
component based upon its fair value, which is determined in reliance on the
specific objective evidence for that element. Such determination is judgmental
and is typically based on normal pricing and discounting practices for those
elements in similar arrangements.

     Revenue from third-party hardware and software sales is recorded at a gross
or net amount according to certain indicators. The application of these
indicators for gross and net reporting of revenue depends on the relative facts
and circumstances and requires significant judgment.

  DOUBTFUL ACCOUNTS

     The allowance for doubtful accounts is for estimated losses resulting from
the inability of our customers to make required payments. We evaluate accounts
receivable to determine if they will ultimately be collected. In performing this
evaluation, significant judgments and estimates are involved, such as past
experience, credit quality of the customer, age of the receivable balance and
current economic conditions that may affect a customer's ability to pay. If
collection is not reasonably assured at the time the transaction is consummated,
we do not recognize revenue until collection becomes reasonably assured. If the
financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required. The allowance for doubtful accounts is established through a charge to
selling, general and administrative expenses.

  TAX ACCOUNTING

     As part of the process of preparing our consolidated financial statements
we are required to estimate our income tax expense in each of the jurisdictions
in which we operate. In the ordinary course of a global business, there are many
transactions and calculations where the ultimate tax outcome is uncertain. Some
of these uncertainties arise as a consequence of revenue sharing and
reimbursement arrangements among related entities, the process of identifying
items of revenue and expenses that qualify for preferential tax treatment and
segregation of foreign and domestic income and expense to avoid double taxation.
This process involves us estimating our actual current tax exposure together
with assessing temporary differences resulting from differing treatment of
items, such as deferred revenue, for tax and accounting differences. These
differences result in deferred tax assets and liabilities, which are included
within our consolidated balance sheet. We record a valuation allowance to reduce
our deferred tax assets to the amount of future tax benefit that is more likely
than not to be realized.

     Although we believe that our estimates are reasonable and that we have
considered future taxable income and ongoing prudent and feasible tax strategies
in estimating our tax outcome and in assessing the need for the valuation
allowance, there is no assurance that the final tax outcome and the valuation
allowance will not be different than those which are reflected in our historical
income tax provisions and accruals. Such differences could have a material
effect on our income tax provision, net income and cash balances in the period
in which such determination is made.

                                        41
<PAGE>

  DERIVATIVE AND HEDGE ACCOUNTING

     Approximately 10% of our revenue and 35% of our operating expenses
(excluding acquisition-related charges and restructuring charges) are not
denominated in U.S. dollars or linked to the U.S. dollar. We enter into foreign
exchange forward contracts to hedge a significant portion of our foreign
currency exposure to minimize fluctuations in revenue and expenses. The majority
of our hedging arrangements are classified as cash flow hedges. Accordingly,
changes in the fair value of these forward exchange contracts are recorded in
other comprehensive Income. We estimate the fair value of such derivative
contracts by reference to forward and spot rates quoted in active markets.

     Establishing and accounting for foreign exchange contracts involve
judgments, such as determining the nature of the exposure, assessing its amount
and timing, and evaluating the effectiveness of the hedging arrangement.

     Although we believe that our estimates are accurate and meet the
requirement of hedge accounting, actual results differ from these estimates, and
such difference could cause fluctuation of our recorded revenue and expenses.

  REALIZABILITY OF LONG-LIVED ASSETS

     We are required to assess the impairment of long-lived assets, tangible and
intangible, on an annual basis, and potentially more frequently if events or
changes in circumstances indicate that the carrying value may not be
recoverable. We assess the impairment based on number of factors, including
significant changes in the manner of our use of the acquired assets or the
strategy of our overall business, significant negative industry or economic
trends and significant decline in our share price for a sustained period.

     Upon determination that the carrying value of a long-lived asset may not be
recoverable based upon a comparison of fair value to the carrying amount of the
asset, an impairment charge is made. We measure fair value based on a projected
future cash flow using a discount rate determined by our management to be
commensurate with the risk inherent in our current business model.

     Within the context of these critical accounting policies, we are not
currently aware of any reasonably likely events or circumstances, which would
result in materially different amounts being reported.

SUBSEQUENT EVENT

     On November 27, 2002 we announced a series of measures designed to reduce
costs and improve productivity. As part of this plan, we will reduce our
workforce by approximately 400 positions out of a total workforce of 9,000
employees. The reductions will be from different centers around the world. In
addition, we will implement other cost reduction measures, including travel cuts
and reductions in other discretionary costs.

LITIGATION

     Beginning on June 24, 2002, a number of complaints were filed by holders of
our ordinary shares against us and four of our officers and directors, in the
United States District Courts for the Eastern District of Missouri and the
Southern District of New York. The complaints allege violations of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Each plaintiff seeks to represent a putative class of all purchasers
of our ordinary shares between July 18, 2000 (or, in some of the complaints,
July 24, 2001) and June 20, 2002. The complaints generally allege that, during
that period, we and the individual defendants made false or misleading
statements, in press releases and Securities and Exchange Commission filings,
regarding among other things our future prospects, backlog, revenue, gross
margin, acquisitions and accounting practices. Each plaintiff seeks unspecified
monetary damages and other relief against all defendants. The parties in the New
York cases have stipulated to transfer them to the Eastern District of Missouri.
The court has recently appointed a lead plaintiff. We dispute the allegations of
wrongdoing in these complaints and intend to defend ourself vigorously.

                                        42
<PAGE>

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

     We rely on the executive officers of our principal operating subsidiaries
to manage our business. In addition, Amdocs Management Limited, our management
subsidiary, performs certain executive coordination functions for all of our
operating subsidiaries.

     As of January 31, 2003, our directors, senior managers and key employees
upon whose work we are dependent were as follows:

<Table>
<Caption>
NAME                                           AGE                   POSITION
----                                           ----                  --------
<S>                                            <C>    <C>
Bruce K. Anderson(1)(3)......................    62   Chairman of the Board and President,
                                                        Amdocs Limited
Avinoam Naor(1)(3)...........................    54   Vice Chairman, Amdocs Limited
Charles E. Foster............................    66   Director, Amdocs Limited
Adrian Gardner(2)............................    40   Director, Amdocs Limited
James S. Kahan(1)(3).........................    55   Director, Amdocs Limited
John T. McLennan(2)..........................    57   Director, Amdocs Limited
Robert A. Minicucci(1)(3)....................    50   Director; Vice President, Amdocs
                                                      Limited
Mario Segal..................................    55   Director, Amdocs Limited
Dov Baharav(1)(3)............................    52   Director, Amdocs Limited; President and
                                                        Chief Executive Officer, Amdocs
                                                        Management Limited
Eli Gelman...................................    44   Director, Amdocs Limited; Executive
                                                      Vice President, Amdocs Management
                                                        Limited
Nehemia Lemelbaum............................    60   Director, Amdocs Limited; Senior Vice
                                                        President, Amdocs Management Limited
Ron Moskovitz................................    39   Chief Financial Officer, Amdocs
                                                        Management Limited
Nissim Daunov................................    46   Senior Vice President, Amdocs
                                                      Management Limited
Thomas G. O'Brien............................    42   Treasurer and Secretary, Amdocs Limited
Simon Cassif.................................    60   Senior Vice President, Amdocs (UK)
                                                        Limited
Melinos Pissourios...........................    34   General Manager, Amdocs Development
                                                        Limited
Kevin Picker.................................    45   Director and General Manager, Amdocs
                                                        (UK) Limited
</Table>

---------------

     (1) Member of the Executive Committee

     (2) Member of Audit Committee

     (3) Member of the Compensation Committee

     Bruce K. Anderson has been Chairman of the Board of Directors of Amdocs
since September 1997 and currently holds the title of President of our holding
company, Amdocs Limited. Since August 1978, he has been a general partner of
Welsh, Carson, Anderson & Stowe ("WCAS"), an investment firm that specializes in
the acquisition of companies in the information services, communications and
health care industries. Investment partnerships affiliated with WCAS are
collectively one of our largest shareholders. Mr. Anderson served for nine years
with Automated Data Processing, Inc. ("ADP") until his resignation as Executive
Vice President and a director of ADP, and President of ADP International,
effective August 1978. Mr. Anderson serves on the board of Alliance Data
Systems, Inc., a publicly held company, and Headstrong, Inc.

                                        43
<PAGE>

     Avinoam Naor has been a director of Amdocs since January 1999 and currently
holds the title of Vice Chairman of the Board of Directors. Mr. Naor was a
member of the team that founded Amdocs in 1982, initially serving as a Senior
Vice President. He was appointed President and Chief Executive Officer of Amdocs
Management Limited in 1995 and held that position until July 2002. In 1998 he
led our initial public offering, and has since directed our major acquisitions
and secondary offerings. He has been involved with software development for 29
years.

     Charles E. Foster has been a director of Amdocs since December 2001. He was
Chairman of the Board of Prodigy Communications Corporation from June until
November 2001. From April 1997 until June 2001, Mr. Foster served as Group
President of SBC, where he was responsible, at various times, for engineering,
network, centralized services, marketing and operations, information systems,
procurement, treasury, international operations, wireless services, merger
integration, real estate, yellow pages and cable TV operations. SBC
International, Inc. ("SBCI"), a wholly owned subsidiary of SBC, is one of our
largest shareholders. SBC, together with its affiliates, is a significant
customer of ours. Mr. Foster is a member of the Texas Society of Professional
Engineers and a director of Storage Technology Corporation, a publicly-traded
company engaged in the manufacture of products for storing digital data.

     Adrian Gardner has been a director of Amdocs since April 1998. Mr. Gardner
is the Chief Financial Officer and a director of Strakan Group, Ltd., a
pharmaceuticals company based in the United Kingdom, which he joined in April
2002. Prior to joining Strakan, he was a Managing Director of Lazard LLC, based
in London, where he worked with technology- and telecommunications-related
companies. Prior to joining Lazard in 1989, Mr. Gardner qualified as a chartered
accountant with Price Waterhouse (now PricewaterhouseCoopers). Mr. Gardner is a
member of the Institute of Chartered Accountants in England & Wales.

     James S. Kahan has been a director of Amdocs since April 1998. He has
worked at SBC since 1983, and currently serves as a Senior Executive Vice
President, a position he has held since 1992. SBCI, a wholly owned subsidiary of
SBC, is one of our largest shareholders. SBC, together with its subsidiaries, is
a significant customer of ours. Prior to joining SBC, Mr. Kahan held various
positions at several telecommunications companies, including Western Electric,
Bell Laboratories, South Central Bell and AT&T.

     John T. McLennan has been a director of Amdocs since November 1999. Since
May 1999, he has served as Vice-Chair and Chief Executive Officer of AT&T
Canada. Mr. McLennan founded and was the President of Jenmark Consulting Inc.
from 1997 until May 1999. From 1994 to 1997, Mr. McLennan served as the
President and Chief Executive Officer of Bell Canada. Prior to that, he held
various positions at several telecommunications companies, including BCE Mobile
Communications and Cantel Inc. Mr. McLennan is also a director of Hummingbird
Ltd., a Canadian publicly held company engaged in the production of enterprise
management software, and of several other private software and communication
companies.

     Robert A. Minicucci has been a director of Amdocs since September 1997 and
currently holds the title of Vice President of Amdocs Limited. He has been a
general partner of WCAS since 1993. From 1992 to 1993, Mr. Minicucci served as
Senior Vice President and Chief Financial Officer of First Data Corporation, a
provider of information processing and related services for credit card and
other payment transactions. From 1991 to 1992, he served as Senior Vice
President and Treasurer of the American Express Company. He served for twelve
years with Lehman Brothers (and its predecessors) until his resignation as a
Managing Director in 1991. Mr. Minicucci is also a director of Alliance Data
Systems, Inc., a publicly held company, and several private companies.

     Mario Segal has been a director of Amdocs since December 2001 and served as
a Senior Vice President and the Chief Operating Officer of Amdocs Management
Limited until July 2002. He joined Amdocs in 1984 as Senior Vice President and
was a leading member of the team that developed the ADS (NG)/Family of Products
directory automation systems and the Ensemble platform. Prior to joining Amdocs,
Mr. Segal was an account manager for a major North American yellow pages
publisher and prior

                                        44
<PAGE>

thereto managed the computer department of a major Israeli insurance company,
leading large-scale software development projects and strategic planning of
automation systems.

     Dov Baharav has been a director of Amdocs and the President and Chief
Executive Officer of Amdocs Management Limited since July 2002. Mr. Baharav has
overall coordination responsibilities for the operations and activities of our
operating subsidiaries. In 1991, Mr. Baharav joined Amdocs Inc., our principal
U.S. subsidiary, serving as its Vice President and then President in St. Louis,
Missouri until 1995. From 1995 until July 2002, Mr. Baharav was a Senior Vice
President and the Chief Financial Officer of Amdocs Management Limited. Prior to
joining Amdocs, Mr. Baharav served as Chief Operating Officer of Optrotech Ltd.,
a publicly held company that develops, manufactures and markets electro-optical
devices.

     Eli Gelman has been a director of Amdocs since July 2002 and is an
Executive Vice President of Amdocs Management Limited, where he has
responsibility for sales, strategic alliances and corporate and business
development. He has more than 26 years of experience in the software industry,
including more than 15 years with Amdocs. Prior to his current position, he was
a division president, where he headed Amdocs' United States sales and marketing
operations and helped spearhead our entry into the CC&B Systems market. Before
that, Mr. Gelman was an account manager for our major European and North
American installations, and has led several major software development projects.
Before joining Amdocs, Mr. Gelman was involved in the development of real-time
software systems for communications networks.

     Nehemia Lemelbaum has been a director of Amdocs since December 2001 and is
a Senior Vice President of Amdocs Management Limited. He joined Amdocs in 1985,
with initial responsibility for U.S. operations. Mr. Lemelbaum led our
development of graphic products for the yellow pages industry and later led our
development of CC&B Systems, as well as our penetration into the CC&B Systems
market. Prior to joining Amdocs, he served for nine years with Contahal Ltd., a
leading Israeli software company, first as a senior consultant, and later as
Managing Director. From 1967 to 1976, Mr. Lemelbaum was employed by the Ministry
of Communications of Israel (the organization that predated Bezeq, the Israel
Telecommunication Corp. Ltd.), with responsibility for computer technology in
the area of business data processing.

     Ron Moskovitz is a Senior Vice President and the Chief Financial Officer of
Amdocs Management Limited, and has overall coordination responsibility for the
financial reporting of our operating subsidiaries. Mr. Moskovitz joined Amdocs
in 1998 and served until July 2002 as Vice President of Finance. He has been
responsible for the company's financial organization, and was involved in
Amdocs' initial public offering, merger and acquisition activities and various
other financial operations. Prior to joining Amdocs, Mr. Moskovitz served in
various senior financial positions with Tower Semiconductor, a publicly-held
semiconductor manufacturer. Mr. Moskovitz is a Certified Public Accountant
(Isr).

     Nissim Daunov is a Senior Vice President at Amdocs Management Limited,
responsible for all product units in the Offering Group (CRM, Billing, and OMS).
Additionally, he is responsible for Corporate Marketing and R&D. For the past 23
years, Mr. Daunov has been involved in design, development and implementation of
large-scale data processing systems, handling large data volumes over
distributed networks. Mr. Daunov joined Amdocs in 1986.

     Thomas G. O'Brien is Treasurer and Secretary of Amdocs Limited and since
July 1995 has held other financial management positions within Amdocs. From July
1993 to July 1995, Mr. O'Brien was Controller of Big River Minerals Corporation,
a diversified natural resources company. From 1989 to 1993, Mr. O'Brien was the
Assistant Controller for Big River Minerals Corporation. From 1983 to 1989, Mr.
O'Brien was with Arthur Young and Company (now Ernst & Young LLP). Mr. O'Brien
is a member of the American Institute of Certified Public Accountants.

     Simon Cassif is a Senior Vice President of Amdocs (UK) Limited. He has
principal responsibility for developing our relationships with strategic
customers in Europe. Mr. Cassif joined Amdocs in January 1994 and has since been
devoting most of his efforts to business development in the area of customer
care, billing and order management systems. Prior to joining Amdocs, Mr. Cassif
was Chief Information Officer

                                        45
<PAGE>

and Vice President, Systems and Computers at Bezeq, the Israel Telecommunication
Corp. Ltd. Mr. Cassif held this position for twelve years, with full
responsibility for Bezeq's information technology strategy, systems development,
maintenance and operations.

     Melinos Pissourios is General Manager of Amdocs Development Limited. Mr.
Pissourios, who joined Amdocs in April 1998, is also the Financial Controller of
Amdocs Development Limited in Cyprus. Prior to joining Amdocs, Mr. Pissourios
was the Group Financial Controller at AEC Holland Group. He also worked for KPMG
Peat Marwick for four years. Mr. Pissourios is a member of the Institute of
Chartered Accountants of England & Wales and of the Cyprus Institute of
Certified Public Accountants and he is a registered auditor in Cyprus.

     Kevin Picker has been a director and the General Manager of Amdocs (UK)
Limited since October 1999. He joined the Amdocs group in 1997 as the financial
director of Directory Technology (PTY) Ltd. From May 1992 Mr. Picker was the
general manager of Myers Tyres in Australia and prior to that financial director
of KM Printing and Publishing. Mr. Picker is a member of the Institute of
Chartered Accountants in Australia, the Israeli Institute of Certified Public
Accountants and the South African Institute of Chartered Accountants.

COMPENSATION

     Our directors who are not employees or affiliates of the Company, or are
not affiliates of any of our principal shareholders have the choice of receiving
as compensation either (i) an annual a cash payment of $30,000 or (ii) every
three years, a grant of options to purchase 10,000 ordinary shares, one-quarter
of which vest immediately and the remainder of which vest annually in three
equal installments. Any such director who serves as a chairman of a committee
also receives options to purchase 1,000 ordinary shares under the same terms. In
addition, we pay each such director $1,500 per meeting of the Board of Directors
and $500 per meeting of a committee of the Board of Directors. We reimburse all
of our directors for their reasonable travel expenses incurred in connection
with attending meetings of the Board of Directors or committees thereof.

     A total of 24 persons who served either as directors of Amdocs or members
of its administrative, supervisory or management bodies during all or part of
fiscal 2002 received remuneration from Amdocs. The aggregate remuneration paid
by us to such persons was approximately $10.8 million, which includes amounts
set aside or accrued to provide pension, retirement or similar benefits, but
does not include amounts expended by us for automobiles made available to such
persons, expenses (including business travel, professional and business
association dues) or other fringe benefits. Included in this amount is
remuneration to three former executive officers and four former directors for
the applicable portions of fiscal 2002.

     During fiscal 2002, directors or members of our administrative, supervisory
or management bodies were granted options to purchase a total of 5,641,677
ordinary shares at a weighted average price of $12.95 per share, with vesting
over two to five year terms. In addition, in the first quarter of fiscal 2003,
we granted options to purchase 10,000 ordinary shares at an exercise price of
$6.40 to one of our non-employee directors with respect to compensation. The
option grant constituted compensation to the director, which the director
elected to receive in lieu of a cash payment, and vests over three years.

     To recognize significant contributions to Amdocs over the years, in the
first quarter of fiscal 2003 and during fiscal year 2002 we granted of options
to six of our non-employee directors to purchase an aggregate 375,000 ordinary
shares at a weighted average exercise price of $15.16 per share.

     All options were granted pursuant to our 1998 Stock Option and Incentive
Plan, as amended. See discussion below -- "Share Ownership -- Employee Stock
Option and Incentive Plan".

BOARD PRACTICES

     Our entire Board of Directors is comprised of up to 13 directors. Eleven
directors were elected to our Board of Directors at our annual meeting of
shareholders on January 23, 2003. As permitted by our Articles of Association,
the Board of Directors may fill the two remaining vacancies at any time. All

                                        46
<PAGE>

directors hold office until the next annual meeting of our shareholders, which
generally is in January of each calendar year, or until their respective
successors are duly elected and qualified or their positions are earlier vacated
by resignation or otherwise.

     Executive officers of Amdocs are elected by the Board of Directors on an
annual basis and serve until the next annual meeting of the Board of Directors
or until their respective successors have been duly elected or qualified or
their positions are earlier vacated by resignation or otherwise. The executive
officers of each of the Amdocs subsidiaries are elected by the board of
directors of such subsidiary on an annual basis and serve until the next annual
meeting of such board of directors or until their respective successors have
been duly elected or qualified or their positions are earlier vacated by
resignation or otherwise.

     Other than the employment agreements between us and our Chief Executive
Officer and Executive Vice President which provide for immediate cash severance
upon termination of employment, there are currently no service contracts in
effect between us and any of our directors providing for immediate cash
severance upon termination of their employment.

  BOARD COMMITTEES

     The Executive Committee may act from time to time instead of the full Board
of Directors and has such responsibilities as may be delegated to it by the
Board of Directors. Our Executive Committee consists of Messrs. Anderson
(Chair), Naor, Baharav, Kahan and Minicucci.

     The Audit Committee of the Board of Directors reviews, acts on and reports
to the Board of Directors with respect to various auditing and accounting
matters, including the selection of our auditors, the scope of the annual
audits, fees to be paid to the auditors, the performance of our independent
auditors and our accounting practices. During fiscal 2002, our Audit Committee
consisted of Messrs. Lawrence Perlman (Chair), Adrian Gardner and John T.
McLennan, all of whom were independent directors, as required by the rules of
the NYSE. Mr. Perlman did not stand for reelection as a director at our January
2003 annual general meeting of shareholders.

     The Compensation Committee of the Board of Directors determines the
salaries and incentive compensation of the officers of Amdocs and our
subsidiaries and provides recommendations for the salaries and incentive
compensation of other employees and certain consultants. The Compensation
Committee also administers various compensation, stock and benefit plans of
Amdocs. Our Compensation Committee consists of Messrs. Anderson (Chair), Naor,
Baharav, Kahan and Minicucci. None of the members of the Committee was an
employee of ours at any time during fiscal 2002, with the exception of Messrs.
Naor and Baharav. Neither Mr. Baharav nor Mr. Naor participates in any
discussions relating to his own compensation.

EMPLOYEES

     The following table presents the approximate number of our full-time
employees as of each date indicated, by function and by geographical location:

<Table>
<Caption>
                                                               AS OF SEPTEMBER 30,
                                                              ---------------------
                                                              2002    2001    2000
                                                              -----   -----   -----
<S>                                                           <C>     <C>     <C>
  Software and Information Technology
     Israel.................................................  4,100   4,200   4,000
     North America..........................................  2,600   2,700   2,200
     Rest of World..........................................  1,700   1,700   1,200
                                                              -----   -----   -----
                                                              8,400   8,600   7,400
  Management and Administration.............................  1,000   1,100   1,000
                                                              -----   -----   -----
Total employees.............................................  9,400   9,700   8,400
                                                              =====   =====   =====
</Table>

     During fiscal 2002, we took steps to reduce our costs and achieve increased
operational efficiency, including by making reductions in our workforce of
approximately 1,000 positions. Some of the affected
                                        47
<PAGE>

employees remained on our payroll as our employees through September 30, 2002.
In addition, in November 2002, we announced additional measures to reduce costs,
including additional reductions in our workforce of approximately 400 positions.
As of January 31, 2003, we employed on a full-time basis approximately 7,800
software and information technology specialists, engaged in research,
development, maintenance and support activities, and approximately 1,000
managers and administrative professionals. Approximately 3,800 of these software
and information technology specialists are located in Israel and approximately
2,400 are located in North America.

     We comply with various labor and immigration laws throughout the world,
including laws and regulations in Australia, Brazil, Canada, Europe, Israel,
Japan and the United States. Our employees in Europe are protected, in some
countries, by mandatory collective bargaining agreements. To date, compliance
with such laws has not been a material burden for us. As the number of our
employees increases over time in particular countries, our compliance with such
regulations could become more burdensome.

     Our principal operating subsidiaries are not party to any collective
bargaining agreements. However, our Israeli subsidiary is subject to certain
labor-related statutes and to certain provisions of collective bargaining
agreements between the Histadrut (General Federation of Labor in Israel) and the
Coordinating Bureau of Economic Organizations (including the Industrialists'
Association), which are applicable to our Israeli employees by virtue of
expansion orders of the Israeli Ministry of Labor and Welfare. A significant
provision applicable to all employees in Israel under collective bargaining
agreements and expansion orders is the automatic adjustment of wages in relation
to increases in the consumer price index, or CPI. The amount and frequency of
these adjustments are modified from time to time. We consider our relationship
with our employees to be good and have never experienced a labor dispute, strike
or work stoppage.

     In addition, all employees in Brazil, including members of management, are
represented by unions. Collective bargaining between employers and unions is
mandatory, negotiated annually, and covers work conditions, including cost of
living increases, minimum wages that exceed the government thresholds and
overtime pay.

SHARE OWNERSHIP

  SECURITY OWNERSHIP OF DIRECTORS AND SENIOR MANAGEMENT AND CERTAIN KEY
  EMPLOYEES

     As of January 31, 2003, the aggregate number of our voting ordinary shares
beneficially owned by our directors, senior managers and certain key employees
was 54,130,359 shares. This number includes ordinary shares held by SBC and WCAS
since affiliates of SBC and WCAS serve on our Board of Directors and,
accordingly, such designees may be deemed to be the beneficial owners of the
voting ordinary shares held by such entities. Each such designee disclaims
beneficial ownership of such shares. See "Major Shareholders and Related Party
Transactions".

     Beneficial ownership by a person, as of a particular date, assumes the
exercise of all options and warrants held by such person that are currently
exercisable or are exercisable within 60 days of such date.

  EMPLOYEE STOCK OPTION AND INCENTIVE PLAN

     Our 1998 Stock Option and Incentive Plan, as amended (the "Option Plan"),
provides for the grant by Amdocs of restricted shares or stock options to our
directors, employees (including officers) and consultants. Of the 32,300,000
ordinary shares originally available for issuance under the Option Plan, options
to purchase 28,875,882 ordinary shares have been granted as of January 31, 2003,
and options to purchase additional 3,424,118 ordinary shares remained available
for future grants. The purpose of the Option Plan is to enable us to attract and
retain qualified personnel and to motivate such persons by providing them with
an equity participation in the Company.

     The Option Plan provides for the granting of "incentive stock options" and
"non-qualified stock options" to purchase ordinary shares and/or the granting of
rights to purchase ordinary shares on a
                                        48
<PAGE>

"restricted" basis. The terms and conditions of individual grants may vary
subject to the following: (i) the exercise price of incentive stock options may
not be less than market value on the date of grant; (ii) the term of incentive
stock options may not exceed ten years from the date of grant; and (iii) no
options or awards may be granted after January 2008.

     The Option Plan is administered by the Compensation Committee, which
determines all the terms of the awards (subject to the above), including which
employees, directors or consultants are granted awards. The Board of Directors
may amend or terminate the Option Plan, provided that shareholder approval is
required to increase the number of ordinary shares available under the Option
Plan, to materially increase the benefits accruing to participants, to change
the class of employees eligible for participation, to decrease the basis upon
which the minimum exercise price of options is determined or to extend the
period in which awards may be granted or to grant an option that is exercisable
for more than ten years. Ordinary shares acquired upon exercise of an award are
subject to certain restrictions on sale, transfer or hypothecation.

     As of January 31, 2003, there were outstanding options to purchase an
aggregate of 26,230,496 ordinary shares at exercise prices ranging from $1.92 to
$78.31 per share and no restricted shares had been awarded.

     As a result of the ITDS and Solect transactions, as of January 31, 2003, we
are obligated to issue (and have reserved for issuance) an additional 162,788
and 198,955 ordinary shares, respectively, upon exercise of options that had
previously been granted under the ITDS and Solect option plans (the "Predecessor
Plans") and were exchanged for options to purchase our ordinary shares. These
options have exercise prices ranging from $0.001 to $71.97 per share. No
additional options have been or will be granted under the Predecessor Plans.

                                        49
<PAGE>

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

     The following table sets forth specified information with respect to the
beneficial ownership of our voting ordinary shares as of January 31, 2003 of any
person known by us to be the beneficial owner of more than 5% of such shares.

<Table>
<Caption>
                                                                 SHARES
                                                              BENEFICIALLY    PERCENTAGE
NAME AND ADDRESS                                                OWNED(1)     OWNERSHIP(2)
----------------                                              ------------   ------------
<S>                                                           <C>            <C>
Southeastern Asset Management, Inc.(3)......................   40,563,500        18.8%
  6410 Poplar Avenue, Suite 900
  Memphis, Tennessee 38119

SBC Communications Inc.(4)..................................   20,303,426         9.4
  175 E. Houston Street
  San Antonio, Texas 78205-2233

Welsh, Carson, Anderson & Stowe(5)..........................   21,263,981         9.9
  320 Park Avenue, Suite 2500
  New York, New York 10022

All directors and executive officers as a group                54,130,359        25.1
  (15 persons)(6)...........................................
</Table>

---------------
(1) Unless otherwise indicated, the entities identified in this table have sole
    voting and investment power with respect to all voting ordinary shares shown
    as beneficially owned by them, subject to community property laws, where
    applicable.

(2) The percentages shown are based on 215,775,612 ordinary shares outstanding
    on January 31, 2003.

(3) Based on a Form 13G filed by Southeastern Asset Management, Inc.
    ("Southeastern") with the SEC on February 7, 2003, Southeastern beneficially
    owns an aggregate of 40,563,500 ordinary shares. In the Form 13G,
    Southeastern indicates that it has sole voting power over 28,334,100 voting
    ordinary shares, and sole dispositive power over 35,633,100 ordinary shares.
    The Form 13G indicates that Southeastern shares the investment and voting
    discretion over 4,930,400 ordinary shares with Longleaf Partners Funds
    Trust.

(4) Based upon information provided to us by SBC, SBCI, a wholly owned
    subsidiary of SBC, holds 7,557,603 of our ordinary shares, and SBC Option
    Delivery LLC, a majority-owned subsidiary of SBCI, holds 12,745,823 of our
    ordinary shares. James S. Kahan, Senior Executive Vice President of SBC,
    serves on our Board of Directors.

(5) Based upon information provided to us by WCAS, WCAS beneficially owns an
    aggregate of 21,263,981 ordinary shares, which includes 12,678,461 ordinary
    shares held by Welsh, Carson, Anderson & Stowe IX, L.P., 5,527,054 ordinary
    shares held by Welsh, Carson, Anderson & Stowe VII, L.P., 1,614,792 ordinary
    shares held by Welsh, Carson, Anderson & Stowe VI, L.P. and 1,443,494
    ordinary shares held by WCAS Capital Partners III, L.P. Bruce K. Anderson
    and Robert A. Minicucci, principals of the various WCAS entities, serve on
    our Board of Directors and Mr. Anderson is Chairman of our Board.

(6) Includes ordinary shares held by SBC and WCAS. See footnotes 4 and 5 above.
    Affiliates of SBC and WCAS serve on the Company's Board of Directors and,
    accordingly, such designees may be deemed to be the beneficial owners of the
    voting ordinary shares held by such entities. Each such designee disclaims
    beneficial ownership of such shares. Also includes options granted to such
    directors and executive officers of the Company, which are exercisable
    within 60 days of January 31, 2003.

     Over the last three years, our major shareholders have included our
directors and executive officers as a group, SBC, WCAS and other institutional
investors. The share ownership by WCAS, SBC and our directors and executive
officers has not significantly changed during this period. AXA Financial, which
at December 1, 2000 held 13.8% of our ordinary shares, is no longer a major
shareholder. Southeastern Asset

                                        50
<PAGE>

Management, which in previous years was not a major shareholder, held 18.8% of
our ordinary shares at January 31, 2003.

     As of January 31, 2003, our ordinary shares were held by approximately 222
recordholders. Based on a review of the information provided to us by our
transfer agent, 158 recordholders, holding approximately 95.8% of our
outstanding ordinary shares, were residents of the United States.

RELATED PARTY TRANSACTIONS

  SHAREHOLDERS AGREEMENTS

     In connection with a series of transactions in 1997, SBCI, WCAS (on behalf
of certain affiliates of WCAS and other investors), Amdocs International Limited
and Amdocs, entered into a Shareholders Agreement, under which these
shareholders have certain rights to have their shares registered for sale to the
public under the Securities Act.

  RELATIONSHIP WITH SBC

     In addition to being a major shareholder, SBC, and some of its operating
subsidiaries, are also significant customers of ours. During fiscal 2002, 2001
and 2000, SBC and those subsidiaries accounted for approximately 10.6%, 13.3%
and 12.6%, respectively, of our revenue. Based on long-term agreements currently
in place with certain SBC subsidiaries and the outsourcing agreement announced
in January 2003 with SBC's directory operations, we expect that revenue
attributable to SBC entities will remain a significant portion of our revenue in
2003. Mr. Kahan, a member of our Board of Directors, is also an employee of SBC.

     SBC is also a beneficial owner of companies that provide certain
miscellaneous support services to us in United States.

ITEM 8.  FINANCIAL INFORMATION

FINANCIAL STATEMENTS

     See "Financial Statements" for our audited Consolidated Financial
Statements and Financial Statement Schedule filed as part of this report.

LEGAL PROCEEDINGS

     Beginning on June 24, 2002, a number of complaints were filed by holders of
our ordinary shares against us and four of our officers and directors, in the
United States District Courts for the Eastern District of Missouri and the
Southern District of New York. The complaints allege violations of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Each plaintiff seeks to represent a putative class of all purchasers
of our ordinary shares between July 18, 2000 (or, in some of the complaints,
July 24, 2001) and June 20, 2002. The complaints generally allege that, during
that period, we and the individual defendants made false or misleading
statements, in press releases and Securities and Exchange Commission filings,
regarding among other things our future prospects, backlog, revenue, gross
margin, acquisitions and accounting practices. Each plaintiff seeks unspecified
monetary damages and other relief against all defendants. The parties in the New
York cases have stipulated to transfer them to the Eastern District of Missouri.
The court has recently appointed a lead plaintiff. We dispute the allegations of
wrongdoing in these complaints and intend to defend ourself vigorously.

DIVIDEND POLICY

     We did not pay any cash dividends on our ordinary shares in fiscal 2002,
2001 or 2000. After the payment of dividends in 1998 that followed a corporate
reorganization, we decided in general to retain earnings to finance the
development of our business. The payment of any future dividends will be paid by
us based on conditions then existing, including our earnings, financial
condition and capital requirements,

                                        51
<PAGE>

as well as other conditions we deem relevant. The terms of any debt that we may
incur could effectively limit our ability to pay dividends.

ITEM 9.  THE OFFER AND LISTING

     Our ordinary shares have been quoted on the NYSE since June 19, 1998, under
the symbol "DOX". The following table sets forth the high and low reported sale
prices for our ordinary shares for the periods indicated:

<Table>
<Caption>
                                                               HIGH       LOW
                                                              -------   -------
<S>                                                           <C>       <C>
FISCAL YEAR ENDED SEPTEMBER 30
1998........................................................  $ 16.50   $  8.19
1999........................................................  $ 30.25   $  8.75
2000........................................................  $ 96.00   $ 19.81
2001........................................................  $ 80.50   $ 25.85
2002........................................................  $ 39.25   $  6.10

QUARTER
Fiscal 2001:
  First Quarter.............................................  $ 73.50   $ 51.62
  Second Quarter............................................  $ 80.50   $ 43.50
  Third Quarter.............................................  $ 66.50   $ 40.60
  Fourth Quarter............................................  $ 55.75   $ 25.85
Fiscal 2002:
  First Quarter.............................................  $ 35.90   $ 24.00
  Second Quarter............................................  $ 39.25   $ 23.60
  Third Quarter.............................................  $ 26.27   $  6.62
  Fourth Quarter............................................  $  9.65   $  6.10
Fiscal 2003:
  First Quarter.............................................  $ 11.98   $  5.85
  Second Quarter (through March 18, 2003)...................  $ 13.95   $  9.86

MOST RECENT SIX MONTHS
  September, 2002...........................................  $  7.87   $  6.10
  October, 2002.............................................  $  7.50   $  5.85
  November, 2002............................................  $ 11.98   $  6.60
  December, 2002............................................  $ 11.89   $  9.68
  January, 2003.............................................  $ 13.95   $  9.86
  February, 2003............................................  $ 13.45   $ 11.50
</Table>

ITEM 10.  ADDITIONAL INFORMATION

MEMORANDUM AND ARTICLES OF ASSOCIATION

     The Company is registered at the Greffe (Companies Registry) in Guernsey,
the Channel Islands and has been assigned company number 19528, registered
office situated at Suite 5, Tower Hill House, Le Bordage, St. Peter Port, Island
of Guernsey, GY1 3QT, Channel Islands. The telephone number at that location is
011-44-1481-728444.

     The purpose of the Company is to perform any and all corporate activities
permissible under Guernsey law, as forth in detail at Clause 3(1) to (37) of the
Memorandum of Association of the Company (the "Memorandum of Association").

     Article 21(2) of the Amended and Restated Articles of Association of the
Company (the "Articles of Association") provides that a director may vote in
respect of any contract or arrangement in which such director has an interest
notwithstanding such director's interest and an interested director will not be
liable

                                        52
<PAGE>

to the Company for any profit realized through any such contract or arrangement
by reason of such director holding the office of director. Article 21 of the
Articles of Association provides that the remuneration of the directors shall
from time to time be determined by the Company by ordinary resolution. No
provision is made in the Articles of Association for directors to vote
compensation to themselves or any members of their body under any circumstances.
Article 22 provides that directors may exercise all the powers of the Company to
borrow money, and to mortgage or charge its undertaking, property and uncalled
capital or any part thereof, and to issue securities whether outright or as
security for any debt, liability or obligation of the Company for any third
party. Such borrowing powers can only be altered through an amendment to the
Articles of Association. Directors of the Company are not required to own shares
of the Company in order to serve as directors.

     The share capital of the Company is L5,750,000 divided into (i) 25,000,000
preferred shares with a par value of L0.01 per share and (ii) 550,000,000
ordinary shares with a par value of L0.01 per share, consisting of 500,000,000
voting ordinary shares and 50,000,000 non-voting ordinary shares. The rights,
preferences and restrictions attaching to each class of the shares are as
follows:

  PREFERRED SHARES

     - Issue -- the preferred shares may be issued from time to time in one or
       more series of any number of shares up to the amount authorized.

     - Authorization to Issue Preferred Shares -- authority is vested in the
       directors from time to time to authorize the issue of one or more series
       of preferred shares and to provide for the designations, powers,
       preferences and relative participating, optional or other special rights
       and qualifications, limitations or restrictions thereon.

     - Relative Rights -- all shares of any one series of preferred shares must
       be identical with each other in all respects, except that shares of any
       one series issued at different times may differ as to the dates from
       which dividends shall be cumulative.

     - Liquidation -- in the event of any liquidation, dissolution or winding-up
       of the Company, the holders of preferred shares are entitled to
       preference with respect to payment and to receive payment (at the rate
       fixed in any resolution or resolutions adopted by the directors in such
       case) plus an amount equal to all dividends accumulated to the date of
       final distribution to such holders. The holders of preferred shares are
       entitled to no further payment other than that stated above. If upon any
       liquidation the assets of the Company are insufficient to pay in full the
       amount stated above then such assets shall be distributed among the
       holders of preferred shares.

     - Voting Rights -- except as otherwise provided for by the directors upon
       the issue of any new series of preferred shares, the holders of shares of
       preferred shares have no right or power to vote on any question or in any
       proceeding or to be represented at, or to receive notice of, any meeting
       of members.

  ORDINARY SHARES AND NON-VOTING ORDINARY SHARES

     Except as otherwise provided by the Memorandum of Association and Articles
of Association, the ordinary shares and non-voting ordinary shares are identical
and entitle holders thereof to the same rights and privileges.

     - Dividends -- when and as dividends are declared on the shares of the
       Company the holders of voting ordinary shares and non-voting shares are
       entitled to share equally, share for share, in such dividends except that
       if dividends are declared which are payable in voting ordinary shares or
       non-voting ordinary shares, dividends must be declared which are payable
       at the same rate in both classes of shares.

     - Conversion of Non-Voting Ordinary Shares into Voting Ordinary
       Shares -- upon the transfer of non-voting ordinary shares from the
       original holder thereof to any third party not affiliated with

                                        53
<PAGE>

       such original holder, non-voting ordinary shares are redesignated in the
       books of the Company as voting ordinary shares and automatically convert
       into the same number of voting ordinary shares.

     - Liquidation -- upon any liquidation, dissolution or winding-up of the
       Company, the assets of the Company remaining after creditors and the
       holders of any preferred shares have been paid in full shall be
       distributed to the holders of voting ordinary shares and non-voting
       ordinary shares equally share for share.

     - Voting Rights -- the holders of voting ordinary shares are entitled to
       vote on all matters to be voted on by the members, and the holders of
       non-voting ordinary shares are not entitled to any voting rights.

     - Preferences -- the voting ordinary shares and non-voting ordinary shares
       are subject to all the powers, rights, privileges, preferences and
       priorities of the preferred shares as are set out in the Articles of
       Association.

     As regards both preferred shares and voting and non-voting ordinary shares,
the Company has power to purchase any of its own shares, whether or not they are
redeemable and may make a payment out of capital for such purchase.

     There are no provisions for a classified Board of Directors or for
cumulative voting for directors.

     Article 8 of the Articles of Association provides that all or any of the
rights, privileges, or conditions attached to any class or group of shares may
be changed as follows:

     - by an agreement between the Company and any person purporting to contract
       on behalf of the holders of shares of the class or group affected,
       provided that such agreement is ratified in writing by the holders of at
       least two-thirds of the issued shares of the class affected; or

     - with the consent in writing of the holders of three-fourths of the issued
       shares of that class or with the sanction of an extraordinary resolution
       passed by majority of three-fourths of the votes of the holders of shares
       of the class or group affected entitled to vote and voting in person or
       by attorney or proxy and passed at a separate meeting of the holders of
       such shares but not otherwise.

     The Companies (Guernsey) Law, 1994 (the "Companies Law") provides that,
where not provided for in the Articles of Association, a special resolution of
the shareholders is required to alter the Articles of Association. A special
resolution must be passed by not less than three-quarters of the votes recorded
at a meeting called for purposes of voting on the matter. As such, the
conditions set out above are as significant as the requirements of Guernsey law.

     Provisions in respect of the holding of general meetings and extraordinary
general meetings are set out at Articles 14, 15 and 16 of the Articles of
Association. The Articles of Association provide that an annual general meeting
must be held once in every calendar year (provided that not more than 15 months
have elapsed since the last such meeting) at such time and place as the
directors appoint and, in default, an annual general meeting may be convened by
any two members holding at least 10% in the aggregate of the Company's share
capital. The directors may, whenever they deem fit, convene an extraordinary
general meeting, and extraordinary general meetings will also be convened on the
requisition in writing of holders of at least 20% of the issued share capital of
the Company carrying voting rights or, if the directors fail upon such
requisition to convene such meeting within 21 days then such meeting may be
convened by such holders in such manner as provided by the Companies Law. A
minimum of 10 days' written notice is required in connection with an annual
general meeting and a minimum of 14 days' written notice is required in
connection with any other meeting. The notice shall specify the place, the day
and the hour of the meeting, and in the case of any special business, the
general nature of that business to such persons as are entitled by the Articles
of Association to receive such notices from the Company provided that a meeting
of the Company shall, notwithstanding that it is called by shorter notice than
that specified in the Articles, be deemed to have been duly called if it is so
agreed by all the members entitled to attend and vote thereat.

                                        54
<PAGE>

     There are no limitations on the rights to own securities, including the
rights of non-resident or foreign shareholders to hold or exercise voting rights
on the securities.

     There are no provisions in the Memorandum of Association or Articles of
Association that would have the effect of delaying, deferring or preventing a
change in control of the Company and that would operate only with respect to a
merger, acquisition or corporate restructuring involving the Company (or any of
its subsidiaries).

     There are no provisions in the Memorandum of Association or Articles of
Association governing the ownership threshold above which shareholder ownership
must be disclosed. United States federal law, however, requires that all
directors, executive officers and holders of 10% or more of the stock of a
company that has a class of stock registered under the Securities Exchange Act
of 1934, as amended (other than a foreign private issuer, such as Amdocs),
disclose such ownership. In addition, holders of more than 5% of a registered
equity security of a company (including a foreign private issuer) must disclose
such ownership.

     Pursuant to Article 13 of the Articles of Association, the Company may from
time to time by ordinary resolution increase the share capital by such sum, to
be divided into shares of such amount, as the resolution prescribes. A
restructuring of the existing share capital must be done by extraordinary
resolution (which requires the same vote as a special resolution), and the
Company may by special resolution reduce its share capital, any capital
redemption reserve fund or any share premium account in accordance with Guernsey
law. These provisions in relation to the alteration of the Company's capital are
in accordance with but no more onerous than the Companies Law.

MATERIAL CONTRACTS

     Other than the Clarify acquisition transaction agreement and related
documents, in the past two years we have not entered into any material contracts
other than contracts entered into in the ordinary course of our business. See
"Information on the Company -- History and Development of Amdocs".

TAXATION

  TAXATION OF THE COMPANY

     The following is a summary of certain material tax considerations relating
to Amdocs and our subsidiaries. To the extent that the discussion is based on
tax legislation that has not been subject to judicial or administrative
interpretation, there can be no assurance that the views expressed in the
discussion will be accepted by the tax authorities in question. The discussion
is not intended, and should not be construed, as legal or professional tax
advice and is not exhaustive of all possible tax considerations.

     General

     Our blended effective tax rate was 107% for the year ended September 30,
2002, compared to 63% for fiscal 2001 and 93% for fiscal 2000. These high
effective tax rates were primarily attributable to amortization of goodwill
related to our acquisitions, much of which is not tax deductible. In the year
ended September 30, 2002 our effective tax rate was also adversely affected by
the fixed non-deductible expenditures representing a larger component of our
pretax income. Excluding the impact of the non-deductible goodwill related to
our acquisitions, our pro forma effective tax rate for fiscal 2002 was 28%
compared to our historical pro forma effective tax rate of 30%, due to the
corporate income tax rates in the various countries in which we operate and
changes in the relative magnitude of our business in those countries.

     We expect a reduction in our pro forma effective tax rate in fiscal 2003
from 28% to 25%. The reduction is due to our continued expansion into countries
with lower effective tax rates.

     There can be no assurance that our effective tax rate will not change over
time as a result of a change in corporate income tax rates or other changes in
the tax laws of the various countries in which we

                                        55
<PAGE>

operate. Moreover, our effective tax rate in future years may be adversely
affected in the event that a tax authority challenged the manner in which items
of income and expense are allocated among us and our subsidiaries. In addition,
the Company and certain of our subsidiaries have been granted certain special
tax benefits, discussed below, in Cyprus, Ireland and Israel. The loss of any
such tax benefits could have an adverse effect on our effective tax rate.

     Certain Guernsey Tax Considerations

     We qualify as an exempt company (i.e., our shareholders are not Guernsey
residents and we do not carry on business in Guernsey) so we generally are not
subject to taxation in Guernsey.

     Certain Cypriot Tax Considerations

     Our Cyprus subsidiary, Amdocs Development Ltd., operates a development
center. Corporations resident in Cyprus currently are subject to a maximum 25%
income tax rate. The Government of Cyprus has issued a permit to our Cypriot
subsidiary pursuant to which the activities conducted by it are deemed to be
offshore activities for the purpose of Cypriot taxation. As a result, our
Cypriot subsidiary is subject to an effective tax rate in Cyprus of 4.25%. In
order for our subsidiary to remain entitled to this reduced rate of taxation
pursuant to the permit, it must continue to satisfy certain requirements
concerning its operations in Cyprus and it must undertake certain information
reporting obligations to the Government of Cyprus. A new Income Tax law has been
enacted in July 2002, introducing a number of changes to the current system in
an attempt to harmonize the regulations with E.U. provisions and abandon any
harmful tax practices as defined by the Organisation for Economic Co-operation
and Development. The new legislation went into effect on January 1, 2003 and the
Income tax rate was set at 10% for all corporations resident in Cyprus. Our
subsidiary will take advantage of the transitionary rules and will continue to
enjoy an effective tax rate of 4.25% until December 2005 as long as certain
requirements imposed by the Government of Cyprus are met. Thereafter, our
subsidiary will be taxed under the 10% tax rate.

     Certain Irish Tax Considerations

     Our Irish subsidiary, Amdocs Software Systems Ltd., operates a development
center. The corporation tax rate on its trading activities was 16% for 2002 and
will decline to 12.5% in 2003. The subsidiary has entered into an agreement with
the Irish Industrial Development Agency pursuant to which it qualifies for
certain job creation grants and, consequently, certain activities conducted by
it are deemed to be manufacturing activities for the purpose of Irish taxation.
As a result, the subsidiary was subject to a corporation tax rate in Ireland of
10% with respect to its manufacturing activities. This tax rate on manufacturing
activities was available to our Irish subsidiary until December 31, 2002. As of
January 1, 2003, our Irish subsidiary was subject to a single corporation tax
rate of 12.5% on all of its trading and manufacturing activities.

     Certain Israeli Tax Considerations

     Our Israeli subsidiary, Amdocs (Israel) Limited, operates our largest
development center. Discussed below are certain Israeli tax considerations
relating to our Israeli subsidiary.

     General Corporate Taxation in Israel.  Effective January 1, 1996, and
thereafter, in general, Israeli companies are subject to "Company Tax" at the
rate of 36% of taxable income. However, the effective tax rate payable by an
Israeli company that derives income from an Approved Enterprise (as further
discussed below) may be considerably less.

     Law for the Encouragement of Capital Investments, 1959.  Certain production
and development facilities of our Israeli subsidiary have been granted "Approved
Enterprise" status pursuant to the Law for the Encouragement of Capital
Investments, 1959 (the "Investment Law"), which provides certain tax and
financial benefits to investment programs that have been granted such status.

                                        56
<PAGE>

     The Investment Law provides that capital investments in production
facilities (or other eligible assets) may, upon application to the Israeli
Investment Center, be designated as an Approved Enterprise. Each instrument of
approval for an Approved Enterprise relates to a specific investment program
delineated both by the financial scope of the investment, including source of
funds, and by the physical characteristics of the facility or other assets. The
tax benefits available under any instrument of approval relate only to taxable
profits attributable to the specific investment program and are contingent upon
compliance with the conditions set out in the instrument of approval.

     Tax Benefits.  Taxable income derived from an Approved Enterprise is
subject to a reduced corporate tax rate of 25% until the earlier of

     - seven consecutive years (or ten in the case of an FIC (as defined below))
       commencing in the year in which the Approved Enterprise first generates
       taxable income,

     - twelve years from the year of commencement of production, or

     - fourteen years from the year of the approval of the Approved Enterprise
       status.

Such income is eligible for further reductions in tax rates if we qualify as a
Foreign Investors' Company ("FIC") depending on the percentage of the foreign
ownership. Subject to certain conditions, an FIC is a company more than 25% of
whose share capital (in terms of shares, rights of profits, voting and
appointment of directors) and more than 25% of whose combined share and loan
capital are owned by non-Israeli residents. The tax rate is 20% if the foreign
investment is 49% or more but less than 74%; 15% if the foreign investment is
74% or more but less than 90%; and 10% if the foreign investment is 90% or more.
The determination of foreign ownership is made on the basis of the lowest level
of foreign ownership during the tax year. A company that owns an Approved
Enterprise, approved after April 1, 1986, may elect to forego the entitlement to
grants and apply for an alternative package of tax benefits. In addition, a
company (like our Israeli subsidiary) with an enterprise outside the National
Priority Regions (which is not entitled to grants) may also apply for the
alternative benefits. Under the alternative benefits, undistributed income from
the Approved Enterprise operations is fully tax exempt (a tax holiday) for a
defined period. The tax holiday ranges between two to ten years from the first
year of taxable income subject to the limitations as described above, depending
principally upon the geographic location within Israel. On expiration of the tax
holiday, the Approved Enterprise is eligible for a beneficial tax rate (25% or
lower in the case of an FIC, as described above) for the remainder of the
otherwise applicable period of benefits.

     Our Israeli subsidiary has elected the alternative benefits with respect to
its current Approved Enterprise and its enlargements, pursuant to which the
Israeli subsidiary enjoys, in relation to its Approved Enterprise operations,
certain tax holidays for a period of two years (and in some cases for a period
of four years) and reduced tax rates for an additional period of up to eight
years. In case our Israeli subsidiary pays a dividend, at any time, out of
income earned during the tax holiday period in respect of its Approved
Enterprise, it will be subject, assuming that the current level of foreign
investment in Amdocs is not reduced, to corporate tax at the otherwise
applicable rate of 10% of the income from which such dividend has been paid and
up to 25% if such foreign investments are reduced (as detailed above). This tax
is in addition to the withholding tax on dividends as described below. Under an
instrument of approval issued in December 1997 and relating to the current
investment program of our Israeli subsidiary and to the income derived
therefrom, our Israeli subsidiary is entitled to a reduced tax rate period of
thirteen years (instead of the eight-year period referred to above.) The tax
benefits, available with respect to an Approved Enterprise only to taxable
income attributable to that specific enterprise, are given according to an
allocation formula provided for in the Investment Law or in the instrument of
approval, and are contingent upon the fulfillment of the conditions stipulated
by the Investment Law, the regulations published thereunder and the instruments
of approval for the specific investments in the Approved Enterprises. In the
event our Israeli subsidiary fails to comply with these conditions, the tax and
other benefits could be canceled, in whole or in part, and the subsidiary might
be required to refund the amount of the canceled benefits, with the addition of
CPI linkage differences and interest. We believe that the Approved

                                        57
<PAGE>

Enterprise of our Israeli subsidiary substantially complies with all such
conditions currently, but there can be no assurance that it will continue to do
so.

     From time to time, the Government of Israel has discussed reducing the
benefits available to companies under the Investment Law. The termination or
substantial reduction of any of the benefits available under the Investment Law
could have a material adverse effect on future investments by us in Israel
(although such termination or reduction would not affect our Israeli
subsidiary's existing Approved Enterprise or the related benefits).

     Dividends

     Dividends paid out of income derived by an Approved Enterprise during the
benefit periods (or out of dividends received from a company whose income is
derived by an Approved Enterprise) are subject to withholding tax at a reduced
rate of 15% (deductible at source). In the case of companies that do not qualify
as a FIC, the reduced rate of 15% is limited to dividends paid at any time up to
twelve years thereafter.

  TAXATION OF HOLDERS OF ORDINARY SHARES

     Certain United States Federal Income Tax Considerations

     The following discussion describes the material United States federal
income tax consequences to a holder of our ordinary shares that is

     (i)   a citizen or resident of the United States,

     (ii)  a corporation created or organized in, or under the laws of, the
           United States or of any state thereof,

     (iii) an estate, the income of which is includable in gross income for

     (iv) United States federal income tax purposes regardless of its source, or

     (v)  a trust, if a court within the United States is able to exercise
          primary supervision over the administration of the trust and one or
          more U.S. persons has the authority to control all substantial
          decisions of the trust.

     This summary generally considers only U.S. holders that own ordinary shares
as capital assets. This summary does not discuss the United States federal
income tax consequences to a holder of ordinary shares that is not a U.S.
holder.

     This discussion is based on current provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), current and proposed Treasury regulations
promulgated thereunder, and administrative and judicial decisions as of the date
hereof, all of which are subject to change, possibly on a retroactive basis.
This discussion does not address all aspects of United States federal income
taxation that may be relevant to a holder of ordinary shares based on such
holder's particular circumstances (including potential application of the
alternative minimum tax), United States federal income tax consequences to
certain holders that are subject to special treatment (such as taxpayers who are
broker-dealers, insurance companies, tax-exempt organizations, financial
institutions, holders of securities held as part of a "straddle", "hedge" or
"conversion transaction" with other investments, or holders owning directly,
indirectly or by attribution at least 10% of the ordinary shares), or any aspect
of state, local or non-United States tax laws. Additionally, the discussion does
not consider the tax treatment of persons who hold ordinary shares through a
partnership or other pass-through entity or the possible application of United
States federal gift or estate taxes.

     Dividends.  In general, a U.S. holder receiving a distribution with respect
to the ordinary shares will be required to include such distribution (including
the amount of foreign taxes, if any, withheld therefrom) in gross income as a
taxable dividend to the extent such distribution is paid from our current or
accumulated earnings and profits as determined under United States federal
income tax principles. Any
                                        58
<PAGE>

distributions in excess of such earnings and profits will first be treated, for
United States federal income tax purposes, as a nontaxable return of capital to
the extent of the U.S. holder's tax basis in the ordinary shares, and then, to
the extent in excess of such tax basis, as gain from the sale or exchange of a
capital asset. See "Disposition of Ordinary Shares" below. United States
corporate shareholders will not be entitled to any deduction for distributions
received as dividends on the ordinary shares.

     The amount of foreign income taxes that may be claimed as a credit against
United States federal income tax in any year is subject to certain complex
limitations and restrictions, which must be determined on an individual basis by
each U.S. holder. The limitations set out in the Code include, among others,
rules that may limit foreign tax credits allowable with respect to specific
classes of income to the United States federal income taxes otherwise payable
with respect to each such class of income. Dividends paid by us generally will
be foreign source "passive income" for United States foreign tax credit
purposes.

     Disposition of Ordinary Shares.  Upon the sale, exchange or other
disposition of our ordinary shares, a U.S. holder generally will recognize
capital gain or loss in an amount equal to the difference between the amount
realized on the disposition by such U.S. holder and its tax basis in the
ordinary shares. Such capital gain or loss will be long-term capital gain or
loss if the U.S. holder has held the ordinary shares for more than one year at
the time of the disposition. In the case of a U.S. holder that is an individual,
trust or estate, long-term capital gains realized upon a disposition of the
ordinary shares generally will be subject to a maximum tax rate of 20%. Gains
realized by a U.S. holder on a sale, exchange or other disposition of ordinary
shares generally will be treated as United States source income for United
States foreign tax credit purposes.

     Information Reporting and Backup Withholding.  Dividend payments with
respect to the ordinary shares and proceeds from the sale, exchange or
redemption of ordinary shares may be subject to information reporting to the
Internal Revenue Service ("IRS") and possible U.S. backup withholding at a 31%
rate. Backup withholding will not apply, however, to a U.S. holder who furnishes
a correct taxpayer identification number and makes any other required
certification or who is otherwise exempt from backup withholding. Generally a
U.S. holder will provide such certification on IRS Form W-9 (Request for
Taxpayer Identification Number and Certification).

     Amounts withheld under the backup withholding rules may be credited against
a U.S. holder's tax liability, and a U.S. holder may obtain a refund of any
excess amounts withheld under the backup withholding rules by filing the
appropriate claim for a refund with the IRS.

     Passive Foreign Investment Company Considerations.  If, during any taxable
year, 75% or more of our gross income consists of certain types of passive
income, or the average value during a taxable year of passive assets (generally
assets that generate passive income) is 50% or more of the average value of all
of our assets, we will be treated as a "passive foreign investment company"
under U.S. federal income tax law for such year and succeeding years. If we are
treated as a passive foreign investment company, a U.S. holder may be subject to
increased tax liability upon the sale of our ordinary shares or upon the receipt
of certain distributions, unless such U.S. holder makes an election to mark our
ordinary shares to market annually.

     Based on an analysis of our financial position, we believe that we have not
been a passive foreign investment company for U.S. federal income tax purposes
for any preceding taxable year and expect that we will not become a passive
foreign investment company during the current taxable year. However, because the
tests for determining passive foreign investment company status are applied as
of the end of each taxable year and are dependent upon a number of factors, some
of which are beyond our control, including the value of our assets, based on the
market price of our ordinary shares, and the amount and type of our gross
income, we cannot assure you that we will not become a passive foreign
investment company in the future or that the IRS will agree with our conclusion
regarding our current passive foreign investment company status. We intend to
use reasonable efforts to avoid becoming a passive foreign investment company.

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<PAGE>

     Rules relating to a passive foreign investment company are very complex.
U.S. holders should consult their own tax advisors regarding the U.S. federal
income tax considerations discussed above and the applicability of passive
foreign investment company rules to their investments in our ordinary shares.

     Certain Guernsey Tax Considerations

     Under the laws of Guernsey as currently in effect, a holder of our ordinary
shares who is not a resident of Guernsey and who does not carry on business in
Guernsey through a permanent establishment situated there is exempt from
Guernsey income tax on dividends paid with respect to the ordinary shares and is
not liable for Guernsey income tax on gains realized on sale or disposition of
such ordinary shares. In addition, Guernsey does not impose a withholding tax on
dividends paid by us to the holders of our ordinary shares.

     There are no capital gains, gift or inheritance taxes levied by Guernsey,
and the ordinary shares generally are not subject to any transfer taxes, stamp
duties or similar charges on issuance or transfer.

DOCUMENTS ON DISPLAY

     We file annual, quarterly and current reports and other information with
the Securities and Exchange Commission ("SEC"). You may read and copy any of our
filings at the SEC's public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for further
information about the Public Reference Room. Our SEC filings are also available
to the public on the SEC's website at http://www.sec.gov.

     You may request copies of the filings, at no cost, by writing to or
telephoning us as follows:

           Amdocs, Inc.
           1390 Timberlake Manor Parkway
           Chesterfield, Missouri 63017
           Telephone: (314) 212-8328

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

CURRENCY FLUCTUATIONS

     Approximately 90% of our revenue is in U.S. dollars or linked to the U.S.
dollar. Therefore, the dollar is our functional currency. Approximately 65% of
our operating expenses (excluding acquisition-related charges and restructuring
charges) are paid in dollars or linked to dollars. Other significant currencies
in which we receive revenue or pay expenses are Australian dollars, British
pounds, Canadian dollars, the euro (ECU) and Israeli shekels. Historically, the
effect of fluctuations in currency exchange rates has had a minimal impact on
our operations. As more of our customers seek contracts that are denominated in
currencies such as the ECU and not the U.S. dollar, our exposure to fluctuations
in currency exchange rates could increase. In managing our foreign exchange
risk, we enter from time to time into various foreign exchange contracts. As of
September 30, 2002, we had substantially hedged our significant exposures in
currencies other than the U.S. dollar.

FOREIGN CURRENCY RISK

     We enter into foreign exchange forward contracts to hedge most of our
foreign currency exposure. We use such contracts to hedge exposure to changes in
foreign currency exchange rates associated with revenue denominated in a foreign
currency, primarily British pounds and the ECU, and anticipated costs to be
incurred in a foreign currency, primarily Australian dollars, Canadian dollars
and Israeli shekels. We also use forward contracts to hedge the impact of the
variability in exchange rates on certain accounts receivables, denominated in
British pounds and the ECU, and on the investment in Certen convertible
debentures denominated in Canadian dollars. We seek to minimize the risk that
the anticipated cash flow from sales of our products and services and cash flow
required for our expenses denominated in a currency other than our functional
currency will be affected by changes in exchange rates. See Note 22 to our

                                        60
<PAGE>

consolidated financial statements included elsewhere in this report. The
following table summarizes our foreign currency forward exchange agreements as
of September 30, 2002. All the forward contracts are expected to mature during
fiscal 2003. The table below (all dollar amounts in millions) presents the
notional amounts, and fair value of the total derivative instruments as of
September 30, 2002. Notional values are calculated based on forward rates as of
September 30, 2002, U.S. dollar translated.

<Table>
<Caption>
                                                              AS OF SEPTEMBER 30, 2002
                                                        -------------------------------------
                                                         NOTIONAL AMOUNT
                                                          TRANSLATED TO         FAIR VALUE OF
                                                          U.S. DOLLAR(*)         DERIVATIVES
                                                        ------------------      -------------
<S>                                                     <C>                     <C>
Revenue...............................................       $   8.9                $(0.9)
Costs.................................................        (145.8)                (6.7)
Balance sheet items...................................          41.2                  0.5
                                                             -------                -----
                                                             $ (95.7)               $(7.1)
                                                             =======                =====
</Table>

---------------
(*) Positive notional amounts represent forward contracts to sell foreign
    currency. Negative notional amounts represent forward contracts to buy
    foreign currency.

INTEREST RATE RISK

     Our interest expenses and income are sensitive to changes in interest
rates, as all of our cash reserves and borrowings, other than the Notes, are
subject to interest rate changes. Excess liquidity is invested in short-term
interest-bearing investments. Such short-term interest-bearing investments
consist primarily of treasury notes, federal agency securities, corporate bonds
and money market funds and currently bear minimal interest rate risk. As of
September 30, 2002, we had nothing outstanding on either our revolving lines of
credit or our short-term credit facilities, and $25.5 million recorded as
long-term lease obligations, which in the aggregate bear minimal interest rate
risk.

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.

                                    PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Not applicable.

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
          PROCEEDS

     Not applicable

ITEM 15.  CONTROLS AND PROCEDURES

     (a) Evaluation of disclosure controls and procedures. To their best
knowledge and belief and based on their evaluation of the Company's disclosure
controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934) as of a date within 90 days of the filing date
of this Annual Report on Form 20-F, the Company's Chief Executive Officer and
Chief Financial Officer have concluded that the Company's disclosure controls
and procedures are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms and are operating in an effective manner.

                                        61
<PAGE>

     (b) Changes in internal controls. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of their most recent evaluation.

ITEM 16.  [RESERVED]

                                    PART III

ITEM 17.  FINANCIAL STATEMENTS

     Not applicable.

ITEM 18.  FINANCIAL STATEMENTS

FINANCIAL STATEMENTS AND SCHEDULE

     The following Consolidated Financial Statements and Financial Statement
Schedule are included at the end of this report:

FINANCIAL STATEMENTS

     Report of Independent Auditors

     Consolidated Balance Sheets as of September 30, 2002 and 2001

     Consolidated Statements of Operations for the years ended September 30,
2002, 2001 and 2000

     Consolidated Statements of Changes in Shareholders' Equity for the years
ended September 30, 2002, 2001 and 2000

     Consolidated Statements of Cash Flows for the years ended September 30,
2002, 2001 and 2000

     Notes to Consolidated Financial Statements

FINANCIAL STATEMENT SCHEDULE

     Valuation and Qualifying Accounts

ITEM 19.  EXHIBITS

     The exhibits listed on the Exhibit Index hereof are filed herewith in
response to this Item.

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<PAGE>

                                   SIGNATURES

     The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

                                          Amdocs Limited

                                          /s/  THOMAS G. O'BRIEN
                                          --------------------------------------
                                          Thomas G. O'Brien
                                          Treasurer and Secretary
                                          Authorized U.S. Representative

Date: March 24, 2003
<PAGE>

                                 CERTIFICATIONS

I, Dov Baharav, certify that:

     1. I have reviewed this annual report on Form 20-F of Amdocs Limited;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          (a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

          (b) evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this annual report (the "Evaluation Date"); and

          (c) presented in this annual report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's Board of Directors (or persons performing the
equivalent function):

          (a) all significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability to
     record, process, summarize and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          (b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and

     6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 24, 2003

/s/  DOV BAHARAV
---------------------------------------------------------
Dov Baharav,
Chief Executive Officer,
Amdocs Management Limited
<PAGE>

I, Ron Moskovitz, certify that:

     1. I have reviewed this annual report on Form 20-F of Amdocs Limited;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          (a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

          (b) evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this annual report (the "Evaluation Date"); and

          (c) presented in this annual report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's Board of Directors (or persons performing the
equivalent function):

          (a) all significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability to
     record, process, summarize and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          (b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and

     6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 24, 2003

/s/  RON MOSKOVITZ
---------------------------------------------------------
Ron Moskovitz,
Chief Financial Officer,
Amdocs Management Limited
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders
Amdocs Limited

      We have audited the accompanying consolidated balance sheets of Amdocs
Limited as of September 30, 2002 and 2001, and the related consolidated
statements of operations, changes in shareholders' equity and cash flows for
each of the three years in the period ended September 30, 2002. Our audits also
included the financial statement schedule listed in the index at Item 2 of Part
I. These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the financial statement schedule based
on our audits.

      We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Amdocs Limited
as of September 30, 2002 and 2001, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
September 30, 2002, in conformity with accounting principles generally accepted
in the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth herein.


/s/ ERNST & YOUNG LLP

New York, New York
October 31, 2002
<PAGE>
                                 AMDOCS LIMITED
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                                  AS OF SEPTEMBER 30,
                                                                              ----------------------------
                                                                                 2002             2001
                                                                              -----------      -----------
<S>                                                                           <C>              <C>
ASSETS

Current assets:
   Cash and cash equivalents                                                  $   466,655      $   872,998
   Short-term interest-bearing investments                                        581,164          237,069
   Accounts receivable, net (*)                                                   312,732          384,851
   Deferred income taxes and taxes receivable                                      48,154           38,916
   Prepaid expenses and other current assets (*)                                   72,196           38,045
                                                                              -----------      -----------
         Total current assets                                                   1,480,901        1,571,879

Equipment, vehicles and leasehold improvements, net                               160,902          173,695
Deferred income taxes                                                              37,582           19,722
Goodwill and other intangible assets, net                                         750,530          788,187
Other noncurrent assets (*)                                                       110,179           70,953
                                                                              -----------      -----------
         Total assets                                                         $ 2,540,094      $ 2,624,436
                                                                              ===========      ===========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued expenses                                      $   192,129      $   166,527
   Accrued personnel costs                                                         86,942          103,990
   Deferred revenue                                                               149,590          140,033
   Short-term portion of capital lease obligations                                 10,347           10,400
   Deferred income taxes and taxes payable                                        103,315           91,026
                                                                              -----------      -----------
         Total current liabilities                                                542,323          511,976


Convertible notes                                                                 445,054          500,000
Deferred income taxes                                                              12,363            7,410
Noncurrent liabilities and other                                                  124,079           92,959
                                                                              -----------      -----------
         Total liabilities                                                      1,123,819        1,112,345
                                                                              -----------      -----------
Shareholders' equity:
   Preferred Shares - Authorized 25,000 shares; L0.01 par value; 0 shares
     issued and outstanding                                                            --               --
   Ordinary Shares - Authorized 550,000 shares; L0.01 par value; 223,316
     and 222,628 issued and 215,583 and 222,628 outstanding, in 2002 and
     2001, respectively                                                             3,572            3,560
   Additional paid-in capital                                                   1,818,345        1,806,290
   Treasury stock                                                                (109,281)              --
   Accumulated other comprehensive loss                                              (108)          (6,382)
   Unearned compensation                                                               --             (185)
   Accumulated deficit                                                           (296,253)        (291,192)
                                                                              -----------      -----------
         Total shareholders' equity                                             1,416,275        1,512,091
                                                                              -----------      -----------
         Total liabilities and shareholders' equity                           $ 2,540,094      $ 2,624,436
                                                                              ===========      ===========
</TABLE>

(*) See Note 4

              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>
                                 AMDOCS LIMITED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                          YEAR ENDED SEPTEMBER 30,
                                                                 --------------------------------------------
                                                                     2002            2001            2000
                                                                 -----------      -----------     -----------
<S>                                                              <C>              <C>             <C>
Revenue:
   License (*)                                                   $   153,664      $   171,430     $   124,822
   Service (*)                                                     1,459,901        1,362,480         993,498
                                                                 -----------      -----------     -----------
                                                                   1,613,565        1,533,910       1,118,320
                                                                 -----------      -----------     -----------
Operating expenses:
    Cost of license                                                    5,054            5,651           5,624
    Cost of service (*)                                              928,283          847,591         639,900
    Research and development                                         124,082          105,807          74,852
    Selling, general and administrative (*)                          223,551          195,592         137,004
    Amortization of goodwill and purchased intangible assets         231,804          219,988         111,199
    Restructuring charges, in-process research and
      development and other indirect acquisition-related
      costs                                                           51,630               --          75,617
                                                                 -----------      -----------     -----------
                                                                   1,564,404        1,374,629       1,044,196
                                                                 -----------      -----------     -----------

Operating income                                                      49,161          159,281          74,124
Interest income and other, net (*)                                    19,298           22,286          10,734
                                                                 -----------      -----------     -----------

Income before income taxes                                            68,459          181,567          84,858
Income taxes                                                          73,520          115,181          78,880
                                                                 -----------      -----------     -----------

Net (loss) income                                                $    (5,061)     $    66,386     $     5,978
                                                                 ===========      ===========     ===========

Basic (loss) earnings per share                                  $     (0.02)     $      0.30     $      0.03
                                                                 ===========      ===========     ===========

Diluted (loss) earnings per share                                $     (0.02)     $      0.29     $      0.03
                                                                 ===========      ===========     ===========

Basic weighted average number of shares outstanding                  220,361          222,002         212,005
                                                                 ===========      ===========     ===========

Diluted weighted average number of shares outstanding                220,361          226,832         216,935
                                                                 ===========      ===========     ===========
</TABLE>

(*) See Note 4.


              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>
                                 AMDOCS LIMITED
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                     Accumulated
                            Ordinary Shares  Additional                 Other                                    Total
                            ---------------   Paid-in    Treasury   Comprehensive    Unearned    Accumulated  Shareholders'
                            Shares   Amount   Capital     Stock        Income      Compensation    Deficit       Equity
                                                                        (Loss)
                            -------  ------  ----------  ---------  -------------  ------------  -----------  -------------
<S>                         <C>      <C>     <C>         <C>        <C>            <C>           <C>          <C>
BALANCE AS OF OCTOBER 1,
1999                        198,800  $3,181  $  489,099  $      --  $      (1,157) $     (3,830) $  (363,556) $     123,737
Comprehensive income:
  Net income                     --      --          --         --             --            --        5,978          5,978
  Decrease in unrealized
     loss on derivative
     instruments, net of
     $1,000 tax                  --      --          --         --          2,333            --           --          2,333
  Increase in unrealized
     loss on cash
     equivalents income,
     net of $(7) tax             --      --          --         --            (17)           --           --            (17)
                                                                                                              -------------
  Comprehensive income                                                                                                8,294
                                                                                                              -------------
Employee stock options
   exercised                  2,058      33      21,327         --             --            --           --         21,360
Tax benefit of stock
   options exercised             --      --      10,825         --             --            --           --         10,825
Issuance of Ordinary
   Shares related to
   acquisitions, net         20,307     325   1,263,330         --             --            --           --      1,263,655
Stock options granted            --      --         235         --             --            --           --            235
Amortization of unearned
   compensation                  --      --          --         --             --         2,666           --          2,666
                            -------  ------  ----------  ---------  -------------  ------------  -----------  -------------
BALANCE AS OF SEPTEMBER
   30, 2000                 221,165   3,539   1,784,816         --          1,159        (1,164)    (357,578)     1,430,772
Comprehensive income:
  Net income                     --      --          --         --             --            --       66,386         66,386
  Decrease in unrealized
     gain on derivatives,
     net of $(3,891) tax         --      --          --         --         (9,078)           --           --         (9,078)
  Increase in unrealized
     gain on cash
     equivalents and
     short-term interest-
     bearing investments,
     net of $659 tax             --      --          --         --          1,537            --           --          1,537
                                                                                                              -------------
  Comprehensive income                                                                                               58,845
                                                                                                              -------------
Employee stock options
   exercised                  1,463      21      13,946         --             --            --           --         13,967
Tax benefit of stock
   options exercised             --      --       7,345         --             --            --           --          7,345
Stock options granted            --      --         183         --             --            --           --            183
Amortization of unearned
   compensation                  --      --          --         --             --           979           --            979
                            -------  ------  ----------  ---------  -------------  ------------  -----------  -------------
BALANCE AS OF SEPTEMBER
   30, 2001                 222,628   3,560   1,806,290         --         (6,382)         (185)    (291,192)     1,512,091
Comprehensive income:
  Net loss                       --      --          --         --             --            --       (5,061)        (5,061)
  Decrease in unrealized
     loss on foreign
     currency hedging
     contracts, net of
     $1,357 tax                  --      --          --         --          2,682            --           --          2,682
  Decrease in unrealized
     loss on cash
     equivalents and
     short-term interest-
     bearing investments,
     net of $1,336 tax           --      --          --         --          3,592            --           --          3,592
                                                                                                              -------------
  Comprehensive income                                                                                                1,213
                                                                                                              -------------
Employee stock options
   exercised                    687      12       5,149         --             --            --           --          5,161
Tax benefit of stock
   options exercised             --      --       6,808         --             --            --           --          6,808
Expense related to vesting
   of stock options              --      --          98         --             --            --           --             98
Repurchase of shares         (7,732)     --          --   (109,281)            --            --           --       (109,281)
Amortization of unearned
   compensation                  --      --          --         --             --           185           --            185
                            -------  ------  ----------  ---------  -------------  ------------  -----------  -------------
BALANCE AS OF SEPTEMBER
   30, 2002                 215,583  $3,572  $1,818,345  $(109,281) $        (108) $         --  $  (296,253) $   1,416,275
                            =======  ======  ==========  =========  =============  ============  ===========  =============
</TABLE>

As of September 30, 2002, 2001 and 2000, accumulated other comprehensive income
(loss) is comprised of unrealized gain (loss) on derivatives, net of tax, of
$(5,220), $(7,902) and $1,176 and unrealized gain (loss) on cash equivalents and
short-term interest-bearing investments, net of tax, of $5,112, $1,520 and
$(17), as of September 30, 2002, 2001 and 2000, respectively.

              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>
                                 AMDOCS LIMITED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                YEAR ENDED SEPTEMBER 30,
                                                         ---------------------------------------
                                                           2002           2001           2000
                                                         ---------      ---------      ---------
<S>                                                      <C>            <C>            <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net (loss) income                                        $  (5,061)     $  66,386      $   5,978
Reconciliation of net (loss) income to net cash
   provided by operating activities:
     Depreciation and amortization                         309,821        282,625        155,359
     Adjustment to the basis of investments                  5,500          6,750             --
     In-process research and development expenses           17,400             --         70,319
     Loss on sale of equipment                                 549            593            148
     Gain on repurchase of convertible notes                (6,012)            --             --
     Deferred income taxes                                  (1,665)         5,018         (1,196)
     Tax benefit of stock options exercised                  6,808          7,345         10,825
     Unrealized other comprehensive income (loss)            8,967        (10,773)         3,309
Net changes in operating assets and liabilities,
   net of amounts acquired:
   Accounts receivable                                      97,055       (121,751)       (29,763)
   Prepaid expenses and other current assets               (22,992)        (3,718)       (12,408)
   Other noncurrent assets                                  (9,875)        (7,826)       (10,861)
   Accounts payable and accrued expenses                    (2,461)        71,772         38,852
   Deferred revenue                                        (21,253)         6,487         24,313
   Income taxes payable                                     (4,798)        20,703         16,071
   Noncurrent liabilities and other                         40,293         14,376         16,642
                                                         ---------      ---------      ---------
Net cash provided by operating activities                  412,276        337,987        287,588
                                                         ---------      ---------      ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment, vehicles and
   leasehold improvements                                    1,795          2,062          1,280
Payments for purchase of equipment, vehicles,
   leasehold improvements and other                        (58,562)       (91,891)       (62,740)
Purchase of short-term interest-bearing
   investments, net                                       (344,095)      (237,069)            --
Investment in noncurrent assets                            (39,584)       (12,291)        (9,000)
Net cash (paid for) acquired in acquisitions              (213,180)            --         67,791
                                                         ---------      ---------      ---------
Net cash used in investing activities                     (653,626)      (339,189)        (2,669)
                                                         ---------      ---------      ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from employee stock options exercised               5,161         13,967         21,360
Repurchase of shares                                      (109,281)            --             --
Repurchase of convertible notes                            (48,934)            --             --
Payments under short-term finance arrangements                  --        (20,000)      (284,464)
Borrowings under short-term finance arrangements                --             --        301,933
Net proceeds from issue of long-term convertible
   notes                                                        --        488,000             --
Principal payments on capital lease obligations            (11,939)       (10,067)        (6,622)
                                                         ---------      ---------      ---------
Net cash (used in) provided by financing activities       (164,993)       471,900         32,207
                                                         ---------      ---------      ---------
Net (decrease) increase in cash and cash equivalents      (406,343)       470,698        317,126
Cash and cash equivalents at beginning of year             872,998        402,300         85,174
                                                         ---------      ---------      ---------
Cash and cash equivalents at end of year                 $ 466,655      $ 872,998      $ 402,300
                                                         =========      =========      =========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>
                                 AMDOCS LIMITED
               CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     YEAR ENDED SEPTEMBER 30,
                                                          ------------------------------------------------
                                                             2002              2001               2000
                                                          -----------       -----------        -----------
<S>                                                       <C>               <C>                <C>
SUPPLEMENTARY CASH FLOW INFORMATION
Interest and Income Taxes Paid
   Cash paid for:
     Income taxes, net of refunds                         $    75,371       $    77,429        $    49,262
     Interest                                                  11,221             2,901              2,614
</TABLE>

NON-CASH INVESTING AND FINANCING ACTIVITIES

         Capital lease obligations of $2,245, $13,116 and $15,732 were incurred
during the years ended September 30, 2002, 2001 and 2000, respectively, when the
Company (as defined below) entered into lease agreements for vehicles.

         In fiscal 2000, the Company issued 6,461 Ordinary Shares and options to
acquire 1,103 Ordinary Shares in connection with the acquisition of ITDS (as
defined below). The Company issued 13,846 exchangeable shares and options to
acquire 1,654 Ordinary Shares in connection with the acquisition of Solect (as
defined below). See Note 3.

             The accompanying notes are an integral part of these
                      consolidated financial statements.
<PAGE>
                                 AMDOCS LIMITED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE 1 - NATURE OF ENTITY

         Amdocs Limited (the "Company") is a leading provider of software
products and services to the communications industry. The Company and its
subsidiaries operate in one business segment, providing business support systems
and related services primarily for the communications industry. The Company
designs, develops, markets, supports, operates and provides outsourcing of
information system solutions primarily to leading communications companies
throughout the world.

         The Company is a Guernsey corporation, which directly or indirectly
holds several wholly owned subsidiaries in the Asia-Pacific region, Europe,
Israel, Latin America and North America. The majority of the Company's customers
are in North America, Europe, Latin America and the Asia-Pacific region. The
Company's main production and operating facilities are located in Israel, the
United States (U.S.), Cyprus, Canada and Ireland.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

         The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States.

CONSOLIDATION

         The financial statements include the accounts of the Company and its
wholly owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.

FUNCTIONAL CURRENCY

         As the U.S. dollar is the predominant currency by which the Company's
revenue and expenses are denominated, the U.S. dollar is the functional currency
for the Company and its subsidiaries.


CASH AND CASH EQUIVALENTS

         Cash and cash equivalents consist of cash and interest-bearing
investments with insignificant interest rate risk and original maturities of 90
days or less.

INVESTMENTS

         When excess funds are available, the Company invests in short-term
interest-bearing investments. The Company classifies all of its short-term
interest-bearing investments as available-for-sale securities. Such short-term
interest-bearing investments consist primarily of treasury notes, federal agency
securities, corporate bonds and money market funds, which are stated at market
value. Unrealized gains and losses are comprised of the difference between
market value and amortized costs of such securities
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


and are reflected, net of tax, as "other comprehensive income (loss)" in
shareholders' equity. Realized gains and losses on short-term interest-bearing
investments are included in earnings and are derived using the specific
identification method for determining the cost of securities.

         From time to time the Company also has made certain investments in
non-publicly traded companies. These investments are included in other
noncurrent assets in the Company's balance sheet and are generally carried at
cost. The Company monitors these investments for impairment and makes
appropriate reductions in carrying values if necessary.

EQUIPMENT, VEHICLES AND LEASEHOLD IMPROVEMENTS

         Equipment, vehicles and leasehold improvements are stated at cost.
Assets under capital leases are recorded at the present value of the future
minimum lease payments at the date of acquisition. Depreciation is computed
using the straight-line method over the estimated useful life of the asset,
which ranges from 2 to 10 years and includes the amortization of assets under
capitalized leases. Leasehold improvements are amortized over the shorter of the
estimated useful lives or the term of the related lease. Management reviews
property and equipment and other long-lived assets on a periodic basis to
determine whether events or changes in circumstances indicate that the carrying
amount of such assets may not be recoverable.

GOODWILL AND OTHER INTANGIBLE ASSETS

         The total purchase price of product line or business acquisitions
accounted for using the purchase method is allocated first to identifiable
assets and liabilities based on estimated fair values. The excess of the
purchase price over the fair value of net assets of purchased businesses is
recorded as goodwill. Goodwill associated with acquisitions completed prior to
July 1, 2001 was amortized on a straight-line basis over its estimated useful
life. For future goodwill amortization, see the discussion below under the
caption "Adoption of New Accounting Standards".

         Other intangible assets consist primarily of purchased computer
software, intellectual property rights, core technology and customer
arrangements.

         Purchased computer software is reported at the lower of amortized cost
or net realizable value, and is amortized over its estimated useful life based
on the pro-rata amount of the future revenue expected to be realized from the
software. This accounting policy results in accelerated amortization of
purchased computer software as compared to the straight-line method.

         Intellectual property rights, core technology, workforce-in-place and
customer arrangements acquired by the Company are amortized over their estimated
useful lives on a straight-line basis.
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


          Through the end of fiscal 2002, the Company considered whether there
are indicators of impairment that would require the comparison of the estimated
net realizable value of goodwill and other intangible assets to their carrying
value under Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of". Any impairment would be recognized when the expected future
operating cash flows derived from such intangible assets is less than their
carrying value.

COMPREHENSIVE INCOME

         The Company accounts for comprehensive income under the provisions of
SFAS No. 130, "Reporting Comprehensive Income", which established standards for
the reporting and display of comprehensive income and its components.
Comprehensive income represents the change in shareholders' equity during a
period from transactions and other events and circumstances from nonowner
sources. It includes all changes in equity except those resulting from
investments by owners and distributions to owners.

CONVERTIBLE NOTES

         The Company presents the outstanding principal amount of the
convertible notes as part of noncurrent liabilities. Accrued interest on the
convertible notes is included in "accounts payable and accrued expenses". The
Company amortizes the issuance cost related to the convertible notes on a
straight-line basis over the term of the convertible notes. Gain or loss on
repurchase of convertible notes represents the difference between the principal
amount and the purchase price. Such gain, aggregating $6,012, is included in
"interest income and other, net". The unamortized issuance cost calculated on a
pro-rata basis, related to the repurchased convertible notes, is included in
"interest income and other, net".

TREASURY STOCK

         The Company repurchases its Ordinary Shares from time to time on the
open market and holds such shares as treasury stock. The Company presents the
cost to repurchase treasury stock as a reduction of shareholders' equity.

INCOME TAXES

         The Company records deferred income taxes to reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting and tax purposes. Deferred taxes are
computed based on tax rates anticipated to be in effect (under applicable laws
at the time the financial statements are prepared) when the deferred taxes are
expected to be paid or realized. A valuation allowance is provided for deferred
tax assets if it is more likely than not these items will either expire before
the Company is able to realize their benefit, or that future deductibility is
uncertain. In the event that a valuation allowance relating to a business
acquisition is subsequently reduced, the adjustment will reduce the original
amount allocated to goodwill.
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


         Deferred tax liabilities and assets are classified as current or
noncurrent based on the classification of the related asset or liability for
financial reporting, or according to the expected reversal dates of the specific
temporary differences, if not related to an asset or liability for financial
reporting, and also include anticipated withholding taxes due on subsidiaries'
earnings when paid as dividends to the Company.

REVENUE RECOGNITION

         The Company usually sells its software as part of an overall solution
offered to a customer, in which significant customization and modification to
the Company's software is required. As a result, revenue generally is recognized
over the course of these long-term projects in conformity with Accounting
Research Bulletin ("ARB") No. 45 "Long Term Construction-Type Contracts",
Statement of Position ("SOP") 81-1 "Accounting for Performance of
Construction-Type and Certain Production-Type Contracts" and SOP 97-2 "Software
Revenue Recognition". Losses are recognized on contracts in the period in which
the loss is identified in accordance with SOP 81-1. Initial license fee for
software revenue is recognized as work is performed, under the percentage of
completion method of accounting. Subsequent license fee revenue is recognized
upon completion of the specified conditions in each contract. Service revenue
that involves significant ongoing obligations, including fees for customization,
implementation and modification, is recognized as work is performed, under the
percentage of completion method of accounting. Revenue from software solutions
that does not require significant customization and modification, is recognized
upon delivery, in accordance with the principles emphasized in Staff Accounting
Bulletin ("SAB") 101 "Revenue Recognition in Financial Statements" and SOP 97-2.
In outsourcing contracts, revenue from operation and maintenance of customers'
billing systems is recognized in the period in which the bills are produced.
Revenue from ongoing support services is recognized as work is performed.
Revenue from third-party hardware and software sales is recognized upon
delivery, and recorded at gross or net amount according to the criteria
established in Emerging Issues Task Force ("EITF") 99-19 "Recording Revenue
Gross as a Principal versus Net as an Agent" and SAB 101. Maintenance revenue is
recognized ratably over the term of the maintenance agreement, which in most
cases is one year or less. As a result of a substantial portion of the Company's
revenue being subject to the percentage of completion accounting method, the
Company's annual and quarterly operating results may be significantly affected
by the size and timing of customer projects and the Company's progress in
completing such projects.

         Many of the Company's agreements include multiple obligations. For
these multiple elements arrangements, the fair value of each component is
determined based on specific objective evidence for that element and revenue is
allocated to each component based upon its fair value. The revenue associated
with each element is recognized using the respective methodology discussed
above.
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


         Deferred revenue represents billings to customers for licenses,
services and third-party products for which revenue has not been recognized.
Unbilled accounts receivable include all amounts that had not been billed as of
the balance sheet date due to contractual or other arrangements with customers.
Allowances that are netted against accounts receivable, represent amounts
provided for accounts which their collectibility is not reasonably assured.

         Included in service revenue are sales of third-party products. Revenue
from sales of such products includes third-party computer hardware and computer
software products and was less than 10 percent of total revenue in each of
fiscal 2002, 2001 and 2000.

COST OF LICENSE AND COST OF SERVICE

         Cost of license and service consists of all costs associated with
providing services to customers, including identified losses on contracts and
warranty expense. Estimated losses on contracts are recognized in the period in
which the loss is identified in accordance with SOP 81-1. Estimated costs
related to warranty obligations are initially provided at the time the product
is delivered and are revised to reflect subsequent changes in circumstances and
estimates. Cost of license includes royalty payments to software suppliers,
amortization of purchased computer software and intellectual property rights.

         Included in cost of service are costs of third-party products
associated with reselling third-party computer hardware and software products to
customers, when revenue from third-party products is recorded at the gross
amount. Customers purchasing third-party products from the Company generally do
so in conjunction with the purchase of services.

RESEARCH AND DEVELOPMENT

         Research and development expenditures consist of costs incurred in the
development of new software modules and product offerings, either in conjunction
with customer projects or as part of the Company's internal product development
programs. Research and development costs, which are incurred in conjunction with
a customer project, are expensed as incurred.

         Based on the Company's product development process, technological
feasibility, as defined in SFAS No. 86, "Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed", is established upon
completion of a detailed program design or, in the absence thereof, completion
of a working model. Costs incurred by the Company after achieving technological
feasibility and before the product is ready for customer release have been
insignificant.

STOCK-BASED COMPENSATION

         The Company accounts for stock-based compensation in accordance with
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


Employees". Pursuant to this accounting standard, the Company records deferred
compensation for share options granted to employees at the date of grant based
on the difference between the exercise price of the options and the market value
of the underlying shares at that date. Deferred compensation is amortized to
compensation expense over the vesting period of the underlying options. No
compensation expense is recorded for stock options that are granted to employees
and directors at an exercise price equal to the fair market value of the
Ordinary Shares at the time of the grant. See Note 18 for pro forma disclosures
required in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation". Compensation expenses that are deductible in a tax return in a
period different from the one in which they are reported as expenses in
measuring net income are temporary differences that result in deferred taxes. To
the extent that compensation is not recorded for stock-based compensation, the
benefit of the related tax deduction is recorded as an increase to additional
paid-in capital in the period of the tax reduction.

FAIR VALUE OF FINANCIAL INSTRUMENTS

         The financial instruments of the Company consist mainly of cash and
cash equivalents, short-term interest-bearing investments, accounts receivable,
short-term financing arrangements, forward exchange contracts, lease obligations
and convertible notes. In view of their nature, the fair value of the financial
instruments, excluding the convertible notes (for which the fair value at
September 30, 2002 is approximately $400,000), included in the accounts of the
Company does not significantly vary from their carrying amount. The fair values
of the Company's foreign currency exchange contracts are estimated based on
quoted market prices of comparable contracts.

CONCENTRATION OF CREDIT RISK

         Financial instruments that potentially subject the Company to
concentration of credit risk consist principally of trade receivables. The
Company invests its excess cash primarily in highly liquid U.S.
dollar-denominated securities with major U.S. institutions. The Company does not
expect any credit losses with respect to these items. The Company's revenue is
generated primarily in North America and Europe. To a lesser extent, revenue is
generated in the Asia-Pacific region and Latin America. Most customers are among
the largest communications and directory publishing companies in the world (or
are owned by them). The Company's business is subject to the effects of general
global economic conditions and, in particular, market conditions in the
communications industry. The Company performs ongoing credit analyses of its
customer base and generally does not require collateral.

EARNINGS PER SHARE

         The Company accounts for earnings per share based on SFAS No. 128
"Earnings per Share". SFAS No. 128 requires companies to compute earnings per
share under two different methods, basic and diluted earnings per share, and to
disclose the methodology used for the calculations. Basic earnings per share are
calculated using the weighted
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


average number of shares outstanding during the period. Diluted earnings per
share is computed on the basis of the weighted average number of shares
outstanding and the effect of dilutive outstanding stock options using the
treasury stock method and the effect of dilutive outstanding convertible notes
using the if-converted method.

DERIVATIVES AND HEDGING

         The Company accounts for derivatives and hedging based on SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133
requires the Company to recognize all derivatives on the balance sheet at fair
value. If a derivative meets the definition of a hedge and is so designated,
depending on the nature of the hedge, changes in the fair value of the
derivative will either be offset against the change in fair value of the hedged
assets, liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value is recognized in
earnings.

RECLASSIFICATIONS

         Certain amounts in prior years' financial statements have been
reclassified to conform to the current year's presentation.

ADOPTION OF NEW ACCOUNTING STANDARDS

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other
Intangible Assets".

         SFAS No. 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001.

         SFAS No. 142 is effective for fiscal years beginning after December 15,
2001. Under SFAS No. 142, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but will be subject to periodic
impairment tests in accordance with the Statement. Other intangible assets will
continue to be amortized over their useful lives.

         Other intangible assets, such as workforce-in-place, will be
reclassified to goodwill, according to SFAS No. 141's new definition of
intangible assets.

         Effective October 1, 2002 the Company will adopt SFAS No. 142.
Subsequent to the adoption of the new rules, the Company will perform the first
of the required periodic impairment tests of goodwill and intangible assets
recorded as of October 1, 2002. Thereafter, a periodic impairment test will be
performed at least annually. The Company has not yet determined what the effect
of these tests will be on its earnings and financial position. The Company
recorded $204,561, $204,566 and $104,268, of goodwill and
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


workforce-in-place amortization during the years ended September 30, 2002, 2001
and 2000, respectively.

         Set forth below is the effect of non-amortization of goodwill and
workforce-in-place:

<TABLE>
<CAPTION>
                                                                     YEAR ENDED SEPTEMBER 30,
                                                          ---------------------------------------------
                                                             2002              2001               2000
                                                          ---------         ---------         ---------
<S>                                                       <C>               <C>               <C>
         Reported net (loss) income                       $  (5,061)        $  66,386         $   5,978
         Add back: goodwill and workforce-in-place
          amortizations                                     204,561           204,566           104,268
         Attributable tax effect                             (2,717)           (2,717)           (2,088)
                                                          ---------         ---------         ---------
         Adjusted net income                              $ 196,783         $ 268,235         $ 108,158
                                                          =========         =========         =========
         Adjusted basic earnings per share                $    0.89         $    1.21         $    0.51
                                                          =========         =========         =========
         Adjusted diluted earnings per share              $    0.88         $    1.18         $    0.50
                                                          =========         =========         =========
</TABLE>

         In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". SFAS No. 145 eliminates previous requirements to classify gains
and losses from extinguishment of debt as extraordinary items in earnings. Gains
or losses from extinguishment of debt for fiscal years beginning after May 15,
2002 shall not be classified as extraordinary items unless certain provisions
are met. Early adoption was encouraged. The Company adopted SFAS No. 145 in the
fourth quarter of fiscal 2002 in connection with the gain related to the
repurchase of its convertible notes. See Note 12.


USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

NOTE 3 - ACQUISITIONS

ITDS

         On November 30, 1999, the Company acquired International
Telecommunication Data Systems, Inc. ("ITDS"), a leading provider of solutions
to communications companies for outsourcing of billing operations. The total
purchase price of $189,034, based on a per share price of $28.25 for the
Company's Ordinary Shares, consisted of the issuance of 6,461 Ordinary Shares,
the grant of options to purchase 1,103 Ordinary Shares and transaction costs.
The acquisition was accounted for using the purchase method of accounting. The
fair market value of ITDS' assets and liabilities has been included in the
Company's balance sheet and the results of ITDS' operations are included
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


in the Company's consolidated statement of income, commencing on December 1,
1999. The value of acquired technology, which was independently determined,
included both existing technology and in-process research and development. The
valuation of these technologies was made by applying the income forecast method,
which considered the present value of cash flows by product lines. The fair
value of core technology was valued at $12,342 and was fully amortized over
approximately two years commencing on December 1, 1999. Purchased in-process
research and development, valued at $19,876, was charged as an expense
immediately following the completion of the acquisition, in accordance with FASB
Interpretation No. 4, "Applicability of FASB Statement No. 2 to Business
Combinations Accounted for by the Purchase Method" ("FIN 4"), since this
technology had not reached technological feasibility and had no alternative use.
This technology required additional development, coding and testing efforts
before technological feasibility could be determined. The fair value of customer
base was valued at $647 and the fair value of workforce-in-place was valued at
$5,407, each of which is being amortized over five years commencing on December
1, 1999. The excess of the purchase price over the fair value of the net assets
acquired, or goodwill, of $70,895 is being amortized over 15 years commencing on
December 1, 1999. Effective October 1, 2002, SFAS No. 142 will be adopted by the
Company. Under SFAS No. 142, amortization of goodwill will cease for
acquisitions completed prior to July 1, 2001. As a result, commencing fiscal
2003, goodwill related to the ITDS acquisition will no longer be amortized, but
will be subject to periodic impairment tests. Other intangible assets, such as
workforce-in-place, will be reclassified to goodwill, according to SFAS No.
141's new definition of intangible assets.

SOLECT

         On April 5, 2000, the Company acquired Solect Technology Group Inc.
("Solect"), a leading provider of customer care and billing software to IP
service providers. Under the terms of the combination agreement, all then
outstanding Solect common shares were exchanged for shares of a newly issued
class of exchangeable shares of Solect. The Solect exchangeable shares entitle
holders to dividends and other rights economically equivalent to the Company's
Ordinary Shares, including the right, through a voting trust, to vote at the
Company's shareholder meetings, and are exchangeable at the option of holders
into the Company's Ordinary Shares on a one-for-one basis. The total purchase
price of $1,087,711, based on a per share price of $69.875 for the Company's
Ordinary Shares, included the issuance of 13,846 exchangeable shares, the grant
of options to purchase 1,654 Ordinary Shares, as well as transaction costs. The
acquisition was accounted for using the purchase method of accounting. The fair
market value of Solect's assets and liabilities has been included in the
Company's balance sheet and the results of Solect's operations are included in
the Company's consolidated statement of income, commencing on April 6, 2000. The
value of acquired technology, which was independently determined, included both
existing technology and in-process research and development. The valuation of
these items was made by applying the income forecast method, which considered
the present value of cash flows by product
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


lines. The fair value of core technology was valued at $18,259 and was fully
amortized over two years commencing on April 6, 2000. Purchased in-process
research and development, valued at $50,443, was charged as an expense
immediately following the completion of the acquisition in accordance with FIN
4, since this technology had not reached technological feasibility and had no
alternative use. This technology required varying additional development, coding
and testing efforts before technological feasibility could be determined. The
fair value of customer base was valued at $1,211 and the fair value of
workforce-in-place was valued at $3,259, each of which is being amortized over
three years commencing on April 6, 2000. The excess of the purchase price over
the fair value of net assets acquired, or goodwill, of $985,271 is being
amortized over five years commencing on April 6, 2000. As a result of the
adoption of SFAS No. 142, commencing fiscal 2003, goodwill related to the Solect
acquisition will no longer be amortized, but will be subject to periodic
impairment tests. Other intangible assets, such as workforce-in-place, will be
reclassified as goodwill, according to SFAS No. 141's new definition of
intangible assets.

         Set forth below is the unaudited pro forma revenue, operating income,
net loss and loss per share figures for the year ended September 30, 2000, as if
ITDS and Solect had been acquired as of October 1, 1998, excluding the write-off
of purchased in-process research and development and other indirect
acquisition-related costs:

<TABLE>
<CAPTION>
                                                         YEAR ENDED
                                                     SEPTEMBER 30, 2000
                                                     ------------------
<S>                                                  <C>
       Revenue                                           $1,152,783
       Operating income                                      41,516
       Net loss                                             (25,516)
       Basic loss per share                                   (0.12)
       Diluted loss per share                                 (0.12)
</TABLE>

CLARIFY

         On November 28, 2001, the Company purchased from Nortel Networks
Corporation substantially all of the assets of its Clarify business ("Clarify"),
a leading provider of Customer Relationship Management ("CRM") software to
communications companies and other enterprise sectors. This acquisition
positioned the Company as a leading provider of CRM software to the
communications industry and, through the addition of Clarify's CRM software to
the Company's Business Support Systems offerings, reinforced the Company's
leadership in delivering a comprehensive portfolio of business software
applications. Following the acquisition, the Company has continued to sell
Clarify's CRM software to customers other than communications service providers,
although this is not the focus of the Company's business and, as a result, it
believes that revenue from such customers will slightly increase over time. The
aggregate initial purchase price for Clarify as of September 30, 2002 was
$212,000 in cash, including transaction costs of $8,250. The purchase price was
subject to final price adjustments that
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


were settled in October 2002 and resulted in an $11,265 reduction of the
purchase price to $200,735 in the first quarter of fiscal 2003. The acquisition
was accounted for as a business combination using the purchase method of
accounting, as required by SFAS No. 141. The fair market value of Clarify's
assets and liabilities has been included in the Company's balance sheet and the
results of Clarify's operations are included in the Company's consolidated
statements of operations, commencing on November 29, 2001. The Company obtained
a valuation of the intangible assets acquired in the Clarify transaction. The
value of acquired technology included both existing technology and in-process
research and development. The valuation of these items was made by applying the
income forecast method, which considered the present value of cash flows by
product lines. Of the $65,600 of acquired identifiable intangible assets,
$17,400 was assigned to in-process research and development and was written off
as of the closing date of the acquisition, in accordance with FIN 4. The fair
value assigned to core technology was $13,400 and is being amortized over two
years commencing on November 29, 2001. The fair value assigned to customer
arrangements was $34,800 and is being amortized over three years commencing on
November 29, 2001.The excess of the purchase price over the fair value of the
net assets acquired, or goodwill, as of September 30, 2002, was $161,258, of
which $156,478 is tax deductible. The amount assigned to goodwill was subject to
possible purchase price adjustments and other contingencies, which were settled
in October 2002, as discussed above. The goodwill is accounted for under SFAS
No. 142. In accordance with SFAS No. 142, goodwill from acquisitions after June
30, 2001 is no longer amortized, but is subject to periodic impairment tests.
Under the transition provisions of SFAS No. 142, goodwill for acquisitions prior
to July 1, 2001 will continue to be amortized only through September 30, 2002.
As a result, goodwill associated with the acquisition of Clarify is not
amortized, while goodwill associated with other acquisitions by the Company will
be amortized only through the end of fiscal 2002.

         The following is the preliminary allocation of the purchase price and
deferred tax liability:

<TABLE>
<S>                                                              <C>
        Net liabilities acquired                                 $  (11,987)
        Core technology                                              13,400
        Customer arrangements                                        34,800
        In-process research and development                          17,400
        Deferred tax liability                                       (2,871)
        Goodwill                                                    161,258
                                                                 ----------
                                                                 $  212,000
                                                                 ==========
</TABLE>

         As discussed above, the purchase price was subject to final price
adjustments that were settled in October 2002. The purchase price allocation
above is not final and will be affected by these adjustments.
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


         Set forth below is the unaudited pro forma revenue, operating income,
net income (loss) and per share figures for the years ended September 30, 2002
and 2001, as if Clarify had been acquired as of October 1, 2000, excluding the
write-off of purchased in-process research and development:

<TABLE>
<CAPTION>
                                                        YEAR ENDED SEPTEMBER 30,
                                                  -----------------------------------
                                                      2002                   2001
                                                  -------------          ------------
<S>                                               <C>                    <C>
       Revenue                                    $   1,633,565          $  1,776,063
       Operating income                                  54,962                27,218
       Net income (loss)                                  2,753               (33,521)
       Basic earnings (loss) per share                     0.01                 (0.15)
       Diluted earnings (loss) per share                   0.01                 (0.15)
</TABLE>

         As a result of SFAS No. 142, goodwill associated with acquisitions
completed after June 30, 2001 is not amortized and, accordingly, the pro forma
information above reflects no amortization of goodwill related to the Clarify
acquisition.

NOTE 4 - RELATED PARTY TRANSACTIONS

         The following related party balances are included in the balance
sheets:

<TABLE>
<CAPTION>
                                                                                AS OF SEPTEMBER 30,
                                                                          -------------------------------
                                                                              2002               2001
                                                                          ------------      -------------
<S>                                                                       <C>               <C>
          Accounts receivable, including unbilled of $100 and $4,479
            in 2002 and 2001, respectively                                $     55,458      $     104,096
          Prepaid expenses and other current assets (1)                          1,550                  -
          Other noncurrent assets (2)                                           48,453             10,091
</TABLE>

     --------------------

         (1)      Consists of interest receivable accrued on convertible
                  debentures issued to the Company by Certen Inc. ("Certen"), a
                  company formed by Bell Canada and the Company in January 2001.

         (2)      Consists of an investment in Certen in equity and convertible
                  debentures. The investment in Certen is accounted for under
                  the cost method, based on the Company's 10% ownership of
                  Certen. As part of its original commitment, the total
                  additional financial investment the Company will be making in
                  Certen is approximately $5,000, translated from Canadian
                  dollars, which is the functional currency for the Certen
                  transaction. The Company's exposure to currency fluctuation
                  with respect to the convertible debenture component of this
                  investment has been substantially hedged.
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


         The Company licenses software and provides computer systems integration
and related services to affiliates of SBC Communications, Inc., including
Certen. The following related party revenue is included in the statements of
operations:

<TABLE>
<CAPTION>
                                                                   YEAR ENDED SEPTEMBER 30,
                                                     ----------------------------------------------------
                                                           2002               2001               2000
                                                     -------------        ------------      -------------
<S>                                                  <C>                  <C>               <C>
       Revenue:
           License                                   $      30,551        $     37,356      $      15,888
           Service                                         314,341             264,278            144,859
</TABLE>

         The following related party expenses are included in the statements of
operations:

<TABLE>
<CAPTION>
                                                                       YEAR ENDED SEPTEMBER 30,
                                                            --------------------------------------------
                                                                2002             2001             2000
                                                            -----------      -----------       ---------
<S>                                                         <C>              <C>               <C>
       Operating expenses (1):
           Cost of service                                  $     2,642      $     3,232       $   2,814
           Selling, general and administrative                      336              663             700

       Interest income and other, net  (2)                        1,886               89               -
</TABLE>

     --------------------

         (1)      The Company leases office space on a month-to-month basis and
                  purchases other miscellaneous support services from affiliates
                  of a certain shareholder.

         (2)      Represents interest and exchange rate differences, net of
                  hedging, on the convertible debentures issued in connection
                  with the Certen transaction. Absent hedging, these amounts
                  would be $1,402, $89 and $0 for the years ended September 30,
                  2002, 2001 and 2000, respectively.

NOTE 5 - SHORT-TERM INTEREST-BEARING INVESTMENTS

         Short-term interest-bearing investments consisted of the following:

<TABLE>
<CAPTION>
                                                      AMORTIZED COST                      MARKET VALUE
                                                    AS OF SEPTEMBER 30,                AS OF SEPTEMBER 30,
                                               ----------------------------       ---------------------------
                                                   2002             2001             2002             2001
                                               ----------        ----------       ----------       ----------
<S>                                            <C>               <C>              <C>             <C>
      Federal agencies                         $  110,743        $  192,095       $  112,092       $  193,537
      U.S. government treasuries                   77,279                 -           79,276                -
      Corporate bonds                             100,544            29,692          102,646           30,468
      Mortgages (including government and
         corporate)                               254,593                 -          256,027                -
      Municipal bonds                              13,543                 -           13,543                -
      Other                                        17,355            13,053           17,580           13,064
                                               ----------        ----------       ----------       ----------
                                                  574,057           234,840          581,164          237,069
      Allowance for unrealized gain                 7,107             2,229                -                -
                                               ----------        ----------       ----------       ----------
      Total                                    $  581,164        $  237,069       $  581,164       $  237,069
                                               ==========        ==========       ==========       ==========
</TABLE>
<PAGE>
                                 AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


         As of September 30, 2002, short-term interest-bearing investments had
the following expected maturity dates:

                                            MARKET VALUE
                                            ------------
        2003                                  $280,204
        2004                                   155,887
        2005                                    90,386
        2006                                    44,841
        2007                                     9,846
                                              --------
        Total                                 $581,164
                                              ========



NOTE 6 - ACCOUNTS RECEIVABLE, NET

         Accounts receivable, net consists of the following:

<TABLE>
<CAPTION>
                                                     AS OF SEPTEMBER 30,
                                             ----------------------------------
                                                  2002                 2001
                                             -------------        -------------
<S>                                          <C>                  <C>
          Accounts receivable - billed       $     314,828        $     365,697
          Accounts receivable - unbilled            24,144               23,272
          Less - allowances                        (26,240)              (4,118)
                                             -------------        -------------
          Accounts receivable, net           $     312,732        $     384,851
                                             =============        =============
</TABLE>

NOTE 7 - EQUIPMENT, VEHICLES AND LEASEHOLD IMPROVEMENTS, NET

         Components of equipment, vehicles and leasehold improvements, net are:

<TABLE>
<CAPTION>
                                                   AS OF SEPTEMBER 30,
                                                ------------------------
                                                  2002            2001
                                                --------        --------
<S>                                             <C>             <C>
         Computer equipment                     $211,010        $171,155
         Vehicles furnished to employees          53,696          54,140
         Leasehold improvements                   54,319          49,137
         Furniture and fixtures                   38,672          31,434
                                                --------        --------
                                                 357,697         305,866
         Less accumulated depreciation           196,795         132,171
                                                --------        --------
                                                $160,902        $173,695
                                                ========        ========
</TABLE>

         The Company has entered into various arrangements for the leasing of
vehicles for periods of five years, carrying interest rates of LIBOR plus an
interest rate ranging 0.5% to 0.9% (between 2.29% to 2.69% as of September 30,
2002). The Company has accounted for these as capital leases and amortization
costs have been included in depreciation expense. Vehicles under capital lease
arrangements had cost of $49,582 and
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


$52,165 with related accumulated depreciation of $21,520 and $15,351 as of
September 30, 2002 and 2001, respectively.

         Capital lease payments, excluding interest, due over the next five
years are as follows:

<TABLE>
<CAPTION>
     FOR THE YEARS ENDED SEPTEMBER 30,
     ---------------------------------
<S>                                           <C>
     2003                                     $  10,347
     2004                                         6,639
     2005                                         6,304
     2006                                         2,079
     2007                                           118
</TABLE>


NOTE 8 - GOODWILL AND OTHER INTANGIBLE ASSETS, NET

         Goodwill and other intangible assets, net are:



<TABLE>
<CAPTION>
                                                  ESTIMATED               AS OF SEPTEMBER 30,
                                                  USEFUL LIFE       -------------------------------
                                                  (IN YEARS)          2002                  2001
                                                  ----------          ----                  ----
<S>                                               <C>               <C>                  <C>
Goodwill (1)(2)                                      5-15           $1,208,469           $1,057,314
Intellectual property rights and purchased
  computer software                                  2-10               91,758               77,358
Other intangible assets                               3-5               47,378               12,403
                                                                    ----------           ----------
                                                                     1,347,605            1,147,075
Less accumulated amortization                                          597,075              358,888
                                                                    ----------           ----------
                                                                    $  750,530           $  788,187
                                                                    ==========           ==========
</TABLE>


--------------------
(1)         In accordance with SFAS No. 142, goodwill from acquisitions
            completed after June 30, 2001 is not amortized, but is subject to
            periodic impairment tests. Under SFAS No. 142, amortization of
            goodwill will cease, for acquisitions completed prior to July 1,
            2001, on October 1, 2002.

(2)         In September 2002, the Company recorded an offsetting reduction of
            the goodwill related to Solect acquisition due to a release of tax
            valuation allowance. See Note 10.
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 9 - OTHER NONCURRENT ASSETS

         Other noncurrent assets consist of the following:

<TABLE>
<CAPTION>
                                                           AS OF SEPTEMBER 30,
                                                         ----------------------
                                                            2002          2001
                                                         --------      --------
<S>                                                      <C>           <C>
Funded employee benefit costs (1)                        $ 40,495      $ 33,624
Noncurrent investments, at cost (2)(3)                      7,596         6,964
Noncurrent investment in convertible debentures (2)        40,857         7,827
Convertible notes issuance cost, net                        5,934        10,667
Restricted cash and cash equivalents (4)                    5,072         4,818
Other                                                      10,225         7,053
                                                         --------      --------
                                                         $110,179      $ 70,953
                                                         ========      ========
</TABLE>


--------------------
(1)         See Note 16.

(2)         Consists of certain investments in non-publicly traded companies
            under the cost method, including investment in Certen. In January
            2001 the Company and Bell Canada formed Certen to provide customer
            care and billing solutions to Bell Canada and some of its affiliated
            companies. Certen is owned 90% by Bell Canada and 10% by the
            Company. Commencing on the 30-month anniversary of the transaction,
            convertible debentures issued by Certen to the Company will be
            convertible into an additional 35% ownership interest in Certen. The
            relative ownership interests of the Company might further be
            modified through the exercise of a series of contractual rights,
            commencing on the 30-month anniversary of the transaction. The
            Company provides the customer care and billing software required by
            Certen, including customization, installation, maintenance and other
            services. The Company accounts for the investment in Certen under
            the cost method. See Note 4.

(3)         In fiscal 2002, the Company recorded pretax charges of $5,500 to
            adjust the carrying value of two investments, accounted for by the
            Company under the cost method. In fiscal 2001, the Company recorded
            pretax charges of $6,750 to adjust the carrying value of four
            investments, accounted for by the Company under the cost method.
            Following these adjustments, as of September 30, 2002, the Company
            had one remaining investment, the investment in Certen, accounted
            for under the cost method. The Company continues to monitor the
            economic and financial aspects of its remaining interests in this
            investment.

(4)         The Company was required to maintain restricted cash and cash
            equivalents balances relating to letters of credit and bank
            guarantees.
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 10 - INCOME TAXES

         The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                      YEAR ENDED SEPTEMBER 30,
              -----------------------------------------
                2002             2001            2000
              ---------       ---------      ---------
<S>           <C>             <C>            <C>
Current       $  75,185       $ 110,163      $  80,076
Deferred         (1,665)          5,018         (1,196)
              ---------       ---------      ---------
              $  73,520       $ 115,181      $  78,880
              =========       =========      =========
</TABLE>


         All income taxes are from continuing operations reported by the Company
in the applicable taxing jurisdiction. Income taxes also include anticipated
withholding taxes due on subsidiaries' earnings when paid as dividends to the
Company.

         Deferred income taxes are comprised of the following components:

<TABLE>
<CAPTION>
                                                                         AS OF SEPTEMBER 30,
                                                                        ---------------------
                                                                        2002            2001
                                                                      --------       --------
<S>                                                                   <C>            <C>
Deferred tax assets:
  Deferred revenue                                                    $ 23,303       $ 18,033
  Accrued employee costs                                                19,367         20,589
  Intangible assets, computer software and intellectual property        14,790          6,553
  Net operating loss carry forwards                                     22,657         30,358
  Other                                                                 11,899         10,275
  Valuation allowances                                                 (10,704)       (27,907)
                                                                      --------       --------
  Total deferred tax assets                                             81,312         57,901
                                                                      --------       --------
Deferred tax liabilities:
  Anticipated withholdings on subsidiaries' earnings                   (42,149)       (32,730)
  Intangible assets, computer software and intellectual property       (10,007)        (7,410)
  Other                                                                 (8,522)        (2,185)
                                                                      --------       --------
  Total deferred tax liabilities                                       (60,678)       (42,325)
                                                                      --------       --------
Net deferred tax assets                                               $ 20,634       $ 15,576
                                                                      ========       ========
</TABLE>
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


         The effective income tax rate varied from the statutory Guernsey tax
rate as follows:

<TABLE>
<CAPTION>
                                                            YEAR ENDED SEPTEMBER 30,
                                                          ----------------------------
                                                          2002        2001        2000
                                                          ----        ----        ----
<S>                                                       <C>         <C>         <C>
Statutory Guernsey tax rate                                20%         20%         20%
Guernsey tax-exempt status                                (20)        (20)        (20)
Foreign taxes                                              28          30          30
                                                          ----        ----        ----
Income tax rate before effect of
  acquisitions-related costs and restructuring
  charges                                                  28          30          30
Effect of acquisition-related costs                        48          33          19
                                                          ----        ----        ----
Income tax rate before restructuring charges,
  in-process research and development and gain from
  the repurchase of Notes                                  76          63          49
Restructuring charges and in-process research
  development and gain from the repurchase of Notes        31          --          44
                                                          ----        ----        ----
Effective income tax rate                                 107%         63%         93%
                                                          ====        ====        ====
</TABLE>

          These high effective tax rates were primarily attributable to
amortization of goodwill related to the Company's acquisitions, much of which is
not tax deductible. In the year ended September 30, 2002 the Company's effective
tax rate was also adversely affected by the fixed non-deductible expenditures
representing a larger component of the Company's pretax income.

          As of September 30, 2002, the Company had deferred tax assets of
$22,657 derived primarily from Canadian net operating loss carry-forwards. The
net operating loss carry-forwards will expire within eight to ten years. Until
fiscal 2002 the realization of these assets through future taxable earnings was
uncertain, and as a result a valuation allowance was recorded. As of September
30, 2002, the Company estimated that operating losses acquired in the Solect
transaction would be realized through future taxable earnings. As a result,
related valuation allowance of $8,957 was released as an offsetting reduction of
the goodwill recorded in the Solect transaction. The remainder of the valuation
allowance of $10,704 is related to Canadian operating losses other than those
acquired in the Solect transaction.
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE 11 - SHORT-TERM FINANCING ARRANGEMENTS

         The Company's financing transactions are described below:

         As of September 30, 2002, the Company had available short-term general
revolving lines of credit totaling $40,000. During fiscal 2002 and as of
September 30, 2002, there was no outstanding balance under any of these credit
lines.

         In addition, as of September 30, 2002, the Company had credit
facilities totaling $43,840, limited for the use of letters of credit and bank
guarantees from various banks. Outstanding letters of credit and bank guarantees
as of September 30, 2002 totaled $24,460. These were mostly supported by a
combination of the credit facilities described above and restricted cash
balances that the Company maintains with the issuing banks. See Note 9.

NOTE 12 - CONVERTIBLE NOTES

         In May 2001 the Company issued $500,000 aggregate principal amount of
2% Convertible Notes due June 1, 2008 (the "Notes"). The Company is obligated to
pay interest on the Notes semi-annually on June 1 and December 1 of each year.
The Notes are senior unsecured obligations of the Company and rank equal in
right of payment with all of existing and future senior unsecured indebtedness
of the Company. The Notes are convertible, at the option of the holders at any
time before the maturity date, into Ordinary Shares of the Company at a
conversion rate of 10.8587 shares per one thousand dollars principal amount,
representing a conversion price of approximately $92.09 per share. The Notes are
subject to redemption at any time on or after June 1, 2006, in whole or in part,
at the option of the Company, at a redemption price of 100% of the principal
amount plus accrued and unpaid interest. The Notes are subject to repurchase, at
the holders' option, on June 1, 2004 and June 1, 2006, at a repurchase price
equal to 100% of the principal amount plus accrued and unpaid interest, if any,
on such repurchase date. The Company may choose to pay the repurchase price in
cash, Ordinary Shares or a combination of cash and Ordinary Shares.

         On July 23, 2002, the board of directors authorized the Company to
repurchase the Notes, in such amounts, at such prices and at such times
considered appropriate. Such repurchases may be made on the open market, in
privately negotiated transactions or otherwise, in accordance with any
applicable laws and the terms of the Notes. During the fourth quarter of fiscal
2002, the Company had repurchased $54,946 aggregate principal amount of the
Notes at an average price of $890 per $1,000 principal amount, resulting in a
gain of $6,012. See Note 14. The Company funded these repurchases, and intends
to fund any future repurchases, with available funds. As of September 30, 2002,
$445,054 aggregate principal amount of the Notes was outstanding.
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE 13 - NONCURRENT LIABILITIES AND OTHER

         Noncurrent liabilities and other consist of the following:

<TABLE>
<CAPTION>
                                                      AS OF SEPTEMBER 30,
                                                      --------------------
                                                      2002           2001
                                                    --------      --------
<S>                                                 <C>           <C>
Accrued employees costs                             $ 66,850      $ 62,663
Noncurrent customer advances                          24,146            --
Long-term portion of capital lease obligations        15,138        24,779
Noncurrent forward exchange obligations                   --         2,265
Accrued lease obligations                             14,031         2,166
Other                                                  3,914         1,086
                                                    --------      --------
                                                    $124,079      $ 92,959
                                                    ========      ========
</TABLE>


NOTE 14 - INTEREST INCOME AND OTHER, NET

         Interest income and other, net consists of the following:

<TABLE>
<CAPTION>
                                              YEAR ENDED SEPTEMBER 30,
                                      ---------------------------------------
                                         2002           2001            2000
                                      --------       --------       --------
<S>                                   <C>            <C>            <C>
Interest income                       $ 31,856       $ 32,156       $ 14,254
Interest expense                       (16,004)        (8,678)        (2,528)
Gain from repurchase of Notes(*)         6,012             --             --
Other, net                              (2,566)        (1,192)          (992)
                                      --------       --------       --------
                                      $ 19,298       $ 22,286       $ 10,734
                                      ========       ========       ========
</TABLE>

--------------------

(*) See Note 12.

NOTE 15 - CONTINGENCIES

Commitments

         The Company leases office space under non-cancelable operating leases
in various countries in which it does business. Future minimum non-cancelable
lease payments required after October 1, 2002 are as follows:

<TABLE>
<CAPTION>
     FOR THE YEARS ENDED SEPTEMBER 30,
     ---------------------------------
<S>                                                          <C>
     2003                                                    $    43,794
     2004                                                         40,681
     2005                                                         36,540
     2006                                                         32,945
     2007                                                         23,805
     Thereafter                                                   26,416
                                                             -----------
                                                             $   204,181
                                                             ===========
</TABLE>
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


         Future minimum non-cancelable lease payments, as stated above, do not
reflect committed future sublease income of $2,634, $2,681, $1,794, $1,444, $914
and $1,746 for the years ended September 30, 2003, 2004, 2005, 2006, 2007 and
thereafter, respectively. Of the $192,968 net operating leases, net of $11,213
of sublease income, $11,087 has been included in accrued restructuring charges
as of September 30, 2002.

         Rent expense, including accruals for future lease losses, was
approximately $39,141, $40,506 and $20,400 for fiscal 2002, 2001 and 2000,
respectively.

Litigation

         Beginning on June 24, 2002, a number of complaints were filed by
holders of the Company's Ordinary Shares against the Company and four of its
officers and directors, in the United States District Courts for the Eastern
District of Missouri and the Southern District of New York. The complaints
allege violations of the Securities Exchange Act of 1934, as amended, and Rule
10b-5 promulgated thereunder. Each plaintiff seeks to represent a putative class
of all purchasers of the Company's Ordinary Shares between July 18, 2000 (or, in
some of the complaints, July 24, 2001) and June 20, 2002. The complaints
generally allege that, during that period, the Company and the individual
defendants made false or misleading statements, in press releases and Securities
and Exchange Commission filings, regarding among other things the Company's
future prospects, backlog, revenue, gross margin, acquisitions and accounting
practices. Each plaintiff seeks unspecified monetary damages and other relief
against all defendants. The parties in the New York cases have stipulated to
transfer them to the Eastern District of Missouri. The court has not yet
appointed a lead plaintiff. The Company disputes the allegations of wrongdoing
in these complaints and intends to defend itself vigorously.

NOTE 16 - EMPLOYEE BENEFITS

         The Company accrues severance pay for the employees of its Israeli
operations in accordance with Israeli law and certain employment procedures on
the basis of the latest monthly salary paid to these employees and the length of
time that they have worked for the Israeli operations. The severance pay
liability, which is included in noncurrent liabilities and other, is partially
funded by amounts on deposit with insurance companies, which are included in
other noncurrent assets. Severance expenses were approximately $9,953, $17,242
and $17,614 for fiscal 2002, 2001 and 2000, respectively.

            The Company sponsors defined contribution plans covering certain
employees in the U.S., U.K. and Canada. The plans provide for Company matching
contributions based upon a percentage of the employees' voluntary contributions.
The Company's fiscal 2002, 2001 and 2000 plan contributions were not
significant.
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE 17 - CAPITAL TRANSACTIONS

         The following are details of the Ordinary Shares issued and
outstanding:

<TABLE>
<CAPTION>
                                    AS OF SEPTEMBER 30,
                                  ----------------------
                                    2002            2001
                                  -------        -------
<S>                               <C>            <C>
Voting Ordinary Shares            220,780        211,849
Non-Voting Ordinary Shares          2,535         10,779
                                  -------        -------
Ordinary Shares issued            223,315        222,628
Less - treasury stock              (7,732)            --
                                  -------        -------
Ordinary Shares outstanding       215,583        222,628
                                  =======        =======
</TABLE>


         All the Non-Voting Ordinary Shares are held by a single shareholder.
Under the Company's Articles of Association, upon the transfer or sale of such
shares to another party, the shares automatically convert to Voting Ordinary
Shares.

         The Company's capital transactions are described below:

         On November 30, 1999 the Company issued 6,461 Ordinary Shares in
connection with the acquisition of ITDS. On April 5, 2000 the Company issued
13,846 exchangeable shares in connection with the acquisition of Solect. See
Note 3.

         Total proceeds from the exercise of employee stock options amounted to
$5,161, $13,967 and $21,360 in fiscal 2002, 2001 and 2000, respectively.

         On November 6, 2001, the Company announced that its board of directors
had approved a twelve-month share repurchase program authorizing the repurchase
of up to 11,000 Ordinary Shares, or approximately 5% of the Company's
outstanding Ordinary Shares as of that date. On April 23, 2002, the Company
announced that its board of directors had expanded the existing stock repurchase
plan to authorize the purchase of up to 20,000 shares, or approximately 9% of
the Company's outstanding Ordinary Shares. Under the program, from time to time
through November 2002, the Company was authorized to repurchase shares on the
open market, in privately negotiated transactions or otherwise, in accordance
with any applicable laws, and at times and prices considered appropriate by the
Company. During fiscal 2002 the Company repurchased 7,732 Ordinary Shares, at an
average price of $14.13 per share. The Company funded these repurchases, and
intends to fund any future repurchases, with available funds.

NOTE 18 - STOCK OPTION AND INCENTIVE PLAN

         In January 1998, the Company first adopted, and in each of January
1999, January 2000 and January 2001 the Company has amended, the Amdocs Limited
1998 Stock Option and Incentive Plan (the "Plan"). Under the provisions of the
Plan, 32,300
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


Ordinary Shares are available to be granted to officers, directors, employees
and consultants. Such options fully vest over one to nine years and have a term
of ten years.

         On November 30, 1999, the Company issued additional options to purchase
1,103 Ordinary Shares in connection with the acquisition of ITDS to replace
issued ITDS options. On April 5, 2000, the Company issued additional options to
purchase 1,654 Ordinary Shares in connection with the acquisition of Solect to
replace issued Solect options. See Note 3.

         The following table summarizes information about share options, as well
as changes during the years ended September 30, 2002, 2001 and 2000:

<TABLE>
<CAPTION>
                                           NUMBER OF       WEIGHTED
                                            SHARE           AVERAGE
                                           OPTIONS       EXERCISE PRICE
                                           ---------     --------------
<S>                                       <C>            <C>
Outstanding as of October 1, 1999          6,236.9       $  11.75

Granted                                    4,948.7          52.82
Options exchanged in acquisitions          2,756.7          18.24
Exercised                                 (2,057.5)         10.38
Forfeited                                   (656.7)         30.11
                                          ---------
Outstanding as of September 30, 2000      11,228.1          30.62

Granted                                    5,745.2          50.15
Exercised                                 (1,462.8)          9.73
Forfeited                                 (1,359.3)         49.59
                                          ---------
Outstanding as of September 30, 2001      14,151.2          38.89

Granted                                   16,648.5          23.88
Exercised                                   (688.9)          7.49
Forfeited                                 (2,418.8)         44.02
                                          ---------
Outstanding as of September 30, 2002      27,692.0          30.30
                                          =========
</TABLE>
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


         The following table summarizes information about share options
outstanding as of September 30, 2002:

<TABLE>
<CAPTION>
                            OUTSTANDING AS OF                                                  EXERCISABLE AS OF
                           SEPTEMBER 30, 2002                                                SEPTEMBER 30, 2002
----------------------------------------------------------------------------         --------------------------------
                                                WEIGHTED
                                                AVERAGE
                                               REMAINING            WEIGHTED
                                              CONTRACTUAL            AVERAGE                              WEIGHTED
                            NUMBER                LIFE              EXERCISE           NUMBER             AVERAGE
   EXERCISE PRICE        OUTSTANDING           (IN YEARS)             PRICE          EXERCISABLE       EXERCISE PRICE
   --------------        -----------          -----------           --------         -----------       --------------
<S>                      <C>                  <C>                   <C>              <C>               <C>
$ 0-3.01                   993.9                   5.70               $ 2.02            857.3               $ 1.95
  6.40-18.60             6,163.5                   9.23                 8.70            766.1                11.93
 20.85-28.60             4,238.3                   8.41                26.36            418.7                23.91
 30.94-31.90             6,257.0                   9.20                31.01              4.6                30.94
 33.07-47.25             5,732.8                   8.51                37.63          1,256.6                38.29
 47.90-65.01             3,528.4                   7.98                58.58          1,240.1                58.34
 66.25-78.31               778.1                   7.81                71.04            358.5                71.03
</TABLE>


         The weighted average grant-date fair value of the 16,648.5, 5,745.2 and
4,948.7 options granted in fiscal 2002, 2001 and 2000, respectively, amounted to
$10.93, $23.07 and $35.71, respectively, per option. The Company utilized the
Black-Scholes option-pricing model to estimate fair value, utilizing the
following assumptions for the year (all in weighted averages):

<TABLE>
<CAPTION>
                                    YEAR ENDED SEPTEMBER 30,
                                ------------------------------
                                 2002        2001        2000
                                -----       -----       -----
<S>                             <C>         <C>         <C>
Risk-free interest rate          2.85%       5.15%       5.75%
Expected life of options         2.89        3.26        3.23
Expected annual volatility      0.756       0.660       1.086
Expected dividend yield          None        None        None
</TABLE>


         Had compensation cost for the Company's options been determined based
on fair value at the grant dates for awards made in fiscal 2002, 2001 and 2000
in accordance with SFAS No. 123, the Company's pro forma net loss and loss per
share would have been as follows:

<TABLE>
<CAPTION>
                                                   YEAR ENDED SEPTEMBER 30,
                                      ---------------------------------------------
                                          2002               2001             2000
                                      -----------       -----------     -----------
<S>                                   <C>               <C>             <C>
Pro forma net loss                    $  (115,224)      $    (3,502)    $   (23,022)
Pro forma diluted loss per share            (0.52)            (0.02)          (0.11)
</TABLE>
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE 19 - (LOSS) EARNINGS PER SHARE

         The following table sets forth the computation of basic and diluted
(loss) earnings per share:

<TABLE>
<CAPTION>
                                                                    YEAR ENDED SEPTEMBER 30,
                                                             ----------------------------------------
                                                                2002            2001            2000
                                                             ---------       ---------      ---------
<S>                                                          <C>             <C>            <C>
Numerator:
    Net (loss) income                                        $  (5,061)      $  66,386      $   5,978
                                                             =========       =========      =========
Denominator:
   Denominator for basic (loss) earnings per share -
     weighted average number of shares outstanding (1)         220,361         222,002        212,005
   Effect of dilutive stock options granted (2)                     --           4,830          4,930
                                                             ---------       ---------      ---------
   Denominator for dilutive (loss) earnings per share -
     adjusted weighted average shares and assumed
     conversions (1)                                           220,361         226,832        216,935
                                                             =========       =========      =========
Basic (loss) earnings per share                              $   (0.02)      $    0.30      $    0.03
                                                             =========       =========      =========
Diluted (loss) earnings per share                            $   (0.02)      $    0.29      $    0.03
                                                             =========       =========      =========
</TABLE>


--------------------

(1)         The weighted average number of shares outstanding includes
            exchangeable shares issued to shareholders of Amdocs Canada, Inc.
            (formerly Solect) pursuant to the Company's acquisition of Solect in
            April 2000, which are exchangeable for the Company's Ordinary Shares
            on a one-for-one basis.

(2)         Due to net loss, 2,201 anti-dilutive securities are excluded from
            the computation of diluted average number of shares outstanding.

         The effect of the Notes on diluted (loss) earnings per share was
anti-dilutive for the years ended September 30, 2002 and 2001, and therefore was
not included in the calculation above. The weighted average effect of the
repurchase of Ordinary Shares by the Company has been included in the
calculation of basic (loss) earnings per share. See Note 17.
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE 20 - SEGMENT INFORMATION AND SALES TO SIGNIFICANT CUSTOMERS

         The Company and its subsidiaries operate in one business segment,
providing business support systems and related services primarily for the
communications industry.

     GEOGRAPHIC INFORMATION

         The following is a summary of revenue and long-lived assets by
geographic area. Revenue is attributed to geographic region based on the
location of the customers.

<TABLE>
<CAPTION>
                                YEAR ENDED SEPTEMBER 30,
                       ------------------------------------------
                           2002            2001            2000
                       ----------      ----------      ----------
<S>                    <C>             <C>             <C>
     REVENUE
North America          $  999,037      $  825,309      $  510,129
Europe                    466,098         549,106         474,300
Rest of the world         148,430         159,495         133,891
                       ----------      ----------      ----------
Total                  $1,613,565      $1,533,910      $1,118,320
                       ==========      ==========      ==========

LONG-LIVED ASSETS
North America (1)      $  842,782      $  866,846      $1,041,383
Israel (2)                 77,988          88,794          85,518
Rest of the world          60,346          43,571          33,466
                       ----------      ----------      ----------
Total                  $  981,116      $  999,211      $1,160,367
                       ==========      ==========      ==========
</TABLE>


--------------------
(1)         Primarily goodwill, computer software and intellectual property
            rights.

(2)         Primarily computers and vehicles.



     REVENUE AND CUSTOMER INFORMATION

         Customer care and billing, customer relationship management or CRM, and
order management systems (collectively, "CC&B") include systems for wireline,
wireless, voice, data, broadband, content, electronic and mobile commerce and IP
services. Directory includes directory sales and publishing systems for
publishers of both traditional printed yellow pages and white pages directories
and electronic Internet directories.

<TABLE>
<CAPTION>
                         YEAR ENDED SEPTEMBER 30,
               ------------------------------------------
                  2002            2001             2000
               ----------      ----------      ----------
<S>            <C>             <C>             <C>
CC&B           $1,439,980      $1,379,654      $  986,553
Directory         173,585         154,256         131,767
               ----------      ----------      ----------
Total          $1,613,565      $1,533,910      $1,118,320
               ==========      ==========      ==========
</TABLE>
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


     SALES TO SIGNIFICANT CUSTOMERS

         The following table summarizes the percentage of sales to significant
customers groups (when they exceed 10 percent of total revenue for the year).

<TABLE>
<CAPTION>
                                                  YEAR ENDED SEPTEMBER 30,
                                                  ------------------------
                                                   2002     2001     2000
                                                   ----     ----     ----
<S>                                                <C>      <C>      <C>
Nextel Communications group                         12%      10%      (*)%
SBC Communications Inc. group, a related party      11       13       13
Vodafone group                                      10       11       14
</TABLE>

--------------------
(*) Less than 10 percent of total revenue



NOTE 21 - OPERATIONAL EFFICIENCY AND COST REDUCTION PROGRAM

         In October 2001, as part of a plan to achieve increased operational
efficiency and to more closely monitor and reduce costs, the Company
consolidated its Stamford, Connecticut data center into its Champaign, Illinois
facility, and closed the Stamford facility. As a direct result of this closure,
the Company recorded a nonrecurring charge of $13,311 in the first quarter of
fiscal 2002, primarily for the write-off of leasehold improvements and rent
obligations, with the remainder for employee separation costs. In addition, as
part of a general effort to reduce costs, the Company has decreased its overall
commitments for employee compensation, through a lesser reliance on fixed
compensation programs and a greater reliance on discretionary arrangements.

         On June 20, 2002, the Company announced its intention to implement a
cost reduction program to reduce costs by approximately 10% in response to a
decline of the Company's forecasted revenue for the third and fourth quarters of
fiscal 2002. The decline resulted from, among other factors, slowdowns in
customer buying decisions in the third quarter of fiscal 2002, stemming from
overall reductions in the capital investment budgets of many communications
service providers, leading to fewer new contracts for the Company than it had
expected, as well as smaller than expected initial spending commitments and
reduced discretionary spending under the Company's contracts with some of its
customers.

         The Company recorded a charge of $20,919 in the fourth quarter of
fiscal 2002, consisting primarily of employee separation costs in connection
with the elimination of approximately one thousand positions of software and
information technology specialists and administrative professionals that have
been eliminated by the Company, with the remainder for the write-off of
leasehold improvements and rent obligations. Except for certain lease
termination costs that will be paid over the respective lease terms, the
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


Company expects to pay substantially all of the remaining accrual balance of the
cost reduction program in the first quarter of fiscal 2003.

         These charges are included in "restructuring charges, in-process
research and development and other indirect acquisition-related costs" for the
year ended September 30, 2002.

         As of September 30, 2002, the remaining restructuring expense reserves
were $14,884. The remaining employee separation costs are expected to be paid
out through the first quarter of fiscal 2003. Facility related costs are
expected to be paid out through April 2012. Actual future cash requirements may
differ materially from the accrual as of September 30, 2002, particularly if
actual sublease income is significantly different from current estimates.

         A summary of restructuring activities along with respective remaining
reserves follows:

<TABLE>
<CAPTION>
                                                                                    Balance as of
                           Restructuring Charges       Cash           Non-cash    September 30, 2002
                           ---------------------       ----           --------    ------------------
                          Plan 1(*)    Plan 2(*)
                          ---------    ---------
<S>                      <C>           <C>            <C>            <C>          <C>
Employee separation
  costs                  $  2,530      $ 11,353       $(10,525)      $     --           $  3,357
Facilities                  6,255         7,880         (3,048)            --             11,087
Asset write-offs            4,126         1,584             --         (5,710)                --
Other                         400           102            (62)            --                440
                         --------      --------       --------       --------           --------
                         $ 13,311      $ 20,919       $(13,635)      $ (5,710)          $ 14,884
                         ========      ========       ========       ========           ========
</TABLE>


--------------------
(*)         Plan 1 refers to the closure of the Stamford facility in the first
            quarter of fiscal 2002. Plan 2 refers to the cost reduction program
            implemented in the fourth quarter of fiscal 2002.

For additional cost reduction measures, see Note 24.
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 22 - FINANCIAL INSTRUMENTS

         The Company enters into forward contracts to sell foreign currency in
order to hedge its exposure associated with some firm commitments from customers
in non-U.S. dollar-based currencies and treats these for accounting purposes as
fair value hedges. The Company also enters into forward contracts in foreign
currency to reduce the exposure associated with estimated receipts from
customers and with anticipated costs (primarily personnel costs), in non-U.S.
dollar-based currencies and treats these as cash flow hedges. The derivative
financial instruments are afforded hedge accounting because they are effective
in managing foreign exchange risks and are appropriately assigned to the
underlying exposures. The Company does not engage in currency speculation.
Generally, the Company measures the differential between forward rates and spot
rates on forward exchange contracts as the inherent ineffectiveness of a hedging
arrangement. Accordingly, changes in the fair value of forward exchange
contracts, which are classified as fair value hedges, offset the change in the
fair value of the hedged item to the extent of the arrangement's effectiveness.
The effective portion of the change in the fair value of forward exchange
contracts, which are classified as cash flow hedges, is recorded as
comprehensive income until the underlying transaction is recognized in earnings.
Forward contracts, which are not designated as hedging instruments under SFAS
No. 133, are used to hedge the impact of the variability in exchange rates on
certain accounts receivables and investment in Certen convertible debentures
denominated in foreign currencies.

         The fair values of the forward derivatives were $(7,125) and $(11,298)
on September 30, 2002 and 2001, respectively. The Company currently enters into
forward exchange contracts exclusively with major financial institutions.

         During fiscal 2002 and 2001, there were no significant gains or losses
recognized in earnings for hedge ineffectiveness, and the Company did not
recognize in earnings any significant gains or losses resulting from a hedged
firm commitment that no longer qualified as a fair value hedge. During fiscal
2002, the Company recognized in earnings $25 loss resulting from hedged
forecasted cash flows that no longer qualified as cash flow hedges.

         Derivatives gains and losses, that are included in other comprehensive
income, are reclassified into earnings at the time the forecasted revenue or
operation expenses are recognized. The Company estimates that a $4,874
derivative net loss included in other comprehensive income will be reclassified
into earnings within the next twelve months.
<PAGE>
                                 AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE 23 - SELECTED QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

         The following are details of the unaudited quarterly results of
operations for the three months ended:

<TABLE>
<CAPTION>
                                           SEPTEMBER
                                              30,           JUNE 30,        MARCH 31,    DECEMBER 31,
                                           ---------       ---------       ---------     ------------
<S>                                        <C>             <C>             <C>            <C>
2002 (*)
Revenue                                    $ 355,520       $ 380,135       $ 455,269      $ 422,641
Operating (loss) income                      (25,385)          2,503          50,813         21,229
Net (loss) income                             (8,986)        (26,851)         26,441          4,334
Basic and diluted (loss) earnings per
  share                                        (0.04)          (0.12)           0.12           0.02

2001
Revenue                                    $ 415,447       $ 404,007       $ 372,289      $ 342,167
Operating income                              49,529          44,864          37,356         27,532
Net income                                    19,905          18,492          15,413         12,576
Basic and diluted earnings per share            0.09            0.08            0.07           0.06
</TABLE>


--------------------
(*)         In fiscal 2002, the fiscal quarters ended December 31, 2001 and
            September 30, 2002 included restructuring charges, purchased
            in-process research and development expense and gain from the
            repurchase of Notes of $30,711, $20,919 and $6,012, respectively.

NOTE 24 - SUBSEQUENT EVENT

         On November 27, 2002 the Company announced a series of measures
designed to reduce costs and improve productivity. As part of this plan, the
Company will reduce its workforce by approximately 400 positions out of a total
workforce of 9,000 employees. The reductions will be from different centers
around the world. In addition, the Company will implement other cost reduction
measures, including travel cuts and reductions in other discretionary costs.
<PAGE>

VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                      Additions
------------------------------------------------------------------------------------------------------------
Description               Balance at      Charged to    Charged to other       Deductions      Balance at
                          beginning of    costs and     accounts                               end of period
                          period          expenses
------------------------------------------------------------------------------------------------------------
<S>                       <C>             <C>           <C>                    <C>             <C>
Accounts receivable         4,118            --             22,859(*)               (737)             26,240
allowances
Valuation allowances       27,907            --                 --               (17,203)             10,704
</TABLE>

(*) Includes accounts receivable allowance of $13,777 acquired as part of the
acquisition of Clarify.
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<S>       <C>
1.        Memorandum and Articles of Association of Amdocs Limited
          (incorporated by reference to Exhibits 3.1 and 3.2 to
          Amdocs' Registration Statement on Form F-1 dated June 19,
          1998; Registration No. 333-8826)



2.a.1     Indenture dated May 30, 2001 between Amdocs and United
          States Trust Company of New York (incorporated by reference
          to Exhibit 4.1 to Amdocs' Form 6-K dated May 31, 2001)



2.a.2     Registration Rights Agreement dated May 30, 2001 between
          Amdocs and Goldman, Sachs & Co. (incorporated by reference
          to Exhibit 4.2 to Amdocs' Form 6-K dated May 31, 2001)



3.        Voting and Exchange Trust Agreement dated as of April 5,
          2000 among Amdocs Limited, Amdocs (Denmark) ApS., Amdocs
          Holdings ULC, Solect Technology Group Inc. and The Trust
          Company of Bank of Montreal (incorporated by reference to
          Exhibit 3 to Amdocs' Annual Report on Form 20-F for the
          fiscal year ended September 30, 2000



4.a.1     Agreement and Plan of Merger dated as of September 3, 1999
          among Amdocs Limited, Ivan Acquisition Corp. and
          International Telecommunication Data Systems, Inc.
          (incorporated by reference to Exhibit 2.1 to Amdocs' Current
          Report on Form 6-K dated September 10, 1999)



4.a.2     Combination Agreement dated as of February 28, 2000 among
          Amdocs Limited, Solect Technology Group Inc., Amdocs
          (Denmark) ApS. and Amdocs Holdings ULC (incorporated by
          reference to Exhibit 2.1 to Amdocs' Current Report on Form
          6-K dated March 3, 2000)



4.a.3     Acquisition Agreement dated as of October 1, 2001, between
          Amdocs Limited and Nortel Networks Corporation.
          (incorporated by reference to Exhibit 2.1 to Amdocs' Current
          Report on Form 6-K dated October 10, 2001)



4.b.1     Information Technology Services Agreement between Amdocs,
          Inc. and SBC Services, Inc. dated January 9, 2003
          (confidential material has been redacted and complete
          exhibits have been separately filed with the Securities and
          Exchange Commission)



4.c.1     Amdocs Limited 1998 Stock Option and Incentive Plan, as
          amended January 24, 2001 (incorporated by reference to
          Exhibit 4 to Amdocs' Registration Statement on Form S-8
          dated April 6, 2001; Registration No. 333-58454)



8.        Subsidiaries of Amdocs Limited



10.a.1    Consent of Ernst & Young LLP



10.a.2    Certification of Chief Executive Officer and Chief Financial
          Officer
</Table>
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                          ---------------------------

                                   FORM 20-F

[ ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
     EXCHANGE ACT OF 1934
                                       OR

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
              FOR THE TRANSITION PERIOD FROM ________ TO ________.

                           COMMISSION FILE NUMBER 1-14840

                                 AMDOCS LIMITED
        ---------------------------------------------------------------
    (Exact name of registrant as specified in its charter and translation of
                        Registrant's name into English)

                               ISLAND OF GUERNSEY
        ---------------------------------------------------------------
                (Jurisdiction of incorporation or organization)

                      SUITE 5, TOWER HILL HOUSE LE BORDAGE
          ST. PETER PORT, ISLAND OF GUERNSEY, GY1 3QT CHANNEL ISLANDS
                                  AMDOCS, INC.
          1390 TIMBERLAKE MANOR PARKWAY, CHESTERFIELD, MISSOURI 63017
        ---------------------------------------------------------------
                    (Address of principal executive offices)

     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 L0.01             New York Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the
Act.

                                      NONE
        ---------------------------------------------------------------
                                (Title of class)

     Securities for which there is a reporting obligation pursuant to Section
15(d) of the Act.
                                      NONE
        ---------------------------------------------------------------
                                (Title of class)

     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.
Voting Ordinary Shares, par value L0.01                       213,048,394(1)
Non-Voting Ordinary Shares, par value L0.01                   2,534,988
(Title of class)                                              (Number of shares)
---------------
(1) Net of 7,732,500 shares held in treasury and includes 75,828 shares held by
    shareholders of a company we acquired, which can be exchanged for our voting
    ordinary shares. Does not include (a) 27,129,090 ordinary shares reserved
    for issuance upon exercise of options granted under our stock option plan,
    (b) 562,887 ordinary shares reserved for issuance upon exercise of vested
    options granted by companies we have acquired, and (c) an aggregate of
    4,832,708 ordinary shares reserved for issuance upon conversion of our 2%
    Convertible Notes due June 1, 2008. As of September 30, 2002, 2,639,648
    ordinary shares remained available for future option grants under our stock
    option plan.

     Indicate by check mark whether the registrant has (1) 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 [X]               No [ ]

     Indicate by check mark which financial statement item the registrant has
selected to follow.
                     Item 17 [ ]               Item 18 [X]
AMDOCS LIMITED
                            ------------------------

                                   FORM 20-F

           ANNUAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002
                            ------------------------

                                     INDEX
PART I

Item 1.   Identity of Directors, Senior Management and Advisors.......    3
Item 2.   Offer Statistics and Expected Timetable.....................    3
Item 3.   Key Information.............................................    3
Item 4.   Information on the Company..................................   14
Item 5.   Operating and Financial Review and Prospects................   26
Item 6.   Directors, Senior Management and Employees..................   43
Item 7.   Major Shareholders and Related Party Transactions...........   50
Item 8.   Financial Information.......................................   51
Item 9.   The Offer and Listing.......................................   52
Item 10.  Additional Information......................................   52
Item 11.  Quantitative and Qualitative Disclosures about Market
          Risk........................................................   60
Item 12.  Description of Securities Other than Equity Securities......   61

                                  PART II

Item 13.  Defaults, Dividend Arrearages and Delinquencies.............   61
Item 14.  Material Modifications to the Rights of Security Holders and
          Use of Proceeds.............................................   61
Item 15.  Controls and Procedures.....................................   61
Item 16.  [Reserved]..................................................   62

                                 PART III

Item 17.  Financial Statements........................................   62
Item 18.  Financial Statements........................................   62
Item 19.  Exhibits....................................................   62
1
Unless the context otherwise requires, all references in this annual report
to "Amdocs", "we", "our", "us" and the "Company" refer to Amdocs Limited and its
consolidated subsidiaries and their respective predecessors. References to
"dollars" or "$" are to U.S. dollars. Unless otherwise stated, all references to
ordinary shares are to both voting and non-voting ordinary shares.

     We own or have rights to trademarks or trade names that we use in
conjunction with the sale of our products, including, without limitation, each
of the following: Amdocs(TM), Ensemble(TM), AmdocsEnabler(TM) and Clarify(TM).

                           FORWARD LOOKING STATEMENTS

     This Annual Report on Form 20-F contains forward-looking statements (within
the meaning of the United States federal securities laws) that involve
substantial risks and uncertainties. You can identify these forward-looking
statements by words such as "expect", "anticipate", "believe", "seek",
"estimate", "project", "forecast", "continue", "potential", "should", "would",
"could" 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; consolidation within the industries in which our
customers operate; the loss of a significant customer; 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; 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
PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

     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 accounting principles generally accepted in the United States ("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, 2002 is derived from our consolidated
financial statements, which have been audited by Ernst & Young LLP, our
independent auditors. 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 and the discussion under "Operating
and Financial Review and Prospects" included elsewhere in this report.
YEAR ENDED SEPTEMBER 30,
                                  --------------------------------------------------------------
                                     2002          2001          2000         1999        1998
                                  ----------    ----------    ----------    --------    --------
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Revenue.........................  $1,613,565    $1,533,910    $1,118,320    $626,855    $403,767
Operating income(1)(2)..........      49,161       159,281        74,124     146,998      84,895
Net (loss) income(1)(2)(3)......      (5,061)       66,386         5,978      98,543      30,107
Basic (loss) earnings per
  share.........................       (0.02)         0.30          0.03        0.50        0.19
Diluted (loss) earnings per
  share.........................       (0.02)         0.29          0.03        0.49        0.19
Dividends declared per share....          --            --            --          --        3.76
AS OF SEPTEMBER 30,
                                  --------------------------------------------------------------
                                     2002          2001          2000         1999        1998
                                  ----------    ----------    ----------    --------    --------
                                                          (IN THOUSANDS)
BALANCE SHEET DATA:
Total assets....................  $2,540,094    $2,624,436    $1,935,085    $430,011    $239,966
Long term obligations
  2% Convertible Notes due June
     1, 2008(4).................     445,054       500,000            --          --          --
  Long-term portion of capital
     lease obligations..........      15,138        24,779        23,417      17,148       9,215
Shareholders' equity
  (deficit)(5)(6)(7)............   1,416,275     1,512,091     1,430,772     123,737     (21,889)
3
ORDINARY SHARES     ADDITIONAL
                                                 -----------------     PAID-IN
                                                 SHARES     AMOUNT     CAPITAL     TREASURY STOCK
                                                 -------    ------    ----------   --------------
                                                                  (IN THOUSANDS)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
  DATA:
Balance as of September 30, 1998...............  196,800    $3,149    $  447,503     $      --
  Issuance of ordinary shares(5)...............    2,000        32        41,352            --
  Stock options granted, net of forfeitures....       --        --           244            --
                                                 -------    ------    ----------     ---------
Balance as of September 30, 1999...............  198,800     3,181       489,099            --
  Issuance of ordinary shares related to
     acquisitions, net(6)......................   20,307       325     1,263,330            --
  Employee stock options exercised.............    2,058        33        21,327            --
  Tax benefit of stock options exercised.......       --        --        10,825            --
  Stock options granted........................       --        --           235            --
                                                 -------    ------    ----------     ---------
Balance as of September 30, 2000...............  221,165     3,539     1,784,816            --
  Employee stock options exercised.............    1,463        21        13,946            --
  Tax benefit of stock options exercised.......       --        --         7,345            --
  Stock options granted........................       --        --           183            --
                                                 -------    ------    ----------     ---------
Balance as of September 30, 2001...............  222,628     3,560     1,806,290            --
  Employee stock options exercised.............      687        12         5,149            --
  Tax benefit of stock options exercised.......       --        --         6,808            --
  Expense related to vesting of stock
     options...................................       --        --            98            --
  Repurchase of shares(7)......................   (7,732)       --            --      (109,281)
                                                 -------    ------    ----------     ---------
Balance as of September 30, 2002...............  215,583    $3,572    $1,818,345     $(109,281)
                                                 =======    ======    ==========     =========
---------------

(1) In fiscal 2000, we recorded nonrecurring acquisition-related charges of
    $75,617, relating to our acquisitions of International Telecommunication
    Data Systems, Inc. ("ITDS") in November 1999 and Solect Technology Group
    Inc. ("Solect") in April 2000, in stock-for-stock transactions. The
    aggregate charges related to the ITDS transaction were $19,876 and were
    incurred by us in the first quarter of fiscal 2000. The aggregate charges
    related to the Solect transaction were $55,741 and were incurred by us in
    the third quarter of fiscal 2000. These charges included write-offs of
    purchased in-process research and development and other indirect
    acquisition-related costs.

(2) In the first quarter of fiscal 2002, we recorded nonrecurring
    acquisition-related charges of in-process research and development of
    $17,400, relating to our acquisition from Nortel Networks Corporation of
    substantially all of the assets of its Clarify business ("Clarify") for
    cash. We also recorded restructuring charges of $13,311 relating to the
    consolidation of our Stamford, Connecticut data center into our Champaign,
    Illinois facility, and the resulting closure of the Stamford facility. In
    the fourth quarter of fiscal 2002, we recorded restructuring charges of
    $20,919 relating to our cost reduction program.

(3) In the fourth quarter of fiscal 2002, we recorded a gain of $6,012 relating
    to the repurchase of a portion of our convertible notes (see footnote 4
    below).

(4) In May 2001, we issued $500,000 aggregate principal amount of 2% Convertible
    Notes due June 1, 2008 (the "Notes"). On July 23, 2002, our Board of
    Directors authorized us to repurchase Notes in such amounts, at such prices
    and at such times considered appropriate. During the fourth quarter of
    fiscal 2002, we repurchased $54,946 aggregate principal amount of Notes, at
    an average price of 89% of the principal amount. As of September 30, 2002,
    $445,054 aggregate principal amount of Notes was outstanding.

(5) We completed a public offering of 2,000 ordinary shares in June 1999. The
    net proceeds to us from the offering were $41,384.

                                        4
(6) An aggregate of 7,564 ordinary shares, including shares issuable upon
    exercise of vested ITDS employee options, were issued in connection with the
    ITDS acquisition, and an aggregate of 15,500 ordinary shares, including
    shares issuable upon exercise of vested Solect employee options, were issued
    in connection with the Solect acquisition.

(7) On November 6, 2001, our Board of Directors approved a twelve-month share
    repurchase program and authorized us to repurchase our ordinary shares.
    During fiscal 2002, we repurchased 7,732 ordinary shares, at an average
    price of $14.13 per share.

                                        5
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, continued industry consolidation, the formation of
alliances among network operators and service providers, and changes in the
regulatory environment have had, and could continue to have, a material adverse
effect on our existing or potential customers. These conditions have reduced the
high growth rates that the communications industry had previously experienced,
and have caused the market value, financial results and prospects, and capital
spending levels of many communications companies to decline or degrade. Over the
past year, further slowdowns in customer buying decisions stemming from
financial pressure on operating expenses and overall reductions in the capital
investment budgets of many communications service providers have led to fewer
new contracts than expected, as well as smaller than expected initial spending
commitments and reduced discretionary spending under our contracts with some of
our customers. These factors, combined with the continuing general economic
slowdown, resulted in our achieving lower revenue levels than expected during
the second half of fiscal 2002. We expect these adverse economic conditions to
continue at least in the near term, making it difficult for us to resume the
growth of our revenue. Until they improve, these conditions will continue to
harm our business.

  IF WE 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.
If we fail to adapt to changing market conditions and to compete successfully
with established or new competitors, it could have a material adverse effect on
our results of operations and financial condition.

     The market for communications information systems is highly competitive and
fragmented, and we expect competition to increase. We compete with independent
providers of information systems and services and with the in-house software
departments of communications companies. Our competitors include firms that
provide comprehensive information systems, 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
and wireless services, systems integrators, service bureaus and companies that
offer software systems in combination with the sale of network equipment.

     We believe that our ability to compete depends on a number of factors,
including:

     -  the development by others of software that is competitive with our
        products and services,

     -  the price at which others offer competitive software and services,

     -  the responsiveness of our competitors to customer needs, and

     -  the ability of our competitors to hire, retain and motivate key
        personnel.

     We compete with a number of companies that have long operating histories,
large customer bases, substantial financial, technical, sales, marketing and
other resources, and strong name recognition. Current and potential competitors
have established, and may establish in the future, cooperative relationships
among themselves or with third parties to increase their ability to address the
needs of our prospective customers. In addition, our competitors have acquired,
and may continue to acquire in the future, companies that may enhance their
market offerings. Accordingly, new competitors or alliances among competitors
may emerge and rapidly acquire significant market share. As a result, our
competitors may be able to adapt more quickly than us to new or emerging
technologies and changes in customer requirements, and may be able to devote
greater resources to the promotion and sale of their products. We cannot assure
you that we will be able to compete successfully with existing or new
competitors. Failure by us to adapt to changing market conditions and to compete
successfully with established or new competitors may have a material adverse
effect on our results of operations and financial condition.

                                        6
WE MUST CONTINUALLY ENHANCE OUR PRODUCTS TO REMAIN COMPETITIVE

     We believe that our future success will depend, to a significant extent,
upon our ability to enhance our existing products and to introduce new products
and features to meet the requirements of our customers in a rapidly developing
and evolving market. We are currently devoting significant resources to refining
and expanding our base software modules and to developing Business Support
Systems products that operate in state-of-the-art computing environments. Our
present or future products may not satisfy the evolving needs of the
communications industry. If we are unable to anticipate or respond adequately to
such needs, due to resource, technological or other constraints, our business
and results of operations could be harmed.

  WE MAY SEEK TO ACQUIRE COMPANIES OR TECHNOLOGIES, WHICH COULD DISRUPT OUR
  ONGOING BUSINESS, DISTRACT OUR MANAGEMENT AND EMPLOYEES AND ADVERSELY AFFECT
  OUR RESULTS OF OPERATIONS

     We may acquire companies where we believe we can acquire new products or
services or otherwise enhance our market position or strategic strengths. We
cannot assure you that suitable acquisition candidates can be found, that
acquisitions can be consummated on favorable terms or that we will be able to
complete otherwise favorable acquisitions because of antitrust or other
regulatory concerns. If we do complete acquisitions, we cannot assure you that
they will ultimately enhance our products or strengthen our competitive
position. In addition, any acquisitions that we make could lead to difficulties
in integrating personnel and operations from the acquired businesses and in
retaining and motivating key personnel from these businesses. Acquisitions may
disrupt our ongoing operations, divert management from day-to-day
responsibilities, increase our expenses and harm our results of operations or
financial position.

  WE DEPEND ON SBC COMMUNICATIONS INC. FOR A SIGNIFICANT PORTION OF OUR REVENUE

     One of our largest groups of customers is comprised of SBC Communications
Inc. ("SBC") and its operating subsidiaries. A significant decrease in the sale
of products and services to SBC may materially adversely affect our results of
operations and financial condition. SBC, through its subsidiaries, is also one
of our largest shareholders. As of February 19, 2003, SBC beneficially owned
approximately 9.4% of our outstanding ordinary shares.

     Substantially all of our work for SBC is conducted directly with SBC's
operating subsidiaries, such as Cingular Wireless, Southwestern Bell Yellow
Pages, Southwestern Bell Communications Services and Southwestern Bell Telephone
Company. These SBC relationships accounted for, in the aggregate, 10.6%, 13.3%
and 12.6% of our total revenue in fiscal 2002, 2001 and 2000, respectively. The
revenue attributable to SBC and such subsidiaries amounted to $171.5 million,
$203.9 million and $141.0 million in fiscal 2002, 2001 and 2000, respectively.
Based on long-term agreements currently in place with certain SBC subsidiaries
and the outsourcing agreement announced in January 2003 with SBC's directory
operations, we expect that revenue attributable to SBC entities will remain a
significant percentage of our total revenue in 2003.

  OUR BUSINESS IS HIGHLY DEPENDENT ON A LIMITED NUMBER OF SIGNIFICANT CUSTOMERS

     Our business is highly dependent on a limited number of significant
customers, including SBC. The loss of any significant customer or a significant
decrease in business from any of those customers could harm our results of
operations and financial condition. Aggregate revenue derived from the multiple
business arrangements we have with each of our five largest customer groups,
excluding the SBC group, accounted for approximately 45.6% of our revenue in
fiscal 2002.

     Although we have received a substantial portion of our revenue from
recurring business with established customers, most of our major customers do
not have any obligation to purchase additional products or services from us and
generally have already acquired fully paid licenses to their installed systems.
Therefore, our customers may not continue to purchase new systems, system
enhancements or services in amounts similar to previous years or may delay
implementation of committed projects.

                                        7
OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO DEVELOP LONG-TERM
  RELATIONSHIPS WITH OUR CUSTOMERS

     We believe that our future success will depend to a significant extent on
our ability to develop long-term relationships with successful network operators
and service providers with the financial and other resources required to invest
in significant ongoing Business Support Systems. If we are unable to develop new
customer relationships, our business will be harmed. In addition, our business
and results of operations depend in part on our ability to provide high quality
services to customers that have already implemented our products. If we are
unable to meet customers' expectations in providing products or performing
services, our business and results of operations could be harmed.

  WE MAY BE EXPOSED TO THE CREDIT RISK OF CUSTOMERS THAT HAVE BEEN ADVERSELY
  AFFECTED BY WEAKENED MARKETS

     We typically sell our software and related customization, modification and
maintenance services as part of long-term projects. During the life of a
project, a customer's budgeting constraints, can impact the scope of a project
and the customer's ability to make required payments. In addition, the
creditworthiness of our customers may deteriorate over time, and we can be
adversely affected by bankruptcies or other business failures.

  THE SKILLED AND HIGHLY QUALIFIED EMPLOYEES THAT WE NEED MAY BE DIFFICULT TO
  HIRE AND RETAIN

     Our business operations depend in large part on our ability to attract,
train, motivate and retain highly skilled information technology professionals,
software programmers and communications engineers. In addition, our competitive
success will depend on our ability to attract and retain other outstanding,
highly qualified employees. Despite recent reductions in headcount, we will need
to hire sales, support, technical and other personnel this year and in the
future. We may face difficulties identifying and hiring qualified personnel and
may be unable to retain employees with the skills and experience that we
require. Our inability to hire and retain the appropriate personnel could make
it difficult for us to manage our operations and to compete for new customer
contracts.

     Our success will also depend, to a certain extent, upon the continued
active participation of a relatively small group of senior management personnel.
The loss of the services of all or some of these executives could harm our
business.

  OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE

     We have experienced fluctuations in our quarterly operating results and
anticipate that such movement may continue and could intensify. Fluctuations may
result from many factors, including:

     - the size and timing of significant customer projects and license fees,

     - delays in or cancellations of significant projects by customers,

     - changes in operating expenses,

     - increased competition,

     - changes in our strategy,

     - personnel changes,

     - foreign currency exchange rate fluctuations, and

     - general economic and political conditions.

     Generally, our license fee revenue and our service fee revenue relating to
customization and modification are recognized as work is performed, using
percentage of completion accounting. Given our reliance on a limited number of
significant customers, our quarterly results may be significantly affected by
the size and timing of customer projects and our progress in completing such
projects.

                                        8
We believe that the placement of customer orders may be concentrated in
specific quarterly periods due to the time requirements and budgetary
constraints of our customers. Although we recognize revenue as projects
progress, progress may vary significantly from project to project, and we
believe that variations in quarterly revenue are sometimes attributable to the
timing of initial order placements. Due to the relatively fixed nature of
certain of our costs, a decline of revenue in any quarter would result in lower
profitability for that quarter.

  OUR BUSINESS IS IMPACTED BY THE LENGTH OF OUR SALES CYCLE

     Our business is directly affected by the length of our sales cycle.
Information systems for communications companies are relatively complex and
their purchase generally involves a significant commitment of capital, with
attendant delays frequently associated with large capital expenditures and
procurement procedures within an organization. The purchase of these types of
products typically also requires coordination and agreement across many
departments within a potential customer's organization. Delays associated with
such timing factors could have a material adverse effect on our results of
operations and financial condition. As a result of the continued slowdown in the
growth of the global communications market, our typical sales cycle has
lengthened, which means that the average time between our initial contact with a
prospective customer and the signing of a sales contract has increased. The
lengthening of our sales cycle has and could continue in the future to reduce
growth in our revenue. In addition, the lengthening of our sales cycle
contributes to an increased cost of sales, thereby reducing our profitability.

  IF THE MARKET FOR OUR PRODUCTS DOES NOT IMPROVE, WE MAY INCUR ADDITIONAL
  RESTRUCTURING CHARGES

     In an effort to implement long-term cost reduction measures, we have
reduced our workforce and have reallocated certain personnel among different
areas of our operations. A reduction in personnel can result in significant
severance, administrative and legal expenses and may also adversely affect or
delay various sales, marketing and product development programs and activities.
If the deterioration in the communications industry continues, we may be forced
to implement additional restructuring plans to further reduce our costs, which
could result in additional restructuring charges. Additional restructuring
charges could have a material adverse effect on our financial results.

  IF WE FAIL TO SUCCESSFULLY PLAN AND MANAGE CHANGES IN THE SIZE OF OUR
  OPERATIONS OUR BUSINESS WILL SUFFER

     Over the last several years, we have both grown and contracted our
operations in order to profitably offer our products and services in a rapidly
changing market. If we are unable to manage these changes and plan and manage
any future changes in the size and scope of our operations, our business will
suffer.

     Our recent restructurings and cost reduction measures have reduced the size
of our operations. On January 31, 2003, we had 7,800 software and information
technology positions compared to 9,100 software and information technology
positions on November 30, 2001 and 7,900 such positions on November 30, 2000.
During these periods, we leased and disposed of office space and related
obligations in an effort to keep pace with the changing size of our operations.
Our recent cost reduction measures include consolidating and/or relocating
certain of our operations to different geographic locations. These activities
could lead to difficulties and significant expenses related to identifying and
moving into suitable office space and subleasing or assigning any surplus space.
We have accrued the estimated expenses that will result from our restructuring
efforts. However, if it is determined that the amount accrued is insufficient,
an additional charge could have an unfavorable impact on our financial
statements in the period this was determined.

  OUR INTERNATIONAL PRESENCE CREATES SPECIAL RISKS

     We are affected by risks associated with conducting business
internationally. We maintain development facilities in Israel, the United
States, Cyprus, Ireland and Canada, operate a support center in Brazil and have
operations in North America, Europe, Latin America and the Asia-Pacific region.
Although a majority of our revenue is derived from customers in North America
and Europe, we obtain

                                        9
significant revenue from customers in the Asia-Pacific region and Latin America.
Our strategy is to continue to broaden our North American and European customer
base and to expand into new international markets. Conducting business
internationally exposes us to certain risks inherent in doing business in
international markets, including:

     - lack of acceptance of non-localized products,

     - legal and cultural differences in the conduct of business,

     - difficulties in staffing and managing foreign operations,

     - longer payment cycles,

     - difficulties in collecting accounts receivable and withholding taxes that
       limit the repatriation of earnings,

     - trade barriers,

     - immigration regulations that limit our ability to deploy our employees,

     - political instability, and

     - variations in effective income tax rates among countries where we conduct
       business.

     One or more of these factors could have a material adverse effect on our
international operations, which could harm our results of operations and
financial condition.

  POLITICAL AND ECONOMIC CONDITIONS IN THE MIDDLE EAST MAY ADVERSELY AFFECT OUR
  BUSINESS

     Of the five development centers we maintain worldwide, our largest
development center is located in five different sites throughout Israel.
Approximately half of our employees are located in Israel. As a result, we are
directly influenced by the political, economic and military conditions affecting
Israel and its neighboring region. Any major hostilities involving Israel could
have a material adverse effect on our business. We have developed contingency
plans to provide ongoing services to our customers in the event political or
military conditions disrupt our normal operations. These plans include the
transfer of some development operations within Israel to various of our other
sites both within and outside of Israel. If we have to implement these plans,
our operations would be disrupted and we would incur significant additional
expenditures, which would adversely affect our business and results of
operations.

     While Israel has entered into peace agreements with both Egypt and Jordan,
Israel has not entered into peace arrangements with any other neighboring
countries. Over the past two years there has been a significant deterioration in
Israel's relationship with the Palestinian Authority and a related increase in
violence. Efforts to resolve the problem have failed to result in an agreeable
solution. Continued violence between the Palestinian community and Israel may
have a material adverse effect on our business. In addition, our operations in
Israel may be affected by any armed conflict with Iraq. If any military action
is initiated against Iraq, the hostilities could adversely affect Israel.
Further deterioration of relations with the Palestinian Authority and/or an
Iraqi conflict might require more military reserve service by some of our
employees, which may have a material adverse effect on our business.

     In addition, our development facility in Cyprus may be adversely affected
by political conditions in that country. As a result of intercommunal strife
between the Greek and Turkish communities, Turkish troops invaded Cyprus in 1974
and continue to occupy approximately 40% of the island. Efforts to finally
resolve the problem have not yet resulted in an agreement. The European Union
("E.U.") has recently announced that Cyprus will be included in the next round
of E.U. enlargement, which is expected to be January 1, 2004. The two
communities are going through a series of intensive discussions facilitated by
the United Nations, the E.U. and the United States, which are expected to lead
to an agreement before the entry of Cyprus to the E.U. Any major hostilities
between Cyprus and Turkey or any failure of the parties to reach a peaceful
resolution may have a material adverse effect on our development facility in
Cyprus.

                                        10
FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES COULD ADVERSELY AFFECT OUR
  BUSINESS

     A significant portion of our operating costs is incurred outside the United
States. Therefore, fluctuations in exchange rates between the currencies in
which such costs are incurred and the dollar may have a material adverse effect
on our results of operations and financial condition. The cost of our operations
in Israel, as expressed in dollars, could be adversely affected by the extent to
which any increase in the rate of inflation in Israel is not offset (or is
offset with a time delay) by a devaluation of the Israeli currency in relation
to the dollar. As a result of this differential, from time to time we experience
increases in the costs of our operations in Israel, as expressed in dollars,
which could in the future have a material adverse effect on our results of
operations and financial condition.

     In addition, a portion of our revenue is not incurred in dollars or linked
to the dollar, and, therefore, fluctuations in exchange rates between the
currencies in which such revenue is incurred and the dollar may have a material
effect on our results of operations and financial condition. If more of our
customers seek contracts that are denominated in currencies such as the euro and
not the dollar, our exposure to fluctuations in currency exchange rates could
increase.

     Generally, the effects of fluctuations in foreign currency exchange rates
are mitigated by the fact that the majority of our revenue and operating costs
is in dollars or linked to the dollar and we generally hedge our currency
exposure on both a short-term and long-term basis with respect to expected
revenue and operating costs. However, we cannot assure you that we will be able
to effectively limit all of our exposure to currency exchange rate fluctuations.

     The imposition of exchange or price controls or other restrictions on the
conversion of foreign currencies could also have a material adverse effect on
our business, results of operations and financial condition.

  WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY

     Any misappropriation of our technology or the development of competitive
technology could seriously harm our business. We regard a substantial portion of
our software products and systems as proprietary and rely on a combination of
statutory and common law copyright, trademark, trade secret laws, customer
licensing agreements, employee and third party non-disclosure agreements and
other methods to protect our proprietary rights. We do not include in our
software any mechanisms to prevent or inhibit unauthorized use, but we generally
enter into confidentiality agreements with our employees, consultants,
subcontractors, customers and potential customers and limit access to, and
distribution of, our proprietary information.

     The steps we have taken to protect our proprietary rights may be
inadequate. If so, we might not be able to prevent others from using what we
regard as our technology to compete with us. Existing trade secret, copyright
and trademark laws offer only limited protection. In addition, the laws of some
foreign countries do not protect our proprietary technology to the same extent
as the laws of the United States. There is also the risk that other companies
could independently develop similar or superior technology without violating our
proprietary rights.

     If we have to resort to legal proceedings to enforce our intellectual
property rights, the proceedings could be burdensome, protracted and expensive
and could involve a high degree of risk.

  CLAIMS BY OTHERS THAT WE INFRINGE THEIR PROPRIETARY TECHNOLOGY COULD HARM OUR
  BUSINESS

     Although we have not received any complaints from third parties alleging
infringement claims, third parties could claim that our current or future
products or technology infringe their proprietary rights. We expect that
software developers will increasingly be subject to infringement claims as the
number of products and competitors providing software and services to the
communications industry increases and overlaps occur. Any claim of infringement
by a third party could cause us to incur substantial costs defending against the
claim, and could distract our management from our business. Furthermore, a party
making such a claim, if successful, could secure a judgment that requires us to
pay substantial damages. A
                                        11
judgment could also include an injunction or other court order that could
prevent us from selling our products or offering our services. Any of these
events could seriously harm our business.

     If anyone asserts a claim against us relating to proprietary technology or
information, while we might seek to license their intellectual property, we
might not be able to obtain a license on commercially reasonable terms or on any
terms. In addition, any efforts to develop non-infringing technology could be
unsuccessful. Our failure to obtain the necessary licenses or other rights or to
develop non-infringing technology could prevent us from selling our products and
could therefore seriously harm our business.

  PRODUCT DEFECTS OR SOFTWARE ERRORS COULD ADVERSELY AFFECT OUR BUSINESS

     Design defects or software errors may cause delays in product introductions
or damage customer satisfaction and may have a material adverse effect on our
business, results of operations and financial condition. Our software products
are highly complex and may, from time to time, contain design defects or
software errors that may be difficult to detect and correct.

     Because our products are generally used by our customers to perform
critical business functions, design defects, software errors, misuse of our
products, incorrect data from external sources or other potential problems
within or out of our control may arise from the use of our products, and may
result in financial or other damages to our customers, for which we may be held
responsible. Although we have license agreements with our customers that contain
provisions designed to limit our exposure to potential claims and liabilities
arising from customer problems, these provisions may not effectively protect us
against such claims in all cases and in all jurisdictions. Claims and
liabilities arising from customer problems could also damage our reputation,
adversely affecting our business, results of operations and financial condition
and the ability to obtain "Errors and Omissions" insurance.

  THE TERMINATION OR REDUCTION OF CERTAIN GOVERNMENT PROGRAMS AND TAX BENEFITS
  COULD ADVERSELY AFFECT OUR OVERALL EFFECTIVE TAX RATE

     We benefit from a variety of government programs and tax benefits,
including programs and benefits in Israel, Cyprus and Ireland. Generally, these
programs contain conditions that we must meet in order to be eligible to obtain
any benefit. If we fail to meet these conditions we could be required to refund
tax benefits already received. Additionally, some of these programs and the
related tax benefits are available to us for a limited number of years, and
these benefits expire from time to time.

     Any of the following could have a material effect on our overall effective
tax rate:

     - some programs may be discontinued,

     - we may be unable to meet the requirements for continuing to qualify for
       some programs,

     - these programs and tax benefits may be unavailable at their current
       levels,

     - upon expiration of a particular benefit, we may not be eligible to
       participate in a new program or qualify for a new tax benefit that would
       offset the loss of the expiring tax benefit, or

     - we may be required to refund previously recognized tax benefits if we are
       found to be in violation of the stipulated conditions.

  WE ARE CURRENTLY A PARTY TO SECURITIES LITIGATION CLASS ACTION LAWSUITS,
  WHICH, IF DETERMINED ADVERSELY, COULD NEGATIVELY AFFECT OUR BUSINESS AND
  RESULTS OF OPERATIONS

     Beginning on June 24, 2002, a number of complaints were filed by holders of
our ordinary shares against us and four of our officers and directors, in the
United States District Courts for the Eastern District of Missouri and the
Southern District of New York. The complaints allege violations of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Each plaintiff seeks to represent a putative class of all purchasers
of our ordinary shares between July 18, 2000 (or, in some of the complaints,
July 24, 2001) and June 20, 2002. The complaints generally allege that, during

                                        12
that period, we and the individual defendants made false or misleading
statements, in press releases and Securities and Exchange Commission filings,
regarding among other things our future prospects, backlog, revenue, gross
margin, acquisitions and accounting practices. Each plaintiff seeks unspecified
monetary damages and other relief against all defendants. The parties in the New
York cases have stipulated to transfer them to the Eastern District of Missouri.
The court has recently appointed a lead plaintiff. An unfavorable resolution of
these matters could materially affect our results of operations and financial
condition. We intend to defend ourself vigorously against these claims and, in
so doing, we may incur substantial costs. In addition, the litigation has been,
and may continue to be, time-consuming and costly and could divert the attention
of our management personnel. These lawsuits or any future lawsuits filed against
us could seriously harm our business.

  THE MARKET PRICE OF OUR ORDINARY SHARES HAS AND MAY CONTINUE TO FLUCTUATE
  WIDELY

     The market price of our ordinary shares has fluctuated widely and may
continue to do so. During fiscal 2002, our ordinary shares traded as high as
$39.25 per share. Prior to our June 20, 2002 announcement of the expected
decline in our revenue from projected results for the third quarter of fiscal
2002, our ordinary shares traded as low as $14.45 per share. Subsequent to that
announcement and through March 18, 2003, our ordinary shares have traded between
$5.85 and $13.95 per share. Many factors could cause the market price of our
ordinary shares to rise and fall. Some of these factors are:

     - market conditions in the industry and the economy as a whole,

     - variations in our quarterly operating results,

     - announcements of technological innovations by us or our competitors,

     - introduction of new products or new pricing policies by us or our
       competitors,

     - trends in the communications or software industries,

     - acquisitions or strategic alliances by us or others in our industry,

     - changes in estimates of our performance or recommendations by financial
       analysts, and

     - political developments in the Middle East.

     In addition, the stock market often experiences significant price and
volume fluctuations. These fluctuations particularly affect the market prices of
the securities of many high technology companies. These broad market
fluctuations could adversely affect the market price of our ordinary shares.

  FUTURE SALES BY EXISTING SHAREHOLDERS COULD DEPRESS THE MARKET PRICE OF OUR
  ORDINARY SHARES

     Sales of substantial amounts of ordinary shares in the public market, or
the perception that such sales could occur, could adversely affect prevailing
market prices for the ordinary shares. As of January 31, 2003, we had
215,775,612 ordinary shares outstanding, a substantial portion of which are
either freely tradable on the New York Stock Exchange or currently eligible for
sale pursuant to Rule 144, under the Securities Act of 1933, as amended (subject
to compliance with the volume and manner of sale limitations of Rule 144), or
pursuant to another exemption from the registration requirements of the
Securities Act.

     Our principal shareholders have the right, in certain circumstances, to
require us to register their shares under the Securities Act for resale to the
public. In addition, we have registered under the Securities Act a total of (i)
35,062,121 ordinary shares, reserved for issuance upon the exercise of options
that have been or may be granted under our stock option plans and stock option
plans assumed by us in connection with our acquisitions of International
Telecommunication Data Systems, Inc. and Solect Technology Group Inc. and (ii)
5,429,350 ordinary shares reserved for issuance upon conversion of our 2%
Convertible Notes due June 1, 2008. The right to exercise options outstanding
under these plans is subject to certain vesting requirements.

                                        13
ITEM 4.  INFORMATION ON THE COMPANY

HISTORY, DEVELOPMENT AND ORGANIZATIONAL STRUCTURE OF AMDOCS

     Amdocs Limited was organized under the laws of the Island of Guernsey in
1988. Since 1995, we have been a holding company for the various subsidiaries
that conduct our business on a worldwide basis. Our global business is providing
Business Support Systems, including software and services, to major
communications companies in North America, Europe and the rest of the world. Our
registered office is located in Suite 5, Tower Hill House Le Bordage, St. Peter
Port, Island of Guernsey, GY1 3QT Channel Islands, and the telephone number at
that location is 011-44-1481-728444.

     In the United States, our main sales and development center is located in
St. Louis, Missouri. The executive offices of our principal subsidiary in the
United States are located at 1390 Timberlake Manor Parkway, Chesterfield,
Missouri 63017, and the telephone number at that location is (314) 212-8328.

     Our subsidiaries are organized under and subject to the laws of several
countries. Our principal operating wholly owned subsidiaries are Amdocs, Inc.
(United States), Amdocs (UK) Limited, Amdocs Development Limited (Cyprus),
Amdocs Management Limited (United Kingdom), Amdocs (Israel) Limited, Amdocs
Software Systems Ltd (Ireland), Amdocs Champaign, Inc. (previously ITDS
Intellicom Services, Inc.) (United States) and Amdocs Canada, Inc. (previously
Solect).

     We have pursued acquisitions in order to offer new products or services or
otherwise enhance our market position or strategic strengths. Our acquisition of
ITDS in November 1999 enabled us to expand our service offerings and enhanced
our ability to provide outsourcing solutions to our customers. (We have since
renamed ITDS, Amdocs Stamford, Inc.) Our acquisition of Solect (since renamed
Amdocs Canada, Inc.) in April 2000 enhanced our ability to serve the growing
Internet Protocol ("IP") needs of our customers, while also expanding our target
market to cover IP operators, such as Internet Service Providers ("ISPs"),
Application Service Providers ("ASPs") and broadband providers. Our acquisition
in November 2001 from Nortel Networks Corporation of substantially all of the
assets of its Clarify business, a leading provider of Customer Relationship
Management ("CRM") software to communications companies and other enterprise
sectors, has positioned us as a leading provider of CRM to the communications
industry and, through our addition of Clarify's CRM software to our product
offerings, reinforced our leadership in delivering a comprehensive portfolio of
business software applications.

     In January 2001 we formed Certen Inc. ("Certen") with Bell Canada to
provide customer care and billing solutions to Bell Canada and some of its
affiliated companies. Certen is owned 90% by Bell Canada and 10% by us. We are
providing the customer care and billing software required by Certen, including
customization, installation, maintenance and other services.

     In the future, we may consider, as part of our strategy, additional
acquisitions and other initiatives in order to offer new products or services or
otherwise enhance our market position or strategic strengths.

     In March 2002, we announced a senior management transition. Effective July
1, 2002, Dov Baharav, who previously had served as Chief Financial Officer of
Amdocs Management Limited, assumed the role of President and Chief Executive
Officer. Ron Moskovitz, who previously had served as Vice President of Finance
for Amdocs Management Limited, took over the role of Chief Financial Officer.
Mr. Baharav replaced Avinoam Naor in the positions of President and Chief
Executive Officer of Amdocs Management Limited. Mr. Naor became the Vice
Chairman of our Board of Directors.

     Under the leadership of our new management team and in response to changing
market conditions, we implemented a new organizational structure during the
fourth quarter of fiscal 2002. Our operations are now centered around two main
groups, the Offering Group and the Delivery Group. The Offering Group is
responsible for developing and marketing our Business Support Systems products
which are delivered through the Delivery Group. The Delivery Group is
responsible for project and service delivery and selling products to our
customers.

     During fiscal 2002, we took steps to reduce our costs and achieve increased
operational efficiency. In October 2001, we consolidated our Stamford,
Connecticut data center into our Champaign, Illinois facility,
                                        14
and we closed the Stamford facility. In June 2002, we announced our intention to
implement a cost reduction program to reduce costs by approximately 10% in
response to a decline of our forecasted revenue for the third and fourth
quarters of fiscal 2002. As part of this program, we reduced our workforce by
approximately 1,000 positions and vacated facilities in different centers around
the world. In November 2002, we announced a series of additional measures
designed to reduce costs and improve productivity. As part of this plan, we
reduced our workforce by approximately 400 positions and vacated additional
facilities in different centers around the world. In addition, we intend to
implement other cost reduction measures, including travel cuts and reductions in
other discretionary costs.

     Our principal capital expenditures for fiscal 2002, 2001 and 2000 have been
for computer equipment, for which we spent approximately $42.8 million, $62.0
million and $35.7 million, respectively. We also lease vehicles for use by our
employees, incurring lease obligations of $2.2 million, $13.1 million and $15.7
million, respectively, in each of the last three fiscal years.

     Principal capital expenditures currently in progress consist of
approximately $11.2 million for additional computer equipment, with the bulk of
these expenditures for computer equipment to be located at our facilities in
North America and Israel.

BUSINESS OVERVIEW

     Our market focus is the communications industry, and we are a leading
provider of software products and services to major communications companies in
North America, Europe and the rest of the world. The products and services that
we provide are known as business support systems, which we refer to as "BSS".
Our BSS products consist primarily of customer care and billing, CRM and order
management systems. We refer to these products, collectively, as "CC&B Systems".
Our products also include a full range of directory sales and publishing
systems, which we refer to as "Directory Systems", for publishers of both
traditional printed yellow page and white page directories and electronic
Internet directories.

     Our CC&B Systems and Directory Systems are designed to meet the
mission-critical needs of leading communications service providers. Our BSS
products and related services are designed to manage and improve key aspects of
the business operations of communications companies, such as CRM, order
management, call rating, invoice calculation and preparation, bill formatting,
collections, partner relationship management ("PRM") and directory publishing
services. We support a wide range of communications services including wireline,
wireless, voice, data, broadband, content, electronic and mobile commerce and
Internet Protocol based services. We also support companies that offer multiple
service packages, commonly referred to as convergent services. Because of the
complexity of BSS projects and the expertise required for system support, we
also provide extensive customization, implementation, system integration,
ongoing support, system enhancement, maintenance and outsourcing services, such
as the operation of data centers and the provision of communications facility
management services, in all cases on either or a combination of a fixed or unit
charge basis to our customers.

     Since the inception of our business in 1982, we have concentrated on
providing software products and services to major communications companies. By
focusing on this market, we believe that we have been able to develop the
innovative products and the industry expertise, project management skills and
technological competencies required for the advanced, large-scale,
specifications-intensive system projects typical of leading communications
providers. Our customer base includes major North American and foreign
communications companies, including major wireline companies (such as Verizon,
BellSouth, SBC, Bell Canada, Tele Danmark and Deutsche Telekom) and wireless
companies (such as Sprint PCS, Nextel, Cingular Wireless and Vodafone Group).

  INDUSTRY BACKGROUND

     Communications Industry

     For close to 20 years, competition in the global communications industry
has increased as a result of deregulation and the development of new service
technologies. Competition in the U.S. market began to

                                        15
increase in 1984 when AT&T was required to divest its local telephone operations
and many new operators began to enter the long distance market. The
Telecommunications Act of 1996 increased competition in the United States even
further by allowing new and existing local, long distance and cable companies to
offer competing services. Many companies now compete by providing multiple or
convergent services, offering combinations of local exchange, long distance,
wireless, content and electronic and mobile commerce services. Deregulation is
also creating opportunities for new ways of doing business, such as wholesaling
and reselling communications services. Internationally, privatization and
deregulation continue to encourage increased international competition and the
emergence of newly authorized communications network operators and service
providers, especially in Europe, Latin America and the Asia-Pacific region. As
markets are opened to competition, new competitors within these markets
typically compete for market share with more established carriers, initially by
providing access to service and then by providing competitive prices, by
introducing new features and services and by being more responsive to customer
needs. In parallel, the communications industry has undergone consolidation as
companies seek to broaden their global reach and expand service offerings. In
addition, global expansion by multinational companies and concurrent
technological advances are opening markets in less developed countries to
enhanced communications services and competition.

     In recent years, there has also been a large increase of new communications
technologies, including ATM, IP, xDSL, WiFi, utilization of cable television
infrastructure to provide Internet services, GPRS (General Packet Radio
Services), UMTS (Universal Mobile Telecommunications System), WAP (Wireless
Application Protocol) for wireless Internet, and intelligent networks.
Additionally, the directory publishing industry, which is currently dominated by
communications companies that are owned by or affiliated with the public
telecommunications carriers, is experiencing significant changes due to the
introduction of new technologies and distribution platforms, especially Internet
directories.

     Recent market conditions in the communications industry have reduced the
high growth that the communications industry had experienced earlier in its
history. As a result, the market value, financial results and prospects and
capital spending levels of many communications companies have declined or
degraded. If these market conditions persist, we and other vendors to the
communications industry will continue to be adversely affected.

     Information Systems

     While the demand for BSS systems has decreased as a result of the downturn
in the communications industry, many communications companies, even in the
current business environment, are seeking to improve their systems. These
communications companies are looking for systems that reduce IT and operational
costs, enhance customer management to support customer retention, support rapid
rollout of new marketing packages and advanced data services, and the ability to
provide customers with single-contact, single-invoice solutions for multiple
services (convergence or "one-stop shopping").

     As a result, communications companies require information systems that
provide the level of integration, flexibility and scalability they need to
improve operational efficiency and to differentiate themselves from their
competitors in an increasingly competitive marketplace. To save scarce capital
and operating expenditure resources, some carriers are investing in
pre-configured open-architecture software products, which require limited
customization rather than highly customized solutions.

     In order to implement efficient, flexible, cost-effective information
systems on a timely basis, many new and existing communications companies are
looking to buy CC&B Systems from external vendors, rather than developing new
systems with internal resources. Moreover, as many communications companies
strive to become more consumer-oriented, they are concentrating their efforts
and internal resources on servicing customers and expanding their service
offerings, and many are turning to third-party vendors for their information
systems. These factors create significant opportunities for vendors of CC&B
Systems and providers of outsourcing services, such as Amdocs.

                                        16
THE AMDOCS SOLUTION

     We believe that our total solutions orientation, product-driven approach
and commitment to and support of quality personnel permit us to offer our
customers effective products and services that are both highly innovative and
reliable. We believe that our success derives from a combination of the
following factors that differentiate us from most of our competitors.

     - Total Solutions Orientation.  We offer our customers total solutions that
       include both BSS products and a broad range of services, including
       customization, implementation, systems integration, maintenance, ongoing
       support and outsourcing. By providing services directly to the customer,
       we are able to effectively utilize our intricate technical knowledge of
       our BSS products in the overall execution of a project, helping to ensure
       delivery and significantly reducing project risk. Our total solutions
       approach differs from the multi-party approach commonly used in the
       market, in which products developed by a BSS software vendor are
       implemented by a third-party system integrator. We believe that our
       approach enhances our ability to provide our customers with timely,
       cost-effective, low-risk solutions at a consistent level of quality.

     - Functional and Flexible BSS Products.  Our BSS products are based on an
       open, multi-tier, client-server, rule and table-based architecture that
       provides the functionality, scalability, modularity and adaptability
       required by communications companies in today's highly competitive
       market. The flexibility of our BSS products enables our customers to
       achieve significant time-to-market advantages and reduce their dependence
       on technical and other staff.

     - Highly Skilled Personnel.  We are able to offer our customers superior
       products and services on a worldwide basis in large part because of our
       highly qualified and trained technical, sales, marketing and managerial
       personnel. We invest significantly in the ongoing training of our
       personnel in key areas such as industry knowledge, software technologies
       and management capabilities. Primarily based on the skills and knowledge
       of our employees, we believe that we have developed a reputation for
       reliably delivering quality solutions within agreed time frames and
       budgets. We have global recruitment capabilities and have development
       centers in Israel, the United States, Cyprus, Ireland and Canada.

  BUSINESS STRATEGY

     Our goal is to provide advanced information technology software products
and related customer service and support to the world's leading communications
companies. We seek to accomplish our goal by pursuing the strategies described
below.

     - Continued Focus on the Communications Industry.  We intend to continue to
       concentrate our main resources and efforts on providing strategic
       information systems to the communications industry. This strategy has
       enabled us to develop the specialized industry know-how and capability
       necessary to deliver the technologically advanced, large-scale,
       specifications-intensive information systems solutions required by the
       leading communications companies in the wireless, wireline, and
       convergent service sectors.

     - Target Industry Leaders and Promising New Entrants.  We intend to
       continue to direct our marketing efforts principally towards the major
       communications companies and new entrants that we believe have the
       potential to be market leaders. Our customer base includes major
       communications companies in North America (including SBC, Verizon, Sprint
       PCS and Nextel), Europe (including Deutsche Telekom (Germany), BT (UK),
       Vodafone Group (UK) and Telefonica (Spain)) and the Asia-Pacific region
       (Telstra (Australia)). We believe that the development of this premier
       customer base has helped position us as a market leader, while
       contributing to the core strength of our business. By targeting industry
       leaders and promising new entrants that require the most sophisticated
       information systems solutions, we believe that we are best able to ensure
       that we remain at the forefront of developments in the industry.

                                        17
- Deliver and Support Total Solutions.  Our strategy is to provide
       customers with total systems solutions consisting of our BSS products and
       our specialized services. By leveraging our product and industry
       knowledge, we believe that we can provide more effective system
       integration and implementation support services to our customers.

     - Provide Customers with a Broad Suite of Products.  We seek to provide our
       customers with a broad suite of products to meet all their BSS needs. For
       communications service providers, we seek to provide CC&B Systems across
       all lines of their business, such as wireline, mobile and data. This
       approach also means that we can support global communications service
       providers throughout their various international operations. We believe
       that our ability to provide a broad suite of products helps establish us
       as a strategic partner for our customers, and also provides us with
       multiple avenues for strengthening and expanding our ongoing customer
       relationships.

     - Maintain and Develop Long-Term Customer Relationships.  We seek to
       maintain and develop long-term, mutually beneficial relationships with
       our customers. These relationships generally involve additional product
       sales, as well as ongoing support, system enhancement and maintenance
       services. We believe that such relationships are facilitated in many
       cases by the mission-critical strategic nature of the systems provided by
       us and by the added value we provide through our specialized skills and
       knowledge. In addition, our strategy is to solidify our existing customer
       relationships by means of long-term support and maintenance contracts.

  TECHNOLOGY

     We have developed core competencies in various advanced technologies that
are used in our BSS products. By utilizing technologies such as rule and
table-based design, multi-tier architecture, object-oriented techniques, data
mining, web-enabling and open application program interfaces, we are able to
provide communications companies with the flexibility required in a highly
competitive, dynamic environment. For example, the use of rule and table-based
technologies allows communications companies to rapidly implement changes to
their marketing and customer service activities, such as new services, price
plans, discount schemes and bill formats, without the need to modify system
code. Similarly, by drawing on web-enabled, Internet technologies, we have been
able to improve access to information by remote users, both internally within a
communications company's organization and between the organization and its
subscribers. These technologies are integrated in an open, multi-tier,
service-oriented architecture. The architecture of our BSS products includes the
key characteristics described below.

     - Scalability.  Our BSS products are designed to take full advantage of the
       proven scalability of the UNIX platform, allowing progressive system
       expansion, proportional with the customer's growth in business volumes.
       Using the same software, our BSS products can support operations for
       small as well as very large service providers.

     - Modularity.  Our BSS products are comprised of sets of functional
       modules. Each module can be installed on an individual stand-alone basis,
       interfacing with the customer's existing systems, or as part of an
       integrated BSS environment. This modularity provides our customers with a
       highly flexible and cost-effective solution that is able to incrementally
       expand with the customer's growing needs and capabilities. The modular
       approach also preserves the customer's initial investment in BSS
       products, while minimizing future disruptions and the overall cost of
       system implementation.

     - Portability.  Utilization of the UNIX platform ensures that our BSS
       customers are able to choose from a variety of hardware vendors,
       including Hewlett-Packard, IBM and Sun Microsystems. Certain applications
       can also be deployed on the MVS or Windows NT platforms. The BSS products
       utilize, where applicable, Java-based design and programming to augment
       cross-platform portability.

                                        18
PRODUCTS

     Our product offerings include an extensive library of BSS software products
that we have developed to provide comprehensive information systems
functionality for communications service providers. Core elements include CRM,
order management, call rating, invoice calculation, bill formatting,
collections, PRM and directory publishing services.

     We configure individual BSS modules into families of products, which serve
as marketing packages oriented to the needs of specific customer segments. We
provide our main CC&B Systems offering in a number of versions to serve the
different needs of communications operators in the various network and business
segments, such as wireline, wireless, broadband and electronic and mobile
commerce. Our main packages include:

     - Amdocs Enabler:  compact offline and online charging product, supporting
       prepaid and postpaid billing plans, for voice and next generation
       services.

     - Amdocs Mobile:  end-to-end billing product for mobile operators, based on
       Amdocs Enabler, together with customer management, provisioning,
       resources management and financial management functions.

     - Amdocs Wireline:  end-to-end billing product for wireline operators,
       based on Amdocs Enabler, together with customer management, resource
       management and financial management functions.

     - Amdocs ClarifyCRM:  end-to-end customer management product for all
       operators, providing support for managing customer relationships,
       including service and support, sales and ordering, and marketing and
       analytics.

     We also offer our new generation, or NG, line of ADS (NG)/Family of
Products which provides comprehensive support for directory publishing
operations.

     Each individual module from the product families can be installed as an
independent stand-alone application, interfacing with the customer's legacy and
third-party systems, or as part of an integrated Amdocs solution.

     CC&B Systems

     The CC&B suites of products that we offer encompass the following key
application areas:

     - Customer Management -- provides customer account information management
       and service support, including account initiation, on-line assistance in
       choosing a price plan, installation scheduling and complaint handling.

     - Acquisition and Formatting -- provides for acquisition and formatting of
       the event records, which are created by usage of the communications
       network. The event records contain information such as the origin and
       destination of a telephone call and its duration.

     - Rating -- calculates charges for usage of communications services, such
       as postpaid and prepaid telephone calls, Internet access and data
       transfer. The rating module calculates the charges for each event based
       on the service packages and price plans applicable to each individual
       user.

     - Billing -- provides comprehensive functionality for bill preparation
       (totaling of usage and other charges, application of discounts, taxes and
       credits) and bill production.

     - Bill Formatter -- enables the flexible definition and modification of
       bill formats, according to user requests (e.g., to combine charges from
       multiple services onto a single bill or to permit certain types of
       charges to be highlighted).

     - Accounts Receivable and Collections -- provides comprehensive
       functionality for accounts receivable and collections, including invoice
       receipt, payment receipt, payment posting, financial reporting and
       automated handling of customers with outstanding debts.

                                        19
- Resource Management -- manages the carrier's inventory of telephone
       numbers and SIM cards.

     - Wireless and IP Provisioning -- manages the interface between the
       carrier's customer care and billing system and the network, transferring
       instructions regarding the provision or discontinuation of wireless and
       IP services to specified users.

     - Partner Relationship Management -- calculates, manages and reconciles
       payments for intercarrier network access, including settlement of roaming
       charges between cellular carriers, as well as management of agreements
       and settlements between carriers and their business partners.

     - Commerce Payments -- manages real-time payment and exchange of
       information between buyer and seller for next generation commerce and
       content transactions.

     The ClarifyCRM product suite that we acquired from Nortel Networks enables
us to provide a complete suite of modular applications. Our suite of CRM
products is divided into the following three main categories:

     - Sales and Ordering Solutions -- offers comprehensive sales automation,
       order negotiation and capture, and commissions management products
       supporting the broad needs of sales professionals in all sales
       situations. We provide a range of fully integrated sales automation tools
       enabling local and remote sales professionals to be more effective in
       managing sales opportunities, developing quotes, forecasting revenue and
       communicating with other sales team members. Our products manage sales
       activities in all direct and indirect channels and handle all back-office
       equipment inventory control, commission calculations and
       performance-based compensation plans.

     - Service and Support Solutions -- enables companies to maximize
       efficiencies in customer service organizations. Our products ensure that
       customer service representatives have straightforward, online access to a
       single storehouse for customer data to reduce service response times and
       increase efficiencies in contacts with a customer. Our products manage
       and track all customer interactions in all applications and contact
       channels through resolution. Customers have access to 24-hour a day
       customer care and order services through Internet and mobile portals.

     - Marketing and Analytics Solutions -- offers full sales campaign
       management, customer retention and cross-sell and up-sell functionality,
       using advanced data mining, data warehousing and predictive modeling
       techniques. Our products rely on field-proven data discovery, analysis
       and forecasting to analyze customer usage and causes of churn. Analysis
       of customer information and usage history also enables the generation of
       predictive tools for analyzing credit risk. Using our products,
       communications providers can pinpoint customer behavior trends, then take
       proactive measures to maximize return on sales and marketing, and track
       the effectiveness of sales campaigns and ongoing service offerings.

     Directory Publishing

     Our main offering in the Directory Systems area is the ADS(NG)/Family of
Products. These products provide comprehensive support for yellow page and white
page directory sales and publishing operations, as well as for Internet
directories and catalogs, including fully integrated electronic commerce
capabilities. These systems support large directory publishing operations that
employ a local sales force numbering thousands of representatives, serve
customer bases of hundreds of thousands of businesses and publish hundreds of
different directories each year. The directory line of products comprises a
series of modules, including:

     - Sales -- addresses all aspects of managing sales to advertisers,
       including preparation and management of the overall sales campaign, which
       encompasses selecting the advertisers to be targeted, allocating the
       advertisers to various sales channels (such as field sales or
       telemarketing sales), assigning the advertisers to sales representatives,
       tracking advertising sales results and calculating sales commissions.
       These modules also provide automated support for the advertising

                                        20
sales representative, including laptop-based applications for use by
       members of the sales force in the field.

     - Publishing -- supports the process of entering, proofing and extracting
       the telephone listing and advertising information that is to be published
       in a directory. These modules encompass contract processing, service
       order processing, listing information management and directory extract in
       preparation for the actual production of the directory.

     - Marketing and Information Analysis -- includes corporate data warehousing
       techniques, online analytical processing and data mining capabilities,
       oriented to the specific marketing needs of the directory publisher. For
       example, these modules can be used to identify changed patterns of
       advertisement buying behavior in certain groups of customers, or to
       perform "what if" analyses on marketing policy parameters. These modules
       are also used by management to analyze the directory market and customer
       behavior, assisting in the planning of corporate strategy and marketing
       tactics.

     - Prepress -- manages the production of advertisements that are to be
       published in a directory and also supports the fully automated pagination
       of yellow page and white page directories, including the generation of
       the final typesetting file so that printed copies of the documents can be
       produced.

     - Customer Service -- permits online support for handling customer
       inquiries and resolving customer complaints, including online correction
       of advertising data and billing adjustments.

     - Financial Management -- specifically designed for the directory
       publisher's billing, accounts receivable and collections functions.

  SERVICES

     We believe that the methodology we employ to deliver BSS products is one of
the key factors that enables us to achieve the time-frame, budget and quality
objectives of our customers' projects. Our methodology emphasizes rigorous
project management, customization, solutions implementation and integration
planning, as well as active customer participation at all stages to help
prioritize and implement time-critical information system solutions that address
the customer's individual needs.

     The extent of services provided varies from customer to customer. Some
communications service providers prefer a highly customized approach, with
extensive modifications to the BSS product and a significant level of ongoing
support. In recent years, more of our customers have chosen to implement
standard, pre-configured products with limited customization and less ongoing
support. We have invested considerable research and development efforts in
upgrading our application suite to address this market requirement.

     The process of customizing a system involves creating a tailored BSS
product to address a customer's specific technical and business requirements.
System implementation and integration activities are conducted by joint teams
from Amdocs and the customer in parallel with the customization effort.
Implementation and integration activities include project management,
development of training methods and procedures, design of work flows, hardware
planning and installation, network and system design and installation, system
conversion and documentation. In most cases, the role of Amdocs personnel is to
provide support services to the customer's own implementation and integration
team, which has primary responsibility for the task. Customers sometimes require
turn-key solutions, in which case we are able to provide full system
implementation and integration services.

     Once the system becomes operational, we are generally retained by the
customer to provide ongoing services such as maintenance, enhancement design and
development, and operational support. For substantially all of our customers,
the implementation and integration of an initial BSS product has been followed
by the sale of additional systems and modules. In recent years, we have
established long-term maintenance and support contracts with a number of our
customers. These contracts have generally involved an expansion in the scope of
support provided, while also ensuring a recurring source of revenue to us.

                                        21
Our business is conducted on a global basis. We maintain five development
facilities located in Israel, the United States, Cyprus, Ireland and Canada,
operate a support center located in Brazil and have operations in North America,
Europe, Latin America and the Asia-Pacific region. Support for implementation
and integration activities is typically performed at the customer site. Once the
system is operational or in production, we provide ongoing support and
maintenance through a combination of remote support from the development centers
and local support at the customer site.

     As part of our effort to provide comprehensive solutions to our customers,
we also offer outsourcing services to support operation of our BSS products.
These outsourcing services generally comprise a combination of functions such as
responsibility for the ongoing development and enhancement of BSS systems that
we have installed, the purchase and management of related hardware assets and
overall management of the customer's associated data centers

  SALES AND MARKETING

     Our sales and marketing activities are primarily directed at major
communications companies. As a result of the strategic importance of our
information systems to the operations of such companies, a number of
constituencies within a customer's organization are typically involved in
purchase decisions, including senior management, information systems personnel
and user groups such as the finance and marketing departments.

     We maintain sales offices in the United States, the United Kingdom, and
several other countries. Our sales activities are supported by marketing
efforts, including marketing communications, product management, market research
and strategic alliances. The management of our operating subsidiaries is closely
involved in establishing sales policies and overseeing sales activities.
Management's role includes the setting of priorities among the multiple sales
opportunities available at any point in time. Management is also responsible for
allocating sufficient resources to each project to meet our quality standards
while also adhering to the project's cost and schedule parameters.

     We also interact with other third parties in our sales activities,
including independent sales agents, information systems consultants engaged by
our customers or prospective customers and systems integrators that provide
complementary products and services to such customers. We also have value-added
reseller agreements with certain hardware and database vendors.

  CUSTOMERS

     Our target market is comprised of communications companies that require
information systems with advanced functionality and technology. The companies in
our target segment are typically market leaders or innovative, well-backed new
entrants. By working with such companies, we help ensure that we remain at the
forefront of developments in the communications industry and that our BSS
product offerings continue to address the market's most sophisticated needs. We
have an international orientation, focusing on potential customers in the
developed, industrialized countries in North America, Europe, Latin America and
the Asia-Pacific region. In addition, we offer CRM applications to selected
customers and segments outside of the communications industry.

     Our customers include global communications leaders, as well as other
leading network operators and service providers and directory publishers in the
United States and around the world. Our customers include SBC and a number of
its operating subsidiaries, such as Cingular Wireless, Southwestern Bell

                                        22
Yellow Pages, Southwestern Bell Communications Services and Southwestern Bell
Telephone Company. Additional customers include:
BCP                                               Tele Danmark
    Bell Canada                                       Telefonica
    BT                                                Telstra
    Deutsche Telekom                                  Telus
    Netcom                                            Verizon
    Nextel                                            Vodafone Group
    Rogers AT&T                                       VoiceStream
    Sprint PCS                                        Western Wireless
Our single largest customer group is Nextel Communications, which accounted
for, in the aggregate, 11.8%, 10.3% and 5.9% of our revenue in fiscal 2002, 2001
and 2000, respectively. Our next largest group of customers is SBC, which
accounted for 10.6%, 13.3% and 12.6% of our revenue in fiscal 2002, 2001 and
2000, respectively.

     Aggregate revenue derived from the multiple business arrangements we have
with each of our five largest customers and their subsidiaries, excluding SBC,
accounted for approximately 45.6%, 41.3% and 39.7% of our revenue in fiscal
2002, 2001 and 2000, respectively.

     The following is a summary of revenue by geographic area. Revenue is
attributed to geographic region based on the location of the customers:
2002     2001     2000
                                                             -----    -----    -----
North America..............................................  61.9%    53.8%    45.6%
Europe.....................................................  28.9     35.8     42.4
Rest of the World..........................................  9.2      10.4     12.0
COMPETITION

     The market for communications information systems is highly competitive and
fragmented, and we expect competition to increase. We compete with many
independent providers of information systems and services, including American
Management Systems, Convergys, CSG, IBM, Portal Software Inc., Saville Systems
(a subsidiary of ADC Telecommunications, Inc.), SchlumbergerSema Group and
Siebel Systems, Inc., with system integrators, such as EDS, and with internal
information systems departments of large communication companies. We expect
continued competition in the communications industry and the entrance of new
competitors into the software information systems market in the future.

     We believe that we are able to differentiate ourselves from the competition
by, among other things:

     - offering customers a total information system from a single vendor,

     - providing high quality reliable, scalable products,

     - effectively managing the timely implementation of products, and

     - responding to customer service and support needs through a skilled
       professional organization.

     We compete with a number of companies that have long operating histories,
large customer bases, substantial financial, technical, sales, marketing and
other resources, and strong name recognition. Current and potential competitors
have established, and may establish in the future, cooperative relationships
among themselves or with third parties to increase their ability to address the
needs of our prospective customers. Accordingly, new competitors or alliances
among competitors may emerge and rapidly acquire significant market share. As a
result, our competitors may be able to adapt more quickly than we can to new or
emerging technologies and changes in customer requirements, or to devote greater
resources to the promotion and sale of their products. There can be no assurance
that we will be able to compete successfully with existing or new competitors.
Failure by us to adapt to changing market conditions and to

                                        23
compete successfully with established or new competitors may have a material
adverse effect on our results of operations and financial condition.

  EMPLOYEES

     We invest significant resources in training, retention and motivation of
high quality personnel. Training programs cover areas such as technology,
applications, development methodology, project methodology, programming
standards, industry background and management development. Our management
development scheme is reinforced by a divisional structure, which provides
opportunities for talented managers to gain experience in general management
roles at the division level. We also invest considerable resources in personnel
motivation, including providing various incentive plans for sales staff and high
quality employees. Our future success depends in large part upon our continuing
ability to attract and retain highly qualified managerial, technical, sales and
marketing personnel.

     See "Directors, Senior Management and Employees -- Employees" for further
details regarding our employees and our relationships with them.

  INTELLECTUAL PROPERTY

     We regard a substantial portion of our software products and systems as
proprietary and rely on a combination of statutory and common law copyright,
trademark, trade secret laws, customer licensing agreements, employee and
third-party non-disclosure agreements and other methods to protect our
proprietary rights. We do not include in our software any mechanisms to prevent
or inhibit unauthorized use, but we generally enter into confidentiality
agreements with our employees, consultants, subcontractors, customers and
potential customers and limit access to, and distribution of, our proprietary
information. While we rely on these methods to protect our technology, we
believe that factors such as the knowledge, skill and experience of our
personnel, new product developments, frequent product enhancements and the
timeliness and quality of support services are also critical to our success.

  PROPERTY, PLANTS AND EQUIPMENT

     Facilities

     We lease land and buildings for our executive offices, sales, marketing,
administrative, development and support centers. We lease an aggregate of
approximately 2,100,000 square feet worldwide, including significant leases in
the United States, Israel, Cyprus, Canada and the United Kingdom. Our aggregate

                                        24
committed annual lease costs are approximately $45 million. The following table
summarizes information with respect to the principal facilities leased by us and
our subsidiaries as of February 1, 2003:
AREA
LOCATION                                                       (SQ. FEET)
--------                                                       ----------
United States
  Chesterfield, MO..........................................     180,000
  San Jose, CA..............................................     132,000
  Stamford, CT(*)...........................................      81,000
  Champaign, IL.............................................     105,000
  Others....................................................      93,000
                                                               ---------
     Total..................................................     591,000

Israel
  Ra'anana..................................................     634,000
  Hod-Hasharon..............................................     201,000
  Jerusalem.................................................      32,000
  Haifa(*)..................................................     133,000
  Negev.....................................................      38,000
                                                               ---------
     Total..................................................   1,038,000

Cyprus (Limassol)...........................................     110,000
Canada (Toronto)(*).........................................     220,000
United Kingdom (London)(*)..................................      59,000
Rest of the world(**).......................................     118,000
---------------

 (*) Includes space sublet to third parties.

(**) Includes Argentina, Australia, Brazil, Czech Republic, Denmark, France,
     Germany, Hong Kong, Hungary, Ireland, Italy, Japan, Poland, South Africa,
     Spain, Thailand and The Netherlands.

     Our leases expire on various dates between 2003 and 2012, not including
various options to extend lease terms.

     Equipment

     We develop our BSS products over a system of UNIX, MVS and Windows NT/2000
servers owned by us. We use a variety of software products in our development
centers, including products by Microsoft, Oracle, Synscsort, CA, Merant, IBM, HP
and BEA. Our data storage is based on equipment from EMC, SUN, NetApp and
Hewlett-Packard. Our development servers are connected to approximately 15,000
personal computers owned by us.

     Automatic tape libraries provide full and incremental backups of the data
used in and generated by our business. The backup tapes are kept on-site and
off-site, as appropriate, to ensure security and integrity, and are used as part
of our disaster recovery plan. The distributed development sites that we operate
worldwide are connected by a high speed redundant wide area network ("WAN"),
using telecommunication equipment manufactured by, among others, Cisco and
Nortel.

     The distributed development sites that we operate worldwide are also
connected by a high speed WAN.

                                        25
ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

INTRODUCTION

     In this section, we discuss the general financial condition and the results
of operations for Amdocs and its subsidiaries including:

     - the factors that affect our business,

     - our revenue and costs for the fiscal years ended September 30, 2002, 2001
       and 2000,

     - the reasons why such revenue and costs were different from year to year,

     - the sources of our revenue,

     - the impact of changes we have made to our organizational structure,

     - how all of this affects our overall financial condition,

     - our expenditures for the fiscal years ended September 30, 2002, 2001 and
       2000, and

     - the sources of our cash to pay for future capital expenditures and
       possible acquisitions.

     In this section, we also analyze and explain the annual changes in the
specific line items in our consolidated statements of operations. You should
read this section in conjunction with our consolidated financial statements,
included elsewhere in this report.

OVERVIEW OF BUSINESS AND TREND INFORMATION

     Our market focus is the communications industry, and we are a leading
provider of software products and services to that industry. Our BSS products
consist primarily of customer care and billing, customer relationship management
and order management systems. Our products also include a full range of
directory sales and publishing systems, for publishers of both traditional
printed yellow page and white page directories and electronic Internet
directories.

     Our CC&B Systems and our Directory Systems are designed to meet the
mission-critical needs of leading communications service providers. We support a
wide range of communications services, including wireline, wireless, voice,
data, broadband, content, electronic and mobile commerce and IP based services.
We also support companies that offer multiple service packages, commonly
referred to as convergent services. Because of the complexity of BSS projects
and the expertise required for system support, we also provide extensive
customization, implementation, system integration, ongoing support, system
enhancement, maintenance and outsourcing services, such as the operation of data
centers and the provision of communications facility management services, in all
cases on either or a combination of a fixed or unit charge basis to our
customers.

     As part of our strategy, we may pursue acquisitions and other initiatives
in order to offer new products or services or otherwise enhance our market
position or strategic strengths. See the discussion below under the caption
"Acquisitions".

     We derive our revenue principally from:

     - the sale of licenses for our products, including initial license fees and
       incremental license fees resulting from increases in a customer's
       business volume,

     - the sale of services related to our products, including customization,
       implementation and integration services,

     - recurring revenue from ongoing support and maintenance provided to our
       customers, and

     - providing outsourcing and other related services for our customers.

     We usually sell our software as part of an overall solution offered to a
customer, in which significant customization and modification to our software
generally is required. As a result, we generally recognize

                                        26
revenue over the course of these long-term projects. Initial license fee revenue
is recognized as work is performed, using the percentage of completion method of
accounting. Subsequent license fee revenue is recognized upon completion of
specified conditions in each contract. Service revenue that involves significant
ongoing obligations, including fees for software customization, implementation
and modification, also is recognized as work is performed, under the percentage
of completion method of accounting. Revenue from software solutions that do not
require significant customization and modification is recognized upon delivery.
In outsourcing contracts, we recognize revenue from the operation and
maintenance of customers' billing systems in the period in which the bills are
produced. Revenue from ongoing support services is recognized as work is
performed. Revenue from third-party hardware and software sales is recognized
upon delivery. Maintenance revenue is recognized ratably over the term of the
maintenance agreement. As a result of a substantial portion of our revenue being
subject to the percentage of completion accounting method, the size and timing
of customer projects and our progress in completing such projects may
significantly affect our annual and quarterly operating results.

     Our business is subject to the effects of general global economic
conditions and, in particular, market conditions in the communications industry.
As a result of the slowdown in the communications industry, the market value,
financial results and prospects, and capital spending levels of communications
companies have declined or degraded.

     The persistence and worsening of the downturn in the communications
industry have significantly impacted our business. Over the past year, further
slowdowns in customer buying decisions stemming from overall reductions in the
capital investment budgets of many communications service providers have led to
fewer new contracts than we had expected, as well as smaller than expected
initial spending commitments and reduced discretionary spending under our
contracts with some of our customers. These factors, combined with the
continuing general economic slowdown, resulted in our achieving lower revenue
levels than expected during the second half of fiscal 2002.

     Due to our heavy dependence on the communications industry, we can be
adversely affected by bankruptcies or other business failures in that industry.
Failures in the communications industry could harm our business and might have a
material adverse effect on our operating results and financial condition.

     Total license and service revenue for the fiscal year ended September 30,
2002 was $1,613.6 million, compared to $1,533.9 million in fiscal 2001 and
$1,118.3 million in fiscal 2000.

     License and service fees from the sale of CC&B Systems amounted to $1,440.0
million in the year ended September 30, 2002, compared to $1,379.7 million in
fiscal 2001 and $986.5 million in fiscal 2000. In fiscal 2002, license and
service fees from the sale of CC&B Systems represented 89.2% of our total
revenue, compared to 89.9% in fiscal 2001 and 88.2% in fiscal 2000.

     We believe that we are a leading global provider of CC&B Systems. We
provide a broad set of CC&B Systems, with proven functionality and scalability,
accompanied by a comprehensive range of support services.

     We believe that demand for our CC&B Systems is driven by, among other key
factors:

     - the global penetration of communications service providers,

     - the emergence of new communications products and services, especially IP,
       data and content services,

     - technological changes, such as the introduction of wireless Internet
       services via GPRS and UMTS technology,

     - the business needs of communications service providers to reduce costs
       and retain customers, and

     - a shift from in-house management to vendor solutions.

                                        27
We also believe that additional drivers of demand are the continuing trend
for communications service providers to offer to their subscribers multiple
service packages, commonly referred to as convergent services (combinations of
voice, broadband, electronic and mobile commerce and IP services), and the
ability of our CC&B Systems to improve productivity and reduce costs of
communications providers.

     Another key to demand for our CC&B Systems is the practice by certain
communications service providers to outsource entirely their customer care and
billing functions.

     Although we are unable at this time to forecast demand for our CC&B
Systems, we could experience additional revenue softness in the future as a
result of the downturn in the communications industry. This industry-wide
downturn had a direct negative impact on our results in fiscal 2002, reducing
both the number of new contracts we have been able to obtain, and the initial
spending commitments and discretionary spending levels of some of our customers.
In the first quarter of fiscal 2003, we had total revenue of $339 million and as
of January 31, 2003, we expect that total revenue for the second quarter of
fiscal 2003 will be in the range of $333 million to $340 million. As of January
31, 2003, we have no clear indication for the second half of fiscal 2003.
Accordingly, at this point, we cannot predict whether revenue levels will
continue to deteriorate or have stabilized. However, we expect that revenue
attributable to our CC&B Systems in fiscal 2003 will be lower than in fiscal
2002.

     License and service fees from the sale of Directory Systems amounted to
$173.6 million in the year ended September 30, 2002, compared to $154.2 million
in fiscal 2001 and $131.8 million in fiscal 2000. In fiscal 2002, license and
service fees from the sale of Directory Systems represented 10.8% of our total
revenue, compared to 10.1% in fiscal 2001 and 11.8% in fiscal 2000.

     We believe that we are a leading provider of Directory Systems in most of
the markets that we serve. We anticipate that revenue levels for our Directory
Systems and related outsourcing projects for fiscal 2003 will be slightly higher
than in fiscal 2002.

SENIOR MANAGEMENT TRANSITION AND NEW ORGANIZATIONAL STRUCTURE

     In March 2002, we announced a senior management transition. Effective July
1, 2002, Dov Baharav, who previously had served as Chief Financial Officer of
Amdocs Management Limited, assumed the role of President and Chief Executive
Officer. Ron Moskovitz, who previously had served as Vice President of Finance
for Amdocs Management Limited, took over the role of Chief Financial Officer.
Mr. Baharav replaced Avinoam Naor in the positions of President and Chief
Executive Officer of Amdocs Management Limited. Mr. Naor became the Vice
Chairman of our Board of Directors.

     Under the leadership of our new management team and in response to changing
market conditions, we implemented a new organizational structure during the
fourth quarter of fiscal 2002. Our operations are now centered around two main
groups, the Offering Group and the Delivery Group. The Offering Group is
responsible for developing and marketing our BSS products, while the Delivery
Group is responsible for project and service delivery to our customers.

OPERATIONAL EFFICIENCY AND COST REDUCTION PROGRAM

     In October 2001, as part of a plan to achieve increased operational
efficiency and to more closely monitor and reduce costs, we consolidated our
Stamford, Connecticut data center into our Champaign, Illinois facility, and we
closed the Stamford facility. As a direct result of this closure, we recorded a
nonrecurring charge of $13.3 million in the first quarter of fiscal 2002,
primarily for the write-off of leasehold improvements and rent obligations, with
the remainder for employee separation costs.

     In addition, in the first quarter of fiscal 2002, as part of a general
effort to reduce costs, we have decreased our overall commitments for employee
compensation, through a lesser reliance on fixed compensation programs and a
greater reliance on discretionary arrangements.

     On June 20, 2002, we announced our intention to implement a cost reduction
program to reduce costs by approximately 10% in response to a decline of our
forecasted revenue for the third and fourth quarters

                                        28
of fiscal 2002. The decline resulted from, among other factors, slowdowns in
customer buying decisions in the third quarter of fiscal 2002, stemming from
overall reductions in the capital investment budgets of many communications
service providers, leading to fewer new contracts than we had expected, as well
as smaller than expected initial spending commitments and reduced discretionary
spending under our contracts with some of our customers.

     We recorded a charge of $20.9 million in the fourth quarter of fiscal 2002,
consisting primarily of employee separation costs in connection with the
elimination of approximately 1,000 positions, with the remainder for the
write-off of leasehold improvements and rent obligations. Except for certain
lease termination costs that will be paid over the respective lease terms, we
expect to pay substantially all of the remaining accrual balance of the cost
reduction program in the first quarter of fiscal 2003.

     These charges are included in "restructuring charges, in-process research
and development and other indirect acquisition-related costs" for the year ended
September 30, 2002.

     Implementation of our cost reduction program permitted us to achieve cost
savings of approximately $18 million in the fourth quarter of fiscal 2002. We
believe that the cost reduction program will create additional quarterly cost
savings of approximately $12 million, which will achieve an overall savings of
$30 million each quarter on an ongoing basis compared to the expense level in
the third quarter of fiscal 2002. During the fourth quarter of fiscal 2002 we
notified all affected employees of their termination. However, some of these
individuals remained on our payroll as our employees through the end of the
fourth quarter. As a result, the cost savings achieved in the fourth quarter
were partial.

     For additional cost reduction measures, see the discussion below under the
caption "Subsequent Event".

ADOPTION OF NEW ACCOUNTING STANDARDS

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations" ("SFAS No. 141"), and No. 142, "Goodwill and Other Intangible
Assets" ("SFAS No. 142").

     SFAS No. 141 requires that the purchase method of accounting be used for
all business combinations initiated after June 30, 2001.

     SFAS No. 142 is effective for fiscal years beginning after December 15,
2001. Under SFAS No. 142, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but, instead, will be subject to
periodic impairment tests in accordance with the Statement. Other intangible
assets will continue to be amortized over their useful lives.

     Other intangible assets, such as workforce-in-place, will be reclassified
to goodwill, according to SFAS No. 141's new definition of intangible assets.

     Effective October 1, 2002 we adopted SFAS No. 142. Subsequent to the
adoption of the new rules, we performed the transitional tests of goodwill and
intangible assets recorded as of October 1, 2002. Thereafter, a periodic
impairment test will be performed at least annually. We operate in one business
segment, and our reporting unit is consistent with that one operating segment.
In calculating the fair value of the reporting unit, we used a discounted cash
flow methodology. There was no impairment of goodwill upon adoption of SFAS 142.
We will perform our annual impairment review during the fourth quarter of each
year commencing in the fourth quarter of fiscal 2003. We recorded goodwill and
workforce-in-place amortization of $204.6 million in fiscal 2002, $204.6 million
in fiscal 2001 and $104.3 million in fiscal 2000. See the discussion below under
the caption "Acquisitions".

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections" ("SFAS No. 145"). SFAS No. 145 eliminates previous requirements to
classify gains and losses from extinguishment of debt as extraordinary items in
earnings. Gains or losses from extinguishment of debt for fiscal years beginning
after May 15, 2002 shall not be classified as extraordinary items unless certain
provisions are met. Early adoption was encouraged. We adopted SFAS No. 145 in
the fourth quarter of fiscal 2002 in connection with the gain related to the
repurchase of our convertible notes. See the discussion below under the caption
"Convertible Notes".

                                        29
ACQUISITIONS

     As part of our strategy, we may pursue acquisitions in order to offer new
products or services or otherwise enhance our market position or strategic
strengths.

     In November 1999, we acquired International Telecommunication Data Systems,
Inc. ("ITDS") in a stock-for-stock acquisition. The acquisition of ITDS, a
leading provider of solutions to communications companies for outsourcing of
billing operations, expanded the scope of our CC&B Systems offerings. We believe
that this acquisition further established our leadership in providing total
solutions to the communications industry. The total purchase price of $189.0
million consisted of the issuance of 6,461,376 ordinary shares, the grant of
options to purchase 1,102,955 ordinary shares and transaction costs. We have
since renamed ITDS, Amdocs Stamford, Inc.

     In April 2000, we acquired Solect Technology Group Inc. ("Solect") in a
stock-for-stock acquisition. The acquisition of Solect, a leading provider of
billing and customer care software to IP service providers, including wireless
and application service providers, or ASPs, expanded our IP service provider
customer base for CC&B Systems. In the acquisition, all then outstanding common
shares of Solect were exchanged for shares of a newly issued class of
exchangeable shares of Solect. The exchangeable shares entitle holders to
dividends and other rights economically equivalent to our ordinary shares,
including the right, through a voting trust, to vote at our shareholder
meetings. The exchangeable shares are exchangeable at the option of the holders
into our ordinary shares on a one-for-one basis. The total purchase price of
$1,087.7 million consisted of the issuance of 13,846,302 exchangeable shares,
the grant of options to purchase 1,653,662 ordinary shares and transaction
costs. We have since renamed Solect, Amdocs Canada, Inc.

     On November 28, 2001, we purchased from Nortel Networks Corporation
substantially all of the assets of its Clarify business ("Clarify"), a leading
provider of CRM software to communications companies and other enterprise
sectors. This acquisition positioned us as a leading provider of CRM software to
the communications industry and, through our addition of Clarify's CRM software
to our CC&B Systems offerings, reinforced our leadership in delivering a
comprehensive portfolio of business software applications. Following the
acquisition, we have continued to sell Clarify's CRM software to customers other
than communication service providers. Although these customers are not the
primary focus of our business, we believe that revenue from such customers will
slightly increase over time. The total purchase price for Clarify, as of
September 30, 2002, was $212.0 million in cash, including transaction costs of
$8.3 million. The purchase price was subject to final price adjustments that
were settled in October 2002 and resulted in an $11.3 million reduction of the
purchase price to $200.7 million in the first quarter of fiscal 2003.

     We accounted for the ITDS, Solect and Clarify acquisitions using the
purchase method of accounting. We have included the fair market value of the
assets and liabilities acquired in these transactions in our balance sheet and
the results of operations for the acquired entities in our consolidated
statements of operations as of the closing date of each acquisition. In each
case, we obtained a valuation of the intangible assets acquired. The value of
the acquired technology included both existing technology and in-process
research and development. The valuation of these items was estimated by applying
the income forecast method, which considered the present value of cash flows by
product lines. We amortized the fair value of existing technology products over
two years, commencing as of the closing date of the applicable acquisition. We
charged as an expense in-process research and development immediately following
the completion of each acquisition in accordance with FASB Interpretation No. 4,
"Applicability of FASB Statement No. 2 to Business Combinations Accounted for by
the Purchase Method", because in each case such technology had not reached
technological feasibility and had no alternative use. We are amortizing the fair
value of customer arrangements and workforce-in-place over five years in the
case of ITDS and three years in the case of Solect and Clarify. These
amortizations commenced on the closing date of the applicable acquisition.

     The excess of the purchase price over the fair value of the net assets
acquired constitutes goodwill. We began amortizing goodwill from the ITDS
acquisition over a 15-year period and from the Solect
                                        30
acquisition over a five-year period, in each case commencing on the closing date
of the applicable acquisition. According to the transition provisions of SFAS
No. 142, goodwill for acquisitions completed subsequent to June 30, 2001 is not
amortized and goodwill for acquisitions completed prior to June 30, 2001 is
amortized only through September 30, 2002. See the discussion above under the
caption "Adoption of New Accounting Standards". In accordance with these
provisions, the goodwill relating to the Clarify acquisition has been not
amortized. Commencing October 1, 2002, as a result of our adoption of SFAS No.
142, we will cease amortizing goodwill related to the ITDS and Solect
acquisitions and all goodwill will be subject to periodic impairment tests. Also
effective October 1, 2002, we adopted SFAS No. 141 for acquisitions prior to
July 1, 2001, which requires us to reclassify to goodwill certain other
intangible assets, such as workforce-in-place. The amount assigned to Clarify
goodwill was subject to possible purchase price adjustments and other
contingencies, which were settled in October 2002, as discussed above.

     No further investments were made in the projects written-off in our
acquisitions.

     For more information on our acquisitions, see Note 3 to the consolidated
financial statements included in this document.

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

     Our research and development activities involve the development of new
software modules and product offerings in response to an identified market
demand, either in conjunction with a customer project or as part of our internal
product development programs. We also expend additional amounts on applied
research and software development activities to keep abreast of new technologies
in the communications markets and to provide new and enhanced functionality to
our existing product offerings. Research and development expenditures were
$124.1 million, $105.8 million and $74.9 million in the fiscal years ended
September 30, 2002, 2001 and 2000, respectively, representing 7.7%, 6.9% and
6.7%, respectively, of our revenue in these fiscal years. We believe that our
research and development efforts are a key element of our strategy and are
essential to our success. Although we intend to continue to devote resources to
research and development as required to maintain and further strengthen our
market position, our research and development budget, like all of our costs, is
sensitive to our overall financial condition. A decrease in our total revenue
could, in certain circumstances, lead to reductions in the levels of our
research and development expenditures.

     We regard significant portions of our software products and systems as
proprietary. We rely on a combination of statutory and common law copyright,
trademark and trade secret laws, customer licensing agreements, employee and
third-party nondisclosure agreements and other methods to protect our
proprietary rights. We generally enter into confidentiality agreements with our
employees, consultants, subcontractors, customers and potential customers and
limit access to, and distribution of, our proprietary information. We believe
that the sophistication and complexity of our BSS offerings make it very
difficult to copy such information or to subject such information to
unauthorized use. We maintain sole ownership of our software products.

CONVERTIBLE NOTES

     In May 2001 we issued $500.0 million aggregate principal amount of 2%
Convertible Notes due June 1, 2008 (the "Notes"). We are obligated to pay
interest on the Notes semi-annually on June 1 and December 1 of each year. The
Notes are our senior unsecured obligations and rank equal in right of payment
with all of our existing and future senior unsecured indebtedness. The Notes are
convertible, at the option of the holders at any time before the maturity date,
into our ordinary shares at a conversion rate of 10.8587 shares per $1,000
principal amount of Notes, representing a conversion price of approximately
$92.09 per share. The Notes are subject to redemption at any time on or after
June 1, 2006, in whole or in part, at our option, at a redemption price of 100%
of the principal amount plus accrued and unpaid interest. The Notes are subject
to repurchase, at the holder's option, on June 1, 2004 and June 1, 2006, at a
repurchase price equal to 100% of the principal amount plus accrued and unpaid
interest, if any, on such

                                        31
repurchase date. We may choose to pay the repurchase price in cash, ordinary
shares or a combination of cash and ordinary shares.

     On July 23, 2002, our Board of Directors authorized us to repurchase Notes,
in such amounts, at such prices and at such times considered appropriate. Such
repurchases may be made on the open market, in privately negotiated transactions
or otherwise, in accordance with any applicable laws and the terms of the Notes.
As of September 30, 2002, we had repurchased $54.9 million aggregate principal
amount of the Notes, at an average price of $890 per $1,000 principal amount. We
funded these repurchases, and intend to fund any future repurchases, with
available funds. As of September 30, 2002, $445.1 million aggregate principal
amount of the Notes was outstanding.

SHARE REPURCHASE PROGRAM

     In November 2001, our Board of Directors approved a twelve-month share
repurchase program, authorizing the repurchase of up to 11 million of our
ordinary shares, or approximately 5% of our outstanding ordinary shares as of
that date. In April 2002, our Board of Directors expanded the stock repurchase
plan to authorize the purchase of up to 20 million shares, or approximately 9%
of our then outstanding ordinary shares. Under the program, from time to time
through November 2002, we were authorized to repurchase shares on the open
market, in privately negotiated transactions or otherwise, in accordance with
any applicable laws, and at times and prices as we deemed appropriate. During
2002 we repurchased 7.7 million of our ordinary shares at a weighted average
price of $14.13 per share. We funded these repurchases, and intend to fund any
future repurchases, with available funds.

INVESTMENT

     In January 2001 we formed Certen Inc. ("Certen") with Bell Canada to
provide customer care and billing solutions to Bell Canada and some of its
affiliated companies. Certen is owned 90% by Bell Canada and 10% by us.
Commencing on the 30-month anniversary of the transaction, convertible
debentures issued by Certen to us will be convertible into an additional 35%
ownership interest in Certen. Our relative ownership interests might be modified
further through the exercise of a series of contractual rights, commencing on
the 30-month anniversary of the transaction. We are providing the customer care
and billing software required by Certen, including customization, installation,
maintenance and other services. We account for our investment in Certen under
the cost method.

ADJUSTMENT TO THE BASIS OF INVESTMENTS

     In fiscal 2002, we recorded pretax charges of $5.5 million to adjust the
carrying value of two investments, accounted for by us under the cost method. In
fiscal 2001, we recorded pretax charges of $6.8 million to adjust the carrying
value of four investments, accounted for by us under the cost method. We
periodically monitor the economic and financial aspects of our interests in all
of our investments. Following these adjustments, as of September 30, 2002, our
only remaining investment accounted for under the cost method was Certen.

                                        32
OPERATING RESULTS

     The following table sets forth for the fiscal years ended September 30,
2002, 2001 and 2000 certain items in our consolidated statements of operations
reflected as a percentage of total revenue:
YEAR ENDED SEPTEMBER 30,
                            --------------------------------------------------------------------
                                    2002                    2001                    2000
                            --------------------    --------------------    --------------------
                              PRO          AS         PRO          AS         PRO          AS
                            FORMA(*)    REPORTED    FORMA(*)    REPORTED    FORMA(*)    REPORTED
                            --------    --------    --------    --------    --------    --------
Revenue:
  License.................     9.5%        9.5%       11.2%       11.2%       11.2%       11.2%
  Service.................    90.5        90.5        88.8        88.8        88.8        88.8
                             -----       -----       -----       -----       -----       -----
                             100.0       100.0       100.0       100.0       100.0       100.0
                             -----       -----       -----       -----       -----       -----
Operating expenses:
  Cost of license.........     0.3         0.3         0.4         0.4         0.5         0.5
  Cost of service.........    57.5        57.5        55.3        55.3        57.2        57.2
  Research and
     development..........     7.7         7.7         6.9         6.9         6.7         6.7
  Selling, general and
     administrative.......    13.9        13.9        12.7        12.7        12.3        12.3
  Amortization of goodwill
     and purchased
     intangible assets....      --        14.4          --        14.3          --         9.9
  Restructuring charges,
     in-process research
     and development and
     other indirect
     acquisition-related
     costs................      --         3.2          --          --          --         6.8
                             -----       -----       -----       -----       -----       -----
                              79.4        97.0        75.3        89.6        76.7        93.4
                             -----       -----       -----       -----       -----       -----
Operating income..........    20.6         3.0        24.7        10.4        23.3         6.6
Interest income and other,
  net.....................     0.8         1.2         1.4         1.4         1.0         1.0
                             -----       -----       -----       -----       -----       -----
Income before income
  taxes...................    21.4         4.2        26.1        11.8        24.3         7.6
Income taxes..............     6.0         4.6         7.8         7.5         7.3         7.1
                             -----       -----       -----       -----       -----       -----
Net (loss) income.........    15.4%       (0.3)%      18.3%        4.3%       17.0%        0.5%
                             =====       =====       =====       =====       =====       =====
---------------

(*) The above pro forma financial information regarding our operating results is
    provided as a complement to results reported in accordance with accounting
    principles generally accepted in the United States. We use this pro forma
    financial information in our internal analysis because it enables us to
    consistently analyze the critical components and results of operations and
    to have a meaningful comparison to prior years. This pro forma financial
    information excludes (i) amortization of goodwill and purchased intangible
    assets, (ii) for fiscal 2002 and 2000 only, $17.4 million and $75.6 million,
    respectively, for purchased in-process research and development and other
    indirect acquisition-related costs, attributable to our acquisitions, (iii)
    for fiscal 2002 only, $13.3 million for a nonrecurring charge related to the
    consolidation of data centers and the resulting closure of our Stamford,
    Connecticut facility, $20.9 million for restructuring charge related to the
    cost reduction program, (iv) for fiscal 2002 only, $6.0 million gain
    attributable to the repurchase of Notes and (v) all related tax effects
    attributable to the above of $23.3 million, $5.3 million and $2.6 million
    for fiscal 2002, 2001 and 2000, respectively. We refer to the items in
    clauses (i) and (ii) collectively, as the "acquisition-related charges".

  FISCAL YEARS ENDED SEPTEMBER 30, 2002 AND 2001

     Revenue.  Total revenue for the year ended September 30, 2002 was $1,613.6
million, an increase of $79.7 million, or 5.2%, over fiscal 2001. This growth
rate was significantly less than the 37.2% revenue increase we had been able to
achieve between fiscal 2000 and 2001, primarily as a result of the

                                        33
pronounced decrease in our CC&B Systems revenue in the second half of fiscal
2002, partially offset by revenue attributable to our acquisition of Clarify.
While CC&B Systems revenue levels in the first six months of fiscal 2002 were
23.8% higher than revenue levels for CC&B Systems in the comparable period of
fiscal 2001, and 6.3% higher sequentially based on a comparison of our second to
our first fiscal quarters of 2002, CC&B Systems revenue declined significantly
in the second six months of fiscal 2002. The Company experienced a $130.6
million, or 16.6%, decline in revenue from our CC&B Systems between the first
half and second half of fiscal 2002 and sequential declines of $65.9 million or
16.3% and $23.0 million or 6.8%, between the second and third fiscal quarters
and third and fourth fiscal quarters of 2002, respectively.

     The recent quarterly trends in our total revenue are summarized below (in
millions):
Q1        Q2        Q3        Q4
                                                  ------    ------    ------    ------
Fiscal 2002.....................................  $422.6    $455.3    $380.1    $355.5
Fiscal 2001.....................................  $342.2    $372.3    $404.0    $415.4
As of January 31, 2003 we expect that total revenue for the first half of
fiscal 2003 will be in the range of $672 million to $679 million. We are unable
at this time to forecast beyond the first half of fiscal 2003. We could
experience stabilization of revenue levels or additional revenue softness in
future quarters. However, we expect that our revenue in fiscal 2003 will be
lower than in fiscal 2002.

     License revenue decreased from $171.4 million in the year ended September
30, 2001 to $153.7 million in the year ended September 30, 2002, a decrease of
10.4%, while service revenue increased 7.2% to $1,459.9 million in the year
ended September 30, 2002 from $1,362.5 million in the year ended September 30,
2001. The decrease in license revenue and the smaller than expected growth in
service revenue are attributable primarily to the slowdown in customer buying
decisions in the second half of fiscal 2002, stemming from overall reductions in
the capital investment budgets of many communications service providers. This
reduction in investment by our customers has resulted in our obtaining fewer new
contracts than expected and smaller than expected initial spending commitments
under contracts with some of our customers. The smaller than anticipated
increase in service revenue is also attributable, in part, to reduced
discretionary spending under our contracts with some of our customers in the
second half of fiscal 2002.

     Total CC&B Systems revenue for the year ended September 30, 2002 was
$1,440.0 million, an increase of $60.3 million, or 4.4%, over fiscal 2001.
During fiscal 2002, the demand for our CC&B Systems was primarily driven by the
need for communications companies to continue to upgrade their customer care and
billing, CRM software and order management systems in response to competition in
the subscriber markets, the need to offer new data services and the need to
improve productivity and operational efficiency. In addition, demand for our
CC&B Systems was enhanced by our acquisition of Clarify, which added Clarify's
CRM software to our CC&B Systems offerings. As a result of the Clarify
acquisition, we derived a portion of our CC&B Systems revenue in fiscal 2002
from customers other than communications service providers. For the year ended
September 30, 2002, $59.9 million of our CC&B Systems revenue was attributable
to such customers. Although our business is not focused on such non-
communications service provider customers, we believe that revenue from such
customers will slightly increase over time.

     Revenue from Directory Systems was $173.6 million for the year ended
September 30, 2002, an increase of $19.3 million, or 12.5%, over fiscal 2001.
The increase is attributable primarily to extensions of agreements with and
additional services rendered to existing customers.

     In the year ended September 30, 2002, revenue from customers in North
America, Europe and the rest of the world accounted for 61.9%, 28.9% and 9.2%,
respectively, compared to 53.8%, 35.8% and 10.4%, respectively, for fiscal 2001.
The growth in North American revenue in the year ended September 30, 2002, was
attributable primarily to increased activity from existing customers.

     Cost of License.  Cost of license for the year ended September 30, 2002 was
$5.1 million, a decrease of $0.6 million, or 10.6%, over the cost of license for
fiscal 2001. Cost of license includes amortization of

                                        34
purchased computer software and intellectual property rights, and is decreasing
as a result of our amortizing on a faster than straight-line basis.

     Cost of Service.  Cost of service for the year ended September 30, 2002 was
$928.3 million, an increase of $80.7 million, or 9.5%, over the cost of service
of $847.6 million for fiscal 2001. As a percentage of revenue, cost of service
increased to 57.5% in fiscal 2002 from 55.3% in fiscal 2001. The increase in
cost of service as a percentage of revenue is attributable to the decrease in
license revenue and the slight decrease in the gross margin of our service
revenue in the second half of fiscal 2002. As a result of general economic and
other factors negatively impacting our markets, we took steps to decrease our
costs. See the discussion above under the caption "Operational Efficiency and
Cost Reduction Program".

     Research and Development.  Research and development expense was primarily
comprised of compensation expense attributable to research and development
activities, either in conjunction with customer projects or as part of our
internal product development program. For the year ended September 30, 2002,
research and development expense was $124.1 million, or 7.7% of revenue,
compared with $105.8 million, or 6.9% of revenue, in fiscal 2001. The increase
in expense reflects ongoing expenditures primarily for CC&B Systems. Our
research and development budget, like all of our costs, is sensitive to our
overall financial condition. A decrease in our total revenue could, in certain
circumstances, lead to reductions in the levels of our research and development
expenditures. See the discussion above under the caption "Research and
Development, Patents and Licenses".

     Selling, General and Administrative.  Selling, general and administrative
expense was primarily comprised of compensation expense and increased by 14.3%
to $223.6 million, or 13.9% of revenue, in the year ended September 30, 2002
from $195.6 million, or 12.7% of revenue, in fiscal 2001. The increase in
selling, general and administrative expense as a percentage of revenue is
attributable primarily to the increase in our selling and marketing efforts in
fiscal 2002 and, to a lesser degree, to the reduction in our revenue growth,
which was not offset by a corresponding decrease in our selling, general and
administrative expense.

     Amortization of Goodwill and Purchased Intangible Assets.  Amortization of
goodwill and purchased intangible assets for the year ended September 30, 2002
was $231.8 million, compared to $220.0 million in fiscal 2001. The increase in
amortization expense in fiscal 2002 is due to non-goodwill related amortization
resulting from the Clarify acquisition. In accordance with SFAS No. 142,
goodwill related to Clarify, an acquisition completed after July 1, 2001, is not
amortized, but is subject to periodic impairment tests. For acquisitions
completed prior to July 1, 2001, under SFAS No. 142 amortization of goodwill and
certain other intangibles, such as workforce-in-place, will cease on October 1,
2002. In fiscal 2002 and 2001, total amortization related to such goodwill and
workforce-in-place was $204.6 million. Effective as of October 1, 2002, we
adopted SFAS No. 142 and goodwill related to our acquisitions will no longer be
amortized. Instead, any such goodwill will be subject only to the same periodic
impairment tests now applicable to Clarify-related goodwill. See the discussion
above under the caption "Acquisitions".

     Restructuring Charges, In-Process Research and Development and Other
Indirect Acquisition-Related Costs.  Restructuring charges, in-process research
and development and other indirect acquisition-related costs in fiscal 2002
consisted of a one-time charge of $17.4 million for write-off of purchased
in-process research and development resulting from the Clarify transaction, a
nonrecurring charge of $13.3 million related to the consolidation of data
centers and the resulting closure of our Stamford, Connecticut facility and a
restructuring charge of $20.9 million related to the cost reduction program we
implemented in the fourth quarter of fiscal 2002. See the discussion above under
the caption "Operational Efficiency and Cost Reduction Program".

     Operating Income.  Operating income for the year ended September 30, 2002,
was $49.2 million, compared to $159.3 million for fiscal 2001, a decrease of
69.1%. The decrease resulted primarily from the reduction in our revenue growth
in fiscal 2002, which was not offset by a corresponding decrease in our costs,
as well as from the Clarify acquisition-related charges and the restructuring
charges resulting from

                                        35
the Stamford facility closing and the implementation of our cost reduction
program. Pro forma operating income for the year ended September 30, 2002,
excluding acquisition-related charges and the restructuring charges, was $332.6
million, or 20.6% of revenue, compared to $379.3 million, or 24.7% of revenue,
for fiscal 2001, a decrease of 12.3%.

     Interest Income and Other, Net.  For the year ended September 30, 2002,
interest income and other, net, was $19.3 million, a decrease of $3.0 million
from fiscal 2001. The decrease in interest income and other, net, is primarily
attributable to the full-year interest expense and amortization of debt issuance
costs related to our Notes, compared to four months of these costs in fiscal
2001. The decrease in interest income and other, net, was partially offset by
gain of $6.0 million from the repurchase of our Notes. See the discussion above
under the caption "Convertible Notes".

     Income Taxes.  Income taxes for the year ended September 30, 2002 were
$73.5 million on pretax income of $68.5 million. Our blended effective tax rate
for fiscal 2002 was 107%, resulting from the non-cash amortization of goodwill
related to acquisitions, much of which is not tax deductible. See the discussion
below under the caption "Effective Tax Rate". The pro forma effective tax rate
for the year ended September 30, 2002, excluding the acquisition-related
charges, the restructuring charges resulting from the Stamford facility closing,
the implementation of our cost reduction program and the gain from the
repurchase of our Notes, was 28%. For the year ended September 30, 2001, income
taxes were $115.2 million on income before income taxes of $181.6 million. The
blended effective tax rate for fiscal 2001 was 63% (due to non-cash amortization
of goodwill related to acquisitions, much of which is not tax deductible) and
the pro forma effective tax rate for such period, excluding acquisition-related
charges, was 30%.

     Net (Loss) Income.  We incurred a net loss of $5.1 million in the year
ended September 30, 2002, compared to net income of $66.4 million in fiscal
2001. The net loss in fiscal 2002 resulted primarily from a decrease in our
license revenue and the reduction in our revenue growth in fiscal 2002, which
was not offset by a corresponding decrease in our costs, as well as from the
Clarify acquisition-related charges and the restructuring charges resulting from
the Stamford facility closing and the implementation of the cost reduction
program. We expect that our adoption of SFAS No. 142 as of October 1, 2002 will
have a positive impact on our results of operations in fiscal 2003. As a result
of the adoption, we will no longer be required to amortize the goodwill from any
of our acquisitions made prior to July 1, 2001. Instead, any such goodwill will
be subject only to periodic impairment tests, as is the case currently for the
goodwill from the Clarify acquisition. See the discussion above under the
caption "Acquisitions". Pro forma net income for the year ended September 30,
2002, excluding the acquisition-related charges, the restructuring charges
resulting from the Stamford facility closing and the implementation of our cost
reduction program, the gain from the repurchase of our Notes and tax effects
related to these items, decreased by 11.4% from fiscal 2001, to $249.0 million,
representing 15.4% of revenue. The decrease in our pro forma net income was due
to a decrease in our revenue growth in the year ended September 30, 2002, caused
by a significant slowdown in our market in the second half of fiscal 2002, which
was not offset by a corresponding decrease in the growth of our costs.

     Set forth below is the effect of non-amortization of goodwill and
workforce-in-place (in millions, except per share data):
FOR THE YEAR ENDED
                                                                 SEPTEMBER 30,
                                                              -------------------
                                                                2002       2001
                                                              --------   --------
Reported net (loss) income..................................   $ (5.1)    $ 66.4
Add back: goodwill and workforce-in-place amortizations.....    204.6      204.6
Attributable tax effect.....................................     (2.7)      (2.7)
                                                               ------     ------
Adjusted net income.........................................   $196.8     $268.3
                                                               ======     ======
Adjusted basic earnings per share...........................   $ 0.89     $ 1.21
                                                               ======     ======
Adjusted diluted earnings per share.........................   $ 0.88     $ 1.18
                                                               ======     ======
36
Diluted (Loss) Earnings Per Share.  Diluted loss per share was $0.02 for
the year ended September 30, 2002, compared to diluted earnings per share of
$0.29 in fiscal 2001. Pro forma diluted earnings per share for the year ended
September 30, 2002, excluding the acquisition-related charges, the restructuring
charges resulting from the Stamford facility closing and the implementation of
the cost reduction program and the gain from the repurchase of our Notes and tax
effects related to these items, decreased by 9.7% from fiscal 2001, to $1.12 per
diluted share. Excluding acquisition-related charges, our pro forma earnings per
share in the first quarter of fiscal 2003 was $0.20, and as of January 31, 2003,
we expect that our pro forma earnings per share in the second quarter of fiscal
2003 will be in the range of $0.18 to $0.20. See the discussion above under the
caption "Operational Efficiency and Cost Reduction Program".

  FISCAL YEARS ENDED SEPTEMBER 30, 2001 AND 2000

     Revenue.  Total revenue for the year ended September 30, 2001 was $1,533.9
million, an increase of $415.6 million, or 37.2%, over fiscal 2000. The increase
in revenue was due to continued growth in the demand for our CC&B Systems
solutions in our traditional target markets of high-end and mid-tier
communications companies. License revenue increased from $124.8 million in the
year ended September 30, 2000 to $171.4 million during fiscal 2001, an increase
of 37.3%, and service revenue increased 37.1% from $993.5 million in the year
ended September 30, 2000 to $1,362.5 million in fiscal 2001.

     Total CC&B Systems revenue for the year ended September 30, 2001 was
$1,379.7 million, an increase of $393.1 million, or 39.8%, over fiscal 2000. In
the year ended September 30, 2001, the demand for our CC&B Systems was primarily
driven by the need for communications companies to upgrade their customer care
and billing, CRM and order management systems in response to competition in the
subscriber markets, the need to offer convergent and IP services, and the need
to improve productivity and operational efficiency.

     Revenue from Directory Systems was $154.2 million for the year ended
September 30, 2001, an increase of $22.5 million, or 17.1%, over fiscal 2000.
The increase was attributable primarily to extensions of agreements with and
additional services rendered to existing customers.

     In the year ended September 30, 2001, revenue from customers in North
America, Europe and the rest of the world accounted for 53.8%, 35.8% and 10.4%,
respectively, compared to 45.6%, 42.4% and 12.0%, respectively, in fiscal 2000.
The growth in North America was attributable primarily to revenue we had gained
from forming or expanding relationships with new or existing customers in fiscal
2001.

     Cost of License.  Cost of license for fiscal 2001 was $5.7 million, which
was approximately equal to the cost of license in the prior fiscal year. Cost of
license included amortization of purchased computer software and intellectual
property rights.

     Cost of Service.  Cost of service for fiscal 2001 was $847.6 million, an
increase of $207.7 million, or 32.5%, over the cost of service of $639.9 million
for the year ended September 30, 2000. As a percentage of revenue, cost of
service decreased to 55.3% in the year ended September 30, 2001 from 57.2% in
fiscal 2000. The decrease in cost of service as a percentage of revenue was
primarily due to increases in our operational efficiency in the year ended
September 30, 2001. In the second half of fiscal 2001, we adopted a plan to
increase the efficiency of our operations and lower costs by reducing
discretionary expenses. As a result of this plan, we were able to reduce the
growth rate of our costs and achieve greater operational efficiency in fiscal
2001.

     Research and Development.  Research and development expense was primarily
comprised of compensation expense attributable to research and development
activities, either in conjunction with customer projects or as part of our
internal product development programs. In the year ended September 30, 2001,
research and development expense was $105.8 million, or 6.9% of revenue,
compared with $74.9 million, or 6.7% of revenue, in the previous fiscal year.
The increase represented ongoing expenditures primarily for CC&B Systems.

                                        37
Selling, General and Administrative.  Selling, general and administrative
expense was primarily comprised of compensation expense and increased by 42.8%
to $195.6 million, or 12.7% of revenue, in the year ended September 30, 2001,
from $137.0 million, or 12.3% of revenue, in fiscal 2000. The increase was
attributable primarily to increases in our selling and marketing efforts in the
year ended September 30, 2001.

     Amortization of Goodwill and Purchased Intangible Assets.  Amortization of
goodwill and purchased intangible assets for the year ended September 30, 2001
was $220.0 million, compared to $111.2 million in fiscal 2000. Amortization of
goodwill and purchased intangible assets relates to the acquisitions of ITDS and
Solect. The increase in amortization of goodwill and purchased intangible assets
in fiscal 2001 was due to the full-year amortization period applied in fiscal
2001 compared to a shorter amortization period in fiscal 2000.

     In-process Research and Development and Other Indirect Acquisition-Related
Costs.  No in-process research and development and other indirect
acquisition-related costs were incurred in fiscal 2001. In fiscal 2000 such
costs consisted of a nonrecurring charge of $75.6 million related to the
acquisitions of ITDS and Solect.

     Operating Income.  Operating income in the year ended September 30, 2001
was $159.3 million, compared to $74.1 million in fiscal 2000, an increase of
115%, primarily due to the effect of a nonrecurring charge for write-off of
purchased in-process research and development related to the acquisitions of
ITDS and Solect in fiscal 2000. Pro forma operating income for the year ended
September 30, 2001, excluding ITDS and Solect acquisition-related charges, was
$379.3 million, or 24.7% of revenue, compared to $260.9 million, or 23.3% of
revenue, for fiscal 2000, an increase of 45.4%.

     Interest Income and Other, Net.  In the year ended September 30, 2001,
interest income and other, net, was $22.3 million, an increase of $11.6 million
over fiscal 2000. The increase in interest income and other, net, was primarily
attributable to the increase in our cash equivalents and short-term
interest-bearing investments partially offset by overall interest rate declines.

     Income Taxes.  Income taxes in the year ended September 30, 2001 were
$115.2 million on income before income taxes of $181.6 million. Our effective
tax rate in the year ended September 30, 2001 was 63%, resulting from the
non-cash amortization of goodwill related to the ITDS and Solect acquisitions,
much of which is not tax deductible. In the year ended September 30, 2000,
income taxes were $78.9 million on income before income taxes of $84.9 million.
In the year ended September 30, 2000, the effective tax rate (based on the ratio
between income taxes and income before income taxes, excluding nonrecurring
charges for write-offs of purchased in-process research and development and
other indirect acquisition-related costs) was 49%. The pro forma effective tax
rate for fiscal 2001 and 2000, excluding ITDS and Solect acquisition-related
charges, was 30%. See the discussion below under the caption "Effective Tax
Rate".

     Net Income.  Net income was $66.4 million in the year ended September 30,
2001, compared to net income of $6.0 million in the previous fiscal year. Pro
forma net income in fiscal 2001, excluding ITDS and Solect acquisition-related
charges, increased by 47.8% over fiscal 2000, reaching $281.1 million,
representing 18.3% of revenue.

     Diluted Earnings per Share.  Diluted earnings per share were $0.29 for the
year ended September 30, 2001, compared to $0.03 in fiscal 2000. Pro forma
diluted earnings per share in the year ended September 30, 2001, excluding ITDS
and Solect acquisition-related charges, increased by 40.9% from the year ended
September 30, 2000, reaching $1.24 per diluted share.

LIQUIDITY AND CAPITAL RESOURCES

     Cash, cash equivalents and short-term interest-bearing investments totaled
$1,047.8 million as of September 30, 2002, compared to $1,110.1 million as of
September 30, 2001. The decrease is attributable primarily to the use of $371.4
million in cash to acquire Clarify and to repurchase our shares and Notes, which
was partially offset by positive cash flows from operations. Net cash provided
by operating activities
                                        38
amounted to $412.3 million for fiscal 2002 and $338.0 million for fiscal 2001.
The increase in cash flows from operations was primarily due to a decrease in
working capital. We currently intend to retain our future operating cash flows
to support the further expansion of our business including new outsourcing deals
and acquisitions, although we may also use a portion of our cash for future
repurchases of our outstanding securities. See the discussions above under the
captions "Share Repurchase Program" and "Convertible Notes".

     As of September 30, 2002, we had positive working capital of $938.6
million, compared to positive working capital of $1,059.9 million as of
September 30, 2001. The decrease is attributable primarily to cash paid for the
acquisition of Clarify and the implementation of our share and Notes repurchase
programs. We believe that our current cash balances, cash generated from
operations and our current lines of credit will provide sufficient resources to
meet our liquidity needs for the next fiscal year.

     As of September 30, 2002, $445.1 million aggregate principal amount of the
Notes was outstanding. In July 2002, our Board of Directors authorized us to
repurchase outstanding Notes, in such amounts, at such prices and at such times
considered appropriate by us. During the fourth quarter of fiscal 2002 we
repurchased $54.9 million aggregate principal amount of the Notes. We funded
these repurchases, and intend to fund any future repurchases, with available
funds. On June 1, 2004, the holders of our Notes may require us to redeem their
Notes. See the discussion above under the caption "Convertible Notes".

     As of September 30, 2002, we had available short-term general revolving
lines of credit totaling $40.0 million, none of which were outstanding. In
addition, as of September 30, 2002 we had credit facilities totaling $43.8
million, limited for the use of letters of credit and bank guarantees from
various banks. Outstanding letters of credit and bank guarantees as of September
30, 2002 totaled $24.5 million. These were mostly supported by a combination of
the credit facilities described above and compensating cash balances that we
maintain with the issuing banks.

     As of September 30, 2002, we had outstanding long-term obligations of $25.5
million in connection with leasing arrangements.

     The following table summarizes our contractual obligations as of September
30, 2002 and the effect such obligations are expected to have on our liquidity
and cash flows in future periods, (in millions):
CASH PAYMENTS DUE BY PERIOD
                                               ---------------------------------------------------------
                                                        LESS THAN
CONTRACTUAL OBLIGATIONS                        TOTAL     1 YEAR     1-3 YEARS   4-5 YEARS   OVER 5 YEARS
-----------------------                        ------   ---------   ---------   ---------   ------------
Convertible notes(*).........................  $445.1     $  --      $445.1       $  --        $  --
Capital lease obligations....................    25.5      10.3        13.0         2.2           --
Non-cancelable operating leases..............   204.2      43.8        77.2        56.8         26.4
                                               ------     -----      ------       -----        -----
                                               $674.8     $54.1      $535.3       $59.0        $26.4
                                               ======     =====      ======       =====        =====
---------------

(*) June 1, 2004 is the earliest date that the holders of Notes may require us
    to redeem their Notes. See the discussion above under the caption
    "Convertible Notes".

     Our capital expenditures were approximately $59 million in fiscal 2002.
These expenditures consisted primarily of purchases of computer equipment and,
to a lesser degree, vehicles and leasehold improvements. We funded our capital
expenditures principally from operating cash flows and capital leasing
arrangements. We do not anticipate any changes to this policy in the foreseeable
future.

     Our accounts receivable allowance for fiscal 2002 was adjusted upward by
approximately $22.1 million, from the allowance as of September 30, 2001. The
increase in our accounts receivable allowance is primarily a result of our
purchase accounting treatment of the Clarify acquisition as well as allowances
for instances where collectibility was not reasonably assured.

                                        39
NET DEFERRED TAX ASSETS

     As of September 30, 2002, deferred tax assets of $10.7 million derived
primarily from carry-forward net operating losses derived by our Canadian
subsidiary were offset by valuation allowances due to the uncertainty of
realizing any tax benefit for such losses. When realization of the tax benefits
associated with such net operating losses is deemed probable, the valuation
allowance will be released. In September 2002 we have released valuation
allowances of deferred tax assets derived from carry-forward operating losses
relating to losses incurred by Solect prior to our acquisition of that company
in April 2000, resulting in an offsetting reduction of the goodwill recorded in
the Solect acquisition of approximately $9.0 million. The release of these
valuation allowances was made based on our estimation that we will be able to
realize the tax benefits associated with those net operating losses.

EFFECTIVE TAX RATE

     Our blended effective tax rate was 107% for the year ended September 30,
2002, compared to 63% for fiscal 2001. These high effective tax rates were
primarily attributable to amortization of goodwill related to our acquisitions,
much of which is not tax deductible. In the year ended September 30, 2002 our
effective tax rate was also adversely affected by the fixed non-deductible
expenditures representing a larger component of our pretax income. Our overall
pro forma effective tax rate for fiscal year 2002 was 28% compared to our
historical pro forma effective tax rate of 30%, due to the corporate income tax
rates in the various countries in which we operate and changes in the relative
magnitude of our business in those countries.

     We expect a reduction in our pro forma effective tax rate in fiscal 2003
from 28% to 25%. The reduction is due to our continued expansion into countries
with lower effective tax rates.

CRITICAL ACCOUNTING POLICIES

     Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates, assumptions and judgments that affect the reported amounts of assets,
liabilities, revenue and expenses, and related disclosure of contingent
liabilities. On a regular basis, we evaluate and may revise our estimates. We
base our estimates on historical experience and various other assumptions that
we believe to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities, that are not readily apparent. Actual results could differ
materially from the estimates under different assumptions or conditions.

     We believe that the estimates, assumptions and judgments involved in the
accounting policies described below have the greatest potential impact on our
financial statements, so we consider these to be our critical accounting
policies. These policies require that we make estimates in the preparation of
our financial statements as of a given date.

     Our critical accounting policies are as follows:

     - Revenue recognition and contract accounting

     - Doubtful accounts

     - Tax accounting

     - Derivative and hedge accounting

     - Realizability of long-lived assets

     Below, we discuss these policies further, as well as the estimates and
judgments involved. We also have other key accounting policies. We believe that,
compared to the critical accounting policies listed above, the other policies
either do not generally require us to make estimates and judgments that are as
difficult or as subjective, or it is less likely that they would have a material
impact on our reported results of operations for a given period.

                                        40
REVENUE RECOGNITION AND CONTRACT ACCOUNTING

     Our revenue recognition policy is significant because our revenue is a key
component of our results of operations. We follow very specific and detailed
guidelines, several of which are discussed above, in measuring revenue; however,
certain judgments affect the application of our revenue recognition policy.

     A significant portion of our revenue is recognized over the course of
long-term projects, under the percentage of completion method of accounting. The
percentage of completion method requires significant judgment, such as
estimations of progress-to-completion, contract revenue and contract costs.

     Our revenue recognition policy takes into consideration the
creditworthiness and past transaction history of each customer in determining
the probability of collection as a criterion of revenue recognition. This
determination requires the exercise of judgment, which affects our revenue
recognition. If we determine that collection of a fee is not reasonably assured,
we defer the revenue recognition until the time collection becomes reasonably
assured, which is generally upon receipt of cash.

     For arrangements with multiple obligations, we allocate revenue to each
component based upon its fair value, which is determined in reliance on the
specific objective evidence for that element. Such determination is judgmental
and is typically based on normal pricing and discounting practices for those
elements in similar arrangements.

     Revenue from third-party hardware and software sales is recorded at a gross
or net amount according to certain indicators. The application of these
indicators for gross and net reporting of revenue depends on the relative facts
and circumstances and requires significant judgment.

  DOUBTFUL ACCOUNTS

     The allowance for doubtful accounts is for estimated losses resulting from
the inability of our customers to make required payments. We evaluate accounts
receivable to determine if they will ultimately be collected. In performing this
evaluation, significant judgments and estimates are involved, such as past
experience, credit quality of the customer, age of the receivable balance and
current economic conditions that may affect a customer's ability to pay. If
collection is not reasonably assured at the time the transaction is consummated,
we do not recognize revenue until collection becomes reasonably assured. If the
financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required. The allowance for doubtful accounts is established through a charge to
selling, general and administrative expenses.

  TAX ACCOUNTING

     As part of the process of preparing our consolidated financial statements
we are required to estimate our income tax expense in each of the jurisdictions
in which we operate. In the ordinary course of a global business, there are many
transactions and calculations where the ultimate tax outcome is uncertain. Some
of these uncertainties arise as a consequence of revenue sharing and
reimbursement arrangements among related entities, the process of identifying
items of revenue and expenses that qualify for preferential tax treatment and
segregation of foreign and domestic income and expense to avoid double taxation.
This process involves us estimating our actual current tax exposure together
with assessing temporary differences resulting from differing treatment of
items, such as deferred revenue, for tax and accounting differences. These
differences result in deferred tax assets and liabilities, which are included
within our consolidated balance sheet. We record a valuation allowance to reduce
our deferred tax assets to the amount of future tax benefit that is more likely
than not to be realized.

     Although we believe that our estimates are reasonable and that we have
considered future taxable income and ongoing prudent and feasible tax strategies
in estimating our tax outcome and in assessing the need for the valuation
allowance, there is no assurance that the final tax outcome and the valuation
allowance will not be different than those which are reflected in our historical
income tax provisions and accruals. Such differences could have a material
effect on our income tax provision, net income and cash balances in the period
in which such determination is made.

                                        41
DERIVATIVE AND HEDGE ACCOUNTING

     Approximately 10% of our revenue and 35% of our operating expenses
(excluding acquisition-related charges and restructuring charges) are not
denominated in U.S. dollars or linked to the U.S. dollar. We enter into foreign
exchange forward contracts to hedge a significant portion of our foreign
currency exposure to minimize fluctuations in revenue and expenses. The majority
of our hedging arrangements are classified as cash flow hedges. Accordingly,
changes in the fair value of these forward exchange contracts are recorded in
other comprehensive Income. We estimate the fair value of such derivative
contracts by reference to forward and spot rates quoted in active markets.

     Establishing and accounting for foreign exchange contracts involve
judgments, such as determining the nature of the exposure, assessing its amount
and timing, and evaluating the effectiveness of the hedging arrangement.

     Although we believe that our estimates are accurate and meet the
requirement of hedge accounting, actual results differ from these estimates, and
such difference could cause fluctuation of our recorded revenue and expenses.

  REALIZABILITY OF LONG-LIVED ASSETS

     We are required to assess the impairment of long-lived assets, tangible and
intangible, on an annual basis, and potentially more frequently if events or
changes in circumstances indicate that the carrying value may not be
recoverable. We assess the impairment based on number of factors, including
significant changes in the manner of our use of the acquired assets or the
strategy of our overall business, significant negative industry or economic
trends and significant decline in our share price for a sustained period.

     Upon determination that the carrying value of a long-lived asset may not be
recoverable based upon a comparison of fair value to the carrying amount of the
asset, an impairment charge is made. We measure fair value based on a projected
future cash flow using a discount rate determined by our management to be
commensurate with the risk inherent in our current business model.

     Within the context of these critical accounting policies, we are not
currently aware of any reasonably likely events or circumstances, which would
result in materially different amounts being reported.

SUBSEQUENT EVENT

     On November 27, 2002 we announced a series of measures designed to reduce
costs and improve productivity. As part of this plan, we will reduce our
workforce by approximately 400 positions out of a total workforce of 9,000
employees. The reductions will be from different centers around the world. In
addition, we will implement other cost reduction measures, including travel cuts
and reductions in other discretionary costs.

LITIGATION

     Beginning on June 24, 2002, a number of complaints were filed by holders of
our ordinary shares against us and four of our officers and directors, in the
United States District Courts for the Eastern District of Missouri and the
Southern District of New York. The complaints allege violations of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Each plaintiff seeks to represent a putative class of all purchasers
of our ordinary shares between July 18, 2000 (or, in some of the complaints,
July 24, 2001) and June 20, 2002. The complaints generally allege that, during
that period, we and the individual defendants made false or misleading
statements, in press releases and Securities and Exchange Commission filings,
regarding among other things our future prospects, backlog, revenue, gross
margin, acquisitions and accounting practices. Each plaintiff seeks unspecified
monetary damages and other relief against all defendants. The parties in the New
York cases have stipulated to transfer them to the Eastern District of Missouri.
The court has recently appointed a lead plaintiff. We dispute the allegations of
wrongdoing in these complaints and intend to defend ourself vigorously.

                                        42
ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

     We rely on the executive officers of our principal operating subsidiaries
to manage our business. In addition, Amdocs Management Limited, our management
subsidiary, performs certain executive coordination functions for all of our
operating subsidiaries.

     As of January 31, 2003, our directors, senior managers and key employees
upon whose work we are dependent were as follows:
NAME                                           AGE                   POSITION
----                                           ----                  --------
Bruce K. Anderson(1)(3)......................    62   Chairman of the Board and President,
                                                        Amdocs Limited
Avinoam Naor(1)(3)...........................    54   Vice Chairman, Amdocs Limited
Charles E. Foster............................    66   Director, Amdocs Limited
Adrian Gardner(2)............................    40   Director, Amdocs Limited
James S. Kahan(1)(3).........................    55   Director, Amdocs Limited
John T. McLennan(2)..........................    57   Director, Amdocs Limited
Robert A. Minicucci(1)(3)....................    50   Director; Vice President, Amdocs
                                                      Limited
Mario Segal..................................    55   Director, Amdocs Limited
Dov Baharav(1)(3)............................    52   Director, Amdocs Limited; President and
                                                        Chief Executive Officer, Amdocs
                                                        Management Limited
Eli Gelman...................................    44   Director, Amdocs Limited; Executive
                                                      Vice President, Amdocs Management
                                                        Limited
Nehemia Lemelbaum............................    60   Director, Amdocs Limited; Senior Vice
                                                        President, Amdocs Management Limited
Ron Moskovitz................................    39   Chief Financial Officer, Amdocs
                                                        Management Limited
Nissim Daunov................................    46   Senior Vice President, Amdocs
                                                      Management Limited
Thomas G. O'Brien............................    42   Treasurer and Secretary, Amdocs Limited
Simon Cassif.................................    60   Senior Vice President, Amdocs (UK)
                                                        Limited
Melinos Pissourios...........................    34   General Manager, Amdocs Development
                                                        Limited
Kevin Picker.................................    45   Director and General Manager, Amdocs
                                                        (UK) Limited
---------------

     (1) Member of the Executive Committee

     (2) Member of Audit Committee

     (3) Member of the Compensation Committee

     Bruce K. Anderson has been Chairman of the Board of Directors of Amdocs
since September 1997 and currently holds the title of President of our holding
company, Amdocs Limited. Since August 1978, he has been a general partner of
Welsh, Carson, Anderson & Stowe ("WCAS"), an investment firm that specializes in
the acquisition of companies in the information services, communications and
health care industries. Investment partnerships affiliated with WCAS are
collectively one of our largest shareholders. Mr. Anderson served for nine years
with Automated Data Processing, Inc. ("ADP") until his resignation as Executive
Vice President and a director of ADP, and President of ADP International,
effective August 1978. Mr. Anderson serves on the board of Alliance Data
Systems, Inc., a publicly held company, and Headstrong, Inc.

                                        43
Avinoam Naor has been a director of Amdocs since January 1999 and currently
holds the title of Vice Chairman of the Board of Directors. Mr. Naor was a
member of the team that founded Amdocs in 1982, initially serving as a Senior
Vice President. He was appointed President and Chief Executive Officer of Amdocs
Management Limited in 1995 and held that position until July 2002. In 1998 he
led our initial public offering, and has since directed our major acquisitions
and secondary offerings. He has been involved with software development for 29
years.

     Charles E. Foster has been a director of Amdocs since December 2001. He was
Chairman of the Board of Prodigy Communications Corporation from June until
November 2001. From April 1997 until June 2001, Mr. Foster served as Group
President of SBC, where he was responsible, at various times, for engineering,
network, centralized services, marketing and operations, information systems,
procurement, treasury, international operations, wireless services, merger
integration, real estate, yellow pages and cable TV operations. SBC
International, Inc. ("SBCI"), a wholly owned subsidiary of SBC, is one of our
largest shareholders. SBC, together with its affiliates, is a significant
customer of ours. Mr. Foster is a member of the Texas Society of Professional
Engineers and a director of Storage Technology Corporation, a publicly-traded
company engaged in the manufacture of products for storing digital data.

     Adrian Gardner has been a director of Amdocs since April 1998. Mr. Gardner
is the Chief Financial Officer and a director of Strakan Group, Ltd., a
pharmaceuticals company based in the United Kingdom, which he joined in April
2002. Prior to joining Strakan, he was a Managing Director of Lazard LLC, based
in London, where he worked with technology- and telecommunications-related
companies. Prior to joining Lazard in 1989, Mr. Gardner qualified as a chartered
accountant with Price Waterhouse (now PricewaterhouseCoopers). Mr. Gardner is a
member of the Institute of Chartered Accountants in England & Wales.

     James S. Kahan has been a director of Amdocs since April 1998. He has
worked at SBC since 1983, and currently serves as a Senior Executive Vice
President, a position he has held since 1992. SBCI, a wholly owned subsidiary of
SBC, is one of our largest shareholders. SBC, together with its subsidiaries, is
a significant customer of ours. Prior to joining SBC, Mr. Kahan held various
positions at several telecommunications companies, including Western Electric,
Bell Laboratories, South Central Bell and AT&T.

     John T. McLennan has been a director of Amdocs since November 1999. Since
May 1999, he has served as Vice-Chair and Chief Executive Officer of AT&T
Canada. Mr. McLennan founded and was the President of Jenmark Consulting Inc.
from 1997 until May 1999. From 1994 to 1997, Mr. McLennan served as the
President and Chief Executive Officer of Bell Canada. Prior to that, he held
various positions at several telecommunications companies, including BCE Mobile
Communications and Cantel Inc. Mr. McLennan is also a director of Hummingbird
Ltd., a Canadian publicly held company engaged in the production of enterprise
management software, and of several other private software and communication
companies.

     Robert A. Minicucci has been a director of Amdocs since September 1997 and
currently holds the title of Vice President of Amdocs Limited. He has been a
general partner of WCAS since 1993. From 1992 to 1993, Mr. Minicucci served as
Senior Vice President and Chief Financial Officer of First Data Corporation, a
provider of information processing and related services for credit card and
other payment transactions. From 1991 to 1992, he served as Senior Vice
President and Treasurer of the American Express Company. He served for twelve
years with Lehman Brothers (and its predecessors) until his resignation as a
Managing Director in 1991. Mr. Minicucci is also a director of Alliance Data
Systems, Inc., a publicly held company, and several private companies.

     Mario Segal has been a director of Amdocs since December 2001 and served as
a Senior Vice President and the Chief Operating Officer of Amdocs Management
Limited until July 2002. He joined Amdocs in 1984 as Senior Vice President and
was a leading member of the team that developed the ADS (NG)/Family of Products
directory automation systems and the Ensemble platform. Prior to joining Amdocs,
Mr. Segal was an account manager for a major North American yellow pages
publisher and prior

                                        44
thereto managed the computer department of a major Israeli insurance company,
leading large-scale software development projects and strategic planning of
automation systems.

     Dov Baharav has been a director of Amdocs and the President and Chief
Executive Officer of Amdocs Management Limited since July 2002. Mr. Baharav has
overall coordination responsibilities for the operations and activities of our
operating subsidiaries. In 1991, Mr. Baharav joined Amdocs Inc., our principal
U.S. subsidiary, serving as its Vice President and then President in St. Louis,
Missouri until 1995. From 1995 until July 2002, Mr. Baharav was a Senior Vice
President and the Chief Financial Officer of Amdocs Management Limited. Prior to
joining Amdocs, Mr. Baharav served as Chief Operating Officer of Optrotech Ltd.,
a publicly held company that develops, manufactures and markets electro-optical
devices.

     Eli Gelman has been a director of Amdocs since July 2002 and is an
Executive Vice President of Amdocs Management Limited, where he has
responsibility for sales, strategic alliances and corporate and business
development. He has more than 26 years of experience in the software industry,
including more than 15 years with Amdocs. Prior to his current position, he was
a division president, where he headed Amdocs' United States sales and marketing
operations and helped spearhead our entry into the CC&B Systems market. Before
that, Mr. Gelman was an account manager for our major European and North
American installations, and has led several major software development projects.
Before joining Amdocs, Mr. Gelman was involved in the development of real-time
software systems for communications networks.

     Nehemia Lemelbaum has been a director of Amdocs since December 2001 and is
a Senior Vice President of Amdocs Management Limited. He joined Amdocs in 1985,
with initial responsibility for U.S. operations. Mr. Lemelbaum led our
development of graphic products for the yellow pages industry and later led our
development of CC&B Systems, as well as our penetration into the CC&B Systems
market. Prior to joining Amdocs, he served for nine years with Contahal Ltd., a
leading Israeli software company, first as a senior consultant, and later as
Managing Director. From 1967 to 1976, Mr. Lemelbaum was employed by the Ministry
of Communications of Israel (the organization that predated Bezeq, the Israel
Telecommunication Corp. Ltd.), with responsibility for computer technology in
the area of business data processing.

     Ron Moskovitz is a Senior Vice President and the Chief Financial Officer of
Amdocs Management Limited, and has overall coordination responsibility for the
financial reporting of our operating subsidiaries. Mr. Moskovitz joined Amdocs
in 1998 and served until July 2002 as Vice President of Finance. He has been
responsible for the company's financial organization, and was involved in
Amdocs' initial public offering, merger and acquisition activities and various
other financial operations. Prior to joining Amdocs, Mr. Moskovitz served in
various senior financial positions with Tower Semiconductor, a publicly-held
semiconductor manufacturer. Mr. Moskovitz is a Certified Public Accountant
(Isr).

     Nissim Daunov is a Senior Vice President at Amdocs Management Limited,
responsible for all product units in the Offering Group (CRM, Billing, and OMS).
Additionally, he is responsible for Corporate Marketing and R&D. For the past 23
years, Mr. Daunov has been involved in design, development and implementation of
large-scale data processing systems, handling large data volumes over
distributed networks. Mr. Daunov joined Amdocs in 1986.

     Thomas G. O'Brien is Treasurer and Secretary of Amdocs Limited and since
July 1995 has held other financial management positions within Amdocs. From July
1993 to July 1995, Mr. O'Brien was Controller of Big River Minerals Corporation,
a diversified natural resources company. From 1989 to 1993, Mr. O'Brien was the
Assistant Controller for Big River Minerals Corporation. From 1983 to 1989, Mr.
O'Brien was with Arthur Young and Company (now Ernst & Young LLP). Mr. O'Brien
is a member of the American Institute of Certified Public Accountants.

     Simon Cassif is a Senior Vice President of Amdocs (UK) Limited. He has
principal responsibility for developing our relationships with strategic
customers in Europe. Mr. Cassif joined Amdocs in January 1994 and has since been
devoting most of his efforts to business development in the area of customer
care, billing and order management systems. Prior to joining Amdocs, Mr. Cassif
was Chief Information Officer

                                        45
and Vice President, Systems and Computers at Bezeq, the Israel Telecommunication
Corp. Ltd. Mr. Cassif held this position for twelve years, with full
responsibility for Bezeq's information technology strategy, systems development,
maintenance and operations.

     Melinos Pissourios is General Manager of Amdocs Development Limited. Mr.
Pissourios, who joined Amdocs in April 1998, is also the Financial Controller of
Amdocs Development Limited in Cyprus. Prior to joining Amdocs, Mr. Pissourios
was the Group Financial Controller at AEC Holland Group. He also worked for KPMG
Peat Marwick for four years. Mr. Pissourios is a member of the Institute of
Chartered Accountants of England & Wales and of the Cyprus Institute of
Certified Public Accountants and he is a registered auditor in Cyprus.

     Kevin Picker has been a director and the General Manager of Amdocs (UK)
Limited since October 1999. He joined the Amdocs group in 1997 as the financial
director of Directory Technology (PTY) Ltd. From May 1992 Mr. Picker was the
general manager of Myers Tyres in Australia and prior to that financial director
of KM Printing and Publishing. Mr. Picker is a member of the Institute of
Chartered Accountants in Australia, the Israeli Institute of Certified Public
Accountants and the South African Institute of Chartered Accountants.

COMPENSATION

     Our directors who are not employees or affiliates of the Company, or are
not affiliates of any of our principal shareholders have the choice of receiving
as compensation either (i) an annual a cash payment of $30,000 or (ii) every
three years, a grant of options to purchase 10,000 ordinary shares, one-quarter
of which vest immediately and the remainder of which vest annually in three
equal installments. Any such director who serves as a chairman of a committee
also receives options to purchase 1,000 ordinary shares under the same terms. In
addition, we pay each such director $1,500 per meeting of the Board of Directors
and $500 per meeting of a committee of the Board of Directors. We reimburse all
of our directors for their reasonable travel expenses incurred in connection
with attending meetings of the Board of Directors or committees thereof.

     A total of 24 persons who served either as directors of Amdocs or members
of its administrative, supervisory or management bodies during all or part of
fiscal 2002 received remuneration from Amdocs. The aggregate remuneration paid
by us to such persons was approximately $10.8 million, which includes amounts
set aside or accrued to provide pension, retirement or similar benefits, but
does not include amounts expended by us for automobiles made available to such
persons, expenses (including business travel, professional and business
association dues) or other fringe benefits. Included in this amount is
remuneration to three former executive officers and four former directors for
the applicable portions of fiscal 2002.

     During fiscal 2002, directors or members of our administrative, supervisory
or management bodies were granted options to purchase a total of 5,641,677
ordinary shares at a weighted average price of $12.95 per share, with vesting
over two to five year terms. In addition, in the first quarter of fiscal 2003,
we granted options to purchase 10,000 ordinary shares at an exercise price of
$6.40 to one of our non-employee directors with respect to compensation. The
option grant constituted compensation to the director, which the director
elected to receive in lieu of a cash payment, and vests over three years.

     To recognize significant contributions to Amdocs over the years, in the
first quarter of fiscal 2003 and during fiscal year 2002 we granted of options
to six of our non-employee directors to purchase an aggregate 375,000 ordinary
shares at a weighted average exercise price of $15.16 per share.

     All options were granted pursuant to our 1998 Stock Option and Incentive
Plan, as amended. See discussion below -- "Share Ownership -- Employee Stock
Option and Incentive Plan".

BOARD PRACTICES

     Our entire Board of Directors is comprised of up to 13 directors. Eleven
directors were elected to our Board of Directors at our annual meeting of
shareholders on January 23, 2003. As permitted by our Articles of Association,
the Board of Directors may fill the two remaining vacancies at any time. All

                                        46
directors hold office until the next annual meeting of our shareholders, which
generally is in January of each calendar year, or until their respective
successors are duly elected and qualified or their positions are earlier vacated
by resignation or otherwise.

     Executive officers of Amdocs are elected by the Board of Directors on an
annual basis and serve until the next annual meeting of the Board of Directors
or until their respective successors have been duly elected or qualified or
their positions are earlier vacated by resignation or otherwise. The executive
officers of each of the Amdocs subsidiaries are elected by the board of
directors of such subsidiary on an annual basis and serve until the next annual
meeting of such board of directors or until their respective successors have
been duly elected or qualified or their positions are earlier vacated by
resignation or otherwise.

     Other than the employment agreements between us and our Chief Executive
Officer and Executive Vice President which provide for immediate cash severance
upon termination of employment, there are currently no service contracts in
effect between us and any of our directors providing for immediate cash
severance upon termination of their employment.

  BOARD COMMITTEES

     The Executive Committee may act from time to time instead of the full Board
of Directors and has such responsibilities as may be delegated to it by the
Board of Directors. Our Executive Committee consists of Messrs. Anderson
(Chair), Naor, Baharav, Kahan and Minicucci.

     The Audit Committee of the Board of Directors reviews, acts on and reports
to the Board of Directors with respect to various auditing and accounting
matters, including the selection of our auditors, the scope of the annual
audits, fees to be paid to the auditors, the performance of our independent
auditors and our accounting practices. During fiscal 2002, our Audit Committee
consisted of Messrs. Lawrence Perlman (Chair), Adrian Gardner and John T.
McLennan, all of whom were independent directors, as required by the rules of
the NYSE. Mr. Perlman did not stand for reelection as a director at our January
2003 annual general meeting of shareholders.

     The Compensation Committee of the Board of Directors determines the
salaries and incentive compensation of the officers of Amdocs and our
subsidiaries and provides recommendations for the salaries and incentive
compensation of other employees and certain consultants. The Compensation
Committee also administers various compensation, stock and benefit plans of
Amdocs. Our Compensation Committee consists of Messrs. Anderson (Chair), Naor,
Baharav, Kahan and Minicucci. None of the members of the Committee was an
employee of ours at any time during fiscal 2002, with the exception of Messrs.
Naor and Baharav. Neither Mr. Baharav nor Mr. Naor participates in any
discussions relating to his own compensation.

EMPLOYEES

     The following table presents the approximate number of our full-time
employees as of each date indicated, by function and by geographical location:
AS OF SEPTEMBER 30,
                                                              ---------------------
                                                              2002    2001    2000
                                                              -----   -----   -----
Software and Information Technology
     Israel.................................................  4,100   4,200   4,000
     North America..........................................  2,600   2,700   2,200
     Rest of World..........................................  1,700   1,700   1,200
                                                              -----   -----   -----
                                                              8,400   8,600   7,400
  Management and Administration.............................  1,000   1,100   1,000
                                                              -----   -----   -----
Total employees.............................................  9,400   9,700   8,400
                                                              =====   =====   =====
During fiscal 2002, we took steps to reduce our costs and achieve increased
operational efficiency, including by making reductions in our workforce of
approximately 1,000 positions. Some of the affected
                                        47
employees remained on our payroll as our employees through September 30, 2002.
In addition, in November 2002, we announced additional measures to reduce costs,
including additional reductions in our workforce of approximately 400 positions.
As of January 31, 2003, we employed on a full-time basis approximately 7,800
software and information technology specialists, engaged in research,
development, maintenance and support activities, and approximately 1,000
managers and administrative professionals. Approximately 3,800 of these software
and information technology specialists are located in Israel and approximately
2,400 are located in North America.

     We comply with various labor and immigration laws throughout the world,
including laws and regulations in Australia, Brazil, Canada, Europe, Israel,
Japan and the United States. Our employees in Europe are protected, in some
countries, by mandatory collective bargaining agreements. To date, compliance
with such laws has not been a material burden for us. As the number of our
employees increases over time in particular countries, our compliance with such
regulations could become more burdensome.

     Our principal operating subsidiaries are not party to any collective
bargaining agreements. However, our Israeli subsidiary is subject to certain
labor-related statutes and to certain provisions of collective bargaining
agreements between the Histadrut (General Federation of Labor in Israel) and the
Coordinating Bureau of Economic Organizations (including the Industrialists'
Association), which are applicable to our Israeli employees by virtue of
expansion orders of the Israeli Ministry of Labor and Welfare. A significant
provision applicable to all employees in Israel under collective bargaining
agreements and expansion orders is the automatic adjustment of wages in relation
to increases in the consumer price index, or CPI. The amount and frequency of
these adjustments are modified from time to time. We consider our relationship
with our employees to be good and have never experienced a labor dispute, strike
or work stoppage.

     In addition, all employees in Brazil, including members of management, are
represented by unions. Collective bargaining between employers and unions is
mandatory, negotiated annually, and covers work conditions, including cost of
living increases, minimum wages that exceed the government thresholds and
overtime pay.

SHARE OWNERSHIP

  SECURITY OWNERSHIP OF DIRECTORS AND SENIOR MANAGEMENT AND CERTAIN KEY
  EMPLOYEES

     As of January 31, 2003, the aggregate number of our voting ordinary shares
beneficially owned by our directors, senior managers and certain key employees
was 54,130,359 shares. This number includes ordinary shares held by SBC and WCAS
since affiliates of SBC and WCAS serve on our Board of Directors and,
accordingly, such designees may be deemed to be the beneficial owners of the
voting ordinary shares held by such entities. Each such designee disclaims
beneficial ownership of such shares. See "Major Shareholders and Related Party
Transactions".

     Beneficial ownership by a person, as of a particular date, assumes the
exercise of all options and warrants held by such person that are currently
exercisable or are exercisable within 60 days of such date.

  EMPLOYEE STOCK OPTION AND INCENTIVE PLAN

     Our 1998 Stock Option and Incentive Plan, as amended (the "Option Plan"),
provides for the grant by Amdocs of restricted shares or stock options to our
directors, employees (including officers) and consultants. Of the 32,300,000
ordinary shares originally available for issuance under the Option Plan, options
to purchase 28,875,882 ordinary shares have been granted as of January 31, 2003,
and options to purchase additional 3,424,118 ordinary shares remained available
for future grants. The purpose of the Option Plan is to enable us to attract and
retain qualified personnel and to motivate such persons by providing them with
an equity participation in the Company.

     The Option Plan provides for the granting of "incentive stock options" and
"non-qualified stock options" to purchase ordinary shares and/or the granting of
rights to purchase ordinary shares on a
                                        48
"restricted" basis. The terms and conditions of individual grants may vary
subject to the following: (i) the exercise price of incentive stock options may
not be less than market value on the date of grant; (ii) the term of incentive
stock options may not exceed ten years from the date of grant; and (iii) no
options or awards may be granted after January 2008.

     The Option Plan is administered by the Compensation Committee, which
determines all the terms of the awards (subject to the above), including which
employees, directors or consultants are granted awards. The Board of Directors
may amend or terminate the Option Plan, provided that shareholder approval is
required to increase the number of ordinary shares available under the Option
Plan, to materially increase the benefits accruing to participants, to change
the class of employees eligible for participation, to decrease the basis upon
which the minimum exercise price of options is determined or to extend the
period in which awards may be granted or to grant an option that is exercisable
for more than ten years. Ordinary shares acquired upon exercise of an award are
subject to certain restrictions on sale, transfer or hypothecation.

     As of January 31, 2003, there were outstanding options to purchase an
aggregate of 26,230,496 ordinary shares at exercise prices ranging from $1.92 to
$78.31 per share and no restricted shares had been awarded.

     As a result of the ITDS and Solect transactions, as of January 31, 2003, we
are obligated to issue (and have reserved for issuance) an additional 162,788
and 198,955 ordinary shares, respectively, upon exercise of options that had
previously been granted under the ITDS and Solect option plans (the "Predecessor
Plans") and were exchanged for options to purchase our ordinary shares. These
options have exercise prices ranging from $0.001 to $71.97 per share. No
additional options have been or will be granted under the Predecessor Plans.

                                        49
ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

     The following table sets forth specified information with respect to the
beneficial ownership of our voting ordinary shares as of January 31, 2003 of any
person known by us to be the beneficial owner of more than 5% of such shares.
SHARES
                                                              BENEFICIALLY    PERCENTAGE
NAME AND ADDRESS                                                OWNED(1)     OWNERSHIP(2)
----------------                                              ------------   ------------
Southeastern Asset Management, Inc.(3)......................   40,563,500        18.8%
  6410 Poplar Avenue, Suite 900
  Memphis, Tennessee 38119

SBC Communications Inc.(4)..................................   20,303,426         9.4
  175 E. Houston Street
  San Antonio, Texas 78205-2233

Welsh, Carson, Anderson & Stowe(5)..........................   21,263,981         9.9
  320 Park Avenue, Suite 2500
  New York, New York 10022

All directors and executive officers as a group                54,130,359        25.1
  (15 persons)(6)...........................................
---------------
(1) Unless otherwise indicated, the entities identified in this table have sole
    voting and investment power with respect to all voting ordinary shares shown
    as beneficially owned by them, subject to community property laws, where
    applicable.

(2) The percentages shown are based on 215,775,612 ordinary shares outstanding
    on January 31, 2003.

(3) Based on a Form 13G filed by Southeastern Asset Management, Inc.
    ("Southeastern") with the SEC on February 7, 2003, Southeastern beneficially
    owns an aggregate of 40,563,500 ordinary shares. In the Form 13G,
    Southeastern indicates that it has sole voting power over 28,334,100 voting
    ordinary shares, and sole dispositive power over 35,633,100 ordinary shares.
    The Form 13G indicates that Southeastern shares the investment and voting
    discretion over 4,930,400 ordinary shares with Longleaf Partners Funds
    Trust.

(4) Based upon information provided to us by SBC, SBCI, a wholly owned
    subsidiary of SBC, holds 7,557,603 of our ordinary shares, and SBC Option
    Delivery LLC, a majority-owned subsidiary of SBCI, holds 12,745,823 of our
    ordinary shares. James S. Kahan, Senior Executive Vice President of SBC,
    serves on our Board of Directors.

(5) Based upon information provided to us by WCAS, WCAS beneficially owns an
    aggregate of 21,263,981 ordinary shares, which includes 12,678,461 ordinary
    shares held by Welsh, Carson, Anderson & Stowe IX, L.P., 5,527,054 ordinary
    shares held by Welsh, Carson, Anderson & Stowe VII, L.P., 1,614,792 ordinary
    shares held by Welsh, Carson, Anderson & Stowe VI, L.P. and 1,443,494
    ordinary shares held by WCAS Capital Partners III, L.P. Bruce K. Anderson
    and Robert A. Minicucci, principals of the various WCAS entities, serve on
    our Board of Directors and Mr. Anderson is Chairman of our Board.

(6) Includes ordinary shares held by SBC and WCAS. See footnotes 4 and 5 above.
    Affiliates of SBC and WCAS serve on the Company's Board of Directors and,
    accordingly, such designees may be deemed to be the beneficial owners of the
    voting ordinary shares held by such entities. Each such designee disclaims
    beneficial ownership of such shares. Also includes options granted to such
    directors and executive officers of the Company, which are exercisable
    within 60 days of January 31, 2003.

     Over the last three years, our major shareholders have included our
directors and executive officers as a group, SBC, WCAS and other institutional
investors. The share ownership by WCAS, SBC and our directors and executive
officers has not significantly changed during this period. AXA Financial, which
at December 1, 2000 held 13.8% of our ordinary shares, is no longer a major
shareholder. Southeastern Asset

                                        50
Management, which in previous years was not a major shareholder, held 18.8% of
our ordinary shares at January 31, 2003.

     As of January 31, 2003, our ordinary shares were held by approximately 222
recordholders. Based on a review of the information provided to us by our
transfer agent, 158 recordholders, holding approximately 95.8% of our
outstanding ordinary shares, were residents of the United States.

RELATED PARTY TRANSACTIONS

  SHAREHOLDERS AGREEMENTS

     In connection with a series of transactions in 1997, SBCI, WCAS (on behalf
of certain affiliates of WCAS and other investors), Amdocs International Limited
and Amdocs, entered into a Shareholders Agreement, under which these
shareholders have certain rights to have their shares registered for sale to the
public under the Securities Act.

  RELATIONSHIP WITH SBC

     In addition to being a major shareholder, SBC, and some of its operating
subsidiaries, are also significant customers of ours. During fiscal 2002, 2001
and 2000, SBC and those subsidiaries accounted for approximately 10.6%, 13.3%
and 12.6%, respectively, of our revenue. Based on long-term agreements currently
in place with certain SBC subsidiaries and the outsourcing agreement announced
in January 2003 with SBC's directory operations, we expect that revenue
attributable to SBC entities will remain a significant portion of our revenue in
2003. Mr. Kahan, a member of our Board of Directors, is also an employee of SBC.

     SBC is also a beneficial owner of companies that provide certain
miscellaneous support services to us in United States.

ITEM 8.  FINANCIAL INFORMATION

FINANCIAL STATEMENTS

     See "Financial Statements" for our audited Consolidated Financial
Statements and Financial Statement Schedule filed as part of this report.

LEGAL PROCEEDINGS

     Beginning on June 24, 2002, a number of complaints were filed by holders of
our ordinary shares against us and four of our officers and directors, in the
United States District Courts for the Eastern District of Missouri and the
Southern District of New York. The complaints allege violations of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Each plaintiff seeks to represent a putative class of all purchasers
of our ordinary shares between July 18, 2000 (or, in some of the complaints,
July 24, 2001) and June 20, 2002. The complaints generally allege that, during
that period, we and the individual defendants made false or misleading
statements, in press releases and Securities and Exchange Commission filings,
regarding among other things our future prospects, backlog, revenue, gross
margin, acquisitions and accounting practices. Each plaintiff seeks unspecified
monetary damages and other relief against all defendants. The parties in the New
York cases have stipulated to transfer them to the Eastern District of Missouri.
The court has recently appointed a lead plaintiff. We dispute the allegations of
wrongdoing in these complaints and intend to defend ourself vigorously.

DIVIDEND POLICY

     We did not pay any cash dividends on our ordinary shares in fiscal 2002,
2001 or 2000. After the payment of dividends in 1998 that followed a corporate
reorganization, we decided in general to retain earnings to finance the
development of our business. The payment of any future dividends will be paid by
us based on conditions then existing, including our earnings, financial
condition and capital requirements,

                                        51
as well as other conditions we deem relevant. The terms of any debt that we may
incur could effectively limit our ability to pay dividends.

ITEM 9.  THE OFFER AND LISTING

     Our ordinary shares have been quoted on the NYSE since June 19, 1998, under
the symbol "DOX". The following table sets forth the high and low reported sale
prices for our ordinary shares for the periods indicated:
HIGH       LOW
                                                              -------   -------
FISCAL YEAR ENDED SEPTEMBER 30
1998........................................................  $ 16.50   $  8.19
1999........................................................  $ 30.25   $  8.75
2000........................................................  $ 96.00   $ 19.81
2001........................................................  $ 80.50   $ 25.85
2002........................................................  $ 39.25   $  6.10

QUARTER
Fiscal 2001:
  First Quarter.............................................  $ 73.50   $ 51.62
  Second Quarter............................................  $ 80.50   $ 43.50
  Third Quarter.............................................  $ 66.50   $ 40.60
  Fourth Quarter............................................  $ 55.75   $ 25.85
Fiscal 2002:
  First Quarter.............................................  $ 35.90   $ 24.00
  Second Quarter............................................  $ 39.25   $ 23.60
  Third Quarter.............................................  $ 26.27   $  6.62
  Fourth Quarter............................................  $  9.65   $  6.10
Fiscal 2003:
  First Quarter.............................................  $ 11.98   $  5.85
  Second Quarter (through March 18, 2003)...................  $ 13.95   $  9.86

MOST RECENT SIX MONTHS
  September, 2002...........................................  $  7.87   $  6.10
  October, 2002.............................................  $  7.50   $  5.85
  November, 2002............................................  $ 11.98   $  6.60
  December, 2002............................................  $ 11.89   $  9.68
  January, 2003.............................................  $ 13.95   $  9.86
  February, 2003............................................  $ 13.45   $ 11.50
ITEM 10.  ADDITIONAL INFORMATION

MEMORANDUM AND ARTICLES OF ASSOCIATION

     The Company is registered at the Greffe (Companies Registry) in Guernsey,
the Channel Islands and has been assigned company number 19528, registered
office situated at Suite 5, Tower Hill House, Le Bordage, St. Peter Port, Island
of Guernsey, GY1 3QT, Channel Islands. The telephone number at that location is
011-44-1481-728444.

     The purpose of the Company is to perform any and all corporate activities
permissible under Guernsey law, as forth in detail at Clause 3(1) to (37) of the
Memorandum of Association of the Company (the "Memorandum of Association").

     Article 21(2) of the Amended and Restated Articles of Association of the
Company (the "Articles of Association") provides that a director may vote in
respect of any contract or arrangement in which such director has an interest
notwithstanding such director's interest and an interested director will not be
liable

                                        52
to the Company for any profit realized through any such contract or arrangement
by reason of such director holding the office of director. Article 21 of the
Articles of Association provides that the remuneration of the directors shall
from time to time be determined by the Company by ordinary resolution. No
provision is made in the Articles of Association for directors to vote
compensation to themselves or any members of their body under any circumstances.
Article 22 provides that directors may exercise all the powers of the Company to
borrow money, and to mortgage or charge its undertaking, property and uncalled
capital or any part thereof, and to issue securities whether outright or as
security for any debt, liability or obligation of the Company for any third
party. Such borrowing powers can only be altered through an amendment to the
Articles of Association. Directors of the Company are not required to own shares
of the Company in order to serve as directors.

     The share capital of the Company is L5,750,000 divided into (i) 25,000,000
preferred shares with a par value of L0.01 per share and (ii) 550,000,000
ordinary shares with a par value of L0.01 per share, consisting of 500,000,000
voting ordinary shares and 50,000,000 non-voting ordinary shares. The rights,
preferences and restrictions attaching to each class of the shares are as
follows:

  PREFERRED SHARES

     - Issue -- the preferred shares may be issued from time to time in one or
       more series of any number of shares up to the amount authorized.

     - Authorization to Issue Preferred Shares -- authority is vested in the
       directors from time to time to authorize the issue of one or more series
       of preferred shares and to provide for the designations, powers,
       preferences and relative participating, optional or other special rights
       and qualifications, limitations or restrictions thereon.

     - Relative Rights -- all shares of any one series of preferred shares must
       be identical with each other in all respects, except that shares of any
       one series issued at different times may differ as to the dates from
       which dividends shall be cumulative.

     - Liquidation -- in the event of any liquidation, dissolution or winding-up
       of the Company, the holders of preferred shares are entitled to
       preference with respect to payment and to receive payment (at the rate
       fixed in any resolution or resolutions adopted by the directors in such
       case) plus an amount equal to all dividends accumulated to the date of
       final distribution to such holders. The holders of preferred shares are
       entitled to no further payment other than that stated above. If upon any
       liquidation the assets of the Company are insufficient to pay in full the
       amount stated above then such assets shall be distributed among the
       holders of preferred shares.

     - Voting Rights -- except as otherwise provided for by the directors upon
       the issue of any new series of preferred shares, the holders of shares of
       preferred shares have no right or power to vote on any question or in any
       proceeding or to be represented at, or to receive notice of, any meeting
       of members.

  ORDINARY SHARES AND NON-VOTING ORDINARY SHARES

     Except as otherwise provided by the Memorandum of Association and Articles
of Association, the ordinary shares and non-voting ordinary shares are identical
and entitle holders thereof to the same rights and privileges.

     - Dividends -- when and as dividends are declared on the shares of the
       Company the holders of voting ordinary shares and non-voting shares are
       entitled to share equally, share for share, in such dividends except that
       if dividends are declared which are payable in voting ordinary shares or
       non-voting ordinary shares, dividends must be declared which are payable
       at the same rate in both classes of shares.

     - Conversion of Non-Voting Ordinary Shares into Voting Ordinary
       Shares -- upon the transfer of non-voting ordinary shares from the
       original holder thereof to any third party not affiliated with

                                        53
such original holder, non-voting ordinary shares are redesignated in the
       books of the Company as voting ordinary shares and automatically convert
       into the same number of voting ordinary shares.

     - Liquidation -- upon any liquidation, dissolution or winding-up of the
       Company, the assets of the Company remaining after creditors and the
       holders of any preferred shares have been paid in full shall be
       distributed to the holders of voting ordinary shares and non-voting
       ordinary shares equally share for share.

     - Voting Rights -- the holders of voting ordinary shares are entitled to
       vote on all matters to be voted on by the members, and the holders of
       non-voting ordinary shares are not entitled to any voting rights.

     - Preferences -- the voting ordinary shares and non-voting ordinary shares
       are subject to all the powers, rights, privileges, preferences and
       priorities of the preferred shares as are set out in the Articles of
       Association.

     As regards both preferred shares and voting and non-voting ordinary shares,
the Company has power to purchase any of its own shares, whether or not they are
redeemable and may make a payment out of capital for such purchase.

     There are no provisions for a classified Board of Directors or for
cumulative voting for directors.

     Article 8 of the Articles of Association provides that all or any of the
rights, privileges, or conditions attached to any class or group of shares may
be changed as follows:

     - by an agreement between the Company and any person purporting to contract
       on behalf of the holders of shares of the class or group affected,
       provided that such agreement is ratified in writing by the holders of at
       least two-thirds of the issued shares of the class affected; or

     - with the consent in writing of the holders of three-fourths of the issued
       shares of that class or with the sanction of an extraordinary resolution
       passed by majority of three-fourths of the votes of the holders of shares
       of the class or group affected entitled to vote and voting in person or
       by attorney or proxy and passed at a separate meeting of the holders of
       such shares but not otherwise.

     The Companies (Guernsey) Law, 1994 (the "Companies Law") provides that,
where not provided for in the Articles of Association, a special resolution of
the shareholders is required to alter the Articles of Association. A special
resolution must be passed by not less than three-quarters of the votes recorded
at a meeting called for purposes of voting on the matter. As such, the
conditions set out above are as significant as the requirements of Guernsey law.

     Provisions in respect of the holding of general meetings and extraordinary
general meetings are set out at Articles 14, 15 and 16 of the Articles of
Association. The Articles of Association provide that an annual general meeting
must be held once in every calendar year (provided that not more than 15 months
have elapsed since the last such meeting) at such time and place as the
directors appoint and, in default, an annual general meeting may be convened by
any two members holding at least 10% in the aggregate of the Company's share
capital. The directors may, whenever they deem fit, convene an extraordinary
general meeting, and extraordinary general meetings will also be convened on the
requisition in writing of holders of at least 20% of the issued share capital of
the Company carrying voting rights or, if the directors fail upon such
requisition to convene such meeting within 21 days then such meeting may be
convened by such holders in such manner as provided by the Companies Law. A
minimum of 10 days' written notice is required in connection with an annual
general meeting and a minimum of 14 days' written notice is required in
connection with any other meeting. The notice shall specify the place, the day
and the hour of the meeting, and in the case of any special business, the
general nature of that business to such persons as are entitled by the Articles
of Association to receive such notices from the Company provided that a meeting
of the Company shall, notwithstanding that it is called by shorter notice than
that specified in the Articles, be deemed to have been duly called if it is so
agreed by all the members entitled to attend and vote thereat.

                                        54
There are no limitations on the rights to own securities, including the
rights of non-resident or foreign shareholders to hold or exercise voting rights
on the securities.

     There are no provisions in the Memorandum of Association or Articles of
Association that would have the effect of delaying, deferring or preventing a
change in control of the Company and that would operate only with respect to a
merger, acquisition or corporate restructuring involving the Company (or any of
its subsidiaries).

     There are no provisions in the Memorandum of Association or Articles of
Association governing the ownership threshold above which shareholder ownership
must be disclosed. United States federal law, however, requires that all
directors, executive officers and holders of 10% or more of the stock of a
company that has a class of stock registered under the Securities Exchange Act
of 1934, as amended (other than a foreign private issuer, such as Amdocs),
disclose such ownership. In addition, holders of more than 5% of a registered
equity security of a company (including a foreign private issuer) must disclose
such ownership.

     Pursuant to Article 13 of the Articles of Association, the Company may from
time to time by ordinary resolution increase the share capital by such sum, to
be divided into shares of such amount, as the resolution prescribes. A
restructuring of the existing share capital must be done by extraordinary
resolution (which requires the same vote as a special resolution), and the
Company may by special resolution reduce its share capital, any capital
redemption reserve fund or any share premium account in accordance with Guernsey
law. These provisions in relation to the alteration of the Company's capital are
in accordance with but no more onerous than the Companies Law.

MATERIAL CONTRACTS

     Other than the Clarify acquisition transaction agreement and related
documents, in the past two years we have not entered into any material contracts
other than contracts entered into in the ordinary course of our business. See
"Information on the Company -- History and Development of Amdocs".

TAXATION

  TAXATION OF THE COMPANY

     The following is a summary of certain material tax considerations relating
to Amdocs and our subsidiaries. To the extent that the discussion is based on
tax legislation that has not been subject to judicial or administrative
interpretation, there can be no assurance that the views expressed in the
discussion will be accepted by the tax authorities in question. The discussion
is not intended, and should not be construed, as legal or professional tax
advice and is not exhaustive of all possible tax considerations.

     General

     Our blended effective tax rate was 107% for the year ended September 30,
2002, compared to 63% for fiscal 2001 and 93% for fiscal 2000. These high
effective tax rates were primarily attributable to amortization of goodwill
related to our acquisitions, much of which is not tax deductible. In the year
ended September 30, 2002 our effective tax rate was also adversely affected by
the fixed non-deductible expenditures representing a larger component of our
pretax income. Excluding the impact of the non-deductible goodwill related to
our acquisitions, our pro forma effective tax rate for fiscal 2002 was 28%
compared to our historical pro forma effective tax rate of 30%, due to the
corporate income tax rates in the various countries in which we operate and
changes in the relative magnitude of our business in those countries.

     We expect a reduction in our pro forma effective tax rate in fiscal 2003
from 28% to 25%. The reduction is due to our continued expansion into countries
with lower effective tax rates.

     There can be no assurance that our effective tax rate will not change over
time as a result of a change in corporate income tax rates or other changes in
the tax laws of the various countries in which we

                                        55
operate. Moreover, our effective tax rate in future years may be adversely
affected in the event that a tax authority challenged the manner in which items
of income and expense are allocated among us and our subsidiaries. In addition,
the Company and certain of our subsidiaries have been granted certain special
tax benefits, discussed below, in Cyprus, Ireland and Israel. The loss of any
such tax benefits could have an adverse effect on our effective tax rate.

     Certain Guernsey Tax Considerations

     We qualify as an exempt company (i.e., our shareholders are not Guernsey
residents and we do not carry on business in Guernsey) so we generally are not
subject to taxation in Guernsey.

     Certain Cypriot Tax Considerations

     Our Cyprus subsidiary, Amdocs Development Ltd., operates a development
center. Corporations resident in Cyprus currently are subject to a maximum 25%
income tax rate. The Government of Cyprus has issued a permit to our Cypriot
subsidiary pursuant to which the activities conducted by it are deemed to be
offshore activities for the purpose of Cypriot taxation. As a result, our
Cypriot subsidiary is subject to an effective tax rate in Cyprus of 4.25%. In
order for our subsidiary to remain entitled to this reduced rate of taxation
pursuant to the permit, it must continue to satisfy certain requirements
concerning its operations in Cyprus and it must undertake certain information
reporting obligations to the Government of Cyprus. A new Income Tax law has been
enacted in July 2002, introducing a number of changes to the current system in
an attempt to harmonize the regulations with E.U. provisions and abandon any
harmful tax practices as defined by the Organisation for Economic Co-operation
and Development. The new legislation went into effect on January 1, 2003 and the
Income tax rate was set at 10% for all corporations resident in Cyprus. Our
subsidiary will take advantage of the transitionary rules and will continue to
enjoy an effective tax rate of 4.25% until December 2005 as long as certain
requirements imposed by the Government of Cyprus are met. Thereafter, our
subsidiary will be taxed under the 10% tax rate.

     Certain Irish Tax Considerations

     Our Irish subsidiary, Amdocs Software Systems Ltd., operates a development
center. The corporation tax rate on its trading activities was 16% for 2002 and
will decline to 12.5% in 2003. The subsidiary has entered into an agreement with
the Irish Industrial Development Agency pursuant to which it qualifies for
certain job creation grants and, consequently, certain activities conducted by
it are deemed to be manufacturing activities for the purpose of Irish taxation.
As a result, the subsidiary was subject to a corporation tax rate in Ireland of
10% with respect to its manufacturing activities. This tax rate on manufacturing
activities was available to our Irish subsidiary until December 31, 2002. As of
January 1, 2003, our Irish subsidiary was subject to a single corporation tax
rate of 12.5% on all of its trading and manufacturing activities.

     Certain Israeli Tax Considerations

     Our Israeli subsidiary, Amdocs (Israel) Limited, operates our largest
development center. Discussed below are certain Israeli tax considerations
relating to our Israeli subsidiary.

     General Corporate Taxation in Israel.  Effective January 1, 1996, and
thereafter, in general, Israeli companies are subject to "Company Tax" at the
rate of 36% of taxable income. However, the effective tax rate payable by an
Israeli company that derives income from an Approved Enterprise (as further
discussed below) may be considerably less.

     Law for the Encouragement of Capital Investments, 1959.  Certain production
and development facilities of our Israeli subsidiary have been granted "Approved
Enterprise" status pursuant to the Law for the Encouragement of Capital
Investments, 1959 (the "Investment Law"), which provides certain tax and
financial benefits to investment programs that have been granted such status.

                                        56
The Investment Law provides that capital investments in production
facilities (or other eligible assets) may, upon application to the Israeli
Investment Center, be designated as an Approved Enterprise. Each instrument of
approval for an Approved Enterprise relates to a specific investment program
delineated both by the financial scope of the investment, including source of
funds, and by the physical characteristics of the facility or other assets. The
tax benefits available under any instrument of approval relate only to taxable
profits attributable to the specific investment program and are contingent upon
compliance with the conditions set out in the instrument of approval.

     Tax Benefits.  Taxable income derived from an Approved Enterprise is
subject to a reduced corporate tax rate of 25% until the earlier of

     - seven consecutive years (or ten in the case of an FIC (as defined below))
       commencing in the year in which the Approved Enterprise first generates
       taxable income,

     - twelve years from the year of commencement of production, or

     - fourteen years from the year of the approval of the Approved Enterprise
       status.

Such income is eligible for further reductions in tax rates if we qualify as a
Foreign Investors' Company ("FIC") depending on the percentage of the foreign
ownership. Subject to certain conditions, an FIC is a company more than 25% of
whose share capital (in terms of shares, rights of profits, voting and
appointment of directors) and more than 25% of whose combined share and loan
capital are owned by non-Israeli residents. The tax rate is 20% if the foreign
investment is 49% or more but less than 74%; 15% if the foreign investment is
74% or more but less than 90%; and 10% if the foreign investment is 90% or more.
The determination of foreign ownership is made on the basis of the lowest level
of foreign ownership during the tax year. A company that owns an Approved
Enterprise, approved after April 1, 1986, may elect to forego the entitlement to
grants and apply for an alternative package of tax benefits. In addition, a
company (like our Israeli subsidiary) with an enterprise outside the National
Priority Regions (which is not entitled to grants) may also apply for the
alternative benefits. Under the alternative benefits, undistributed income from
the Approved Enterprise operations is fully tax exempt (a tax holiday) for a
defined period. The tax holiday ranges between two to ten years from the first
year of taxable income subject to the limitations as described above, depending
principally upon the geographic location within Israel. On expiration of the tax
holiday, the Approved Enterprise is eligible for a beneficial tax rate (25% or
lower in the case of an FIC, as described above) for the remainder of the
otherwise applicable period of benefits.

     Our Israeli subsidiary has elected the alternative benefits with respect to
its current Approved Enterprise and its enlargements, pursuant to which the
Israeli subsidiary enjoys, in relation to its Approved Enterprise operations,
certain tax holidays for a period of two years (and in some cases for a period
of four years) and reduced tax rates for an additional period of up to eight
years. In case our Israeli subsidiary pays a dividend, at any time, out of
income earned during the tax holiday period in respect of its Approved
Enterprise, it will be subject, assuming that the current level of foreign
investment in Amdocs is not reduced, to corporate tax at the otherwise
applicable rate of 10% of the income from which such dividend has been paid and
up to 25% if such foreign investments are reduced (as detailed above). This tax
is in addition to the withholding tax on dividends as described below. Under an
instrument of approval issued in December 1997 and relating to the current
investment program of our Israeli subsidiary and to the income derived
therefrom, our Israeli subsidiary is entitled to a reduced tax rate period of
thirteen years (instead of the eight-year period referred to above.) The tax
benefits, available with respect to an Approved Enterprise only to taxable
income attributable to that specific enterprise, are given according to an
allocation formula provided for in the Investment Law or in the instrument of
approval, and are contingent upon the fulfillment of the conditions stipulated
by the Investment Law, the regulations published thereunder and the instruments
of approval for the specific investments in the Approved Enterprises. In the
event our Israeli subsidiary fails to comply with these conditions, the tax and
other benefits could be canceled, in whole or in part, and the subsidiary might
be required to refund the amount of the canceled benefits, with the addition of
CPI linkage differences and interest. We believe that the Approved

                                        57
Enterprise of our Israeli subsidiary substantially complies with all such
conditions currently, but there can be no assurance that it will continue to do
so.

     From time to time, the Government of Israel has discussed reducing the
benefits available to companies under the Investment Law. The termination or
substantial reduction of any of the benefits available under the Investment Law
could have a material adverse effect on future investments by us in Israel
(although such termination or reduction would not affect our Israeli
subsidiary's existing Approved Enterprise or the related benefits).

     Dividends

     Dividends paid out of income derived by an Approved Enterprise during the
benefit periods (or out of dividends received from a company whose income is
derived by an Approved Enterprise) are subject to withholding tax at a reduced
rate of 15% (deductible at source). In the case of companies that do not qualify
as a FIC, the reduced rate of 15% is limited to dividends paid at any time up to
twelve years thereafter.

  TAXATION OF HOLDERS OF ORDINARY SHARES

     Certain United States Federal Income Tax Considerations

     The following discussion describes the material United States federal
income tax consequences to a holder of our ordinary shares that is

     (i)   a citizen or resident of the United States,

     (ii)  a corporation created or organized in, or under the laws of, the
           United States or of any state thereof,

     (iii) an estate, the income of which is includable in gross income for

     (iv) United States federal income tax purposes regardless of its source, or

     (v)  a trust, if a court within the United States is able to exercise
          primary supervision over the administration of the trust and one or
          more U.S. persons has the authority to control all substantial
          decisions of the trust.

     This summary generally considers only U.S. holders that own ordinary shares
as capital assets. This summary does not discuss the United States federal
income tax consequences to a holder of ordinary shares that is not a U.S.
holder.

     This discussion is based on current provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), current and proposed Treasury regulations
promulgated thereunder, and administrative and judicial decisions as of the date
hereof, all of which are subject to change, possibly on a retroactive basis.
This discussion does not address all aspects of United States federal income
taxation that may be relevant to a holder of ordinary shares based on such
holder's particular circumstances (including potential application of the
alternative minimum tax), United States federal income tax consequences to
certain holders that are subject to special treatment (such as taxpayers who are
broker-dealers, insurance companies, tax-exempt organizations, financial
institutions, holders of securities held as part of a "straddle", "hedge" or
"conversion transaction" with other investments, or holders owning directly,
indirectly or by attribution at least 10% of the ordinary shares), or any aspect
of state, local or non-United States tax laws. Additionally, the discussion does
not consider the tax treatment of persons who hold ordinary shares through a
partnership or other pass-through entity or the possible application of United
States federal gift or estate taxes.

     Dividends.  In general, a U.S. holder receiving a distribution with respect
to the ordinary shares will be required to include such distribution (including
the amount of foreign taxes, if any, withheld therefrom) in gross income as a
taxable dividend to the extent such distribution is paid from our current or
accumulated earnings and profits as determined under United States federal
income tax principles. Any
                                        58
distributions in excess of such earnings and profits will first be treated, for
United States federal income tax purposes, as a nontaxable return of capital to
the extent of the U.S. holder's tax basis in the ordinary shares, and then, to
the extent in excess of such tax basis, as gain from the sale or exchange of a
capital asset. See "Disposition of Ordinary Shares" below. United States
corporate shareholders will not be entitled to any deduction for distributions
received as dividends on the ordinary shares.

     The amount of foreign income taxes that may be claimed as a credit against
United States federal income tax in any year is subject to certain complex
limitations and restrictions, which must be determined on an individual basis by
each U.S. holder. The limitations set out in the Code include, among others,
rules that may limit foreign tax credits allowable with respect to specific
classes of income to the United States federal income taxes otherwise payable
with respect to each such class of income. Dividends paid by us generally will
be foreign source "passive income" for United States foreign tax credit
purposes.

     Disposition of Ordinary Shares.  Upon the sale, exchange or other
disposition of our ordinary shares, a U.S. holder generally will recognize
capital gain or loss in an amount equal to the difference between the amount
realized on the disposition by such U.S. holder and its tax basis in the
ordinary shares. Such capital gain or loss will be long-term capital gain or
loss if the U.S. holder has held the ordinary shares for more than one year at
the time of the disposition. In the case of a U.S. holder that is an individual,
trust or estate, long-term capital gains realized upon a disposition of the
ordinary shares generally will be subject to a maximum tax rate of 20%. Gains
realized by a U.S. holder on a sale, exchange or other disposition of ordinary
shares generally will be treated as United States source income for United
States foreign tax credit purposes.

     Information Reporting and Backup Withholding.  Dividend payments with
respect to the ordinary shares and proceeds from the sale, exchange or
redemption of ordinary shares may be subject to information reporting to the
Internal Revenue Service ("IRS") and possible U.S. backup withholding at a 31%
rate. Backup withholding will not apply, however, to a U.S. holder who furnishes
a correct taxpayer identification number and makes any other required
certification or who is otherwise exempt from backup withholding. Generally a
U.S. holder will provide such certification on IRS Form W-9 (Request for
Taxpayer Identification Number and Certification).

     Amounts withheld under the backup withholding rules may be credited against
a U.S. holder's tax liability, and a U.S. holder may obtain a refund of any
excess amounts withheld under the backup withholding rules by filing the
appropriate claim for a refund with the IRS.

     Passive Foreign Investment Company Considerations.  If, during any taxable
year, 75% or more of our gross income consists of certain types of passive
income, or the average value during a taxable year of passive assets (generally
assets that generate passive income) is 50% or more of the average value of all
of our assets, we will be treated as a "passive foreign investment company"
under U.S. federal income tax law for such year and succeeding years. If we are
treated as a passive foreign investment company, a U.S. holder may be subject to
increased tax liability upon the sale of our ordinary shares or upon the receipt
of certain distributions, unless such U.S. holder makes an election to mark our
ordinary shares to market annually.

     Based on an analysis of our financial position, we believe that we have not
been a passive foreign investment company for U.S. federal income tax purposes
for any preceding taxable year and expect that we will not become a passive
foreign investment company during the current taxable year. However, because the
tests for determining passive foreign investment company status are applied as
of the end of each taxable year and are dependent upon a number of factors, some
of which are beyond our control, including the value of our assets, based on the
market price of our ordinary shares, and the amount and type of our gross
income, we cannot assure you that we will not become a passive foreign
investment company in the future or that the IRS will agree with our conclusion
regarding our current passive foreign investment company status. We intend to
use reasonable efforts to avoid becoming a passive foreign investment company.

                                        59
Rules relating to a passive foreign investment company are very complex.
U.S. holders should consult their own tax advisors regarding the U.S. federal
income tax considerations discussed above and the applicability of passive
foreign investment company rules to their investments in our ordinary shares.

     Certain Guernsey Tax Considerations

     Under the laws of Guernsey as currently in effect, a holder of our ordinary
shares who is not a resident of Guernsey and who does not carry on business in
Guernsey through a permanent establishment situated there is exempt from
Guernsey income tax on dividends paid with respect to the ordinary shares and is
not liable for Guernsey income tax on gains realized on sale or disposition of
such ordinary shares. In addition, Guernsey does not impose a withholding tax on
dividends paid by us to the holders of our ordinary shares.

     There are no capital gains, gift or inheritance taxes levied by Guernsey,
and the ordinary shares generally are not subject to any transfer taxes, stamp
duties or similar charges on issuance or transfer.

DOCUMENTS ON DISPLAY

     We file annual, quarterly and current reports and other information with
the Securities and Exchange Commission ("SEC"). You may read and copy any of our
filings at the SEC's public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for further
information about the Public Reference Room. Our SEC filings are also available
to the public on the SEC's website at http://www.sec.gov.

     You may request copies of the filings, at no cost, by writing to or
telephoning us as follows:

           Amdocs, Inc.
           1390 Timberlake Manor Parkway
           Chesterfield, Missouri 63017
           Telephone: (314) 212-8328

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

CURRENCY FLUCTUATIONS

     Approximately 90% of our revenue is in U.S. dollars or linked to the U.S.
dollar. Therefore, the dollar is our functional currency. Approximately 65% of
our operating expenses (excluding acquisition-related charges and restructuring
charges) are paid in dollars or linked to dollars. Other significant currencies
in which we receive revenue or pay expenses are Australian dollars, British
pounds, Canadian dollars, the euro (ECU) and Israeli shekels. Historically, the
effect of fluctuations in currency exchange rates has had a minimal impact on
our operations. As more of our customers seek contracts that are denominated in
currencies such as the ECU and not the U.S. dollar, our exposure to fluctuations
in currency exchange rates could increase. In managing our foreign exchange
risk, we enter from time to time into various foreign exchange contracts. As of
September 30, 2002, we had substantially hedged our significant exposures in
currencies other than the U.S. dollar.

FOREIGN CURRENCY RISK

     We enter into foreign exchange forward contracts to hedge most of our
foreign currency exposure. We use such contracts to hedge exposure to changes in
foreign currency exchange rates associated with revenue denominated in a foreign
currency, primarily British pounds and the ECU, and anticipated costs to be
incurred in a foreign currency, primarily Australian dollars, Canadian dollars
and Israeli shekels. We also use forward contracts to hedge the impact of the
variability in exchange rates on certain accounts receivables, denominated in
British pounds and the ECU, and on the investment in Certen convertible
debentures denominated in Canadian dollars. We seek to minimize the risk that
the anticipated cash flow from sales of our products and services and cash flow
required for our expenses denominated in a currency other than our functional
currency will be affected by changes in exchange rates. See Note 22 to our

                                        60
consolidated financial statements included elsewhere in this report. The
following table summarizes our foreign currency forward exchange agreements as
of September 30, 2002. All the forward contracts are expected to mature during
fiscal 2003. The table below (all dollar amounts in millions) presents the
notional amounts, and fair value of the total derivative instruments as of
September 30, 2002. Notional values are calculated based on forward rates as of
September 30, 2002, U.S. dollar translated.
AS OF SEPTEMBER 30, 2002
                                                        -------------------------------------
                                                         NOTIONAL AMOUNT
                                                          TRANSLATED TO         FAIR VALUE OF
                                                          U.S. DOLLAR(*)         DERIVATIVES
                                                        ------------------      -------------
Revenue...............................................       $   8.9                $(0.9)
Costs.................................................        (145.8)                (6.7)
Balance sheet items...................................          41.2                  0.5
                                                             -------                -----
                                                             $ (95.7)               $(7.1)
                                                             =======                =====
---------------
(*) Positive notional amounts represent forward contracts to sell foreign
    currency. Negative notional amounts represent forward contracts to buy
    foreign currency.

INTEREST RATE RISK

     Our interest expenses and income are sensitive to changes in interest
rates, as all of our cash reserves and borrowings, other than the Notes, are
subject to interest rate changes. Excess liquidity is invested in short-term
interest-bearing investments. Such short-term interest-bearing investments
consist primarily of treasury notes, federal agency securities, corporate bonds
and money market funds and currently bear minimal interest rate risk. As of
September 30, 2002, we had nothing outstanding on either our revolving lines of
credit or our short-term credit facilities, and $25.5 million recorded as
long-term lease obligations, which in the aggregate bear minimal interest rate
risk.

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.

                                    PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Not applicable.

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
          PROCEEDS

     Not applicable

ITEM 15.  CONTROLS AND PROCEDURES

     (a) Evaluation of disclosure controls and procedures. To their best
knowledge and belief and based on their evaluation of the Company's disclosure
controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934) as of a date within 90 days of the filing date
of this Annual Report on Form 20-F, the Company's Chief Executive Officer and
Chief Financial Officer have concluded that the Company's disclosure controls
and procedures are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms and are operating in an effective manner.

                                        61
(b) Changes in internal controls. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of their most recent evaluation.

ITEM 16.  [RESERVED]

                                    PART III

ITEM 17.  FINANCIAL STATEMENTS

     Not applicable.

ITEM 18.  FINANCIAL STATEMENTS

FINANCIAL STATEMENTS AND SCHEDULE

     The following Consolidated Financial Statements and Financial Statement
Schedule are included at the end of this report:

FINANCIAL STATEMENTS

     Report of Independent Auditors

     Consolidated Balance Sheets as of September 30, 2002 and 2001

     Consolidated Statements of Operations for the years ended September 30,
2002, 2001 and 2000

     Consolidated Statements of Changes in Shareholders' Equity for the years
ended September 30, 2002, 2001 and 2000

     Consolidated Statements of Cash Flows for the years ended September 30,
2002, 2001 and 2000

     Notes to Consolidated Financial Statements

FINANCIAL STATEMENT SCHEDULE

     Valuation and Qualifying Accounts

ITEM 19.  EXHIBITS

     The exhibits listed on the Exhibit Index hereof are filed herewith in
response to this Item.

                                        62
SIGNATURES

     The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

                                          Amdocs Limited

                                          /s/  THOMAS G. O'BRIEN
                                          --------------------------------------
                                          Thomas G. O'Brien
                                          Treasurer and Secretary
                                          Authorized U.S. Representative

Date: March 24, 2003
CERTIFICATIONS

I, Dov Baharav, certify that:

     1. I have reviewed this annual report on Form 20-F of Amdocs Limited;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          (a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

          (b) evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this annual report (the "Evaluation Date"); and

          (c) presented in this annual report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's Board of Directors (or persons performing the
equivalent function):

          (a) all significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability to
     record, process, summarize and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          (b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and

     6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 24, 2003

/s/  DOV BAHARAV
---------------------------------------------------------
Dov Baharav,
Chief Executive Officer,
Amdocs Management Limited
I, Ron Moskovitz, certify that:

     1. I have reviewed this annual report on Form 20-F of Amdocs Limited;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          (a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

          (b) evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this annual report (the "Evaluation Date"); and

          (c) presented in this annual report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's Board of Directors (or persons performing the
equivalent function):

          (a) all significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability to
     record, process, summarize and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          (b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and

     6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 24, 2003

/s/  RON MOSKOVITZ
---------------------------------------------------------
Ron Moskovitz,
Chief Financial Officer,
Amdocs Management Limited
REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders
Amdocs Limited

      We have audited the accompanying consolidated balance sheets of Amdocs
Limited as of September 30, 2002 and 2001, and the related consolidated
statements of operations, changes in shareholders' equity and cash flows for
each of the three years in the period ended September 30, 2002. Our audits also
included the financial statement schedule listed in the index at Item 2 of Part
I. These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the financial statement schedule based
on our audits.

      We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Amdocs Limited
as of September 30, 2002 and 2001, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
September 30, 2002, in conformity with accounting principles generally accepted
in the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth herein.

/s/ ERNST & YOUNG LLP

New York, New York
October 31, 2002
AMDOCS LIMITED
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
AS OF SEPTEMBER 30,
                                                                              ----------------------------
                                                                                 2002             2001
                                                                              -----------      -----------
ASSETS

Current assets:
   Cash and cash equivalents                                                  $   466,655      $   872,998
   Short-term interest-bearing investments                                        581,164          237,069
   Accounts receivable, net (*)                                                   312,732          384,851
   Deferred income taxes and taxes receivable                                      48,154           38,916
   Prepaid expenses and other current assets (*)                                   72,196           38,045
                                                                              -----------      -----------
         Total current assets                                                   1,480,901        1,571,879

Equipment, vehicles and leasehold improvements, net                               160,902          173,695
Deferred income taxes                                                              37,582           19,722
Goodwill and other intangible assets, net                                         750,530          788,187
Other noncurrent assets (*)                                                       110,179           70,953
                                                                              -----------      -----------
         Total assets                                                         $ 2,540,094      $ 2,624,436
                                                                              ===========      ===========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued expenses                                      $   192,129      $   166,527
   Accrued personnel costs                                                         86,942          103,990
   Deferred revenue                                                               149,590          140,033
   Short-term portion of capital lease obligations                                 10,347           10,400
   Deferred income taxes and taxes payable                                        103,315           91,026
                                                                              -----------      -----------
         Total current liabilities                                                542,323          511,976

Convertible notes                                                                 445,054          500,000
Deferred income taxes                                                              12,363            7,410
Noncurrent liabilities and other                                                  124,079           92,959
                                                                              -----------      -----------
         Total liabilities                                                      1,123,819        1,112,345
                                                                              -----------      -----------
Shareholders' equity:
   Preferred Shares - Authorized 25,000 shares; L0.01 par value; 0 shares
     issued and outstanding                                                            --               --
   Ordinary Shares - Authorized 550,000 shares; L0.01 par value; 223,316
     and 222,628 issued and 215,583 and 222,628 outstanding, in 2002 and
     2001, respectively                                                             3,572            3,560
   Additional paid-in capital                                                   1,818,345        1,806,290
   Treasury stock                                                                (109,281)              --
   Accumulated other comprehensive loss                                              (108)          (6,382)
   Unearned compensation                                                               --             (185)
   Accumulated deficit                                                           (296,253)        (291,192)
                                                                              -----------      -----------
         Total shareholders' equity                                             1,416,275        1,512,091
                                                                              -----------      -----------
         Total liabilities and shareholders' equity                           $ 2,540,094      $ 2,624,436
                                                                              ===========      ===========
(*) See Note 4

              The accompanying notes are an integral part of these
                       consolidated financial statements.
AMDOCS LIMITED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED SEPTEMBER 30,
                                                                 --------------------------------------------
                                                                     2002            2001            2000
                                                                 -----------      -----------     -----------
Revenue:
   License (*)                                                   $   153,664      $   171,430     $   124,822
   Service (*)                                                     1,459,901        1,362,480         993,498
                                                                 -----------      -----------     -----------
                                                                   1,613,565        1,533,910       1,118,320
                                                                 -----------      -----------     -----------
Operating expenses:
    Cost of license                                                    5,054            5,651           5,624
    Cost of service (*)                                              928,283          847,591         639,900
    Research and development                                         124,082          105,807          74,852
    Selling, general and administrative (*)                          223,551          195,592         137,004
    Amortization of goodwill and purchased intangible assets         231,804          219,988         111,199
    Restructuring charges, in-process research and
      development and other indirect acquisition-related
      costs                                                           51,630               --          75,617
                                                                 -----------      -----------     -----------
                                                                   1,564,404        1,374,629       1,044,196
                                                                 -----------      -----------     -----------

Operating income                                                      49,161          159,281          74,124
Interest income and other, net (*)                                    19,298           22,286          10,734
                                                                 -----------      -----------     -----------

Income before income taxes                                            68,459          181,567          84,858
Income taxes                                                          73,520          115,181          78,880
                                                                 -----------      -----------     -----------

Net (loss) income                                                $    (5,061)     $    66,386     $     5,978
                                                                 ===========      ===========     ===========

Basic (loss) earnings per share                                  $     (0.02)     $      0.30     $      0.03
                                                                 ===========      ===========     ===========

Diluted (loss) earnings per share                                $     (0.02)     $      0.29     $      0.03
                                                                 ===========      ===========     ===========

Basic weighted average number of shares outstanding                  220,361          222,002         212,005
                                                                 ===========      ===========     ===========

Diluted weighted average number of shares outstanding                220,361          226,832         216,935
                                                                 ===========      ===========     ===========
(*) See Note 4.

              The accompanying notes are an integral part of these
                       consolidated financial statements.
AMDOCS LIMITED
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)
Accumulated
                            Ordinary Shares  Additional                 Other                                    Total
                            ---------------   Paid-in    Treasury   Comprehensive    Unearned    Accumulated  Shareholders'
                            Shares   Amount   Capital     Stock        Income      Compensation    Deficit       Equity
                                                                        (Loss)
                            -------  ------  ----------  ---------  -------------  ------------  -----------  -------------
BALANCE AS OF OCTOBER 1,
1999                        198,800  $3,181  $  489,099  $      --  $      (1,157) $     (3,830) $  (363,556) $     123,737
Comprehensive income:
  Net income                     --      --          --         --             --            --        5,978          5,978
  Decrease in unrealized
     loss on derivative
     instruments, net of
     $1,000 tax                  --      --          --         --          2,333            --           --          2,333
  Increase in unrealized
     loss on cash
     equivalents income,
     net of $(7) tax             --      --          --         --            (17)           --           --            (17)
                                                                                                              -------------
  Comprehensive income                                                                                                8,294
                                                                                                              -------------
Employee stock options
   exercised                  2,058      33      21,327         --             --            --           --         21,360
Tax benefit of stock
   options exercised             --      --      10,825         --             --            --           --         10,825
Issuance of Ordinary
   Shares related to
   acquisitions, net         20,307     325   1,263,330         --             --            --           --      1,263,655
Stock options granted            --      --         235         --             --            --           --            235
Amortization of unearned
   compensation                  --      --          --         --             --         2,666           --          2,666
                            -------  ------  ----------  ---------  -------------  ------------  -----------  -------------
BALANCE AS OF SEPTEMBER
   30, 2000                 221,165   3,539   1,784,816         --          1,159        (1,164)    (357,578)     1,430,772
Comprehensive income:
  Net income                     --      --          --         --             --            --       66,386         66,386
  Decrease in unrealized
     gain on derivatives,
     net of $(3,891) tax         --      --          --         --         (9,078)           --           --         (9,078)
  Increase in unrealized
     gain on cash
     equivalents and
     short-term interest-
     bearing investments,
     net of $659 tax             --      --          --         --          1,537            --           --          1,537
                                                                                                              -------------
  Comprehensive income                                                                                               58,845
                                                                                                              -------------
Employee stock options
   exercised                  1,463      21      13,946         --             --            --           --         13,967
Tax benefit of stock
   options exercised             --      --       7,345         --             --            --           --          7,345
Stock options granted            --      --         183         --             --            --           --            183
Amortization of unearned
   compensation                  --      --          --         --             --           979           --            979
                            -------  ------  ----------  ---------  -------------  ------------  -----------  -------------
BALANCE AS OF SEPTEMBER
   30, 2001                 222,628   3,560   1,806,290         --         (6,382)         (185)    (291,192)     1,512,091
Comprehensive income:
  Net loss                       --      --          --         --             --            --       (5,061)        (5,061)
  Decrease in unrealized
     loss on foreign
     currency hedging
     contracts, net of
     $1,357 tax                  --      --          --         --          2,682            --           --          2,682
  Decrease in unrealized
     loss on cash
     equivalents and
     short-term interest-
     bearing investments,
     net of $1,336 tax           --      --          --         --          3,592            --           --          3,592
                                                                                                              -------------
  Comprehensive income                                                                                                1,213
                                                                                                              -------------
Employee stock options
   exercised                    687      12       5,149         --             --            --           --          5,161
Tax benefit of stock
   options exercised             --      --       6,808         --             --            --           --          6,808
Expense related to vesting
   of stock options              --      --          98         --             --            --           --             98
Repurchase of shares         (7,732)     --          --   (109,281)            --            --           --       (109,281)
Amortization of unearned
   compensation                  --      --          --         --             --           185           --            185
                            -------  ------  ----------  ---------  -------------  ------------  -----------  -------------
BALANCE AS OF SEPTEMBER
   30, 2002                 215,583  $3,572  $1,818,345  $(109,281) $        (108) $         --  $  (296,253) $   1,416,275
                            =======  ======  ==========  =========  =============  ============  ===========  =============
As of September 30, 2002, 2001 and 2000, accumulated other comprehensive income
(loss) is comprised of unrealized gain (loss) on derivatives, net of tax, of
$(5,220), $(7,902) and $1,176 and unrealized gain (loss) on cash equivalents and
short-term interest-bearing investments, net of tax, of $5,112, $1,520 and
$(17), as of September 30, 2002, 2001 and 2000, respectively.

              The accompanying notes are an integral part of these
                       consolidated financial statements.
AMDOCS LIMITED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
YEAR ENDED SEPTEMBER 30,
                                                         ---------------------------------------
                                                           2002           2001           2000
                                                         ---------      ---------      ---------
CASH FLOW FROM OPERATING ACTIVITIES:
Net (loss) income                                        $  (5,061)     $  66,386      $   5,978
Reconciliation of net (loss) income to net cash
   provided by operating activities:
     Depreciation and amortization                         309,821        282,625        155,359
     Adjustment to the basis of investments                  5,500          6,750             --
     In-process research and development expenses           17,400             --         70,319
     Loss on sale of equipment                                 549            593            148
     Gain on repurchase of convertible notes                (6,012)            --             --
     Deferred income taxes                                  (1,665)         5,018         (1,196)
     Tax benefit of stock options exercised                  6,808          7,345         10,825
     Unrealized other comprehensive income (loss)            8,967        (10,773)         3,309
Net changes in operating assets and liabilities,
   net of amounts acquired:
   Accounts receivable                                      97,055       (121,751)       (29,763)
   Prepaid expenses and other current assets               (22,992)        (3,718)       (12,408)
   Other noncurrent assets                                  (9,875)        (7,826)       (10,861)
   Accounts payable and accrued expenses                    (2,461)        71,772         38,852
   Deferred revenue                                        (21,253)         6,487         24,313
   Income taxes payable                                     (4,798)        20,703         16,071
   Noncurrent liabilities and other                         40,293         14,376         16,642
                                                         ---------      ---------      ---------
Net cash provided by operating activities                  412,276        337,987        287,588
                                                         ---------      ---------      ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment, vehicles and
   leasehold improvements                                    1,795          2,062          1,280
Payments for purchase of equipment, vehicles,
   leasehold improvements and other                        (58,562)       (91,891)       (62,740)
Purchase of short-term interest-bearing
   investments, net                                       (344,095)      (237,069)            --
Investment in noncurrent assets                            (39,584)       (12,291)        (9,000)
Net cash (paid for) acquired in acquisitions              (213,180)            --         67,791
                                                         ---------      ---------      ---------
Net cash used in investing activities                     (653,626)      (339,189)        (2,669)
                                                         ---------      ---------      ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from employee stock options exercised               5,161         13,967         21,360
Repurchase of shares                                      (109,281)            --             --
Repurchase of convertible notes                            (48,934)            --             --
Payments under short-term finance arrangements                  --        (20,000)      (284,464)
Borrowings under short-term finance arrangements                --             --        301,933
Net proceeds from issue of long-term convertible
   notes                                                        --        488,000             --
Principal payments on capital lease obligations            (11,939)       (10,067)        (6,622)
                                                         ---------      ---------      ---------
Net cash (used in) provided by financing activities       (164,993)       471,900         32,207
                                                         ---------      ---------      ---------
Net (decrease) increase in cash and cash equivalents      (406,343)       470,698        317,126
Cash and cash equivalents at beginning of year             872,998        402,300         85,174
                                                         ---------      ---------      ---------
Cash and cash equivalents at end of year                 $ 466,655      $ 872,998      $ 402,300
                                                         =========      =========      =========
The accompanying notes are an integral part of these
                       consolidated financial statements.
AMDOCS LIMITED
               CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                                 (IN THOUSANDS)
YEAR ENDED SEPTEMBER 30,
                                                          ------------------------------------------------
                                                             2002              2001               2000
                                                          -----------       -----------        -----------
SUPPLEMENTARY CASH FLOW INFORMATION
Interest and Income Taxes Paid
   Cash paid for:
     Income taxes, net of refunds                         $    75,371       $    77,429        $    49,262
     Interest                                                  11,221             2,901              2,614
NON-CASH INVESTING AND FINANCING ACTIVITIES

         Capital lease obligations of $2,245, $13,116 and $15,732 were incurred
during the years ended September 30, 2002, 2001 and 2000, respectively, when the
Company (as defined below) entered into lease agreements for vehicles.

         In fiscal 2000, the Company issued 6,461 Ordinary Shares and options to
acquire 1,103 Ordinary Shares in connection with the acquisition of ITDS (as
defined below). The Company issued 13,846 exchangeable shares and options to
acquire 1,654 Ordinary Shares in connection with the acquisition of Solect (as
defined below). See Note 3.

             The accompanying notes are an integral part of these
                      consolidated financial statements.
AMDOCS LIMITED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1 - NATURE OF ENTITY

         Amdocs Limited (the "Company") is a leading provider of software
products and services to the communications industry. The Company and its
subsidiaries operate in one business segment, providing business support systems
and related services primarily for the communications industry. The Company
designs, develops, markets, supports, operates and provides outsourcing of
information system solutions primarily to leading communications companies
throughout the world.

         The Company is a Guernsey corporation, which directly or indirectly
holds several wholly owned subsidiaries in the Asia-Pacific region, Europe,
Israel, Latin America and North America. The majority of the Company's customers
are in North America, Europe, Latin America and the Asia-Pacific region. The
Company's main production and operating facilities are located in Israel, the
United States (U.S.), Cyprus, Canada and Ireland.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

         The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States.

CONSOLIDATION

         The financial statements include the accounts of the Company and its
wholly owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.

FUNCTIONAL CURRENCY

         As the U.S. dollar is the predominant currency by which the Company's
revenue and expenses are denominated, the U.S. dollar is the functional currency
for the Company and its subsidiaries.

CASH AND CASH EQUIVALENTS

         Cash and cash equivalents consist of cash and interest-bearing
investments with insignificant interest rate risk and original maturities of 90
days or less.

INVESTMENTS

         When excess funds are available, the Company invests in short-term
interest-bearing investments. The Company classifies all of its short-term
interest-bearing investments as available-for-sale securities. Such short-term
interest-bearing investments consist primarily of treasury notes, federal agency
securities, corporate bonds and money market funds, which are stated at market
value. Unrealized gains and losses are comprised of the difference between
market value and amortized costs of such securities
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

and are reflected, net of tax, as "other comprehensive income (loss)" in
shareholders' equity. Realized gains and losses on short-term interest-bearing
investments are included in earnings and are derived using the specific
identification method for determining the cost of securities.

         From time to time the Company also has made certain investments in
non-publicly traded companies. These investments are included in other
noncurrent assets in the Company's balance sheet and are generally carried at
cost. The Company monitors these investments for impairment and makes
appropriate reductions in carrying values if necessary.

EQUIPMENT, VEHICLES AND LEASEHOLD IMPROVEMENTS

         Equipment, vehicles and leasehold improvements are stated at cost.
Assets under capital leases are recorded at the present value of the future
minimum lease payments at the date of acquisition. Depreciation is computed
using the straight-line method over the estimated useful life of the asset,
which ranges from 2 to 10 years and includes the amortization of assets under
capitalized leases. Leasehold improvements are amortized over the shorter of the
estimated useful lives or the term of the related lease. Management reviews
property and equipment and other long-lived assets on a periodic basis to
determine whether events or changes in circumstances indicate that the carrying
amount of such assets may not be recoverable.

GOODWILL AND OTHER INTANGIBLE ASSETS

         The total purchase price of product line or business acquisitions
accounted for using the purchase method is allocated first to identifiable
assets and liabilities based on estimated fair values. The excess of the
purchase price over the fair value of net assets of purchased businesses is
recorded as goodwill. Goodwill associated with acquisitions completed prior to
July 1, 2001 was amortized on a straight-line basis over its estimated useful
life. For future goodwill amortization, see the discussion below under the
caption "Adoption of New Accounting Standards".

         Other intangible assets consist primarily of purchased computer
software, intellectual property rights, core technology and customer
arrangements.

         Purchased computer software is reported at the lower of amortized cost
or net realizable value, and is amortized over its estimated useful life based
on the pro-rata amount of the future revenue expected to be realized from the
software. This accounting policy results in accelerated amortization of
purchased computer software as compared to the straight-line method.

         Intellectual property rights, core technology, workforce-in-place and
customer arrangements acquired by the Company are amortized over their estimated
useful lives on a straight-line basis.
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

          Through the end of fiscal 2002, the Company considered whether there
are indicators of impairment that would require the comparison of the estimated
net realizable value of goodwill and other intangible assets to their carrying
value under Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of". Any impairment would be recognized when the expected future
operating cash flows derived from such intangible assets is less than their
carrying value.

COMPREHENSIVE INCOME

         The Company accounts for comprehensive income under the provisions of
SFAS No. 130, "Reporting Comprehensive Income", which established standards for
the reporting and display of comprehensive income and its components.
Comprehensive income represents the change in shareholders' equity during a
period from transactions and other events and circumstances from nonowner
sources. It includes all changes in equity except those resulting from
investments by owners and distributions to owners.

CONVERTIBLE NOTES

         The Company presents the outstanding principal amount of the
convertible notes as part of noncurrent liabilities. Accrued interest on the
convertible notes is included in "accounts payable and accrued expenses". The
Company amortizes the issuance cost related to the convertible notes on a
straight-line basis over the term of the convertible notes. Gain or loss on
repurchase of convertible notes represents the difference between the principal
amount and the purchase price. Such gain, aggregating $6,012, is included in
"interest income and other, net". The unamortized issuance cost calculated on a
pro-rata basis, related to the repurchased convertible notes, is included in
"interest income and other, net".

TREASURY STOCK

         The Company repurchases its Ordinary Shares from time to time on the
open market and holds such shares as treasury stock. The Company presents the
cost to repurchase treasury stock as a reduction of shareholders' equity.

INCOME TAXES

         The Company records deferred income taxes to reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting and tax purposes. Deferred taxes are
computed based on tax rates anticipated to be in effect (under applicable laws
at the time the financial statements are prepared) when the deferred taxes are
expected to be paid or realized. A valuation allowance is provided for deferred
tax assets if it is more likely than not these items will either expire before
the Company is able to realize their benefit, or that future deductibility is
uncertain. In the event that a valuation allowance relating to a business
acquisition is subsequently reduced, the adjustment will reduce the original
amount allocated to goodwill.
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

         Deferred tax liabilities and assets are classified as current or
noncurrent based on the classification of the related asset or liability for
financial reporting, or according to the expected reversal dates of the specific
temporary differences, if not related to an asset or liability for financial
reporting, and also include anticipated withholding taxes due on subsidiaries'
earnings when paid as dividends to the Company.

REVENUE RECOGNITION

         The Company usually sells its software as part of an overall solution
offered to a customer, in which significant customization and modification to
the Company's software is required. As a result, revenue generally is recognized
over the course of these long-term projects in conformity with Accounting
Research Bulletin ("ARB") No. 45 "Long Term Construction-Type Contracts",
Statement of Position ("SOP") 81-1 "Accounting for Performance of
Construction-Type and Certain Production-Type Contracts" and SOP 97-2 "Software
Revenue Recognition". Losses are recognized on contracts in the period in which
the loss is identified in accordance with SOP 81-1. Initial license fee for
software revenue is recognized as work is performed, under the percentage of
completion method of accounting. Subsequent license fee revenue is recognized
upon completion of the specified conditions in each contract. Service revenue
that involves significant ongoing obligations, including fees for customization,
implementation and modification, is recognized as work is performed, under the
percentage of completion method of accounting. Revenue from software solutions
that does not require significant customization and modification, is recognized
upon delivery, in accordance with the principles emphasized in Staff Accounting
Bulletin ("SAB") 101 "Revenue Recognition in Financial Statements" and SOP 97-2.
In outsourcing contracts, revenue from operation and maintenance of customers'
billing systems is recognized in the period in which the bills are produced.
Revenue from ongoing support services is recognized as work is performed.
Revenue from third-party hardware and software sales is recognized upon
delivery, and recorded at gross or net amount according to the criteria
established in Emerging Issues Task Force ("EITF") 99-19 "Recording Revenue
Gross as a Principal versus Net as an Agent" and SAB 101. Maintenance revenue is
recognized ratably over the term of the maintenance agreement, which in most
cases is one year or less. As a result of a substantial portion of the Company's
revenue being subject to the percentage of completion accounting method, the
Company's annual and quarterly operating results may be significantly affected
by the size and timing of customer projects and the Company's progress in
completing such projects.

         Many of the Company's agreements include multiple obligations. For
these multiple elements arrangements, the fair value of each component is
determined based on specific objective evidence for that element and revenue is
allocated to each component based upon its fair value. The revenue associated
with each element is recognized using the respective methodology discussed
above.
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

         Deferred revenue represents billings to customers for licenses,
services and third-party products for which revenue has not been recognized.
Unbilled accounts receivable include all amounts that had not been billed as of
the balance sheet date due to contractual or other arrangements with customers.
Allowances that are netted against accounts receivable, represent amounts
provided for accounts which their collectibility is not reasonably assured.

         Included in service revenue are sales of third-party products. Revenue
from sales of such products includes third-party computer hardware and computer
software products and was less than 10 percent of total revenue in each of
fiscal 2002, 2001 and 2000.

COST OF LICENSE AND COST OF SERVICE

         Cost of license and service consists of all costs associated with
providing services to customers, including identified losses on contracts and
warranty expense. Estimated losses on contracts are recognized in the period in
which the loss is identified in accordance with SOP 81-1. Estimated costs
related to warranty obligations are initially provided at the time the product
is delivered and are revised to reflect subsequent changes in circumstances and
estimates. Cost of license includes royalty payments to software suppliers,
amortization of purchased computer software and intellectual property rights.

         Included in cost of service are costs of third-party products
associated with reselling third-party computer hardware and software products to
customers, when revenue from third-party products is recorded at the gross
amount. Customers purchasing third-party products from the Company generally do
so in conjunction with the purchase of services.

RESEARCH AND DEVELOPMENT

         Research and development expenditures consist of costs incurred in the
development of new software modules and product offerings, either in conjunction
with customer projects or as part of the Company's internal product development
programs. Research and development costs, which are incurred in conjunction with
a customer project, are expensed as incurred.

         Based on the Company's product development process, technological
feasibility, as defined in SFAS No. 86, "Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed", is established upon
completion of a detailed program design or, in the absence thereof, completion
of a working model. Costs incurred by the Company after achieving technological
feasibility and before the product is ready for customer release have been
insignificant.

STOCK-BASED COMPENSATION

         The Company accounts for stock-based compensation in accordance with
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

Employees". Pursuant to this accounting standard, the Company records deferred
compensation for share options granted to employees at the date of grant based
on the difference between the exercise price of the options and the market value
of the underlying shares at that date. Deferred compensation is amortized to
compensation expense over the vesting period of the underlying options. No
compensation expense is recorded for stock options that are granted to employees
and directors at an exercise price equal to the fair market value of the
Ordinary Shares at the time of the grant. See Note 18 for pro forma disclosures
required in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation". Compensation expenses that are deductible in a tax return in a
period different from the one in which they are reported as expenses in
measuring net income are temporary differences that result in deferred taxes. To
the extent that compensation is not recorded for stock-based compensation, the
benefit of the related tax deduction is recorded as an increase to additional
paid-in capital in the period of the tax reduction.

FAIR VALUE OF FINANCIAL INSTRUMENTS

         The financial instruments of the Company consist mainly of cash and
cash equivalents, short-term interest-bearing investments, accounts receivable,
short-term financing arrangements, forward exchange contracts, lease obligations
and convertible notes. In view of their nature, the fair value of the financial
instruments, excluding the convertible notes (for which the fair value at
September 30, 2002 is approximately $400,000), included in the accounts of the
Company does not significantly vary from their carrying amount. The fair values
of the Company's foreign currency exchange contracts are estimated based on
quoted market prices of comparable contracts.

CONCENTRATION OF CREDIT RISK

         Financial instruments that potentially subject the Company to
concentration of credit risk consist principally of trade receivables. The
Company invests its excess cash primarily in highly liquid U.S.
dollar-denominated securities with major U.S. institutions. The Company does not
expect any credit losses with respect to these items. The Company's revenue is
generated primarily in North America and Europe. To a lesser extent, revenue is
generated in the Asia-Pacific region and Latin America. Most customers are among
the largest communications and directory publishing companies in the world (or
are owned by them). The Company's business is subject to the effects of general
global economic conditions and, in particular, market conditions in the
communications industry. The Company performs ongoing credit analyses of its
customer base and generally does not require collateral.

EARNINGS PER SHARE

         The Company accounts for earnings per share based on SFAS No. 128
"Earnings per Share". SFAS No. 128 requires companies to compute earnings per
share under two different methods, basic and diluted earnings per share, and to
disclose the methodology used for the calculations. Basic earnings per share are
calculated using the weighted
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

average number of shares outstanding during the period. Diluted earnings per
share is computed on the basis of the weighted average number of shares
outstanding and the effect of dilutive outstanding stock options using the
treasury stock method and the effect of dilutive outstanding convertible notes
using the if-converted method.

DERIVATIVES AND HEDGING

         The Company accounts for derivatives and hedging based on SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133
requires the Company to recognize all derivatives on the balance sheet at fair
value. If a derivative meets the definition of a hedge and is so designated,
depending on the nature of the hedge, changes in the fair value of the
derivative will either be offset against the change in fair value of the hedged
assets, liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value is recognized in
earnings.

RECLASSIFICATIONS

         Certain amounts in prior years' financial statements have been
reclassified to conform to the current year's presentation.

ADOPTION OF NEW ACCOUNTING STANDARDS

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other
Intangible Assets".

         SFAS No. 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001.

         SFAS No. 142 is effective for fiscal years beginning after December 15,
2001. Under SFAS No. 142, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but will be subject to periodic
impairment tests in accordance with the Statement. Other intangible assets will
continue to be amortized over their useful lives.

         Other intangible assets, such as workforce-in-place, will be
reclassified to goodwill, according to SFAS No. 141's new definition of
intangible assets.

         Effective October 1, 2002 the Company will adopt SFAS No. 142.
Subsequent to the adoption of the new rules, the Company will perform the first
of the required periodic impairment tests of goodwill and intangible assets
recorded as of October 1, 2002. Thereafter, a periodic impairment test will be
performed at least annually. The Company has not yet determined what the effect
of these tests will be on its earnings and financial position. The Company
recorded $204,561, $204,566 and $104,268, of goodwill and
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

workforce-in-place amortization during the years ended September 30, 2002, 2001
and 2000, respectively.

         Set forth below is the effect of non-amortization of goodwill and
workforce-in-place:
YEAR ENDED SEPTEMBER 30,
                                                          ---------------------------------------------
                                                             2002              2001               2000
                                                          ---------         ---------         ---------
Reported net (loss) income                       $  (5,061)        $  66,386         $   5,978
         Add back: goodwill and workforce-in-place
          amortizations                                     204,561           204,566           104,268
         Attributable tax effect                             (2,717)           (2,717)           (2,088)
                                                          ---------         ---------         ---------
         Adjusted net income                              $ 196,783         $ 268,235         $ 108,158
                                                          =========         =========         =========
         Adjusted basic earnings per share                $    0.89         $    1.21         $    0.51
                                                          =========         =========         =========
         Adjusted diluted earnings per share              $    0.88         $    1.18         $    0.50
                                                          =========         =========         =========
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". SFAS No. 145 eliminates previous requirements to classify gains
and losses from extinguishment of debt as extraordinary items in earnings. Gains
or losses from extinguishment of debt for fiscal years beginning after May 15,
2002 shall not be classified as extraordinary items unless certain provisions
are met. Early adoption was encouraged. The Company adopted SFAS No. 145 in the
fourth quarter of fiscal 2002 in connection with the gain related to the
repurchase of its convertible notes. See Note 12.

USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

NOTE 3 - ACQUISITIONS

ITDS

         On November 30, 1999, the Company acquired International
Telecommunication Data Systems, Inc. ("ITDS"), a leading provider of solutions
to communications companies for outsourcing of billing operations. The total
purchase price of $189,034, based on a per share price of $28.25 for the
Company's Ordinary Shares, consisted of the issuance of 6,461 Ordinary Shares,
the grant of options to purchase 1,103 Ordinary Shares and transaction costs.
The acquisition was accounted for using the purchase method of accounting. The
fair market value of ITDS' assets and liabilities has been included in the
Company's balance sheet and the results of ITDS' operations are included
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

in the Company's consolidated statement of income, commencing on December 1,
1999. The value of acquired technology, which was independently determined,
included both existing technology and in-process research and development. The
valuation of these technologies was made by applying the income forecast method,
which considered the present value of cash flows by product lines. The fair
value of core technology was valued at $12,342 and was fully amortized over
approximately two years commencing on December 1, 1999. Purchased in-process
research and development, valued at $19,876, was charged as an expense
immediately following the completion of the acquisition, in accordance with FASB
Interpretation No. 4, "Applicability of FASB Statement No. 2 to Business
Combinations Accounted for by the Purchase Method" ("FIN 4"), since this
technology had not reached technological feasibility and had no alternative use.
This technology required additional development, coding and testing efforts
before technological feasibility could be determined. The fair value of customer
base was valued at $647 and the fair value of workforce-in-place was valued at
$5,407, each of which is being amortized over five years commencing on December
1, 1999. The excess of the purchase price over the fair value of the net assets
acquired, or goodwill, of $70,895 is being amortized over 15 years commencing on
December 1, 1999. Effective October 1, 2002, SFAS No. 142 will be adopted by the
Company. Under SFAS No. 142, amortization of goodwill will cease for
acquisitions completed prior to July 1, 2001. As a result, commencing fiscal
2003, goodwill related to the ITDS acquisition will no longer be amortized, but
will be subject to periodic impairment tests. Other intangible assets, such as
workforce-in-place, will be reclassified to goodwill, according to SFAS No.
141's new definition of intangible assets.

SOLECT

         On April 5, 2000, the Company acquired Solect Technology Group Inc.
("Solect"), a leading provider of customer care and billing software to IP
service providers. Under the terms of the combination agreement, all then
outstanding Solect common shares were exchanged for shares of a newly issued
class of exchangeable shares of Solect. The Solect exchangeable shares entitle
holders to dividends and other rights economically equivalent to the Company's
Ordinary Shares, including the right, through a voting trust, to vote at the
Company's shareholder meetings, and are exchangeable at the option of holders
into the Company's Ordinary Shares on a one-for-one basis. The total purchase
price of $1,087,711, based on a per share price of $69.875 for the Company's
Ordinary Shares, included the issuance of 13,846 exchangeable shares, the grant
of options to purchase 1,654 Ordinary Shares, as well as transaction costs. The
acquisition was accounted for using the purchase method of accounting. The fair
market value of Solect's assets and liabilities has been included in the
Company's balance sheet and the results of Solect's operations are included in
the Company's consolidated statement of income, commencing on April 6, 2000. The
value of acquired technology, which was independently determined, included both
existing technology and in-process research and development. The valuation of
these items was made by applying the income forecast method, which considered
the present value of cash flows by product
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

lines. The fair value of core technology was valued at $18,259 and was fully
amortized over two years commencing on April 6, 2000. Purchased in-process
research and development, valued at $50,443, was charged as an expense
immediately following the completion of the acquisition in accordance with FIN
4, since this technology had not reached technological feasibility and had no
alternative use. This technology required varying additional development, coding
and testing efforts before technological feasibility could be determined. The
fair value of customer base was valued at $1,211 and the fair value of
workforce-in-place was valued at $3,259, each of which is being amortized over
three years commencing on April 6, 2000. The excess of the purchase price over
the fair value of net assets acquired, or goodwill, of $985,271 is being
amortized over five years commencing on April 6, 2000. As a result of the
adoption of SFAS No. 142, commencing fiscal 2003, goodwill related to the Solect
acquisition will no longer be amortized, but will be subject to periodic
impairment tests. Other intangible assets, such as workforce-in-place, will be
reclassified as goodwill, according to SFAS No. 141's new definition of
intangible assets.

         Set forth below is the unaudited pro forma revenue, operating income,
net loss and loss per share figures for the year ended September 30, 2000, as if
ITDS and Solect had been acquired as of October 1, 1998, excluding the write-off
of purchased in-process research and development and other indirect
acquisition-related costs:
YEAR ENDED
                                                     SEPTEMBER 30, 2000
                                                     ------------------
Revenue                                           $1,152,783
       Operating income                                      41,516
       Net loss                                             (25,516)
       Basic loss per share                                   (0.12)
       Diluted loss per share                                 (0.12)
CLARIFY

         On November 28, 2001, the Company purchased from Nortel Networks
Corporation substantially all of the assets of its Clarify business ("Clarify"),
a leading provider of Customer Relationship Management ("CRM") software to
communications companies and other enterprise sectors. This acquisition
positioned the Company as a leading provider of CRM software to the
communications industry and, through the addition of Clarify's CRM software to
the Company's Business Support Systems offerings, reinforced the Company's
leadership in delivering a comprehensive portfolio of business software
applications. Following the acquisition, the Company has continued to sell
Clarify's CRM software to customers other than communications service providers,
although this is not the focus of the Company's business and, as a result, it
believes that revenue from such customers will slightly increase over time. The
aggregate initial purchase price for Clarify as of September 30, 2002 was
$212,000 in cash, including transaction costs of $8,250. The purchase price was
subject to final price adjustments that
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

were settled in October 2002 and resulted in an $11,265 reduction of the
purchase price to $200,735 in the first quarter of fiscal 2003. The acquisition
was accounted for as a business combination using the purchase method of
accounting, as required by SFAS No. 141. The fair market value of Clarify's
assets and liabilities has been included in the Company's balance sheet and the
results of Clarify's operations are included in the Company's consolidated
statements of operations, commencing on November 29, 2001. The Company obtained
a valuation of the intangible assets acquired in the Clarify transaction. The
value of acquired technology included both existing technology and in-process
research and development. The valuation of these items was made by applying the
income forecast method, which considered the present value of cash flows by
product lines. Of the $65,600 of acquired identifiable intangible assets,
$17,400 was assigned to in-process research and development and was written off
as of the closing date of the acquisition, in accordance with FIN 4. The fair
value assigned to core technology was $13,400 and is being amortized over two
years commencing on November 29, 2001. The fair value assigned to customer
arrangements was $34,800 and is being amortized over three years commencing on
November 29, 2001.The excess of the purchase price over the fair value of the
net assets acquired, or goodwill, as of September 30, 2002, was $161,258, of
which $156,478 is tax deductible. The amount assigned to goodwill was subject to
possible purchase price adjustments and other contingencies, which were settled
in October 2002, as discussed above. The goodwill is accounted for under SFAS
No. 142. In accordance with SFAS No. 142, goodwill from acquisitions after June
30, 2001 is no longer amortized, but is subject to periodic impairment tests.
Under the transition provisions of SFAS No. 142, goodwill for acquisitions prior
to July 1, 2001 will continue to be amortized only through September 30, 2002.
As a result, goodwill associated with the acquisition of Clarify is not
amortized, while goodwill associated with other acquisitions by the Company will
be amortized only through the end of fiscal 2002.

         The following is the preliminary allocation of the purchase price and
deferred tax liability:
Net liabilities acquired                                 $  (11,987)
        Core technology                                              13,400
        Customer arrangements                                        34,800
        In-process research and development                          17,400
        Deferred tax liability                                       (2,871)
        Goodwill                                                    161,258
                                                                 ----------
                                                                 $  212,000
                                                                 ==========
As discussed above, the purchase price was subject to final price
adjustments that were settled in October 2002. The purchase price allocation
above is not final and will be affected by these adjustments.
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

         Set forth below is the unaudited pro forma revenue, operating income,
net income (loss) and per share figures for the years ended September 30, 2002
and 2001, as if Clarify had been acquired as of October 1, 2000, excluding the
write-off of purchased in-process research and development:
YEAR ENDED SEPTEMBER 30,
                                                  -----------------------------------
                                                      2002                   2001
                                                  -------------          ------------
Revenue                                    $   1,633,565          $  1,776,063
       Operating income                                  54,962                27,218
       Net income (loss)                                  2,753               (33,521)
       Basic earnings (loss) per share                     0.01                 (0.15)
       Diluted earnings (loss) per share                   0.01                 (0.15)
As a result of SFAS No. 142, goodwill associated with acquisitions
completed after June 30, 2001 is not amortized and, accordingly, the pro forma
information above reflects no amortization of goodwill related to the Clarify
acquisition.

NOTE 4 - RELATED PARTY TRANSACTIONS

         The following related party balances are included in the balance
sheets:
AS OF SEPTEMBER 30,
                                                                          -------------------------------
                                                                              2002               2001
                                                                          ------------      -------------
Accounts receivable, including unbilled of $100 and $4,479
            in 2002 and 2001, respectively                                $     55,458      $     104,096
          Prepaid expenses and other current assets (1)                          1,550                  -
          Other noncurrent assets (2)                                           48,453             10,091
--------------------

         (1)      Consists of interest receivable accrued on convertible
                  debentures issued to the Company by Certen Inc. ("Certen"), a
                  company formed by Bell Canada and the Company in January 2001.

         (2)      Consists of an investment in Certen in equity and convertible
                  debentures. The investment in Certen is accounted for under
                  the cost method, based on the Company's 10% ownership of
                  Certen. As part of its original commitment, the total
                  additional financial investment the Company will be making in
                  Certen is approximately $5,000, translated from Canadian
                  dollars, which is the functional currency for the Certen
                  transaction. The Company's exposure to currency fluctuation
                  with respect to the convertible debenture component of this
                  investment has been substantially hedged.
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

         The Company licenses software and provides computer systems integration
and related services to affiliates of SBC Communications, Inc., including
Certen. The following related party revenue is included in the statements of
operations:
YEAR ENDED SEPTEMBER 30,
                                                     ----------------------------------------------------
                                                           2002               2001               2000
                                                     -------------        ------------      -------------
Revenue:
           License                                   $      30,551        $     37,356      $      15,888
           Service                                         314,341             264,278            144,859
The following related party expenses are included in the statements of
operations:
YEAR ENDED SEPTEMBER 30,
                                                            --------------------------------------------
                                                                2002             2001             2000
                                                            -----------      -----------       ---------
Operating expenses (1):
           Cost of service                                  $     2,642      $     3,232       $   2,814
           Selling, general and administrative                      336              663             700

       Interest income and other, net  (2)                        1,886               89               -
--------------------

         (1)      The Company leases office space on a month-to-month basis and
                  purchases other miscellaneous support services from affiliates
                  of a certain shareholder.

         (2)      Represents interest and exchange rate differences, net of
                  hedging, on the convertible debentures issued in connection
                  with the Certen transaction. Absent hedging, these amounts
                  would be $1,402, $89 and $0 for the years ended September 30,
                  2002, 2001 and 2000, respectively.

NOTE 5 - SHORT-TERM INTEREST-BEARING INVESTMENTS

         Short-term interest-bearing investments consisted of the following:
AMORTIZED COST                      MARKET VALUE
                                                    AS OF SEPTEMBER 30,                AS OF SEPTEMBER 30,
                                               ----------------------------       ---------------------------
                                                   2002             2001             2002             2001
                                               ----------        ----------       ----------       ----------
Federal agencies                         $  110,743        $  192,095       $  112,092       $  193,537
      U.S. government treasuries                   77,279                 -           79,276                -
      Corporate bonds                             100,544            29,692          102,646           30,468
      Mortgages (including government and
         corporate)                               254,593                 -          256,027                -
      Municipal bonds                              13,543                 -           13,543                -
      Other                                        17,355            13,053           17,580           13,064
                                               ----------        ----------       ----------       ----------
                                                  574,057           234,840          581,164          237,069
      Allowance for unrealized gain                 7,107             2,229                -                -
                                               ----------        ----------       ----------       ----------
      Total                                    $  581,164        $  237,069       $  581,164       $  237,069
                                               ==========        ==========       ==========       ==========
AMDOCS LIMITED
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

         As of September 30, 2002, short-term interest-bearing investments had
the following expected maturity dates:

                                            MARKET VALUE
                                            ------------
        2003                                  $280,204
        2004                                   155,887
        2005                                    90,386
        2006                                    44,841
        2007                                     9,846
                                              --------
        Total                                 $581,164
                                              ========

NOTE 6 - ACCOUNTS RECEIVABLE, NET

         Accounts receivable, net consists of the following:
AS OF SEPTEMBER 30,
                                             ----------------------------------
                                                  2002                 2001
                                             -------------        -------------
Accounts receivable - billed       $     314,828        $     365,697
          Accounts receivable - unbilled            24,144               23,272
          Less - allowances                        (26,240)              (4,118)
                                             -------------        -------------
          Accounts receivable, net           $     312,732        $     384,851
                                             =============        =============
NOTE 7 - EQUIPMENT, VEHICLES AND LEASEHOLD IMPROVEMENTS, NET

         Components of equipment, vehicles and leasehold improvements, net are:
AS OF SEPTEMBER 30,
                                                ------------------------
                                                  2002            2001
                                                --------        --------
Computer equipment                     $211,010        $171,155
         Vehicles furnished to employees          53,696          54,140
         Leasehold improvements                   54,319          49,137
         Furniture and fixtures                   38,672          31,434
                                                --------        --------
                                                 357,697         305,866
         Less accumulated depreciation           196,795         132,171
                                                --------        --------
                                                $160,902        $173,695
                                                ========        ========
The Company has entered into various arrangements for the leasing of
vehicles for periods of five years, carrying interest rates of LIBOR plus an
interest rate ranging 0.5% to 0.9% (between 2.29% to 2.69% as of September 30,
2002). The Company has accounted for these as capital leases and amortization
costs have been included in depreciation expense. Vehicles under capital lease
arrangements had cost of $49,582 and
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

$52,165 with related accumulated depreciation of $21,520 and $15,351 as of
September 30, 2002 and 2001, respectively.

         Capital lease payments, excluding interest, due over the next five
years are as follows:
FOR THE YEARS ENDED SEPTEMBER 30,
     ---------------------------------
2003                                     $  10,347
     2004                                         6,639
     2005                                         6,304
     2006                                         2,079
     2007                                           118
NOTE 8 - GOODWILL AND OTHER INTANGIBLE ASSETS, NET

         Goodwill and other intangible assets, net are:
ESTIMATED               AS OF SEPTEMBER 30,
                                                  USEFUL LIFE       -------------------------------
                                                  (IN YEARS)          2002                  2001
                                                  ----------          ----                  ----
Goodwill (1)(2)                                      5-15           $1,208,469           $1,057,314
Intellectual property rights and purchased
  computer software                                  2-10               91,758               77,358
Other intangible assets                               3-5               47,378               12,403
                                                                    ----------           ----------
                                                                     1,347,605            1,147,075
Less accumulated amortization                                          597,075              358,888
                                                                    ----------           ----------
                                                                    $  750,530           $  788,187
                                                                    ==========           ==========
--------------------
(1)         In accordance with SFAS No. 142, goodwill from acquisitions
            completed after June 30, 2001 is not amortized, but is subject to
            periodic impairment tests. Under SFAS No. 142, amortization of
            goodwill will cease, for acquisitions completed prior to July 1,
            2001, on October 1, 2002.

(2)         In September 2002, the Company recorded an offsetting reduction of
            the goodwill related to Solect acquisition due to a release of tax
            valuation allowance. See Note 10.
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 9 - OTHER NONCURRENT ASSETS

         Other noncurrent assets consist of the following:
AS OF SEPTEMBER 30,
                                                         ----------------------
                                                            2002          2001
                                                         --------      --------
Funded employee benefit costs (1)                        $ 40,495      $ 33,624
Noncurrent investments, at cost (2)(3)                      7,596         6,964
Noncurrent investment in convertible debentures (2)        40,857         7,827
Convertible notes issuance cost, net                        5,934        10,667
Restricted cash and cash equivalents (4)                    5,072         4,818
Other                                                      10,225         7,053
                                                         --------      --------
                                                         $110,179      $ 70,953
                                                         ========      ========
--------------------
(1)         See Note 16.

(2)         Consists of certain investments in non-publicly traded companies
            under the cost method, including investment in Certen. In January
            2001 the Company and Bell Canada formed Certen to provide customer
            care and billing solutions to Bell Canada and some of its affiliated
            companies. Certen is owned 90% by Bell Canada and 10% by the
            Company. Commencing on the 30-month anniversary of the transaction,
            convertible debentures issued by Certen to the Company will be
            convertible into an additional 35% ownership interest in Certen. The
            relative ownership interests of the Company might further be
            modified through the exercise of a series of contractual rights,
            commencing on the 30-month anniversary of the transaction. The
            Company provides the customer care and billing software required by
            Certen, including customization, installation, maintenance and other
            services. The Company accounts for the investment in Certen under
            the cost method. See Note 4.

(3)         In fiscal 2002, the Company recorded pretax charges of $5,500 to
            adjust the carrying value of two investments, accounted for by the
            Company under the cost method. In fiscal 2001, the Company recorded
            pretax charges of $6,750 to adjust the carrying value of four
            investments, accounted for by the Company under the cost method.
            Following these adjustments, as of September 30, 2002, the Company
            had one remaining investment, the investment in Certen, accounted
            for under the cost method. The Company continues to monitor the
            economic and financial aspects of its remaining interests in this
            investment.

(4)         The Company was required to maintain restricted cash and cash
            equivalents balances relating to letters of credit and bank
            guarantees.
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 10 - INCOME TAXES

         The provision for income taxes consists of the following:
YEAR ENDED SEPTEMBER 30,
              -----------------------------------------
                2002             2001            2000
              ---------       ---------      ---------
Current       $  75,185       $ 110,163      $  80,076
Deferred         (1,665)          5,018         (1,196)
              ---------       ---------      ---------
              $  73,520       $ 115,181      $  78,880
              =========       =========      =========
All income taxes are from continuing operations reported by the Company
in the applicable taxing jurisdiction. Income taxes also include anticipated
withholding taxes due on subsidiaries' earnings when paid as dividends to the
Company.

         Deferred income taxes are comprised of the following components:
AS OF SEPTEMBER 30,
                                                                        ---------------------
                                                                        2002            2001
                                                                      --------       --------
Deferred tax assets:
  Deferred revenue                                                    $ 23,303       $ 18,033
  Accrued employee costs                                                19,367         20,589
  Intangible assets, computer software and intellectual property        14,790          6,553
  Net operating loss carry forwards                                     22,657         30,358
  Other                                                                 11,899         10,275
  Valuation allowances                                                 (10,704)       (27,907)
                                                                      --------       --------
  Total deferred tax assets                                             81,312         57,901
                                                                      --------       --------
Deferred tax liabilities:
  Anticipated withholdings on subsidiaries' earnings                   (42,149)       (32,730)
  Intangible assets, computer software and intellectual property       (10,007)        (7,410)
  Other                                                                 (8,522)        (2,185)
                                                                      --------       --------
  Total deferred tax liabilities                                       (60,678)       (42,325)
                                                                      --------       --------
Net deferred tax assets                                               $ 20,634       $ 15,576
                                                                      ========       ========
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

         The effective income tax rate varied from the statutory Guernsey tax
rate as follows:
YEAR ENDED SEPTEMBER 30,
                                                          ----------------------------
                                                          2002        2001        2000
                                                          ----        ----        ----
Statutory Guernsey tax rate                                20%         20%         20%
Guernsey tax-exempt status                                (20)        (20)        (20)
Foreign taxes                                              28          30          30
                                                          ----        ----        ----
Income tax rate before effect of
  acquisitions-related costs and restructuring
  charges                                                  28          30          30
Effect of acquisition-related costs                        48          33          19
                                                          ----        ----        ----
Income tax rate before restructuring charges,
  in-process research and development and gain from
  the repurchase of Notes                                  76          63          49
Restructuring charges and in-process research
  development and gain from the repurchase of Notes        31          --          44
                                                          ----        ----        ----
Effective income tax rate                                 107%         63%         93%
                                                          ====        ====        ====
These high effective tax rates were primarily attributable to
amortization of goodwill related to the Company's acquisitions, much of which is
not tax deductible. In the year ended September 30, 2002 the Company's effective
tax rate was also adversely affected by the fixed non-deductible expenditures
representing a larger component of the Company's pretax income.

          As of September 30, 2002, the Company had deferred tax assets of
$22,657 derived primarily from Canadian net operating loss carry-forwards. The
net operating loss carry-forwards will expire within eight to ten years. Until
fiscal 2002 the realization of these assets through future taxable earnings was
uncertain, and as a result a valuation allowance was recorded. As of September
30, 2002, the Company estimated that operating losses acquired in the Solect
transaction would be realized through future taxable earnings. As a result,
related valuation allowance of $8,957 was released as an offsetting reduction of
the goodwill recorded in the Solect transaction. The remainder of the valuation
allowance of $10,704 is related to Canadian operating losses other than those
acquired in the Solect transaction.
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 11 - SHORT-TERM FINANCING ARRANGEMENTS

         The Company's financing transactions are described below:

         As of September 30, 2002, the Company had available short-term general
revolving lines of credit totaling $40,000. During fiscal 2002 and as of
September 30, 2002, there was no outstanding balance under any of these credit
lines.

         In addition, as of September 30, 2002, the Company had credit
facilities totaling $43,840, limited for the use of letters of credit and bank
guarantees from various banks. Outstanding letters of credit and bank guarantees
as of September 30, 2002 totaled $24,460. These were mostly supported by a
combination of the credit facilities described above and restricted cash
balances that the Company maintains with the issuing banks. See Note 9.

NOTE 12 - CONVERTIBLE NOTES

         In May 2001 the Company issued $500,000 aggregate principal amount of
2% Convertible Notes due June 1, 2008 (the "Notes"). The Company is obligated to
pay interest on the Notes semi-annually on June 1 and December 1 of each year.
The Notes are senior unsecured obligations of the Company and rank equal in
right of payment with all of existing and future senior unsecured indebtedness
of the Company. The Notes are convertible, at the option of the holders at any
time before the maturity date, into Ordinary Shares of the Company at a
conversion rate of 10.8587 shares per one thousand dollars principal amount,
representing a conversion price of approximately $92.09 per share. The Notes are
subject to redemption at any time on or after June 1, 2006, in whole or in part,
at the option of the Company, at a redemption price of 100% of the principal
amount plus accrued and unpaid interest. The Notes are subject to repurchase, at
the holders' option, on June 1, 2004 and June 1, 2006, at a repurchase price
equal to 100% of the principal amount plus accrued and unpaid interest, if any,
on such repurchase date. The Company may choose to pay the repurchase price in
cash, Ordinary Shares or a combination of cash and Ordinary Shares.

         On July 23, 2002, the board of directors authorized the Company to
repurchase the Notes, in such amounts, at such prices and at such times
considered appropriate. Such repurchases may be made on the open market, in
privately negotiated transactions or otherwise, in accordance with any
applicable laws and the terms of the Notes. During the fourth quarter of fiscal
2002, the Company had repurchased $54,946 aggregate principal amount of the
Notes at an average price of $890 per $1,000 principal amount, resulting in a
gain of $6,012. See Note 14. The Company funded these repurchases, and intends
to fund any future repurchases, with available funds. As of September 30, 2002,
$445,054 aggregate principal amount of the Notes was outstanding.
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 13 - NONCURRENT LIABILITIES AND OTHER

         Noncurrent liabilities and other consist of the following:
AS OF SEPTEMBER 30,
                                                      --------------------
                                                      2002           2001
                                                    --------      --------
Accrued employees costs                             $ 66,850      $ 62,663
Noncurrent customer advances                          24,146            --
Long-term portion of capital lease obligations        15,138        24,779
Noncurrent forward exchange obligations                   --         2,265
Accrued lease obligations                             14,031         2,166
Other                                                  3,914         1,086
                                                    --------      --------
                                                    $124,079      $ 92,959
                                                    ========      ========
NOTE 14 - INTEREST INCOME AND OTHER, NET

         Interest income and other, net consists of the following:
YEAR ENDED SEPTEMBER 30,
                                      ---------------------------------------
                                         2002           2001            2000
                                      --------       --------       --------
Interest income                       $ 31,856       $ 32,156       $ 14,254
Interest expense                       (16,004)        (8,678)        (2,528)
Gain from repurchase of Notes(*)         6,012             --             --
Other, net                              (2,566)        (1,192)          (992)
                                      --------       --------       --------
                                      $ 19,298       $ 22,286       $ 10,734
                                      ========       ========       ========
--------------------

(*) See Note 12.

NOTE 15 - CONTINGENCIES

Commitments

         The Company leases office space under non-cancelable operating leases
in various countries in which it does business. Future minimum non-cancelable
lease payments required after October 1, 2002 are as follows:
FOR THE YEARS ENDED SEPTEMBER 30,
     ---------------------------------
2003                                                    $    43,794
     2004                                                         40,681
     2005                                                         36,540
     2006                                                         32,945
     2007                                                         23,805
     Thereafter                                                   26,416
                                                             -----------
                                                             $   204,181
                                                             ===========
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

         Future minimum non-cancelable lease payments, as stated above, do not
reflect committed future sublease income of $2,634, $2,681, $1,794, $1,444, $914
and $1,746 for the years ended September 30, 2003, 2004, 2005, 2006, 2007 and
thereafter, respectively. Of the $192,968 net operating leases, net of $11,213
of sublease income, $11,087 has been included in accrued restructuring charges
as of September 30, 2002.

         Rent expense, including accruals for future lease losses, was
approximately $39,141, $40,506 and $20,400 for fiscal 2002, 2001 and 2000,
respectively.

Litigation

         Beginning on June 24, 2002, a number of complaints were filed by
holders of the Company's Ordinary Shares against the Company and four of its
officers and directors, in the United States District Courts for the Eastern
District of Missouri and the Southern District of New York. The complaints
allege violations of the Securities Exchange Act of 1934, as amended, and Rule
10b-5 promulgated thereunder. Each plaintiff seeks to represent a putative class
of all purchasers of the Company's Ordinary Shares between July 18, 2000 (or, in
some of the complaints, July 24, 2001) and June 20, 2002. The complaints
generally allege that, during that period, the Company and the individual
defendants made false or misleading statements, in press releases and Securities
and Exchange Commission filings, regarding among other things the Company's
future prospects, backlog, revenue, gross margin, acquisitions and accounting
practices. Each plaintiff seeks unspecified monetary damages and other relief
against all defendants. The parties in the New York cases have stipulated to
transfer them to the Eastern District of Missouri. The court has not yet
appointed a lead plaintiff. The Company disputes the allegations of wrongdoing
in these complaints and intends to defend itself vigorously.

NOTE 16 - EMPLOYEE BENEFITS

         The Company accrues severance pay for the employees of its Israeli
operations in accordance with Israeli law and certain employment procedures on
the basis of the latest monthly salary paid to these employees and the length of
time that they have worked for the Israeli operations. The severance pay
liability, which is included in noncurrent liabilities and other, is partially
funded by amounts on deposit with insurance companies, which are included in
other noncurrent assets. Severance expenses were approximately $9,953, $17,242
and $17,614 for fiscal 2002, 2001 and 2000, respectively.

            The Company sponsors defined contribution plans covering certain
employees in the U.S., U.K. and Canada. The plans provide for Company matching
contributions based upon a percentage of the employees' voluntary contributions.
The Company's fiscal 2002, 2001 and 2000 plan contributions were not
significant.
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 17 - CAPITAL TRANSACTIONS

         The following are details of the Ordinary Shares issued and
outstanding:
AS OF SEPTEMBER 30,
                                  ----------------------
                                    2002            2001
                                  -------        -------
Voting Ordinary Shares            220,780        211,849
Non-Voting Ordinary Shares          2,535         10,779
                                  -------        -------
Ordinary Shares issued            223,315        222,628
Less - treasury stock              (7,732)            --
                                  -------        -------
Ordinary Shares outstanding       215,583        222,628
                                  =======        =======
All the Non-Voting Ordinary Shares are held by a single shareholder.
Under the Company's Articles of Association, upon the transfer or sale of such
shares to another party, the shares automatically convert to Voting Ordinary
Shares.

         The Company's capital transactions are described below:

         On November 30, 1999 the Company issued 6,461 Ordinary Shares in
connection with the acquisition of ITDS. On April 5, 2000 the Company issued
13,846 exchangeable shares in connection with the acquisition of Solect. See
Note 3.

         Total proceeds from the exercise of employee stock options amounted to
$5,161, $13,967 and $21,360 in fiscal 2002, 2001 and 2000, respectively.

         On November 6, 2001, the Company announced that its board of directors
had approved a twelve-month share repurchase program authorizing the repurchase
of up to 11,000 Ordinary Shares, or approximately 5% of the Company's
outstanding Ordinary Shares as of that date. On April 23, 2002, the Company
announced that its board of directors had expanded the existing stock repurchase
plan to authorize the purchase of up to 20,000 shares, or approximately 9% of
the Company's outstanding Ordinary Shares. Under the program, from time to time
through November 2002, the Company was authorized to repurchase shares on the
open market, in privately negotiated transactions or otherwise, in accordance
with any applicable laws, and at times and prices considered appropriate by the
Company. During fiscal 2002 the Company repurchased 7,732 Ordinary Shares, at an
average price of $14.13 per share. The Company funded these repurchases, and
intends to fund any future repurchases, with available funds.

NOTE 18 - STOCK OPTION AND INCENTIVE PLAN

         In January 1998, the Company first adopted, and in each of January
1999, January 2000 and January 2001 the Company has amended, the Amdocs Limited
1998 Stock Option and Incentive Plan (the "Plan"). Under the provisions of the
Plan, 32,300
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

Ordinary Shares are available to be granted to officers, directors, employees
and consultants. Such options fully vest over one to nine years and have a term
of ten years.

         On November 30, 1999, the Company issued additional options to purchase
1,103 Ordinary Shares in connection with the acquisition of ITDS to replace
issued ITDS options. On April 5, 2000, the Company issued additional options to
purchase 1,654 Ordinary Shares in connection with the acquisition of Solect to
replace issued Solect options. See Note 3.

         The following table summarizes information about share options, as well
as changes during the years ended September 30, 2002, 2001 and 2000:
NUMBER OF       WEIGHTED
                                            SHARE           AVERAGE
                                           OPTIONS       EXERCISE PRICE
                                           ---------     --------------
Outstanding as of October 1, 1999          6,236.9       $  11.75

Granted                                    4,948.7          52.82
Options exchanged in acquisitions          2,756.7          18.24
Exercised                                 (2,057.5)         10.38
Forfeited                                   (656.7)         30.11
                                          ---------
Outstanding as of September 30, 2000      11,228.1          30.62

Granted                                    5,745.2          50.15
Exercised                                 (1,462.8)          9.73
Forfeited                                 (1,359.3)         49.59
                                          ---------
Outstanding as of September 30, 2001      14,151.2          38.89

Granted                                   16,648.5          23.88
Exercised                                   (688.9)          7.49
Forfeited                                 (2,418.8)         44.02
                                          ---------
Outstanding as of September 30, 2002      27,692.0          30.30
                                          =========
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

         The following table summarizes information about share options
outstanding as of September 30, 2002:
OUTSTANDING AS OF                                                  EXERCISABLE AS OF
                           SEPTEMBER 30, 2002                                                SEPTEMBER 30, 2002
----------------------------------------------------------------------------         --------------------------------
                                                WEIGHTED
                                                AVERAGE
                                               REMAINING            WEIGHTED
                                              CONTRACTUAL            AVERAGE                              WEIGHTED
                            NUMBER                LIFE              EXERCISE           NUMBER             AVERAGE
   EXERCISE PRICE        OUTSTANDING           (IN YEARS)             PRICE          EXERCISABLE       EXERCISE PRICE
   --------------        -----------          -----------           --------         -----------       --------------
$ 0-3.01                   993.9                   5.70               $ 2.02            857.3               $ 1.95
  6.40-18.60             6,163.5                   9.23                 8.70            766.1                11.93
 20.85-28.60             4,238.3                   8.41                26.36            418.7                23.91
 30.94-31.90             6,257.0                   9.20                31.01              4.6                30.94
 33.07-47.25             5,732.8                   8.51                37.63          1,256.6                38.29
 47.90-65.01             3,528.4                   7.98                58.58          1,240.1                58.34
 66.25-78.31               778.1                   7.81                71.04            358.5                71.03
The weighted average grant-date fair value of the 16,648.5, 5,745.2 and
4,948.7 options granted in fiscal 2002, 2001 and 2000, respectively, amounted to
$10.93, $23.07 and $35.71, respectively, per option. The Company utilized the
Black-Scholes option-pricing model to estimate fair value, utilizing the
following assumptions for the year (all in weighted averages):
YEAR ENDED SEPTEMBER 30,
                                ------------------------------
                                 2002        2001        2000
                                -----       -----       -----
Risk-free interest rate          2.85%       5.15%       5.75%
Expected life of options         2.89        3.26        3.23
Expected annual volatility      0.756       0.660       1.086
Expected dividend yield          None        None        None
Had compensation cost for the Company's options been determined based
on fair value at the grant dates for awards made in fiscal 2002, 2001 and 2000
in accordance with SFAS No. 123, the Company's pro forma net loss and loss per
share would have been as follows:
YEAR ENDED SEPTEMBER 30,
                                      ---------------------------------------------
                                          2002               2001             2000
                                      -----------       -----------     -----------
Pro forma net loss                    $  (115,224)      $    (3,502)    $   (23,022)
Pro forma diluted loss per share            (0.52)            (0.02)          (0.11)
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 19 - (LOSS) EARNINGS PER SHARE

         The following table sets forth the computation of basic and diluted
(loss) earnings per share:
YEAR ENDED SEPTEMBER 30,
                                                             ----------------------------------------
                                                                2002            2001            2000
                                                             ---------       ---------      ---------
Numerator:
    Net (loss) income                                        $  (5,061)      $  66,386      $   5,978
                                                             =========       =========      =========
Denominator:
   Denominator for basic (loss) earnings per share -
     weighted average number of shares outstanding (1)         220,361         222,002        212,005
   Effect of dilutive stock options granted (2)                     --           4,830          4,930
                                                             ---------       ---------      ---------
   Denominator for dilutive (loss) earnings per share -
     adjusted weighted average shares and assumed
     conversions (1)                                           220,361         226,832        216,935
                                                             =========       =========      =========
Basic (loss) earnings per share                              $   (0.02)      $    0.30      $    0.03
                                                             =========       =========      =========
Diluted (loss) earnings per share                            $   (0.02)      $    0.29      $    0.03
                                                             =========       =========      =========
--------------------

(1)         The weighted average number of shares outstanding includes
            exchangeable shares issued to shareholders of Amdocs Canada, Inc.
            (formerly Solect) pursuant to the Company's acquisition of Solect in
            April 2000, which are exchangeable for the Company's Ordinary Shares
            on a one-for-one basis.

(2)         Due to net loss, 2,201 anti-dilutive securities are excluded from
            the computation of diluted average number of shares outstanding.

         The effect of the Notes on diluted (loss) earnings per share was
anti-dilutive for the years ended September 30, 2002 and 2001, and therefore was
not included in the calculation above. The weighted average effect of the
repurchase of Ordinary Shares by the Company has been included in the
calculation of basic (loss) earnings per share. See Note 17.
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 20 - SEGMENT INFORMATION AND SALES TO SIGNIFICANT CUSTOMERS

         The Company and its subsidiaries operate in one business segment,
providing business support systems and related services primarily for the
communications industry.

     GEOGRAPHIC INFORMATION

         The following is a summary of revenue and long-lived assets by
geographic area. Revenue is attributed to geographic region based on the
location of the customers.
YEAR ENDED SEPTEMBER 30,
                       ------------------------------------------
                           2002            2001            2000
                       ----------      ----------      ----------
REVENUE
North America          $  999,037      $  825,309      $  510,129
Europe                    466,098         549,106         474,300
Rest of the world         148,430         159,495         133,891
                       ----------      ----------      ----------
Total                  $1,613,565      $1,533,910      $1,118,320
                       ==========      ==========      ==========

LONG-LIVED ASSETS
North America (1)      $  842,782      $  866,846      $1,041,383
Israel (2)                 77,988          88,794          85,518
Rest of the world          60,346          43,571          33,466
                       ----------      ----------      ----------
Total                  $  981,116      $  999,211      $1,160,367
                       ==========      ==========      ==========
--------------------
(1)         Primarily goodwill, computer software and intellectual property
            rights.

(2)         Primarily computers and vehicles.

     REVENUE AND CUSTOMER INFORMATION

         Customer care and billing, customer relationship management or CRM, and
order management systems (collectively, "CC&B") include systems for wireline,
wireless, voice, data, broadband, content, electronic and mobile commerce and IP
services. Directory includes directory sales and publishing systems for
publishers of both traditional printed yellow pages and white pages directories
and electronic Internet directories.
YEAR ENDED SEPTEMBER 30,
               ------------------------------------------
                  2002            2001             2000
               ----------      ----------      ----------
CC&B           $1,439,980      $1,379,654      $  986,553
Directory         173,585         154,256         131,767
               ----------      ----------      ----------
Total          $1,613,565      $1,533,910      $1,118,320
               ==========      ==========      ==========
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

     SALES TO SIGNIFICANT CUSTOMERS

         The following table summarizes the percentage of sales to significant
customers groups (when they exceed 10 percent of total revenue for the year).
YEAR ENDED SEPTEMBER 30,
                                                  ------------------------
                                                   2002     2001     2000
                                                   ----     ----     ----
Nextel Communications group                         12%      10%      (*)%
SBC Communications Inc. group, a related party      11       13       13
Vodafone group                                      10       11       14
--------------------
(*) Less than 10 percent of total revenue

NOTE 21 - OPERATIONAL EFFICIENCY AND COST REDUCTION PROGRAM

         In October 2001, as part of a plan to achieve increased operational
efficiency and to more closely monitor and reduce costs, the Company
consolidated its Stamford, Connecticut data center into its Champaign, Illinois
facility, and closed the Stamford facility. As a direct result of this closure,
the Company recorded a nonrecurring charge of $13,311 in the first quarter of
fiscal 2002, primarily for the write-off of leasehold improvements and rent
obligations, with the remainder for employee separation costs. In addition, as
part of a general effort to reduce costs, the Company has decreased its overall
commitments for employee compensation, through a lesser reliance on fixed
compensation programs and a greater reliance on discretionary arrangements.

         On June 20, 2002, the Company announced its intention to implement a
cost reduction program to reduce costs by approximately 10% in response to a
decline of the Company's forecasted revenue for the third and fourth quarters of
fiscal 2002. The decline resulted from, among other factors, slowdowns in
customer buying decisions in the third quarter of fiscal 2002, stemming from
overall reductions in the capital investment budgets of many communications
service providers, leading to fewer new contracts for the Company than it had
expected, as well as smaller than expected initial spending commitments and
reduced discretionary spending under the Company's contracts with some of its
customers.

         The Company recorded a charge of $20,919 in the fourth quarter of
fiscal 2002, consisting primarily of employee separation costs in connection
with the elimination of approximately one thousand positions of software and
information technology specialists and administrative professionals that have
been eliminated by the Company, with the remainder for the write-off of
leasehold improvements and rent obligations. Except for certain lease
termination costs that will be paid over the respective lease terms, the
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

Company expects to pay substantially all of the remaining accrual balance of the
cost reduction program in the first quarter of fiscal 2003.

         These charges are included in "restructuring charges, in-process
research and development and other indirect acquisition-related costs" for the
year ended September 30, 2002.

         As of September 30, 2002, the remaining restructuring expense reserves
were $14,884. The remaining employee separation costs are expected to be paid
out through the first quarter of fiscal 2003. Facility related costs are
expected to be paid out through April 2012. Actual future cash requirements may
differ materially from the accrual as of September 30, 2002, particularly if
actual sublease income is significantly different from current estimates.

         A summary of restructuring activities along with respective remaining
reserves follows:
Balance as of
                           Restructuring Charges       Cash           Non-cash    September 30, 2002
                           ---------------------       ----           --------    ------------------
                          Plan 1(*)    Plan 2(*)
                          ---------    ---------
Employee separation
  costs                  $  2,530      $ 11,353       $(10,525)      $     --           $  3,357
Facilities                  6,255         7,880         (3,048)            --             11,087
Asset write-offs            4,126         1,584             --         (5,710)                --
Other                         400           102            (62)            --                440
                         --------      --------       --------       --------           --------
                         $ 13,311      $ 20,919       $(13,635)      $ (5,710)          $ 14,884
                         ========      ========       ========       ========           ========
--------------------
(*)         Plan 1 refers to the closure of the Stamford facility in the first
            quarter of fiscal 2002. Plan 2 refers to the cost reduction program
            implemented in the fourth quarter of fiscal 2002.

For additional cost reduction measures, see Note 24.
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 22 - FINANCIAL INSTRUMENTS

         The Company enters into forward contracts to sell foreign currency in
order to hedge its exposure associated with some firm commitments from customers
in non-U.S. dollar-based currencies and treats these for accounting purposes as
fair value hedges. The Company also enters into forward contracts in foreign
currency to reduce the exposure associated with estimated receipts from
customers and with anticipated costs (primarily personnel costs), in non-U.S.
dollar-based currencies and treats these as cash flow hedges. The derivative
financial instruments are afforded hedge accounting because they are effective
in managing foreign exchange risks and are appropriately assigned to the
underlying exposures. The Company does not engage in currency speculation.
Generally, the Company measures the differential between forward rates and spot
rates on forward exchange contracts as the inherent ineffectiveness of a hedging
arrangement. Accordingly, changes in the fair value of forward exchange
contracts, which are classified as fair value hedges, offset the change in the
fair value of the hedged item to the extent of the arrangement's effectiveness.
The effective portion of the change in the fair value of forward exchange
contracts, which are classified as cash flow hedges, is recorded as
comprehensive income until the underlying transaction is recognized in earnings.
Forward contracts, which are not designated as hedging instruments under SFAS
No. 133, are used to hedge the impact of the variability in exchange rates on
certain accounts receivables and investment in Certen convertible debentures
denominated in foreign currencies.

         The fair values of the forward derivatives were $(7,125) and $(11,298)
on September 30, 2002 and 2001, respectively. The Company currently enters into
forward exchange contracts exclusively with major financial institutions.

         During fiscal 2002 and 2001, there were no significant gains or losses
recognized in earnings for hedge ineffectiveness, and the Company did not
recognize in earnings any significant gains or losses resulting from a hedged
firm commitment that no longer qualified as a fair value hedge. During fiscal
2002, the Company recognized in earnings $25 loss resulting from hedged
forecasted cash flows that no longer qualified as cash flow hedges.

         Derivatives gains and losses, that are included in other comprehensive
income, are reclassified into earnings at the time the forecasted revenue or
operation expenses are recognized. The Company estimates that a $4,874
derivative net loss included in other comprehensive income will be reclassified
into earnings within the next twelve months.
AMDOCS LIMITED
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 23 - SELECTED QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

         The following are details of the unaudited quarterly results of
operations for the three months ended:
SEPTEMBER
                                              30,           JUNE 30,        MARCH 31,    DECEMBER 31,
                                           ---------       ---------       ---------     ------------
2002 (*)
Revenue                                    $ 355,520       $ 380,135       $ 455,269      $ 422,641
Operating (loss) income                      (25,385)          2,503          50,813         21,229
Net (loss) income                             (8,986)        (26,851)         26,441          4,334
Basic and diluted (loss) earnings per
  share                                        (0.04)          (0.12)           0.12           0.02

2001
Revenue                                    $ 415,447       $ 404,007       $ 372,289      $ 342,167
Operating income                              49,529          44,864          37,356         27,532
Net income                                    19,905          18,492          15,413         12,576
Basic and diluted earnings per share            0.09            0.08            0.07           0.06
--------------------
(*)         In fiscal 2002, the fiscal quarters ended December 31, 2001 and
            September 30, 2002 included restructuring charges, purchased
            in-process research and development expense and gain from the
            repurchase of Notes of $30,711, $20,919 and $6,012, respectively.

NOTE 24 - SUBSEQUENT EVENT

         On November 27, 2002 the Company announced a series of measures
designed to reduce costs and improve productivity. As part of this plan, the
Company will reduce its workforce by approximately 400 positions out of a total
workforce of 9,000 employees. The reductions will be from different centers
around the world. In addition, the Company will implement other cost reduction
measures, including travel cuts and reductions in other discretionary costs.
VALUATION AND QUALIFYING ACCOUNTS
Additions
------------------------------------------------------------------------------------------------------------
Description               Balance at      Charged to    Charged to other       Deductions      Balance at
                          beginning of    costs and     accounts                               end of period
                          period          expenses
------------------------------------------------------------------------------------------------------------
Accounts receivable         4,118            --             22,859(*)               (737)             26,240
allowances
Valuation allowances       27,907            --                 --               (17,203)             10,704
(*) Includes accounts receivable allowance of $13,777 acquired as part of the
acquisition of Clarify.
EXHIBIT INDEX
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
1.        Memorandum and Articles of Association of Amdocs Limited
          (incorporated by reference to Exhibits 3.1 and 3.2 to
          Amdocs' Registration Statement on Form F-1 dated June 19,
          1998; Registration No. 333-8826)

2.a.1     Indenture dated May 30, 2001 between Amdocs and United
          States Trust Company of New York (incorporated by reference
          to Exhibit 4.1 to Amdocs' Form 6-K dated May 31, 2001)

2.a.2     Registration Rights Agreement dated May 30, 2001 between
          Amdocs and Goldman, Sachs & Co. (incorporated by reference
          to Exhibit 4.2 to Amdocs' Form 6-K dated May 31, 2001)

3.        Voting and Exchange Trust Agreement dated as of April 5,
          2000 among Amdocs Limited, Amdocs (Denmark) ApS., Amdocs
          Holdings ULC, Solect Technology Group Inc. and The Trust
          Company of Bank of Montreal (incorporated by reference to
          Exhibit 3 to Amdocs' Annual Report on Form 20-F for the
          fiscal year ended September 30, 2000

4.a.1     Agreement and Plan of Merger dated as of September 3, 1999
          among Amdocs Limited, Ivan Acquisition Corp. and
          International Telecommunication Data Systems, Inc.
          (incorporated by reference to Exhibit 2.1 to Amdocs' Current
          Report on Form 6-K dated September 10, 1999)

4.a.2     Combination Agreement dated as of February 28, 2000 among
          Amdocs Limited, Solect Technology Group Inc., Amdocs
          (Denmark) ApS. and Amdocs Holdings ULC (incorporated by
          reference to Exhibit 2.1 to Amdocs' Current Report on Form
          6-K dated March 3, 2000)

4.a.3     Acquisition Agreement dated as of October 1, 2001, between
          Amdocs Limited and Nortel Networks Corporation.
          (incorporated by reference to Exhibit 2.1 to Amdocs' Current
          Report on Form 6-K dated October 10, 2001)

4.b.1     Information Technology Services Agreement between Amdocs,
          Inc. and SBC Services, Inc. dated January 9, 2003
          (confidential material has been redacted and complete
          exhibits have been separately filed with the Securities and
          Exchange Commission)

4.c.1     Amdocs Limited 1998 Stock Option and Incentive Plan, as
          amended January 24, 2001 (incorporated by reference to
          Exhibit 4 to Amdocs' Registration Statement on Form S-8
          dated April 6, 2001; Registration No. 333-58454)

8.        Subsidiaries of Amdocs Limited

10.a.1    Consent of Ernst & Young LLP

10.a.2    Certification of Chief Executive Officer and Chief Financial
          Officer