UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2011
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
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Commission file number 0-13163
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ACXIOM CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE
(State or Other Jurisdiction of Incorporation
or Organization)
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71-0581897
(I.R.S. Employer Identification No.)
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P.O. Box 8180, 601 E. Third Street,
Little Rock, Arkansas
(Address of Principal Executive Offices)
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72201
(Zip Code)
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(501) 342-1000
(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange
on which registered
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Common Stock, $.10 Par Value
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The NASDAQ Global Select Market
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Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Yes [X]
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No [ ]
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
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Exchange Act.
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Yes [ ]
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No [X]
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Yes [X]
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No [ ]
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such filings).
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Yes [X]
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No [ ]
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer [X]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [ ]
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes [ ]
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No [X]
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The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of the registrant’s Common Stock, $.10 par value per share, as of the last business day of the registrant’s most recently completed second fiscal quarter as reported on the NASDAQ Global Select Market was approximately $1,088,762,537. (For purposes of determination of the above stated amount only, all directors, executive officers and 10% or more shareholders of the registrant are presumed to be affiliates.)
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The number of shares of Common Stock, $.10 par value per share, outstanding as of May 25, 2011, was 81,149,455.
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Table of Contents | Page
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4
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Part I
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4
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Item 1. |
6
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Item 1A. |
13
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Item 1B. |
17
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Item 2. |
18
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Item 3. |
20
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Part II
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Item 5. |
20
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Item 6. |
23
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Item 7. |
23
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Item 7A. |
23
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Item 8. |
23
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Item 9. |
23
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Item 9A. |
23
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Item 9B. |
24
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Part III
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Item 10. |
24
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Item 11. |
24
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Item 12. |
24
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Item 13. |
24
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Item 14. |
24
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Part IV
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Item 15. |
25
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28
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F-1 – F-57
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·
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management’s expectations about the macro economy;
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·
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that the amounts for restructuring and impairment charges and accruals for litigation will be within estimated ranges;
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·
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that the cash flows used in estimating the recoverability of assets will be within the estimated ranges; and
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·
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that items which management currently believes are not material will continue to not be material in the future.
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·
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the risk factors described in Part I, “Item 1A. Risk Factors” and elsewhere in this report and those described from time to time in our future reports filed with the Securities and Exchange Commission;
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·
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the possibility that in the event a change of control of the Company is sought that certain clients may attempt to invoke provisions in their contracts resulting in a decline in revenue and profit;
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·
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the possibility that the integration of acquired businesses may not be as successful as planned;
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·
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the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods;
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·
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the possibility that sales cycles may lengthen;
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·
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the possibility that we won’t be able to properly motivate our sales force or other associates;
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·
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the possibility that we may not be able to attract and retain qualified technical and leadership associates, or that we may lose key associates to other organizations;
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·
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the possibility that we may be unable to quickly and seamlessly integrate a new chief executive officer and chief financial officer;
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·
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the possibility that we won’t be able to continue to receive credit upon satisfactory terms and conditions;
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·
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the possibility that competent, competitive products, technologies or services will be introduced into the marketplace by other companies;
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·
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the possibility that there will be changes in consumer or business information industries and markets that negatively impact the Company;
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·
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the possibility that we won’t be able to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms;
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·
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the possibility that there will be changes in the legislative, accounting, regulatory and consumer environments affecting our business, including but not limited to litigation, legislation, regulations and customs relating to our ability to collect, manage, aggregate and use data;
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·
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the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services;
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·
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the possibility that we may enter into short-term contracts which would affect the predictability of our revenues;
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·
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the possibility that the amount of ad hoc, volume-based and project work will not be as expected;
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·
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the possibility that we may experience a loss of data center capacity or interruption of telecommunication links or power sources;
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·
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the possibility that we may experience failures or breaches of our network and data security systems, leading to potential adverse publicity, negative customer reaction, or liability to third parties;
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·
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the possibility that our clients may cancel or modify their agreements with us;
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·
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the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue;
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·
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the possibility that we experience processing errors which result in credits to customers, re-performance of services or payment of damages to customers; and
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·
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general and global negative economic conditions.
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·
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Recognition of consumers at any touchpoint, leveraging targeting techniques, such as consumer lifestage and retargeting, and creating a single customer view without compromising the privacy or security of personally identifiable information.
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·
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Multichannel marketing solutions for campaign management across a broad spectrum of channels, including personalized email, targeted website, banner and other Web advertisements, search engines, mobile devices, digital TV and direct mail
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·
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Marketing solutions built on our acquisition- and customer-marketing database framework for customer acquisition, customer growth and retention, and multichannel integration
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·
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Professional consulting that provides analytical tools, household segmentation products, and marketing support infrastructure to help our clients better understand their prospects and customers
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·
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Large-scale data and systems management through strategic IT infrastructure services
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Identity verification and risk information, scoring and analytics for fraud and risk management
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·
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Increasing demand for business intelligence by transforming huge stores of structured and unstructured data into insight for operational decision making
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·
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Increasingly personalized, interactive and integrated marketing strategies
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·
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Consumer empowerment that enables individuals to better choose, receive and reject information
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·
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Technological advances in data management
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·
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Movement toward multiple communication tools/technology, from search engines to blogs to social networking to addressable TV
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·
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Consumer privacy, security and fraud management demands
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·
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Increasing demand for identity verification/authentication
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·
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Globalization
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·
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Build on our client relationships as we innovate with them to profitably acquire, retain and develop their customers.
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Gain new clients, especially in under-penetrated sectors, who demonstrate the potential to become significant long-term partners.
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Generate new growth avenues for our products by partnering with responsible consumer companies.
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Selectively pursue acquisitions that profitably provide additional scale or complement and accelerate the development of our products and services.
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Improve operational efficiency via new technology and processes to continue to add value and remain competitive.
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Allocate and deploy shareholder capital in a disciplined and value-creating manner.
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Global multichannel marketing capabilities that can be integrated to form full solutions with measurable ROI
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·
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Consumer insight products, including data and segmentation
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·
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Data integration, management and delivery capabilities
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·
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Information systems technology and management
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·
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Fraud/risk management and identity authentication
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• Longer sales cycles for our solutions due to the nature of that technology as an enterprise-wide solution;
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• The introduction of competent, competitive products or technologies by other companies;
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• Changes in the consumer and/or business information industries and markets, including the decline in the use of direct mail marketing and the ever-increasing use of alternative marketing channels such as online
advertising, which could result in lower profit margins;
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• The ability to protect our proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; and
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• The impact of changing legislative, judicial, accounting, regulatory, cultural and consumer environments in the geographies where our products and services are deployed.
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·
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Longer sales cycles for our solutions due to the nature of that technology as an enterprise-wide solution;
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·
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The introduction of competent, competitive products or technologies by other companies;
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·
|
Changes in the consumer and/or business information industries and markets, including the decline in the use of direct mail marketing and the ever-increasing use of alternative marketing channels such as online advertising, which could result in lower profit margins for the Company;
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·
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The ability to protect our proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; and
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·
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The impact of changing legislative, judicial, accounting, regulatory, cultural and consumer environments in the geographies where our products and services are deployed.
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·
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make it more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the future;
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·
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cause our lenders to depart from prior credit industry practice and make more difficult or expensive the granting of any technical or other waivers under our credit agreements to the extent we may seek them in the future;
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·
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impair the financial condition of some of our customers and suppliers, thereby increasing customer bad debts;
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·
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decrease the value of our investments in equity and debt securities; and
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·
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impair the financial viability of our insurers.
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Location
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Held
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Use
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Business Segment
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United States:
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Conway, Arkansas
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Eleven facilities held in fee
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Data center; office space
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Information Services and Information Products
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Fayetteville, Arkansas
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Lease
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Office space
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Information Services and Information Products
|
Little Rock, Arkansas
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Two buildings held in fee
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Principal executive offices; office space; data center
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Information Services and Information Products
|
Foster City, California
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Lease
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Office space
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Information Services
|
Broomfield, Colorado
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Lease
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Office space
|
Information Services and Information Products
|
Cape Coral, Florida
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Lease
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Office space
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Information Products
|
Chicago, Illinois
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Lease
|
Data center; office space
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Information Services
|
Downers Grove, Illinois
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Lease
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Data center; office space
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Information Services
|
Shoreview, Minnesota
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Lease
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Office space
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Information Services
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New York, New York
|
Two leased offices
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Office space
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Information Services and Information Products
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Fairlawn, Ohio
|
Lease
|
Office space
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Information Products
|
Independence, Ohio
|
Lease
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Office space
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Information Products
|
Memphis, Tennessee
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Lease
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Office space
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Information Services
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Nashville, Tennessee
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Lease
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Office space
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Information Services
|
Europe:
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London, England
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Lease
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Office space
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Information Services and Information Products
|
Normanton, England
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Lease
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Data center; office space
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Information Services and Information Products
|
Sunderland, England
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Lease
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Data center; fulfillment service center; office space; warehouse space
|
Information Services and Information Products
|
Paris, France
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Lease
|
Data center; office space
|
Information Services and Information Products
|
Frankfurt, Germany
|
Lease
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Office space
|
Information Services and Information Products
|
Munich, Germany
|
Lease
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Office space
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Information Services and Information Products
|
Gdansk, Poland
|
Lease
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Office space
|
Information Services and Information Products
|
Warsaw, Poland
|
Lease
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Office space
|
Information Services and Information Products
|
Australia:
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Sydney, Australia
|
Lease
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Office space
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Information Services and Information Products
|
China:
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Shanghai, China
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Lease
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Office space
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Information Services and Information Products
|
Nantong, China
|
Lease
|
Data center; office space
|
Information Services
|
Saudi Arabia:
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Jeddah, Saudi Arabia
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Lease
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Office space
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Information Services and Information Products
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South America:
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Porto Alegre, Brazil
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Lease
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Office space
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Information Services and Information Products
|
Fiscal 2011
|
High
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Low
|
Dividend Declared
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Fourth Quarter
|
$ 18.83
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$ 12.58
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-
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||
Third Quarter
|
18.79
|
15.38
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-
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Second Quarter
|
16.75
|
12.19
|
-
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First Quarter
|
19.99
|
14.51
|
-
|
Fiscal 2010
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High
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Low
|
Dividend Declared
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||
Fourth Quarter
|
$ 18.74
|
$ 13.50
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-
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||
Third Quarter
|
14.41
|
9.07
|
-
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||
Second Quarter
|
10.20
|
7.76
|
-
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First Quarter
|
12.59
|
7.25
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-
|
Plan category
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
Number of securities
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))
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(a)
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(b)
|
(c)
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Equity compensation plans approved by shareholders
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9,328,2391
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$20.95
|
5,343,658
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Equity compensation plans not approved by shareholders
|
198,7502
|
11.19
|
149,884
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||
Total
|
9,526,989
|
$20.75
|
5,493,542
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1
|
This figure represents stock options issued under shareholder-approved stock option plans, 58,620 of which options were assumed in connection with our acquisitions of May & Speh, Inc. in 1998 and Digital Impact, Inc. in 2006.
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2
|
Issued pursuant to the Company’s 2008 Nonqualified Equity Compensation Plan described below, which does not require shareholder approval under the exception provided for in NASDAQ Marketplace Rule 5635(c)(4).
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1.
|
Financial Statements.
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Page
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Reports of Independent Registered Public Accounting Firm | F-21- F-22 | |
Consolidated Balance Sheets as of March 31, 2011 and 2010 | F-23 | |
Consolidated Statements of Operations for the years ended March 31, 2011, 2010 and 2009 | F-24 | |
Consolidated Statements of Equity and Comprehensive Income (Loss) for the years ended March 31, 2011, 2010 and 2009 | F-25 | |
Consolidated Statements of Cash Flows for the years ended March 31, 2011, 2010 and 2009 | F-26 - F-27 | |
Notes to the Consolidated Financial Statements | F-28- F-57 | |
2.
|
Financial Statement Schedules.
|
3.
|
Exhibits.
|
3.1
|
Amended and Restated Certificate of Incorporation (previously filed as Exhibit 3(i) to Acxiom Corporation's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1996, Commission File No. 0-13163, and incorporated herein by reference)
|
3.2
|
Amended and Restated Bylaws (previously filed as Exhibit 3(b) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008, and incorporated herein by reference)
|
10.1
|
2005 Stock Purchase Plan of Acxiom Corporation (previously filed as Appendix B to Acxiom Corporation’s Proxy Statement dated June 24, 2005, and incorporated herein by reference)
|
10.2
|
Amended and Restated Key Associate Stock Option Plan of Acxiom Corporation (previously filed as Exhibit 10(e) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2000, Commission File No. 0-13163, and incorporated herein by reference)
|
10.3
|
2005 Equity Compensation Plan of Acxiom Corporation (formerly known as the Amended and Restated 2000 Associate Stock Option Plan of Acxiom Corporation) (previously filed as Appendix B to Acxiom Corporation’s Proxy Statement dated November 16, 2007, and incorporated herein by reference)
|
10.4
|
2008 Nonqualified Equity Compensation Plan of Acxiom Corporation (previously filed on May 15, 2008, as Exhibit 10.2 to Acxiom Corporation’s Current Report on Form 8-K, and incorporated herein by reference)
|
10.5
|
Acxiom Corporation U.K. Share Option Scheme (previously filed as Exhibit 10(f) to Acxiom Corporation's Annual Report on Form 10-K for the fiscal year ended March 31, 1997, Commission File No. 0-13163, and incorporated herein by reference)
|
10.6
|
2010 Executive Cash Incentive Plan of Acxiom Corporation (previously filed as Exhibit 10(g) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2010, and incorporated herein by reference)
|
10.7
|
Acxiom Corporation Executive Officer FY 2012 Cash Incentive Plan
|
10.8
|
General Electric Capital Corporation Master Lease Agreement, dated as of September 30, 1999 (previously filed as Exhibit 10(m) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2001, Commission File No. 0-13163, and incorporated herein by reference)
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10.9
|
Amendment to General Electric Capital Corporation Master Lease Agreement dated as of December 6, 2002 (previously filed as Exhibit 10 (j) to Acxiom Corporation’s Annual Report of Form 10-K for the fiscal year ended March 31, 2003, Commission File No. 0-13163, and incorporated herein by reference)
|
10.10
|
Third Amended and Restated Credit Agreement dated as of March 24, 2005, by and among Acxiom Corporation, as borrower, J.P. Morgan, N.A., as agent, and the lenders who are party thereto (previously filed as Exhibit 10.2 to Acxiom Corporation’s Current Report on Form 8-K dated March 24, 2005, and incorporated herein by reference)
|
10.11
|
Second Amendment to Third Amended and Restated Credit Agreement, dated as of April 22, 2005, by and among Acxiom Corporation, as borrower, J.P. Morgan, N.A., as agent, and the lenders who are a party thereto (previously filed as Exhibit 10(j) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2005, Commission File No. 0-13163, and incorporated herein by reference)
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10.12
|
First Amendment to Fourth Amended and Restated Credit Agreement dated as of November 13, 2009, among Acxiom Corporation, a Delaware corporation, the lenders party thereto and JPMorgan Chase Bank, N.A. (previously filed on November 19, 2009, as Exhibit 10.1 to Acxiom Corporation’s Current Report on Form 8-K, and incorporated herein by reference)
|
10.13
|
Increased Commitment Supplement to Third Amended and Restated Credit Agreement, dated as of May 13, 2005, by and among Acxiom Corporation, as borrower, J.P. Morgan, N.A., as agent, and the lenders who are a party thereto (previously filed as Exhibit 10(k) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2005, Commission File No. 0-13163, and incorporated herein by reference)
|
10.14
|
Assignment of Head Lease dated as of February 10, 2003, by and between Wells Fargo Bank Northwest, National Association, as Owner Trustee under the AC Trust 2001-1 (“Assignor”) and Acxiom Corporation, assigning all of Assignor’s rights, title and interest in that certain Head Lease Agreement dated as of May 1, 2000, between the City of Little Rock, AR and Assignor, each relating to the lease of an office building in downtown Little Rock which was previously financed pursuant to a terminated synthetic real estate facility (previously filed as Exhibit 10 (l) to Acxiom Corporation’s Annual Report of Form 10-K for the fiscal year ended March 31, 2003, Commission File No. 0-13163, and incorporated herein by reference)
|
10.15
|
Form of Executive Security Agreement effective as of April 8, 2008 (previously filed as Exhibit 10(n) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008 and incorporated herein by reference)
|
10.16
|
Asset Purchase and License Agreement dated December 29, 2005, between Acxiom Corporation and EMC Corporation and EMC (Benelux) B.V., S.à.r.l. (previously filed as Exhibit 10(s) to Acxiom Corporation's Annual Report on Form 10-K for the fiscal year ended March 31, 2008, and incorporated herein by reference)
|
10.17
|
Transition Amendment dated March 31, 2008, between Acxiom Corporation and EMC Corporation and EMC (Benelux) B.V., S.à.r.l. (previously filed as Exhibit 10(t) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008, and incorporated herein by reference)
|
10.18
|
Transition Agreement dated March 28, 2011, between Acxiom Corporation and John A. Meyer (previously filed on March 30, 2011, as Exhibit 10.1 to Acxiom Corporation’s Current Report on Form 8-K, and incorporated herein by reference)
|
|
10.19
|
Retention Agreement dated May 6, 2011, between Acxiom Corporation and Christopher W. Wolf (previously filed on May 9, 2011, as Exhibit 10.1 to Acxiom Corporation’s Current Report on Form 8-K, and incorporated herein by reference)
|
10.20
|
Amended and Restated Employment Agreement dated November 15, 2010, between Acxiom Corporation and John A. Adams (previously filed on November 16, 2010 as Exhibit 10.2 to Acxiom Corporation’s Current Report on Form 8-K, and incorporated herein by reference)
|
10.21
|
Acxiom Corporation 2010 Executive Officer Severance Policy (previously filed on November 16, 2010 as Exhibit 10.3 to Acxiom Corporation’s Current Report on Form 8-K, and incorporated herein by reference)
|
10.22
|
Form of director indemnity agreement (previously filed as Exhibit 10(x) to Acxiom Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2010, and incorporated herein by reference)
|
10.23
|
Form of officer and director indemnity agreement (previously filed as Appendix C to Acxiom Corporation’s Proxy Statement dated January 22, 1987)
|
|
21
|
Subsidiaries of Acxiom Corporation
|
23
|
Consent of KPMG LLP
|
24
|
Powers of Attorney
|
31(1)
|
Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to Sections 302 and 404 of the Sarbanes-Oxley Act of 2002
|
31(2)
|
Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to Sections 302 and 404 of the Sarbanes-Oxley Act of 2002
|
32(1)
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32(2)
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101
|
The following financial information from our Annual Report on Form 10-K for the fiscal year ended March 31, 2011, formatted in XBRL: (i) Consolidated Balance Sheets as of March 31, 2011 and 2010; (ii) Consolidated Statements of Operations for the fiscal years ended March 31, 2011, 2010 and 2009; (iii) Consolidated Statements of Equity and Comprehensive Income (Loss) for the fiscal years ended March 31, 2011, 2010 and 2009; (iv) Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2011, 2010 and 2009; and (v) Notes to the Consolidated Financial Statements
|
Date: May 27, 2011
|
By:
|
/s/ Catherine L. Hughes
|
|
Catherine L. Hughes
Corporate Governance Officer & Secretary
|
William T. Dillard II*
|
Director
|
May 27, 2011
|
Michael J. Durham*
|
Director (Non-Executive Chairman of the Board)
|
May 27, 2011
|
Jerry D. Gramaglia*
|
Director, CEO & President (principal executive officer)
|
May 27, 2011
|
Jerry D. Gramaglia
|
|
Ann Die Hasselmo*
|
Director
|
May 27, 2011
|
William J. Henderson*
|
Director
|
May 27, 2011
|
Clark M. Kokich*
|
Director
|
|
May 27, 2011
|
Clark M. Kokich
|
|
Kevin M. Twomey*
|
Director
|
May 27, 2011
|
Kevin M. Twomey
|
|
R. Halsey Wise*
|
Director
|
May 27, 2011
|
Christopher W. Wolf*
Christopher W. Wolf
|
CFO & Executive Vice President (principal financial
and accounting officer)
|
May 27, 2011
|
*By:
|
/s/ Catherine L. Hughes
|
Selected Financial Data
|
F-2 | |||
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
F-3 | |||
Management’s Report on Internal Control Over Financial Reporting
|
F-20 | |||
Reports of Independent Registered Public Accounting Firm
|
F-21 | |||
Annual Financial Statements:
|
||||
Consolidated Balance Sheets as of March 31, 2011 and 2010
|
F-23 | |||
Consolidated Statements of Operations for the years ended March 31, 2011, 2010 and 2009
|
F-24 | |||
Consolidated Statements of Equity and Comprehensive Income (Loss)
for the years ended March 31, 2011, 2010 and 2009
|
F-25 | |||
Consolidated Statements of Cash Flows
for the years ended March 31, 2011, 2010 and 2009
|
F-26 | |||
Notes to the Consolidated Financial Statements
|
F-28 |
Years ended March 31,
|
2011
|
2010
|
2009
|
2008
|
2007
|
|||||||||||||||
Statement of operations data:
|
||||||||||||||||||||
Revenue
|
$ | 1,159,970 | $ | 1,099,235 | $ | 1,276,573 | $ | 1,384,079 | $ | 1,390,511 | ||||||||||
Net earnings (loss)
|
$ | (28,442 | ) | $ | 44,159 | $ | 37,504 | $ | (7,780 | ) | $ | 67,873 | ||||||||
Net earnings (loss) attributable to Acxiom
|
$ | (23,147 | ) | $ | 44,549 | $ | 37,504 | $ | (7,780 | ) | $ | 67,873 | ||||||||
Earnings (loss) per share:
|
||||||||||||||||||||
Basic
|
$ | (0.36 | ) | $ | 0.56 | $ | 0.48 | $ | (0.10 | ) | $ | 0.82 | ||||||||
Diluted
|
$ | (0.36 | ) | $ | 0.55 | $ | 0.48 | $ | (0.10 | ) | $ | 0.80 | ||||||||
Earnings (loss) per share attributable to Acxiom stockholders:
|
||||||||||||||||||||
Basic
|
$ | (0.29 | ) | $ | 0.56 | $ | 0.48 | $ | (0.10 | ) | $ | 0.82 | ||||||||
Diluted
|
$ | (0.29 | ) | $ | 0.56 | $ | 0.48 | $ | (0.10 | ) | $ | 0.80 | ||||||||
Cash dividend per common share
|
$ | 0.00 | $ | 0.00 | $ | 0.12 | $ | 0.12 | $ | 0.22 | ||||||||||
As of March 31,
|
2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||
Balance sheet data:
|
||||||||||||||||||||
Current assets
|
$ | 459,250 | $ | 458,705 | $ | 458,522 | $ | 384,508 | $ | 380,495 | ||||||||||
Current liabilities
|
$ | 229,494 | $ | 255,056 | $ | 254,554 | $ | 339,626 | $ | 387,788 | ||||||||||
Total assets
|
$ | 1,306,625 | $ | 1,363,420 | $ | 1,366,792 | $ | 1,471,304 | $ | 1,623,523 | ||||||||||
Long-term debt, excluding current installments
|
$ | 394,260 | $ | 458,629 | $ | 537,272 | $ | 575,308 | $ | 648,879 | ||||||||||
Total equity
|
$ | 591,033 | $ | 578,497 | $ | 503,414 | $ | 496,256 | $ | 485,225 |
·
|
Revenue of $1.160 billion, up 5.5 percent from $1.099 billion a year ago, an increase of $60.7 million in annual revenue.
|
·
|
Income from operations of $30.9 million compared to $98.8 million last year.
|
·
|
Diluted earnings (loss) per share attributable to Acxiom stockholders of ($0.29) compared to $0.56 in fiscal 2010.
|
·
|
Pre-tax earnings of $5.6 million, compared to pre-tax earnings of $76.8 million in fiscal 2010.
|
·
|
Operating cash flow for the fiscal year was $166.2 million compared to $239.3 million in the prior year.
|
·
|
Gross margin was 23.7 percent, compared to 23.6 percent for fiscal 2010.
|
·
|
The Company recorded an impairment charge of $79.7 million related to its International operations.
|
·
|
The Company recorded $4.4 million in restructuring charges and adjustments included in gains, losses and other items in the consolidated statement of operations.
|
·
|
The Company recorded a $3.3 million loss in gains, losses and other items in the consolidated statement of operations resulting from the disposal of its operations in Portugal and The Netherlands.
|
·
|
The Company made term loan prepayments of $66.0 million.
|
·
|
The Company completed the acquisitions of 100% of the outstanding shares of a digital marketing business (“XYZ”) operating in Australia and New Zealand, and a 70% interest in GoDigital Tecnologia E Participacoes, Ltda. (“GoDigital”), a Brazilian marketing services business.
|
2011
|
2010
|
2009
|
% Change
2011-2010
|
% Change
2010-2009
|
||||||||||||||||
Revenue
|
||||||||||||||||||||
Services
|
$ | 893.6 | $ | 849.4 | $ | 920.3 | 5 | % | (8 | )% | ||||||||||
Products
|
266.4 | 249.8 | 356.3 | 7 | (30 | ) | ||||||||||||||
$ | 1,160.0 | $ | 1,099.2 | $ | 1,276.6 | 6 | % | (14 | )% | |||||||||||
Total operating costs and expenses
|
1,129.1 | 1,000.4 | 1,183.7 | (13 | ) | 15 | ||||||||||||||
Income from operations
|
$ | 30.9 | $ | 98.8 | $ | 92.9 | (69 | )% | 6 | % | ||||||||||
Diluted earnings (loss) per share attributable to Acxiom shareholders
|
$ | (0.29 | ) | $ | 0.56 | $ | 0.48 | (152 | )% | 17 | % |
2011
|
2010
|
2009
|
% Change
2011-2010
|
% Change
2010-2009
|
||||||||||||||||
Cost of revenue
|
||||||||||||||||||||
Services
|
$ | 695.0 | $ | 654.7 | $ | 694.3 | (6 | )% | 6 | % | ||||||||||
Products
|
189.9 | 184.6 | 280.8 | (3 | ) | 34 | ||||||||||||||
Total cost of revenue
|
884.9 | 839.3 | 975.1 | (5 | ) | 14 | ||||||||||||||
Selling, general and administrative
|
159.9 | 162.1 | 170.0 | 1 | 5 | |||||||||||||||
Impairment of goodwill and other intangibles
|
79.7 | - | - | (100 | ) | - | ||||||||||||||
Gains, losses and other items, net
|
4.6 | (1.0 | ) | 38.6 | (587 | ) | 102 | |||||||||||||
Total operating costs and expenses
|
$ | 1,129.1 | $ | 1,000.4 | $ | 1,183.7 | (13 | )% | 15 | % |
2011
|
2010
|
2009
|
||||||||||
Gross profit margin
|
||||||||||||
Services
|
22.2 | % | 22.9 | % | 24.5 | % | ||||||
Products
|
28.7 | 26.1 | 21.2 | |||||||||
Total gross profit margin
|
23.7 | % | 23.6 | % | 23.6 | % | ||||||
Operating profit margin
|
2.7 | % | 9.0 | % | 7.3 | % |
2011
|
2010
|
2009
|
||||||||||
Gain on disposition of operations in France
|
$ | - | $ | (677 | ) | $ | (2,083 | ) | ||||
Loss on disposition of operations in Portugal
|
828 | - | - | |||||||||
Loss on disposition of operations in The Netherlands
|
2,511 | - | - | |||||||||
Legal contingency
|
(2,125 | ) | - | 1,000 | ||||||||
Restructuring plan charges and adjustments
|
4,435 | (1,292 | ) | 42,340 | ||||||||
Leased airplane disposals
|
- | - | (110 | ) | ||||||||
Earnout liability adjustment
|
(1,058 | ) | - | - | ||||||||
Other
|
9 | 1,025 | (2,581 | ) | ||||||||
$ | 4,600 | $ | (944 | ) | $ | 38,566 |
Associate-related reserves
|
Ongoing
contract costs
|
Other accruals
|
Total
|
|||||||||||||
March 31, 2008
|
$ | 13,648 | $ | 26,880 | $ | 357 | $ | 40,885 | ||||||||
Fiscal year 2009 restructuring
plan amount
|
12,434 | 3,210 | - | 15,644 | ||||||||||||
Adjustments
|
(1,246 | ) | 752 | (39 | ) | (533 | ) | |||||||||
Payments
|
(16,603 | ) | (6,910 | ) | (318 | ) | (23,831 | ) | ||||||||
March 31, 2009
|
$ | 8,233 | $ | 23,932 | $ | - | $ | 32,165 | ||||||||
Adjustments
|
1,026 | (1,336 | ) | - | (310 | ) | ||||||||||
Payments
|
(6,389 | ) | (9,692 | ) | - | (16,081 | ) | |||||||||
March 31, 2010
|
$ | 2,870 | $ | 12,904 | $ | - | $ | 15,774 | ||||||||
Fiscal year 2011 restructuring
plan amount
|
6,064 | - | - | 6,064 | ||||||||||||
Adjustments
|
(291 | ) | (1,338 | ) | - | (1,629 | ) | |||||||||
Payments
|
(3,081 | ) | (2,024 | ) | - | (5,105 | ) | |||||||||
March 31, 2011
|
$ | 5,562 | $ | 9,542 | $ | - | $ | 15,104 | ||||||||
March 31,
2011
|
March 31,
2010
|
|||||||
Numerator – trade accounts receivable, net
|
$ | 176,654 | $ | 168,522 | ||||
Denominator:
|
||||||||
Quarter revenue
|
298,796 | 288,342 | ||||||
Number of days in quarter
|
90 | 90 | ||||||
Average daily revenue
|
$ | 3,320 | $ | 3,204 | ||||
Days sales outstanding
|
53 | 53 |
For the years ending March 31
|
||||||||||||||||||||||||||||
2012
|
2013
|
2014
|
2015
|
2016
|
Thereafter
|
Total
|
||||||||||||||||||||||
Term loan
|
$ | 6,000 | $ | 6,000 | $ | 6,000 | $ | 337,000 | $ | - | $ | - | $ | 355,000 | ||||||||||||||
Capital lease and installment payment obligations
|
16,423 | 13,140 | 3,925 | 750 | 863 | 8,094 | 43,195 | |||||||||||||||||||||
Software and data license liabilities
|
2,918 | 1,768 | - | - | - | - | 4,686 | |||||||||||||||||||||
Other long-term debt
|
2,637 | 2,689 | 1,607 | 1,664 | 7,308 | 3,452 | 19,357 | |||||||||||||||||||||
Total long-term debt
|
27,978 | 23,597 | 11,532 | 339,414 | 8,171 | 11,546 | 422,238 | |||||||||||||||||||||
Operating lease payments
|
21,484 | 19,758 | 17,725 | 13,656 | 11,142 | 51,895 | 135,660 | |||||||||||||||||||||
Total contractual cash obligations
|
$ | 49,462 | $ | 43,355 | $ | 29,257 | $ | 353,070 | $ | 19,313 | $ | 63,441 | $ | 557,898 |
For the years ending March 31
|
||||||||||||||||||||||||||||
2012
|
2013
|
2014
|
2015
|
2016
|
Thereafter
|
Total
|
||||||||||||||||||||||
Total purchase commitments
|
$ | 61,243 | $ | 29,397 | $ | 11,193 | $ | 11,008 | $ | 7,338 | $ | 2,296 | $ | 122,475 |
Guarantees on certain partnership and other loans
|
$ | 1,351 | ||
Outstanding letters of credit
|
506 |
·
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 207,023 | $ | 224,104 | ||||
Trade accounts receivable, net
|
176,654 | 168,522 | ||||||
Deferred income taxes
|
12,480 | 11,874 | ||||||
Refundable income taxes
|
7,402 | - | ||||||
Other current assets
|
55,691 | 54,205 | ||||||
Total current assets
|
459,250 | 458,705 | ||||||
Property and equipment, net of accumulated depreciation and amortization
|
255,307 | 236,839 | ||||||
Software, net of accumulated amortization of $214,713 in 2011 and $198,410 in 2010
|
26,412 | 38,845 | ||||||
Goodwill
|
417,654 | 470,261 | ||||||
Purchased software licenses, net of accumulated amortization of $257,029 in 2011 and $253,434 in 2010
|
38,583 | 51,356 | ||||||
Deferred costs, net
|
81,837 | 68,914 | ||||||
Data acquisition costs, net
|
17,627 | 21,931 | ||||||
Other assets, net
|
9,955 | 16,569 | ||||||
$ | 1,306,625 | $ | 1,363,420 | |||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current installments of long-term debt
|
$ | 27,978 | $ | 42,106 | ||||
Trade accounts payable
|
27,507 | 42,774 | ||||||
Accrued expenses
|
||||||||
Payroll
|
42,236 | 36,517 | ||||||
Other
|
75,852 | 75,632 | ||||||
Deferred revenue
|
55,921 | 55,567 | ||||||
Income taxes
|
- | 2,460 | ||||||
Total current liabilities
|
229,494 | 255,056 | ||||||
Long-term debt
|
394,260 | 458,629 | ||||||
Deferred income taxes
|
84,360 | 61,284 | ||||||
Other liabilities
|
7,478 | 9,954 | ||||||
Commitments and contingencies
|
||||||||
Equity:
|
||||||||
Common stock, $0.10 par value (authorized 200 million shares; issued 117.8 million and 116.6 million shares at March 31, 2011 and 2010, respectively)
|
11,777 | 11,662 | ||||||
Additional paid-in capital
|
837,439 | 814,929 | ||||||
Retained earnings
|
459,096 | 482,243 | ||||||
Accumulated other comprehensive income (loss)
|
15,991 | 4,167 | ||||||
Treasury stock, at cost (37.2 million shares at March 31, 2011 and 2010)
|
(739,125 | ) | (738,601 | ) | ||||
Total Acxiom stockholders' equity
|
585,178 | 574,400 | ||||||
Noncontrolling interest
|
5,855 | 4,097 | ||||||
Total equity
|
591,033 | 578,497 | ||||||
$ | 1,306,625 | $ | 1,363,420 | |||||
See accompanying notes to consolidated financial statements.
|
2011
|
2010
|
2009
|
||||||||||
Revenue:
|
||||||||||||
Services
|
$ | 893,594 | $ | 849,432 | $ | 920,262 | ||||||
Products
|
266,376 | 249,803 | 356,311 | |||||||||
Total revenue
|
1,159,970 | 1,099,235 | 1,276,573 | |||||||||
Operating costs and expenses:
|
||||||||||||
Cost of revenue
|
||||||||||||
Services
|
694,988 | 654,659 | 694,340 | |||||||||
Products
|
189,900 | 184,610 | 280,846 | |||||||||
Total cost of revenue
|
884,888 | 839,269 | 975,186 | |||||||||
Selling, general and administrative
|
159,884 | 162,097 | 169,960 | |||||||||
Impairment of goodwill and other intangibles
|
79,674 | - | - | |||||||||
Gains, losses and other items, net
|
4,600 | (944 | ) | 38,566 | ||||||||
Total operating costs and expenses
|
1,129,046 | 1,000,422 | 1,183,712 | |||||||||
Income from operations
|
30,924 | 98,813 | 92,861 | |||||||||
Other income (expense):
|
||||||||||||
Interest expense
|
(23,823 | ) | (22,480 | ) | (32,596 | ) | ||||||
Other, net
|
(1,466 | ) | 425 | 1,949 | ||||||||
Total other income (expense)
|
(25,289 | ) | (22,055 | ) | (30,647 | ) | ||||||
Earnings before income taxes
|
5,635 | 76,758 | 62,214 | |||||||||
Income tax expense
|
34,077 | 32,599 | 24,710 | |||||||||
Net earnings (loss)
|
(28,442 | ) | 44,159 | 37,504 | ||||||||
Less: Net loss attributable to noncontrolling interest
|
(5,295 | ) | (390 | ) | - | |||||||
Net earnings (loss) attributable to Acxiom
|
$ | (23,147 | ) | $ | 44,549 | $ | 37,504 | |||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
$ | (0.36 | ) | $ | 0.56 | $ | 0.48 | |||||
Diluted
|
$ | (0.36 | ) | $ | 0.55 | $ | 0.48 | |||||
Earnings (loss) per share attributable to Acxiom stockholders:
|
||||||||||||
Basic
|
$ | (0.29 | ) | $ | 0.56 | $ | 0.48 | |||||
Diluted
|
$ | (0.29 | ) | $ | 0.56 | $ | 0.48 | |||||
See accompanying notes to consolidated financial statements.
|
Common Stock
|
Treasury stock
|
Number of shares
|
Amount
|
Additional paid-in capital
|
Comprehensive income (loss)
|
Retained earnings
|
Accumulated other comprehensive income (loss)
|
Number
of shares
|
Amount
|
Noncontrolling interest
|
Total equity
|
|||||||||||||||||||||||||||||||
Balances at March 31, 2008
|
114,280,599 | $ | 11,428 | $ | 779,815 | - | $ | 409,502 | $ | 33,976 | (36,996,236 | ) | $ | (738,465 | ) | $ | - | $ | 496,256 | |||||||||||||||||||||
Employee stock awards, benefit plans and other issuances
|
1,143,308 | 115 | 10,751 | - | - | - | - | - | - | 10,866 | ||||||||||||||||||||||||||||||
Tax impact of stock options, warrants and restricted stock
|
- | - | 34 | - | - | - | - | - | - | 34 | ||||||||||||||||||||||||||||||
Non-cash share-based compensation
|
- | - | 9,527 | - | - | - | 53,869 | 815 | - | 10,342 | ||||||||||||||||||||||||||||||
Restricted stock units vested
|
332,969 | 33 | (33 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
Acquisition of treasury stock
|
- | - | - | - | - | - | (282,500 | ) | (2,062 | ) | - | (2,062 | ) | |||||||||||||||||||||||||||
Dividends
|
- | - | - | - | (9,312 | ) | - | - | - | - | (9,312 | ) | ||||||||||||||||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation
|
- | - | - | (36,163 | ) | - | (36,163 | ) | - | - | - | (36,163 | ) | |||||||||||||||||||||||||||
Unrealized loss on interest rate swap
|
- | - | - | (3,956 | ) | - | (3,956 | ) | - | - | - | (3,956 | ) | |||||||||||||||||||||||||||
Unrealized loss on marketable securities
|
- | - | - | (95 | ) | - | (95 | ) | - | - | - | (95 | ) | |||||||||||||||||||||||||||
Net earnings
|
- | - | - | 37,504 | 37,504 | - | - | - | - | 37,504 | ||||||||||||||||||||||||||||||
Total comprehensive loss
|
$ | (2,710 | ) | |||||||||||||||||||||||||||||||||||||
Balances at March 31, 2009
|
115,756,876 | $ | 11,576 | $ | 800,094 | $ | 437,694 | $ | (6,238 | ) | (37,224,867 | ) | $ | (739,712 | ) | $ | - | $ | 503,414 | |||||||||||||||||||||
Employee stock awards, benefit plans and other issuances
|
559,348 | 56 | 5,869 | - | - | - | - | - | - | 5,925 | ||||||||||||||||||||||||||||||
Tax impact of stock options, warrants and restricted stock
|
- | - | (683 | ) | - | - | - | - | - | - | (683 | ) | ||||||||||||||||||||||||||||
Non-cash share-based compensation
|
- | - | 9,679 | - | - | - | 70,631 | 1,111 | - | 10,790 | ||||||||||||||||||||||||||||||
Restricted stock units vested
|
303,458 | 30 | (30 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
Purchase of MENA
|
- | - | - | - | - | - | - | - | 4,030 | 4,030 | ||||||||||||||||||||||||||||||
Noncontrolling interest equity contributions
|
- | - | - | - | - | - | - | - | 457 | 457 | ||||||||||||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation
|
- | - | - | 9,674 | - | 9,674 | - | - | - | 9,674 | ||||||||||||||||||||||||||||||
Unrealized gain on interest rate swap
|
- | - | - | 758 | - | 758 | - | - | - | 758 | ||||||||||||||||||||||||||||||
Unrealized loss on marketable securities
|
- | - | - | (27 | ) | - | (27 | ) | - | - | - | (27 | ) | |||||||||||||||||||||||||||
Net earnings
|
- | - | - | 44,549 | 44,549 | - | - | (390 | ) | 44,159 | ||||||||||||||||||||||||||||||
Total comprehensive income
|
- | - | - | $ | 54,954 | |||||||||||||||||||||||||||||||||||
Balances at March 31, 2010
|
116,619,682 | $ | 11,662 | $ | 814,929 | $ | 482,243 | $ | 4,167 | (37,154,236 | ) | $ | (738,601 | ) | $ | 4,097 | $ | 578,497 | ||||||||||||||||||||||
Employee stock awards, benefit plans and other issuances
|
662,988 | 66 | 9,778 | - | - | - | (29,538 | ) | (524 | ) | - | 9,320 | ||||||||||||||||||||||||||||
Tax impact of stock options, warrants and restricted stock
|
- | - | (316 | ) | - | - | - | - | - | - | (316 | ) | ||||||||||||||||||||||||||||
Non-cash share-based compensation
|
- | - | 13,097 | - | - | - | - | - | - | 13,097 | ||||||||||||||||||||||||||||||
Restricted stock units vested
|
484,865 | 49 | (49 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
Purchase of GoDigital
|
- | - | - | - | - | - | - | - | 6,573 | 6,573 | ||||||||||||||||||||||||||||||
Noncontrolling interest equity contribution
|
- | - | - | - | - | - | - | - | 480 | 480 | ||||||||||||||||||||||||||||||
Comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation
|
- | - | - | 9,518 | - | 9,518 | - | - | - | 9,518 | ||||||||||||||||||||||||||||||
Unrealized gain on interest rate swap
|
- | - | - | 2,306 | - | 2,306 | - | - | - | 2,306 | ||||||||||||||||||||||||||||||
Net loss
|
- | - | - | (23,147 | ) | (23,147 | ) | - | - | (5,295 | ) | (28,442 | ) | |||||||||||||||||||||||||||
Total comprehensive loss
|
- | - | - | $ | (11,323 | ) | ||||||||||||||||||||||||||||||||||
Balances at March 31, 2011
|
117,767,535 | $ | 11,777 | $ | 837,439 | $ | 459,096 | $ | 15,991 | (37,183,774 | ) | $ | (739,125 | ) | $ | 5,855 | $ | 591,033 | ||||||||||||||||||||||
|
See accompanying notes to consolidated financial statements
|
2011
|
2010
|
2009
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net earnings (loss)
|
$ | (28,442 | ) | $ | 44,159 | $ | 37,504 | |||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
|
||||||||||||
Impairment of goodwill and other intangibles
|
79,674 | - | - | |||||||||
Depreciation, amortization and impairment of long-lived assets
|
146,355 | 167,564 | 198,684 | |||||||||
Gain on disposal of assets, net
|
3,883 | 417 | 22,658 | |||||||||
Deferred income taxes
|
18,579 | 32,810 | 16,423 | |||||||||
Non-cash share-based compensation expense
|
13,097 | 10,790 | 10,342 | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable, net
|
(13,024 | ) | 10,295 | 16,100 | ||||||||
Other assets
|
(2,394 | ) | 2,171 | 12,347 | ||||||||
Deferred costs
|
(29,385 | ) | (20,289 | ) | (4,743 | ) | ||||||
Accounts payable and other liabilities
|
(22,899 | ) | (8,215 | ) | (32,006 | ) | ||||||
Deferred revenue
|
775 | (420 | ) | (8,468 | ) | |||||||
Net cash provided by operating activities
|
166,219 | 239,282 | 268,841 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Payments for the disposition of operations
|
(1,079 | ) | - | - | ||||||||
Proceeds received from the disposition of assets
|
- | 1,058 | 24,174 | |||||||||
Capitalized software development costs
|
(4,555 | ) | (8,257 | ) | (16,239 | ) | ||||||
Capital expenditures
|
(59,021 | ) | (57,908 | ) | (31,449 | ) | ||||||
Payments received (paid) for investments
|
175 | (2,000 | ) | 2,599 | ||||||||
Data acquisition costs
|
(13,366 | ) | (18,808 | ) | (30,561 | ) | ||||||
Net cash paid in acquisitions
|
(12,927 | ) | (3,428 | ) | (15,903 | ) | ||||||
Cash collected from the sale and license of
software
|
- | - | 2,000 | |||||||||
Net cash used in investing activities
|
(90,773 | ) | (89,343 | ) | (65,379 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Payments of debt
|
(102,101 | ) | (104,521 | ) | (86,772 | ) | ||||||
Fees for debt refinancing
|
- | (4,564 | ) | - | ||||||||
Dividends paid
|
- | - | (9,312 | ) | ||||||||
Sale of common stock
|
9,320 | 5,925 | 10,866 | |||||||||
Acquisition of treasury stock
|
- | (306 | ) | (1,756 | ) | |||||||
Noncontrolling interests equity contributions
|
480 | 457 | - | |||||||||
Income tax impact of stock options, warrants and restricted stock
|
(316 | ) | (683 | ) | 34 | |||||||
Net cash used in financing activities
|
(92,617 | ) | (103,692 | ) | (86,940 | ) | ||||||
Effect of exchange rate changes on cash
|
90 | 691 | (2,017 | ) | ||||||||
Net increase in cash and cash equivalents
|
(17,081 | ) | 46,938 | 114,505 | ||||||||
Cash and cash equivalents at beginning of period
|
224,104 | 177,166 | 62,661 | |||||||||
Cash and cash equivalents at end of period
|
$ | 207,023 | $ | 224,104 | $ | 177,166 | ||||||
See accompanying notes to consolidated financial statements
|
2011
|
2010
|
2009
|
||||||||||
Supplemental cash flow information:
|
||||||||||||
Cash paid (received) during the period for:
|
||||||||||||
Interest
|
$ | 23,886 | $ | 21,337 | $ | 33,138 | ||||||
Income taxes
|
25,339 | (7,549 | ) | (3,189 | ) | |||||||
Payments on capital leases and installment payment arrangements
|
22,357 | 29,697 | 40,789 | |||||||||
Payments on software and data license liabilities
|
5,316 | 7,526 | 23,217 | |||||||||
Prepayment of debt
|
66,000 | 57,500 | 14,500 | |||||||||
Other debt payments, excluding line of credit
|
8,428 | 9,798 | 8,266 | |||||||||
Noncash investing and financing activities:
|
||||||||||||
Acquisition of property and equipment under capital leases and installment payment arrangements
|
23,753 | 24,193 | 11,040 | |||||||||
Enterprise software licenses and maintenance acquired under software obligation
|
- | 2,171 | 9,955 | |||||||||
See accompanying notes to consolidated financial statements.
|
(dollars in thousands)
|
2011
|
2010
|
2009
|
|||||||||
Basic earnings (loss) per share:
|
||||||||||||
Numerator – net earnings (loss)
|
$ | (28,442 | ) | $ | 44,159 | $ | 37,504 | |||||
Denominator – weighted-average shares outstanding
|
80,111 | 78,974 | 77,892 | |||||||||
Basic earnings (loss) per share
|
$ | (0.36 | ) | $ | 0.56 | $ | 0.48 | |||||
Diluted earnings (loss) per share:
|
||||||||||||
Numerator – net earnings (loss)
|
$ | (28,442 | ) | $ | 44,159 | $ | 37,504 | |||||
Denominator:
|
||||||||||||
Weighted-average shares outstanding
|
80,111 | 78,974 | 77,892 | |||||||||
Dilutive effect of common stock options, warrants,
and restrictive stock as computed under the
treasury stock method
|
- | 751 | 333 | |||||||||
80,111 | 79,725 | 78,225 | ||||||||||
Diluted earnings (loss) per share
|
$ | (0.36 | ) | $ | 0.55 | $ | 0.48 | |||||
Basic earnings (loss) per share attributable to Acxiom stockholders:
|
||||||||||||
Numerator – net earnings (loss) attributable to Acxiom
|
$ | (23,147 | ) | $ | 44,549 | $ | 37,504 | |||||
Denominator – weighted-average shares outstanding
|
80,111 | 78,974 | 77,892 | |||||||||
Basic earnings (loss) per share attributable to Acxiom stockholders
|
$ | (0.29 | ) | $ | 0.56 | $ | 0.48 | |||||
Diluted earnings (loss) per share attributable to Acxiom stockholders:
|
||||||||||||
Numerator – net earnings (loss) attributable to Acxiom
|
$ | (23,147 | ) | $ | 44,549 | $ | 37,504 | |||||
Denominator:
|
||||||||||||
Weighted-average shares outstanding
|
80,111 | 78,974 | 77,892 | |||||||||
Dilutive effect of common stock options, warrants,
and restrictive stock as computed under the
treasury stock method
|
- | 751 | 333 | |||||||||
80,111 | 79,725 | 78,225 | ||||||||||
Diluted earnings (loss) per share attributable to Acxiom stockholders
|
$ | (0.29 | ) | $ | 0.56 | $ | 0.48 | |||||
2011
|
2010
|
2009
|
||||||||||
Number of shares outstanding under options, warrants and restricted stock units
|
5,938 | 8,839 | 10,773 | |||||||||
Range of exercise prices for options and warrants
|
$ | 16.71-$75.55 | $ | 11.87-$268.55 | $ | 10.66-$268.55 |
Associate-related reserves
|
Ongoing
contract costs
|
Other accruals
|
Total
|
|||||||||||||
March 31, 2008
|
$ | 13,648 | $ | 26,880 | $ | 357 | $ | 40,885 | ||||||||
Fiscal year 2009 restructuring
plan amount
|
12,434 | 3,210 | - | 15,644 | ||||||||||||
Adjustments
|
(1,246 | ) | 752 | (39 | ) | (533 | ) | |||||||||
Payments
|
(16,603 | ) | (6,910 | ) | (318 | ) | (23,831 | ) | ||||||||
March 31, 2009
|
$ | 8,233 | $ | 23,932 | $ | - | $ | 32,165 | ||||||||
Adjustments
|
1,026 | (1,336 | ) | - | (310 | ) | ||||||||||
Payments
|
(6,389 | ) | (9,692 | ) | - | (16,081 | ) | |||||||||
March 31, 2010
|
$ | 2,870 | $ | 12,904 | $ | - | $ | 15,774 | ||||||||
Fiscal year 2011 restructuring plan amount
|
6,064 | - | - | 6,064 | ||||||||||||
Adjustments
|
(291 | ) | (1,338 | ) | - | (1,629 | ) | |||||||||
Payments
|
(3,081 | ) | (2,024 | ) | - | (5,105 | ) | |||||||||
March 31, 2011
|
$ | 5,562 | $ | 9,542 | $ | - | $ | 15,104 | ||||||||
2011
|
2010
|
2009
|
||||||||||
Gain on disposition of operations in France
|
- | (677 | ) | (2,083 | ) | |||||||
Loss on disposition of operations in Portugal (see note 4)
|
828 | - | - | |||||||||
Loss on disposition of operations in Netherlands (see note 4)
|
2,511 | - | - | |||||||||
Legal contingency
|
(2,125 | ) | - | 1,000 | ||||||||
Restructuring plan charges and adjustments
|
4,435 | (1,292 | ) | 42,340 | ||||||||
Leased airplane disposals
|
- | - | (110 | ) | ||||||||
Earnout liability adjustment (see note 3)
|
(1,058 | ) | - | - | ||||||||
Other
|
9 | 1,025 | (2,581 | ) | ||||||||
$ | 4,600 | $ | (944 | ) | $ | 38,566 |
GoDigital
|
XYZ
|
MENA
|
Quinetia
|
Alvion
|
Precision Marketing
|
|||||||||||||||||||
Assets acquired:
|
||||||||||||||||||||||||
Cash
|
$ | 776 | $ | 547 | $ | 40 | $ | 138 | $ | 368 | $ | - | ||||||||||||
Goodwill
|
15,546 | 1,446 | 4,824 | 2,024 | 873 | 5,715 | ||||||||||||||||||
Other intangible assets
|
6,500 | 779 | 3,250 | 900 | 1,860 | 2,300 | ||||||||||||||||||
Other current and noncurrent assets
|
1,178 | 184 | 2,139 | 606 | 1,049 | 2,806 | ||||||||||||||||||
24,000 | 2,956 | 10,253 | 3,668 | 4,150 | 10,821 | |||||||||||||||||||
Accounts payable, accrued expenses and capital leases assumed
|
2,091 | 120 | 2,027 | 191 | 150 | 2,178 | ||||||||||||||||||
Net assets acquired
|
21,909 | 2,836 | 8,226 | 3,477 | 4,000 | 8,643 | ||||||||||||||||||
Less:
|
||||||||||||||||||||||||
Cash acquired
|
776 | 547 | 40 | 138 | 368 | - | ||||||||||||||||||
Earnout liability
|
3,611 | 532 | 371 | - | - | - | ||||||||||||||||||
Noncontrolling interest
|
6,573 | - | 4,030 | - | - | - | ||||||||||||||||||
Net cash paid
|
$ | 10,949 | $ | 1,757 | $ | 3,785 | $ | 3,339 | $ | 3,632 | $ | 8,643 |
2011
|
2010
|
2009
|
||||||||||
Database assets, gross
|
$ | - | $ | 10,040 | $ | 10,040 | ||||||
Accumulated amortization
|
- | (10,040 | ) | (10,040 | ) | |||||||
Net database assets
|
$ | - | $ | - | $ | - | ||||||
Developed technology assets, gross
|
$ | 21,165 | $ | 20,990 | $ | 19,590 | ||||||
Accumulated amortization
|
(15,679 | ) | (16,615 | ) | (12,650 | ) | ||||||
Net developed technology assets
|
$ | 5,486 | $ | 4,375 | $ | 6,940 | ||||||
Customer/trademark assets, gross
|
$ | 25,042 | $ | 30,015 | $ | 28,165 | ||||||
Accumulated amortization
|
(18,146 | ) | (20,294 | ) | (16,586 | ) | ||||||
Net customer/trademark assets
|
$ | 6,896 | $ | 9,721 | $ | 11,579 | ||||||
Total intangible assets, gross
|
$ | 46,207 | $ | 61,045 | $ | 57,795 | ||||||
Total accumulated amortization
|
(33,825 | ) | (46,949 | ) | (39,276 | ) | ||||||
Net intangible assets
|
$ | 12,382 | $ | 14,096 | $ | 18,519 | ||||||
Amortization expense
|
$ | 6,950 | $ | 7,673 | $ | 7,929 |
Year ending March 31,
|
Projected amortization expense
|
|||
2012
|
5,880 | |||
2013
|
2,972 | |||
2014
|
1,803 | |||
2015
|
1,202 | |||
2016
|
463 | |||
Thereafter
|
62 |
March 31,
2011
|
March 31,
2010
|
|||||||
Current portion of unbilled and notes receivable
|
$ | 738 | $ | 907 | ||||
Prepaid expenses
|
40,501 | 40,420 | ||||||
Non-trade receivables
|
1,409 | 1,188 | ||||||
Assets of non-qualified retirement plan (note 15)
|
12,840 | 11,564 | ||||||
Other miscellaneous assets
|
203 | 126 | ||||||
Other current assets
|
$ | 55,691 | $ | 54,205 |
March 31,
2011
|
March 31,
2010
|
|||||||
Acquired intangible assets, net
|
$ | 6,896 | $ | 9,721 | ||||
Other miscellaneous noncurrent assets
|
2,748 | 4,975 | ||||||
Noncurrent portion of unbilled and notes receivable
|
311 | 1,873 | ||||||
Noncurrent assets
|
$ | 9,955 | $ | 16,569 |
(dollars in thousands)
|
Information Services
|
Information Products
|
Total
|
|||||||||
Balance at March 31, 2009
|
$ | 336,406 | $ | 118,538 | $ | 454,944 | ||||||
Acquisition of MENA
|
4,824 | - | 4,824 | |||||||||
Purchase adjustments
|
5,295 | - | 5,295 | |||||||||
Change in foreign currency translation adjustment
|
1,559 | 3,639 | 5,198 | |||||||||
Balance at March 31, 2010
|
$ | 348,084 | $ | 122,177 | $ | 470,261 | ||||||
Acquisition of XYZ
|
1,446 | - | 1,446 | |||||||||
Acquisition of GoDigital
|
15,546 | - | 15,546 | |||||||||
Purchase adjustments
|
244 | - | 244 | |||||||||
Goodwill impairment
|
(20,224 | ) | (57,100 | ) | (77,324 | ) | ||||||
Change in foreign currency translation adjustment
|
2,315 | 5,166 | 7,481 | |||||||||
Balance at March 31, 2011
|
$ | 347,411 | $ | 70,243 | $ | 417,654 |
March 31,
2011
|
March 31,
2010
|
|||||||
Land
|
$ | 6,737 | $ | 6,737 | ||||
Buildings and improvements
|
250,193 | 223,861 | ||||||
Data processing equipment
|
566,948 | 528,737 | ||||||
Office furniture and other equipment
|
64,839 | 64,749 | ||||||
888,717 | 824,084 | |||||||
Less accumulated depreciation and amortization
|
633,410 | 587,245 | ||||||
$ | 255,307 | $ | 236,839 |
March 31,
2011
|
March 31,
2010
|
|||||||
Term loan credit agreement
|
$ | 355,000 | $ | 427,000 | ||||
Capital leases and installment payment obligations on land, buildings and equipment payable in monthly payments of principal plus interest at rates ranging from approximately 3% to 8%; remaining terms up to twelve years
|
43,195 | 41,788 | ||||||
Software license liabilities payable over terms up to three years; effective interest rates ranging from approximately 4% to 7%
|
4,686 | 10,001 | ||||||
Other debt and long-term liabilities
|
19,357 | 21,946 | ||||||
Total long-term debt and capital leases
|
422,238 | 500,735 | ||||||
Less current installments
|
27,978 | 42,106 | ||||||
Long-term debt, excluding current installments
|
$ | 394,260 | $ | 458,629 | ||||
Year ending March 31,
|
||||
2012
|
27,978 | |||
2013
|
23,597 | |||
2014
|
11,532 | |||
2015
|
339,414 | |||
2016
|
8,171 | |||
Thereafter
|
11,546 | |||
$ | 422,238 |
Balance at beginning of period
|
Additions charged to costs and expenses
|
Other changes
|
Bad debts written off, net of amounts recovered
|
Balance at end of period
|
||||||||||||||||
2009:
|
||||||||||||||||||||
Allowance for doubtful accounts, returns and credits
|
$ | 10,011 | $ | 4,068 | $ | (1,253 | ) | $ | (2,788 | ) | $ | 10,038 | ||||||||
2010:
|
||||||||||||||||||||
Allowance for doubtful accounts, returns and credits
|
$ | 10,038 | $ | 3,820 | $ | (872 | ) | $ | (6,645 | ) | $ | 6,341 | ||||||||
2011:
|
||||||||||||||||||||
Allowance for doubtful accounts, returns and credits
|
$ | 6,341 | $ | 940 | $ | 198 | $ | (1,857 | ) | $ | 5,622 |
Number of warrants outstanding
|
Issued
|
Vesting date
|
Expiration date
|
Weighted average exercise price
|
|||||||
AISS acquisition (fiscal 2003)
|
1,272,024 |
August 2002
|
August 2002
|
August 12, 2017
|
$ | 16.32 | |||||
Toplander acquisition (fiscal 2003)
|
102,935 |
March 2004
|
March 2004
|
March 17, 2019
|
$ | 13.24 | |||||
1,374,959 | $ | 16.09 |
Number of shares
|
Weighted-average exercise price per share
|
Weighted-average remaining contractual term (in years)
|
Aggregate Intrinsic value (in thousands)
|
|||||||||||||
Outstanding at March 31, 2010
|
10,368,532 | $ | 20.33 | |||||||||||||
Granted
|
254,133 | |||||||||||||||
Exercised
|
(375,317 | ) | $ | 554 | ||||||||||||
Forfeited or cancelled
|
(720,359 | ) | ||||||||||||||
Outstanding at March 31, 2011
|
9,526,989 | $ | 20.75 | 4.59 | $ | 6,033 | ||||||||||
Exercisable at March 31, 2011
|
8,672,052 | $ | 21.35 | 4.30 | $ | 4,613 |
Options outstanding
|
Options exercisable
|
||||||||||||||||||
Range of
exercise price
per share
|
Options
outstanding
|
Weighted- average remaining contractual life
|
Weighted-average
exercise price
per share
|
Options
exercisable
|
Weighted-average
exercise price
per share
|
||||||||||||||
$ | 3.69 - $ 9.62 | 400,649 |
6.53 years
|
$ | 8.72 | 174,399 | $ | 8.47 | |||||||||||
$ | 10.22 - $ 15.00 | 1,989,406 |
4.92 years
|
$ | 12.45 | 1,697,500 | $ | 12.24 | |||||||||||
$ | 15.10 - $ 19.82 | 2,384,592 |
5.00 years
|
$ | 16.62 | 2,135,311 | $ | 16.58 | |||||||||||
$ | 20.12 - $ 25.00 | 2,342,112 |
4.89 years
|
$ | 22.95 | 2,292,112 | $ | 22.90 | |||||||||||
$ | 25.98 - $ 29.30 | 1,370,719 |
3.53 years
|
$ | 26.80 | 1,333,219 | $ | 26.78 | |||||||||||
$ | 30.93 - $ 39.12 | 780,889 |
2.89 years
|
$ | 35.70 | 780,889 | $ | 35.70 | |||||||||||
$ | 40.50 - $ 62.06 | 258,622 |
3.40 years
|
$ | 44.15 | 258,622 | $ | 44.15 | |||||||||||
9,526,989 |
4.59 years
|
$ | 20.75 | 8,672,052 | $ | 21.35 |
Number
of shares
|
Weighted average fair value per share at
grant date
(in thousands)
|
Weighted-average remaining contractual term (in years)
|
||||||||||
Outstanding at March 31, 2010
|
2,495,641 | $ | 11.15 | 2.24 | ||||||||
Granted
|
731,519 | $ | 19.32 | |||||||||
Vested
|
(484,865 | ) | $ | 10.10 | ||||||||
Forfeited or cancelled
|
(960,983 | ) | $ | 11.18 | ||||||||
Outstanding at March 31, 2011
|
1,781,312 | $ | 14.08 | 1.60 |
March 31,
2011
|
March 31,
2010
|
|||||||
Foreign currency translation
|
$ | 16,883 | $ | 7,365 | ||||
Unrealized loss on interest rate swap
|
(892 | ) | (3,198 | ) | ||||
$ | 15,991 | $ | 4,167 | |||||
2011
|
2010
|
2009
|
||||||||||
Income from operations
|
$ | 34,077 | $ | 32,599 | $ | 24,710 | ||||||
Stockholders’ equity:
|
||||||||||||
Tax (benefit) expense of stock options, warrants and restricted stock
|
316 | 683 | (34 | ) | ||||||||
$ | 34,393 | $ | 33,282 | $ | 24,676 |
2011
|
2010
|
2009
|
||||||||||
Current:
|
||||||||||||
U.S. Federal
|
$ | 12,872 | $ | 164 | $ | 6,039 | ||||||
Non-U.S.
|
176 | 351 | 20 | |||||||||
State
|
2,450 | (726 | ) | 2,228 | ||||||||
15,498 | (211 | ) | 8,287 | |||||||||
Deferred:
|
||||||||||||
U.S. Federal
|
19,477 | 31,641 | 15,938 | |||||||||
Non-U.S.
|
(264 | ) | (1,056 | ) | (286 | ) | ||||||
State
|
(634 | ) | 2,225 | 771 | ||||||||
18,579 | 32,810 | 16,423 | ||||||||||
Total
|
$ | 34,077 | $ | 32,599 | $ | 24,710 |
2011
|
2010
|
2009
|
||||||||||
U.S.
|
$ | 99,250 | $ | 87,507 | $ | 63,197 | ||||||
Non-U.S.
|
(93,615 | ) | (10,749 | ) | (983 | ) | ||||||
Total
|
$ | 5,635 | $ | 76,758 | $ | 62,214 |
2011
|
2010
|
2009
|
||||||||||
Computed expected tax expense (benefit)
|
$ | 1,972 | $ | 26,865 | $ | 21,775 | ||||||
Increase (reduction) in income taxes resulting from:
|
||||||||||||
State income taxes, net of federal benefit, exclusive of benefit of reduction in valuation reserves
|
2,079 | 2,124 | 1,949 | |||||||||
Reserves for tax items
|
(3,336 | ) | 1,015 | 384 | ||||||||
Research, experimentation and other tax credits
|
(561 | ) | (1,167 | ) | - | |||||||
Impairment of goodwill and intangibles not deductible for tax
|
28,006 | - | - | |||||||||
Other permanent differences between book and tax expense
|
(58 | ) | 1,967 | (4,474 | ) | |||||||
Non-U.S. subsidiaries taxed at other than 35%
|
4,409 | 1,655 | 6,684 | |||||||||
Adjustment to valuation reserves
|
1,312 | (1,149 | ) | (2,144 | ) | |||||||
Other, net
|
254 | 1,289 | 536 | |||||||||
$ | 34,077 | $ | 32,599 | $ | 24,710 |
(dollars in thousands)
|
2011
|
2010
|
||||||
Deferred tax assets:
|
||||||||
Accrued expenses not currently deductible for tax purposes
|
$ | 12,531 | $ | 11,897 | ||||
Revenue recognized for tax purposes in excess of revenue for financial reporting purposes
|
1,718 | - | ||||||
Investments, principally due to differences in basis for tax and financial reporting purposes
|
2,050 | 1,776 | ||||||
Property and equipment, principally due to differences in depreciation
|
- | 4,728 | ||||||
Net operating loss and tax credit carryforwards
|
51,489 | 50,943 | ||||||
Other
|
13,554 | 12,994 | ||||||
Total deferred tax assets
|
81,342 | 82,338 | ||||||
Less valuation allowance
|
36,377 | 30,578 | ||||||
Net deferred tax assets
|
44,965 | 51,760 | ||||||
Deferred tax liabilities:
|
||||||||
Intangible assets, principally due to differences in amortization
|
$ | (68,140 | ) | $ | (64,854 | ) | ||
Costs capitalized for financial reporting purposes in excess of amounts capitalized for tax purposes
|
(33,339 | ) | (36,294 | ) | ||||
Property and equipment, principally due to differences in depreciation
|
(15,366 | ) | - | |||||
Revenue recognized for financial reporting purposes in excess of revenue for tax purposes
|
- | (22 | ) | |||||
Total deferred tax liabilities
|
(116,845 | ) | (101,170 | ) | ||||
Net deferred tax liability
|
$ | (71,880 | ) | $ | (49,410 | ) |
(dollars in thousands)
|
2011
|
2010
|
2009
|
|||||||||
Balance at beginning of period
|
$ | 6,379 | $ | 5,364 | $ | 4,980 | ||||||
Additions based on tax positions related to the current year
|
360 | 566 | - | |||||||||
Reduction due to lapsing of statute of limitations
|
(3,460 | ) | - | - | ||||||||
Adjustments to tax positions taken in prior years
|
(236 | ) | 449 | 384 | ||||||||
Balance at end of period included in other liabilities
|
$ | 3,043 | $ | 6,379 | $ | 5,364 |
2011
|
2010
|
2009
|
||||||||||
United States
|
$ | 997,857 | $ | 940,567 | $ | 1,096,022 | ||||||
Foreign
|
||||||||||||
Europe
|
$ | 118,072 | $ | 133,625 | $ | 158,058 | ||||||
Asia/Pacific
|
32,282 | 23,375 | 22,493 | |||||||||
Other
|
11,759 | 1,668 | - | |||||||||
All Foreign
|
$ | 162,113 | $ | 158,668 | $ | 180,551 | ||||||
$ | 1,159,970 | $ | 1,099,235 | $ | 1,276,573 |
2011
|
2010
|
|||||||
United States
|
$ | 751,824 | $ | 732,253 | ||||
Foreign
|
||||||||
Europe
|
$ | 43,863 | $ | 140,122 | ||||
Asia/Pacific
|
26,845 | 21,291 | ||||||
Other
|
24,532 | 9,176 | ||||||
All Foreign
|
$ | 95,240 | $ | 170,589 | ||||
$ | 847,064 | $ | 902,842 |
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Other current assets
|
$ | 12,840 | $ | - | $ | - | $ | 12,840 | ||||||||
Total assets
|
$ | 12,840 | $ | - | $ | - | $ | 12,840 | ||||||||
Liabilities:
|
||||||||||||||||
Other current liabilities
|
$ | 12,840 | $ | - | $ | - | $ | 12,840 | ||||||||
Other non current liabilities
|
- | 892 | - | 892 | ||||||||||||
Total liabilities
|
$ | 12,840 | $ | 892 | $ | - | $ | 13,732 |
2011
|
2010
|
2009
|
||||||||||
Revenue:
|
||||||||||||
Information services
|
$ | 893,594 | $ | 849,432 | $ | 920,262 | ||||||
Information products
|
266,376 | 249,803 | 356,311 | |||||||||
Total revenue
|
$ | 1,159,970 | $ | 1,099,235 | $ | 1,276,573 | ||||||
Income from operations:
|
||||||||||||
Information services
|
$ | 91,402 | $ | 91,013 | $ | 117,397 | ||||||
Information products
|
23,796 | 6,856 | 14,030 | |||||||||
Other
|
(84,274 | ) | 944 | (38,566 | ) | |||||||
Income from operations
|
$ | 30,924 | $ | 98,813 | $ | 92,861 | ||||||
Depreciation and amortization:
|
||||||||||||
Information services
|
$ | 116,467 | $ | 132,113 | $ | 149,649 | ||||||
Information products
|
29,888 | 35,451 | 49,035 | |||||||||
Depreciation and amortization
|
$ | 146,355 | $ | 167,564 | $ | 198,684 | ||||||
Total assets:
|
||||||||||||
Information services
|
$ | 911,821 | $ | 908,554 | ||||||||
Information products
|
144,663 | 191,799 | ||||||||||
Other
|
250,141 | 263,067 | ||||||||||
Total assets
|
$ | 1,306,625 | $ | 1,363,420 |
(dollars in thousands)
|
Quarter ended
June 30, 2010
|
Quarter ended September 30, 2010
|
Quarter ended December 31, 2010
|
Quarter ended
March 31, 2011
|
||||||||||||
Revenue
|
$ | 270,395 | $ | 291,669 | $ | 299,110 | $ | 298,796 | ||||||||
Gross profit
|
59,974 | 67,662 | 72,266 | 75,180 | ||||||||||||
Income (loss) from operations
|
22,076 | 27,310 | 34,575 | (53,037 | ) | |||||||||||
Net earnings (loss)
|
9,436 | 12,697 | 20,414 | (70,989 | ) | |||||||||||
Net earnings (loss) attributable to Acxiom
|
9,805 | 13,281 | 20,823 | (67,056 | ) | |||||||||||
Basic earnings (loss) per share
|
0.12 | 0.16 | 0.25 | (0.88 | ) | |||||||||||
Diluted earnings (loss ) per share
|
0.12 | 0.16 | 0.25 | (0.88 | ) | |||||||||||
Basic earnings (loss) per share attributable to Acxiom stockholders
|
0.12 | 0.17 | 0.26 | (0.83 | ) | |||||||||||
Diluted earnings (loss) per share attributable to Acxiom stockholders
|
0.12 | 0.16 | 0.25 | (0.83 | ) |
(dollars in thousands)
|
Quarter ended
June 30, 2009
|
Quarter ended September 30, 2009
|
Quarter ended December 31, 2009
|
Quarter ended
March 31, 2010
|
||||||||||||
Revenue
|
$ | 255,981 | $ | 271,105 | $ | 283,807 | $ | 288,342 | ||||||||
Gross profit
|
50,486 | 59,184 | 73,874 | 76,422 | ||||||||||||
Income from operations
|
12,496 | 21,247 | 29,859 | 35,211 | ||||||||||||
Net earnings (loss)
|
4,194 | 9,445 | 14,158 | 16,362 | ||||||||||||
Net earnings (loss) attributable to Acxiom
|
4,194 | 9,445 | 14,262 | 16,648 | ||||||||||||
Basic earnings (loss) per share
|
0.05 | 0.12 | 0.18 | 0.21 | ||||||||||||
Diluted earnings (loss ) per share
|
0.05 | 0.12 | 0.18 | 0.20 | ||||||||||||
Basic earnings (loss) per share attributable to Acxiom stockholders
|
0.05 | 0.12 | 0.18 | 0.21 | ||||||||||||
Diluted earnings (loss) per share attributable to Acxiom stockholders
|
0.05 | 0.12 | 0.18 | 0.21 | ||||||||||||
Performance Measure
|
Target
|
Operating Income1
|
$120,420,000
|
Performance Goal
|
Weighting
|
Target
|
Revenue
|
60%
|
TBD
|
Operating Income
|
40%
|
TBD
|
Performance Goal
|
Weighting
|
Target
|
Revenue
|
30%
|
TBD
|
Total Contract Value
|
30%
|
TBD
|
Operating Income
|
40%
|
TBD
|
SUBSIDIARIES OF ACXIOM
|
||
U.S. SUBSIDIARIES
|
||
Name
|
Incorporated In
|
Doing Business As
|
1. Acxiom CDC, Inc.
|
Arkansas
|
Acxiom CDC, Inc.
|
2. Acxiom CH, Inc.
|
Delaware
|
Acxiom CH, Inc.
|
3. Acxiom Digital, Inc.
|
Delaware
|
Acxiom Digital, Inc.
|
4. Acxiom Direct, Inc.
|
Tennessee
|
Acxiom Direct, Inc.
|
5. Acxiom / Direct Media, Inc.
|
Arkansas
|
Acxiom / Direct Media, Inc.
|
6. Acxiom Dutch Holdings, LLC
|
Delaware
|
Acxiom Dutch Holdings, LLC
|
7. Acxiom Government Services, Inc.
|
Arkansas
|
Acxiom Government Services, Inc.
|
8. Acxiom Identity Solutions, Inc.
|
Colorado
|
Acxiom Identity Solutions, Inc.
|
9. Acxiom Information Security
Services, Inc.
|
Arkansas
|
Acxiom Information Security Services,
Inc.
|
10. Acxiom / May & Speh, Inc.
|
Delaware
|
Acxiom / May & Speh, Inc.
|
INTERNATIONAL SUBSIDIARIES
|
||
Name
|
Incorporated In
|
Doing Business As
|
1. ACDUHO, C.V.
|
The Netherlands
|
ACDUHO, C.V.
|
2. Acxiom Australia Pty Ltd
|
Australia
|
Acxiom Australia Pty Ltd
|
|
Name: JERRY D. GRAMAGLIA, Director and Interim Chief
|
|
Executive Officer (principle executive officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Acxiom Corporation;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By: /s/ Jerry D. Gramaglia
|
|
(Signature)
|
|
Jerry D. Gramaglia
|
|
CEO & President
|
1.
|
I have reviewed this annual report on Form 10-K of Acxiom Corporation;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By: /s/ Christopher W. Wolf
|
|
(Signature)
|
|
Christopher W. Wolf
|
|
Chief Financial Officer
|
9 18. UNAUDITED SELECTED QUARTERLY FINANCIAL DATA: (dollars in thousands) Quarter ended Quarter ended Quarter ended Quarter ended Revenue $ 270,395 $ 291,669 $ 299,110 $ 298,796 Gross profit 59,974 67,662 72,266 75,180 Income (loss) from operations 22,076 27,310 34,575 (53,037 ) Net earnings (loss) 9,436 12,697 20,414 (70,989 ) Net earnings (loss) attributable to Acxiom 9,805 13,281 20,823 (67,056 ) Basic earnings (loss) per share 0.12 0.16 0.25 (0.88 ) Diluted earnings (loss) per share 0.12 0.16 0.25 (0.88 ) Basic earnings (loss) per share attributable to Acxiom stockholders 0.12 0.17 0.26 (0.83 ) Diluted earnings (loss) per share attributable to Acxiom stockholders 0.12 0.16 0.25 (0.83 ) (dollars in thousands) Quarter ended Quarter ended Quarter ended Quarter ended Revenue $ 255,981 $ 271,105 $ 283,807 $ 288,342 Gross profit 50,486 59,184 73,874 76,422 Income from operations 12,496 21,247 29,859 35,211 Net earnings (loss) 4,194 9,445 14,158 16,362 Net earnings (loss) attributable to Acxiom 4,194 9,445 14,262 16,648 Basic earnings (loss) per share 0.05 0.12 0.18 0.21 Diluted earnings (loss) per share 0.05 0.12 0.18 0.20 Basic earnings (loss) per share attributable to Acxiom stockholders 0.05 0.12 0.18 0.21 Diluted earnings (loss) per share attributable to Acxiom stockholders 0.05 0.12 0.18 0.21 In the fourth quarter of fiscal 2011 the Company recorded impairment of goodwill and other intangible assets of $79.7 million. Also in the fourth quarter of fiscal 2011 the Company recorded a total of $8.2 million in gains, losses and other items, net in the consolidated statements of operations. The total included $3.3 million related to the disposal of the Netherlands and Portugal operations and $5.5 million of restructuring charges, offset by a credit of $0.6 million related to the reduction of an earnout liability. In the fourth quarter of fiscal 2011 the Company also recorded $1.6 million in other, net related to the impairment of an investment. In the third quarter of fiscal 2011, the Company recorded adjustments primarily to restructuring and legal accruals totaling $3.6 million recorded in gains, losses and other items, net. In addition, the Company reduced a reserve for unrecognized tax benefits by approximately $3.5 million due to the expiration of the related statute of limitations. In the fourth quarter of fiscal 2010 the Company recorded a gain of $1.8 million in gains, losses, and other items in the consolidated statement of operations. The reversal of expense was related to a $1.5 million reversal of lease restructuring charges, a $0.2 million reversal of other restructuring charges, and a $0.1 additional gain recorded on the disposition of operations in France. In the third quarter of fiscal 2010 the Company recorded a total of $0.5 million expense in gains, losses, and other items in the consolidated statement of operations. These charges included a $1.0 million loss recorded on a contingent liability netted against a $0.5 million additional gain recorded on the disposition of operations in France. In the first quarter of fiscal 2010 the Company recorded $0.3 million expense in gains, losses and other items in the consolidated statement of operations. The adjustments were related to previous restructuring charges. "+ text.join( " " + text[p] + " ' + raw + ' 7. SOFTWARE AND RESEARCH AND DEVELOPMENT COSTS: The Company recorded amortization expense related to internally developed computer software of $20.5 million, $23.6 million, and $21.1 million for fiscal 2011, 2010, and 2009, respectively, and amortization of purchased software licenses of $15.6 million, $14.5 million and $27.2 million in 2011, 2010 and 2009, respectively. Additionally, research and development costs of $11.6 million, $6.8 million and $19.4 million were charged to cost of revenue during 2011, 2010 and 2009, respectively. Amortization expense related to both internally developed and purchased software is included in cost of revenue in the accompanying consolidated statements of operations. 12. STOCKHOLDERS EQUITY: The Company has authorized 200 million shares of $0.10 par value common stock and 1 million shares of $1.00 par value preferred stock. The board of directors of the Company may designate the relative rights and preferences of the preferred stock when and if issued. Such rights and preferences could include liquidation preferences, redemption rights, voting rights and dividends, and the shares could be issued in multiple series with different rights and preferences. The Company currently has no plans for the issuance of any shares of preferred stock. The Company has issued warrants to purchase shares of its common stock. The following table shows outstanding warrants as of March 31, 2011: Number of Issued Vesting date Expiration date Weighted AISS acquisition (fiscal 2003) 1,272,024 August 2002 August 2002 August 12, 2017 $ 16.32 Toplander acquisition (fiscal 2003) 102,935 March 2004 March 2004 March 17, 2019 $ 13.24 1,374,959 $ 16.09 In conjunction with the acquisition of ChinaLOOP in fiscal 2005, the Company issued a warrant to purchase 100,000 shares of its common stock. The exercise price for the warrant was $15 per share and the warrant could be exercised until October 24, 2014. The warrant also contained a put feature, which gave the holders the right to receive up to an additional $1.5 million in Acxiom common stock if the value of the common stock upon exercise was less than $30 per share. The put feature could only be exercised on or after November 1, 2009, and could only be exercised concurrently with the exercise of the warrant. The warrant and put were exercised by all holders during fiscal 2010. The Company agreed with the holders to pay the value of the warrant in cash, rather than in stock. As a result, the Company paid $1.5 million during fiscal 2010. During the fiscal year ended March 31, 2009, the Company repurchased 0.3 million shares for $2.1 million. Cash paid for repurchases differs from the aggregate purchase price due to trades made at the end of the period which were settled in the following period. The Company paid dividends on its common stock in the amount of $0.12 per share in fiscal 2009. No dividends were paid during fiscal 2011 or 2010. Stock Option Activity The Company has stock option and equity compensation plans for which a total of 37.7 million shares of the Companys common stock have been reserved for issuance since inception of the plans. These plans provide that the exercise prices of qualified options will be at or above the fair market value of the common stock at the time of the grant. Board policy has also required that nonqualified options be priced at or above the fair market value of the common stock at the time of grant. At March 31, 2011, there were a total of 5.5 million shares available for future grants under the plans. The per-share weighted-average fair value of the stock options granted during 2011 was $7.54 on the date of grant using a customized binomial lattice approach with the following weighted-average assumptions: dividend yield of 0.0%; risk-free interest rate of 3.4%; expected option life of 5.6 years; expected volatility of 52% and a suboptimal exercise multiple of 1.9. The per-share weighted-average fair value of stock options granted during 2010 was $4.61 on the date of grant using a customized binomial lattice option pricing model with the following weighted-average assumptions: dividend yield of 0.0%; risk-free interest rate of 3.5%; expected option life of 5.4 years and expected volatility of 54%. The per-share weighted-average fair value of stock options granted during 2009 was $4.37 on the date of grant using a customized binomial lattice option pricing model with the following weighted-average assumptions: dividend yield of 1.6%; risk-free interest rate of 3.9%; expected option life of 5.6 years and expected volatility of 37%. Total expense related to stock options was approximately $2.4 million for fiscal 2011, $2.4 million for fiscal 2010 and $2.2 million for 2009. Future expense for these options is expected to be approximately $3.7 million in total over the next four years. Activity in stock options was as follows: Number of Weighted-average Weighted- Aggregate Outstanding at March 31, 2010 10,368,532 $ 20.33 Granted 254,133 Exercised (375,317 ) $ 554 Forfeited or cancelled (720,359 ) Outstanding at March 31, 2011 9,526,989 $ 20.75 4.59 $ 6,033 Exercisable at March 31, 2011 8,672,052 $ 21.35 4.30 $ 4,613 The aggregate intrinsic value for options exercised in fiscal 2009 was $43 thousand, for fiscal 2010 was $1.1 million and for fiscal 2011 was $0.6 million. The aggregate intrinsic value at period end represents total pre-tax intrinsic value (the difference between Acxioms closing stock price on the last trading day of the period and the exercise price for each in-the-money option) that would have been received by the option holders had option holders exercised their options on March 31, 2011. This amount changes based upon changes in the fair market value of Acxioms stock. Following is a summary of stock options outstanding as of March 31, 2011: Options outstanding Options exercisable Range of Options Weighted- Weighted- Options Weighted- $ 3.69 - $ 9.62 400,649 6.53 years $ 8.72 174,399 $ 8.47 $ 10.22 - $ 15.00 1,989,406 4.92 years $ 12.45 1,697,500 $ 12.24 $ 15.10 - $ 19.82 2,384,592 5.00 years $ 16.62 2,135,311 $ 16.58 $ 20.12 - $ 25.00 2,342,112 4.89 years $ 22.95 2,292,112 $ 22.90 $ 25.98 - $ 29.30 1,370,719 3.53 years $ 26.80 1,333,219 $ 26.78 $ 30.93 - $ 39.12 780,889 2.89 years $ 35.70 780,889 $ 35.70 $ 40.50 - $ 62.06 258,622 3.40 years $ 44.15 258,622 $ 44.15 9,526,989 4.59 years $ 20.75 8,672,052 $ 21.35 Restricted Stock Unit Activity Non-vested restricted stock units and changes during the year ended March 31, 2011 were as follows: Number Weighted average Weighted-average Outstanding at March 31, 2010 2,495,641 $ 11.15 2.24 Granted 731,519 $ 19.32 Vested (484,865 ) $ 10.10 Forfeited or cancelled (960,983 ) $ 11.18 Outstanding at March 31, 2011 1,781,312 $ 14.08 1.60 During fiscal 2011, the Company granted restricted stock units covering 731,519 shares of common stock with a value at the date of grant of $14.1 million. Of the restricted stock unites granted during fiscal 2011, 467,641 vest in equal annual increments over four years and 72,088 vest in one year. The remaining 191,790 vest subject to attainment of performance criteria established by the compensation committee of the board of directors. Each recipient of the performance units may vest in a number of shares from zero to 200% of their award, based on the total shareholder return of Acxiom stock compared to total shareholder return of a group of peer companies established by the committee for the period from April 1, 2010 to March 29, 2013. The value of the performance units is determined using a Monte Carlo simulation model. Valuation of all other restricted stock units is equal to the quoted market price for the shares on the date of grant. During fiscal 2010, the Company issued restricted stock units covering 1,545,000 shares of common stock with a value at the date of grant of $14.8 million. Of the 1,545,000 restricted stock units issued during fiscal 2010, 599,000 units were performance units. Performance units vest subject to 1) the Companys achievement of certain performance criteria and 2) the individual remaining employed by the Company for three years from the date of grant. If both criteria are met the units vest after three years. In fiscal 2011, all of the 599,000 performance units were cancelled as the performance criteria was not met. All other restricted stock units vest in equal annual increments over four years. During fiscal 2009, the Company issued restricted stock units covering 861,532 shares of common stock with a value at the date of grant of $11.1 million. All of these restricted stock units vest in equal annual increments over four years. The value at the date of grant for restricted stock units granted during 2009 and 2010 was equal to the quoted market prices for the shares. The expense related to restricted stock was $10.7 million in fiscal 2011, $7.7 million in fiscal 2010 and $6.9 million in fiscal 2009. Future expense for these restricted stock units is expected to be approximately $7.6 million in fiscal 2012, $5.2 million in fiscal 2013, $2.2 million in fiscal 2014, and $0.3 million in fiscal 2015. Qualified Employee Stock Purchase Plan In addition to the share-based plans, the Company maintains a qualified employee stock purchase plan (ESPP) that permits substantially all employees to purchase shares of common stock. Prior to July 1, 2009 the employees were allowed to purchase shares of stock at 85% of the market price. Subsequent to that date, all purchases by employees have been at the market price. The number of shares available for issuance at March 31, 2011 was approximately 1.0 million. Approximately 471,158 shares were purchased under the ESPP during the combined fiscal years 2011, 2010, and 2009. There was no expense to the Company for the year ended March 31, 2011. The expense for 2010 and 2009 for the discount to the market price was $0.1 million and $0.5 million, respectively. Accumulated Other Comprehensive Income The accumulated balances for each component of other comprehensive income are as follows (dollars in thousands): March 31, March 31, Foreign currency translation $ 16,883 $ 7,365 Unrealized loss on interest rate swap (892 ) (3,198 ) $ 15,991 $ 4,167 3. ACQUISITIONS: On July 1, 2010, the Company completed the acquisition of a 70% interest in GoDigital Tecnologia E Participacoes, Ltda. (GoDigital), a Brazilian marketing services business. The Company paid $10.9 million, net of cash acquired, and not including amounts, if any, to be paid under an earnout agreement in which the Company may pay up to an additional $9.3 million based on the results of the acquired business over approximately the next two years. The acquired business has annual revenue of approximately $8 million. The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of the acquisition is not material. The results of operations for GoDigital are included in the Companys consolidated results beginning July 1, 2010. The value of the earnout was originally estimated at $3.6 million. During the current fiscal period, the Company has estimated the value of the earnout to have decreased by $1.1 million and has recorded the adjustment in gains, losses and other items, net on the consolidated statement of operations. The value of the earnout liability will continue to be adjusted to its estimated value until the completion of the earnout period. On April 1, 2010, the Company acquired 100% of the outstanding shares of a digital marketing business (XYZ) operating in Australia and New Zealand. The acquisition gives the Company additional market opportunities in this region. The Company paid $1.8 million in cash, net of cash acquired, and not including amounts, if any, to be paid under an earnout agreement in which the Company may pay up to an additional $0.6 million if the acquired business achieves a revenue target over the next two years. The value of the earnout is estimated at $0.5 million. The acquired business has annual revenue of less than $2 million. The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition is not material. The results of operation for the acquisition are included in the Companys consolidated results beginning April 1, 2010. In December 2009, the Company acquired a 51% interest in Direct Marketing Services (DMS), with operations in Saudi Arabia and the United Arab Emirates. Subsequently, Acxioms ownership has increased to 57%. Upon acquisition DMS was reorganized as a limited liability company registered under the laws and regulations of the Kingdom of Saudi Arabia and renamed Acxiom Middle East and North Africa, LTD (MENA). The purchase price for DMS was $3.8 million in cash, not including the amount, if any, to be paid pursuant to an earnout agreement where additional payment is contingent on MENAs financial performance for the period ending on December 31, 2012. Financial performance under the earnout will be measured based on MENAs calculation of earnings before interest, taxes, depreciation and amortization (EBITDA). The actual EBITDA will be divided by $18.3 million and that percentage multiplied by $6.1 million to determine the earnout payment. There will be no earnout payment if the actual EBITDA does not exceed $12.8 million. The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition is not material to the Companys consolidated results for any period presented. DMS has annual revenue of less than $5 million. The results of operations for MENA are included in the Companys consolidated results beginning December 1, 2009. During the year ended March 31, 2011, triggering events occurred which required the Company to test the goodwill and other intangible assets of MENA for impairment (see note 6). Management concluded that all of the goodwill and other intangibles were impaired. A total impairment charge of $7.2 million was recorded in impairment of goodwill and other intangibles on the consolidated statement of operations, of which $4.8 million was related to goodwill and $2.4 million related to other intangible assets. Approximately 43% of this charge is attributable to the noncontrolling interest. On November 7, 2008, the Company acquired the assets of Quinetia, LLC, a Rochester, New York-based provider of analytics and predictive modeling for large and medium size businesses. The acquisition provides the Company additional consumer insight capabilities that enable clients to more effectively retain and grow their customer base and optimize pricing. The Company paid $2.7 million, net of cash acquired, for the acquisition not including amounts paid pursuant to an earnout agreement. The earnout agreement allows for payment of up to $1.2 million if the acquired business achieves certain earnings before interest, tax, depreciation and amortization goals. Payments under the earnout agreement are determined based on results in the target measurement periods ending March 31, 2009, 2010 and 2011. The first earnout payment of $0.2 million in fiscal 2009 and the second earnout payment of $0.2 million in fiscal 2010 have been added to the purchase price. The final earnout payment of $0.3 million was added to the purchase price in fiscal 2011. The acquired business has annual revenues of less than $5.0 million. The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition is not material to the Companys consolidated results for any period presented. Quinetias results of operations are included in the Companys consolidated results beginning November 7, 2008. On September 15, 2008, the Company acquired the direct marketing technology unit of Alvion, LLC. The acquisition allowed the Company to obtain a proven online marketing list fulfillment platform that can be used by small and medium-size businesses that need immediate access to marketing information through a software-as-service environment. The Company paid $3.6 million in cash, net of cash acquired, for the acquisition. The acquired business has annual revenues of less than $5.0 million. The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition is not material to the Companys consolidated results for any period presented. Alvions results of operations are included in the Companys consolidated results beginning September 15, 2008. In July 2008, the Company acquired the database marketing unit of ChoicePoint Precision Marketing, LLC (Precision Marketing). The Company paid $9.0 million, of which $4.5 million was paid into two escrow accounts which were subject to escrow arrangements which were finally resolved during fiscal 2010. A total of $0.5 million of one of the escrow funds was released to reimburse the Company for costs incurred. Of the remaining $4.0 million escrow fund, $3.6 million was paid to the sellers and approximately $0.4 million was returned to the Company. The $4.0 million placed into escrow was originally treated as purchase price, therefore the $0.4 million returned to the Company was recorded as a reduction of purchase price and the $3.6 million was charged to goodwill. The acquired business had annual revenue of approximately $16.0 million. The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition is not material to the Companys consolidated results for any period presented. Precision Marketings results of operations are included in the Companys consolidated results beginning July 1, 2008. The following table shows the allocation of GoDigital, XYZ, MENA, Quinetia, Alvion, and Precision Marketing purchase prices to assets acquired and liabilities assumed (dollars in thousands): GoDigital XYZ MENA Quinetia Alvion Precision Assets acquired: Cash $ 776 $ 547 $ 40 $ 138 $ 368 $ Goodwill 15,546 1,446 4,824 2,024 873 5,715 Other intangible assets 6,500 779 3,250 900 1,860 2,300 Other current and noncurrent assets 1,178 184 2,139 606 1,049 2,806 24,000 2,956 10,253 3,668 4,150 10,821 Accounts payable, accrued expenses and capital leases assumed 2,091 120 2,027 191 150 2,178 Net assets acquired 21,909 2,836 8,226 3,477 4,000 8,643 Less: Cash acquired 776 547 40 138 368 Earnout liability 3,611 532 371 Noncontrolling interest 6,573 4,030 Net cash paid $ 10,949 $ 1,757 $ 3,785 $ 3,339 $ 3,632 $ 8,643 The fair values of the noncontrolling interests in GoDigital and MENA in the table above were derived based on the purchase price paid by Acxiom for its interest. The amount allocated to goodwill is due primarily to assembled work force. The amounts allocated to other intangible assets in the table above include software, customer relationship intangibles and trademarks. Amortization lives for those intangibles range from two years to seven years. The following table shows the amortization activity of these intangible assets (dollars in thousands): 2011 2010 2009 Database assets, gross $ $ 10,040 $ 10,040 Accumulated amortization (10,040 ) (10,040 ) Net database assets $ $ $ Developed technology assets, gross $ 21,165 $ 20,990 $ 19,590 Accumulated amortization (15,679 ) (16,615 ) (12,650 ) Net developed technology assets $ 5,486 $ 4,375 $ 6,940 Customer/trademark assets, gross $ 25,042 $ 30,015 $ 28,165 Accumulated amortization (18,146 ) (20,294 ) (16,586 ) Net customer/trademark assets $ 6,896 $ 9,721 $ 11,579 Total intangible assets, gross $ 46,207 $ 61,045 $ 57,795 Total accumulated amortization (33,825 ) (46,949 ) (39,276 ) Net intangible assets $ 12,382 $ 14,096 $ 18,519 Amortization expense $ 6,950 $ 7,673 $ 7,929 The following table shows a projection of amortization expense associated with the above assets for the next five years (dollars in thousands): Year ending March 31, Projected amortization expense 2012 5,880 2013 2,972 2014 1,803 2015 1,202 2016 463 Thereafter 62 The amounts allocated to intangible assets and goodwill for the Quinetia, Alvion, and Precision Marketing acquisitions are expected to be deductible for income tax purposes. The amounts allocated to intangible assets for GoDigital, XYZ and MENA are not expected to be deductible. 9. LONG-TERM DEBT: Long-term debt consists of the following (dollars in thousands): March 31, March 31, Term loan credit agreement $ 355,000 $ 427,000 Capital leases and installment payment obligations on land, buildings and equipment payable in monthly payments of principal plus interest at rates ranging from approximately 3% to 8%; remaining terms up to twelve years 43,195 41,788 Software license liabilities payable over terms up to three years; effective interest rates ranging from approximately 4% to 7% 4,686 10,001 Other debt and long-term liabilities 19,357 21,946 Total long-term debt and capital leases 422,238 500,735 Less current installments 27,978 42,106 Long-term debt, excluding current installments $ 394,260 $ 458,629 The Companys amended and restated credit agreement provides for (1) term loans up to an aggregate principal amount of $600 million and (2) revolving credit facility borrowings consisting of revolving loans, letter of credit participations and swing-line loans up to an aggregate amount of $200 million. In November 2009, the Company entered into an amendment to its term loan credit facility (the Amendment). Under the terms of the Amendment, certain of the lenders agreed to extend the maturity date of the existing term loan, becoming Tranche 2 Term Lenders. Lenders who did not agree to extend the maturity date became Tranche 1 Term Lenders. Certain lenders also agreed to extend the maturity date of the existing revolving loan commitment, becoming Tranche 2 Revolving Lenders. Lenders who did not agree to extend the maturity date of the revolving loan commitment became Tranche 1 Revolving Lenders. Of the $355.0 million balance of the term loan as of March 31, 2011, all of the balance is held by Tranche 2 Term Lenders. The remaining Tranche 1 term loan balance was prepaid in full during fiscal 2011. Of the $200 million revolving loan commitment, $80 million is held by Tranche 1 Revolving Lenders and $120 million is held by Tranche 2 Revolving Lenders. The term loan is payable in quarterly installments of approximately $1.5 million each, through December 31, 2014, with a final payment of approximately $332.5 million due March 15, 2015. The Tranche 1 revolving loan commitment expires September 15, 2011 and the Tranche 2 revolving loan commitment expires March 15, 2014. Revolving credit facility borrowings currently bear interest at LIBOR plus a credit spread, or at an alternative base rate or at the Federal Funds rate plus a credit spread, depending on the type of borrowing. The LIBOR credit spread is 1.5% for Tranche 1 and 2.75% for Tranche 2. There were no revolving credit borrowings outstanding at March 31, 2011 or March 31, 2010. Term loan borrowings bear interest at LIBOR plus a credit spread which is 1.75% for Tranche 1, and 3.00% for Tranche 2. The weighted-average interest rate on term loan borrowings at March 31, 2011 was 4.1%. Outstanding letters of credit at March 31, 2011 were $0.5 million. The term loan allows prepayments before maturity. The credit agreement is secured by the accounts receivable of Acxiom and its domestic subsidiaries, as well as by the outstanding stock of certain Acxiom subsidiaries. Under the terms of the term loan, the Company is required to maintain certain debt-to-cash flow and debt service coverage ratios, among other restrictions. At March 31, 2011, the Company was in compliance with these covenants and restrictions. In addition, if certain financial ratios and other conditions are not satisfied, the revolving credit facility limits the Companys ability to pay dividends in excess of $30 million in any fiscal year (plus additional amounts in certain circumstances). In fiscal 2009, the Company entered into an interest rate swap agreement. The agreement provides for the Company to pay interest through July 25, 2011 at a fixed rate of 3.25% plus the applicable credit spread on $95.0 million notional amount while receiving interest for the same period at the LIBOR rate on the same notional amount. The LIBOR rate as of March 31, 2011 was 0.30%. The swap was entered into as a cash flow hedge against LIBOR interest rate movements on the term loan. The Company assesses the effectiveness of the hedge based on the hypothetical derivative method. There was no ineffectiveness for the period ended March 31, 2011. Under the hypothetical derivative method, the cumulative change in fair value of the actual swap is compared to the cumulative change in fair value of the hypothetical swap, which has terms that identically match the critical terms of the hedged transaction. Thus, the hypothetical swap is presumed to perfectly offset the hedged cash flows. The change in the fair value of the hypothetical swap will then be regarded as a proxy for the present value of the cumulative change in the expected future cash flows from the hedged transactions. All of the fair values are derived from an interest-rate futures model. As of March 31, 2011, the hedge relationship qualified as an effective hedge under applicable accounting standards. Consequently, all changes in fair value of the derivative are deferred and recorded in other comprehensive income (loss) until the related forecasted transaction is recognized in the consolidated statement of operations. The fair market value of the derivative was zero at inception and an unrealized loss of $0.9 million since inception is recorded in other comprehensive income (loss) with the offset recorded to other noncurrent liabilities. The fair value of the interest rate swap agreement recorded in accumulated other comprehensive income (loss) may be recognized in the statement of operations if certain terms of the floating-rate debt change, if the floating-rate debt is extinguished or if the interest rate swap agreement is terminated prior to maturity. The Company has assessed the creditworthiness of the counterparty of the swap and concludes that no substantial risk of default exists as of March 31, 2011. The Companys future obligations, excluding interest, under its long-term debt at March 31, 2011 are as follows (dollars in thousands): Year ending March 31, 2012 27,978 2013 23,597 2014 11,532 2015 339,414 2016 8,171 Thereafter 11,546 $ 422,238 14. RETIREMENT PLANS: The Company has a qualified 401(k) retirement savings plan which covers substantially all U.S. employees. The Company also offers a supplemental nonqualified deferred compensation plan (SNQDC Plan) for certain highly-compensated employees. Prior to July 1, 2009, the Company matched 50% of the first 6% of employees annual aggregate contributions to both plans and may contribute additional amounts to the plans from the Companys earnings at the discretion of the board of directors. Effective July 1, 2009, through the remainder of the fiscal year 2010, the Company match was suspended. Effective April 1, 2010, the Company reinstated the match at 25% of the first 6% of employees annual aggregate contributions. Effective October 1, 2010, the Company reinstated the full 50% match of the first 6% of employees annual aggregate contributions. Company contributions for the above plans amounted to approximately $3.9 million, $1.7 million and $7.5 million in fiscal years 2011, 2010 and 2009, respectively. Included in both other current assets and other accrued liabilities are the assets and liabilities of the SNQDC Plan in the amount of $12.8 million and $11.6 million at March 31, 2011 and 2010, respectively. The Company has one small defined benefit pension plan covering certain European employees. During fiscal 2010, the Company had three small defined benefit pension plans covering certain European employees, however one plan was discontinued at the end of fiscal 2010 and one plan was transferred to the purchaser of the disposed Netherlands operations. Both the projected benefit obligation and accumulated benefit obligation were $0.6 million as of March 31, 2011 and $3.3 million as of March 31, 2010. There was no fair value in the plan assets as of March 31, 2011 and $2.6 million as of March 31, 2010. The excess of benefit obligations over plan assets was $0.6 million at March 31, 2011 and $0.7 million at March 31, 2010. 10. ALLOWANCE FOR DOUBTFUL ACCOUNTS: A summary of the activity of the allowance for doubtful accounts, returns and credits is as follows (dollars in thousands): Balance at Additions Other Bad debts Balance at 2009: Allowance for doubtful accounts, returns and credits $ 10,011 $ 4,068 $ (1,253 ) $ (2,788 ) $ 10,038 2010: Allowance for doubtful accounts, returns and credits $ 10,038 $ 3,820 $ (872 ) $ (6,645 ) $ 6,341 2011: Allowance for doubtful accounts, returns and credits $ 6,341 $ 940 $ 198 $ (1,857 ) $ 5,622 Included in other changes are allowance accounts acquired in connection with business combinations, disposals, and the effects of exchange rates. 8. PROPERTY AND EQUIPMENT: Property and equipment, some of which has been pledged as collateral for long-term debt, is summarized as follows (dollars in thousands): March 31, March 31, Land $ 6,737 $ 6,737 Buildings and improvements 250,193 223,861 Data processing equipment 566,948 528,737 Office furniture and other equipment 64,839 64,749 888,717 824,084 Less accumulated depreciation and amortization 633,410 587,245 $ 255,307 $ 236,839 Depreciation expense on property and equipment (including amortization of property and equipment under capitalized leases) was $64.1 million, $60.7 million and $69.4 million for the years ended March 31, 2011, 2010 and 2009, respectively. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Description of Business - Acxiom is a recognized leader in marketing services and technology that enable marketers to successfully manage audiences, personalize consumer experiences and create profitable customer relationships. Our superior industry-focused, consultative approach combines consumer data and analytics, databases, data integration and consulting solutions for personalized, multichannel marketing strategies. Acxiom leverages over 40 years of experience in data management to deliver high-performance, highly secure, reliable information management services. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, USA and serves clients around the world from locations in the United States, Europe, South America, Asia-Pacific and the Middle East. Basis of Presentation and Principles of Consolidation - The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in 20% to 50% owned entities are accounted for using the equity method with equity in earnings recorded in other, net in the accompanying consolidated statements of operations. Investments in less than 20% owned entities are accounted for at cost. Investment income and charges related to investments accounted for at cost are recorded in other, net. Use of Estimates - Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States. Actual results could differ from those estimates. Areas in which significant judgments and estimates are used include projected cash flows associated with recoverability of assets, restructuring and impairment accruals, and litigation loss accruals. Adoption of New Accounting Standards - In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141(R), Business Combinations, (SFAS 141R), which replaces SFAS 141. SFAS 141R has subsequently been codified in the FASB Accounting Standards Codification Topic 805 (ASC 805). ASC 805 requires most assets acquired and liabilities assumed in a business combination, contingent consideration, and certain acquired contingencies to be measured at their fair values as of the date of acquisition. The new standard also requires that acquisition-related costs and restructuring costs be recognized separately from the business combination. The new standard was adopted by the Company as of April 1, 2009 and is effective prospectively for business combinations entered into after that date. In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interest in Consolidated Financial Statements, (SFAS 160). SFAS 160 has subsequently been codified in the FASB Accounting Standards Codification Topic 810 (ASC 810). The new standard amends previous accounting standards to establish new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The new standard was adopted by the Company as of April 1, 2009. As a result of adoption of this standard, the Company classifies noncontrolling interests as a component of equity and the results of operations attributable to noncontrolling interests is reported as a part of net earnings. The FASBs Emerging Issues Task Force has issued new accounting guidance for revenue arrangements with multiple deliverables. Under previous accounting guidance, one of the requirements for recognition of revenue for a delivered item under a multiple element arrangement was that there must be objective and verifiable evidence of the standalone selling price of the undelivered item. The new guidance eliminates that requirement and requires an entity to estimate the selling price of each element in the arrangement. In addition, absent specific software revenue guidance, the residual method of allocating arrangement consideration is no longer permitted. Under the new guidance, a multiple-deliverable arrangement is separated into more than one unit of accounting if the delivered items have value to the client on a stand-alone basis and, if the arrangement includes a general right of return related to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. If these criteria are not met, the arrangement is accounted for as one unit of accounting, which would result in revenue being recognized ratably over the contract term or being deferred until the earlier of when those criteria are met or when the last undelivered item is delivered. If the arrangement is separated into multiple units of accounting, the arrangement consideration is allocated to the separate units of accounting based on each units relative selling price. The relative selling price for each unit of accounting in a multiple-element arrangement is established using vendor-specific objective evidence (VSOE), if available, third-party evidence (TPE), if available, or managements best estimate of stand-alone selling price (BESP). In most cases, the Company has neither VSOE nor TPE and therefore uses BESP. The objective of BESP is to determine the price at which the company would transact a sale if the product or service were sold on a stand-alone basis. Managements BESP is determined by considering multiple factors including actual contractual selling prices when the item is sold on a stand-alone basis, as well as market conditions, competition, internal costs, profit objectives and pricing practices. The amount of revenue recognized for a delivered element is limited to an amount that is not contingent upon future delivery of additional products or services. As pricing and marketing strategies evolve, we may modify our pricing practices in the future, which could result in changes to BESP, or to the development of VSOE or TPE for individual products or services. As a result, future revenue recognition for multiple-element arrangements could differ from recognition in the current period. Our relative selling prices are analyzed on an annual basis, or more frequently if we experience significant changes in selling prices. As allowed, the Company has elected to early-adopt the provisions of the guidance as of April 1, 2010 on a prospective basis for new arrangements entered into or materially modified on or after that date. The impact of the new accounting standard is not expected to be material going forward, nor would it have had a material impact if it had been applied to the previous fiscal year. There was also no material impact from implementation of the guidance in the year ended March 31, 2011. The FASB has also issued guidance which amended the scope of existing software revenue recognition guidance. Tangible products containing software components and non-software components that function together to deliver the tangible products essential functionality are no longer within the scope of software revenue guidance and are accounted for based on other applicable revenue recognition guidance. In addition, the amendments require that hardware components of a tangible product containing software components are always excluded from the software revenue guidance. This guidance must be adopted in the same period that the Company adopts the amended guidance for arrangements with multiple deliverables. Therefore, the Company elected to early-adopt this guidance as of April 1, 2010 on a prospective basis for all new or materially modified arrangements entered into on or after that date. The adoption of this guidance did not have a material impact on the consolidated financial statements. Cash and Cash Equivalents - The Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. Accounts Receivable - Accounts receivable include amounts billed to customers as well as unbilled amounts recognized in accordance with the Companys revenue recognition policies, as stated below. Unbilled amounts included in accounts receivable, which generally arise from the delivery of data and performance of services to customers in advance of billings, were $24.8 million and $19.8 million, respectively, at March 31, 2011 and 2010. Accounts receivable are presented net of allowance for doubtful accounts. The Company evaluates its allowance for doubtful accounts based on a combination of factors at each reporting date. Each account or group of accounts is evaluated based on specific information known to management regarding each customers ability or inability to pay, as well as historical experience for each customer or group of customers, the length of time the receivable has been outstanding, and current economic conditions in the customers industry. Accounts receivable that are determined to be uncollectible are charged against the allowance for doubtful accounts. Property and Equipment - Property and equipment are stated at cost. Depreciation and amortization are calculated on the straight-line method over the estimated useful lives of the assets as follows: buildings and improvements, 2 - 30 years; data processing equipment, 2 - 5 years, and office furniture and other equipment, 3 - 7 years. Property held under capitalized lease arrangements is included in property and equipment, and the associated liabilities are included in long-term obligations. Amortization of property under capitalized leases is included in depreciation and amortization expense. Property and equipment taken out of service and held for sale is recorded at the lower of depreciated cost or net realizable value and depreciation is ceased. Leases - Rent expense on operating leases is recorded on a straight-line basis over the term of the lease agreement. Software and Research and Development Costs - Costs of internally developed software are amortized on a straight-line basis over the remaining estimated economic life of the software product, generally two to five years, or the amortization that would be recorded by using the ratio of gross revenues for a product to total current and anticipated future gross revenues for that product, whichever is greater. The Company capitalizes software development costs following accounting standards regarding the costs of computer software to be sold, leased or otherwise marketed or the costs of computer software developed or obtained for internal use. Although there are differences in the two accounting standards, depending on whether a product is intended for internal use or to be provided to customers, both accounting standards generally require that research and development costs incurred prior to establishing technological feasibility or the beginning of the application development stage of software products are charged to operations as such costs are incurred. Once technological feasibility is established or the application development stage has begun, costs are capitalized until the software is available for general release. Amortization expense related to both internally developed and purchased software is included in cost of revenue in the accompanying consolidated statements of operations. Purchased Software Licenses - Costs of purchased software licenses are amortized using a units-of-production basis over the estimated economic life of the license, generally not to exceed ten years. Amortization of software is included in cost of revenue in the accompanying consolidated statements of operations. Some of these licenses are, in effect, volume purchase agreements for software licenses needed for internal use and to provide services to customers over the terms of the agreements. Therefore, amortization lives are periodically reevaluated and, if justified, adjusted to reflect current and future expected usage based on units-of-production amortization. Factors considered in estimating remaining useful life include, but are not limited to, contract provisions of the underlying licenses, introduction of new mainframe hardware which is compatible with previous generation software, predictions of continuing viability of mainframe architecture, and customers continuing commitments to utilize mainframe architecture and the software under contract. Goodwill - Goodwill represents the excess of acquisition costs over the fair values of net assets acquired in business combinations. Goodwill is reviewed at least annually for impairment under a two-part test. Part one of the goodwill impairment test involves a determination of whether the total book value of each reporting unit of the Company (generally defined as the carrying value of assets minus the carrying value of liabilities) exceeds the reporting units estimated fair value. In the event that part one of the impairment test indicates an excess of book value over the estimated fair value of net assets, performance of part two of the impairment test is required, whereby estimated fair values are assigned to identifiable assets with any residual fair value assigned to goodwill. Impairment exists to the extent that the reporting units recorded goodwill exceeds the residual fair value assigned to such goodwill. Any impairment that results from the completion of the two-part test is recorded as a charge to operations during the period in which the impairment test is completed. Completion of the Companys most recent annual impairment test during the quarter ended June 30, 2010 indicated that no potential impairment of its goodwill balances existed. During the quarter ended March 31, 2011, triggering events occurred which required the Company to test the goodwill in its International operations for impairment. Results of the two-step test indicated impairment in certain units, and the Company has recorded an impairment charge of $77.3 million to those units (see note 6). The Company expects to complete its next annual impairment test during the quarter ending June 30, 2011. Impairment of Long-lived Assets and Long-lived Assets to Be Disposed Of - Long-lived assets and certain identifiable intangibles as well as equity investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company considers factors such as operating losses, declining outlooks, and business conditions when evaluating the necessity for an impairment analysis. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of shall be classified as held for sale and are reported at the lower of the carrying amount or fair value less costs to sell. During the quarter ended March 31, 2011, in conjunction with the goodwill impairment test noted above, the Company also tested certain intangible assets in its International operations for impairment. As a result of that review, the Company has recorded an impairment charge of $2.4 million for intangible assets related to the Middle East operations (see note 6). Deferred Costs and Data Acquisition Costs - The Company defers certain costs, primarily salaries and benefits and other direct and incremental third party costs, in connection with client contracts and various other contracts and arrangements. Direct and incremental costs incurred during the setup phase under client contracts for database management or for IT management arrangements are deferred until such time as the database or the outsourcing services are operational and revenue recognition begins. These costs are directly related to the individual client, are to be used specifically for the individual client and have no other use or future benefit. In addition, revenue recognition of billings, if any, related to these setup activities are deferred during the setup phase under client contracts. All costs and billings deferred are then amortized as contract revenue recognition occurs over the remaining term of the arrangement. During the period when costs are being deferred, the Company performs a net realizable value review on a quarterly basis to ensure that the deferred costs are recoverable through either 1) recognition of previously deferred revenue, 2) future minimum contractual billings or 3) billings in excess of contractual minimum billings that can be reasonably estimated and are deemed likely to occur. Once revenue recognition begins, these deferred costs are assessed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Some contracts contain provisions allowing the customer to request reductions in pricing if they can demonstrate that the Company charges lower prices for similar services to other customers, or if the prices charged are higher than certain benchmarks. If pricing is renegotiated, deferred costs are assessed for impairment. The test of recoverability is performed by comparing the carrying value of the asset to its undiscounted expected future cash flows. If such review indicates that the carrying amount of an asset exceeds the sum of its expected future cash flows, the assets carrying amount is written down to its estimated fair value. Fair value is determined by an internally developed discounted projected cash flow analysis of the asset. In addition to client contract costs, the Company defers direct and incremental costs incurred in connection with obtaining other contracts, including debt facilities, lease facilities, and various other arrangements. Costs deferred in connection with obtaining scheduled debt facilities are amortized over the term of the arrangement using the interest method. Costs deferred in connection with lease facilities or revolving credit facilities are amortized over the term of the arrangement on a straight-line basis. The Company also defers costs related to the acquisition or licensing of data for the Companys proprietary databases which are used in providing data products and services to customers. These costs are amortized over the useful life of the data, which is from two to seven years. In order to estimate the useful life of any acquired data, the Company considers several factors including 1) the kind of data acquired, 2) whether the data becomes stale over time, 3) to what extent the data will be replaced by updated data over time, 4) whether the stale data continues to have value as historical data, 5) whether a license places restrictions on the use of the data, and 6) the term of the license. Deferred Revenue - Deferred revenue consists of amounts billed in excess of revenue recognized on sales of data licenses, services and equipment. Deferred revenues are subsequently recorded as revenue in accordance with the Companys revenue recognition policies. Revenue Recognition - The Company provides database management and IT management services under long-term arrangements. These arrangements may require the Company to perform setup activities such as the design and build of a database for the customer under the database management contracts and migration of the customers IT environment under IT management contracts. In the case of database management contracts, the customer does not acquire any ownership rights to the Companys intellectual property used in the database and the database itself provides no benefit to the customer outside of the utilization of the system during the term of the database management arrangement. In some cases, the arrangements also contain provisions requiring customer acceptance of the setup activities prior to commencement of the ongoing services arrangement. Up-front fees billed during the setup phase for these arrangements are deferred and setup costs that are direct and incremental to the contract are capitalized and amortized on a straight-line basis over the service term of the contract. Revenue recognition does not begin until after customer acceptance in cases where contracts contain acceptance provisions. Once the setup phase is complete and customer acceptance occurs, the Company recognizes revenue over the remaining service term of the contract. In situations where the arrangement does not require customer acceptance before the Company begins providing services, revenue is recognized over the contract period and no costs are deferred. Sales of third-party software, hardware and certain other equipment are recognized when delivered. If such sales are part of a multiple-element arrangement, they are recognized as a separate element unless collection of the sales price is dependent upon delivery of other products or services. Additionally, the Company evaluates revenue from the sale of data, software, hardware and equipment in accordance with accounting standards to determine whether such revenue should be recognized on a gross or a net basis. All of the factors in the accounting standards are considered with the primary factor being whether the Company is the primary obligor in the arrangement. Out-of-pocket expenses incurred by, and reimbursed to, the Company in connection with customer contracts are recorded as gross revenue. The Company evaluates its database management and IT management arrangements to determine whether the arrangement contains a lease. If the arrangement is determined to contain a lease, applicable accounting standards require the Company to account for the lease component separately from the remaining components of the arrangement. In cases where database management or IT management arrangements are determined to include a lease, the lease is evaluated to determine whether it is a capital lease or operating lease and accounted for accordingly. These lease revenues are not significant to the Companys consolidated financial statements. Revenues from the licensing of data are recognized upon delivery of the data to the customer. Revenue from the licensing of data to the customer in circumstances where the license agreement contains a volume cap is recognized in proportion to the total records to be delivered under the arrangement. Revenue from the sale of data on a per-record basis is recognized as the records are delivered. The relative selling price for each unit of accounting in a multiple-element arrangement is established using vendor-specific objective evidence (VSOE), if available, third-party evidence (TPE), if available, or managements best estimate of stand-alone selling price (BESP). In most cases, the Company has neither VSOE nor TPE and therefore uses BESP. The objective of BESP is to determine the price at which the company would transact a sale if the product or service were sold on a stand-alone basis. Managements BESP is determined by considering multiple factors including actual contractual selling prices when the item is sold on a stand-alone basis, as well as market conditions, competition, internal costs, profit objectives and pricing practices. The amount of revenue recognized for a delivered element is limited to an amount that is not contingent upon future delivery of additional products or services. As pricing and marketing strategies evolve, we may modify our pricing practices in the future, which could result in changes to BESP, or to the development of VSOE or TPE for individual products or services. As a result, future revenue recognition for multiple-element arrangements could differ from recognition in the current period. Our relative selling prices are analyzed on an annual basis, or more frequently if we experience significant changes in selling prices. All taxes assessed on revenue-producing transactions described above are presented on a net basis, or excluded from revenues. The Company also performs services on a project basis outside of, or in addition to, the scope of long-term arrangements. The Company recognizes revenue from these services as the services are performed. The Company does not provide end-users with price-protection or rights of return. The Companys contracts provide a warranty that the services or products will meet the agreed-upon criteria or any necessary modifications will be made. The Company ensures that services or products delivered meet the agreed-upon criteria prior to recognition of revenue. Concentration of Credit Risk - Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts, unbilled and notes receivable. The Companys receivables are from a large number of customers. Accordingly, the Companys credit risk is affected by general economic conditions. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management, however, believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Income Taxes - The Company and its domestic subsidiaries file a consolidated federal income tax return. The Companys foreign subsidiaries file separate income tax returns in the countries in which their operations are based. The Company provides for deferred taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed. Valuation allowances are recorded to reduce deferred tax assets to an amount whose realization is more likely than not. In determining the recognition of uncertain tax positions, the Company applies a more-likely-than-not recognition threshold and determines the measurement of uncertain tax positions considering the amounts and probabilities of the outcomes that could be realized upon ultimate settlement with taxing authorities. Income taxes payable are classified in the accompanying consolidated balance sheets based on their estimated payment date. Foreign Currency Translation - The balance sheets of the Companys foreign subsidiaries are translated at period-end rates of exchange, and the statements of operations are translated at the weighted-average exchange rate for the period. Gains or losses resulting from translating foreign currency financial statements are included in accumulated other comprehensive income (loss) in the consolidated statements of stockholders equity and comprehensive income (loss). Advertising Expense - The Company expenses advertising costs as incurred. Advertising expense was approximately $7.6 million, $8.1 million and $10.7 million for the years ended March 31, 2011, 2010 and 2009, respectively. Advertising expense is included in selling, general and administrative expense on the accompanying consolidated statements of operations. Guarantees - The Company accounts for the guarantees of indebtedness of others under applicable accounting standards which require a guarantor to recognize, at the inception of the guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. A guarantor is also required to make additional disclosures in its financial statements about obligations under certain guarantees issued. The Company is required to recognize a liability in its consolidated financial statements equal to the fair value of its guarantees, including any guarantees issued in connection with its synthetic equipment leasing arrangements. However, these provisions are applied only on a prospective basis to guarantees issued or modified after December 31, 2002. The Companys liability for the fair value of guarantees is not material. Loss Contingencies and Legal Expenses - The Company records a liability for loss contingencies when the liability is probable and reasonably estimable. Legal fees associated with loss contingencies are recorded when the legal fees are incurred. Earnings (Loss) per Share - A reconciliation of the numerator and denominator of basic and diluted earnings (loss) per share is shown below (in thousands, except per share amounts): (dollars in thousands) 2011 2010 2009 Basic earnings (loss) per share: Numerator net earnings (loss) $ (28,442 ) $ 44,159 $ 37,504 Denominator weighted-average shares outstanding 80,111 78,974 77,892 Basic earnings (loss) per share $ (0.36 ) $ 0.56 $ 0.48 Diluted earnings (loss) per share: Numerator net earnings (loss) $ (28,442 ) $ 44,159 $ 37,504 Denominator: Weighted-average shares outstanding 80,111 78,974 77,892 Dilutive effect of common stock options, warrants, and restrictive stock as computed under the treasury stock method 751 333 80,111 79,725 78,225 Diluted earnings (loss) per share $ (0.36 ) $ 0.55 $ 0.48 Basic earnings (loss) per share attributable to Acxiom stockholders: Numerator net earnings (loss) attributable to Acxiom $ (23,147 ) $ 44,549 $ 37,504 Denominator weighted-average shares outstanding 80,111 78,974 77,892 Basic earnings (loss) per share attributable to Acxiom stockholders $ (0.29 ) $ 0.56 $ 0.48 Diluted earnings (loss) per share attributable to Acxiom stockholders: Numerator net earnings (loss) attributable to Acxiom $ (23,147 ) $ 44,549 $ 37,504 Denominator: Weighted-average shares outstanding 80,111 78,974 77,892 Dilutive effect of common stock options, warrants, and restrictive stock as computed under the treasury stock method 751 333 80,111 79,725 78,225 Diluted earnings (loss) per share attributable to Acxiom stockholders $ (0.29 ) $ 0.56 $ 0.48 Due to the net loss incurred by the Company, the dilutive effect of options, warrants and restricted stock of 1.7 million shares was excluded from the earnings per share calculation for fiscal 2011 since the impact on the calculation was anti-dilutive. In addition, options, warrants and restricted stock units to purchase shares of common stock that were outstanding during the periods presented, but were not included in the computation of diluted earnings per share because the effect was anti-dilutive are shown below (in thousands, except per share amounts): 2011 2010 2009 Number of shares outstanding under options, warrants and restricted stock units 5,938 8,839 10,773 Range of exercise prices for options and warrants $16.71-$75.55 $11.87-$268.55 $10.66-$268.55 Share-based Compensation - The Company accounts for share-based compensation under applicable accounting standards which require the cost of employee services received in exchange for an award of equity instruments (including stock options) based on the grant-date fair value of the award to be recognized in the statement of earnings over the service period of the award. Expense for awards with graded vesting is recognized on a straight-line basis over the service period of the entire award. Share-based Compensation Plans - The Company has stock option plans and equity compensation plans (collectively referred to as the share-based plans) administered by the compensation committee of the board of directors under which options and restricted stock units were outstanding as of March 31, 2011. The Companys equity compensation plan provides that all associates (employees, officers, directors, affiliates, independent contractors or consultants) are eligible to receive awards (grant of any option, stock appreciation right, restricted stock award, restricted stock unit award, performance award, performance share, performance unit, qualified performance-based award, or other stock unit award) pursuant to the plan with the terms and conditions applicable to an award set forth in applicable grant documents. The Company currently has outstanding, and expects to grant in the future, restricted stock awards, stock options and performance-based awards. Incentive stock option awards granted pursuant to the share-based plans cannot be granted with an exercise price less than 100% of the per-share market value of the Companys shares at the date of grant and have a maximum duration of ten years from the date of grant. Board policy currently requires that nonqualified options also must be priced at or above the fair market value of the common stock at the time of grant with a maximum duration of ten years. Restricted stock units may be issued pursuant to the equity compensation plan and represent the right to receive shares in the future by way of an award agreement which includes vesting provisions. Award agreements can further provide for forfeitures triggered by certain prohibited activities, such as breach of confidentiality. All restricted stock units will be expensed over the vesting period as adjusted for estimated forfeitures. The vesting of some restricted stock units is subject to the Companys achievement of certain performance criteria, as well as the individual remaining employed by the Company for a period of years. The Company receives income tax deductions as a result of the exercise of stock options and the vesting of restricted stock units. The tax benefit of share-based compensation expense in excess of the book compensation expense is reflected as a financing cash inflow and operating cash outflow included in changes in operating assets and liabilities. The Company has elected the short-cut method in accounting for the tax benefits of share-based payment awards. Derivatives and Hedging - The Company has entered into an interest rate swap as a cash flow hedge against LIBOR interest rate movements on the term loan. The Company assesses the effectiveness of the hedge based on the hypothetical derivative method. Under the hypothetical derivative method, the cumulative change in fair value of the actual swap is compared to the cumulative change in fair value of the hypothetical swap, which has terms that identically match the critical terms of the hedged transaction. Thus, the hypothetical swap is presumed to perfectly offset the hedged cash flows. The change in the fair value of the perfect hypothetical swap will then be regarded as a proxy for the present value of the cumulative change in the expected future cash flows from the hedged transactions. All of the fair values are derived from an interest-rate futures model. All changes in fair value of the derivative are deferred and recorded in other comprehensive income (loss) until the related forecasted transaction is recognized in the consolidated statement of operations. The fair value of the interest rate swap agreement recorded in accumulated other comprehensive income (loss) may be recognized in the statement of operations if certain terms of the floating-rate debt change, if the floating-rate debt is extinguished or if the interest rate swap agreement is terminated prior to maturity. Restructuring - The Company records costs associated with employee terminations and other exit activity in accordance with applicable accounting standards, depending on whether the costs relate to exit or disposal activities under the accounting standards, or whether they are other post employment termination benefits, Under applicable accounting standards related to exit or disposal costs, the Company records employee termination benefits as an operating expense when the benefit arrangement is communicated to the employee and no significant future services are required. Under the accounting standards related to post employment termination benefits the Company records employee termination benefits when the termination benefits are probable and can be estimated. The Company recognizes the present value of facility lease termination obligations, net of estimated sublease income and other exit costs, when the Company has future payments with no future economic benefit or a commitment to pay the termination costs of a prior commitment. In future periods the Company will record accretion expense to increase the liability to an amount equal to the estimated future cash payments necessary to exit the leases. This requires a significant amount of judgment and management estimation in order to determine the expected time frame it will take to secure a subtenant, the amount of sublease income to be received and the appropriate discount rate to calculate the present value of the future cash flows. Should actual lease exit costs differ from estimates, the Company may be required to adjust the restructuring charge which will impact net income in the period any adjustment is recorded. 4. DIVESTITURES: On February 1, 2011, the Company entered into an agreement to dispose of the Companys operations in Portugal. The Company made a cash payment of $0.9 million to the acquirer as part of the disposal and recorded a loss in the statement of operations of $0.8 million. There was no goodwill allocated to the disposed operations. The revenue associated with the Portugal operations was approximately $0.7 million in fiscal 2011. On March 31, 2011, the Company entered into an agreement to dispose of the Companys operations in The Netherlands. The Company transferred $0.2 million in cash as part of the sale and recorded a loss in the statement of operations of $2.5 million. There was no goodwill allocated to the disposed operations. Included in the loss calculation was a $1.1 million accrual for exit activities. The revenue associated with The Netherlands operations was approximately $3.5 million in fiscal 2011. 5. OTHER CURRENT AND NONCURRENT ASSETS: Other current assets consist of the following (dollars in thousands): March 31, March 31, Current portion of unbilled and notes receivable $ 738 $ 907 Prepaid expenses 40,501 40,420 Non-trade receivables 1,409 1,188 Assets of non-qualified retirement plan (note 15) 12,840 11,564 Other miscellaneous assets 203 126 Other current assets $ 55,691 $ 54,205 Other noncurrent assets consist of the following (dollars in thousands): March 31, March 31, Acquired intangible assets, net $ 6,896 $ 9,721 Other miscellaneous noncurrent assets 2,748 4,975 Noncurrent portion of unbilled and notes receivable 311 1,873 Noncurrent assets $ 9,955 $ 16,569 13. INCOME TAXES: Total income tax expense (benefit) was allocated as follows (dollars in thousands): 2011 2010 2009 Income from operations $ 34,077 $ 32,599 $ 24,710 Stockholders equity: Tax (benefit) expense of stock options, warrants and restricted stock 316 683 (34 ) $ 34,393 $ 33,282 $ 24,676 Income tax expense (benefit) attributable to earnings from operations consists of (dollars in thousands): 2011 2010 2009 Current: U.S. Federal $ 12,872 $ 164 $ 6,039 Non-U.S. 176 351 20 State 2,450 (726 ) 2,228 15,498 (211 ) 8,287 Deferred: U.S. Federal 19,477 31,641 15,938 Non-U.S. (264 ) (1,056 ) (286 ) State (634 ) 2,225 771 18,579 32,810 16,423 Total $ 34,077 $ 32,599 $ 24,710 Deferred income tax expense for 2009 includes expense of $3.1 million, resulting from utilization of acquired deferred tax assets on which full valuation allowances existed and that resulted in reductions in goodwill. In 2010 and 2009, the Company reversed valuation allowances previously recorded for certain deferred tax assets, resulting in a deferred tax benefit of $1.1 million and $2.1 million, respectively. In addition, in fiscal 2009, the Company reversed valuation allowances previously recorded for deferred tax assets on certain acquired companies, resulting in an additional $7.4 million reduction in goodwill. Earnings (loss) before income tax attributable to U.S. and non-U.S. operations consist of (dollars in thousands): 2011 2010 2009 U.S. $ 99,250 $ 87,507 $ 63,197 Non-U.S. (93,615 ) (10,749 ) (983 ) Total $ 5,635 $ 76,758 $ 62,214 Earnings before income taxes, as shown above, are based on the location of the entity to which such earnings are attributable. However, since such earnings may be subject to taxation in more than one country, the income tax provision shown above as U.S. or non-U.S. may not correspond to the earnings shown above. Below is a reconciliation of income tax expense (benefit) computed using the U.S. federal statutory income tax rate of 35% of earnings before income taxes to the actual provision for income taxes (dollars in thousands): 2011 2010 2009 Computed expected tax expense (benefit) $ 1,972 $ 26,865 $ 21,775 Increase (reduction) in income taxes resulting from: State income taxes, net of federal benefit, exclusive of benefit of reduction in valuation reserves 2,079 2,124 1,949 Reserves for tax items (3,336 ) 1,015 384 Research, experimentation and other tax credits (561 ) (1,167 ) Impairment of goodwill and intangibles not deductible for tax 28,006 Other permanent differences between book and tax expense (58 ) 1,967 (4,474 ) Non-U.S. subsidiaries taxed at other than 35% 4,409 1,655 6,684 Adjustment to valuation reserves 1,312 (1,149 ) (2,144 ) Other, net 254 1,289 536 $ 34,077 $ 32,599 $ 24,710 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2011 and 2010 are presented below. In accordance with income tax accounting standards, as of March 31, 2011 the Company has not recognized deferred income taxes on approximately $34.4 million of undistributed earnings of foreign subsidiaries that are indefinitely reinvested outside the respective parents country. Calculation of the deferred income tax related to these earnings is not practicable. (dollars in thousands) 2011 2010 Deferred tax assets: Accrued expenses not currently deductible for tax purposes $ 12,531 $ 11,897 Revenue recognized for tax purposes in excess of revenue for financial reporting purposes 1,718 Investments, principally due to differences in basis for tax and financial reporting purposes 2,050 1,776 Property and equipment, principally due to differences in depreciation 4,728 Net operating loss and tax credit carryforwards 51,489 50,943 Other 13,554 12,994 Total deferred tax assets 81,342 82,338 Less valuation allowance 36,377 30,578 Net deferred tax assets 44,965 51,760 Deferred tax liabilities: Intangible assets, principally due to differences in amortization $ (68,140 ) $ (64,854 ) Costs capitalized for financial reporting purposes in excess of amounts capitalized for tax purposes (33,339 ) (36,294 ) Property and equipment, principally due to differences in depreciation (15,366 ) Revenue recognized for financial reporting purposes in excess of revenue for tax purposes (22 ) Total deferred tax liabilities (116,845 ) (101,170 ) Net deferred tax liability $ (71,880 ) $ (49,410 ) At March 31, 2011, the Company has net operating loss carryforwards of approximately $21.7 million and $79.6 million for U.S. federal and state income tax purposes, respectively. These net operating loss carryforwards expire in various amounts from 2011 through 2028. The Company has foreign net operating loss carryforwards of approximately $135.1 million. Of this amount, $127.9 million do not have expiration dates. The remainder expires in various amounts through 2016. The increase in the valuation allowance noted in the table above is due primarily to current year foreign losses. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon the Companys history of profitability and taxable income and the reversal of taxable temporary differences in the U.S., management believes that with the exception of carryforwards in certain states it is more likely than not the Company will realize the benefits of these deductible differences. The Company has established valuation allowances against $48.5 million of loss carryforwards in the states where activity does not support the deferred tax asset. Based upon the Companys history of losses in certain non-U.S. jurisdictions, management believes it is more likely than not the Company will not realize the benefits of certain foreign carryforwards and has established valuation allowances for substantial portions of its foreign deferred assets. The goodwill recorded related to the purchase of certain non-U.S. based subsidiaries includes valuation allowances recorded against their deferred tax assets because these companies had not yet demonstrated consistent and/or sustainable profitability. The following table sets forth changes in the total gross unrecognized tax benefit liabilities, including accrued interest, for the years ended March 31, 2011 and 2010. The entire liability, if recognized, would reduce the Companys effective income tax rate in future periods. (dollars in thousands) 2011 2010 2009 Balance at beginning of period $ 6,379 $ 5,364 $ 4,980 Additions based on tax positions related to the current year 360 566 Reduction due to lapsing of statute of limitations (3,460 ) Adjustments to tax positions taken in prior years (236 ) 449 384 Balance at end of period included in other liabilities $ 3,043 $ 6,379 $ 5,364 The Company reports accrued interest and penalties related to unrecognized tax benefits in income tax expense. For the fiscal year ended March 31, 2011, the Company recognized $0.3 million of tax-related interest expense and penalties and had $0.4 million of accrued interest and penalties at March 31, 2011. During the fiscal year ended March 31, 2011, the expiration of the statute of limitations resulted in a reduction to the unrecognized tax benefits related to certain tax credits by approximately $3.5 million. The Company files a consolidated U.S. federal income tax return and tax returns in various state and local jurisdictions. The Companys subsidiaries also file tax returns in various foreign jurisdictions in which it operates. In the U.S., the statute of limitations for Internal Revenue Service examinations remains open for the Companys federal income tax returns for fiscal years subsequent to 2007. The status of state and local and foreign tax examinations varies by jurisdiction. The Company does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress. 6. GOODWILL: Goodwill represents the excess of acquisition costs over the fair values of net assets acquired in business combinations. Goodwill is measured and tested for impairment on an annual basis in the first quarter of the Companys fiscal year in accordance with applicable accounting standards, or more frequently if indicators of impairment exist. Triggering events for interim impairment testing include indicators such as adverse industry or economic trends, restructuring actions, downward revisions to projections of financial performance, or a sustained decline in market capitalization. The performance of the impairment test involves a two-step process. The first step requires comparing the estimated fair value of a reporting unit to its net book value, including goodwill. A potential impairment exists if the estimated fair value of the reporting unit is lower than its net book value. The second step of the impairment test involves assigning the estimated fair value of the reporting unit to its identifiable assets, with any residual fair value being assigned to goodwill. If the carrying value of an individual indefinite-lived intangible asset (including goodwill) exceeds its estimated fair value, such asset is written down by an amount equal to such excess, and a corresponding amount is recorded as a charge to operations for the period in which the impairment test is completed. Completion of the Companys annual impairment test during the quarter ended June 30, 2010 indicated no potential impairment of its goodwill balances. Each quarter the Company considers whether indicators of impairment exist such that additional impairment testing may be necessary. During the quarter ended March 31, 2011, triggering events occurred which required the Company to test the goodwill associated with its International operations for impairment. The triggering events were changes to the Companys projected long-term revenue growth and margins in both Europe and the Middle East and North Africa (MENA) as well as the disposal of the Companys Portugal and Netherlands operations. Results of the two-step test indicated impairment associated with these operations, and the Company recorded an impairment charge of $79.7 million, of which $77.3 million was related to goodwill and $2.4 million was related to other intangible assets. The Company had not previously recorded any goodwill impairment, so the amount of goodwill impairment recorded in fiscal 2011 is also the cumulative amount of goodwill impairment as of March 31, 2011. The carrying amount of goodwill, by operating segment, at March 31, 2011, 2010 and 2009, and the changes in those balances are presented in the following table. (dollars in thousands) Information Information Total Balance at March 31, 2009 $ 336,406 $ 118,538 $ 454,944 Acquisition of MENA 4,824 4,824 Purchase adjustments 5,295 5,295 Change in foreign currency translation adjustment 1,559 3,639 5,198 Balance at March 31, 2010 $ 348,084 $ 122,177 $ 470,261 Acquisition of XYZ 1,446 1,446 Acquisition of GoDigital 15,546 15,546 Purchase adjustments 244 244 Goodwill impairment (20,224 ) (57,100 ) (77,324 ) Change in foreign currency translation adjustment 2,315 5,166 7,481 Balance at March 31, 2011 $ 347,411 $ 70,243 $ 417,654 Goodwill is tested for impairment at the reporting unit level, which is defined as either an operating segment or one step below operating segment, known as a component. Acxioms two operating segments as presented above are the Information Services segment and the Information Products segment. Because each of these segments contains both a US component and an International component, and there are some differences in economic characteristics between the US and International components, management tested a total of four components in its annual impairment test performed during the first quarter of fiscal 2011. The goodwill amounts as of April 1, 2010 included in each component tested were US Information Services, $306.1 million; US Information Products, $51.2 million; International Information Services, $42.0 million; and International Information Products $71.0 million. In order to estimate a valuation for each of the four components tested, management used an income approach based on a discounted cash flow model together with valuations based on an analysis of public company market multiples and a similar transactions analysis. The income approach involved projecting cash flows for each component into the future and discounting these cash flows at an appropriate discount rate. Management used budget figures for the first year of the projection model, and then projected those figures out into the future years using managements best estimates of future revenue growth, operating margins, and other cash flow assumptions. The discount rates used for each component in order to arrive at an estimated fair value were estimated as the weighted-average cost of capital which a marketplace participant would use to value each component. These weighted-average costs of capital rates included a market risk factor, added to a risk-free rate of return, and a size premium that was specific to the component being tested. The resulting cost of equity was then weighted-averaged with the after-tax cost of debt. The public company market multiple method was used to estimate values for each of the components by looking at market value multiples to revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) for selected public companies that were believed to be representative of companies that marketplace participants would use to arrive at comparable multiples for the individual component being tested. These multiples were then used to develop an estimated value for that component. The similar transactions method compared multiples based on acquisition prices of other companies believed to be those that marketplace participants would use to compare to the individual component being tested. Those multiples were then used to develop an estimated value for that component. In order to arrive at an estimated value for each component, management used a weighted-average approach to combine the results of each analysis. Management believes that using multiple valuation approaches and then weighting them appropriately is a technique that a marketplace participant would use. As a final test of the valuation results, the total of the values of the components was reconciled to the actual market value of Acxiom Corporation stock as of the April 1, 2010 valuation date. This reconciliation indicated an implied control premium. Management believes this control premium was reasonable compared to historical control premiums observed in actual transactions. As of April 1, 2010, each of the components had an estimated fair value in excess of its carrying value, indicating no impairment. All of the components had a significant excess fair value, except for the International Information Products component, for which the excess fair value was 12%. As described above, the Company historically had concluded that its International Information Products operations, which includes operations in Europe and Asia/Pacific (APAC), were properly aggregated into a single International Information Products component for purposes of impairment testing and its International Information Services operations, which includes operations in Europe, APAC, MENA and Brazil, were properly aggregated into a single International Information Services component for purposes of impairment testing. These conclusions were based on managements determinations that the operations included in each of these non-US components shared economic characteristics, as well as similar products and services, types of customers, and services distribution methods. The primary economic characteristic that management concluded was similar for each of these units was expected long-term gross margins. During the fourth quarter of fiscal 2011, as a result of the triggering events described above, and as management was developing revised projections for the Companys International operations, management concluded that it was no longer appropriate to conclude that the respective operations previously included in the International Information Products component and the International Information Services component, respectively, all shared similar economic characteristics, due to managements differing expectations for these operations over the long term. Therefore management did not aggregate these operations for testing as it had in the past, but instead performed step-one testing on the operations in the geographic regions described above individually (except for the Brazil operation, which was acquired in the current fiscal year and as to which management concluded the long-term expectations had not changed since the acquisition). The carrying value of the goodwill associated with these operations prior to performing the impairment tests performed in the fourth quarter of fiscal 2011 were: Europe Information Services, $28.8 million; APAC Information Services, $10.8 million; MENA Information Services, $4.8 million; Brazil Information Services, $16.9 million; Europe Information Products, $66.2 million; and APAC Information Products, $10.0 million. Based on the step-one testing, which utilized a weighted average of estimated values derived from a discounted cash flow model, similar transactions analysis, and public company market multiples analysis, the Company determined that there was indicated impairment for Europe Information Services, Europe Information Products, and MENA Information Services units. The estimated fair value for each of APAC Information Services and APAC Information Products exceeded its carrying value by a significant margin. Step two of the goodwill test, which was required only for Europe Information Services, Europe Information Products, and MENA Information Services consisted of performing a hypothetical purchase price allocation, under which the estimated fair value was allocated to its tangible and intangible assets based on their estimated fair values. In the case of MENA Information Services, this process indicated that all of its existing goodwill and other intangibles were impaired, and management determined that it was not necessary to perform detailed step two calculations in order to conclude that all of the goodwill and other intangibles related to MENA Information Services should be written off. The total impairment charge for MENA Information Services was therefore $7.2 million, of which $4.8 million related to goodwill and $2.4 million related to other intangible assets. For the European operations, there was no impairment for other intangible assets, but the hypothetical purchase price allocation indicated goodwill impairment of $72.5 million, of which $15.4 million was for European Information Services and $57.1 million was for European Information Products. The remaining goodwill for all current components, as of March 31, 2011, is US Information Services, $306.3 million; Europe Information Services, $13.4 million; APAC Information Services, $10.8 million; Brazil Information Services, $16.9 million; US Information Products, $51.2 million; Europe Information Products, $9.1 million; and APAC Information Products, $10.0 million. Management believes that the estimated valuations it arrived at are reasonable and consistent with what other marketplace participants would use in valuing the Companys components. However, management cannot give any assurance that these market values will not change in the future. For example, if discount rates demanded by the market increase, this could lead to reduced valuations under the income approach. If the Companys projections are not achieved in the future, this could lead management to reassess their assumptions and lead to reduced valuations under the income approach. If the market price of the Companys stock decreases, this could cause the Company to reassess the reasonableness of the implied control premium, which might cause management to assume a higher discount rate under the income approach which could lead to reduced valuations. If future similar transactions exhibit lower multiples than those observed in the past, this could lead to reduced valuations under the similar transactions approach. And finally, if there is a general decline in the stock market and particularly in those companies selected as comparable to the Companys components, this could lead to reduced valuations under the public company market multiple approach. The Companys next annual impairment test will be performed during the first quarter of fiscal 2012 at which time the Company will perform step-one testing on all of its components (including the US and Brazil components which were not tested in the fourth quarter of fiscal 2011). Given the current market conditions and continued economic uncertainty, the fair value of the Companys components could deteriorate which could result in the need to record impairment charges in future periods. The Company continues to monitor potential triggering events including changes in the business climate in which it operates, attrition of key personnel, the current volatility in the capital markets, the Companys market capitalization compared to its book value, the Companys recent operating performance, and the Companys financial projections. The occurrence of one or more triggering events could require additional impairment testing, which could result in additional impairment charges. 16. FAIR VALUE OF FINANCIAL INSTRUMENTS: The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value. Cash and cash equivalents, trade receivables, unbilled and notes receivable, short-term borrowings and trade payables - The carrying amount approximates fair value because of the short maturity of these instruments. Long-term debt - The interest rate on the term loan and revolving credit agreement is adjusted for changes in market rates and therefore the carrying value of these loans approximates fair value. The estimated fair value of other long-term debt was determined based upon the present value of the expected cash flows considering expected maturities and using interest rates currently available to the Company for long-term borrowings with similar terms. At March 31, 2011, the estimated fair value of long-term debt approximates its carrying value. Derivative instruments included in other liabilitiesThe carrying value is adjusted to fair value through other comprehensive income (loss) at each balance sheet date. The fair value is determined from an interest-rate futures model (See note 9). Under applicable accounting standards financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Company assigned assets and liabilities to the hierarchy in the accounting standards, which is Level 1quoted prices in active markets for identical assets or liabilities, Level 2significant other observable inputs and Level 3significant unobservable inputs. The following table presents the balances of assets and liabilities measured at fair value as of March 31, 2011 (dollars in thousands): Level 1 Level 2 Level 3 Total Assets: Other current assets $ 12,840 $ $ $ 12,840 Total assets $ 12,840 $ $ $ 12,840 Liabilities: Other current liabilities $ 12,840 $ $ $ 12,840 Other non current liabilities 892 892 Total liabilities $ 12,840 $ 892 $ $ 13,732 17. SEGMENT INFORMATION: The Company reports segment information consistent with the way management internally disaggregates its operations to assess performance and to allocate resources. The Companys business segments consist of Information Services and Information Products. The Information Services segment includes the Companys global lines of business for Customer Data Integration (CDI), Multichannel Marketing Services, Infrastructure Management Services and Consulting Services. The Information Products segment is comprised of the Companys global Consumer Insights and Risk Mitigation Products lines of business and the U.S. Background Screening Products line of business. Beginning in fiscal 2010, the Company has revised its calculation of segment operating income to allocate all corporate expenses, excluding those reported as gains, losses and other items, to the segments. Segment results for prior periods have been reclassified to reflect the revised segment operating income. These reclassifications had no effect on consolidated results. The following tables present information by business segment (dollars in thousands): 2011 2010 2009 Revenue: Information services $ 893,594 $ 849,432 $ 920,262 Information products 266,376 249,803 356,311 Total revenue $ 1,159,970 $ 1,099,235 $ 1,276,573 Income from operations: Information services $ 91,402 $ 91,013 $ 117,397 Information products 23,796 6,856 14,030 Other (84,274 ) 944 (38,566 ) Income from operations $ 30,924 $ 98,813 $ 92,861 Depreciation and amortization: Information services $ 116,467 $ 132,113 $ 149,649 Information products 29,888 35,451 49,035 Depreciation and amortization $ 146,355 $ 167,564 $ 198,684 Total assets: Information services $ 911,821 $ 908,554 Information products 144,663 191,799 Other 250,141 263,067 Total assets $ 1,306,625 $ 1,363,420 2. RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES: The following table summarizes the restructuring activity for the years ended March 31, 2009, 2010 and 2011 (dollars in thousands): Associate-related Ongoing Other accruals Total March 31, 2008 $ 13,648 $ 26,880 $ 357 $ 40,885 Fiscal year 2009 restructuring plan amount 12,434 3,210 15,644 Adjustments (1,246 ) 752 (39 ) (533 ) Payments (16,603 ) (6,910 ) (318 ) (23,831 ) March 31, 2009 $ 8,233 $ 23,932 $ $ 32,165 Adjustments 1,026 (1,336 ) (310 ) Payments (6,389 ) (9,692 ) (16,081 ) March 31, 2010 $ 2,870 $ 12,904 $ $ 15,774 Fiscal year 2011 restructuring plan amount 6,064 6,064 Adjustments (291 ) (1,338 ) (1,629 ) Payments (3,081 ) (2,024 ) (5,105 ) March 31, 2011 $ 5,562 $ 9,542 $ $ 15,104 The above balances are included in accrued expenses on the consolidated balance sheet. Restructuring Plans In the current fiscal year, the Company recorded $4.4 million in restructuring charges and adjustments included in gains, losses and other items in the consolidated statement of operations. The expense includes severance and other associate-related charges of $3.4 million, offset by adjustments to previous restructuring plans of $1.7 million, and executive leadership transition charges of $2.7 million. The associate-related charges of $3.4 million result from the termination of associates in the United States, Australia, and Europe. Of the $3.4 million accrued, $2.8 million remained accrued at March 31, 2011. These amounts are expected to be paid out during fiscal 2012. The transition charges of $2.7 million result from the transition agreement between the Company and its Chief Executive Officer upon his resignation in March 2011. According to the agreement, one lump sum payment equal to two times the Officers annual salary and bonus opportunity was to be paid by the Company. The entire amount of $2.7 million was accrued at March 31, 2011 and was paid in full in April 2011. In fiscal 2009, the Company recorded a total of $42.3 million in restructuring charges and adjustments included in gains, losses and other items in the consolidated statement of operations. The expense included severance and other associate-related payments of $12.4 million, lease accruals of $3.2 million, asset disposal and write-offs of $26.5 million and adjustments to the fiscal 2008 restructuring plan of $0.2 million. Included in the asset disposal was a $24.6 million loss incurred as a result of the Company terminating a software contract. The associate-related payments of $12.4 million relate to the termination of associates in the United States and Europe. All of these costs had been paid as of March 31, 2011. The lease accruals of $3.2 million were evaluated under the accounting standards which govern exit costs. These accounting standards require the Company to make an accrual for the liability for lease costs that will continue to be incurred without economic benefit to the Company upon the date that the Company ceases using the leased property. On or before March 31, 2009, the Company ceased using certain leased office facilities. The Company attempts to sublease those facilities to the extent possible. The Company established a liability for the fair value of the remaining lease payments, partially offset by the estimated sublease payments to be received over the course of those leases. The fair value of these liabilities is based on a net present value model using a credit-adjusted risk-free rate. These liabilities will be paid out over the remainder of the leased properties terms, of which the longest continues through August 2015. Actual sublease terms may differ from the estimates originally made by the Company. Any future changes in the estimates or in the actual sublease income could require future adjustments to the liability for these leases, which would impact net income in the period the adjustment is recorded. The remaining amount accrued at March 31, 2011 is $1.2 million. In fiscal 2008, the Company recorded a total of $75.1 million in restructuring charges and adjustments included in gains, losses and other items in the consolidated statement of operations. The expense included severance and other associate-related payments of $19.3 million, of which $0.1 million remain to be paid at March 31, 2011; lease accruals of $19.0 million, of which $8.3 million remain to be paid over the remainder of the lease terms, of which the longest continues through November 2021; contract accruals of $6.7 million, all of which had been paid by March 31, 2011; asset disposal and write-offs of $29.6 million, and other related costs of $0.5 million. Disposition of Operations in France In fiscal 2008, the Company sold its GIS operations in France. Adjustments regarding the final calculated purchase price were recorded in fiscal 2009 and 2010 resulting in gains of $2.1 million and $0.7 million, respectively. Gains, Losses and Other Items Gains, losses and other items for each of the years presented are as follows (dollars in thousands): 2011 2010 2009 Gain on disposition of operations in France (677 ) (2,083 ) Loss on disposition of operations in Portugal (see note 4) 828 Loss on disposition of operations in Netherlands (see note 4) 2,511 Legal contingency (2,125 ) 1,000 Restructuring plan charges and adjustments 4,435 (1,292 ) 42,340 Leased airplane disposals (110 ) Earnout liability adjustment (see note 3) (1,058 ) Other 9 1,025 (2,581 ) $ 4,600 $ (944 ) $ 38,566 11. COMMITMENTS AND CONTINGENCIES: Legal Matters The Company is involved in various claims and legal proceedings. Management routinely assesses the likelihood of adverse judgments or outcomes to those matters, as well as ranges of probable losses, to the extent losses are reasonably estimable. The Company records accruals for these matters to the extent that management concludes a loss is probable and the financial impact, should an adverse outcome occur, is reasonably estimable. These accruals are reflected in the Companys consolidated financial statements. In managements opinion, the Company has made appropriate and adequate accruals for these matters and management believes the probability of a material loss beyond the amounts accrued to be remote; however, the ultimate liability for these matters is uncertain, and if accruals are not adequate, an adverse outcome could have a material effect on the Companys consolidated financial condition or results of operations. Listed below are certain claims made against the Company and/or its subsidiaries for which the potential exposure is considered material to the Companys consolidated financial statements. Management believes the Company has substantial defenses to the claims made and intends to vigorously defend these matters. On April 26, 2011 a lawsuit styled Macomb County Employees Retirement System v. Acxiom Corporation, et al was filed in the United States District Court for the Eastern District of Arkansas against the Company and certain current and former officers and a director of the Company. The action seeks to be certified as a class action covering persons who acquired Acxiom stock between October 27, 2010 and March 30, 2011. The action purports to assert claims that the defendants violated federal securities laws by not properly disclosing that the Company was experiencing a significant decline in its International operations and that the Company failed to properly and timely account for impaired assets related to its International operations. The Company and the individual defendants dispute such allegations and intend to vigorously contest the case. Richard Fresco, et al. v. R.L. Polk and Company and Acxiom Corporation, (U.S. Dist. Court, S.D. Florida, 07-60695) formerly, Linda Brooks and Richard Fresco v. Auto Data Direct, Inc., et al., (U.S. Dist. Court, S.D. Florida, 03-61063) is a putative class action lawsuit, removed to federal court in May 2003, filed against Acxiom and several other information providers. The plaintiffs alleged that the defendants obtained and used drivers license data in violation of the federal Drivers Privacy Protection Act. Among other things, the plaintiffs sought injunctive relief, statutory damages, and attorneys fees. Acxiom has agreed to settle the case and the court approved the settlement on July 27, 2010. The settlement became effective January 18, 2011. During fiscal 2008 and 2009 Acxiom accrued $5.0 million for the settlement and ancillary costs to obtain final approval and previously paid $2.5 million of this amount into an escrow fund established for the settlement, and paid approximately $0.4 million in ancillary costs. The remaining accrual of $2.1 million was reversed during fiscal 2011. Two companion cases, Sharon Taylor, et al., v. Acxiom, et al., (U.S. District Court, E.D. Texas, 207CV001) and Sharon Taylor, et al. v. Biometric Access Company, et al., (U.S. District Court, E.D. Texas, 2:07-CV-00018), were filed in January 2007. Both Taylor cases were dismissed by the District Court and the dismissal was upheld on appeal on July 14, 2010. The plaintiffs sought review by the U.S. Supreme Court, which declined to consider the matter on January 10, 2011, bringing both to final resolution. The Company is involved in various other claims and legal actions in the ordinary course of business. In the opinion of management, the ultimate disposition of all of these other matters will not have a material adverse effect on the Companys consolidated financial position, results of operations or cash flows. Commitments The Company leases or licenses data processing equipment, software, office furniture and equipment, land and office space under noncancellable operating leases or licenses. The Company has a future commitment for lease or license payments over the next 29 years of $135.7 million. Total rental expense on operating leases and software licenses was $34.3 million, $35.7 million and $45.5 million for the years ended March 31, 2011, 2010 and 2009, respectively. Future minimum lease payments under all noncancellable operating leases and software licenses for the five years ending March 31, 2016, are as follows: 2012, $21.5 million; 2013, $19.8 million; 2014, $17.7 million; 2015, $13.7 million; and 2016, $11.1 million. In connection with a certain building, the Company has entered into a 50/50 joint venture with a real estate developer. The Company is guaranteeing a portion of the loan for the building. In addition, in connection with the disposal of certain assets, the Company has guaranteed loans for the buyers of the assets. These guarantees were made by the Company primarily to facilitate favorable financing terms for those third parties. Should the third parties default on this indebtedness, the Company would be required to perform under these guarantees. Substantially all of the third-party indebtedness is collateralized by various pieces of real property. At March 31, 2011 the Companys maximum potential future payments under these guarantees of third-party indebtedness were $1.4 million. 15. FOREIGN OPERATIONS: The Company attributes revenue to each geographic region based on the location of the Companys operations. The following table shows financial information by geographic area for the years 2011, 2010 and 2009 (dollars in thousands): Revenue 2011 2010 2009 United States $ 997,857 $ 940,567 $ 1,096,022 Foreign Europe $ 118,072 $ 133,625 $ 158,058 Asia/Pacific 32,282 23,375 22,493 Other 11,759 1,668 All Foreign $ 162,113 $ 158,668 $ 180,551 $ 1,159,970 $ 1,099,235 $ 1,276,573 Long-lived assets excluding financial instruments (dollars in thousands) 2011 2010 United States $ 751,824 $ 732,253 Foreign Europe $ 43,863 $ 140,122 Asia/Pacific 26,845 21,291 Other 24,532 9,176 All Foreign $ 95,240 $ 170,589 $ 847,064 $ 902,842 F*SKWX1Z)=WMY)'JFNV=C>S&:ZTRTOC':S,<;MR8SAL<\_3'&-+
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In Thousands, except Per Share data12 Months Ended
Revenue:
Â
Â
Â
Services
$ 893,594
$ 849,432
$ 920,262
Products
266,376
249,803
356,311
Total revenue
1,159,970
1,099,235
1,276,573
Cost of revenue
Â
Â
Â
Services
694,988
654,659
694,340
Products
189,900
184,610
280,846
Total cost of revenue
884,888
839,269
975,186
Selling, general and administrative
159,884
162,097
169,960
Impairment of goodwill and other intangibles
79,674
Â
Â
Gains, losses and other items, net
4,600
(944)
38,566
Total operating costs and expenses
1,129,046
1,000,422
1,183,712
Income from operations
30,924
98,813
92,861
Other income (expense):
Â
Â
Â
Interest expense
(23,823)
(22,480)
(32,596)
Other, net
(1,466)
425
1,949
Total other income (expense)
(25,289)
(22,055)
(30,647)
Earnings before income taxes
5,635
76,758
62,214
Income tax expense
34,077
32,599
24,710
Net earnings (loss)
(28,442)
44,159
37,504
Less: Net loss attributable to noncontrolling interest
(5,295)
(390)
Â
Net earnings (loss) attributable to Acxiom
$ (23,147)
$ 44,549
$ 37,504
Earnings (loss) per share:
Â
Â
Â
Basic (in dollars per share)
$ (0.36)
$ 0.56
$ 0.48
Diluted (in dollars per share)
$ (0.36)
$ 0.55
$ 0.48
Earnings (loss) per share attributable to Acxiom stockholders:
Â
Â
Â
Basic (in dollars per share)
$ (0.29)
$ 0.56
$ 0.48
Diluted (in dollars per share)
$ (0.29)
$ 0.56
$ 0.48
12 Months Ended
UNAUDITED SELECTED QUARTERLY FINANCIAL DATA:
Â
UNAUDITED SELECTED QUARTERLY FINANCIAL DATA:
June 30, 2010
September 30, 2010
December 31, 2010
March 31, 2011
June 30, 2009
September 30, 2009
December 31, 2009
March 31, 2010
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12 Months Ended
SOFTWARE AND RESEARCH AND DEVELOPMENT COSTS:
Â
SOFTWARE AND RESEARCH AND DEVELOPMENT COSTS:
12 Months Ended
STOCKHOLDERS' EQUITY:
Â
STOCKHOLDERS' EQUITY:
warrants
outstanding
average
exercise price
shares
exercise price
per share
average
remaining
contractual
term (in
years)
Intrinsic value
(in thousands)
exercise price
per share
outstanding
average
remaining
contractual life
average
exercise price
per share
exercisable
average
exercise price
per share
of shares
fair value
per share at
grant date
(in thousands)
remaining
contractual term
(in years)
2011
2010
12 Months Ended
ACQUISITIONS:
Â
ACQUISITIONS:
Marketing
12 Months Ended
LONG-TERM DEBT:
Â
LONG-TERM DEBT:
2011
2010
12 Months Ended
RETIREMENT PLANS:
Â
RETIREMENT PLANS:
12 Months Ended
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
Â
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
beginning of
period
charged to
costs and
expenses
changes
written off,
net of
amounts
recovered
end of period
12 Months Ended
PROPERTY AND EQUIPMENT:
Â
PROPERTY AND EQUIPMENT:
2011
2010
12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Â
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
12 Months Ended
DIVESTITURES:
Â
DIVESTITURES:
12 Months Ended
OTHER CURRENT AND NONCURRENT ASSETS:
Â
OTHER CURRENT AND NONCURRENT ASSETS:
2011
2010
2011
2010
12 Months Ended
INCOME TAXES:
Â
INCOME TAXES:
12 Months Ended
GOODWILL:
Â
GOODWILL:
Services
Products
12 Months Ended
FAIR VALUE OF FINANCIAL INSTRUMENTS:
Â
FAIR VALUE OF FINANCIAL INSTRUMENTS:
12 Months Ended
SEGMENT INFORMATION:
Â
SEGMENT INFORMATION:
12 Months Ended
Document and Entity Information
Â
Â
Â
Entity Registrant Name
ACXIOM CORP
Â
Â
Entity Central Index Key
0000733269
Â
Â
Document Type
10-K
Â
Â
Document Period End Date
Mar. 31,
2011
Amendment Flag
false
Â
Â
Current Fiscal Year End Date
--03-31
Â
Â
Entity Well-known Seasoned Issuer
Yes
Â
Â
Entity Voluntary Filers
No
Â
Â
Entity Current Reporting Status
Yes
Â
Â
Entity Filer Category
Large Accelerated Filer
Â
Â
Entity Public Float
Â
Â
$ 1,088,762,537
Entity Common Stock, Shares Outstanding
Â
81,149,455
Â
Document Fiscal Year Focus
2011
Â
Â
Document Fiscal Period Focus
FY
Â
Â
12 Months Ended
RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES:
Â
RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES:
reserves
contract costs
12 Months Ended
COMMITMENTS AND CONTINGENCIES:
Â
COMMITMENTS AND CONTINGENCIES:
12 Months Ended
FOREIGN OPERATIONS:
Â
FOREIGN OPERATIONS:
In Thousands, except Share data in Millions, unless otherwise specified
CONSOLIDATED BALANCE SHEETS
Â
Â
Software, accumulated amortization (in dollars)
$ 214,713
$ 198,410
Purchased software licenses, accumulated amortization (in dollars)
$ 257,029
$ 253,434
Common stock, par value (in dollars per share)
$ 0.10
$ 0.10
Common stock, authorized shares
200
200
Common stock, issued shares
117.8
116.6
Treasury stock, shares
37.2
37.2