<PAGE>

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

                                   FORM 20-F

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

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT
    OF 1934
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004

                                       OR

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

                           COMMISSION FILE NUMBER 1-14840

                                 AMDOCS LIMITED
        ---------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

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

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

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

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

                                      NONE
        ---------------------------------------------------------------

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

     Indicate the number of outstanding shares of each of the issuer's classes
of capital or common stock as of the close of the period covered by the Annual
Report.

<Table>
<S>                                                           <C>
Ordinary Shares, par value L0.01                              201,334,057(1)
(Title of class)                                              (Number of shares)
</Table>

---------------
(1) Net of 23,613,623 shares held in treasury. Does not include (a) 25,850,798
    ordinary shares reserved for issuance upon exercise of stock options granted
    under our stock option plan, (b) 195,680 ordinary shares reserved for
    issuance upon exercise of options granted by companies we have acquired, and
    (c) 10,435,995 ordinary shares reserved for issuance upon conversion of our
    0.50% Convertible Senior Notes due 2024, and (d) 2,954 ordinary shares
    reserved for issuance upon conversion of our 2% Convertible Senior Notes due
    2008. As of September 30, 2004, 8,476,277 ordinary shares remained available
    for future option grants under our stock option plan.

     Indicate by check mark whether the registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                          Yes [X]               No [ ]

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

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

                                   FORM 20-F

           ANNUAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
                            ------------------------

                                     INDEX

<Table>
<S>        <C>                                                           <C>
                                   PART I
Item 1.    Identity of Directors, Senior Management and Advisors.......    3
Item 2.    Offer Statistics and Expected Timetable.....................    3
Item 3.    Key Information.............................................    3
Item 4.    Information on the Company..................................   15
Item 5.    Operating and Financial Review and Prospects................   27
Item 6.    Directors, Senior Management and Employees..................   45
Item 7.    Major Shareholders and Related Party Transactions...........   53
Item 8.    Financial Information.......................................   54
Item 9.    The Offer and Listing.......................................   54
Item 10.   Additional Information......................................   55
Item 11.   Quantitative and Qualitative Disclosure about Market Risk...   63
Item 12.   Description of Securities Other than Equity Securities......   65

                                  PART II

Item 13.   Defaults, Dividend Arrearages and Delinquencies.............   65
Item 14.   Material Modifications to the Rights of Security Holders and
           Use of Proceeds.............................................   65
Item 15.   Controls and Procedures.....................................   65
Item 16A.  Audit Committee Financial Expert............................   65
Item 16B.  Code of Ethics..............................................   65
Item 16C.  Principal Accountant Fees and Services......................   66
Item 16D.  Exemption From the Listing Standards for Audit Committees...   67
Item 16E.  Purchases of Equity Securities by the Issuer and Affiliated
           Purchasers..................................................   67

                                  PART III

Item 17.   Financial Statements........................................   69
Item 18.   Financial Statements........................................   69
Item 19.   Exhibits....................................................   69
</Table>

                                        1
<PAGE>

     Unless the context otherwise requires, all references in this Annual Report
on Form 20-F to "Amdocs", "we", "our", "us" and the "Company" refer to Amdocs
Limited and its consolidated subsidiaries and their respective predecessors. Our
consolidated financial statements are prepared in accordance with U.S. GAAP and
are expressed in U.S. dollars. References to "dollars" or "$" are to U.S.
dollars. Our fiscal year ends on September 30 of each year. References to any
specific financial year refer to the year ended September 30 of the calendar
year specified.

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

                           FORWARD LOOKING STATEMENTS

     This Annual Report on Form 20-F contains forward-looking statements (within
the meaning of the United States federal securities laws) that involve
substantial risks and uncertainties. You can identify these forward-looking
statements by words such as "expect", "anticipate", "believe", "seek",
"estimate", "project", "forecast", "continue", "potential", "should", "would",
"could" and "may", and other words that convey uncertainty of future events or
outcome. Statements that we make in this Annual Report that are not statements
of historical fact also may be forward-looking statements. Forward-looking
statements are not guarantees of future performance, and involve risks,
uncertainties and assumptions that may cause our actual results to differ
materially from the expectations that we describe in our forward-looking
statements. There may be events in the future that we are not accurately able to
predict, or over which we have no control. You should not place undue reliance
on forward-looking statements. We do not promise to notify you if we learn that
our assumptions or projections are wrong for any reason. We disclaim any
obligation to update our forward-looking statements, except where applicable law
may otherwise require us to do so.

     Important factors that may affect these projections or expectations
include, but are not limited to: changes in the overall economy; changes in
competition in markets in which we operate; changes in the demand for our
products and services; consolidation within the industries in which our
customers operate; the loss of a significant customer; changes in the
telecommunications regulatory environment; changes in technology that impact
both the markets we serve and the types of products and services we offer;
financial difficulties of our customers; losses of key personnel; difficulties
in completing or integrating acquisitions; litigation and regulatory
proceedings; and acts of war or terrorism. For a discussion of these important
factors, please read the information set forth below under the caption "Risk
Factors".

                                        2
<PAGE>

                                     PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

     Not applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

     Not applicable.

ITEM 3.  KEY INFORMATION

SELECTED FINANCIAL DATA

     Our historical consolidated financial statements are prepared in accordance
with U.S. generally accepted accounting principles ("GAAP") and presented in
U.S. dollars. The selected historical consolidated financial information set
forth below has been derived from our historical consolidated financial
statements for the years presented. Historical information as of and for the
five years ended September 30, 2004 is derived from our consolidated financial
statements, which have been audited by Ernst & Young LLP, our independent
auditors. You should read the information presented below in conjunction with
those statements.

     The information presented below is qualified by the more detailed
historical consolidated financial statements, the notes thereto and the
discussion under "Operating and Financial Review and Prospects" included
elsewhere in this Annual Report.

<Table>
<Caption>
                                                      YEAR ENDED SEPTEMBER 30,
                                   --------------------------------------------------------------
                                      2004         2003         2002         2001         2000
                                   ----------   ----------   ----------   ----------   ----------
                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                <C>          <C>          <C>          <C>          <C>
STATEMENT OF OPERATIONS DATA:
Revenue..........................  $1,773,732   $1,483,327   $1,613,565   $1,533,910   $1,118,320
Operating income(1)(2)(3)(4).....     296,200      210,418       49,161      159,281       74,124
Net income (loss)(5).............     234,860      168,883       (5,061)      66,386        5,978
Basic earnings (loss) per
  share..........................        1.13         0.78        (0.02)        0.30         0.03
Diluted earnings (loss) per
  share..........................        1.10         0.77        (0.02)        0.29         0.03
Dividends declared per share.....          --           --           --           --           --
</Table>

<Table>
<Caption>
                                                        AS OF SEPTEMBER 30,
                                   --------------------------------------------------------------
                                      2004         2003         2002         2001         2000
                                   ----------   ----------   ----------   ----------   ----------
                                                           (IN THOUSANDS)
<S>                                <C>          <C>          <C>          <C>          <C>
BALANCE SHEET DATA:
Total assets.....................  $2,863,884   $2,877,517   $2,540,094   $2,624,436   $1,935,085
Long term obligations
  2% Convertible Notes due June
     1, 2008(5)..................         272      400,454      445,054      500,000           --
  0.50% Convertible Senior Notes
     due 2024(6).................     450,000           --           --           --           --
  Long-term portion of capital
     lease obligations...........       4,112       23,825       15,138       24,779       23,417
Shareholders' equity(7)..........   1,444,190    1,591,600    1,416,275    1,512,091    1,430,772
</Table>

                                        3
<PAGE>

<Table>
<Caption>
                                                   ORDINARY SHARES    ADDITIONAL
                                                   ----------------    PAID-IN
                                                   SHARES    AMOUNT    CAPITAL     TREASURY STOCK
                                                   -------   ------   ----------   --------------
                                                                   (IN THOUSANDS)
<S>                                                <C>       <C>      <C>          <C>
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
  DATA:
Balance as of September 30, 2000.................  221,165   $3,539   $1,784,816     $      --
  Employee stock options exercised...............    1,463       21       13,946            --
  Tax benefit of stock options exercised.........       --       --        7,345            --
  Stock options granted..........................       --       --          183            --
                                                   -------   ------   ----------     ---------
Balance as of September 30, 2001.................  222,628    3,560    1,806,290            --
  Employee stock options exercised...............      687       12        5,149            --
  Tax benefit of stock options exercised.........       --       --        6,808            --
  Expense related to vesting of stock options....       --       --           98            --
  Repurchase of shares(7)........................   (7,732)      --           --      (109,281)
                                                   -------   ------   ----------     ---------
Balance as of September 30, 2002.................  215,583    3,572    1,818,345      (109,281)
  Employee stock options exercised...............      475        8        2,312            --
  Tax benefit of stock options exercised.........       --       --          262            --
  Expense related to vesting of stock options....       --       --           37            --
                                                   -------   ------   ----------     ---------
Balance as of September 30, 2003.................  216,058    3,580    1,820,956      (109,281)
  Issuance of ordinary shares related to
     acquisition, net(8).........................      561       --          747        14,392
  Employee stock options exercised...............    1,157       21       12,056            --
  Tax benefit of stock options exercised.........       --       --        3,094            --
  Stock options granted, net of foreitures.......       --       --          749            --
  Repurchase of shares(7)........................  (16,442)      --           --      (407,527)
  Expense related to vesting of stock options....       --       --            6            --
                                                   -------   ------   ----------     ---------
Balance as of September 30, 2004.................  201,334   $3,601   $1,837,608     $(502,416)
                                                   =======   ======   ==========     =========
</Table>

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

(1) In fiscal 2000, we recorded acquisition-related charges of $75,617, relating
    to our acquisitions of International Telecommunication Data Systems, Inc.
    ("ITDS") in November 1999 and Solect Technology Group Inc. ("Solect") in
    April 2000, in stock-for-stock transactions. These charges included
    write-offs of purchased in-process research and development and other
    indirect acquisition-related costs. In addition, fiscal 2000 includes
    $104,268 of amortization of goodwill related to our acquisitions.

(2) Fiscal 2001 includes $204,566 of amortization of goodwill related to our
    acquisitions.

(3) In fiscal 2002, we recorded acquisition-related charges for in-process
    research and development of $17,400, relating to our November 2001
    acquisition from Nortel Networks Corporation of substantially all of the
    assets of its Clarify business ("Clarify") for cash. We also recorded
    restructuring charges of $34,230 relating to the closure of our Stamford,
    Connecticut data center and our cost reduction program. In addition, fiscal
    2002 includes $204,561 of amortization of goodwill related to our
    acquisitions.

(4) In fiscal 2003, we recorded a restructuring charge of $9,956 related to our
    cost reduction program and an acquisition-related charge of $4,133 related
    to our July 2003 acquisition from Bell Canada of its 90% ownership interest
    in Certen Inc. ("Certen") for cash. Prior to this acquisition, we had 10%
    ownership interest in Certen. This charge reflects our 10% share in Certen's
    pre-acquisition results. Effective October 1, 2002, we adopted Statement of
    Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
    Intangible Assets", and no longer amortize goodwill.

(5) In May 2001, we issued $500,000 aggregate principal amount of 2% Convertible
    Notes due June 1, 2008 (the "2% Notes"). During the first quarter of fiscal
    2004, we repurchased $5,000 aggregate principal amount of 2% Notes for an
    aggregate purchase price of $4,987. During fiscal 2003 and 2002,

                                        4
<PAGE>

    we repurchased $44,600 and $54,946 aggregate principal amount of 2% Notes,
    respectively. In fiscal 2004, 2003 and 2002, we recorded gains of $13, $448
    and $6,012, respectively, relating to the repurchases of 2% Notes. On June
    1, 2004, we purchased $395,110 in aggregate principal amount of 2% Notes
    that had been tendered pursuant to the right of the holders to require us to
    purchase their 2% Notes on such date at a price equal to 100% of the
    principal amount plus accrued and unpaid interest. Of the $344 principal
    amount of untendered 2% Notes, $72 was subsequently purchased by us at a
    price of 100% of their principal amount and the balance remains as our
    outstanding obligations, in accordance with their terms.

(6) In March 2004, we issued $450,000 aggregate principal amount of 0.50%
    Convertible Senior Notes due March 15, 2024 (the "0.50% Notes").

(7) In accordance with a share repurchase program authorized by our Board of
    Directors, we repurchased 4,990 ordinary shares, at an average price of
    $24.82 per share, during the first quarter of fiscal 2004. In connection
    with our acquisition of XACCT Technologies Ltd. ("XACCT"), our Board of
    Directors approved the repurchase of ordinary shares to offset the dilutive
    effect of share issuances in the acquisition. The closing of the acquisition
    occurred in February 2004, and we repurchased 484 ordinary shares in
    February 2004, at an average price of $27.67 per share. In connection with
    our issuance of the 0.50% Notes, the Board of Directors approved the
    repurchase of ordinary shares sold short by purchasers of the 0.50% Notes in
    negotiated transactions, concurrently with the sale of the 0.50% Notes, to
    offset the dilutive effect of the ordinary shares issuable upon conversion
    of the 0.50% Notes. The closing of the sale of the 0.50% Notes occurred in
    March 2004, and we repurchased 6,074 ordinary shares, for an aggregate
    purchase price of $170,061, out of the 10,436 ordinary shares issuable upon
    conversion of the 0.50% Notes, based on a conversion rate of 23.1911 shares
    per $1,000 principal amount. In July 2004, we announced that our Board of
    Directors had extended our share repurchase program for the additional
    repurchase of up to $100,000 of our ordinary shares in open market or
    privately negotiated transactions and at times and prices we deem
    appropriate. In accordance with this extension we repurchased 4,894 ordinary
    shares, at an average price of $20.40 per share.

(8) On February 19, 2004, we acquired XACCT, a privately-held provider of
    mediation software to communications service providers. We acquired XACCT's
    outstanding shares for $28,425, of which $13,286 was paid in cash and the
    balance in 561 of the Company's ordinary shares valued at $15,139.

                                        5
<PAGE>

RISK FACTORS

  WE ARE EXPOSED TO GENERAL GLOBAL ECONOMIC AND MARKET CONDITIONS, PARTICULARLY
  THOSE IMPACTING THE COMMUNICATIONS INDUSTRY.

     Developments in the communications industry, such as the impact of general
global economic conditions, continued industry consolidation, the formation of
alliances among network operators and service providers, and changes in the
regulatory environment have had, and could continue to have, a material adverse
effect on our existing or potential customers. These conditions have reduced the
high growth rates that the communications industry had previously experienced,
and have caused the market value, financial results and prospects, and capital
spending levels of many communications companies to decline or degrade. In
recent years, the communications industry has experienced significant financial
pressures that have caused many in the industry to cut expenses and limit
investment in capital intensive projects and have led to numerous restructurings
and bankruptcies. Recent communications company mergers may have a material
adverse effect on our results of operations.

     The need for communications providers to control operating expenses and
capital investment budgets has resulted in slowed customer buying decisions, as
well as price pressures. Due to adverse conditions in the business environment
for communications companies in fiscal 2002 and fiscal 2003, our revenues
declined in the second half of fiscal 2002 and continued to decline in the first
quarter of fiscal 2003. As a result, we undertook restructuring programs in
fiscal 2002 and fiscal 2003 to reduce costs. Although the decline in our
quarterly revenue halted in the second quarter of fiscal 2003, adverse market
conditions in the future could have a negative impact on our business by
reducing the number of new contracts we are able to sign and the size of initial
spending commitments, as well as decreasing the level of discretionary spending
under contracts with existing customers. In addition, a further slowdown in the
buying decisions of communications providers could extend our sales cycle period
and limit our ability to forecast our flow of new contracts.

  IF WE FAIL TO ADAPT TO CHANGING MARKET CONDITIONS AND CANNOT COMPETE
  SUCCESSFULLY WITH EXISTING OR NEW COMPETITORS, OUR BUSINESS COULD BE HARMED.

     We may be unable to compete successfully with existing or new competitors.
If we fail to adapt to changing market conditions and to compete successfully
with established or new competitors, it could have a material adverse effect on
our results of operations and financial condition. We face intense competition
for the software products and services that we sell, including competition for
Managed Services we provide to customers under long-term service agreements.
These Managed Services include services, such as system modernization and
consolidation, operation of data centers, ongoing support, maintenance, system
modification, billing and communications facility management.

     The market for communications information systems is highly competitive and
fragmented, and we expect competition to increase. We compete with independent
providers of information systems and services and with the in-house software
departments of communications companies. Our competitors include firms that
provide comprehensive information systems and Managed Services solutions,
software vendors that sell products for particular aspects of a total
information system, software vendors that specialize in systems for particular
communications services such as Internet and wireless services, systems
integrators, service bureaus and companies that offer software systems in
combination with the sale of network equipment.

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

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

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

     -  the responsiveness of our competitors to customer needs, and

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

                                        6
<PAGE>

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

  IF WE DO NOT CONTINUALLY ENHANCE OUR PRODUCTS AND SERVICE OFFERINGS, WE MAY
  HAVE DIFFICULTY RETAINING EXISTING CUSTOMERS AND ATTRACTING NEW CUSTOMERS.

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

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

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

  OUR BUSINESS IS DEPENDENT ON A LIMITED NUMBER OF SIGNIFICANT CUSTOMERS, AND
  THE LOSS OF ANY ONE OF OUR SIGNIFICANT CUSTOMERS COULD HARM OUR RESULTS OF
  OPERATIONS.

     Our business is dependent on a limited number of significant customers. Our
three largest groups of customers are comprised of Bell Canada, Nextel
Communications ("Nextel") and SBC Communications Inc. ("SBC") and certain of
their subsidiaries, each of which accounted for more than 10% of our revenue in
fiscal 2004. Aggregate revenue derived from the multiple business arrangements
we have with our five largest customer groups accounted for approximately 61% of
our revenue in fiscal 2004. SBC has historically been one of our largest
shareholders, and, as of November 24, 2004, it beneficially owned approximately
6.3% of our outstanding ordinary shares. The loss of any significant customer or
a significant decrease in business from any such customer could harm our results
of operations and financial condition.

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

                                        7
<PAGE>

services in amounts similar to previous years or may delay implementation of
committed projects, each of which could reduce our revenues and profits.

  OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO DEVELOP LONG-TERM
  RELATIONSHIPS WITH OUR CUSTOMERS AND TO MEET THEIR EXPECTATIONS IN PROVIDING
  PRODUCTS AND PERFORMING SERVICES.

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

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

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

  THE SKILLED AND HIGHLY QUALIFIED EMPLOYEES THAT WE NEED TO DEVELOP, IMPLEMENT
  AND MODIFY OUR SOLUTIONS MAY BE DIFFICULT TO HIRE AND RETAIN, AND IF WE ARE
  UNABLE TO HIRE AND RETAIN SUCH PERSONNEL, WE COULD FACE INCREASED COSTS TO
  RETAIN OUR SKILLED EMPLOYEES.

     Our business operations depend in large part on our ability to attract,
train, motivate and retain highly skilled information technology professionals,
software programmers and communications engineers. In addition, our competitive
success will depend on our ability to attract and retain other outstanding,
highly qualified employees. Although we made reductions in our workforce in
fiscal 2002 and in the first quarter of fiscal 2003, we continually need to hire
sales, support, technical and other personnel. Because our software products are
highly complex and are generally used by our customers to perform critical
business functions, we depend heavily on skilled technology professionals.
Skilled technology professionals are often in high demand and short supply. If
we are unable to hire or retain qualified technology professionals to develop,
implement and modify our solutions, we may be unable to meet the needs of our
customers. In addition, if we were to obtain several new customers or implement
several new large-scale projects in a short period of time, we may need to
attract and train additional employees at a rapid rate. We may face difficulties
identifying and hiring qualified personnel. Our inability to hire and retain the
appropriate personnel could increase our costs of retaining skilled employees
and make it difficult for us to manage our operations, to meet our commitments
and to compete for new customer contracts.

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

  OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE, AND A DECLINE IN REVENUE IN ANY
  QUARTER COULD RESULT IN LOWER PROFITABILITY FOR THAT QUARTER AND FLUCTUATIONS
  IN THE MARKET PRICE OF OUR ORDINARY SHARES.

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

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

     - delays in or cancellations of significant projects by customers,

     - changes in operating expenses,

                                        8
<PAGE>

     - increased competition,

     - changes in our strategy,

     - personnel changes,

     - foreign currency exchange rate fluctuations, and

     - general economic and political conditions.

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

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

  OUR REVENUE, EARNINGS AND PROFITABILITY ARE IMPACTED BY THE LENGTH OF OUR
  SALES CYCLE, AND A LONGER SALES CYCLE COULD ADVERSELY AFFECT OUR RESULTS OF
  OPERATIONS AND FINANCIAL CONDITION.

     Our business is directly affected by the length of our sales cycle.
Information systems for communications companies are relatively complex and
their purchase generally involves a significant commitment of capital, with
attendant delays frequently associated with large capital expenditures and
procurement procedures within an organization. The purchase of these types of
products typically also requires coordination and agreement across many
departments within a potential customer's organization. Delays associated with
such timing factors could have a material adverse effect on our results of
operations and financial condition. In periods of economic slowdown in the
communications industry, our typical sales cycle lengthens, which means that the
average time between our initial contact with a prospective customer and the
signing of a sales contract increases. In fiscal 2002 and fiscal 2003, buying
decisions of communications providers were often delayed due to adverse
conditions in the business environment, and our sales cycle period lengthened as
a result. The lengthening of our sales cycle could reduce growth in our revenue
in the future. In addition, the lengthening of our sales cycle contributes to an
increased cost of sales, thereby reducing our profitability.

  IF THE MARKET FOR OUR PRODUCTS DETERIORATES, WE MAY INCUR ADDITIONAL
  RESTRUCTURING CHARGES.

     In an effort to implement long-term cost reduction measures, we reduced our
workforce in the fourth quarter of fiscal 2002 and in the first quarter of
fiscal 2003 and reallocated certain personnel among different areas of our
operations. A reduction in personnel can result in significant severance,
administrative and legal expenses and may also adversely affect or delay various
sales, marketing and product development programs and activities. Depending on
market conditions in the communications industry and our business and financial
needs, we may be forced to implement additional restructuring plans to further
reduce our costs, which could result in additional restructuring charges.
Additional restructuring charges could have a material adverse effect on our
financial results.

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

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

                                        9
<PAGE>

     Our restructurings and cost reduction measures reduced the size of our
operations. On January 31, 2003, after implementation of the second reduction in
our workforce, we employed approximately 7,800 individuals in software and
information technology positions, compared to approximately 9,100 on November
30, 2001. Our software and information technology workforce increased to 9,000
positions as of November 30, 2003, primarily as a result of the Certen
acquisition in July 2003 and a Managed Services agreement signed in January
2003, and to 9,600 positions as of September 30, 2004. During periods of
contraction, we disposed of office space and related obligations in an effort to
keep pace with the changing size of our operations. These cost reduction
measures included consolidating and/or relocating certain of our operations to
different geographic locations. These activities could lead to difficulties and
significant expenses related to subleasing or assigning any surplus space. We
have accrued the estimated expenses that will result from our restructuring
efforts. However, if it is determined that the amount accrued is insufficient,
an additional charge could have an unfavorable impact on our consolidated
financial statements in the period this was determined.

  OUR INTERNATIONAL PRESENCE EXPOSES US TO RISKS ASSOCIATED WITH VARIED AND
  CHANGING POLITICAL, CULTURAL AND ECONOMIC CONDITIONS WORLDWIDE.

     We are affected by risks associated with conducting business
internationally. We maintain development facilities in Canada, Cyprus, Ireland,
Israel and the United States, operate a support center in Brazil and have
operations in North America, Europe, Latin America and the Asia-Pacific region.
Recently, we established a new development center in India. Although a majority
of our revenue is derived from customers in North America and Europe, we obtain
significant revenue from customers in the Asia-Pacific region and Latin America.
Our strategy is to continue to broaden our North American and European customer
base and to expand into new international markets. Conducting business
internationally exposes us to certain risks inherent in doing business in
international markets, including:

     - lack of acceptance of non-localized products,

     - legal and cultural differences in the conduct of business,

     - difficulties in staffing and managing foreign operations,

     - longer payment cycles,

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

     - trade barriers,

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

     - political instability, and

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

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

  POLITICAL AND ECONOMIC CONDITIONS IN THE MIDDLE EAST MAY ADVERSELY AFFECT OUR
  BUSINESS AND OUR DEVELOPMENT FACILITY IN CYPRUS MAY BE ADVERSELY AFFECTED BY
  POLITICAL CONDITIONS IN THAT COUNTRY.

     Of the six development centers we maintain worldwide, our largest
development center is located in five different sites throughout Israel.
Approximately 45% of our employees are located in Israel. As a result, we are
directly influenced by the political, economic and military conditions affecting
Israel and its neighboring region. Any major hostilities involving Israel could
have a material adverse effect on our business. We have developed contingency
plans to provide ongoing services to our customers in the event political or
military conditions disrupt our normal operations. These plans include the
transfer of some development operations within Israel to various of our other
sites both within and outside of Israel. If we

                                        10
<PAGE>

have to implement these plans, our operations would be disrupted and we would
incur significant additional expenditures, which would adversely affect our
business and results of operations.

     While Israel has entered into peace agreements with both Egypt and Jordan,
Israel has not entered into peace arrangements with any other neighboring
countries. Over the past several years there has been a significant
deterioration in Israel's relationship with the Palestinian Authority and a
related increase in violence. Efforts to resolve the problem have failed to
result in an agreeable solution. Continued violence between the Palestinian
community and Israel may have a material adverse effect on our business. Further
deterioration of relations with the Palestinian Authority might require more
military reserve service by some of our employees, which may have a material
adverse effect on our business.

     In addition, our development facility in Cyprus may be adversely affected
by political conditions in that country. As a result of intercommunal strife
between the Greek and Turkish communities, Turkish troops invaded Cyprus in 1974
and continue to occupy approximately 40% of the island. Although Cyprus has
joined the European Union, intensive discussions facilitated by the United
Nations, the European Union and the United States have not resulted in an
agreed-upon plan of reunification for Cyprus. Any major hostilities between
Cyprus and Turkey or the failure of the parties to finalize a peaceful
resolution may have a material adverse effect on our development facility in
Cyprus.

  OUR INTERNATIONAL OPERATIONS EXPOSE US TO RISKS ASSOCIATED WITH FLUCTUATIONS
  IN FOREIGN CURRENCY EXCHANGE RATES THAT COULD ADVERSELY AFFECT OUR BUSINESS.

     Although approximately 45% of our employees are located in Israel and we
have operations throughout the world, the majority of our revenues and costs are
denominated in, or linked to, the U.S. dollar. Accordingly, we consider the U.S.
dollar to be our functional currency. However, a significant portion of our
operating costs is incurred outside the United States in other currencies.
Therefore, fluctuations in exchange rates between the currencies in which such
costs are incurred and the dollar may have a material adverse effect on our
results of operations and financial condition. The cost of our operations
outside of the United States, as expressed in dollars, could be adversely
affected by the extent to which any increase in the rate of inflation in a
particular country is not offset (or is offset with a time delay) by a
devaluation of the local currency in relation to the dollar. As a result of this
differential, from time to time we may experience increases in the costs of our
operations outside the United States, as expressed in dollars, which could have
a material adverse effect on our results of operations and financial condition.

     In addition, a portion of our revenue (approximately 30% in fiscal 2004) is
not incurred in dollars or linked to the dollar, and, therefore, fluctuations in
exchange rates between the currencies in which such revenue is incurred and the
dollar may have a material effect on our results of operations and financial
condition. If more of our customers seek contracts that are denominated in
currencies such as the Euro and not the dollar, our exposure to fluctuations in
currency exchange rates could increase.

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

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

  IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY FROM MISAPPROPRIATION,
  OUR BUSINESS MAY BE HARMED.

     Any misappropriation of our technology or the development of competitive
technology could seriously harm our business. We regard a substantial portion of
our software products and systems as proprietary

                                        11
<PAGE>

and rely on a combination of statutory and common law copyright, trademark,
trade secret laws, customer licensing agreements, employee and third party
non-disclosure agreements and other methods to protect our proprietary rights.
We do not include in our software any mechanisms to prevent or inhibit
unauthorized use, but we generally enter into confidentiality agreements with
our employees, consultants, subcontractors, customers and potential customers
and limit access to, and distribution of, our proprietary information.

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

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

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

     Although we have not received any complaints from third parties alleging
infringement claims, third parties could claim that our current or future
products or technology infringe their proprietary rights. We expect that
software developers will increasingly be subject to infringement claims as the
number of products and competitors providing software and services to the
communications industry increases and overlaps occur. Any claim of infringement
by a third party could cause us to incur substantial costs defending against the
claim, and could distract our management from our business. Furthermore, a party
making such a claim, if successful, could secure a judgment that requires us to
pay substantial damages. A judgment could also include an injunction or other
court order that could prevent us from selling our products or offering our
services, or prevent a customer from continuing to use our products. Any of
these events could seriously harm our business.

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

  PRODUCT DEFECTS OR SOFTWARE ERRORS COULD ADVERSELY AFFECT OUR BUSINESS.

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

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

                                        12
<PAGE>

  SYSTEM DISRUPTIONS AND FAILURES MAY RESULT IN CUSTOMER DISSATISFACTION,
  CUSTOMER LOSS OR BOTH, WHICH COULD MATERIALLY AND ADVERSELY AFFECT OUR
  REPUTATION AND BUSINESS.

     Our systems are an integral part of our customers' business operations. The
continued and uninterrupted performance of these systems by our customers is
critical to our success. Customers may become dissatisfied by any system failure
that interrupts our ability to provide services to them. Sustained or repeated
system failures would reduce the attractiveness of our services significantly,
and could result in decreased demand for our products and services.

     Our ability to perform Managed Services depends on our ability to protect
our computer systems against damage from fire, power loss, water damage,
telecommunications failures, earthquake, terrorism attack, vandalism and similar
unexpected adverse events. Despite our efforts to implement network security
measures, our systems are also vulnerable to computer viruses, break-ins and
similar disruptions from unauthorized tampering. We do not carry enough business
interruption insurance to compensate for any significant losses that may occur
as a result of any of these events.

     We have experienced systems outages and service interruptions in the past.
We expect to experience additional outages in the future. To date, these outages
have not had a material adverse effect on us. However, in the future, a
prolonged system-wide outage or frequent outages could cause harm to our
reputation and could cause our customers to make claims against us for damages
allegedly resulting from an outage or interruption. Any damage or failure that
interrupts or delays our operations could result in material harm to our
business and expose us to material liabilities.

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

     There can be no assurance that our effective tax rate of 22% for the year
ended September 30, 2004 will not change over time as a result of changes in
corporate income tax rates or other changes in the tax laws of the various
countries in which we operate. We have benefited or currently benefit from a
variety of government programs and tax benefits that generally carry conditions
that we must meet in order to be eligible to obtain any benefit.

     For example, the government of Cyprus has issued a permit to our Cypriot
subsidiary pursuant to which its activities are deemed to be offshore activities
for Cypriot tax purposes, resulting in an effective tax rate in Cyprus of 4.25%.
Our Irish subsidiary entered into an agreement with the Irish Industrial
Development Agency by which it qualified for certain job creation grants and,
consequently, certain of its activities were deemed to be manufacturing
activities for Irish tax purposes, resulting in a corporation tax rate of 10%
until December 31, 2002 with respect to such manufacturing activities. Beginning
January 1, 2003, our Irish subsidiary became subject to a single corporation tax
rate of 12.5%. Pursuant to recently enacted legislation, Israeli companies are
generally subject to a company tax rate on taxable income of 35% for 2004, 34%
for 2005, 32% for 2006 and 30% thereafter. However, certain production and
development facilities of our Israeli subsidiary have been granted a status that
allows for taxation at a rate of 25% or lower. The status by which these
facilities enjoy reduced taxation is subject to certain time limitations.

     If we fail to meet the conditions upon which certain favorable tax
treatment are based, we could be required to refund tax benefits already
received. Additionally, some of these programs and the related tax benefits are
available to us for a limited number of years, and these benefits expire from
time to time.

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

     - some programs may be discontinued,

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

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

                                        13
<PAGE>

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

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

  WE ARE CURRENTLY THE SUBJECT OF A SECURITIES EXCHANGE COMMISSION
  INVESTIGATION, WHICH COULD NEGATIVELY AFFECT OUR BUSINESS AND RESULTS OF
  OPERATIONS.

     We have been informed that the Midwest Regional Office of the United States
Securities and Exchange Commission (the "SEC") is conducting a private
investigation into the events leading up to our announcement in June 2002 of
revised projected revenue for the third and fourth quarters of fiscal 2002. The
investigation appears to be focused on, but is not explicitly limited to, our
forecasting beginning with our April 23, 2002 press release. Although we believe
that we will be able to satisfy any concerns the SEC staff may have in this
regard, we are unable to predict the duration, scope or outcome of the
investigation. We are cooperating fully with the SEC staff. At a minimum, this
investigation may divert the attention of our management and other resources
that would otherwise be engaged in operating our business.

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

     The market price of our ordinary shares has fluctuated widely and may
continue to do so. During fiscal year 2004, our ordinary shares have traded as
high as $30.69 per share and as low as $18.08 per share. Our ordinary shares
traded as high as $80.50 per share in fiscal 2001 and as low as $5.85 per share
in fiscal 2003. As of December 27, 2004, the closing price of our ordinary
shares was $26.22 per share. Many factors could cause the market price of our
ordinary shares to rise and fall, including:

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

     - variations in our quarterly operating results,

     - announcements of technological innovations by us or our competitors,

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

     - trends in the communications or software industries,

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

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

     - political developments in the Middle East.

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

  IT MAY BE DIFFICULT FOR OUR SHAREHOLDERS TO ENFORCE ANY JUDGMENT OBTAINED IN
  THE UNITED STATES AGAINST US OR OUR AFFILIATES.

     We are incorporated under the laws of the Island of Guernsey and several of
our directors and executive officers are not residents of the United States. A
significant portion of our assets and the assets of those persons are located
outside the United States. As a result, it may not be possible for investors to
effect service of process upon us within the United States or upon such persons
outside their jurisdiction of residence. Also, we have been advised that there
is doubt as to the enforceability in Guernsey of judgments of the U.S. courts of
civil liabilities predicated solely upon the laws of the United States,
including the federal securities laws.

                                        14
<PAGE>

ITEM 4.  INFORMATION ON THE COMPANY

HISTORY, DEVELOPMENT AND ORGANIZATIONAL STRUCTURE OF AMDOCS

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

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

     Our subsidiaries are organized under and subject to the laws of several
countries. Our principal operating subsidiaries are located in Canada, Cyprus,
Ireland, Israel, the United Kingdom and the United States.

     We have pursued acquisitions in order to offer new products or services or
otherwise enhance our market position or strategic strengths. Our acquisition of
ITDS in November 1999 enabled us to expand our service offerings and enhanced
our ability to provide Managed Services solutions to our customers. In April
2000, we acquired Solect, which enhanced our ability to serve the growing
Internet Protocol ("IP") needs of our customers. The acquisition in November
2001 from Nortel Networks Corporation of substantially all of the assets of its
Clarify business, which provided Customer Relationship Management ("CRM")
software to communications services companies and other enterprise sectors, has
positioned us as a leading provider of CRM to the communications industry and,
through our addition of Clarify's CRM software to our product offerings,
reinforced our leadership in delivering a comprehensive portfolio of business
software applications. In July 2003, we purchased Bell Canada's 90% ownership
interest in Certen, which we formed with Bell Canada in January 2001. This
acquisition expanded our Managed Services offerings and positioned us as a
leading provider of Managed Services to the communications industry. As a result
of the acquisition, Certen is now our wholly owned subsidiary. In February 2004,
we acquired XACCT, a provider of mediation software to communications service
providers.

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

     During fiscal 2002 and 2003, we took steps to reduce our costs and achieve
increased operational efficiency. In fiscal 2002, we implemented a cost
reduction program to reduce costs in response to a decline in our revenue for
the third and fourth quarters of fiscal 2002. As part of this cost reduction
program, we reduced our workforce by approximately 1,000 software and
information technology specialists and administrative professionals and vacated
facilities in different centers around the world. In an effort to achieve
increased operational efficiency and to more closely monitor and reduce costs,
in fiscal 2002 we also consolidated our Stamford, Connecticut data center into
our Champaign, Illinois facility, and closed the Stamford facility. In November
2002, we announced a series of additional measures designed to reduce costs and
improve productivity. As part of this plan, we reduced our workforce by
approximately 400 software and information technology specialists and
administrative professionals and vacated facilities in different centers around
the world. In addition, we implemented other cost reduction measures, including
travel cuts and reductions in other discretionary costs. As a result of these
cost reduction programs, our software and information technology workforce
consisted of approximately 7,800 employees as of January 31, 2003. During fiscal
2003, we increased our software and information technology workforce by
approximately 1,200 employees, primarily as a result of the Certen acquisition
in July 2003 and a Managed Services agreement signed with an affiliate of SBC in
January 2003. As of September 30, 2004, our software and information technology
workforce had increased to approximately 9,600 employees.

                                        15
<PAGE>

     Our principal capital expenditures for fiscal 2004, 2003 and 2002 have been
for computer equipment, for which we spent approximately $50.8 million, $50.5
million and $42.8 million, respectively. Principal capital expenditures
currently in progress consist of approximately $4.5 million for additional
computer equipment, with the bulk of these expenditures for computer equipment
to be located at our facilities in North America and Israel.

BUSINESS OVERVIEW

     Our market focus is primarily the communications industry, and we are a
leading provider of software products and services to leading communications
service providers in North America, Europe and the rest of the world. We are
also expanding on our experience by working with service providers in the
financial services sector, since certain of the challenges faced by companies in
this sector are similar to those of the communications service providers.

     Our products and services help our customers move toward an integrated
approach to customer management, which we refer to as "Integrated Customer
Management". Our Integrated Customer Management product offerings consist
primarily of billing and customer relationship management systems, which we
refer to, collectively, as "Customer Care and Billing Systems", or "CC&B
Systems". We refer to customer relationship management products included within
CC&B Systems as "CRM" products.

     Our portfolio also includes a full range of directory sales and publishing
systems, which we refer to as "Directory Systems", for publishers of both
traditional printed yellow page and white page directories and electronic
Internet directories.

     Our Integrated Customer Management systems are designed to meet the
mission-critical needs of leading communications service providers throughout
the entire customer lifecycle. Consequently, our portfolio includes CRM, order
management, mediation, call rating, invoice calculation and preparation, bill
formatting, collections, provisioning, content and partner relationship
management, support solutions, customer interaction products. We support a wide
range of communications services, including wireline, wireless, cable, voice,
video, data, broadband, content, electronic and mobile commerce and IP-based
services. We also support companies that offer multiple service packages,
commonly referred to as bundled or convergent services.

     Due to the complexity of our customers' projects and the expertise required
for system support, we also provide information technology, or IT, services,
including extensive system implementation, integration, modification, ongoing
support, enhancement and maintenance services. In addition, we offer Managed
Services, which include services, such as the operation of data centers, ongoing
support, maintenance services, system modification, the provisions of billing
services and communications facility management services, in all cases on either
or a combination of a fixed or unit charge basis to our customers. We are also
expanding to system integration and providing IT consulting services, such as
profit enhancement.

     Since the inception of our business in 1982, we have concentrated on
providing software products and services to major communications companies. By
focusing on this market, we believe that we have been able to develop the
innovative products and the industry expertise, project management skills and
technological competencies required for the advanced, large-scale,
specifications-intensive system projects typical of leading communications
providers. Our customer base includes major North American, European and other
communications companies, including major wireline and wireless companies.

  INDUSTRY BACKGROUND

     Communications Industry

     It is our view that, for close to 20 years, competition in the global
communications industry has increased as a result of deregulation and the
development of new service technologies. Competition in the U.S. market began to
increase in 1984 when AT&T was required to divest its local telephone operations
and many new operators began to enter the long distance market. The
Telecommunications Act of 1996
                                        16
<PAGE>

increased competition in the United States even further by allowing new and
existing local, long distance and cable companies to offer competing services.
Our experience tells us that many companies now compete by providing bundled or
convergent services, offering combinations of local exchange, long distance,
wireless, broadband access, content and electronic and mobile commerce services.
Deregulation is also creating opportunities for new ways of doing business, such
as wholesaling and reselling communications services. Privatization and
deregulation continue to encourage increased competition worldwide. We believe
that, as markets are opened to competition, new competitors within these markets
typically compete for market share with more established carriers by offering
competitive prices, introducing new features and services and being more
responsive to customer needs. In parallel, the communications industry has
undergone consolidation, as companies seek to broaden their global reach and
expand service offerings. In addition, global expansion by multinational
companies and concurrent technological advances are opening markets in less
developed countries to enhanced communications services and competition.

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

     Information Systems

     While the demand for products and services was negatively affected by the
downturn in the communications industry during 2002 and 2003, many
communications companies are seeking to upgrade their systems and install new
systems that would enable them to move toward Integrated Customer Management and
to offer new services. We believe that these communications companies are
looking for systems that reduce IT and operational costs, enhance customer
management to support customer retention, and support rapid rollout of new
marketing packages and advanced data services, as well as the ability to provide
customers with single-contact, single-invoice solutions for convergent or
bundled services.

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

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

  THE AMDOCS SOLUTIONS

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

                                        17
<PAGE>

     - Integrated Portfolio of Products.  We enable our customers to achieve
       Integrated Customer Management by providing a portfolio of pre-integrated
       products that span the entire customer lifecycle. Our portfolio is
       designed to support Integrated Customer Management across the
       organization, providing a single platform for aligning business processes
       around the customer, linking customer-facing business processes and touch
       points across back-office and front-office systems. Products are
       pre-integrated for a seamless modular extension of our solution as a
       service provider moves toward achieving Integrated Customer Management
       and to ensure fast and reduced-cost implementations.

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

     - Functional and Flexible Portfolio.  Our Integrated Customer Management
       products are based on an open, multi-tier, client-server, rule and
       table-based architecture that provides the functionality, scalability,
       modularity and adaptability required by communications companies in
       today's highly competitive market. The open, standard architecture allows
       products to operate as standalone within existing environments. The
       flexibility of our Integrated Customer Management products enables our
       customers to achieve significant time-to-market advantages and reduce
       their dependence on technical and other staff.

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

  BUSINESS STRATEGY

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

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

     - Target Industry Leaders.  We intend to continue to direct our marketing
       efforts principally toward the major communications companies. We derive
       a significant portion of our revenues from our customer base of major
       communications companies in North America, Europe and the Asia-Pacific
       region. We believe that the development of this premier customer base has
       helped position us as a market leader, while contributing to the core
       strength of our business. By targeting industry leaders
                                        18
<PAGE>

       that require the most sophisticated information systems solutions, we
       believe that we are best able to ensure that we remain at the forefront
       of developments in the industry.

     - Deliver Integrated Products and Services Solutions.  Our strategy is to
       provide customers with total systems solutions consisting of our
       Integrated Customer Management products and our specialized services. By
       leveraging our product and industry knowledge, we believe that we can
       provide more effective system integration and implementation services, as
       well as Managed Services to our customers.

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

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

  TECHNOLOGY

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

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

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

     - Portability.  Utilization of the UNIX platform for our Integrated
       Customer Management products ensures that our customers are able to
       choose from a variety of hardware vendors, including

                                        19
<PAGE>

       Hewlett-Packard, IBM and Sun Microsystems. Certain applications can also
       be deployed on the MVS or Windows NT platforms. The Integrated Customer
       Management products utilize, where applicable, Java-based design and
       programming to augment cross-platform portability.

  PRODUCTS

     Our product offerings include an extensive library of Integrated Customer
Management software products that we have developed to provide comprehensive
information systems functionality for communications service providers. Our
Integrated Customer Management systems cover the full range of CRM, order
management, mediation, real-time rating and billing, including enhanced support
for a broad range of billing-related activities, content and partner
relationship management, support and customer interaction products, as well as
directory publishing services.

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

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

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

     - Order Management:  a real-time ordering system with provisioning
       capabilities that supports all lines of businesses and enables service
       providers to launch new services quickly.

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

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

     CC&B Systems

     Our CC&B suite of products consists of modules for each of the following
key application areas:

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

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

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

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

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

                                        20
<PAGE>

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

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

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

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

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

     - Amdocs eCare -- enables residential and corporate customers to use the
       Internet to self-manage interactions with their communications service
       providers.

     Our ClarifyCRM suite of products consists of modules for each of the
following three main categories:

     - Sales and Ordering Solutions -- offer comprehensive sales automation and
       order management products supporting the broad needs of sales
       professionals in sales situations. We provide a range of integrated sales
       automation tools enabling local and remote sales professionals to manage
       sales opportunities, develop quotes, forecast revenue and communicate
       with other sales team members. Amdocs Order Management applications help
       companies manage and track the ordering process from order capture and
       negotiation, through to provisioning and service delivery.

     - Service and Support Solutions -- enable companies to maximize
       efficiencies in customer service organizations. Our offering includes
       support centers, contact centers and self-service solutions. These
       applications provide a unified desktop framework that allows agents to
       support customer care activities, including marketing, ordering, billing
       and servicing. They enhance customer service and communications to help
       improve customer satisfaction and retention. Amdocs Service and Support
       solutions provide companies a complete view of the customer by
       integrating incoming and outgoing customer contacts from all channels.

     - Marketing and Analytics Solutions -- provide tools to analyze and
       optimize the key customer metrics that affect a business, including
       customer acquisition, retention, penetration and lifetime value. Using
       our products in conjunction with generally available business
       intelligence tools, our customers can identify usage and other behavioral
       trends, allowing them to take proactive measures in order to improve
       retention rates of their high-value customers and focus offers on their
       best prospective or existing customers either in real-time or using
       traditional outbound campaigns. As a result, communications providers can
       track the effectiveness of their strategies and refine them as necessary.

     Our Order Management suite of products consists of modules for each of the
following two main categories:

     - Ordering Module -- enables service providers to quickly configure new
       services and offer them to their customers. To ensure maximum flexibility
       for new service configurations, the ordering module is supported by
       preconfigured ordering processes that allow an operator to quickly launch
       traditional services using industry best practices.

     - Provisioning Module -- enables service providers to access Operational
       Support Systems applications, such as Network Resource Management and
       Work Force Management, and use them to quickly deploy new orders and
       services to their customers.

                                        21
<PAGE>

     Directory Publishing

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

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

     - Publishing -- supports the process of entering, proofing and extracting
       the telephone listing and advertising information that is to be published
       in the customer's yellow page or white page directory or electronic
       Internet directory. These modules encompass contract processing, service
       order processing, listing information management and directory extract in
       preparation for the actual production of the directory.

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

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

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

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

  SERVICES

     We believe that the methodology we employ to enable Integrated Customer
Management and to deliver our products and services is one of the key factors
that allows us to achieve the time-frame, budget and quality objectives of our
customers' projects. Our methodology incorporates rigorous focus on the people,
processes and technology of an organization (program management,
customer-specific solution development, implementation and integration and
operation), as well as active customer participation at all stages to help
prioritize and implement time-critical information system solutions that address
the customer's individual needs.

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

                                        22
<PAGE>

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

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

     As part of our effort to provide comprehensive solutions to our customers,
we offer a broad suite of consulting, integration and Managed Services to
support operation of our Integrated Customer Management products. These Managed
Services include services, such as system modernization and consolidation,
operation of data centers, ongoing support, maintenance, system modification,
billing and communications facility management.

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

  SALES AND MARKETING

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

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

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

                                        23
<PAGE>

  CUSTOMERS

     Our target market is comprised of communications companies that require
information systems with advanced functionality and technology. The companies in
our target segment are typically market leaders. By working with such companies,
we help ensure that we remain at the forefront of developments in the
communications industry and that our Integrated Customer Management product
offerings continue to address the market's most sophisticated needs. We have an
international orientation, focusing on potential customers in the developed,
industrialized countries in North America, Europe, Latin America and the
Asia-Pacific region. We are also expanding on our experience by working with
service providers in the financial services sector, since the challenges faced
by companies in this sector are similar to those of the communications service
providers.

     Our customers include global communications leaders, as well as other
leading network operators and service providers, as well as directory publishers
in the United States and around the world. Our customers include:

<Table>
    <S>                                               <C>
    ABN AMRO                                          Rogers AT&T Wireless
    BCP                                               SBC
    Bell Canada                                       Sprint PCS
    BT                                                Telefonica
    CenturyTel                                        Telkom SA
    Cingular Wireless                                 Telstra
    Deutsche Telekom                                  Telus
    Dex Media                                         T-Mobile
    Far EasTone                                       Verizon
    Group Cegetel                                     Vimplecom
    Netcom                                            Vodafone Group
    Nextel                                            Western Wireless
</Table>

     Our three largest groups of customers are comprised of Bell Canada, Nextel
and SBC and certain of their subsidiaries, each of which accounted for more than
10% of our revenue in fiscal 2004. Aggregate revenue derived from the multiple
business arrangements we have with our five largest customer groups accounted
for approximately 61% of our revenue in fiscal 2004. SBC has historically been
one of our largest shareholders, and, as of November 24, 2004, it beneficially
owned approximately 6.3% of our outstanding ordinary shares.

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

<Table>
<Caption>
                                                              2004   2003   2002
                                                              ----   ----   ----
<S>                                                           <C>    <C>    <C>
North America...............................................  65.9%  62.0%  61.9%
Europe......................................................  27.1   29.8   28.9
Rest of the World...........................................   7.0    8.2    9.2
</Table>

  COMPETITION

     The market for communications information systems is highly competitive and
fragmented, and we expect competition to increase. We compete with many
independent providers of information systems and services, including CGI Group,
Convergys, CSG Systems International, Intec Telecom Systems, Portal Software,
and Siebel Systems, with system integrators and providers of IT services, such
as Accenture, EDS and IBM Global Services, and with internal information systems
departments of large communication companies. We expect continued competition in
the communications industry and the entrance of new competitors into the
software information systems market in the future.

                                        24
<PAGE>

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

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

     - providing high quality reliable, scalable and modular products,

     - effectively managing the timely implementation of products, and

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

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

  EMPLOYEES

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

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

  RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

     Our research and development activities involve the development of new
software architecture, modules and product offerings in response to an
identified market demand, either in conjunction with a customer project or as
part of our internal product development programs. We also expend additional
amounts on applied research and software development activities to keep abreast
of new technologies in the communications markets and to provide new and
enhanced functionality to our existing product offerings. While we continue to
upgrade our existing systems, in fiscal 2004 we focused significant research and
development efforts on the integration between our products and a unified user
interface in order to assist our customers in adopting an Integrated Customer
Management strategy. As part of these efforts, we expect to launch Amdocs 6 in
calendar 2005. The majority of our research and development expenditures is
directed at our billing and CRM systems, and the remainder to directory, content
management, mediation, order management products and self service. We believe
that our research and development efforts are a crucial element of our strategy
and are essential to our success.

     Our software and software systems are largely comprised of software and
systems that we have developed and that we regard as proprietary. Our software
and software systems are the results of long and complex development processes,
and certain aspects of our products make use of readily available software
components that we license from third parties. The ability to develop and use
our software and software systems requires knowledge and professional experience
that we believe is unique to us and would be very difficult for others to
independently obtain. Our software and software systems have never been the
subject

                                        25
<PAGE>

of a material intellectual property infringement claim. We rely upon a
combination of trademarks, contractual rights, trade secret law, copyrights,
nondisclosure agreements and technical measures to establish and protect our
proprietary rights in our products and technologies. We also enter into non-
disclosure and confidentiality agreements with our customers, employees and
marketing representatives and with certain contractors with access to sensitive
information. Additionally, we limit customer access to the source code of our
software and software systems. However, these measures taken by us may not be
adequate to protect our technology from third-party infringement. In addition,
our competitors may also independently develop technologies that are
substantially equivalent or superior to ours.

     Our technology is not dependent on patents or licenses from third parties.

     See the discussion under "Operating and Financial Review and
Prospects -- Research and Development, Patents and Licenses."

  PROPERTY, PLANTS AND EQUIPMENT

     Facilities

     We lease land and buildings for our executive offices, sales, marketing,
administrative, development and support centers. We lease an aggregate of
approximately 2,530,000 square feet worldwide, including significant leases in
the United States, Israel, Canada, Cyprus, India and the United Kingdom. Our
aggregate annual lease costs are approximately $49.0 million. The following
table summarizes information with respect to the principal facilities leased by
us and our subsidiaries as of November 30, 2004:

<Table>
<Caption>
                                                                  AREA
LOCATION                                                       (SQ. FEET)
--------                                                       ----------
<S>                                                            <C>
United States:
  Chesterfield, MO(*).......................................     180,000
  San Jose, CA..............................................     129,000
  Champaign, IL.............................................     105,000
  Others(*).................................................     222,000
                                                               ---------
     Total..................................................     636,000

Israel:
  Ra'anana..................................................     618,000
  Hod-Hasharon..............................................     202,000
  Haifa(*)..................................................     133,000
  Others....................................................      85,000
                                                               ---------
     Total..................................................   1,038,000

Canada:
  Toronto(*)................................................     244,000
  Montreal..................................................     144,000
  Others....................................................      91,000
                                                               ---------
     Total..................................................     479,000

Cyprus (Limassol)...........................................     103,000
India (Pune)................................................     114,000
United Kingdom(*)...........................................      48,000
Rest of the world(**).......................................     110,000
</Table>

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

 (*) Includes space sublet to third parties.

(**) Includes Argentina, Australia, Brazil, Czech Republic, France, Germany,
     Greece, Hong Kong, Hungary, Indonesia, Ireland, Italy, Japan, Mexico,
     Poland, Russia, South Africa, Spain, Sweden, Switzerland, Thailand and The
     Netherlands.

                                        26
<PAGE>

     Our leases expire on various dates between 2004 and 2014, not including
various options to extend lease terms.

     Equipment

     We develop our Integrated Customer Management products over a system of
UNIX, MVS and Windows 2000/2003 servers owned or leased by us. We use a variety
of software products in our development centers, including products by
Microsoft, Oracle, Synscsort, CA, Merant, IBM, HP, SUN and BEA. Our data storage
is based on equipment from EMC, SUN, NetApp and Hewlett-Packard. Our development
servers are connected to approximately 16,000 personal computers owned or leased
by us.

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

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

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

INTRODUCTION

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

     - the factors that affect our business,

     - our revenue and costs for the fiscal years ended September 30, 2004, 2003
       and 2002,

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

     - the sources of our revenue,

     - how all of this affects our overall financial condition,

     - our capital expenditures for the fiscal years ended September 30, 2004,
       2003 and 2002, and

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

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

OVERVIEW OF BUSINESS AND TREND INFORMATION

     Our market focus is primarily the communications industry, and we are a
leading provider of software products and services to that industry. Our
Integrated Customer Management product offerings consist primarily of CC&B
Systems. Our portfolio also includes a full range of Directory Systems.

     Our Integrated Customer Management systems are designed to meet the
mission-critical needs of leading communications service providers. We support a
wide range of communications services, including wireline, wireless, voice,
video, data, broadband, content, electronic and mobile commerce and IP based
services. We also support companies that offer multiple service packages,
commonly referred to as bundled or convergent services. Due to the complexity of
our customers' projects and the expertise required for system support, we also
provide extensive implementation, system integration, system customization and
modification, and ongoing support including data-base management, system
enhancement and maintenance

                                        27
<PAGE>

services. In addition, we offer "Managed Services", which include services such
as the operation of data centers, ongoing support, maintenance services, system
modification, the provision of billing services and communications facility
management services, in all cases on either or a combination of a fixed or unit
charge basis to our customers.

     Our business is conducted on a global basis. We maintain five development
facilities located in Israel, the United States, Cyprus, Ireland and Canada.
Recently, we established a new development center in India. We expect the
development center in India to grow and support the overall activity of our
business worldwide, at comparatively lower operating costs.

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

     We derive our revenue principally from:

     - the initial sales of licenses to use our products and related services,
       including modification, implementation and integration services,

     - providing Managed Services and other related services for our solutions,
       and

     - recurring revenue from ongoing support and maintenance provided to our
       customers, and from incremental license fees resulting from increases in
       a customer's business volume.

     Revenue is recognized only when all of the following conditions have been
met: (i) there is persuasive evidence of an arrangement; (ii) delivery has
occurred; (iii) the fee is fixed and determinable; and (iv) collectibility of
the fee is reasonably assured. We usually sell our software licenses as part of
an overall solution offered to a customer that combines the sale of software
licenses with a broad range of services, which normally include significant
customization, modification, implementation and integration. As a result, we
generally recognize combined license and service revenue over the course of
these long-term projects, using the percentage of completion method of
accounting. Initial license fee revenue is recognized as work is performed,
using the percentage of completion method of accounting. Subsequent license fee
revenue is recognized upon completion of specified conditions in each contract,
based on a customer's subscriber level or number of users when greater than the
level specified in the contract for the initial license fee. Service revenue
that involves significant ongoing obligations, including fees for software
customization, implementation and modification, also is recognized as work is
performed, under the percentage of completion method of accounting. Revenue from
software solutions that do not require significant customization and
modification is recognized upon delivery. In Managed Services contracts, we
typically recognize revenue from the operation of a customer's system either
ratably over the service period or as services are performed. Revenue from
ongoing support services is recognized as work is performed. Revenue from
third-party hardware sales is recognized upon delivery and installation, and
revenue from third-party software sales is recognized upon delivery. Maintenance
revenue is recognized ratably over the term of the maintenance agreement. As a
result of a significant portion of our revenue being subject to the percentage
of completion accounting method, the size and timing of customer projects and
our progress in completing such projects may significantly affect our annual and
quarterly operating results.

     Our business is subject to the effects of general global economic
conditions and, in particular, market conditions in the communications industry.
As a result of the slowdown in the communications industry during fiscal years
2003 and 2002, the market value, financial results and prospects, and capital
spending levels of communications companies have declined or degraded.

     During fiscal 2004, several communications service providers demonstrated a
greater readiness to commit to new projects. Nevertheless, during fiscal years
2003 and 2002, delays in customer buying decisions stemming from rigorous
management of operating expenses and overall reductions in the capital
investment budgets of many communications service providers led to fewer new
contracts, as well as smaller initial spending commitments and reduced
discretionary spending under contracts with certain of our customers. As a
result of these market conditions, our revenue in the third quarter of fiscal
2002

                                        28
<PAGE>

decreased by more than $75 million from the previous quarter. Revenue continued
to decline in the fourth quarter of fiscal 2002 and the first quarter of fiscal
2003. During fiscal 2003, the market began to stabilize. As a result, we resumed
sequential revenue growth in the second quarter of fiscal 2003. During fiscal
2003, total quarterly revenue increased by 4.6% between the first and second
quarters, by 6.2% between the second and third quarters and by 9.2% between the
third and fourth quarters, primarily as a result of new Managed Services
agreements and our acquisition of Certen in the fourth quarter of fiscal 2003.
While we continue to operate in a challenging environment, we believe that our
market leadership, together with our expanding relationships with strategic
customers and the overall improvement of market conditions, create a firm basis
for growth. We expect modest growth in the first quarter of fiscal 2005 and
anticipate an increase in our growth rate in the second quarter of fiscal 2005.

     Our quarterly revenue for the last twelve quarters is summarized below (in
millions):

<Table>
<Caption>
                                                       Q1       Q2       Q3       Q4
                                                     ------   ------   ------   ------
<S>                                                  <C>      <C>      <C>      <C>
Fiscal 2004........................................  $428.3   $442.8   $450.2   $452.4
Fiscal 2003........................................  $339.4   $355.0   $377.2   $411.7
Fiscal 2002........................................  $422.6   $455.3   $380.2   $355.5
</Table>

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

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

     - the global use of communications services,

     - the emergence of new communications products and services, including IP,
       video, broadband, data and content services and IPTV,

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

     - the ongoing consolidation within the communications industry,

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

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

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

     Revenue from Managed Services arrangements is included in both license and
service revenue from the sale of CC&B Systems and Directory Systems. Managed
Services projects are a significant part of our business, and generate
substantial, long-term revenue streams, cash flow and operating income. In the
initial period of our Managed Services projects, we generally invest in
modernization and consolidation of the customer's systems. Invoices are usually
structured on a periodic fixed or unit charge basis. As a result, Managed
Services projects can be less profitable in the initial period. Margins tend to
improve over time as we benefit from the operational efficiencies provided by
system modernization and consolidation. We expect that our Managed Services
relationships will generate margins comparable to sales of our other products
and related license and services over the entire relationships. Revenue related
to Managed Services agreements in the year ended September 30, 2004 was
approximately 40% of total revenue.

ACQUISITIONS

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

                                        29
<PAGE>

     In November 2001, we purchased from Nortel Networks Corporation
substantially all of the assets of its Clarify business, a leading provider of
CRM software to communications companies and other enterprise sectors. This
acquisition positioned us as a leading provider of CRM software to the
communications industry and, through our addition of Clarify's CRM software to
our portfolio of product offerings, reinforced our leadership in delivering
Integrated Customer Management software applications. This acquisition completed
our CRM product suite, enabling us to deliver a pre-integrated CRM, billing and
order management solution and stand-alone communications CRM offering to
communications providers. Following the acquisition we integrated the Clarify
sales to telecommunication customers into our overall sales efforts. Generally,
we sell our ClarifyCRM products to telecommunication customers as integral parts
of projects that also include license and service arrangements. Following the
acquisition, we have continued to sell Clarify's CRM software to customers other
than communications service providers. The total purchase price for Clarify, as
of September 30, 2002, was $212.0 million in cash, including transaction costs
of $8.3 million. The purchase price was subject to final price adjustments that
were settled in October 2002 and resulted in an $11.1 million reduction of the
purchase price to $200.9 million in the first quarter of fiscal 2003.

     Our global business is providing Integrated Customer Management systems,
software and services, including ClarifyCRM products. Our Integrated Customer
Management systems include a portfolio of pre-integrated billing and CRM
products. Such systems combine products with a broad range of services,
including customization, implementation, integration, maintenance, ongoing
support and Managed Services. In addition, following the Clarify acquisition, we
combined our own CRM product suite with the acquired product to form our
ClarifyCRM products. We also provide our customers with system interfaces,
systems integration and conversion services. Therefore, we analyze our sales
efforts and revenue development by customer.

     In July 2003, we acquired from Bell Canada ("Bell") its 90% ownership
interest in Certen, which we formed with Bell in January 2001 to provide
customer care and billing solutions to Bell and a number of Bell's affiliated
companies. Prior to this acquisition, we owned 10% of Certen. As a result of the
acquisition, Certen is now our wholly owned subsidiary. Since Certen's
inception, we have provided customer care and billing software required by
Certen, including related customization, installation, maintenance and other
services. This acquisition expanded our Managed Services offerings and
positioned us as a major provider of Managed Services to the communications
industry, and was our next logical step in the evolution of our relationship
with Bell. In addition, as a result of this acquisition, we continued to develop
an integrated billing platform to replace legacy systems built on a
product-by-product basis. The total purchase price for the 90% ownership
interest in Certen was approximately $66.0 million in cash. In addition, we
incurred transaction related costs of approximately $3.0 million.

     On February 19, 2004, we acquired XACCT, a privately-held provider of
mediation software to communications service providers. We acquired XACCT's
outstanding shares for approximately $28.0 million, of which approximately $13.0
million was paid in cash and the balance in 560,777 of our ordinary shares,
valued at $15.0 million. In addition, we had related transaction costs of
approximately $0.8 million. This acquisition further expands the scope of our
billing capabilities in the network mediation space, enabling the collection,
formatting and distribution of network usage events. With this acquisition, we
achieved the capability to support end-to-end event processing, from network
mediation through billing, for voice, data, content and commerce prepaid and
postpaid transactions. We repurchased 484,500 of our ordinary shares in February
2004 to offset the dilutive effect of shares issued in the acquisition. The fair
market value of XACCT's assets and liabilities has been included in our balance
sheet and the results of XACCT's operations have been included in our
consolidated statement of income, commencing on February 19, 2004.

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

                                        30
<PAGE>

OPERATIONAL EFFICIENCY AND COST REDUCTION PROGRAMS

     In the first quarter of fiscal 2003, we announced a series of measures
designed to reduce costs and improve productivity and recorded a charge of $10.0
million, consisting primarily of employee separation costs in connection with
the termination of employment of approximately four hundred software and
information technology specialists and administrative professionals and for the
write-off of leasehold improvements and the accrual of rent obligations. The
employee terminations occurred at various locations around the world. In
addition, we implemented other cost reduction measures, including travel cuts
and reductions in other discretionary costs.

     This cost reduction program is in addition to the measures implemented
during the first and fourth quarters of fiscal 2002. In the fourth quarter of
fiscal 2002, we recorded a charge of $20.9 million, consisting primarily of
employee separation costs in connection with the termination of employment of
approximately one thousand software and information technology specialists and
administrative professionals and for the write-off of leasehold improvements and
the accrual of rent obligations. In the first quarter of fiscal 2002, we
consolidated our Stamford, Connecticut data center into our Champaign, Illinois
facility, and closed the Stamford facility. As a direct result of this closure,
we recorded a restructuring charge of $13.3 million in the first quarter of
fiscal 2002, primarily for the write-off of leasehold improvements and the
accrual of rent obligations, with the remainder for employee separation costs.

     During the fourth quarter of fiscal 2004, we increased the accrual related
to our unused facilities in Stamford, Connecticut by approximately $4.0 million
to reflect the current subleasing market in Stamford.

     For more information on our operational efficiency and cost reduction
programs, see Note 21 to the consolidated financial statements included in this
document.

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

     Our research and development activities involve the development of new
software architecture, modules and product offerings in response to an
identified market demand, either in conjunction with a customer project or as
part of our internal product development programs. We also expend additional
amounts on applied research and software development activities to keep abreast
of new technologies in the communications markets and to provide new and
enhanced functionality to our existing product offerings. Research and
development expenditures were $126.4 million, $119.3 million and $124.1 million
in the fiscal years ended September 30, 2004, 2003 and 2002, respectively,
representing 7.1%, 8.0% and 7.7%, respectively, of our revenue in these fiscal
years. While we continue to upgrade our existing systems, in fiscal 2004 we
focused significant research and development efforts on the integration between
our products and unified user interface in order to enable our customers
adopting an Integrated Customer Management strategy. As part of these efforts we
expect to launch Amdocs 6 in calendar 2005. The majority of our research and
development expenditures is directed at our billing and CRM systems, and the
remainder to directory, content management, mediation, order management products
and self service. We believe that our research and development efforts are a
crucial element of our strategy and are essential to our success. Although we
intend to continue to devote resources to research and development as required
to maintain and further strengthen our market position, our research and
development budget, like all of our costs, is sensitive to our overall financial
condition. A decrease in our total revenue could, in certain circumstances, lead
to reductions in the levels of our research and development expenditures. In the
near-term, we intend to continue to make substantial investments in our research
and development activities. We believe that this ongoing investment will
position us to capitalize on future potential opportunities in the
communications industry.

     Our software and software systems are largely comprised of software and
systems that we have developed and that we regard as proprietary. Our software
and software systems are the results of long and complex development processes,
and certain aspects of our products make use of readily available software
components that we license from third parties. The ability to develop and use
our software and software systems requires knowledge and professional experience
that we believe is unique to us and would be very difficult for others to
independently obtain. Our software and software systems have never been the
subject
                                        31
<PAGE>

of a material intellectual property infringement claim. We rely upon a
combination of trademarks, contractual rights, trade secret law, copyrights,
nondisclosure agreements and technical measures to establish and protect our
proprietary rights in our products and technologies. We also enter into non-
disclosure and confidentiality agreements with our customers, employees and
marketing representatives and with certain contractors with access to sensitive
information. Additionally, we limit customer access to the source code of our
software and software systems. However, these measures taken by us may not be
adequate to protect our technology from third-party infringement. In addition,
our competitors may also independently develop technologies that are
substantially equivalent or superior to ours.

     The Company's technology is not dependent on patents or licenses from third
parties.

CONVERTIBLE NOTES

     In May 2001, we issued $500.0 million aggregate principal amount of 2%
Notes due June 1, 2008. Pursuant to the indenture for the 2% Notes, each holder
of the 2% Notes had the right to require us to repurchase on June 1, 2004 all or
any part of such holder's 2% Notes at a price equal to 100% of the principal
amount plus accrued and unpaid interest. Under the terms of the 2% Notes, we had
the option to pay for the 2% Notes with cash, ordinary shares or a combination
of cash and ordinary shares.

     As of June 1, 2004, holders had tendered to us for repurchase $395.1
million in principal amount of the $395.5 million aggregate principal amount of
2% Notes then outstanding and we purchased the tendered 2% Notes for cash.
Subsequently we purchased additional 2% Notes and as of September 30, 2004, $0.3
million principal amount of the 2% Notes remain as our outstanding obligations,
in accordance with their terms.

     On March 5, 2004, we issued $450.0 million aggregate principal amount of
0.50% Notes due 2024 through a private placement to qualified institutional
buyers pursuant to Rule 144A under the Securities Act. We used approximately
$170.1 million of the net proceeds from the sale of the 0.50% Notes to
repurchase approximately 6.1 million ordinary shares sold short by purchasers of
the 0.50% Notes in negotiated transactions concurrently with the offering. We
also used net proceeds and other cash resources to repurchase the 2% Notes
tendered as of June 1, 2004.

SHARE REPURCHASE PROGRAM

     In November 2003, we announced that our Board of Directors had authorized a
share repurchase program of up to five million ordinary shares over the next
twelve months. The authorization permitted us to purchase ordinary shares in the
open market or privately negotiated transactions and at prices we deemed
appropriate. We stated that one of the main purposes of the repurchase program
was to offset the dilutive effect of any future share issuances, including
issuances in connection with acquisitions or pursuant to employee equity plans.
During the first quarter of fiscal 2004, we purchased 5.0 million of our
ordinary shares under this repurchase program, at a weighted average price of
$24.82 per share.

     On July 28, 2004, we announced that our Board of Directors extended the
share repurchase program for the additional repurchase of up to $100 million of
our ordinary shares in the open market or privately negotiated transactions and
at times and prices we deem appropriate. In accordance with this extension, we
repurchased in the fourth quarter of fiscal 2004 approximately 4.9 million
ordinary shares, at an average price of $20.40 per share.

     On December 20, 2004, we announced that our Board of Directors extended the
share repurchase program for the additional repurchase of up to $100 million of
our ordinary shares in the open market or privately negotiated transactions and
at times and prices we deem appropriate.

                                        32
<PAGE>

OPERATING RESULTS

     The following table sets forth for the fiscal years ended September 30,
2004, 2003 and 2002 certain items in our consolidated statements of operations
reflected as a percentage of total revenue:

<Table>
<Caption>
                                                              YEAR ENDED SEPTEMBER 30,
                                                              ------------------------
                                                               2004     2003     2002
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Revenue:
  License...................................................    4.3%     4.4%     9.5%
  Service...................................................   95.7     95.6     90.5
                                                              -----    -----    -----
                                                              100.0    100.0    100.0
                                                              -----    -----    -----
Operating expenses:
  Cost of license...........................................    0.3      0.4      0.3
  Cost of service...........................................   63.0     61.2     57.5
  Research and development..................................    7.1      8.0      7.7
  Selling, general and administrative.......................   11.9     13.9     13.9
  Amortization of goodwill and purchased intangible
     assets.................................................    1.0      1.4     14.4
  Restructuring charges, in-process research and development
     and other..............................................     --      0.9      3.2
                                                              -----    -----    -----
                                                               83.3     85.8     97.0
                                                              -----    -----    -----
Operating income............................................   16.7     14.2      3.0
Interest income and other, net..............................    0.3      1.0      1.2
                                                              -----    -----    -----
Income before income taxes..................................   17.0     15.2      4.2
Income taxes................................................    3.7      3.8      4.5
                                                              -----    -----    -----
Net income (loss)...........................................   13.3%    11.4%    (0.3)%
                                                              =====    =====    =====
</Table>

  FISCAL YEARS ENDED SEPTEMBER 30, 2004 AND 2003

     The following is a tabular presentation of our results of operations for
the fiscal year ended September 30, 2004, compared to the fiscal year ended
September 30, 2003. Following the table is a discussion and analysis of our
business and results of operations for such years.

<Table>
<Caption>
                                            YEAR ENDED SEPTEMBER 30,    INCREASE (DECREASE)
                                            -------------------------   -------------------
                                               2004          2003        AMOUNT        %
                                            -----------   -----------   ---------   -------
                                                       (IN THOUSANDS)
<S>                                         <C>           <C>           <C>         <C>
Revenue:
  License.................................  $   76,586    $   65,582    $ 11,004      16.8%
  Service.................................   1,697,146     1,417,745     279,401      19.7
                                            ----------    ----------    --------
                                             1,773,732     1,483,327     290,405      19.6
                                            ----------    ----------    --------
Operating expenses:
  Cost of license.........................       5,022         5,752        (730)    (12.7)
  Cost of service.........................   1,117,810       907,607     210,203      23.2
  Research and development................     126,407       119,256       7,151       6.0
  Selling, general and administrative.....     210,384       206,265       4,119       2.0
  Amortization of purchased intangible
     assets...............................      17,909        19,940      (2,031)    (10.2)
  Restructuring charges and other.........          --        14,089     (14,089)   (100.0)
                                            ----------    ----------    --------
                                             1,477,532     1,272,909     204,623      16.1
                                            ----------    ----------    --------
Operating income..........................     296,200       210,418      85,782      40.8
Interest income and other, net............       4,903        14,759      (9,856)    (66.8)
                                            ----------    ----------    --------
Income before income taxes................     301,103       225,177      75,926      33.7
Income taxes..............................      66,243        56,294       9,949      17.7
                                            ----------    ----------    --------
Net income................................  $  234,860    $  168,883    $ 65,977      39.1
                                            ==========    ==========    ========
</Table>

     Revenue.  Total revenue increased by $290.4 million, or 19.6%, in the year
ended September 30, 2004 to $1,773.7 million from $1,483.3 million in fiscal
2003. The increase in total revenue in fiscal 2004

                                        33
<PAGE>

was due to an increase in service revenue attributable to the Managed Services
agreements signed during fiscal 2003 and additional revenue resulting from our
acquisition of Certen in the fourth quarter of fiscal 2003. Revenue related to
Managed Services agreements was approximately 40% of total revenue. Revenue from
the Managed Services agreements entered into during fiscal 2003, including the
effect of the Certen acquisition, increased total revenue by approximately $211
million in the year ended September 30, 2004.

     License and service revenue from the sale of CC&B Systems was $1,537.0
million for the year ended September 30, 2004, an increase of $256.6 million, or
20.0%, from the year ended September 30, 2003. Approximately 60% of the increase
was attributable to our acquisition of Certen in the fourth quarter of fiscal
2003, approximately $8 million resulted from our acquisition of XACCT in
February 2004 and the remainder was attributable to additional revenue from
existing and new customers. License and service revenue from the sale of CC&B
Systems represented 86.7% and 86.3% of our total revenue in fiscal 2004 and
2003, respectively. The demand for our CC&B Systems is primarily driven by the
need for communications companies to continue to integrate their billing, CRM
and order management systems into Integrated Customer Management products and
services. In fiscal 2003, many communications companies reduced or delayed
expenditures on system upgrades as a result of the slowdown in the
communications industry. Recently, however, there has been an improvement in
market conditions contributing to the increase in revenue in the year ended
September 30, 2004.

     License and service revenue from the sale of Directory Systems was $236.7
million for the year ended September 30, 2004, an increase of $33.8 million, or
16.7%, from fiscal 2003. Approximately $62 million of the increase in Directory
Systems revenue in fiscal 2004 was attributable to Managed Services agreements.
This revenue was partially offset by the completion of certain implementation
projects that accounted for $27 million of revenue in the comparable period of
fiscal 2003. License and service revenue from the sale of Directory Systems
represented 13.3% and 13.7% of our total revenue in fiscal 2004 and 2003,
respectively. We believe that we are a leading provider of Directory Systems in
most of the markets we serve. We expect that our revenue from Directory Systems
will remain relatively stable in fiscal 2005.

     In fiscal 2004, revenue from customers in North America, Europe and the
rest of the world accounted for 65.9%, 27.1% and 7.0%, respectively, of total
revenue compared to 62.0%, 29.8% and 8.2%, respectively, for the year ended
September 30, 2003. Approximately 85% of the increase in revenue from customers
in North America was attributable to Managed Services agreements, including the
acquisition of Certen, which expanded our activity and revenue from customers in
North America, and approximately 15% was attributable to the expansion of
relationships with existing customers in North America. The decreased
contribution to revenue from customers in Europe relative to customers in North
America, as a percentage of revenue, resulted from the relatively greater growth
in activity from customers in North America than in Europe during fiscal 2004.
Revenue from customers outside of North America and Europe, in absolute amount,
was relatively stable in fiscal 2004 compared to fiscal 2003.

     Cost of License.  Cost of license mainly includes amortization of purchased
computer software and intellectual property rights. Because such amortization is
relatively stable from period to period and, absent impairment, is generally
fixed in amount, an increase or decrease in license revenue will cause a
significant fluctuation in cost of license as a percentage of license revenue.
In fiscal 2004, cost of license, as a percentage of license revenue, was 6.6%
compared to 8.8% in fiscal 2003.

     Cost of Service.  The increase in cost of service in fiscal 2004 was 23.2%,
which was higher than the 19.6% increase in our total revenue in fiscal 2004,
and resulted in a 1.7% decrease in our gross margin, as a percentage of revenue.
Our gross margin was affected by the Managed Services agreements signed during
fiscal 2003, which we expect to be less profitable in their initial period. The
increase in cost of service was also attributable to the $4.0 million increase
in the accrual related mainly to our unused facilities in Stamford, Connecticut,
which we made in the fourth quarter of fiscal 2004, to reflect the current
subleasing market in Stamford. See the discussion above under the caption
"Operational Efficiency and Cost Reduction Programs".

     Research and Development.  Research and development expense was primarily
comprised of compensation expense attributed to research and development
activities, which involve the development of
                                        34
<PAGE>

new software modules and product offerings, either in conjunction with customer
projects or as part of our internal product development program. Research and
development expense increased by $7.2 million, or 6.0%, in the year ended
September 30, 2004 to $126.4 million from $119.3 million in fiscal 2003. Such
increase in research and development expense was proportionally less than the
increase in our total revenue, and decreased, as a percentage of revenue, from
8.0% of revenue in fiscal 2003 to 7.1% of revenue in fiscal 2004. While we
continue to upgrade our existing systems, in fiscal 2004 we focused significant
research and development efforts on the integration between our products and
unified user interface in order to enable our customers to adopt Integrated
Customer Management strategy. As part of these efforts we plan to launch Amdocs
6 in calendar 2005. The majority of our research and development expenditures
are directed to our billing and CRM systems, and the remainder to directory,
content, mediation, order management solutions and other. Although we intend to
continue to devote resources to research and development, our research and
development budget, like all of our costs, is sensitive to our overall financial
condition. We believe that our research and development efforts are a key
element of our strategy and are essential to our success. However, an increase
or a decrease in our total revenue would not necessarily result in a
proportional increase or decrease in the levels of our research and development
expenditures, which could affect our operating margin. See the discussion above
under the caption "Research and Development, Patents and Licenses".

     Selling, General and Administrative.  Selling, general and administrative
expense increased by $4.1 million, or 2.0%, in fiscal 2004 to $210.4 million,
from $206.3 million in fiscal 2003. Selling, general and administrative expense
was primarily comprised of compensation expense. The increase in selling,
general and administrative expense was attributable to the overall increase in
our operations, as well as to the increase in our selling and marketing efforts,
although the 2% increase was significantly less than the 19.6% increase in our
total revenue, due to the impact of the cost reduction programs implemented in
fiscal 2003 and 2002.

     Amortization of Purchased Intangible Assets.  Amortization of purchased
intangible assets for the year ended September 30, 2004 was $17.9 million,
compared to $19.9 million in fiscal 2003. The decrease in amortization of
purchased intangible assets was due to purchased intangible assets that were
fully amortized in fiscal 2003, which was partially offset by amortization of
purchased intangible assets acquired in the Certen and XACCT acquisitions.

     Restructuring Charges and Other.  The restructuring charges and other in
the year ended September 30, 2003 consisted of a restructuring charge of $10.0
million related to the cost reduction program we implemented in the first
quarter of fiscal 2003 and a $4.1 million charge reflecting the cumulative
effect, in the fourth quarter of fiscal 2003, of our 10% share in Certen's
results prior to our acquisition of Certen.

     Operating Income.  Operating income increased by $85.8 million, or 40.8%,
in the year ended September 30, 2004, to $296.2 million, or 16.7% of revenue,
from $210.4 million, or 14.2% of revenue, in fiscal 2003. The increase in
operating income in fiscal 2004 resulted from the 19.6% increase in our total
revenue, which was partially offset by the 1.7% decrease in our gross margin, as
a percentage of revenue, attributable to the relatively lower gross margin of
our Managed Services projects in their early stages of implementation, and to
the effect of the $14.1 million of restructuring charges and other in the year
ended September 30, 2003.

     Interest Income and Other, Net.  Interest income and other, net decreased
by $9.9 million, or 66.8%, in fiscal 2004 to $4.9 million from $14.8 million in
fiscal 2003. The decrease in interest income and other, net was primarily
attributable to the decline in interest rates on our short-term interest-bearing
investments, which resulted from our decision to shorten the duration of our
investments due to volatility in the interest rate environment, and was also
affected by the decrease of interest income on debentures issued by Certen to us
that was eliminated as a result of the Certen acquisition. In addition, interest
income and other, net decreased as a result of capital lease obligations
acquired in the Certen acquisition, and, to a lesser extent, to changes in
exchange rates of currencies other than the dollar. Although we hedge
significant exposures in currencies other than the dollar, currency fluctuations
partially affect our

                                        35
<PAGE>

interest income and other, net. The decrease in interest income and other, net
was partially offset by the net decrease in interest expense related to the
repurchase of our 2% Notes in June 2004 and the issuance of the 0.50% Notes in
March 2004. See the discussion above under the caption "Convertible Notes".

     Income Taxes.  Income taxes for fiscal 2004 were $66.2 million on pretax
income of $301.1 million, an effective tax rate of 22% compared to 25% in fiscal
2003. Our effective tax rate is dependent on the corporate income tax rates in
the various countries in which we operate and the relative magnitude of our
business in those countries. The reduction in our effective tax rate in fiscal
2004 was due to our continued expansion into countries with lower income tax
rates. See the discussion below under the caption "Effective Tax Rate".

     Net Income.  Net income was $234.9 million in fiscal 2004, compared to a
net income of $168.9 million in fiscal 2003. The increase in net income was
attributable to the 19.6% increase in our total revenue and to the effect of the
$14.1 million restructuring charges and other in the year ended September 30,
2003. The increase was partially offset by the 1.7% decrease in our gross
margin, as a percentage of revenue, attributable to the relatively lower gross
margin of our Managed Services projects in their early stages of implementation.

     Diluted Earnings Per Share.  Diluted earnings per share were $1.10 for the
year ended September 30, 2004, compared to $0.77 in the year ended September 30,
2003.

     In fiscal 2004, we purchased 16.4 million of our ordinary shares, reducing
the diluted weighted average number of shares outstanding from 219.9 million in
fiscal 2003 to 214.2 million in fiscal 2004.

  FISCAL YEARS ENDED SEPTEMBER 30, 2003 AND 2002

     The following is a tabular presentation of our results of operations for
the fiscal year ended September 30, 2003, compared to the fiscal year ended
September 30, 2002. Following the table is a discussion and analysis of our
business and results of operations for such years.

<Table>
<Caption>
                                            YEAR ENDED SEPTEMBER 30,    INCREASE (DECREASE)
                                            -------------------------   -------------------
                                               2003          2002         AMOUNT       %
                                            -----------   -----------   ----------   ------
                                                        (IN THOUSANDS)
<S>                                         <C>           <C>           <C>          <C>
Revenue:
  License.................................  $   65,582    $  153,664    $ (88,082)   (57.3)%
  Service.................................   1,417,745     1,459,901      (42,156)    (2.9)
                                            ----------    ----------    ---------
                                             1,483,327     1,613,565     (130,238)    (8.1)
                                            ----------    ----------    ---------
Operating expenses:
  Cost of license.........................       5,752         5,984         (232)    (3.9)
  Cost of service.........................     907,607       927,353      (19,746)    (2.1)
  Research and development................     119,256       124,082       (4,826)    (3.9)
  Selling, general and administrative.....     206,265       223,551      (17,286)    (7.7)
  Amortization of goodwill and purchased
     intangible assets....................      19,940       231,804     (211,864)   (91.4)
  Restructuring charges, in-process
     research and development and other...      14,089        51,630      (37,541)   (72.7)
                                            ----------    ----------    ---------
                                             1,272,909     1,564,404     (291,495)   (18.6)
                                            ----------    ----------    ---------
Operating income..........................     210,418        49,161      161,257    328.0
Interest income and other, net............      14,759        19,298       (4,539)   (23.5)
                                            ----------    ----------    ---------
Income before income taxes................     225,177        68,459      156,718    228.9
Income taxes..............................      56,294        73,520      (17,226)   (23.4)
                                            ----------    ----------    ---------
Net income (loss).........................  $  168,883    $   (5,061)   $ 173,944
                                            ==========    ==========    =========
</Table>

                                        36
<PAGE>

     Revenue.  Total revenue decreased by $130.2 million, or 8.1%, in the fiscal
year ended September 30, 2003 to $1,483.3 million from $1,613.6 million in
fiscal 2002. The decrease in revenue was due to the slowdown in customer buying
decisions, stemming from overall reductions in the capital investment budgets of
many communications service providers.

     License revenue decreased by $88.1 million, or 57.3%, in the fiscal year
ended September 30, 2003 to $65.6 million from $153.7 million in fiscal 2002.
Service revenue decreased by $42.2 million, or 2.9%, in the fiscal year ended
September 30, 2003 to $1,417.7 million from $1,459.9 million in fiscal 2002. The
decrease in license revenue is attributable primarily to the reduction in
capital investments by our communications customers, which resulted in our
obtaining fewer new contracts than in fiscal 2002 and smaller initial spending
commitments under contracts with some of our customers. The significant new
contracts that we did obtain in fiscal 2002 were for Managed Services
arrangements, which contain only a small license revenue component. We believe
that this reduction in capital spending caused our communications customers to
shift from purchasing large-scale end-to-end solutions to purchasing more
gradual side-by-side installations with fewer users or fewer modules with the
possibility of extending orders in the future. In addition, the communications
market environment resulted in pricing pressure, particularly with respect to
license fees. The decrease in service revenue is attributable to smaller initial
spending commitments by our communications customers and reduced discretionary
spending under contracts with some of our customers. We did not significantly
change our pricing policy for products and services and accordingly, pricing
pressure resulted in fewer new customer projects.

     Total quarterly revenue increased by $15.6 million, or 4.6%, between the
first and second quarters and by $22 million, or 6.2%, between the second and
third quarters. These sequential increases were as a result of new Managed
Services agreements signed during fiscal 2003. In addition, total quarterly
revenue increased by $34.5 million, or 9.2%, between the third and fourth
quarters, consisting of approximately $45 million resulting from new Managed
Services agreements signed during fiscal 2003 (including the effect of the
Certen acquisition) in the fourth quarter of fiscal 2003, offset by a decrease
in the volume of services rendered to existing customers of approximately $10
million.

     The decline in our overall revenue in fiscal 2003 was attributable to a
decrease in revenue from CC&B Systems. Total CC&B Systems revenue decreased by
$159.6 million, or 11.1%, in the fiscal year ended September 30, 2003 to
$1,280.4 million from $1,440.0 million in fiscal 2002. License and service
revenue from the sale of CC&B Systems represented 86.3% and 89.2% of our total
revenue in fiscal years 2003 and 2002, respectively. The demand for our CC&B
Systems is primarily driven by the need for communications companies to continue
to upgrade their billing, CRM and order management systems. In fiscal 2003, many
communications companies reduced or delayed expenditures on system upgrades as a
result of the slowdown in the communications industry. Approximately $59.0
million of CC&B Systems revenue for fiscal 2003 was derived from customers other
than communications service providers.

     Revenue from Directory Systems increased by $29.3 million, or 16.9%, in the
fiscal year ended September 30, 2003 to $202.9 million from $173.6 million in
fiscal 2002. Approximately $47 million of the increase in Directory Systems
revenue in fiscal 2003 was attributable to new Managed Services agreements,
which signed during fiscal 2003. This revenue was partially offset by completion
of certain implementation projects that accounted for approximately $18 million
of revenue in fiscal 2002. License and service revenue from the sale of
Directory Systems represented 13.7% and 10.8% of our total revenue in fiscal
years 2003 and 2002, respectively.

     In fiscal 2003, revenue from customers in North America, Europe and the
rest of the world accounted for 62.0%, 29.8% and 8.2% of our total revenue,
respectively, compared to 61.9%, 28.9% and 9.2%, respectively, for fiscal 2002.
The decrease in the absolute amount of revenue from customers in North America
was attributable to a decrease in the volume of services rendered to existing
customers, which was offset by a $74 million increase from new Managed Services
arrangements signed during fiscal 2003, including the Certen acquisition.

     Cost of License.  Cost of license mainly includes amortization of purchased
computer software and intellectual property rights. Because such amortization is
relatively stable from period to period and, absent
                                        37
<PAGE>

impairment, is generally fixed in amount, an increase or decrease in license
revenue will cause a significant fluctuation in cost of license as a percentage
of license revenue. Cost of license for fiscal 2003 was $5.8 million compared to
$6.0 million for fiscal 2002, or, as a percentage of license revenue, 8.8% and
3.9%, respectively.

     Cost of Service.  The decrease in cost of service in fiscal 2003 was 2.1%,
which was less than the 8.1% decrease in our total revenue in fiscal 2003, and
resulted in a 3.8% decrease in our gross margin, as a percentage of revenue. The
decrease in cost of service in fiscal 2003 is attributable to the cost reduction
programs that we implemented in fiscal 2002 and in the first quarter of fiscal
2003. Although our cost of service decreased in fiscal 2003, our gross margin
also decreased. The decrease in the gross margin is attributable to the decrease
in license revenue of $88.1 million and to the fact that our cost reductions
were proportionally less than the decrease in our service revenue. Our gross
margin was also affected by new Managed Services projects, which tend to be less
profitable in their initial period. We have taken steps to decrease our costs
and increase our gross margin. See the discussion above under the caption
"Operational Efficiency and Cost Reduction Programs".

     Research and Development.  Research and development expense was primarily
comprised of compensation expense attributable to research and development
activities, which involve the development of new software modules and product
offerings, either in conjunction with customer projects or as part of our
internal product development program. Research and development expense decreased
by $4.8 million, or 3.9%, in the fiscal year ended September 30, 2003 to $119.3
million, or 8.0% of revenue, from $124.1 million, or 7.7% of revenue in fiscal
2002. As a result of our research and development program, in fiscal 2003 we
launched major releases of our flagship products -- our billing platform, which
we call Amdocs Enabler version 5, and Amdocs ClarifyCRM version 12. Enabler
version 5 supports new revenue streams and business models with advanced online
charging capabilities and supports multi-market/multi-national operations, all
on a single platform. ClarifyCRM version 12 features advanced user interface
technology that delivers real-time, relevant, and actionable customer
information to the service agent's desktop, transforming the high-volume call
center into a more efficient and effective multi-channel customer contact
center. We focus significant development efforts on the integration between our
products in order to provide Integrated Customer Management to our customers,
while continuing to upgrade our existing systems. The majority of our research
and development expenditures are aimed to our billing and CRM systems, and the
remainder to directory, content and order management solutions. Our research and
development budget, like all of our costs, is sensitive to our overall financial
condition. A decrease in our total revenue could, in certain circumstances, lead
to reductions in the levels of our research and development expenditures.

     Selling, General and Administrative.  Selling, general and administrative
expense decreased by $17.3 million, or 7.7%, in the fiscal year ended September
30, 2003 to $206.3 million, or 13.9% of revenue, in fiscal 2003 from $223.6
million, or 13.9% of revenue, in fiscal 2002. Selling, general and
administrative expense was primarily comprised of compensation expense. The
decrease in selling, general and administrative expense is attributable to the
cost reduction programs that we implemented in fiscal 2002 and in the first
quarter of fiscal 2003. Selling, general and administrative expense decreased in
fiscal 2003 proportionally with our revenue, resulting in the same percentage of
revenue as in fiscal 2002.

     Amortization of Goodwill and Purchased Intangible Assets.  Effective as of
October 1, 2002, we adopted SFAS No. 142, "Goodwill and Other Intangible
Assets", and goodwill related to our acquisitions is no longer amortized.
Instead, any such goodwill is subject only to periodic impairment tests.
Amortization of goodwill for fiscal 2002 was $204.6 million. Amortization of
purchased intangible assets for fiscal 2003 was $19.9 million, compared to $27.2
million in fiscal 2002. Amortization of purchased intangible assets for fiscal
2002 included amortization of purchased intangible assets that were fully
amortized in fiscal 2002.

     Restructuring Charges, In-Process Research and Development and
Other.  Restructuring charges, in-process research and development and other in
fiscal 2003 consisted of a restructuring charge of $10.0 million related to the
cost reduction program we implemented in the first quarter of fiscal 2003 and
the cumulative effect of our 10% share in Certen's pre-acquisition results of
$4.1 million. Restructuring

                                        38
<PAGE>

charges, in-process research and development and other in fiscal 2002 consisted
of a one-time charge of $17.4 million for write-off of purchased in-process
research and development resulting from the Clarify transaction, a restructuring
charge of $13.3 million related to the consolidation of data centers and the
resulting closure of our Stamford, Connecticut facility and a restructuring
charge of $20.9 million related to the cost reduction program we implemented in
the fourth quarter of fiscal 2002. See the discussion above under the caption
"Operational Efficiency and Cost Reduction Programs".

     Operating Income.  Operating income increased by $161.3 million, or 328%,
in the fiscal year ended September 30, 2003, to $210.4 million, or 14.2% of
revenue, from $49.2 million, or 3.0% of revenue, in fiscal 2002. The increase is
attributable to our adoption of SFAS No. 142, which resulted in no amortization
of goodwill in fiscal 2003, which accounted for $204.6 million in fiscal 2002.

     Operating income for fiscal 2003 included amortization of purchased
intangible assets of $19.9 million, restructuring charges of $10.0 million and
the cumulative effect of our 10% share in Certen's pre-acquisition results of
$4.1 million. Operating income for fiscal 2002 included amortization of goodwill
of $204.6 million, amortization of purchased intangible assets of $27.2 million,
restructuring charges of $34.2 million and the write-off of in-process research
and development of $17.4 million.

     Interest Income and Other, Net.  Interest income and other, net, decreased
by $4.5 million, or 23.5%, in the fiscal year ended September 30, 2003 to $14.8
million from $19.3 million in fiscal 2002. The decrease in interest income and
other, net, is attributable to a decline in interest rates on our short-term
interest-bearing investments which resulted in a decrease of $4.5 million in
interest income, and to the $6.0 million gain recognized in the fourth quarter
of fiscal 2002 from the repurchases of our 2% Notes that was greater than the
$0.4 million gain from our repurchases in the fourth quarter of fiscal 2003.
These decreases were offset primarily by the decrease in interest expense of
approximately $4 million related to the 2% Notes that we repurchased in the
fourth quarter of fiscal 2002, and by a decrease of $1.6 million in other
interest expenses.

     Income Taxes.  Income taxes for fiscal 2003 were $56.3 million on pretax
income of $225.2 million, resulting in an effective tax rate of 25%. As a result
of the adoption of SFAS No. 142, we no longer amortize goodwill resulting from
acquisitions, thus goodwill amortization that is not tax-deductible no longer
affects our effective tax rate. In fiscal 2002, income taxes were $73.5 million
on pretax income of $68.5 million, or 107% of pretax income. This higher
effective tax rate in 2002 was attributable to the fact that non-cash
amortization of goodwill related to acquisitions (much of which is not
tax-deductible) represented a large component of our pretax income. Excluding
the effect of such non-deductible non-cash amortization of goodwill (which
accounted for 89% of the effective tax rate) and offsetting such 89% by the 10%
decrease in the tax rate due to the repurchase of our 2% Notes, our effective
tax rate for 2002 would have been 28%. See the discussion below under the
caption "Effective Tax Rate".

     Net Income (Loss).  Net income was $168.9 million in fiscal 2003, compared
to a net loss of $5.1 million in fiscal 2002. Net income for fiscal 2003
included amortization of purchased intangible assets, restructuring charges and
the cumulative effect of our 10% share in Certen's pre-acquisition results. Net
loss for fiscal 2002 included amortization of goodwill and purchased intangible
assets, restructuring charges, the write-off of in-process research and
development and the gain from the repurchase of our 2% Notes.

                                        39
<PAGE>

     Prior to fiscal 2003, goodwill was amortized using the straight-line method
over its estimated period of benefit. Net income and earnings per share for
fiscal 2002, adjusted to exclude amortization of goodwill and
workforce-in-place, net of tax, are as follows (in millions, except per share
data):

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

     Diluted Earnings (Loss) Per Share.  Diluted earnings per share were $0.77
for fiscal 2003, compared to net loss per share of $0.02 in fiscal 2002.

LIQUIDITY AND CAPITAL RESOURCES

     Cash, cash equivalents and short-term interest-bearing investments totaled
$1,190.7 million as of September 30, 2004, compared to $1,290.9 million as of
September 30, 2003. The decrease is attributable to the use of approximately
$395.1 million to repurchase the 2% Notes, the use of $170.1 million to
repurchase ordinary shares sold short by purchasers of the 0.50% Notes in
negotiated transactions concurrently with the sale of the 0.50% Notes, and the
use of an additional $237.4 million to repurchase our ordinary shares pursuant
to our share repurchase programs and in connection with our acquisition of
XACCT, which was partially offset by the net proceeds from the issuance of
$450.0 million of the 0.50% Notes in March 2004 and positive cash flows from
operations. Net cash provided by operating activities amounted to $344.3 million
for fiscal 2004 and $391.8 million for fiscal 2003. Although net income before
depreciation and amortization increased in fiscal 2004, cash flows from
operations decreased, due primarily to increases in accounts receivable. We
currently intend to retain our future operating cash flows to support the
further expansion of our business, including investments related to new Managed
Services projects and acquisitions. From time to time, we may also repurchase
our shares, subject to our Board of Directors' authorization.

     Our policy is to retain substantial cash balances in order to support the
growth of the Company. We believe that our current cash balances, cash generated
from operations and our current lines of credit will provide sufficient
resources to meet our liquidity needs for at least the next fiscal year.

     As of September 30, 2004, we had positive working capital of $813.5
million, compared to positive working capital of $567.3 million as of September
30, 2003. The increase is attributable primarily to cash generated from
operating activities and the net proceeds from the issuance of the 0.50% Notes,
which was partially offset by use of cash to repurchase the 2% Notes and
repurchase our ordinary shares.

     As of September 30, 2004, $0.3 million and $450.0 million aggregate
principal amount of our 2% Notes and 0.50% Notes were outstanding, respectively.
See the discussion above under the caption "Convertible Notes".

     As of September 30, 2004, we had available short-term general revolving
lines of credit totaling $31.0 million, pursuant to which $1.0 million of loans
were outstanding. In addition, as of September 30, 2004, we had outstanding
letters of credit and bank guarantees from various banks totaling $13.0 million.

     As of September 30, 2004, we had outstanding long-term obligations of $23.3
million in connection with leasing arrangements.

                                        40
<PAGE>

     The following table summarizes our contractual obligations as of September
30, 2004, and the effect such obligations are expected to have on our liquidity
and cash flows in future periods (in millions):

<Table>
<Caption>
                                                              CASH PAYMENTS DUE BY PERIOD
                                               ---------------------------------------------------------
                                                        LESS THAN
CONTRACTUAL OBLIGATIONS                        TOTAL     1 YEAR     1-3 YEARS   4-5 YEARS   OVER 5 YEARS
-----------------------                        ------   ---------   ---------   ---------   ------------
<S>                                            <C>      <C>         <C>         <C>         <C>
Convertible notes(*).........................  $460.4     $ 2.3      $  7.0      $451.1        $  --
Financing arrangements.......................     1.6       1.6          --          --           --
Capital lease obligations....................    24.4      20.3         4.1          --           --
Pension funding..............................    32.6       3.4         8.6         6.3         14.3
Non-cancelable operating leases..............   200.0      50.5        99.1        29.2         21.2
                                               ------     -----      ------      ------        -----
                                               $719.0     $78.1      $118.8      $486.6        $35.5
                                               ======     =====      ======      ======        =====
</Table>

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

(*) See the discussion above under the caption "Convertible Notes".

     Our capital expenditures were approximately $54.1 million in fiscal 2004.
Approximately 85% of these expenditures consisted of purchases of computer
equipment and, the remainder, leasehold improvements. We funded our capital
expenditures principally from operating cash flows. We do not anticipate any
changes to this policy in the foreseeable future.

NET DEFERRED TAX ASSETS

     As of September 30, 2004, deferred tax assets of $11.4 million, derived
from net capital and operating loss carry forwards related to some of our
subsidiaries, were offset by valuation allowances due to the uncertainty of the
realizing any tax benefit for such losses. When realization of the tax benefits
associated with such net capital and operating losses is deemed more likely than
not, the valuation allowance will be released through income taxes.

     In September 2003, we released $13.3 million of valuation allowances
related to deferred tax assets derived from carry-forward operating losses
incurred by our Canadian subsidiary. In September 2002, we released valuation
allowances related to deferred tax assets derived from carry-forward operating
losses relating to losses incurred by the subsidiary prior to our acquisition of
that company in April 2000, resulting in an offsetting reduction of the goodwill
recorded in the acquisition of approximately $9.0 million. The release of these
valuation allowances was made based on our estimation that we will be able to
realize the tax benefits associated with those net operating losses.

EFFECTIVE TAX RATE

     Our effective tax rate for fiscal year 2004 was 22%, compared to 25% in
fiscal 2003, due to the corporate income tax rates in the various countries in
which we operate and the relative magnitude of our business in those countries.

     Effective October 1, 2002, following the adoption of SFAS No. 142, we no
longer amortize goodwill resulting from acquisitions. As a result, goodwill
amortization that is not tax-deductible no longer affects our effective tax
rate.

     In fiscal 2002, our effective tax rate was 107%. This effective tax rate in
2002 was attributable to the fact that non-cash amortization of goodwill related
to our acquisitions (much of which is not tax deductible) represented a large
component of our pretax income. Excluding the effect of such non-deductible
non-cash amortization of goodwill (which accounted for 89% of the effective tax
rate) and offsetting such 89% by the 10% decrease in the tax rate due to the
repurchase of our 2% Notes, our effective tax rate for 2002 would have been 28%.
This high effective tax rate was also adversely affected by the revision we made
in our third quarter of fiscal 2002 to our annual estimated pretax income
levels.

     We expect a reduction in our effective tax rate in fiscal 2005 from 22% to
between 21% and 20%. The reduction is due to our continued expansion into
countries with lower income tax rates.

                                        41
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

     The Effect of Contingently Convertible Instruments on Diluted Earnings Per
Share

     In September 2004, the Emerging Issues Task Force ("EITF") reached a
consensus on EITF Issue No. 04-8, "The Effect of Contingently Convertible
Instruments on Diluted Earnings Per Share" ("Issue 04-8"). Issue 04-8 addresses
contingently convertible debt instruments, which are generally convertible into
common shares of the issuer after the common stock price has exceeded a
predetermined threshold for a specified time period. Currently, the potential
dilutive effect of the conversion feature is excluded from diluted earnings per
share until the market price contingency is met. Under Issue 04-8 all
instruments that have embedded conversion features that are contingent on market
conditions indexed to an issuer's share price should be included in diluted
earnings per share computations, if dilutive, regardless of whether the market
conditions have been met. The effective date of Issue 04-8 is for reporting
periods ending after December 15, 2004 (first quarter of our fiscal year 2005).
The consensus would be applied retroactively to instruments outstanding at the
date of adoption. Diluted earnings per share of all prior periods presented for
comparative purposes should be restated to conform to the consensus guidance.
For instruments whose terms have been modified prior to the date of adoption,
the consensus would apply to terms of instruments in place at the date of
adoption, and diluted earnings per share for all prior periods would be restated
based upon the modified terms. For instruments that have been cash settled
before the date of adoption, restatement of diluted earnings per share is not
required. The effect of Issue 04-8 is the increase of weighted average number of
shares used for diluted earnings per share calculation by 10.4 million shares
underlying our 0.50% Notes, while interest and issuance costs amortization net
of tax, would be added to net income. We believe that the change in accounting
rules will reduce previously reported quarterly diluted earnings per share by
approximately $0.01 per share for each of the third and fourth quarters of
fiscal 2004, and by approximately $0.02 per share for fiscal 2004.

CRITICAL ACCOUNTING POLICIES

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

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

     Our critical accounting policies are as follows:

     - Revenue recognition and contract accounting

     - Doubtful accounts

     - Tax accounting

     - Derivative and hedge accounting

     - Goodwill

     - Realizability of long-lived assets

     Below, we discuss these policies further, as well as the estimates and
judgments involved. We also have other key accounting policies. We believe that,
compared to the critical accounting policies listed above, the other policies
either do not generally require us to make estimates and judgments that are as

                                        42
<PAGE>

difficult or as subjective, or it is less likely that they would have a material
impact on our reported consolidated results of operations for a given period.

  REVENUE RECOGNITION AND CONTRACT ACCOUNTING

     We follow very specific and detailed guidelines, several of which are
discussed above, in measuring revenue; however, certain judgments affect the
application of our revenue recognition policy.

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

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

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

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

     See Note 2 to the consolidated financial statements included in this
document for further information.

  DOUBTFUL ACCOUNTS

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

  TAX ACCOUNTING

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

     Although we believe that our estimates are reasonable and that we have
considered future taxable income and ongoing prudent and feasible tax strategies
in estimating our tax outcome and in assessing the

                                        43
<PAGE>

need for the valuation allowance, there is no assurance that the final tax
outcome and the valuation allowance will not be different than those which are
reflected in our historical income tax provisions and accruals. Such differences
could have a material effect on our income tax provision, net income and cash
balances in the period in which such determination is made.

  DERIVATIVE AND HEDGE ACCOUNTING

     Approximately 70% of our revenue and 50% of our operating expenses are
denominated in U.S. dollar or linked to the U.S. dollar. We enter into foreign
exchange forward contracts to hedge a significant portion of our foreign
currency exposure to minimize fluctuations in revenue and expenses. The majority
of our hedging arrangements are classified as cash flow hedges. Accordingly,
changes in the fair value of these forward exchange contracts are recorded in
other comprehensive income. We estimate the fair value of such derivative
contracts by reference to forward and spot rates quoted in active markets.

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

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

  GOODWILL

     We follow SFAS No. 142, "Goodwill and Other Intangible Assets". Under SFAS
No. 142, goodwill and intangible assets deemed to have indefinite lives are no
longer amortized but are subject to periodic impairment tests in accordance with
the Statement. Goodwill impairment is deemed to exist if the net book value of a
reporting unit exceeds its estimated fair value. The total purchase price of
business acquisitions accounted for using the purchase method is allocated first
to identifiable assets and liabilities based on estimated fair values. The
excess of the purchase price over the fair value of net assets of purchased
businesses is recorded as goodwill.

     Effective October 1, 2002, we adopted SFAS No. 142, and we performed the
transitional tests of goodwill recorded as of October 1, 2002. Thereafter, an
annual impairment test will be performed in the fourth quarter of each fiscal
year, or more frequently if impairment indicators are present. We operate in one
operating segment, and this segment comprises our only reporting unit. In
calculating the fair value of the reporting unit, we used a discounted cash flow
methodology. There was no impairment of goodwill upon adoption of SFAS No. 142
and there was no impairment at the annual impairment test dates.

  REALIZABILITY OF LONG-LIVED ASSETS

     We are required to assess the impairment of long-lived assets, other than
goodwill, tangible and intangible under SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", on a periodic basis, and if events
or changes in circumstances indicate that the carrying value may not be
recoverable. Impairment indicators include any significant changes in the manner
of our use of the assets or the strategy of our overall business, significant
negative industry or economic trends and significant decline in our share price
for a sustained period.

     Upon determination that the carrying value of a long-lived asset may not be
recoverable based upon a comparison of fair value to the carrying amount of the
asset, an impairment charge is recorded. We measure fair value using an
undiscounted projected future cash flow.

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

                                        44
<PAGE>

LITIGATION

     On December 2, 2003 we announced that the United States District Court for
the Eastern District of Missouri had issued an order granting our motion to
dismiss the securities class action lawsuits that had been pending against us
and certain of our directors and officers since June 2002. The court's order
also directed that judgment be entered in our favor. On December 2, 2004, the
United States Court of Appeals for the Eighth Circuit affirmed per curiam the
dismissal of the complaint.

SECURITIES AND EXCHANGE COMMISSION INVESTIGATION

     We have been informed that the Midwest Regional Office of the SEC is
conducting a private investigation into the events leading up to our
announcement in June 2002 of revised projected revenue for the third and fourth
quarters of fiscal 2002. The investigation appears to be focused on, but is not
explicitly limited to, our forecasting beginning with our April 23, 2002 press
release. Although we believe that we will be able to satisfy any concerns the
SEC staff may have in this regard, we are unable to predict the duration, scope,
or outcome of the investigation. We are cooperating fully with the SEC staff.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

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

     As of November 30, 2004, our directors, senior managers and key employees
upon whose work we are dependent were as follows:

<Table>
<Caption>
NAME                                           AGE                   POSITION
----                                           ----                  --------
<S>                                            <C>    <C>
Bruce K. Anderson(2)(4)......................    64   Chairman of the Board, Amdocs Limited
Adrian Gardner(1)(3).........................    42   Director and Chairman of the Audit
                                                        Committee, Amdocs Limited
Julian A. Brodsky(3).........................    71   Director, Amdocs Limited
Charles E. Foster(1)(3)......................    68   Director, Amdocs Limited
James S. Kahan(2)(3)(4)......................    57   Director, Amdocs Limited
John T. McLennan(1)..........................    59   Director, Amdocs Limited
Robert A. Minicucci(2)(4)....................    52   Director, Amdocs Limited
Simon Olswang................................    61   Director, Amdocs Limited
Mario Segal..................................    57   Director, Amdocs Limited
Dov Baharav(4)...............................    54   Director, Amdocs Limited; President and
                                                        Chief Executive Officer, Amdocs
                                                        Management Limited
Eli Gelman...................................    46   Director, Amdocs Limited; Executive
                                                      Vice President, Amdocs Management
                                                        Limited
Nehemia Lemelbaum(4).........................    62   Director, Amdocs Limited; Senior Vice
                                                        President, Amdocs Management Limited
Ron Moskovitz................................    41   Senior Vice President and Chief
                                                      Financial Officer, Amdocs Management
                                                        Limited
Harel Kodesh.................................    46   Chief Products Officer, Amdocs
                                                        Management Limited
Michael Matthews.............................    48   Chief Marketing Officer, Amdocs
                                                        Management Limited
Thomas G. O'Brien............................    44   Treasurer and Secretary, Amdocs Limited
</Table>

                                        45
<PAGE>

<Table>
<Caption>
NAME                                           AGE                   POSITION
----                                           ----                  --------
<S>                                            <C>    <C>
Melinos Pissourios...........................    36   Managing Director and General Manager,
                                                        Amdocs Development Limited
Burt Podbere.................................    38   General Manager, Amdocs Software
                                                        Systems Limited
</Table>

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

     (1) Member of the Audit Committee

     (2) Member of the Compensation Committee

     (3) Member of the Nominating and Corporate Governance Committee

     (4) Member of the Executive Committee

     Bruce K. Anderson has been Chairman of the Board of Directors of Amdocs
since September 1997. Since August 1978, Mr. Anderson has been a general partner
of Welsh, Carson, Anderson & Stowe ("WCAS"), an investment firm that specializes
in the acquisition of companies in the information services, communications and
health care industries. Until September 2003, investment partnerships affiliated
with WCAS had been among our largest shareholders. Mr. Anderson served for nine
years with Automated Data Processing, Inc. ("ADP") until his resignation as
Executive Vice President and a director of ADP, and President of ADP
International, effective August 1978. Mr. Anderson serves on the board of
Alliance Data Systems, Inc., a publicly held company that provides transaction,
credit and marketing services to large consumer based businesses, and
Headstrong, Inc., a global consultancy firm.

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

     Julian A. Brodsky has been a director of Amdocs since July 2003. Mr.
Brodsky has served as a director and as Vice Chairman of Comcast Corporation for
more than five years. Prior to November 2002, he served as a director and Vice
Chairman of Comcast Holdings for more than five years. For five years prior to
May 2004, Mr. Brodsky was Chairman of Comcast Interactive Capital, LP, a venture
fund affiliated with Comcast. He is also a director of RBB Fund, Inc. and Grey
Global Group.

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

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

     John T. McLennan has been a director of Amdocs since November 1999. From
May 2000 until June 2004, he served as Vice-Chair and Chief Executive Officer of
Allstream (formerly AT&T Canada). Mr. McLennan founded and was the President of
Jenmark Consulting Inc. from 1997 until May 2000.

                                        46
<PAGE>

From 1993 to 1997, Mr. McLennan served as the President and Chief Executive
Officer of Bell Canada. Prior to that, he held various positions at several
telecommunications companies, including BCE Mobile Communications and Cantel
Inc. Mr. McLennan is also a director of Manitoba Telephone Systems, Air Canada
Enterprises, Hummingbird Ltd., a Canadian publicly held company engaged in the
production of enterprise management software, and of several other private
software and communication companies.

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

     Simon Olswang has been a director of Amdocs since November 2004. He
recently retired as Chairman of Olswang, a United Kingdom law firm he founded in
1981. In 1995 Mr. Olswang co-founded Informed Sources International Ltd, a
strategic media industry consultancy in Europe and North America. Mr. Olswang is
a co-founder and non-executive director of LongAcre Partners Ltd, a specialized
mergers and acquisitions and advisory firm focusing on the media and
entertainment industries. He is a member of the Board of Directors of The
British Library and of the British Screen Advisory Council and has served as a
non-executive director of a number of companies and organizations, including
Aegis Group plc, The Press Association and the British Film Institute. Mr.
Olswang serves as Chairman of Governors of Langdon College of Further (Special)
Education in Salford, of which he is a co-founder and trustee.

     Mario Segal has been a director of Amdocs since December 2001 and served as
a Senior Vice President and the Chief Operating Officer of Amdocs Management
Limited from 1995 until July 2002. He joined Amdocs in 1984 as Senior Vice
President and was a leading member of the team that developed the ADS
(NG)/Family of Products directory automation systems and the Amdocs CC&B Systems
platform. Prior to joining Amdocs, Mr. Segal was an account manager for a major
North American yellow pages publisher and prior thereto managed the computer
department of a major Israeli insurance company, leading large-scale software
development projects and strategic planning of automation systems.

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

     Eli Gelman has been a director of Amdocs and the Executive Vice President
of Amdocs Management Limited since July 2002. Mr. Gelman has responsibility for
sales, strategic alliances and corporate and business development. He has more
than 27 years of experience in the software industry, including the last 16
years with Amdocs. Prior to his current position, he was a division president,
where he headed our United States sales and marketing operations and helped
spearhead our entry into the CC&B Systems market. Before that, Mr. Gelman was an
account manager for our major European and North American installations, and has
led several major software development projects. Before joining Amdocs, Mr.
Gelman was involved in the development of real-time software systems for
communications networks.

     Nehemia Lemelbaum has been a director of Amdocs since December 2001 and is
a Senior Vice President of Amdocs Management Limited. He joined Amdocs in 1985,
with initial responsibility for U.S. operations. Mr. Lemelbaum led our
development of graphic products for the yellow pages industry and later led our
development of CC&B Systems, as well as our penetration into the CC&B Systems
market. Prior to joining Amdocs, he served for nine years with Contahal Ltd., a
leading Israeli software company, first as a senior consultant, and later as
Managing Director. From 1967 to 1976, Mr. Lemelbaum
                                        47
<PAGE>

was employed by the Ministry of Communications of Israel (the organization that
predated Bezeq, the Israel Telecommunication Corp. Ltd.), with responsibility
for computer technology in the area of business data processing.

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

     Harel Kodesh has been the Chief Products Officer of Amdocs Management
Limited since 2003. Mr. Kodesh oversees Amdocs' product activities and is
responsible for the company's technological vision and execution. From 2000
until 2003, Mr. Kodesh served as president and chief executive officer of
Wingcast LLC, a joint venture between Qualcomm Inc. and Ford Motor Company
formed to offer telecommunications and other technology services for vehicles.
Between 1990 and 2000, Mr. Kodesh held executive positions at Microsoft Corp.,
where he served from 1998 until 2000 as vice president of its information
appliances division.

     Michael Matthews has been with Amdocs since February 2003 and is the Chief
Marketing Officer of Amdocs Management Limited. He has more than twenty-five
years experience across a broad spectrum of disciplines in high technology
companies. From 1999 until February 2003, he was an early investor, strategist
and operating executive at Groove Networks, a privately held start-up technology
company. From 1996 through 1999, Mr. Matthews was executive vice president,
worldwide marketing for PLATINUM technology inc., a database management company
that has since been acquired by Computer Associates International Inc. Mr.
Matthews began his career in Australia selling computers for NCR Corporation and
has also worked with Digital Equipment Corp. and Sterling Software Inc. as sales
and marketing manager and vice president, business development, respectively. He
holds a degree in Civil Engineering from the University of Queensland
(Australia).

     Thomas G. O'Brien has been Treasurer and Secretary of Amdocs Limited since
1998 and has held other financial management positions within Amdocs since 1995.
From 1993 to 1995, Mr. O'Brien was Controller of Big River Minerals Corporation,
a diversified natural resources company. From 1989 to 1993, Mr. O'Brien was the
Assistant Controller for Big River Minerals Corporation. From 1983 to 1989, Mr.
O'Brien was with Arthur Young and Company (now Ernst & Young LLP). Mr. O'Brien
is a member of the American Institute of Certified Public Accountants.

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

     Burt Podbere has been the General Manager of Amdocs Software Systems
Limited in Ireland since October 2002. He joined the Amdocs group in May 2001 as
the financial director of Amdocs Canada Inc. Prior to joining Amdocs, Mr.
Podbere was the Canadian Group Controller at US Filter Corporation, part of the
Vivendi group of companies. He also worked for Ernst & Young LLP for four years.
Mr. Podbere is a member of the Canadian Institute of Chartered Accountants.

COMPENSATION

     As of November 3, 2004, our directors who are not employees of the Company
("Non-Employee Directors") receive compensation for their services as directors
in the form of cash and options to purchase ordinary shares. Our compensation
policy provides that each Non-Employee Director receives an

                                        48
<PAGE>

annual cash payment of $30,000. Each of our Non-Employee Directors also receives
an initial option grant for the purchase of 12,000 ordinary shares. Thereafter,
Non-Employee Directors receive an annual option grant for the purchase of 7,500
ordinary shares, except for Non-Employee Directors who are members of our Audit
Committee or Executive Committee, who receive an annual option grant for the
purchase of 8,500 ordinary shares. All option grants to our Non-Employee
Directors vest as to one-quarter of the shares immediately, with the remainder
vesting annually in three equal installments. The exercise price of all options
granted to our Non-Employee Directors is the market price of our shares on the
last trading day preceding the grant date. Each Non-Employee Director receives
$1,500 per meeting of the Board of Directors and $1,000 per meeting of a
committee of the Board of Directors, except for Non-Employee Directors who are
members of our Audit Committee or Executive Committee, who receive $2,000 per
meeting. We reimburse all of our directors for their reasonable travel expenses
incurred in connection with attending Board or committee meetings.

     During fiscal 2004, we granted options to purchase ordinary shares to
certain of our Non-Employee Directors, but did not make any option grants to
members of our administrative, supervisory or management bodies. We granted to
nine Non-Employee Directors options to purchase an aggregate of 48,000 ordinary
shares at a weighted average price of $21.20 per share, with vesting over three
year terms.

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

     A total of 18 persons who served either as directors of Amdocs or members
of its administrative, supervisory or management bodies during all or part of
fiscal 2004 received remuneration from Amdocs. The aggregate remuneration paid
by us to such persons was approximately $7.5 million, which includes amounts set
aside or accrued to provide pension, retirement or similar benefits, but does
not include amounts expended by us for automobiles made available to such
persons, expenses (including business travel, professional and business
association dues) or other fringe benefits. Included in this amount is
remuneration to two former executive officers and one former director for the
applicable portions of fiscal 2004.

BOARD PRACTICES

     Our entire Board of Directors is comprised of 13 directors. Twelve
directors were elected to our Board of Directors at our annual meeting of
shareholders on January 23, 2003. One director resigned from our Board of
Directors in August 2004 and one director was appointed to our Board of
Directors effective November 2004. As permitted by our Articles of Association,
the Board of Directors may fill the one remaining vacancy at any time. All
directors hold office until the next annual meeting of our shareholders, which
generally is in January of each calendar year, or until their respective
successors are duly elected and qualified or their positions are earlier vacated
by resignation or otherwise.

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

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

  BOARD COMMITTEES

     Our Board of Directors has formed four committees set forth below. Members
of each committee are appointed by the Board of Directors.

                                        49
<PAGE>

     The Audit Committee reviews, acts on and reports to the Board of Directors
with respect to various auditing and accounting matters, including the selection
of our auditors, the scope of the annual audits, fees to be paid to the
auditors, the performance of our independent auditors, and assists with the
Board of Directors' oversight of our accounting practices, financial statement
integrity and compliance with legal and regulatory requirements. The current
members of our Audit Committee are Messrs. Gardner (Chair), Foster and McLennan,
all of whom are independent directors, as defined by the rules of the New York
Stock Exchange, or the NYSE, and pursuant to the categorical director
independence standards adopted by our Board of Directors. The Board of Directors
has determined that Mr. Gardner is an "audit committee financial expert" as
defined by rules promulgated by the SEC. The Audit Committee written charter is
available on our website at www.amdocs.com.

     The Compensation Committee discharges the responsibilities of our Board of
Directors relating to the compensation of the Chief Executive Officer of Amdocs
Management Limited and makes recommendations to our Board of Directors with
respect to the compensation of our other executive officers. The current members
of our Compensation Committee are Messrs. Anderson, Kahan and Minicucci, all of
whom are independent directors, as defined by the rules of the NYSE, and
pursuant to the categorical director independence standards adopted by our Board
of Directors. The Compensation Committee written charter is available on our
website at www.amdocs.com.

     The Nominating and Corporate Governance Committee identifies individuals
qualified to become members of our Board of Directors, recommends to the Board
of Directors the persons to be nominated for election as directors at the annual
general meeting of shareholders, develops and makes recommendations to the Board
of Directors regarding our corporate governance principles and oversees the
evaluations of our Board of Directors and our management. The current members of
the Nominating and Corporate Governance Committee are Messrs. Brodsky, Gardner,
Foster and Kahan, all of whom are independent directors, as required by the NYSE
listing standards, and pursuant to the categorical director independence
standards adopted by our Board of Directors. The Nominating and Corporate
Governance Committee written charter is available on our website at
www.amdocs.com. Additionally, the Nominating and Corporate Governance Committee,
which was established in November 2004, is in the process of approving corporate
governance guidelines that it expects to recommend for approval by our Board of
Directors at its upcoming meetings. Upon such approval by our Board, we intend
to make the corporate governance guidelines available on our website. We believe
there are no significant ways that our corporate governance practices differ
from those followed by U.S. domestic companies under NYSE listing standards.

     The Executive Committee has such responsibilities as may be delegated to it
from time to time by the Board of Directors. The current members of our
Executive Committee are Messrs. Anderson, Baharav, Kahan, Lemelbaum and
Minicucci.

     Our independent directors receive no compensation from the Company, except
in connection with their membership on the Board of Directors and its committees
as described above regarding Non-Employee Directors under "-- Compensation".

                                        50
<PAGE>

EMPLOYEES

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

<Table>
<Caption>
                                                                AS OF SEPTEMBER 30,
                                                              -----------------------
                                                               2004     2003    2002
                                                              ------   ------   -----
<S>                                                           <C>      <C>      <C>
  Software and Information Technology
     Israel.................................................   4,100    4,100   4,100
     North America..........................................   3,400    3,500   2,600
     Rest of World..........................................   2,100    1,600   1,700
                                                              ------   ------   -----
                                                               9,600    9,200   8,400
  Management and Administration.............................   1,000    1,000   1,000
                                                              ------   ------   -----
Total employees.............................................  10,600   10,200   9,400
                                                              ======   ======   =====
</Table>

     During fiscal 2002 and the first quarter of fiscal 2003, we took steps to
reduce our costs and achieve increased operational efficiency, including by
making reductions in our workforce. In the fourth quarter of 2002, as part of a
cost reduction program, we reduced our workforce by approximately 1,000 software
and information technology specialists and administrative professionals. In
November 2002, we announced additional measures to reduce costs, including
further reductions in our workforce of approximately 400 software and
information technology specialists and administrative professionals. During
fiscal 2003, as a result of our acquisition of Certen and our Managed Services
agreement with SBC, we increased our workforce by approximately 1,200 employees.
As of September 30, 2004, we employed on a full-time basis approximately 9,600
software and information technology specialists, engaged in research,
development, maintenance and support activities, and approximately 1,000
managers and administrative professionals.

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

     Our principal operating subsidiaries are not party to any collective
bargaining agreements. However, our Israeli subsidiaries are subject to certain
labor-related statutes and to certain provisions of collective bargaining
agreements between the Histadrut (General Federation of Labor in Israel) and the
Coordinating Bureau of Economic Organizations (including the Industrialists'
Association), which are applicable to our Israeli employees by virtue of
expansion orders of the Israeli Ministry of Labor and Welfare. A significant
provision applicable to all employees in Israel under collective bargaining
agreements and expansion orders is an adjustment of wages in relation to
increases in the consumer price index, or CPI. The amount and frequency of these
adjustments are modified from time to time.

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

     We consider our relationship with our employees to be good and have never
experienced a labor dispute, strike or work stoppage.

SHARE OWNERSHIP

  SECURITY OWNERSHIP OF DIRECTORS AND SENIOR MANAGEMENT AND CERTAIN KEY
  EMPLOYEES

     As of November 24, 2004, the aggregate number of our ordinary shares
beneficially owned by our directors, senior managers and certain key employees
was 20,636,098 shares. This number includes

                                        51
<PAGE>

12,747,698 ordinary shares held by SBC, since Mr. Kahan, Senior Executive Vice
President of SBC, serves on our Board of Directors, and accordingly, he may be
deemed to be the beneficial owner of the shares held by SBC. Mr. Kahan disclaims
beneficial ownership of such shares. Historically, this number also included
shares held by WCAS, since Messrs. Anderson and Minicucci, affiliates of WCAS,
serve on our Board of Directors. As of September 24, 2003, various investment
partnerships affiliated with WCAS ceased to be shareholders of the Company. See
"Major Shareholders and Related Party Transactions". As of November 24, 2004,
other than Mr. Kahan, none of our directors, senior managers or key employees
beneficially own 1% or more of our outstanding ordinary shares.

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

  EMPLOYEE STOCK OPTION AND INCENTIVE PLAN

     Our 1998 Stock Option and Incentive Plan, as amended (the "Option Plan"),
provides for the grant by Amdocs of restricted shares or stock options to our
directors, employees (including officers) and consultants. The purpose of the
Option Plan is to enable us to attract and retain qualified personnel and to
motivate such persons by providing them with an equity participation in the
Company. As of September 30, 2004, of the 38,300,000 ordinary shares available
for issuance under the Option Plan, 3,972,925 ordinary shares had been issued as
a result of option exercises and 8,476,277 ordinary shares remained available
for future grants. As of September 30, 2004, there were outstanding options to
purchase an aggregate of 25,850,798 ordinary shares at exercise prices ranging
from $0 to $78.31 per share and no restricted shares had been awarded.

     The Option Plan provides for the granting of "incentive stock options" and
"non-qualified stock options" to purchase ordinary shares and/or the granting of
rights to purchase ordinary shares on a "restricted" basis. The terms and
conditions of individual grants may vary subject to the following: (i) the
exercise price of incentive stock options may not be less than market value on
the date of grant; (ii) the term of incentive stock options may not exceed ten
years from the date of grant; and (iii) no options or awards may be granted
after January 2008.

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

     As a result of acquisitions, as of September 30, 2004, we are obligated to
issue (and have reserved for issuance) an additional 195,680 ordinary shares
upon exercise of options that had previously been granted under the option plans
of the acquired companies (the "Predecessor Plans") and were exchanged for
options to purchase our ordinary shares. These options have exercise prices
ranging from $1.87 to $71.97 per share. No additional options have been or will
be granted under the Predecessor Plans.

                                        52
<PAGE>

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

     The following table sets forth specified information with respect to the
beneficial ownership of the ordinary shares as of November 24, 2004 of (i) any
person known by us to be the beneficial owner of more than 5% of our ordinary
shares and (ii) all of our directors and executives officers as a group.
Beneficial ownership is determined in accordance with the rules of the SEC and,
unless otherwise indicated, includes voting and investment power with respect to
all ordinary shares, subject to community property laws, where applicable. The
number of ordinary shares used in calculating the percentage beneficial
ownership included in the table below is based on 201,946,567 ordinary shares
outstanding as of November 24, 2004.

<Table>
<Caption>
                                                                 SHARES
                                                              BENEFICIALLY   PERCENTAGE
NAME AND ADDRESS                                                 OWNED       OWNERSHIP
----------------                                              ------------   ----------
<S>                                                           <C>            <C>
Massachusetts Financial Services Company(1).................   19,406,163        9.6%
  500 Boylston Street, 15th Floor
  Boston, Massachusetts 02116

SBC Communications Inc.(2)..................................   12,747,698        6.3%
  175 E. Houston Street
  San Antonio, Texas 78205-2233

All directors and executive officers as a group
  (18 persons)(3)...........................................   20,636,098       10.2%
</Table>

---------------
(1) Based on a Form 13F filed by Massachusetts Financial Services Company
    ("MFS") with the SEC on November 10, 2004, as of September 30, 2004, MFS had
    sole voting power over 19,088,913 of our ordinary shares and no voting power
    over 317,250 ordinary shares. The Form 13F indicates that MFS had sole
    investment discretion over 19,406,163 ordinary shares.

(2) Based upon information provided to us by SBC, as of November 24, 2004, SBCI,
    a wholly owned subsidiary of SBC, held 7,551,875 of our ordinary shares, and
    SBC Option Delivery LLC, a majority-owned subsidiary of SBCI, held 5,195,823
    of our ordinary shares. James S. Kahan, Senior Executive Vice President of
    SBC, serves on our Board of Directors.

(3) Includes ordinary shares held by SBC. See footnote 2 above. Mr. Kahan,
    Senior Executive Vice President of SBC, serves on the Company's Board of
    Directors and, accordingly, may be deemed to be the beneficial owner of the
    ordinary shares held by SBC. Mr. Kahan disclaims beneficial ownership of
    such shares. Also includes options granted to such directors and executive
    officers of the Company that are exercisable within 60 days of November 24,
    2004. With the exception of Mr. Kahan, no individual director or executive
    officer may be deemed to be the beneficial owner of more than 1% of the
    Company's outstanding ordinary shares.

     Over the last three years, our major shareholders have included our
directors and executive officers as a group, SBC, WCAS, Fidelity Management and
Research ("FMR"), which became a major shareholder in fiscal 2003, MFS, which
became a major shareholder in September 2003, and other institutional investors.
SBC's share ownership has decreased to 6.3% as of November 24, 2004 from 14.4%
in November 2001. FMR ceased to be a major shareholder in fiscal 2004.
Investment partnerships affiliated with WCAS, which had been major shareholders
in the three fiscal years ending September 30, 2003, ceased to be shareholders
of the Company in September 2003 as a result of distributions made to the
partners of such investment partnerships. Southeastern Asset Management, which
had been a major shareholder in fiscal 2002, ceased to be a major shareholder in
June 2003. AXA Financial, which had been a major shareholder in fiscal 2001,
ceased to be a major shareholder in December 2002.

     As of November 24, 2004, our ordinary shares were held by 235
recordholders. Based on a review of the information provided to us by our
transfer agent, 162 recordholders, holding approximately 97% of our outstanding
ordinary shares, were residents of the United States.

                                        53
<PAGE>

RELATED PARTY TRANSACTIONS

     In addition to being a major shareholder, SBC, and some of its operating
subsidiaries, are also significant customers of ours. During fiscal 2004, 2003
and 2002, SBC and those subsidiaries accounted for approximately 12%, 11% and
11%, respectively, of our revenue. Based on long-term agreements currently in
place with certain SBC subsidiaries and the Managed Services agreement announced
in January 2003 with SBC's directory operations, we expect that revenue
attributable to SBC entities will remain a significant portion of our revenue in
fiscal 2005. Mr. Kahan, a member of our Board of Directors, is also Senior
Executive Vice President of SBC.

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

ITEM 8.  FINANCIAL INFORMATION

FINANCIAL STATEMENTS

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

LEGAL PROCEEDINGS

     On December 2, 2003 we announced that the United States District Court for
the Eastern District of Missouri had issued an order granting our motion to
dismiss the securities class action lawsuits that had been pending against us
and certain of our directors and officers since June 2002. The court's order
also directed that judgment be entered in our favor. On December 2, 2004, the
United States Court of Appeals for the Eighth Circuit affirmed per curiam the
dismissal of the complaint.

DIVIDEND POLICY

     We did not pay any cash dividends on our ordinary shares in fiscal 2004,
2003 or 2002. After the payment of dividends in 1998 that followed a corporate
reorganization, we decided in general to retain earnings to finance the
development of our business. The payment of any future dividends will be paid by
us based on conditions then existing, including our earnings, financial
condition and capital requirements, as well as other conditions we deem
relevant. The terms of any debt that we may incur could effectively limit our
ability to pay dividends.

ITEM 9.  THE OFFER AND LISTING

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

<Table>
<Caption>
                                                               HIGH       LOW
                                                              -------   -------
<S>                                                           <C>       <C>
FISCAL YEAR ENDED SEPTEMBER 30
2000........................................................  $ 96.00   $ 19.81
2001........................................................  $ 80.50   $ 25.85
2002........................................................  $ 39.25   $  6.10
2003........................................................  $ 27.25   $  5.85
2004........................................................  $ 30.69   $ 18.08
QUARTER
Fiscal 2003:
  First Quarter.............................................  $ 11.98   $  5.85
  Second Quarter............................................  $ 13.95   $  9.86
  Third Quarter.............................................  $ 25.01   $ 13.25
  Fourth Quarter............................................  $ 27.25   $ 18.55
</Table>

                                        54
<PAGE>

<Table>
<Caption>
                                                               HIGH       LOW
                                                              -------   -------
<S>                                                           <C>       <C>
Fiscal 2004:
  First Quarter.............................................  $ 27.10   $ 18.90
  Second Quarter............................................  $ 29.74   $ 22.17
  Third Quarter.............................................  $ 30.69   $ 22.65
  Fourth Quarter............................................  $ 24.00   $ 18.08
Fiscal 2005:
  First Quarter (through December 27, 2004).................  $ 27.56   $ 20.70
MOST RECENT SIX MONTHS
  June, 2004................................................  $ 25.95   $ 22.65
  July, 2004................................................  $ 24.00   $ 19.75
  August, 2004..............................................  $ 22.40   $ 18.08
  September, 2004...........................................  $ 23.20   $ 20.01
  October, 2004.............................................  $ 25.40   $ 20.70
  November, 2004............................................  $ 27.25   $ 24.25
</Table>

ITEM 10.  ADDITIONAL INFORMATION

MEMORANDUM AND ARTICLES OF ASSOCIATION

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

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

     Article 21(2) of the Amended and Restated Articles of Association of the
Company (the "Articles of Association") provides that a director may vote in
respect of any contract or arrangement in which such director has an interest
notwithstanding such director's interest and an interested director will not be
liable to the Company for any profit realized through any such contract or
arrangement by reason of such director holding the office of director. Article
21 of the Articles of Association provides that the remuneration of the
directors shall from time to time be determined by the Company by ordinary
resolution. No provision is made in the Articles of Association for directors to
vote compensation to themselves or any members of their body under any
circumstances. Article 22 provides that directors may exercise all the powers of
the Company to borrow money, and to mortgage or charge its undertaking, property
and uncalled capital or any part thereof, and to issue securities whether
outright or as security for any debt, liability or obligation of the Company for
any third party. Such borrowing powers can only be altered through an amendment
to the Articles of Association. Directors of the Company are not required to own
shares of the Company in order to serve as directors.

     The share capital of the Company is L5,750,000 divided into (i) 25,000,000
preferred shares with a par value of L0.01 per share and (ii) 550,000,000
ordinary shares with a par value of L0.01 per share, consisting of 500,000,000
voting ordinary shares and 50,000,000 non-voting ordinary shares. As of
September 30, 2004, 201,334,057 ordinary shares were outstanding (net of
treasury shares) and no non-voting ordinary shares or preferred shares were
outstanding. The rights, preferences and restrictions attaching to each class of
the shares are as follows:

  PREFERRED SHARES

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

                                        55
<PAGE>

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

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

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

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

  ORDINARY SHARES AND NON-VOTING ORDINARY SHARES

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

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

     - Conversion of Non-Voting Ordinary Shares into Voting Ordinary
       Shares -- upon the transfer of non-voting ordinary shares from the
       original holder thereof to any third party not affiliated with such
       original holder, non-voting ordinary shares are redesignated in the books
       of the Company as voting ordinary shares and automatically convert into
       the same number of voting ordinary shares.

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

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

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

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

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

                                        56
<PAGE>

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

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

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

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

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

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

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

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

     Pursuant to Article 13 of the Articles of Association, the Company may from
time to time by ordinary resolution increase the share capital by such sum, to
be divided into shares of such amount, as the resolution prescribes. A
restructuring of the existing share capital must be done by extraordinary
resolution (which requires the same vote as a special resolution), and the
Company may by special resolution reduce its share capital, any capital
redemption reserve fund or any share premium account in
                                        57
<PAGE>

accordance with Guernsey law. These provisions in relation to the alteration of
the Company's capital are in accordance with but no more onerous than the
Companies Law.

MATERIAL CONTRACTS

     Other than the Certen acquisition transaction agreement, in the past two
years we have not entered into any material contracts other than contracts
entered into in the ordinary course of our business.

TAXATION

  TAXATION OF THE COMPANY

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

     General

     Our effective tax rate was 22% for the year ended September 30, 2004,
compared to 25% for fiscal 2003 and 107% for fiscal 2002. The high effective tax
rate in fiscal 2002 was primarily attributable to amortization of goodwill
related to our acquisitions, much of which is not tax deductible. Effective
October 1, 2002, following the adoption of SFAS No. 142, we no longer amortize
goodwill resulting from acquisitions. See the discussion above under the caption
"Operating and Financial Review and prospects -- Critical Accounting
Policies -- Goodwill". As a result, goodwill amortization that is not
tax-deductible no longer affects our effective tax rate. In the year ended
September 30, 2002 our effective tax rate was also adversely affected by the
fixed non-deductible expenditures representing a larger component of our pretax
income. Excluding the impact of the non-deductible goodwill related to our
acquisitions, our effective tax rate for fiscal 2002 was 28% due to the
corporate income tax rates in the various countries in which we operate and
changes in the relative magnitude of our business in those countries.

     We expect a reduction in our effective tax rate in fiscal 2005 from 22% to
between 21% and 20%. The reduction is due to our continued expansion into
countries with lower effective tax rates.

     There can be no assurance that our effective tax rate will not change over
time as a result of a change in corporate income tax rates or other changes in
the tax laws of the various countries in which we operate. Moreover, our
effective tax rate in future years may be adversely affected in the event that a
tax authority challenged the manner in which items of income and expense are
allocated among us and our subsidiaries. In addition, the Company and certain of
our subsidiaries have been granted certain special tax benefits, discussed
below, in Cyprus, Ireland and Israel. The loss of any such tax benefits could
have an adverse effect on our effective tax rate.

     Certain Guernsey Tax Considerations

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

     Certain Cypriot Tax Considerations

     Our Cyprus subsidiary, Amdocs Development Ltd., operates a development
center. Corporations resident in Cyprus are taxed on income at 10% commencing
January 1, 2003 (previously at a 25% corporate tax rate) following a new Income
Tax law enacted in July 2002, introducing a number of changes to the current
system in an attempt to harmonize the regulations with E.U. provisions and
abandon any harmful tax practices as defined by the Organization for Economic
Co-operation and Development. The Government of Cyprus had issued a permit to
our Cypriot subsidiary pursuant to which the activities conducted by it were
deemed to be offshore activities for the purpose of Cypriot taxation. As
                                        58
<PAGE>

a result, our Cypriot subsidiary is subject to an effective tax rate in Cyprus
of 4.25%. In order for our subsidiary to remain entitled to this reduced rate of
taxation pursuant to the permit, it had to satisfy certain requirements
concerning its operations in Cyprus and to undertake certain information
reporting obligations to the Government of Cyprus. The new Income Tax law
repealed the favorable tax provisions applicable to offshore activities subject
to certain transition rules. Pursuant to the rules, our subsidiary will continue
to enjoy an effective tax rate of 4.25% until December 2005 as long as certain
requirements imposed by the Government of Cyprus are met. Thereafter, our
subsidiary will be taxed at the 10% tax rate.

     Certain Irish Tax Considerations

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

     Certain Israeli Tax Considerations

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

     General Corporate Taxation in Israel.  In June 2004, the Israeli parliament
enacted legislation, which has gradually reduced the "Companies Tax" rates of
taxable income apply to Israeli companies. According to this legislation, the
Companies Tax rate on taxable income in 2004 and upcoming years will be as
follows: 35% in 2004, 34% in 2005, 32% in 2006, and 30% in 2007 and thereafter.
However, the effective tax rate payable by an Israeli company that derives
income from an Approved Enterprise may be considerably less.

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

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

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

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

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

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

Such income is eligible for further reductions in tax rates if we qualify as a
Foreign Investors' Company ("FIC") depending on the percentage of the foreign
ownership. Subject to certain conditions, an FIC is a
                                        59
<PAGE>

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

     Our Israeli subsidiary has elected the alternative benefits with respect to
its current Approved Enterprise and its enlargements, pursuant to which the
Israeli subsidiary enjoys, in relation to its Approved Enterprise operations,
certain tax holidays, based on the location of activities within Israel, for a
period of two or ten years (and in some cases for a period of four years) and,
in the case of two year tax holidays, reduced tax rates for an additional period
of up to eight years. In case our Israeli subsidiary pays a dividend, at any
time, out of income earned during the tax holiday period in respect of its
Approved Enterprise, it will be subject, assuming that the current level of
foreign investment in Amdocs is not reduced, to corporate tax at the otherwise
applicable rate of 10% of the income from which such dividend has been paid and
up to 25% if such foreign investments are reduced (as detailed above). This tax
is in addition to the withholding tax on dividends as described below. Under an
instrument of approval issued in December 1997 and relating to the current
investment program of our Israeli subsidiary and to the income derived
therefrom, our Israeli subsidiary is entitled to a reduced tax rate period of
thirteen years (instead of the eight-year period referred to above.) The tax
benefits, available with respect to an Approved Enterprise only to taxable
income attributable to that specific enterprise, are given according to an
allocation formula provided for in the Investment Law or in the instrument of
approval, and are contingent upon the fulfillment of the conditions stipulated
by the Investment Law, the regulations published thereunder and the instruments
of approval for the specific investments in the Approved Enterprises. In the
event our Israeli subsidiary fails to comply with these conditions, the tax and
other benefits could be canceled, in whole or in part, and the subsidiary might
be required to refund the amount of the canceled benefits, with the addition of
CPI linkage differences and interest. We believe that the Approved Enterprise of
our Israeli subsidiary substantially complies with all such conditions
currently, but there can be no assurance that it will continue to do so.

     From time to time, the Government of Israel considers revising the benefits
available to companies under the Investment Law. The Investment Law and
regulations prescribing the benefits provide for an expiration date for the
grant of new benefits. The expiration date has been extended several times in
the past. The expiration date currently in effect is March 31, 2005 (which may
be extended by ministerial decision), and no new benefits will be granted after
that date unless the expiration date is extended again. There can be no
assurance that new benefits will be available after March 31, 2005 or that
existing benefits will be continued in the future at their current level or at
any level. The termination or substantial reduction of any of the benefits
available under the Investment Law could have a material adverse effect on
future investments by us in Israel (although such termination or reduction would
not affect our Israeli subsidiary's existing Approved Enterprise or the related
benefits).

  Dividends

     Dividends paid out of income derived by an Approved Enterprise during the
benefit periods (or out of dividends received from a company whose income is
derived by an Approved Enterprise) are subject to

                                        60
<PAGE>

withholding tax at a reduced rate of 15% (deductible at source). In the case of
companies that do not qualify as a FIC, the reduced rate of 15% is limited to
dividends paid at any time up to twelve years thereafter.

  TAXATION OF HOLDERS OF ORDINARY SHARES

  Certain United States Federal Income Tax Considerations

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

     (i)   an individual who is a citizen or resident of the United States;

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

     (iii) an estate, the income of which is includable in gross income for
           United States federal income tax purposes regardless of its source;
           or

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

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

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

     This summary is for general information only and is not binding on the
Internal Revenue Service ("IRS"). There can be no assurance that the IRS will
not challenge one or more of the statements made herein. U.S. holders are urged
to consult their own tax advisers as to the particular tax consequences to them
of owning and disposing of our ordinary shares.

     Dividends.  In general, a U.S. holder receiving a distribution with respect
to the ordinary shares will be required to include such distribution (including
the amount of foreign taxes, if any, withheld therefrom) in gross income as a
taxable dividend to the extent such distribution is paid from our current or
accumulated earnings and profits as determined under United States federal
income tax principles. Any distributions in excess of such earnings and profits
will first be treated, for United States federal income tax purposes, as a
nontaxable return of capital to the extent of the U.S. holder's tax basis in the
ordinary shares, and then, to the extent in excess of such tax basis, as gain
from the sale or exchange of a capital asset. See "Disposition of Ordinary
Shares" below. United States corporate shareholders will not be entitled to any
deduction for distributions received as dividends on the ordinary shares.

     Dividend income is generally taxed as ordinary income. However, as a result
of recent United States tax legislation, a maximum United States federal income
tax rate of 15% will apply to "qualified dividend

                                        61
<PAGE>

income" received by individuals (as well as certain trusts and estates) in
taxable years beginning after December 31, 2002 and before January 1, 2009,
provided that certain holding period requirements are met. "Qualified dividend
income" includes dividends paid on shares of United States corporations as well
as dividends paid on shares of "qualified foreign corporations", including
shares of a foreign corporation which are readily tradable on an established
securities market in the United States. Since our ordinary shares are readily
tradable on the New York Stock Exchange, we believe that dividends paid by us
with respect to our ordinary shares should constitute "qualified dividend
income" for United States federal income tax purposes, provided that the holding
period requirements are satisfied and none of the other special exceptions
applies.

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

     Disposition of Ordinary Shares.  Upon the sale, exchange or other
disposition of our ordinary shares, a U.S. holder generally will recognize
capital gain or loss in an amount equal to the difference between the amount
realized on the disposition by such U.S. holder and its tax basis in the
ordinary shares. Such capital gain or loss will be long-term capital gain or
loss if the U.S. holder has held the ordinary shares for more than one year at
the time of the disposition. In the case of a U.S. holder that is an individual,
trust or estate, long-term capital gains realized upon a disposition of the
ordinary shares after May 5, 2003 and before the end of a taxable year which
begins before January 1, 2009 generally will be subject to a maximum United
States federal tax income rate of 15%. Gains realized by a U.S. holder on a
sale, exchange or other disposition of ordinary shares generally will be treated
as United States source income for United States foreign tax credit purposes.

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

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

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

     Based on an analysis of our financial position, we believe that we have not
been a passive foreign investment company for U.S. federal income tax purposes
for any preceding taxable year and expect that we will not become a passive
foreign investment company during the current taxable year. However, because the
tests for determining passive foreign investment company status are applied as
of the end of each taxable year and are dependent upon a number of factors, some
of which are beyond our control, including the value of our assets, based on the
market price of our ordinary shares, and the amount and
                                        62
<PAGE>

type of our gross income, we cannot assure you that we will not become a passive
foreign investment company in the future or that the IRS will agree with our
conclusion regarding our current passive foreign investment company status. We
intend to use reasonable efforts to avoid becoming a passive foreign investment
company.

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

  Certain Guernsey Tax Considerations

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

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

DOCUMENTS ON DISPLAY

     We are subject to the reporting requirements of foreign private issuers
under the U.S. Securities Exchange Act of 1934. Pursuant to the Exchange Act, we
file reports with the SEC, including this Annual Report on Form 20-F. We also
submit reports to the SEC, including Reports of Foreign Private Issuers on Form
6-K. You may read and copy such reports at the SEC's public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. You may call the SEC at
1-800-SEC-0330 for further information about the Public Reference Room. Such
reports are also available to the public on the SEC's website at www.sec.gov.
Some of this information may also be found on our website at www.amdocs.com.

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

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

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

CURRENCY FLUCTUATIONS

     We manage our foreign subsidiaries as integral direct components of our
operations. The U.S. dollar is our functional currency. According to the salient
economic factors indicated in SFAS No. 52, "Foreign Currency Translation", our
cash flow, sale price, sales market, expense, financing and intercompany
transactions and arrangement indicators are denominated in the U.S. dollar. The
operations of our foreign subsidiaries provide the same type of services with
the same type of expenditures throughout Amdocs' group.

     During fiscal 2004, our revenue and operating expenses in U.S. dollar or
linked to the U.S. dollar decreased compared to fiscal 2003, from 80% to 70% and
from 60% to 50%, respectively, primarily as a result of the acquisition of
Certen Inc., the majority of whose business is in Canadian dollars. As a result
of long-term contracts in currencies other than the U.S. dollar and more
customers seeking contracts that are denominated in currencies such as the Euro,
we expect that the percentage of our revenue and operating expenses in U.S.
dollar or linked to the U.S. dollar will decrease slightly over time.
Historically, the effect of fluctuations in currency exchange rates has had a
minimal impact on our consolidated operations. As more of our customers seek
contracts that are denominated in currencies other than the

                                        63
<PAGE>

U.S. dollar, our exposure to fluctuations in currency exchange rates could
increase. In managing our foreign exchange risk, we enter from time to time into
various foreign exchange hedging contracts. We do not hedge all of our exposure
in currencies other than the U.S. dollar, but rather our policy is to hedge
significant net exposures in the major foreign currencies in which we operate.
We periodically assess the applicability of the U.S. dollar as our functional
currency by reviewing the salient indicators.

FOREIGN CURRENCY RISK

     We enter into foreign exchange forward contracts to hedge most of our
foreign currency exposure. We use such contracts to hedge exposure to changes in
foreign currency exchange rates associated with revenue denominated in a foreign
currency, primarily British pounds, Canadian dollars and the Euro, and
anticipated costs to be incurred in a foreign currency, primarily Australian
dollars, Canadian dollars and Israeli shekels. We also use forward contracts to
hedge the impact of the variability in exchange rates on certain accounts
receivables, denominated primarily in British pounds and the Euro. We seek to
minimize the risk that the anticipated cash flow from sales of our products and
services and cash flow required for our expenses denominated in a currency other
than our functional currency will be affected by changes in exchange rates. See
Note 22 to our consolidated financial statements. The following table summarizes
our foreign currency forward exchange agreements as of September 30, 2004. All
the forward contracts are expected to mature during fiscal 2005 or during fiscal
2006. The table below (all dollar amounts in millions) presents the notional
amounts and fair value of the total derivative instruments as of September 30,
2004. Notional values are calculated based on forward rates as of September 30,
2004, U.S. dollar translated.

<Table>
<Caption>
                                                            AS OF SEPTEMBER 30, 2004
                                                       -----------------------------------
                                                        NOTIONAL AMOUNT       FAIR VALUE
                                                         TRANSLATED TO            OF
                                                         U.S. DOLLAR(*)       DERIVATIVES
                                                       ------------------    -------------
                                                       CONTRACTS MATURING
                                                         DURING FISCAL
                                                       ------------------
                                                         2005       2006
                                                       --------    ------
<S>                                                    <C>         <C>       <C>
Revenue..............................................  $  49.0     $37.7         $(4.4)
Costs................................................   (142.8)     (0.6)          2.5
Balance sheet items..................................      1.0        --          (0.2)
                                                       -------     -----         -----
                                                       $ (92.8)    $37.1         $(2.1)
                                                       =======     =====         =====
</Table>

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

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

INTEREST RATE RISK

     Our interest expenses and income are sensitive to changes in interest
rates, as all of our cash reserves and some of our borrowings, other than the
0.50% Notes and 2% Notes, are subject to interest rate changes. Excess liquidity
is invested in short-term interest-bearing investments. Such short-term
interest-bearing investments consist primarily of commercial paper, Treasury
notes, Federal agency securities, corporate bonds, corporate backed obligations
and mortgages, and currently bear minimal interest rate risk. As of September
30, 2004, we had $1.0 million of outstanding borrowings under our revolving
lines of credit or our short-term credit facilities. As of September 30, 2004,
we had outstanding long-term lease obligations of $23.3 million and a financing
arrangement of $0.6 million, which in the aggregate bear minimal interest rate
risk.

                                        64
<PAGE>

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.

                                    PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Not applicable.

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

     Not applicable

ITEM 15.  CONTROLS AND PROCEDURES

     The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer of Amdocs Management Limited,
evaluated the effectiveness of the Company's disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of
September 30, 2004. Based on this evaluation, the Chief Executive Officer and
the Chief Financial Officer of Amdocs Management Limited concluded that, as of
September 30, 2004, the Company's disclosure controls and procedures were (1)
designed to ensure that material information relating to the Company, including
its consolidated subsidiaries, is made known to the Chief Executive Officer and
the Chief Financial Officer of Amdocs Management Limited by others within those
entities, particularly during the period in which this Annual Report was being
prepared and (2) effective, in that they provide reasonable assurance that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.

     No change in the Company's internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during
the fiscal quarter ended September 30, 2004 that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.

ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

     Our Board of Directors has determined that the Company has at least one
audit committee financial expert, Adrian Gardner, serving on its Audit
Committee.

ITEM 16B.  CODE OF ETHICS AND BUSINESS CONDUCT

     Our Board of Directors has adopted a Code of Ethics and Business Conduct
that sets forth legal and ethical standards of conduct for directors and
employees, including executive officers, of the Company, our subsidiaries and
other business entities controlled by us worldwide.

     Our Code of Ethics and Business Conduct is available on our website at
www.amdocs.com, or you may request a copy of our code of ethics, at no cost, by
writing to or telephoning us as follows:

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

     We intend to post on our website all disclosures that are required by law
or NYSE rules concerning any amendments to, or waivers from, any provision of
the code.

                                        65
<PAGE>

ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     During each of the last two fiscal years, Ernst & Young LLP has acted as
the Company's independent auditors.

AUDIT FEES

     Ernst & Young billed the Company approximately $2.6 million for audit
services for fiscal 2004, including fees associated with the annual audit and
reviews of the Company's quarterly financial results submitted on Form 6-K,
consultations on various accounting issues and performance of local statutory
audits. Ernst & Young billed the Company approximately $1.85 million for audit
services for fiscal 2003.

AUDIT-RELATED FEES

     Ernst & Young billed the Company approximately $1.2 million for
audit-related services for fiscal 2004. Audit-related services principally
include due diligence examinations, SAS 70 report issuances, assistance with the
requirements of the Sarbanes-Oxley Act of 2002 and related SEC regulations,
attestation services that are not required by statute or regulation and
consultations concerning financial accounting and reporting standards. Ernst &
Young billed the Company approximately $0.8 million for audit-related services
for fiscal 2003.

TAX FEES

     Ernst & Young billed the Company approximately $1.8 million for tax advice,
including fees associated with tax compliance, tax advice and tax planning
services for fiscal 2004. Ernst & Young billed the Company approximately $1.3
million for tax advice in fiscal 2003.

ALL OTHER FEES

     Ernst & Young did not bill the Company for services other than Audit Fees,
Audit-Related Fees and Tax Fees described above for fiscal 2004. Ernst & Young
billed the Company approximately $0.1 million for services other than Audit
Fees, Audit-Related Fees and Tax Fees described above for fiscal 2003. In fiscal
2003, such other services included human resource consulting.

PRE-APPROVAL POLICIES FOR NON-AUDIT SERVICES

     The Audit Committee has adopted policies and procedures relating to the
approval of all audit and non-audit services that are to be performed by the
Company's independent auditors. These policies generally provide that the
Company will not engage its independent auditors to render audit or non-audit
services unless the service is specifically approved in advance by the Audit
Committee or the engagement is entered into pursuant to the pre-approval
procedure described below.

     From time to time, the Audit Committee may pre-approve specified types of
services that are expected to be provided to the Company by its independent
auditors during the next 12 months. Any such pre-approval is detailed as to the
particular service or type of services to be provided and is also generally
subject to a maximum dollar amount. In fiscal 2004, the Company's Audit
Committee approved all of the services provided by Ernst & Young.

                                        66
<PAGE>

ITEM 16D.  EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

     Not applicable.

ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
           PURCHASERS

     The following table provides information about purchases by us and our
affiliated purchasers during the fiscal year ended September 30, 2004 of equity
securities that are registered by us pursuant to Section 12 of the Exchange Act:

     Ordinary Shares

<Table>
<Caption>
                                 (A)               (B)                (C)                      (D)
                                                                TOTAL NUMBER OF
                                                               SHARES (OR UNITS)       MAXIMUM NUMBER (OR
                                                               PURCHASED AS PART    APPROXIMATE DOLLAR VALUE)
                           TOTAL NUMBER OF    AVERAGE PRICE       OF PUBLICLY       OF SHARES (OR UNITS) THAT
                          SHARES (OR UNITS)   PAID PER SHARE    ANNOUNCED PLANS    MAY YET BE PURCHASED UNDER
PERIOD                        PURCHASED         (OR UNIT)         OR PROGRAMS      THE PLANS OR PROGRAMS(1)(2)
------                    -----------------   --------------   -----------------   ---------------------------
<S>                       <C>                 <C>              <C>                 <C>
10/01/03-10/31/03.......             --           $   --                  --                              --
11/01/03-11/30/03.......        460,100            24.49             460,100                       4,539,900
12/01/03-12/31/03.......      4,529,800            24.86           4,529,800                          10,100
01/01/04-01/31/04.......             --               --                  --                          10,100
02/01/04-02/29/04.......        484,500(3)         27.67             484,500(3)                       10,100
03/01/04-03/31/04.......      6,073,600(4)         28.00           6,073,600(4)                       10,100
04/01/04-04/30/04.......             --               --                  --                          10,100
05/01/04-05/31/04.......             --               --                  --                          10,100
06/01/04-06/30/04.......             --               --                  --                          10,100
07/01/04-07/31/04.......      1,437,000            21.68           1,437,000        10,100 and $68.8 million
08/01/04-08/31/04.......      2,588,300            19.49           2,588,300        10,100 and $18.4 million
09/01/04-09/30/04.......        868,600            21.11             868,600                          10,100
                             ----------                           ----------
Total...................     16,441,900            24.77          16,441,900                          10,100
                             ==========                           ==========
</Table>

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

(1) On November 5, 2003, the Company announced that its board of directors had
    authorized a share repurchase program of up to five million ordinary shares
    during fiscal 2004. The authorization permits the Company to purchase
    ordinary shares in open market or privately negotiated transactions and at
    prices the Company deems appropriate. The Company stated that one of the
    main purposes of the repurchase program was to offset the dilutive effect of
    any future share issuances, including issuances pursuant to employee equity
    plans or in connection with acquisitions.

(2) On July 28, 2004, the Company announced that its board of directors had
    extended the Company's share repurchase program by authorizing the
    repurchase of up to $100.0 million of its outstanding ordinary shares. The
    authorization permits the Company to purchase its ordinary shares in open
    market or privately negotiated transactions at times and prices considered
    appropriate by the Company.

(3) In connection with the Company's acquisition of XACCT, the board of
    directors approved the repurchase of ordinary shares to offset the dilutive
    effect of share issuances in the acquisition. The closing of the acquisition
    occurred in February 2004, and the Company repurchased through open market
    purchases 484,500 ordinary shares in February 2004. No additional share
    repurchases are authorized in connection with the acquisition.

(4) In connection with the Company's issuance of the 0.50% Notes, the board of
    directors approved the repurchase of ordinary shares sold short by
    purchasers of the 0.50% Notes in negotiated transactions, concurrently with
    the sale of the notes, to offset the dilutive effect of the ordinary shares
    issuable

                                        67
<PAGE>

    upon conversion of the 0.50% Notes. The closing of the sale of the 0.50%
    Notes occurred in March 2004, and the Company repurchased 6,073,600 ordinary
    shares, out of the 10,435,995 ordinary shares issuable upon conversion of
    the 0.50% Notes, based on a conversion rate of 23.1911 shares per $1,000
    principal amount.

     Convertible Notes

<Table>
<Caption>
                                     (A)                (B)                 (C)                    (D)
                                                                                              MAXIMUM NUMBER
                                                                                             (OR APPROXIMATE
                                                   AVERAGE PRICE      TOTAL NUMBER OF        DOLLAR VALUE) OF
                                                  PAID PER $1,000   PRINCIPAL AMOUNT OF    PRINCIPAL AMOUNT OF
                               TOTAL PRINCIPAL       PRINCIPAL       CONVERTIBLE NOTES      CONVERTIBLE NOTES
                                  AMOUNT OF          AMOUNT OF      PURCHASED AS PART OF     THAT MAY YET BE
                              CONVERTIBLE NOTES     CONVERTIBLE      PUBLICLY ANNOUNCED    PURCHASED UNDER THE
PERIOD                            PURCHASED            NOTES         PLANS OR PROGRAMS     PLANS OR PROGRAMS(1)
------                        -----------------   ---------------   --------------------   --------------------
<S>                           <C>                 <C>               <C>                    <C>
10/01/03-10/31/03...........    $         --         $      --          $         --           $400,454,000
11/01/03-11/30/03...........              --                --                    --            400,454,000
12/01/03-12/31/03...........       5,000,000            998.75             5,000,000            395,454,000
01/01/04-01/31/04...........              --                --                    --            395,454,000
02/01/04-02/29/04...........              --                --                    --            395,454,000
03/01/04-03/31/04...........              --                --                    --            395,454,000
04/01/04-04/30/04...........              --                --                    --            395,454,000
05/01/04-05/31/04...........              --                --                    --            395,454,000
06/01/04-06/30/04...........     395,110,000(2)       1,000.00           395,110,000(2)             344,000
07/01/04-07/31/04...........          72,000            995.00                72,000                272,000
08/01/04-08/31/04...........              --                --                    --                272,000
09/01/04-09/30/04...........              --                --                    --                272,000
                                ------------                            ------------
Total.......................    $400,182,000            999.98          $400,182,000                272,000
                                ============                            ============
</Table>

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

(1) In July 2002, the Company's board of directors authorized the Company to
    repurchase the 2% Notes, in such amounts, at such prices and at such times
    considered appropriate.

(2) On June 1, 2004, the Company completed a cash offer for the 2% Notes.
    Pursuant to the indenture for the 2% Notes, each holder of the 2% Notes had
    the right to require the Company to repurchase on June 1, 2004 all or any
    part of such holder's notes at a price equal to 100% of the principal amount
    plus accrued and unpaid interest. Under the terms of the 2% Notes, the
    Company had the option to pay for the 2% Notes with cash, ordinary shares,
    or a combination of cash and ordinary shares. The Company elected to pay for
    the 2% Notes solely with cash. The Company accepted for payment $395.1
    million principal amount of 2% Notes surrendered for repurchase pursuant to
    the offer. The untendered 2% Notes remain as the Company's obligations due
    June 1, 2008, in accordance with their terms.

                                        68
<PAGE>

                                    PART III

ITEM 17.  FINANCIAL STATEMENTS

     Not applicable.

ITEM 18.  FINANCIAL STATEMENTS

FINANCIAL STATEMENTS AND SCHEDULE

     The following Financial Statements and Financial Statement Schedule of
Amdocs Limited, with respect to financial results for the fiscal years ended
September 30, 2004, 2003 and 2002, are included at the end of this Annual
Report:

  AUDITED FINANCIAL STATEMENTS OF AMDOCS LIMITED

     Report of Independent Registered Public Accounting Firm

     Consolidated Balance Sheets as of September 30, 2004 and 2003

     Consolidated Statements of Operations for the years ended September 30,
2004, 2003 and 2002

     Consolidated Statements of Changes in Shareholders' Equity for the years
ended September 30, 2004, 2003 and 2002

     Consolidated Statements of Cash Flows for the years ended September 30,
2004, 2003 and 2002

     Notes to Consolidated Financial Statements

  FINANCIAL STATEMENT SCHEDULE OF AMDOCS LIMITED

     Valuation and Qualifying Accounts

ITEM 19.  EXHIBITS

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

                                        69
<PAGE>

                                   SIGNATURES

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

                                          Amdocs Limited

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

Date: December 30, 2004
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<S>       <C>
 1.       Memorandum and Articles of Association of Amdocs Limited
          (incorporated by reference to Exhibits 3.1 and 3.2 to
          Amdocs' Registration Statement on Form F-1 dated June
          19,1998; Registration No. 333-8826)
 2.a.1    Indenture dated May 30, 2001 between Amdocs and United
          States Trust Company of New York (incorporated by reference
          to Exhibit 4.1 to Amdocs' Form 6-K dated May 31, 2001)
 2.a.2    Registration Rights Agreement dated May 30, 2001 between
          Amdocs and Goldman, Sachs & Co. (incorporated by reference
          to Exhibit 4.2 to Amdocs' Form 6-K dated May 31, 2001)
 2.a.3    Indenture, dated March 5, 2004, between Amdocs Limited and
          The Bank of New York, as trustee, for 0.50% Convertible
          Senior Notes due 2024 (incorporated by reference to Exhibit
          99.1 to Amdocs' Report on Form 6-K, filed March 5, 2004)
 2.a.4    Registration Rights Agreement, dated March 5, 2004, among
          Amdocs Limited and Morgan Stanley & Co. Incorporated,
          Goldman, Sachs & Co. and Merrill Lynch, Pierce Fenner &
          Smith Incorporated (incorporated by reference to Exhibit
          99.2 to Amdocs' Report on Form 6-K, filed March 5, 2004)
 4.a.1    Agreement and Plan of Merger dated as of September 3, 1999
          among Amdocs Limited, Ivan Acquisition Corp. and
          International Telecommunication Data Systems, Inc.
          (incorporated by reference to Exhibit 2.1 to Amdocs' Current
          Report on Form 6-K dated September 10, 1999)
 4.a.2    Combination Agreement dated as of February 28, 2000 among
          Amdocs Limited, Solect Technology Group Inc., Amdocs
          (Denmark) ApS. and Amdocs Holdings ULC (incorporated by
          reference to Exhibit 2.1 to Amdocs' Current Report on Form
          6-K dated March 3, 2000)
 4.a.3    Acquisition Agreement dated as of October 1, 2001, between
          Amdocs Limited and Nortel Networks Corporation.
          (incorporated by reference to Exhibit 2.1 to Amdocs' Current
          Report on Form 6-K dated October 10, 2001)
 4.a.4    Share Purchase Agreement dated as of May 28, 2003 between
          Amdocs Holdings ULC and Bell Canada (incorporated by
          reference to Exhibit 99.1 to Amdocs' Amendment No. 1 to
          Registration Statement on Form F-3, dated September 21,
          2004, Registration No. 333-114344).
 4.b.1    Information Technology Services Agreement between Amdocs,
          Inc. and SBC Services, Inc. dated January 9, 2003
          (confidential material has been redacted and complete
          exhibits have been separately filed with the Securities and
          Exchange Commission) (incorporated by reference to Exhibit
          4.b.1 to Amdocs' Annual Report on Form 20-F for the fiscal
          year ended September 30, 2003)
 4.b.2    Master Agreement for Software and Services between Amdocs,
          Inc. and SBC Operations, Inc., effective July 7, 1998
          (confidential material has been redacted and complete
          exhibits have been separately filed with the Securities and
          Exchange Commission) (incorporated by reference to Exhibit
          10.13 to Amdocs' Amendment No. 1 to Registration Statement
          on Form F-1, dated May 21, 1999, Registration No. 333-75151)
 4.b.3    Software Master Agreement between Amdocs Software Systems
          Limited and SBC Services, Inc., effective December 10, 2003
          (confidential material has been redacted and complete
          exhibits have been separately filed with the Securities and
          Exchange Commission) (incorporated by reference to Exhibit
          99.2 to Amdocs' Amendment No. 1 to Registration Statement on
          Form F-3, dated September 21, 2004, Registration No.
          333-114344)
 4.b.4    Agreement between Amdocs Inc. and SBC Services, Inc. for
          Software and Professional Services, effective August 7, 2003
          (confidential material has been redacted and complete
          exhibits have been separately filed with the Securities and
          Exchange Commission) (incorporated by reference to Exhibit
          99.3 to Amdocs' Amendment No. 1 to Registration Statement on
          Form F-3, dated September 21, 2004, Registration No.
          333-114344)
 4.b.5    Customer Care and Billing Services Agreement, between Nextel
          Finance Company and Amdocs Software Systems Limited, dated
          as of January 1, 2000, as amended (confidential material has
          been redacted and complete exhibits have been separately
          filed with the Securities and Exchange Commission)
          (incorporated by reference to Exhibit 99.1 to Amdocs'
          Current Report on Form 6-K dated September 30, 2004)
</Table>
<PAGE>

<Table>
<Caption>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<S>       <C>
 4.b.6    Further Amended and Restated Master Outsourcing Services
          Agreement, between Bell Canada and Certen Inc., dated as of
          July 1, 2003 (confidential material has been redacted and
          complete exhibits have been separately filed with the
          Securities and Exchange Commission) (incorporated by
          reference to Exhibit 99.1 to Amdocs' Current Report on Form
          6-K dated October 1, 2004)
 4.c.1    Amdocs Limited 1998 Stock Option and Incentive Plan, as
          amended January 24, 2001 (incorporated by reference to
          Exhibit 4 to Amdocs' Registration Statement on Form S-8
          dated April 6, 2001; Registration No. 333-58454)
 8        Subsidiaries of Amdocs Limited
12.1      Certification of Chief Executive Officer pursuant to Rule
          13a-14(a)/15d-14(a)
12.2      Certification of Chief Financial Officer pursuant to Rule
          13a-14(a)/15d-14(a)
13.1      Certification of Chief Executive Officer pursuant to 18
          U.S.C. 1350
13.2      Certification of Chief Financial Officer pursuant to 18
          U.S.C. 1350
14.1      Consent of Ernst & Young LLP
</Table>
<PAGE>

                                 AMDOCS LIMITED
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
  Report of Independent Registered Public Accounting Firm...   F-2
  Consolidated Balance Sheets as of September 30, 2004 and
     2003...................................................   F-3
  Consolidated Statements of Operations for the years ended
     September 30, 2004, 2003 and 2002......................   F-4
  Consolidated Statements of Changes in Shareholders' Equity
     for the years ended September 30, 2004, 2003 and
     2002...................................................   F-5
  Consolidated Statements of Cash Flows for the years ended
     September 30, 2004, 2003 and 2002......................   F-6
  Notes to the Consolidated Financial Statements............   F-8
FINANCIAL STATEMENT SCHEDULE
  Valuation and Qualifying Accounts.........................  F-46
</Table>

                                       F-1
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Amdocs Limited

     We have audited the accompanying consolidated balance sheets of Amdocs
Limited as of September 30, 2004 and 2003, and the related consolidated
statements of operations, changes in shareholders' equity, and cash flows for
each of the three years in the period ended September 30, 2004. Our audits also
included the financial statement schedule listed in the Index at Item 18 of Part
III. These financial statements and the schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and the schedule based on our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Amdocs Limited
at September 30, 2004 and 2003, and the consolidated results of its operations
and its cash flows for each of the three years in the period ended September 30,
2004, in conformity with U.S. generally accepted accounting principles. Also, in
our opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.

     As discussed in Note 2 to the accompanying consolidated financial
statements, effective October 1, 2002, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets.

                                                           /s/ ERNST & YOUNG LLP

New York, New York
October 28, 2004

                                       F-2
<PAGE>

                                 AMDOCS LIMITED

                          CONSOLIDATED BALANCE SHEETS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                   AS OF SEPTEMBER 30,
                                                              -----------------------------
                                                                 2004               2003
                                                              ----------         ----------
<S>                                                           <C>                <C>
                                          ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................  $  550,352         $  847,600
  Short-term interest-bearing investments...................     640,347            443,292
  Accounts receivable, net..................................     254,779            198,274
  Deferred income taxes and taxes receivable................      62,284             60,868
  Prepaid expenses and other current assets.................      80,229             85,902
                                                              ----------         ----------
          TOTAL CURRENT ASSETS..............................   1,587,991          1,635,936
Equipment, vehicles and leasehold improvements, net.........     181,121            203,467
Deferred income taxes.......................................     113,589            105,943
Goodwill....................................................     806,874            797,134
Intangible assets, net......................................      47,512             58,841
Other noncurrent assets.....................................     126,797             76,196
                                                              ----------         ----------
          TOTAL ASSETS......................................  $2,863,884         $2,877,517
                                                              ==========         ==========

                           LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable..........................................  $  104,415         $  101,116
  Accrued expenses and other current liabilities............     137,664            123,223
  Accrued personnel costs...................................     124,284            106,857
  2% Convertible notes......................................          --            400,454
  Short-term portion of financing arrangements..............       1,604              2,179
  Deferred revenue..........................................     223,122            174,616
  Short-term portion of capital lease obligations...........      19,706             27,140
  Deferred income taxes and taxes payable...................     163,648            133,002
                                                              ----------         ----------
          TOTAL CURRENT LIABILITIES.........................     774,443          1,068,587
Convertible notes...........................................     450,272                 --
Deferred income taxes.......................................      40,530             44,835
Noncurrent liabilities and other............................     154,449            172,495
                                                              ----------         ----------
          TOTAL LIABILITIES.................................   1,419,694          1,285,917
                                                              ----------         ----------
SHAREHOLDERS' EQUITY:
  Preferred Shares -- Authorized 25,000 shares; L0.01 par
     value; 0 shares issued and outstanding.................          --                 --
  Ordinary Shares -- Authorized 550,000 shares; L0.01 par
     value; 224,947 and 223,790 issued and 201,334 and
     216,058 outstanding, in 2004 and 2003, respectively....       3,601              3,580
  Additional paid-in capital................................   1,837,608          1,820,956
  Treasury stock, at cost -- 23,613 and 7,732 Ordinary
     Shares, in 2004 and 2003, respectively.................    (502,416)          (109,281)
  Accumulated other comprehensive (loss) income.............      (1,919)             3,715
  Unearned compensation.....................................        (174)                --
  Retained earnings (accumulated deficit)...................     107,490           (127,370)
                                                              ----------         ----------
          TOTAL SHAREHOLDERS' EQUITY........................   1,444,190          1,591,600
                                                              ----------         ----------
          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........  $2,863,884         $2,877,517
                                                              ==========         ==========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       F-3
<PAGE>

                                 AMDOCS LIMITED

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                 YEAR ENDED SEPTEMBER 30,
                                                           ------------------------------------
                                                              2004         2003         2002
                                                           ----------   ----------   ----------
<S>                                                        <C>          <C>          <C>
REVENUE:
  License(*).............................................  $   76,586   $   65,582   $  153,664
  Service(*).............................................   1,697,146    1,417,745    1,459,901
                                                           ----------   ----------   ----------
                                                            1,773,732    1,483,327    1,613,565
                                                           ----------   ----------   ----------
OPERATING EXPENSES:
     Cost of license.....................................       5,022        5,752        5,984
     Cost of service(*)..................................   1,117,810      907,607      927,353
     Research and development............................     126,407      119,256      124,082
     Selling, general and administrative(*)..............     210,384      206,265      223,551
     Amortization of goodwill and purchased intangible
       assets............................................      17,909       19,940      231,804
     Restructuring charges, in-process research and
       development and other.............................          --       14,089       51,630
                                                           ----------   ----------   ----------
                                                            1,477,532    1,272,909    1,564,404
                                                           ----------   ----------   ----------
Operating income.........................................     296,200      210,418       49,161
Interest income and other, net(*)........................       4,903       14,759       19,298
                                                           ----------   ----------   ----------
Income before income taxes...............................     301,103      225,177       68,459
Income taxes.............................................      66,243       56,294       73,520
                                                           ----------   ----------   ----------
NET INCOME (LOSS)........................................  $  234,860   $  168,883   $   (5,061)
                                                           ==========   ==========   ==========
BASIC EARNINGS (LOSS) PER SHARE..........................  $     1.13   $     0.78   $    (0.02)
                                                           ==========   ==========   ==========
DILUTED EARNINGS (LOSS) PER SHARE........................  $     1.10   $     0.77   $    (0.02)
                                                           ==========   ==========   ==========
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING......     208,726      215,849      220,361
                                                           ==========   ==========   ==========
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING....     214,197      219,876      220,361
                                                           ==========   ==========   ==========
</Table>

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

(*) See Note 4.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       F-4
<PAGE>

                                 AMDOCS LIMITED

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)
<Table>
<Caption>
                                                                                  ACCUMULATED                     RETAINED
                                     ORDINARY SHARES    ADDITIONAL                   OTHER                        EARNINGS
                                     ----------------    PAID-IN     TREASURY    COMPREHENSIVE     UNEARNED     (ACCUMULATED
                                     SHARES    AMOUNT    CAPITAL       STOCK     (LOSS) INCOME   COMPENSATION     DEFICIT)
                                     -------   ------   ----------   ---------   -------------   ------------   ------------
<S>                                  <C>       <C>      <C>          <C>         <C>             <C>            <C>
BALANCE AS OF OCTOBER 1, 2001......  222,628   $3,560   $1,806,290   $      --      $(6,382)        $(185)       $(291,192)
Comprehensive income:
 Net loss..........................       --      --            --          --           --            --           (5,061)
 Unrealized gain on foreign
   currency hedging contracts, net
   of $1,357 tax...................       --      --            --          --        2,682            --               --
 Unrealized gain on cash
   equivalents and short-term
   interest-bearing investments,
   net of $1,336 tax...............       --      --            --          --        3,592            --               --
 Comprehensive income..............
Employee stock options exercised...      687      12         5,149          --           --            --               --
Tax benefit of stock options
 exercised.........................       --      --         6,808          --           --            --               --
Expense related to vesting of stock
 options...........................       --      --            98          --           --            --               --
Repurchase of shares...............   (7,732)     --            --    (109,281)          --            --               --
Amortization of unearned
 compensation......................       --      --            --          --           --           185               --
                                     -------   ------   ----------   ---------      -------         -----        ---------
BALANCE AS OF SEPTEMBER 30, 2002...  215,583   3,572     1,818,345    (109,281)        (108)           --         (296,253)
Comprehensive income:
 Net income........................       --      --            --          --           --            --          168,883
 Unrealized gain on foreign
   currency hedging contracts, net
   of $3,258 tax...................       --      --            --          --        8,903            --               --
 Unrealized loss on cash
   equivalents and short-term
   interest-bearing investments,
   net of $(1,977) tax.............       --      --            --          --       (5,080)           --               --
 Comprehensive income..............
Employee stock options exercised...      475       8         2,312          --           --            --               --
Tax benefit of stock options
 exercised.........................       --      --           262          --           --            --               --
Expense related to vesting of stock
 options...........................       --      --            37          --           --            --               --
                                     -------   ------   ----------   ---------      -------         -----        ---------
BALANCE AS OF SEPTEMBER 30, 2003...  216,058   3,580     1,820,956    (109,281)       3,715            --         (127,370)
Comprehensive income:
 Net income........................       --      --            --          --           --            --          234,860
 Unrealized loss on foreign
   currency hedging contracts, net
   of $(1,575) tax.................       --      --            --          --       (4,915)           --               --
 Unrealized loss on short-term
   interest-bearing investments,
   net of $(204) tax...............       --      --            --          --         (719)           --               --
 Comprehensive income..............
Employee stock options exercised...    1,157      21        12,056          --           --            --               --
Tax benefit of stock options
 exercised.........................       --      --         3,094          --           --            --               --
Repurchase of shares...............  (16,442)     --            --    (407,527)          --            --               --
Issuance of Ordinary Shares related
 to acquisition, net...............      561      --           747      14,392           --            --               --
Stock options granted, net of
 forfeitures.......................       --      --           749          --           --          (749)              --
Amortization of unearned
 compensation......................       --      --            --          --           --           575               --
Expense related to vesting of stock
 options...........................       --      --             6          --           --            --               --
                                     -------   ------   ----------   ---------      -------         -----        ---------
BALANCE AS OF SEPTEMBER 30, 2004...  201,334   $3,601   $1,837,608   $(502,416)     $(1,919)        $(174)       $ 107,490
                                     =======   ======   ==========   =========      =======         =====        =========

<Caption>

                                         TOTAL
                                     SHAREHOLDERS'
                                        EQUITY
                                     -------------
<S>                                  <C>
BALANCE AS OF OCTOBER 1, 2001......   $1,512,091
Comprehensive income:
 Net loss..........................       (5,061)
 Unrealized gain on foreign
   currency hedging contracts, net
   of $1,357 tax...................        2,682
 Unrealized gain on cash
   equivalents and short-term
   interest-bearing investments,
   net of $1,336 tax...............        3,592
                                      ----------
 Comprehensive income..............        1,213
                                      ----------
Employee stock options exercised...        5,161
Tax benefit of stock options
 exercised.........................        6,808
Expense related to vesting of stock
 options...........................           98
Repurchase of shares...............     (109,281)
Amortization of unearned
 compensation......................          185
                                      ----------
BALANCE AS OF SEPTEMBER 30, 2002...    1,416,275
Comprehensive income:
 Net income........................      168,883
 Unrealized gain on foreign
   currency hedging contracts, net
   of $3,258 tax...................        8,903
 Unrealized loss on cash
   equivalents and short-term
   interest-bearing investments,
   net of $(1,977) tax.............       (5,080)
                                      ----------
 Comprehensive income..............      172,706
                                      ----------
Employee stock options exercised...        2,320
Tax benefit of stock options
 exercised.........................          262
Expense related to vesting of stock
 options...........................           37
                                      ----------
BALANCE AS OF SEPTEMBER 30, 2003...    1,591,600
Comprehensive income:
 Net income........................      234,860
 Unrealized loss on foreign
   currency hedging contracts, net
   of $(1,575) tax.................       (4,915)
 Unrealized loss on short-term
   interest-bearing investments,
   net of $(204) tax...............         (719)
                                      ----------
 Comprehensive income..............      229,226
                                      ----------
Employee stock options exercised...       12,077
Tax benefit of stock options
 exercised.........................        3,094
Repurchase of shares...............     (407,527)
Issuance of Ordinary Shares related
 to acquisition, net...............       15,139
Stock options granted, net of
 forfeitures.......................           --
Amortization of unearned
 compensation......................          575
Expense related to vesting of stock
 options...........................            6
                                      ----------
BALANCE AS OF SEPTEMBER 30, 2004...   $1,444,190
                                      ==========
</Table>

     As of September 30, 2004, 2003 and 2002, accumulated other comprehensive
(loss) income is comprised of unrealized (loss) gain on derivatives, net of tax,
of $(1,232), $3,683 and $(5,220) and unrealized (loss) gain on cash equivalents
and short-term interest-bearing investments, net of tax, of $(687), $32 and
$5,112, as of September 30, 2004, 2003 and 2002, respectively.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       F-5
<PAGE>

                                 AMDOCS LIMITED

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                YEAR ENDED SEPTEMBER 30,
                                                          -------------------------------------
                                                             2004          2003         2002
                                                          -----------   -----------   ---------
<S>                                                       <C>           <C>           <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss).......................................  $   234,860   $   168,883   $  (5,061)
Reconciliation of net income (loss) to net cash provided
  by operating activities:
     Depreciation and amortization......................      100,877        97,452     309,821
     Adjustment to the basis of investments.............           --            --       5,500
     In-process research and development expenses and
       other............................................           --         4,133      17,400
     (Gain) loss on sale of equipment...................       (1,436)          396         549
     Gain on repurchase of 2% convertible notes.........          (13)         (448)     (6,012)
     Deferred income taxes..............................      (11,272)        4,001      (1,665)
     Tax benefit of stock options exercised.............        3,094           262       6,808
     Realized gain from short-term interest-bearing
       investments......................................        1,863         2,802          --
     Unrealized other comprehensive income..............           --            --       8,967
Net changes in operating assets and liabilities, net of
  amounts acquired:
  Accounts receivable...................................      (53,723)       58,485      97,055
  Prepaid expenses and other current assets.............        1,856         2,278     (22,992)
  Other noncurrent assets...............................      (44,401)      (26,882)     (9,875)
  Accounts payable and accrued expenses.................       31,697           429      (2,461)
  Deferred revenue......................................       46,713        53,294     (21,253)
  Income taxes payable..................................       33,773        21,854      (4,798)
  Noncurrent liabilities and other......................          516         4,892      40,293
                                                          -----------   -----------   ---------
Net cash provided by operating activities...............      344,404       391,831     412,276
                                                          -----------   -----------   ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment, vehicles and leasehold
  improvements..........................................        4,431         2,532       1,795
Payments for purchase of equipment, vehicles and
  leasehold improvements................................      (54,148)      (62,410)    (58,562)
Purchase of short-term interest-bearing investments.....   (1,325,383)   (1,065,236)         --
Proceeds from sale of short-term interest-bearing
  investments...........................................    1,125,538     1,193,248          --
Purchase of short-term interest-bearing investments,
  net...................................................           --            --    (344,095)
Investment in noncurrent assets.........................           --            --     (39,584)
Net cash paid for in acquisitions.......................      (10,651)      (30,980)   (213,180)
                                                          -----------   -----------   ---------
Net cash (used in) provided by investing activities.....     (260,213)       37,154    (653,626)
                                                          -----------   -----------   ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from employee stock options exercised..........       12,077         2,320       5,161
Repurchase of shares....................................     (407,527)           --    (109,281)
Redemption of 2% convertible notes......................     (395,110)           --          --
Repurchase of 2% convertible notes......................       (5,059)      (44,153)    (48,934)
Net proceeds from issue of long-term 0.50% convertible
  notes.................................................      441,610            --          --
Borrowings under financing arrangements.................          987         3,345          --
Principal payments under financing arrangements.........       (2,213)         (595)         --
Proceeds from sale-leaseback transaction................           --         8,076          --
Principal payments on capital lease obligations.........      (26,204)      (17,033)    (11,939)
                                                          -----------   -----------   ---------
Net cash used in financing activities...................     (381,439)      (48,040)   (164,993)
                                                          -----------   -----------   ---------
Net (decrease) increase in cash and cash equivalents....     (297,248)      380,945    (406,343)
Cash and cash equivalents at beginning of year..........      847,600       466,655     872,998
                                                          -----------   -----------   ---------
Cash and cash equivalents at end of year................  $   550,352   $   847,600   $ 466,655
                                                          ===========   ===========   =========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       F-6
<PAGE>
                                 AMDOCS LIMITED

              CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)

<Table>
<Caption>
                                                               YEAR ENDED SEPTEMBER 30,
                                                              ---------------------------
                                                               2004      2003      2002
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
SUPPLEMENTARY CASH FLOW INFORMATION
Interest and Income Taxes Paid
  Cash paid for:
     Income taxes, net of refunds...........................  $35,677   $30,823   $75,371
     Interest...............................................   11,940     9,690    11,221
</Table>

NON-CASH INVESTING AND FINANCING ACTIVITIES

     Capital lease obligations of $2,245 were incurred during the year ended
September 30, 2002, when the Company (as defined below) entered into lease
agreements for vehicles.

     In the year ended September 30, 2004, the Company issued 561 Ordinary
Shares in connection with the acquisition of XACCT (as defined below) valued at
$15,139. See Note 3.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       F-7
<PAGE>

                                 AMDOCS LIMITED

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
                               SEPTEMBER 30, 2004

NOTE 1 -- NATURE OF ENTITY

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

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

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  BASIS OF PRESENTATION

     The consolidated financial statements are prepared in accordance with U.S.
generally accepted accounting principles.

  CONSOLIDATION

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

  FUNCTIONAL CURRENCY

     The Company manages its foreign subsidiaries as integral direct components
of its operations. According to the salient economic factors indicated in
Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign Currency
Translation", the Company's cash flow, sale price, sales market, expense,
financing and intercompany transactions and arrangement indicators are
denominated in the U.S. dollar. The operations of the Company's foreign
subsidiaries provide the same type of services with the same type of
expenditures throughout the Amdocs group. Accordingly, the Company has
determined that its functional currency is the U.S. dollar. The Company
periodically assesses the applicability of the U.S. dollar as the Company's
functional currency by reviewing the salient indicators.

  CASH AND CASH EQUIVALENTS

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

  INVESTMENTS

     The Company classifies all of its short-term interest-bearing investments
as available-for-sale securities. Such short-term interest-bearing investments
consist primarily of commercial paper, Treasury notes, Federal agency
securities, corporate bonds, corporate backed obligations and mortgages, which
are stated at market value. Unrealized gains and losses are comprised of the
difference between market value and amortized costs of such securities and are
reflected, net of tax, as "accumulated other comprehensive income (loss)" in
shareholders' equity. Realized gains and losses on short-term interest-bearing

                                       F-8
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

investments are included in earnings and are derived using the specific
identification method for determining the cost of securities.

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

     In fiscal 2002, the Company recorded pretax charges of $5,500 to adjust the
carrying value of two investments, accounted for by the Company under the cost
method. The declines in the fair values of the investments were judged to be
other than temporary and, therefore, the cost basis was written down. The
write-downs were taken due to the severe financial difficulties the individual
companies were facing, combined with a lack of earnings potential and other
going concern issues in accordance with Staff Accounting Bulletin ("SAB") 59,
"Accounting for Noncurrent Marketable Equity Securities". Further, the fair
value of each investee had been substantially less than the cost of the
investment and the Company's management did not expect a recovery in fair value.
Some of the companies have ceased operations and the others have minimal
operations. All of the companies were small privately-held companies that had
prospects for developing technology that might be of interest to the Company. As
of September 30, 2004 and 2003, as a result of the acquisition of Certen Inc.
and the adjustments described above, all of the Company's remaining cost method
investments are presented at nil fair value.

  EQUIPMENT, VEHICLES AND LEASEHOLD IMPROVEMENTS

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

  GOODWILL AND OTHER INTANGIBLE ASSETS

     The Company follows SFAS No. 141, "Business Combinations", and SFAS No.
142, "Goodwill and Other Intangible Assets". SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Under SFAS No. 142, goodwill and intangible assets deemed
to have indefinite lives are no longer amortized but are subject to periodic
impairment tests in accordance with the Statement. Goodwill impairment is deemed
to exist if the net book value of a reporting unit exceeds its estimated fair
value. Other intangible assets will continue to be amortized over their useful
lives. According to SFAS No. 141's new definition of intangible assets,
workforce-in-place was reclassified to goodwill.

     The total purchase price of business acquisitions accounted for using the
purchase method is allocated first to identifiable assets and liabilities based
on estimated fair values. The excess of the purchase price over the fair value
of net assets of purchased businesses is recorded as goodwill. Goodwill
associated with acquisitions completed prior to July 1, 2001 was amortized on a
straight-line basis over its estimated useful life. Commencing October 1, 2002
goodwill is no longer amortized, but is subject to periodical impairment tests.
See Note 8.

                                       F-9
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

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

     Intellectual property rights, purchased computer software and core
technology acquired by the Company are amortized over their estimated useful
lives on a straight-line basis. Workforce-in-place acquired by the Company was
amortized over its estimated useful life on a straight-line basis through fiscal
2002. Commencing October 1, 2002, workforce-in-place is considered goodwill and
no longer is amortized. See Note 8.

     Some of acquired customer arrangements are amortized over their estimated
useful lives based on the pro-rata amount of the future revenue expected to be
realized from the customer arrangements. This accounting policy results in
accelerated amortization of such customer arrangements as compared to the
straight-line method. All other acquired customer arrangements are amortized
over their estimated useful lives on a straight-line basis.

  LONG-LIVED ASSETS

     The Company considers whether there are indicators of impairment that would
require the comparison of the estimated net realizable value of intangible
assets with finite lives, equipment, leasehold improvements and vehicles and
other long-lived assets, using an undiscounted cash flow analysis, to their
carrying value under SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets". Any impairment would be recognized when the fair market
value of such long-lived assets is less than their carrying value. During the
year ended September 30, 2004 the Company identified and recognized an
impairment charge (included in cost of service) of $2,785 related to software
technology that the Company had no future use for, and therefore was abandoned.

  COMPREHENSIVE INCOME (LOSS)

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

  CONVERTIBLE NOTES

     Accrued interest on the Company's convertible notes is included in "accrued
expenses and other current liabilities". The Company amortizes the issuance
costs related to the convertible notes on a straight-line basis over the term of
the convertible notes. Gain or loss on repurchase of convertible notes
represents the difference between the principal amount and the purchase price.
Such gains, aggregating $13, $448 and $6,012, are included in "interest income
and other, net" in fiscal 2004, 2003 and 2002, respectively. The amortized
issuance cost calculated on a pro-rata basis, related to the repurchased 2%
convertible notes, is included in "interest income and other, net".

  TREASURY STOCK

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

                                       F-10
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

  INCOME TAXES

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

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

  REVENUE RECOGNITION

     Revenue is recognized only when all of the following conditions have been
met: (i) there is persuasive evidence of an arrangement; (ii) delivery has
occurred; (iii) the fee is fixed and determinable; and (iv) collectibility of
the fee is reasonably assured. The Company usually sells its software licenses
as part of an overall solution offered to a customer that combines the sale of
software licenses with a broad range of services, which normally include
significant customization, modification, implementation and integration. As a
result, combined license and service revenue generally is recognized over the
course of these long-term projects, using the percentage of completion method of
accounting in conformity with Accounting Research Bulletin ("ARB") No. 45, "Long
Term Construction-Type Contracts", Statement of Position ("SOP") 81-1,
"Accounting for Performance of Construction-Type and Certain Production-Type
Contracts" and SOP 97-2, "Software Revenue Recognition". Losses are recognized
on contracts in the period in which the loss is identified in accordance with
SOP 81-1.

     Initial license fee for software revenue is recognized as work is
performed, under the percentage of completion method of accounting. Subsequent
license fee revenue is recognized upon completion of specified conditions in
each contract, based on a customer's subscriber level or number of users when
greater than the level specified in the contract for the initial license fee.

     Service revenue that involves significant ongoing obligations, including
fees for software customization, implementation and modification as part of a
long-term contract is recognized as work is performed, under the percentage of
completion method of accounting. In cases where extended payment terms exist,
license and related customization fees are recognized when payments are due, in
accordance with SOP 97-2. Revenue from software solutions that do not require
significant customization and modification is recognized upon delivery or as
services are provided, in accordance with SAB 104, "Revenue Recognition" and SOP
97-2. The Company complies with Emerging Issues Task Force ("EITF") 03-05,
"Applicability of AICPA SOP 97-2 to Non-Software Deliverables in an Arrangement
Containing More Than Incidental Software".

     In Managed Services contracts, revenue from the operation of a customer's
system is recognized either ratably over the service period or as services are
performed. Revenue from ongoing support services is recognized as work is
performed.

     Revenue from third-party hardware sales is recognized upon delivery and
installation, and revenue from third-party software sales is recognized upon
delivery. Revenue from third-party hardware and software sales is recorded
according to the criteria established in EITF 99-19, "Recording Revenue Gross

                                       F-11
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

as a Principal versus Net as an Agent" and SAB 104. Revenue is recorded at gross
amount for transactions in which the Company is the primary obligor under the
arrangement and/or possesses other attributes such as pricing and supplier
selection latitude. In specific circumstances where the Company does not meet
the above criteria, particularly when the contract stipulates that the Company
is not the primary obligor, the Company recognizes revenue on a net basis.

     Maintenance revenue is recognized ratably over the term of the maintenance
agreement, which in most cases is one year or less.

     As a result of a significant portion of the Company's revenue being subject
to the percentage of completion accounting method, the Company's annual and
quarterly operating results may be significantly affected by the size and timing
of customer projects and the Company's progress in completing such projects.

     Many of the Company's agreements include multiple deliverables. For these
multiple element arrangements, the fair value of each component is determined
based on specific objective evidence for that element and revenue is allocated
to each component based upon its fair value. The revenue associated with each
element is recognized using the respective methodology discussed above. The
Company uses the residual method in accordance with SOP 97-2 and EITF 00-21,
"Revenue Arrangements with Multiple Deliverables", in multiple element
arrangements that include license for the sale of software solutions that do not
require significant customization and modification and first year maintenance to
determine the appropriate value for the license component.

     In circumstances where the Company enters into a contract with a customer
for the provision of Managed Services for a defined period of time, the Company
defers, in accordance with SAB 104, certain costs incurred by the Company at the
inception of the contract. These costs include costs associated with migration
of data and the establishment of software interfaces. The deferred costs are
amortized on a straight-line basis over the life of the respective customer
contract. Revenue associated with these capitalized costs is deferred and is
recognized over the life of the respective customer contract.

     In cases where extended payment terms exist and revenue is deferred until
payments are due, related costs are capitalized as contract costs and recognized
as revenue is recognized.

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

     Included in service revenue are sales of third-party products. Revenue from
sales of such products includes third-party computer hardware and computer
software products and was less than 10% of total revenue in each of fiscal 2004,
2003 and 2002.

  COST OF LICENSE AND COST OF SERVICE

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

                                       F-12
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

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

  RESEARCH AND DEVELOPMENT

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

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

  EMPLOYEE BENEFIT PLANS

     The Company maintains a non-contributory defined benefit plan for one of
its Canadian subsidiaries that provides for pensions for substantially all of
that subsidiary's employees based on length of service and rate of pay.
Additionally, the Company provides to these employees other retirement benefits
such as certain health care and life insurance benefits on retirement and
various disability plans, workers' compensation and medical benefits to former
or inactive employees, their beneficiaries and covered dependants, after
employment but before retirement, under specified circumstances.

     The Company accrues its obligations to these employees under employee
benefit plans and the related costs net of returns on plan assets. Pension
expense and other retirement benefits earned by employees are actuarially
determined using the projected benefit method pro-rated on service and based on
management's best estimates of expected plan investments performance, salary
escalation, retirement ages of employees and expected health care costs.

     The fair value of the employee benefit plans' assets is based on market
values. The plan assets are valued at market value for the purpose of
calculating the expected return on plan assets and the amortization of
experience gains and losses. Past service costs, which may arise from plan
amendments, are amortized on a straight-line basis over the average remaining
service period of the employees active at the date of amendment. The excess of
the net actuarial gain (loss) over 10% of the greater of the benefit obligation
and the market-related value of plan assets is amortized over the average
remaining service period of active employees.

  STOCK-BASED COMPENSATION

     The Company follows Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees" and related Interpretations in
accounting for its employee stock options. Pursuant to these accounting
standards, the Company records deferred compensation for share options granted
to employees at the date of grant based on the difference between the exercise
price of the options and the market value of the underlying shares at that date.
Deferred compensation is amortized to compensation expense over the vesting
period of the underlying options in accordance with the accelerated expense
attribution method. No compensation expense is recorded for stock options that
are granted to employees and directors at an exercise price equal to the fair
market value of the Ordinary Shares at the time of the

                                       F-13
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

grant. Compensation expenses that are deductible in a tax return in a period
different from the one in which they are reported as expenses in measuring net
income are temporary differences that result in deferred taxes. To the extent
that compensation is not recorded for stock-based compensation, the benefit of
the related tax deduction is recorded as an increase to additional paid-in
capital in the period of the tax reduction.

     In December 2002, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 148, "Accounting for Stock-Based Compensation -- Transition and
Disclosure -- an Amendment of FASB Statement No. 123". SFAS No. 148 amends SFAS
No. 123 to provide alternative methods of transition for a voluntary change to
the fair value-based method of accounting for stock-based employee compensation.
In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to
require more prominent disclosures in both annual and interim financial
statements regarding the method of accounting for stock-based employee
compensation and the effect of the method used on reported results.

     As presented below, the Company determined pro forma net income (loss) and
earnings (loss) per share information as if the fair value method described in
SFAS No. 123, as amended by SFAS No. 148, had been applied to its employee
stock-based compensation. The Company utilized the Black-Scholes option-pricing
model to estimate fair value, which is one of several methods that can be used
under SFAS No. 123. The Black-Scholes option valuation model was developed for
use in estimating the fair value of traded options that have no vesting
restrictions and are fully transferable. Option valuation models require the
input of highly subjective assumptions, including the expected share price
volatility. The Company's options have characteristics significantly different
from those of traded options, and changes in the subjective input assumptions
can materially affect the fair value estimates.

     The fair value of options granted was estimated at the date of grant using
the Black-Scholes pricing model with the following assumptions for the presented
periods (all in weighted averages):

<Table>
<Caption>
                                                     YEAR ENDED SEPTEMBER 30,
                                                     ------------------------
                                                      2004     2003     2002
                                                     ------   ------   ------
<S>                                                  <C>      <C>      <C>
Risk-free interest rate............................    3.12%    2.70%    2.85%
Expected life of options...........................    4.49     2.93     2.94
Expected annual volatility.........................   0.687    0.568    0.756
Expected dividend yield............................    None     None     None
Fair value per option..............................  $12.62   $ 5.08   $10.72
</Table>

                                       F-14
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     The following table sets forth the pro forma effect of applying SFAS No.
123 on net income (loss) and earnings (loss) per share for the presented
periods:

<Table>
<Caption>
                                                 YEAR ENDED SEPTEMBER 30,
                                              -------------------------------
                                                2004       2003       2002
                                              --------   --------   ---------
<S>                                           <C>        <C>        <C>
Net income (loss), as reported..............  $234,860   $168,883   $  (5,061)
Add: Stock-based compensation expense
  included in net income (loss), net of
  related tax effects.......................       453      1,153         204
Less: Total stock-based compensation expense
  determined under fair value method for all
  awards, net of related tax effects........   (35,989)   (59,947)   (101,231)
                                              --------   --------   ---------
Pro forma net income (loss).................  $199,324   $110,089   $(106,088)
                                              ========   ========   =========
Basic earnings (loss) per share:
  As reported...............................  $   1.13   $   0.78   $   (0.02)
                                              ========   ========   =========
  Pro forma.................................  $   0.95   $   0.51   $   (0.48)
                                              ========   ========   =========
Diluted earnings (loss) per share:
  As reported...............................  $   1.10   $   0.77   $   (0.02)
                                              ========   ========   =========
  Pro forma.................................  $   0.93   $   0.50   $   (0.48)
                                              ========   ========   =========
</Table>

     The pro forma results for fiscal years 2003 and 2002 have been revised due
to a correction of the stock-based employee expense amounts for such years.
These corrections resulted in a decrease in pro forma net income of $35,255 in
fiscal 2003, and in an increase in pro forma net loss of $6,653 in fiscal 2002
from amounts previously reported, and a decrease in pro forma diluted earnings
per share of $0.17 in fiscal 2003, and an increase in pro forma diluted loss per
share of $0.03 in fiscal 2002 from amounts previously reported.

  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The financial instruments of the Company consist mainly of cash and cash
equivalents, short-term interest-bearing investments, accounts receivable,
accounts payable, short-term financing arrangements, forward exchange contracts,
lease obligations and convertible notes. In view of their nature, the fair value
of the financial instruments, excluding the convertible notes (for which the
fair value as of September 30, 2004 is approximately $406,000), included in the
accounts of the Company does not significantly vary from their carrying amount.
The fair values of the Company's foreign currency exchange contracts are
estimated based on quoted market prices of comparable contracts.

  CONCENTRATIONS OF CREDIT RISK

     Financial instruments that potentially subject the Company to concentration
of credit risk consist principally of cash and cash equivalents, short-term
interest-bearing investments and trade receivables. The Company invests its
excess cash primarily in highly liquid U.S. dollar-denominated securities with
major U.S. institutions. The Company does not expect any credit losses with
respect to these items.

     The Company's revenue is generated primarily in North America and Europe.
To a lesser extent, revenue is generated in the Asia-Pacific region and Latin
America. Most customers are among the largest communications and directory
publishing companies in the world (or are owned by them). The Company's business
is subject to the effects of general global economic conditions and, in
particular, market

                                       F-15
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

conditions in the communications industry. The Company performs ongoing credit
analyses of its customer base and generally does not require collateral. The
allowance for doubtful accounts is for estimated losses resulting from the
inability of the Company's customers to make required payments. The Company
evaluates accounts receivable to determine if they will ultimately be collected.
In performing this evaluation, significant judgments and estimates are involved,
such as past experience, credit quality of the customer, age of the receivable
balance and current economic conditions that may affect a customer's ability to
pay. As of September 30, 2004, the Company had no customers that had accounts
receivable balances of more than 10% of total accounts receivable. As of
September 30, 2003, the Company had two customers that had accounts receivable
balances of more than 10% of total accounts receivable, aggregating 27.4% (16.7%
and 10.7%).

  EARNINGS PER SHARE

     The Company accounts for earnings per share based on SFAS No. 128,
"Earnings per Share". SFAS No. 128 requires companies to compute earnings per
share under two different methods, basic and diluted earnings per share, and to
disclose the methodology used for the calculations. Basic earnings per share are
calculated using the weighted average number of shares outstanding during the
period. Diluted earnings per share is computed on the basis of the weighted
average number of shares outstanding and the effect of dilutive outstanding
stock options using the treasury stock method and the effect of dilutive
outstanding convertible notes using the if-converted method.

  DERIVATIVES AND HEDGING

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

  GUARANTOR'S ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES

     The Company follows FASB Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" ("FIN No. 45"). FIN No. 45 requires that, at the
inception of certain types of guarantees, the guarantor must disclose and
recognize a liability for the fair value of the obligation it assumes under the
guarantee. See Note 15.

  GAINS AND LOSSES FROM EXTINGUISHMENT OF DEBT

     The Company follows SFAS No. 145, "Rescission of FASB Statements No. 4, 44
and 64, Amendment of FASB Statement No. 13, and Technical Corrections". SFAS No.
145 eliminates previous requirements to classify gains and losses from
extinguishment of debt as extraordinary items in earnings. The Company adopted
SFAS No. 145 in the fourth quarter of fiscal 2002 in connection with the gains
related to the repurchases of its convertible notes. See Note 12.

  RECLASSIFICATIONS

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

                                       F-16
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

  ADOPTION OF NEW ACCOUNTING STANDARDS

     SFAS No. 132 (revised 2003), "Employers' Disclosures about Pensions and
Other Postretirement Benefits", requires additional disclosures about assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other post-retirement benefit plans. The provisions of this
Statement are effective for fiscal years ending after December 15, 2003. The
Company adopted the disclosure provisions in fiscal 2004.

  RECENT ACCOUNTING PRONOUNCEMENTS

     The Effect of Contingently Convertible Instruments on Diluted Earnings Per
Share

     In September 2004, the EITF reached a consensus on EITF Issue No. 04-8,
"The Effect of Contingently Convertible Instruments on Diluted Earnings Per
Share" ("Issue 04-8"). Issue 04-8 relates to contingently convertible debt
instruments, which are generally convertible into common shares of the issuer
after the common stock price has exceeded a predetermined threshold for a
specified time period (market price trigger). Currently, the potential dilutive
effect of the conversion feature is excluded from diluted earnings per share
until the market price contingency is met. Under Issue 04-8 all instruments that
have embedded conversion features that are contingent on market conditions
indexed to an issuer's share price should be included in diluted earnings per
share computations, if dilutive, regardless of whether the market conditions
have been met. The effective date of Issue 04-8 is for reporting periods ending
after December 15, 2004 (first quarter of the Company's fiscal 2005). The
consensus would be applied retroactively to instruments outstanding at the date
of adoption. Diluted earnings per share of all prior periods presented for
comparative purposes should be restated to conform to the consensus guidance.
For instruments whose terms have been modified prior to the date of adoption,
the consensus would apply to terms of instruments in place at the date of
adoption, and diluted earnings per share for all prior periods would be restated
based upon the modified terms. For instruments that have been cash settled
before the date of adoption, restatement of diluted earnings per share is not
required. The Company believes that the change in accounting rules will reduce
previously reported quarterly diluted earnings per share by approximately $0.01
per share for each of the third and fourth quarters of fiscal 2004, and by
approximately $0.02 per share for fiscal 2004.

  USE OF ESTIMATES

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

NOTE 3 -- ACQUISITIONS

  CLARIFY

     In November 2001, the Company purchased from Nortel Networks Corporation
substantially all of the assets of its Clarify business ("Clarify"), a leading
provider of Customer Relationship Management ("CRM") software to communications
companies and other enterprise sectors. The aggregate initial purchase price for
Clarify as of September 30, 2002 was $212,000 in cash, including transaction
costs of $8,250. The purchase price was subject to final price adjustments that
were settled in October 2002 and resulted in an $11,111 reduction of the
purchase price to $200,889 in the first quarter of fiscal 2003. The acquisition
was accounted for as a business combination using the purchase method of
accounting, as

                                       F-17
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

required by SFAS No. 141. The fair market value of Clarify's assets and
liabilities has been included in the Company's consolidated balance sheet and
the results of Clarify's operations are included in the Company's consolidated
statements of operations, commencing on November 29, 2001. The Company obtained
a valuation of the intangible assets acquired in the Clarify transaction. The
value of acquired technology included both existing technology and in-process
research and development. The valuation of these items was made by applying the
income forecast method, which considered the present value of cash flows by
product lines. Of the $65,600 of acquired identifiable intangible assets,
$17,400 was assigned to in-process research and development and was written-off
as of the closing date of the acquisition, in accordance with FASB
Interpretation No. 4, "Applicability of FASB Statement No. 2 to Business
Combinations Accounted for by the Purchase Method". The fair value assigned to
core technology was $13,400 and was amortized over two years commencing on
November 29, 2001. The fair value assigned to customer arrangements was $34,800
and is being amortized over three years commencing on November 29, 2001. The
excess of the purchase price over the fair value of the net assets acquired, or
goodwill, following the settlement was $147,734, of which $141,345 is tax
deductible. The goodwill is accounted for under SFAS No. 142. In accordance with
SFAS No. 142, goodwill from acquisitions after June 30, 2001 is no longer
amortized, but is subject to periodic impairment tests. As a result, goodwill
associated with the acquisition of Clarify is not amortized.

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

<Table>
<S>                                                           <C>
Net liabilities acquired....................................  $ (9,574)
Core technology.............................................    13,400
Customer arrangements.......................................    34,800
In-process research and development.........................    17,400
Deferred tax liability......................................    (2,871)
Goodwill....................................................   147,734
                                                              --------
                                                              $200,889
                                                              ========
</Table>

  CERTEN

     In July 2003, the Company acquired from Bell Canada ("Bell") its 90%
ownership interest in Certen Inc. ("Certen", which was renamed Amdocs Canada
Managed Services, Inc.) for approximately $66,000 in cash. In addition, the
Company had related transaction costs of approximately $3,000. The Company and
Bell formed Certen in January 2001 to provide customer care and billing
solutions to Bell and a number of Bell's affiliated companies. Prior to this
acquisition, the Company owned 10% of Certen and Bell's ownership interest in
Certen was 90%. As a result of the acquisition, Certen is now a wholly owned
subsidiary of the Company. Since Certen's inception, the Company has provided
customer care and billing software required by Certen, including related
customization, installation, maintenance and other services. This acquisition
expanded the Company's Managed Services offerings and positioned it as a major
provider of Managed Services to the communications industry, and was its next
logical step in the evolution of its relationship with Bell. In addition, as a
result of this acquisition, the Company continued to develop an integrated
billing platform to replace legacy systems built on a product-by-product basis.
Following the acquisition, Certen continues to provide Managed Services to Bell
as it did prior to the acquisition. The Company has a major billing operations
Managed Services agreement with Bell through December 2010.

     The acquisition was accounted for using the purchase method of accounting,
as required by SFAS No. 141. The fair market value of Certen's assets and
liabilities has been included in the Company's consolidated balance sheet and
the results of Certen's operations are included in the Company's consolidated
statements of operations, commencing on July 2, 2003. The Company obtained a

                                       F-18
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

valuation of the intangible assets acquired in the Certen transaction. The total
purchase price was allocated to Certen's assets and liabilities, including
identifiable intangible, based on their respective estimated fair values, on the
date the transaction was consummated. Because the Company had a preexisting
right to utilize the Amdocs billing software and customization prior to the
acquisition, there was minimal incremental value to the Company in acquiring the
software that was licensed to and customized for Certen. The value of the
acquired customer arrangement was made by applying the income forecast method.
The value assigned to the customer arrangement was $36,385 and is being
amortized over seven and half years commencing on July 2, 2003 (the remaining
life of the Managed Services agreement). The excess of the purchase price over
the fair value of the net assets and identifiable intangible acquired, or
goodwill, was $101,081, which is not tax deductible. The goodwill is accounted
for under SFAS No. 142. In accordance with SFAS No. 142, goodwill from
acquisitions after June 30, 2001 is no longer amortized, but is subject to
periodic impairment tests. As a result, goodwill associated with the acquisition
of Certen is not amortized. In addition, deferred taxes were recognized for the
difference between the book and tax basis of certain assets and liabilities.

     Prior to the Company's acquisition of Bell's ownership interest in Certen,
the Company accounted for its investment in Certen under the cost method for its
10% ownership. In the fourth quarter of 2003, the Company recognized its 10%
share in Certen's results prior to the acquisition. The Company's share in
Certen's pre-acquisition results was a charge of $4,133, and is included in
"restructuring charges, in-process research and development and other" for the
year ended September 30, 2003.

     The following is the final allocation of the purchase price and deferred
taxes:

<Table>
<S>                                                           <C>
Purchase price..............................................  $ 65,887
Transaction costs...........................................     2,925
                                                              --------
Total purchase price........................................    68,812
Write-off of deferred revenue and allowance on Amdocs books,
  net of tax................................................   (33,666)
                                                              --------
Net amount for purchase price allocation....................  $ 35,146
                                                              ========
</Table>

     Allocation of purchase price:

<Table>
<S>                                                           <C>
90% tangible assets acquired, net of capitalized Amdocs
  system on Certen's books..................................  $  80,929
90% liabilities assumed.....................................   (241,460)
                                                              ---------
Net tangible assets.........................................   (160,531)
Customer arrangement........................................     36,385
Adjustment to fair value of pension and other
  post-employment benefit liabilities.......................    (12,605)
EITF 95-3 and other liabilities.............................     (2,857)
Deferred taxes resulting from the difference between the
  assigned value of certain assets and liabilities and their
  respective tax bases......................................     73,673
                                                              ---------
Net fair value of tangible assets acquired..................    (65,935)
Goodwill....................................................    101,081
                                                              ---------
                                                              $  35,146
                                                              =========
</Table>

     Set forth below is the unaudited pro forma revenue, operating income
(loss), net income (loss) and per share figures for the years ended September
30, 2003 and 2002, as if Clarify had been acquired as of

                                       F-19
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

October 1, 2000 and as if Certen had been acquired as of October 1, 2001,
excluding the write-off of purchased in-process research and development:

<Table>
<Caption>
                                                       YEAR ENDED SEPTEMBER 30,
                                                       -------------------------
                                                          2003          2002
                                                       -----------   -----------
<S>                                                    <C>           <C>
Revenue..............................................  $1,621,957    $1,774,678
Operating income (loss)..............................     188,468        (6,231)
Net income (loss)....................................     150,224       (44,679)
Basic earnings (loss) per share......................        0.70         (0.20)
Diluted earnings (loss) per share....................        0.68         (0.20)
</Table>

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

  XACCT

     On February 19, 2004, the Company acquired XACCT Technologies Ltd.
("XACCT"), a privately-held provider of mediation software to communications
service providers. The Company acquired XACCT's outstanding shares for $28,425,
of which $13,286 was paid in cash and the balance in 561 of the Company's
Ordinary Shares. In addition, the Company had related transaction costs of
approximately $750. This acquisition further expands the scope of the Company's
billing capabilities in the network mediation space, enabling the collection,
formatting and distribution of network usage events. With this acquisition, the
Company achieves the capability to support end-to-end event processing, from
network mediation through billing, for voice, data, content and commerce prepaid
and postpaid transactions. The Company repurchased 484 Ordinary Shares in
February 2004 to offset the dilutive effect of shares issued in the acquisition.
The fair market value of XACCT's assets and liabilities has been included in the
Company's balance sheet and the results of XACCT's operations have been included
in the Company's consolidated statement of income, commencing on February 19,
2004. The excess of the purchase price over the fair value of the net assets
acquired, or goodwill, was $13,455, which is not tax deductible. The goodwill is
accounted for under SFAS No. 142. In accordance with SFAS No. 142, goodwill from
acquisitions after June 30, 2001 is no longer amortized, but is subject to
periodic impairment tests. As a result, goodwill associated with the acquisition
of XACCT is not amortized.

     In addition, the Company granted XACCT's key employees an aggregate of 35
options with no exercise price, which vest over eighteen months. In accordance
with APB 25, the Company recorded deferred compensation, net of forfeitures, of
$749, which is amortized over the vesting period in accordance with the
accelerated expense attribution method.

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

<Table>
<S>                                                           <C>
Net assets acquired.........................................  $   584
Technology..................................................    9,209
Customer arrangements.......................................    1,064
Deferred tax assets.........................................    4,863
Goodwill....................................................   13,455
                                                              -------
                                                              $29,175
                                                              =======
</Table>

                                       F-20
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     Pro forma information on the Company's consolidated results of operations
for the years ended September 30, 2004, 2003 and 2002 to reflect the XACCT
acquisition is not presented, as its results of operations during such years are
not material to the Company's consolidated results of operations.

NOTE 4 -- RELATED PARTY TRANSACTIONS

     The financial information presented below includes transactions with SBC
Communications, Inc. ("SBC") through December 31, 2002 and Certen, prior to the
Company's acquisition of the remaining 90% of Certen in July 2003. As a result
of the Certen acquisition, Certen is a wholly owned subsidiary of the Company,
and ceased to be a related party as of July 2, 2003, according to SFAS No. 57,
"Related Party Disclosures". In addition, during the quarter ended December 31,
2002, SBC ceased to be a principal shareholder of the Company, according to SFAS
No. 57, and thus is no longer a related party.

     The Company had licensed software and provided computer systems integration
and related services to affiliates of SBC and to Certen. The following related
party revenue is included in the consolidated statements of operations:

<Table>
<Caption>
                                                               YEAR ENDED
                                                             SEPTEMBER 30,
                                                           ------------------
                                                            2003       2002
                                                           -------   --------
<S>                                                        <C>       <C>
Revenue:
  License................................................  $ 3,827   $ 30,551
  Service................................................   84,122    314,341
</Table>

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

<Table>
<Caption>
                                                                YEAR ENDED
                                                               SEPTEMBER 30,
                                                              ---------------
                                                               2003     2002
                                                              ------   ------
<S>                                                           <C>      <C>
Operating expenses(1):
  Cost of service...........................................  $   --   $2,642
  Selling, general and administrative.......................      --      336
Interest income and other, net(2)...........................   1,662    1,886
</Table>

---------------
(1) The Company leased office space on a month-to-month basis and purchased
    other miscellaneous support services from affiliates of SBC.

(2) Represents interest and exchange rate differences, net of hedging, on the
    convertible debentures of Certen for the year ended September 30, 2002, and
    for the year ended September 30, 2003 only through the acquisition date,
    July 2, 2003. Absent hedging, these amounts would be $9,344 and $1,402 for
    the years ended September 30, 2003 and 2002, respectively.

                                       F-21
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 5 -- SHORT-TERM INTEREST-BEARING INVESTMENTS

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

<Table>
<Caption>
                                               AMORTIZED COST         MARKET VALUE
                                             AS OF SEPTEMBER 30,   AS OF SEPTEMBER 30,
                                             -------------------   -------------------
                                               2004       2003       2004       2003
                                             --------   --------   --------   --------
<S>                                          <C>        <C>        <C>        <C>
Federal agencies...........................  $ 51,572   $ 50,371   $ 51,476   $ 50,403
U.S. government treasuries.................    51,242     23,373     50,872     23,674
Corporate backed obligations...............   224,859    197,243    224,612    197,157
Corporate bonds............................   130,103     64,153    130,096     64,151
Mortgages (including government and
  corporate)...............................    67,272     44,743     67,117     44,724
Commercial paper/CD........................    35,500     35,643     35,496     35,457
Private placement..........................    80,680     26,219     80,678     26,225
Municipal bonds............................        --      1,501         --      1,501
                                             --------   --------   --------   --------
                                              641,228    443,246    640,347    443,292
Allowance for unrealized (loss) gain.......      (881)        46         --         --
                                             --------   --------   --------   --------
          Total............................  $640,347   $443,292   $640,347   $443,292
                                             ========   ========   ========   ========
</Table>

     As of September 30, 2004, short-term interest-bearing investments had the
following maturity dates:

<Table>
<Caption>
                                                               MARKET
                                                               VALUE
                                                              --------
<S>                                                           <C>
2005........................................................  $ 96,432
2006........................................................   124,058
2007........................................................   127,909
2008........................................................    57,663
2009........................................................    50,093
Thereafter..................................................   184,192
                                                              --------
                                                              $640,347
                                                              ========
</Table>

NOTE 6 -- ACCOUNTS RECEIVABLE, NET

     Accounts receivable, net consists of the following:

<Table>
<Caption>
                                                          AS OF SEPTEMBER 30,
                                                          -------------------
                                                            2004       2003
                                                          --------   --------
<S>                                                       <C>        <C>
Accounts receivable --billed............................  $242,254   $200,220
Accounts receivable --unbilled..........................    24,696     16,072
Less --allowances.......................................   (12,171)   (18,018)
                                                          --------   --------
Accounts receivable, net................................  $254,779   $198,274
                                                          ========   ========
</Table>

                                       F-22
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 7 -- EQUIPMENT, VEHICLES AND LEASEHOLD IMPROVEMENTS, NET

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

<Table>
<Caption>
                                                          AS OF SEPTEMBER 30,
                                                          -------------------
                                                            2004       2003
                                                          --------   --------
<S>                                                       <C>        <C>
Computer equipment......................................  $355,143   $311,319
Vehicles furnished to employees.........................    35,817     50,080
Leasehold improvements..................................    57,769     49,834
Furniture and fixtures..................................    41,368     40,109
                                                          --------   --------
                                                           490,097    451,342
Less accumulated depreciation...........................   308,976    247,875
                                                          --------   --------
                                                          $181,121   $203,467
                                                          ========   ========
</Table>

     The Company has entered into various arrangements for the leasing of
vehicles for periods of five years, carrying interest rates of LIBOR plus a
margin ranging 0.5% to 0.9% (between 2.52% to 2.92% as of September 30, 2004).
Vehicles under capital lease arrangements had a cost of $30,021 and $43,918 with
related accumulated depreciation of $22,542 and $26,121 as of September 30, 2004
and 2003, respectively. As a result of the Certen acquisition, the Company
assumed various arrangements for the leasing of computer equipment (hardware and
software) for remaining periods of two to three years, denominated in Canadian
dollars with interest rates ranging between 5.16% to 11.7%. Computer equipment
under capital lease arrangements had a cost of $48,203 with related accumulated
depreciation of $14,013 and $2,111 as of September 30, 2004 and 2003,
respectively.

     The Company has accounted for these as capital leases and amortization
costs have been included in depreciation expense. Total depreciation expense on
equipment, vehicles and leasehold improvements for fiscal years 2004, 2003 and
2002, was $73,619, $69,560 and $66,621, respectively.

     Capital lease payments, excluding interest, due over the remaining lease
terms are as follows:

<Table>
<Caption>
FOR THE YEARS ENDED SEPTEMBER 30,
---------------------------------
<S>                                          <C>
2005.......................................  $19,262
2006.......................................    3,987
2007.......................................       89
                                             -------
                                             $23,338
                                             =======
</Table>

     The above capital lease payments do not reflect a liability of $480,
reflecting adjustment to fair value, resulting from the final valuation of
capital lease agreements assumed in the acquisition of Certen. This adjustment
will be amortized over the life of the lease.

     As of September 30, 2004, $7,227 of the above capital lease payments is
guaranteed by Bell until payment is made in full.

     The above capital lease payments include a sale-leaseback transaction that
was recognized on Certen's books as of the acquisition date. The proceeds for
this transaction were received after the acquisition date, and are reflected in
the consolidated cash flow statement for fiscal 2003 as "proceeds from
sale-leaseback transaction".

                                       F-23
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 8 -- GOODWILL AND OTHER INTANGIBLE ASSETS, NET

     Effective October 1, 2002 the Company adopted SFAS No. 142, and the Company
performed the transitional tests of goodwill recorded as of October 1, 2002.
Thereafter, an annual impairment test will be performed in the fourth quarter of
each fiscal year, or more frequently if impairment indicators are present. As
discussed in Note 1, the Company and its subsidiaries operate in one operating
segment, and this segment comprises its only reporting unit. In calculating the
fair value of the reporting unit, the Company used a discounted cash flow
methodology. There was no impairment of goodwill upon adoption of SFAS No. 142
and there was no impairment at the annual impairment test dates.

     Prior to fiscal 2003, goodwill and workforce-in-place were amortized using
the straight-line method over their estimated period of benefit. Net loss and
loss per share for fiscal 2002 adjusted to exclude amortization of goodwill and
workforce-in-place, net of tax, are as follows:

<Table>
<Caption>
                                                               YEAR ENDED
                                                              SEPTEMBER 30,
                                                                  2002
                                                              -------------
<S>                                                           <C>
Reported net loss...........................................    $ (5,061)
Add back: goodwill and workforce-in-place amortizations.....     204,561
Attributable tax effect.....................................      (2,717)
                                                                --------
Adjusted net income.........................................    $196,783
                                                                ========
Adjusted basic earnings per share...........................    $   0.89
                                                                ========
Adjusted diluted earnings per share.........................    $   0.88
                                                                ========
</Table>

     The following table presents details of the Company's total goodwill:

<Table>
<S>                                                           <C>
As of September 30, 2002....................................  $705,862
Decrease in Clarify goodwill as a result of a purchase price
  settlement (see Note 3)...................................   (13,524)
Goodwill resulted from Certen acquisition (see Note 3)......   104,796
                                                              --------
As of September 30, 2003....................................   797,134
Decrease in Certen goodwill as a result of a purchase price
  allocation adjustment (see Note 3)........................    (3,715)
Goodwill resulted from XACCT acquisition (see Note 3).......    13,455
                                                              --------
As of September 30, 2004....................................  $806,874
                                                              ========
</Table>

     The following table presents details of amortization expense of purchased
intangible assets as reported in the consolidated statements of operations:

<Table>
<Caption>
                                                   YEAR ENDED SEPTEMBER 30,
                                                  ---------------------------
                                                   2004      2003      2002
                                                  -------   -------   -------
<S>                                               <C>       <C>       <C>
Cost of license.................................  $ 3,878   $ 4,075   $ 3,550
Cost of service.................................    2,785        --        --
Amortization of purchased intangible assets.....   17,909    19,940    27,243
                                                  -------   -------   -------
Total...........................................  $24,572   $24,015   $30,793
                                                  =======   =======   =======
</Table>

                                       F-24
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     The following table presents details of the Company's total purchased
intangible assets:

<Table>
<Caption>
                                              ESTIMATED
                                             USEFUL LIFE              ACCUMULATED
                                             (IN YEARS)     GROSS     AMORTIZATION     NET
                                             -----------   --------   ------------   -------
<S>                                          <C>           <C>        <C>            <C>
SEPTEMBER 30, 2004
Core technology............................    2-3         $ 53,744    $ (46,326)    $ 7,418
Customer arrangements......................   2-7.5          74,107      (41,655)     32,452
Intellectual property rights and purchased
  computer software........................    3-10          51,996      (44,354)      7,642
                                                           --------    ---------     -------
Total......................................                $179,847    $(132,335)    $47,512
                                                           ========    =========     =======
SEPTEMBER 30, 2003
Core technology............................    2-3         $ 44,535    $ (43,418)    $ 1,117
Customer arrangements......................   3-7.5          70,073      (26,653)     43,420
Intellectual property rights and purchased
  computer software........................    3-10          51,996      (37,692)     14,304
                                                           --------    ---------     -------
Total......................................                $166,604    $(107,763)    $58,841
                                                           ========    =========     =======
</Table>

     The estimated future amortization expense of purchased intangible assets as
of September 30, 2004 is as follows:

<Table>
<Caption>
                                             AMOUNT
                                             -------
<S>                                          <C>
FISCAL YEAR:
2005......................................   $12,574
2006......................................    10,639
2007......................................     8,532
2008......................................     4,851
2009......................................     4,851
Thereafter................................     6,065
</Table>

NOTE 9 -- OTHER NONCURRENT ASSETS

     Other noncurrent assets consist of the following:

<Table>
<Caption>
                                                              AS OF SEPTEMBER 30,
                                                              --------------------
                                                                2004        2003
                                                              ---------   --------
<S>                                                           <C>         <C>
Funded employee benefit costs(1)............................  $ 54,591    $49,020
Managed services costs(2)...................................    49,582     15,916
Convertible notes issuance cost, net........................     7,406      2,096
Restricted cash and cash equivalents(3).....................       275        234
Other.......................................................    14,943      8,930
                                                              --------    -------
                                                              $126,797    $76,196
                                                              ========    =======
</Table>

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

(2) See Note 2.

(3) The Company is required to maintain restricted cash and cash equivalents
    balances relating to letters of credit and bank guarantees.

                                       F-25
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 10 -- INCOME TAXES

     The provision for income taxes consists of the following:

<Table>
<Caption>
                                                           YEAR ENDED SEPTEMBER 30,
                                                          ---------------------------
                                                           2004      2003      2002
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Current.................................................  $72,588   $52,293   $75,185
Deferred................................................   (6,345)    4,001    (1,665)
                                                          -------   -------   -------
                                                          $66,243   $56,294   $73,520
                                                          =======   =======   =======
</Table>

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

     Deferred income taxes are comprised of the following components:

<Table>
<Caption>
                                                          AS OF SEPTEMBER 30,
                                                          -------------------
                                                            2004       2003
                                                          --------   --------
<S>                                                       <C>        <C>
Deferred tax assets:
  Deferred revenue......................................  $ 36,869   $ 27,056
  Accrued employee costs................................    29,473     26,333
  Equipment, vehicles and leasehold improvements, net...    49,436     47,932
  Intangible assets, computer software and intellectual
     property...........................................    13,738     15,052
  Net operating loss carry forwards.....................    27,945     13,629
  Other.................................................    24,826     23,061
  Valuation allowances..................................   (11,424)        --
                                                          --------   --------
  Total deferred tax assets.............................   170,863    153,063
                                                          --------   --------
Deferred tax liabilities:
  Anticipated withholdings on subsidiaries' earnings....   (38,973)   (43,046)
  Equipment, vehicles and leasehold improvements, net...    (9,832)    (6,634)
  Intangible assets, computer software and intellectual
     property...........................................   (29,157)   (28,563)
  Other.................................................    (8,134)   (14,867)
                                                          --------   --------
  Total deferred tax liabilities........................   (86,096)   (93,110)
                                                          --------   --------
Net deferred tax assets.................................  $ 84,767   $ 59,953
                                                          ========   ========
</Table>

                                       F-26
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

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

<Table>
<Caption>
                                                                YEAR ENDED
                                                              SEPTEMBER 30,
                                                            ------------------
                                                            2004   2003   2002
                                                            ----   ----   ----
<S>                                                         <C>    <C>    <C>
Statutory Guernsey tax rate...............................   20%    20%    20%
Guernsey tax-exempt status................................  (20)   (20)   (20)
Foreign taxes.............................................   20     30     28
Valuation allowance.......................................    2     (5)    --
                                                            ---    ---    ---
Income tax rate before effect of acquisition-related
  costs, restructuring charges and gains from the
  repurchases of convertible notes........................   22     25     28
Effect of:
  Acquisition-related costs...............................   --     --     59
  Restructuring charges...................................   --     --     30
  Gains from the repurchases of convertible notes.........   --     --    (10)
                                                            ---    ---    ---
                                                             22%    25%   107%
                                                            ===    ===    ===
</Table>

     As a Guernsey company with tax-exempt status, the Company's overall
effective tax rate is attributable solely to foreign taxes. Effective October 1,
2002, the Company adopted SFAS No. 142. As a result, the Company no longer
amortizes goodwill, the majority of which is not tax-deductible. Therefore, this
non tax-deductible item did not negatively impact the Company's effective tax
rate in fiscal years 2004 and 2003.

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

     During fiscal 2004, the Company recognized deferred tax assets of $11,424
derived from net capital and operating loss carry forwards related to certain of
its subsidiaries. The expiration of these losses carry forwards is unlimited.
Given the uncertainty of the realization of these assets through future taxable
earnings, a valuation allowance of $11,424 was recorded as of September 30,
2004.

     As of September 30, 2003, the Company estimated that operating losses
related to its Canadian subsidiary would be realized through future taxable
earnings. As a result, related valuation allowance of $13,282 was released
through the income tax provision. The decrease in the Company's effective tax
rate following the release of the valuation allowance was reflected in the
Company's results of operations. As of September 30, 2002, the Company estimated
that operating losses incurred by the subsidiary prior to the Company's
acquisition of that company in April 2000 would be realized through future
taxable earnings. As a result, the related valuation allowance of $8,957 was
released as an offsetting reduction of the goodwill recorded in that
transaction. As of September 30, 2004 and 2003, there was no valuation allowance
balance related to the Canadian subsidiary. The valuation allowance related to
the Company's Canadian subsidiary was changed during fiscal 2003 due to changes
in timing differences prior to the Company's conclusion that the operating
losses related to this subsidiary would be realized through future taxable
earnings.

                                       F-27
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 11 -- FINANCING ARRANGEMENTS

  SHORT-TERM

     The Company's financing transactions are described below:

     As of September 30, 2004, the Company had available short-term general
revolving lines of credit totaling $31,000. As of September 30, 2004, the
outstanding balance under these credit lines was $987. The cost of maintaining
these revolving lines of credit was insignificant.

     In addition, as of September 30, 2004, the Company had outstanding letters
of credit and bank guarantees of $12,956. These were mostly supported by a
combination of the credit facilities and restricted cash balances that the
Company maintains with various banks. See Note 9.

  LONG-TERM

     Following the Company's acquisition of Certen (see Note 3), the Company
assumed a loan bearing an annual interest rate of 7.53% and denominated in
Canadian dollars. The principal of $617 and interest is payable in quarterly
installments and matures in fiscal 2005.

NOTE 12 -- CONVERTIBLE NOTES

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

     During the first quarter of 2004, the Company repurchased $5,000 aggregate
principal amount of the 2% Notes for an aggregate purchase price of $4,987, and
during the fourth quarter of 2004 and subsequent to the redemption on June 1,
2004, the Company repurchased $72 aggregate principal amount of the 2% Notes for
an aggregate purchase price of $72. During the fourth quarter of fiscal 2003,
the Company repurchased $44,600 aggregate principal amount of the 2% Notes at an
average price of $990 per $1,000 principal amount, resulting in a gain of $448.
During the fourth quarter of fiscal 2002, the Company repurchased $54,946
aggregate principal amount of the 2% Notes at an average price of $890 per
$1,000 principal amount, resulting in a gain of $6,012. See Note 14. The Company
funded these repurchases, and intends to fund any future repurchases, with
available funds. As of June 1, 2004 holders had tendered to the Company for
repurchase $395,110 principal amount of 2% Notes of the $395,454 then
outstanding, and we purchased the tendered 2% Notes for cash. Subsequently, we
purchased additional 2% Notes and as of September 30, 2004, $272 principal
amount of 2% Notes remain as obligations of the Company, due June 1, 2008, in
accordance with their terms. As of September 30, 2004, the remaining 2% Notes
are presented as noncurrent liabilities under "Convertible notes". As of
September 30, 2003, the 2% Notes were presented as current liabilities.

                                       F-28
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     In March 2004, the Company issued $450,000 aggregate principal amount of
0.50% Convertible Senior Notes due 2024 (the "0.50% Notes") through a private
placement to qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The Company is obligated to pay interest on the 0.50% Notes
semi-annually on March 15 and September 15 of each year. The 0.50% Notes are
senior unsecured obligations of the Company and rank equal in right of payment
with all existing and future senior unsecured indebtedness of the Company. The
0.50% Notes are convertible, at the option of the holders at any time before the
maturity date, into Ordinary Shares of the Company at a conversion rate of
23.1911 shares per one thousand dollars principal amount, representing a
conversion price of approximately $43.12 per share, as follows: (i) during any
fiscal quarter commencing after March 31, 2004, and only during that quarter if
the closing sale price of the Company's Ordinary Shares exceeds 130% of the
conversion price for at least 20 trading days in the 30 consecutive trading days
ending on the last trading day of the proceeding fiscal quarter (initially 130%
of $43.12, or $56.06); (ii) upon the occurrence of specified credit rating
events with respect to the notes; (iii) subject to certain exceptions, during
the five business day period after any five consecutive trading day period in
which the trading price per note for each day of that measurement period was
less than 98% of the product of the closing sale price of the Company's Ordinary
Shares and the conversion rate; provided, however, holders may not convert their
notes (in reliance on this subsection) if on any trading day during such
measurement period the closing sale price of the Company's Ordinary Shares was
between 100% and 130% of the then current conversion price of the notes
(initially, between $43.12 and $56.06); (iv) if the notes have been called for
redemption, or (v) upon the occurrence of specified corporate events. The 0.50%
Notes are subject to redemption at any time on or after March 20, 2009, in whole
or in part, at the option of the Company, at a redemption price of 100% of the
principal amount plus accrued and unpaid interest, if any, on such redemption
date. The 0.50% Notes are subject to repurchase, at the holders' option, on
March 15, 2009, 2014 and 2019, at a repurchase price equal to 100% of the
principal amount plus accrued and unpaid interest, if any, on such repurchase
date ("Put Rights"). The Company may choose to pay the repurchase price in cash,
Ordinary Shares or a combination of cash and Ordinary Shares. Recently, the FASB
issued an exposure draft that would amend SFAS No. 128 to require that if a
convertible financial instrument has an option to settle a required redemption
in cash or shares, the assumption is the option would be settled in shares and
therefore the "if converted" method should be applied based on the current share
price and not according to the conversion price (the current accounting
guidelines) when computing diluted earnings per share. Subsequent to the balance
sheet date the Board of Directors has authorized the Company to amend the 0.50%
Notes by waiving its right to a share settlement upon exercise of Put Rights and
committing to a cash settlement. If the Company amends the 0.50% Notes as
authorized by its Board of Directors, then the expected new accounting rule
would have no impact on the Company's consolidated financial results.

                                       F-29
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 13 -- NONCURRENT LIABILITIES AND OTHER

     Noncurrent liabilities and other consist of the following:

<Table>
<Caption>
                                                          AS OF SEPTEMBER 30,
                                                          -------------------
                                                            2004       2003
                                                          --------   --------
<S>                                                       <C>        <C>
Accrued employees costs.................................  $ 82,478   $ 75,654
Accrued pension liability(1)............................    21,255     16,372
Noncurrent customer advances............................    26,281     34,725
Long-term portion of capital lease obligations..........     4,112     23,825
Accrued lease obligations...............................    10,835     10,235
Other...................................................     9,488     11,684
                                                          --------   --------
                                                          $154,449   $172,495
                                                          ========   ========
</Table>

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

NOTE 14 -- INTEREST INCOME AND OTHER, NET

     Interest income and other, net consists of the following:

<Table>
<Caption>
                                                  YEAR ENDED SEPTEMBER 30,
                                               ------------------------------
                                                 2004       2003       2002
                                               --------   --------   --------
<S>                                            <C>        <C>        <C>
Interest income..............................  $ 17,941   $ 26,580   $ 31,856
Interest expense.............................   (12,867)   (11,425)   (16,004)
Gain from repurchase of 2% Notes(1)..........        13        448      6,012
Other, net...................................      (184)      (844)    (2,566)
                                               --------   --------   --------
                                               $  4,903   $ 14,759   $ 19,298
                                               ========   ========   ========
</Table>

---------------
(1) See Note 12.

NOTE 15 -- CONTINGENCIES

  COMMITMENTS

     The Company leases office space under non-cancelable operating leases in
various countries in which it does business. Future minimum non-cancelable lease
payments required after October 1, 2004 are as follows:

<Table>
<Caption>
FOR THE YEARS ENDED SEPTEMBER 30,
---------------------------------
<S>                                         <C>
2005......................................  $ 46,061
2006......................................    40,142
2007......................................    29,979
2008......................................    19,252
2009......................................    14,730
Thereafter................................    35,641
                                            --------
                                            $185,805
                                            ========
</Table>

                                       F-30
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     Future minimum non-cancelable lease payments, as stated above, do not
reflect committed future sublease income of $6,846, $5,688, $4,606, $2,786,
$1,968 and $5,461 for the years ended September 30, 2005, 2006, 2007, 2008, 2009
and thereafter, respectively. Of the $158,450 net operating leases, net of
$27,355 of sublease income, $10,280 has been included in accrued restructuring
charges as of September 30, 2004.

     Rent expense, including accruals for future lease losses, was approximately
$43,505, $33,039 and $39,141 for fiscal 2004, 2003 and 2002, respectively.

     The Company leases vehicles under operating leases. Future minimum
non-cancelable lease payments required after October 1, 2004 are as follows:

<Table>
<Caption>
FOR THE YEARS ENDED SEPTEMBER 30,
---------------------------------
<S>                                          <C>
2005.......................................  $ 4,365
2006.......................................    3,985
2007.......................................    3,985
2008.......................................    1,804
                                             -------
                                             $14,139
                                             =======
</Table>

  LITIGATION

     On December 2, 2003 the Company announced that the United States District
Court for the Eastern District of Missouri had issued an order granting the
Company's motion to dismiss the securities class action lawsuits that had been
pending against the Company and certain of its directors and officers since June
2002. The court's order also directed that judgment be entered in the Company's
favor. On December 2, 2004, the United States Court of Appeals for the Eighth
Circuit affirmed per curiam the dismissal of the complaint.

  OTHER LEGAL PROCEEDINGS

     The Company is involved in various other legal proceedings arising in the
normal course of its business. Based upon the advice of counsel, the Company
does not believe that the ultimate resolution of these matters will have a
material adverse effect on the Company's consolidated financial position,
results of operations or cash flows.

  SECURITIES AND EXCHANGE COMMISSION INVESTIGATION

     The Company has been informed that the Midwest Regional Office of the SEC
is conducting a private investigation into the events leading up to the
Company's announcement in June 2002 of revised projected revenue for the third
and fourth quarters of fiscal 2002. The investigation appears to be focused on,
but is not explicitly limited to, the Company's forecasting beginning with its
April 23, 2002 press release. Although the Company believes that it will be able
to satisfy any concerns the SEC staff may have in this regard, the Company is
unable to predict the duration, scope, or outcome of the investigation. The
Company is cooperating fully with the SEC staff.

  GUARANTOR'S ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES

     The Company is a party to an agreement entered into prior to December 31,
2002 that includes an indemnification of one of its customers for any
withholding tax that might be required under the customer's local tax laws from
certain payments made to the Company under this agreement. The

                                       F-31
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

indemnification under this agreement expires in December 2005. As of September
30, 2004 and September 30, 2003, the maximum potential amount of the Company's
future exposure under this guarantee pursuant to FIN No. 45 was $4,717.

     The Company generally sells its ClarifyCRM products with a limited warranty
for a period of 90 days. The Company's policy is to accrue for warranty costs,
if needed, based on historical trends in product failure. Based on the Company's
experience, only minimal warranty services have been required and, as a result,
the Company did not accrue any amounts for product warranty liability during
fiscal years 2004 and 2003.

     The Company generally indemnifies its customers against claims of
intellectual property infringement made by third parties arising from the use of
the Company's software. To date, the Company has incurred only minimal costs as
a result of such obligations and has not accrued any liabilities related to such
indemnification in its consolidated financial statements.

NOTE 16 -- EMPLOYEE BENEFITS

     The Company accrues severance pay for the employees of its Israeli
operations in accordance with Israeli law and certain employment procedures on
the basis of the latest monthly salary paid to these employees and the length of
time that they have worked for the Israeli operations. The severance pay
liability, which is included in noncurrent liabilities and other, is partially
funded by amounts on deposit with insurance companies, which are included in
other noncurrent assets. Severance expenses were approximately $15,363, $15,036
and $9,953 for fiscal 2004, 2003 and 2002, respectively.

     The Company sponsors defined contribution plans covering certain employees
in the U.S., U.K. and Canada. The plans provide for Company matching
contributions based upon a percentage of the employees' voluntary contributions.
The Company's contributions in fiscal 2004, 2003 and 2002 under such plans were
not significant.

     Following the Company's acquisition of Certen (see Note 3) and commencing
on the acquisition date, July 2, 2003, the Company maintains non-contributory
defined benefit plans that provide for pension, other retirement and post
employment benefits for Certen employees based on length of service and rate of
pay. The measurement date for the pension plan was September 30, 2003 and the
measurement date for the other benefits was December 31, 2003.

  COMPONENTS OF NET BENEFIT PLANS COST

     The net periodic benefit cost for the year ended September 30, 2004,
related to pension and other benefits were as follows:

<Table>
<Caption>
                                                             PENSION     OTHER
                                                             BENEFITS   BENEFITS
                                                             --------   --------
<S>                                                          <C>        <C>
Service costs..............................................  $ 1,967      $373
Interest on benefit obligations............................    2,676       386
Expected return on plan assets.............................   (2,200)       --
                                                             -------      ----
                                                             $ 2,443      $759
                                                             =======      ====
</Table>

                                       F-32
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     The net periodic benefit cost for the year ended September 30, 2003
(commencing July 2, 2003), related to pension and other benefits were as
follows:

<Table>
<Caption>
                                                              PENSION     OTHER
                                                              BENEFITS   BENEFITS
                                                              --------   --------
<S>                                                           <C>        <C>
Service costs...............................................   $ 493       $ 90
Interest on benefit obligations.............................     564         98
Expected return on plan assets..............................    (409)        --
                                                               -----       ----
                                                               $ 648       $188
                                                               =====       ====
</Table>

  COMPONENTS OF ACCRUED BENEFIT LIABILITY

     The following table sets forth changes in the fair value of plan assets,
benefit obligations and the funded status of the plans:

<Table>
<Caption>
                                                           PENSION     OTHER
                                                           BENEFITS   BENEFITS
                                                           --------   --------
<S>                                                        <C>        <C>
CHANGE IN PLAN ASSETS:
Fair value of plan assets as of September 30, 2003.......  $ 27,971   $    --
Actual return on plan assets.............................     3,077        --
Foreign exchange gain....................................     1,735        --
Employer contribution....................................     2,208         8
Benefits paid............................................      (949)       (8)
                                                           --------   -------
FAIR VALUE OF PLAN ASSETS AS OF SEPTEMBER 30, 2004.......    34,042        --
                                                           --------   -------
CHANGE IN BENEFIT OBLIGATIONS:
Benefit obligations as of September 30, 2003.............   (38,294)   (5,426)
Service costs............................................    (1,967)     (373)
Interest on benefit obligations..........................    (2,676)     (386)
Actuarial losses.........................................    (2,446)     (248)
Special termination costs................................    (2,209)     (360)
Foreign exchange loss....................................    (3,108)     (449)
Benefits paid............................................       949         8
                                                           --------   -------
BENEFIT OBLIGATIONS AS OF SEPTEMBER 30, 2004.............   (49,751)   (7,234)
                                                           --------   -------
FUNDED STATUS-PLAN DEFICIT AS OF SEPTEMBER 30, 2004......   (15,709)   (7,234)
Unrecognized actuarial net losses........................    (1,077)     (257)
                                                           --------   -------
ACCRUED BENEFIT COSTS AS OF SEPTEMBER 30, 2004...........  $(14,632)  $(6,977)
                                                           ========   =======
ACCRUED BENEFIT COSTS INCLUDED IN ACCRUED PERSONNEL
  COSTS..................................................  $   (354)  $    --
                                                           ========   =======
ACCRUED BENEFIT COSTS INCLUDED IN NONCURRENT LIABILITIES
  AND OTHER..............................................  $(14,278)  $(6,977)
                                                           ========   =======
</Table>

     As of September 30, 2004, the accumulated benefit obligation for the
pension plan was $41,097, and $6,824 for the other benefits.

                                       F-33
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     The following table sets forth the funded status of the plans as of
September 30, 2003:

<Table>
<Caption>
                                                           PENSION     OTHER
                                                           BENEFITS   BENEFITS
                                                           --------   --------
<S>                                                        <C>        <C>
CHANGE IN PLAN ASSETS:
Fair value of plan assets in acquisition acquired........  $ 27,060   $    --
Actual return on plan assets.............................     1,032        --
Foreign exchange loss....................................      (107)       --
Benefits paid............................................       (14)       --
                                                           --------   -------
FAIR VALUE OF PLAN ASSETS AS OF SEPTEMBER 30, 2003.......    27,971        --
                                                           --------   -------
CHANGE IN BENEFIT OBLIGATIONS:
Benefit obligations assumed in acquisition...............   (37,400)   (5,262)
Service costs............................................      (493)      (90)
Interest on benefit obligations..........................      (564)      (98)
Foreign exchange gain....................................       149        24
Benefits paid............................................        14        --
                                                           --------   -------
BENEFIT OBLIGATIONS AS OF SEPTEMBER 30, 2003.............   (38,294)   (5,426)
                                                           --------   -------
FUNDED STATUS-PLAN DEFICIT AS OF
SEPTEMBER 30, 2003.......................................   (10,323)   (5,426)
Unrecognized actuarial net gain..........................       623        --
                                                           --------   -------
ACCRUED BENEFIT COSTS AS OF SEPTEMBER 30, 2003...........  $(10,946)  $(5,426)
                                                           ========   =======
</Table>

  SIGNIFICANT ASSUMPTIONS

     The significant assumptions adopted in measuring the Canadian subsidiary's
accrued benefit obligations and the net periodic benefit cost were as follows:

<Table>
<Caption>
                                                              2004   2003
                                                              ----   ----
<S>                                                           <C>    <C>
AS OF SEPTEMBER 30:
  ACCRUED BENEFIT OBLIGATIONS
  Weighted average discount rate, end of year...............  6.25%  6.50%
  Weighted average rate of compensation increase, end of
     year...................................................  3.50   3.50
FOR THE YEAR ENDED SEPTEMBER 30:
  NET PERIODIC BENEFIT COST
  Weighted average discount rate, end of preceding year.....  6.50%   n/a(1)
  Weighted average expected long-term rate of return on plan
     assets, end of preceding year..........................  7.50    n/a(1)
  Weighted average rate of compensation increase, end of
     preceding year.........................................  3.50    n/a(1)
</Table>

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

(1) The plans commenced following the Company's acquisition of Certen on July 2,
    2003; therefore there is no data for this time period.

     The expected future rate of return assumption is based on the target asset
allocation policy and the expected future rates of return on these assets.

     For measurement purposes, a 4.5% annual rate of increase in the per capita
cost of covered health care benefits (the health care cost trend rate) was
assumed for the year ended September 30, 2004, except

                                       F-34
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

for the cost of medication, which was assumed to increase at an annual rate of
10.5% for 2004. This rate was assumed to gradually decline to 4.5% by 2010 and
remain stable thereafter.

     A 1% change in the assumed health care cost trend rates would have the
following effect as of September 30, 2004:

<Table>
<Caption>
                                                        1% INCREASE   1% DECREASE
                                                        -----------   -----------
<S>                                                     <C>           <C>
Effect on other benefits -- total service and interest
  cost................................................    $  102         $ (82)
Effect on other benefits -- accrued benefit
  obligations.........................................     1,116          (878)
</Table>

  PENSION PLAN ASSETS

     The following table sets forth the allocation of the pension plan assets as
of September 30, 2004 and 2003, the target allocation for 2005 and the expected
long-term rate of return by asset class. The fair value of the plan assets was
$34,042 as of September 30, 2004 and $27,971 as of September 30, 2003.

<Table>
<Caption>
                                                        PERCENTAGE       WEIGHTED-
                                                         OF PLAN          AVERAGE
                                            TARGET     ASSETS AS OF      LONG-TERM
                                          ALLOCATION  SEPTEMBER 30,    RATE OF RETURN
                                          ----------  -------------    --------------
ASSET CATEGORY                               2005     2004      2003        2004
--------------                            ----------  ----      ----   --------------
<S>                                       <C>         <C>       <C>    <C>
Equity securities.......................  45%-65%      57%       56%        9.0%
Debt securities.........................   35-55       43        44         5.5
                                                      ---       ---
Total...................................              100%      100%        7.5
                                                      ===       ===
</Table>

     Plan assets consist primarily of Canadian and other equities, government
and corporate bonds, debentures and secured mortgages, which are held in units
of the BCE Master Trust Fund, a Trust established by Bell. The investment
strategy is to maintain an asset allocation that is diversified between multiple
different asset classes, and between multiple managers within each asset class,
in order to minimize the risk of large losses and to maximize the long-term
risk-adjusted rate of return.

  PROJECTED CASH FLOWS

     The Company is responsible for adequately funding the pension plan.
Contributions by the Company are based on various generally accepted actuarial
methods and reflect actuarial assumptions concerning future investment returns,
salary projections and future service benefits. The Company contributed $2,208
to the pension plan in 2004 which was the minimum contribution required by law.
Because the Company does not fund the other employee future benefit plan, the
total payments of $8 paid in 2004 represents payments made to beneficiaries
under this plan. The following table sets forth the Company's estimates for
future minimum contributions to the pension plan and for benefit payments under
the other benefit plan.

<Table>
<Caption>
                                                             PENSION     OTHER
FOR THE YEARS ENDED SEPTEMBER 30,                            BENEFITS   BENEFITS
---------------------------------                            --------   --------
<S>                                                          <C>        <C>
2005.......................................................  $ 3,285     $   89
2006.......................................................    2,628        109
2007.......................................................    2,725        121
2008.......................................................    2,836        136
2009.......................................................    2,950        155
2010 - 2014................................................   16,236      1,266
                                                             -------     ------
Total......................................................  $30,660     $1,876
                                                             =======     ======
</Table>

                                       F-35
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 17 -- CAPITAL TRANSACTIONS

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

<Table>
<Caption>
                                                            AS OF SEPTEMBER 30,
                                                            -------------------
                                                              2004       2003
                                                            --------   --------
<S>                                                         <C>        <C>
Voting Ordinary Shares issued.............................  224,947    223,790
Less -- treasury stock....................................  (23,613)    (7,732)
                                                            -------    -------
Ordinary Shares outstanding...............................  201,334    216,058
                                                            =======    =======
</Table>

     The Company's capital transactions are described below:

     Total proceeds from the exercise of employee stock options amounted to
$12,077, $2,320 and $5,161 in fiscal 2004, 2003 and 2002, respectively.

     During fiscal 2002, the Company repurchased 7,732 Ordinary Shares, at an
average price of $14.13 per share pursuant to a share repurchase program.

     On November 5, 2003, the Company announced that its Board of Directors had
authorized a share repurchase program of up to 5,000 Ordinary Shares over the
next twelve months. The authorization permitted the Company to purchase Ordinary
Shares in open market or privately negotiated transactions and at prices the
Company deems appropriate. The Company stated that one of the main purposes of
the repurchase program was to offset the dilutive effect of any future share
issuances, including issuances pursuant to employee equity plans or in
connection with acquisitions. During the first quarter of fiscal 2004, the
Company repurchased 4,990 Ordinary Shares under this repurchase program, for an
aggregate purchase price of $123,993.

     In connection with the Company's acquisition of XACCT (see Note 3), the
Company's Board of Directors approved the repurchase of Ordinary Shares to
offset the dilutive effect of share issuances in the acquisition. The closing of
the acquisition occurred in February 2004, and the Company repurchased 484
Ordinary Shares in February 2004 for an aggregate purchase price of $13,417.

     In connection with the Company's issuance of the 0.50% Notes (see Note 12),
the Board of Directors approved the repurchase of Ordinary Shares sold short by
purchasers of the 0.50% Notes in negotiated transactions, concurrently with the
sale of the notes, to offset the dilutive effect of the Ordinary Shares issuable
upon conversion of the 0.50% Notes. The closing of the sale of the 0.50% Notes
occurred in March 2004, and the Company repurchased 6,074 Ordinary Shares, for
an aggregate purchase price of $170,061, out of the 10,436 Ordinary Shares
issuable upon conversion of the 0.50% Notes, based on a conversion rate of
23.1911 shares per $1,000 principal amount.

     On July 28, 2004, the Company announced that its Board of Directors
extended the share repurchase program for the additional repurchase of up to
$100,000 of its Ordinary Shares in open market or privately negotiated
transactions and at times and prices the Company deems appropriate. In
accordance with this extension, the Company repurchased 4,894 Ordinary Shares,
at an average price of $20.40 per share.

     The Company funded these repurchases, and intends to fund any future
repurchases, with available funds.

NOTE 18 -- STOCK OPTION AND INCENTIVE PLAN

     In January 1998, the Company first adopted, and in each of January 1999,
January 2000, January 2001 and January 2004, the Company has amended, the Amdocs
Limited 1998 Stock Option and Incentive Plan (the "Plan"). Under the provisions
of the Plan, 38,300 Ordinary Shares were authorized to

                                       F-36
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

be granted to officers, directors, employees and consultants. Such options fully
vest over a period of up to seven years and have a term of ten years.

     The following table summarizes information about share options, as well as
changes during the years ended September 30, 2004, 2003 and 2002:

<Table>
<Caption>
                                                                       WEIGHTED
                                                           NUMBER OF   AVERAGE
                                                             SHARE     EXERCISE
                                                            OPTIONS     PRICE
                                                           ---------   --------
<S>                                                        <C>         <C>
Outstanding as of October 1, 2001........................  14,151.2     $38.89
Granted..................................................  16,648.5      23.88
Exercised................................................    (688.9)      7.49
Forfeited................................................  (2,418.8)     44.02
                                                           --------
Outstanding as of September 30, 2002.....................  27,692.0      30.30
Granted..................................................   3,151.2      10.49
Exercised................................................    (474.5)      4.89
Forfeited................................................  (4,803.0)     37.16
                                                           --------
Outstanding as of September 30, 2003.....................  25,565.7      27.04
Granted..................................................   4,177.2      22.07
Exercised................................................  (1,156.5)     10.44
Forfeited................................................  (2,539.9)     30.89
                                                           --------
Outstanding as of September 30, 2004.....................  26,046.5      26.61
                                                           ========
</Table>

     As of September 30, 2004, 8,476.3 Ordinary Shares remained available for
grant pursuant to the Plan.

     The following table summarizes information about share options outstanding
as of September 30, 2004:

<Table>
<Caption>
                       OUTSTANDING                                   EXERCISABLE
---------------------------------------------------------   ------------------------------
                                  WEIGHTED
                                   AVERAGE       WEIGHTED
                                  REMAINING      AVERAGE
   EXERCISE        NUMBER        CONTRACTUAL     EXERCISE     NUMBER      WEIGHTED AVERAGE
    PRICE        OUTSTANDING   LIFE (IN YEARS)    PRICE     EXERCISABLE    EXERCISE PRICE
   --------      -----------   ---------------   --------   -----------   ----------------
<S>              <C>           <C>               <C>        <C>           <C>
$    0 -  3.01       472.4          3.93          $ 1.86        462.7          $ 1.90
  6.40 - 18.60     8,138.2          7.88            9.99      2,796.5            9.59
 19.21 - 28.60     6,510.1          7.84           24.56      1,827.2           25.92
 30.94 - 31.90     4,694.6          7.20           31.01      3,851.9           31.01
 33.07 - 45.07     3,198.3          6.27           38.30      2,483.7           38.16
 47.90 - 65.01     2,535.3          5.96           58.36      2,184.7           58.13
 66.25 - 78.31       497.6          5.83           70.23        476.4           70.10
</Table>

                                       F-37
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 19 -- EARNINGS (LOSS) PER SHARE

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

<Table>
<Caption>
                                                   YEAR ENDED SEPTEMBER 30,
                                                ------------------------------
                                                  2004       2003       2002
                                                --------   --------   --------
<S>                                             <C>        <C>        <C>
Numerator:
     Net income (loss)........................  $234,860   $168,883   $ (5,061)
                                                ========   ========   ========
Denominator:
  Denominator for basic earnings (loss) per
     share -- weighted average number of
     shares outstanding(1)....................   208,726    215,849    220,361
  Effect of dilutive stock options
     granted(2)...............................     5,471      4,027         --
                                                --------   --------   --------
  Denominator for dilutive earnings (loss) per
     share -- adjusted weighted average shares
     and assumed conversions(1)...............   214,197    219,876    220,361
                                                ========   ========   ========
Basic earnings (loss) per share...............  $   1.13   $   0.78   $  (0.02)
                                                ========   ========   ========
Diluted earnings (loss) per share.............  $   1.10   $   0.77   $  (0.02)
                                                ========   ========   ========
</Table>

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

(1) The weighted average number of shares outstanding includes exchangeable
    shares issued to shareholders of Amdocs Canada, Inc. (formerly Solect
    Technology Group Inc. ("Solect")) pursuant to the Company's acquisition of
    Solect in April 2000, which were exchangeable for the Company's Ordinary
    Shares on a one-for-one basis. As of September 30, 2003, none of the
    exchangeable shares remained outstanding.

(2) Due to net loss, 2,201 anti-dilutive securities are excluded from the
    computation of diluted average number of shares outstanding in the year
    ended September 30, 2002.

     The effect of the 2% Notes issued by the Company in May 2001 on diluted
earnings (loss) per share was anti-dilutive for the years ended September 30,
2004, 2003 and 2002, and therefore was not included in the calculation above.
The effect of the 0.50% Notes issued by the Company in March 2004 on diluted
earnings per share was not included in the above calculation due to the
conditions on their conversion. The weighted average effect of the repurchase of
Ordinary Shares by the Company has been included in the calculation of basic
earnings (loss) per share. See Note 17.

NOTE 20 -- SEGMENT INFORMATION AND SALES TO SIGNIFICANT CUSTOMERS

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

                                       F-38
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

  GEOGRAPHIC INFORMATION

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

<Table>
<Caption>
                                                 YEAR ENDED SEPTEMBER 30,
                                           ------------------------------------
                                              2004         2003         2002
                                           ----------   ----------   ----------
<S>                                        <C>          <C>          <C>
REVENUE
United States............................  $  824,931   $  732,400   $  817,728
Canada...................................     333,898      183,973      178,240
Europe...................................     480,177      442,673      466,098
Rest of the world........................     134,726      124,281      151,499
                                           ----------   ----------   ----------
Total....................................  $1,773,732   $1,483,327   $1,613,565
                                           ==========   ==========   ==========
</Table>

<Table>
<Caption>
                                                   AS OF SEPTEMBER 30,
                                           ------------------------------------
                                              2004         2003         2002
                                           ----------   ----------   ----------
<S>                                        <C>          <C>          <C>
LONG-LIVED ASSETS
United States(1).........................  $  340,090   $  308,959   $  302,950
Canada(2)................................     668,806      686,748      539,832
Rest of the world........................      98,817       90,911      138,334
                                           ----------   ----------   ----------
Total....................................  $1,107,713   $1,086,618   $  981,116
                                           ==========   ==========   ==========
</Table>

---------------
(1) Primarily goodwill, computer software and hardware.

(2) Primarily goodwill.

  REVENUE AND CUSTOMER INFORMATION

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

<Table>
<Caption>
                                                 YEAR ENDED SEPTEMBER 30,
                                           ------------------------------------
                                              2004         2003         2002
                                           ----------   ----------   ----------
<S>                                        <C>          <C>          <C>
CC&B.....................................  $1,536,993   $1,280,430   $1,439,980
Directory................................     236,739      202,897      173,585
                                           ----------   ----------   ----------
Total....................................  $1,773,732   $1,483,327   $1,613,565
                                           ==========   ==========   ==========
</Table>

                                       F-39
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

  SALES TO SIGNIFICANT CUSTOMERS

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

<Table>
<Caption>
                                                                 YEAR ENDED
                                                               SEPTEMBER 30,
                                                             ------------------
                                                             2004   2003   2002
                                                             ----   ----   ----
<S>                                                          <C>    <C>    <C>
Customer 1.................................................   18%    11%    (*)%
Customer 2.................................................   14     15     12
Customer 3.................................................   12     11     11
Customer 4.................................................   (*)    (*)    10
</Table>

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

NOTE 21 -- OPERATIONAL EFFICIENCY AND COST REDUCTION PROGRAMS

  Fiscal Year Ended September 30, 2003

     In the first quarter of fiscal 2003, the Company implemented a series of
measures designed to reduce costs and improve productivity, with targeted
quarterly savings of approximately $8,000. As part of this plan, the Company
reduced its workforce by approximately 400 employees, representing approximately
4% of the Company's worldwide workforce of 9,000 full-time employees, vacated
facilities in different centers around the world and implemented other cost
reduction measures, including travel cuts and reduction in other discretionary
costs.

     The restructuring charge associated with these actions and recorded in the
first quarter of fiscal 2003 was $9,956. Approximately $5,923 of the total
charge was paid in cash as of September 30, 2004. The remaining facility related
costs, are expected to be paid out through June 2008.

     Details of $9,956 Restructuring Charge:

     The Company recorded a charge of $4,011 related to employee separation
costs in connection with the termination of employment of software information
technology specialists and administrative professionals from various locations
around the world. The Company recorded a charge of $4,022 related to facilities,
representing rent obligations relating to vacated facilities in Raanana, Israel
and St. Louis, Missouri. The Company also recorded a provision of $1,829 for
asset write-offs, principally for leasehold improvements in Raanana, Israel and
St. Louis, Missouri that were abandoned.

                                       F-40
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     The first quarter of fiscal 2003 restructuring charge is comprised of the
following as of September 30, 2004:

<Table>
<Caption>
                                           EMPLOYEE
                                          SEPARATION                  ASSET
                                            COSTS      FACILITIES   WRITE-OFFS   OTHER    TOTAL
                                          ----------   ----------   ----------   -----   -------
<S>                                       <C>          <C>          <C>          <C>     <C>
Balance as of October 1, 2002...........   $    --      $    --      $    --     $ --    $    --
Charges.................................     4,011        4,022        1,829       94      9,956
Cash payments...........................    (3,890)        (467)          --      (94)    (4,451)
Non cash................................        --           --       (1,829)      --     (1,829)
Adjustments(1)..........................        38         (453)          --       --       (415)
                                           -------      -------      -------     ----    -------
Balance as of September 30, 2003........       159        3,102           --       --      3,261
Cash payments...........................      (167)      (1,305)          --       --     (1,472)
Adjustments.............................         8           --           --       --          8
                                           -------      -------      -------     ----    -------
Balance as of September 30, 2004........   $    --      $ 1,797      $    --     $ --    $ 1,797
                                           =======      =======      =======     ====    =======
</Table>

---------------
(1) Reflects differences in foreign exchange rates from balances paid in
    currencies other than the U.S. dollar of $81 that were credited to "interest
    income and other, net" and adjustments of $334 due to changes in previous
    estimates. These adjustments resulted in a decrease of restructuring
    liabilities related to facilities of $453 and an increase of restructuring
    liabilities related to employee separation costs of $119. The net amount was
    credited to "cost of service" and "selling, general and administrative"
    expenses in the year ended September 30, 2003.

     The financial savings of these actions, of approximately $8,000 quarterly
commencing in the second quarter of 2003, is reflected as a reduction in
operating expense. These cost savings may not be permanent as increased activity
levels resulting from, among other factors, acquisitions, Managed Services
agreements and increased revenue, may require an increase in headcount and other
increased spending.

  Fiscal Year Ended September 30, 2002

     In the fourth quarter of fiscal 2002, the Company implemented a cost
reduction program targeted to reduce costs by approximately $30,000 quarterly in
response to a decline of the forecasted revenue for the third and fourth
quarters of fiscal 2002. The decline resulted from, among other factors,
slowdowns in customer buying decisions in the third quarter of fiscal 2002,
stemming from overall reductions in the capital investment budgets of many
communications service providers, leading to fewer new contracts than expected,
as well as from smaller than expected initial spending commitments and reduced
discretionary spending under contracts with some customers.

     The restructuring charge associated with these actions and recorded in the
fourth quarter of fiscal 2002 was $20,919. Approximately $17,063 of the total
charge was paid in cash as of September 30, 2004. The remaining facility related
costs, are expected to be paid out through April 2012.

     Details of $20,919 Restructuring Charge:

     The Company recorded a charge of $11,353 related to employee separation
costs in connection with the termination of employment of approximately 1,000
employees, representing approximately 10% of the Company's worldwide workforce
of 9,900 full-time employees. The actual number of employees terminated
approximated original estimates. There was not a single group of employees or
business function that was solely impacted by these measures; instead it
impacted information technology specialists and administration professionals
across a broad range of functions according to the areas with reduced
activities. The Company recorded a charge of $7,880 related to facilities,
representing rent obligations

                                       F-41
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

relating to vacated facilities in various locations in Canada, Israel and the
United States. The Company also recorded a provision of $1,584 for asset
write-offs, principally for leasehold improvements in Canada, Israel and the
United States that were abandoned.

     The fourth quarter of fiscal 2002 restructuring charge is comprised of the
following as of September 30, 2004:

<Table>
<Caption>
                                           EMPLOYEE
                                          SEPARATION                  ASSET
                                            COSTS      FACILITIES   WRITE-OFFS   OTHER    TOTAL
                                          ----------   ----------   ----------   -----   -------
<S>                                       <C>          <C>          <C>          <C>     <C>
Balance as of October 1, 2001...........   $    --      $    --      $    --     $ --    $    --
Charges.................................    11,353        7,880        1,584      102     20,919
Cash payments...........................    (8,053)        (456)          --      (57)    (8,566)
Non cash................................        --           --       (1,584)      --     (1,584)
                                           -------      -------      -------     ----    -------
Balance as of September 30, 2002........     3,300        7,424           --       45     10,769
Cash payments...........................    (3,240)      (4,082)          --      (45)    (7,367)
Adjustments(1)..........................        22         (148)          --       --       (126)
                                           -------      -------      -------     ----    -------
Balance as of September 30, 2003........        82        3,194           --       --      3,276
Cash payments...........................        --       (1,130)          --       --     (1,130)
Adjustments(2)..........................       (82)         601           --       --        519
                                           -------      -------      -------     ----    -------
Balance as of September 30, 2004........   $    --      $ 2,665      $    --     $ --    $ 2,665
                                           =======      =======      =======     ====    =======
</Table>

---------------
(1) Reflects differences in foreign exchange rates from balances paid in
    currencies other than the U.S. dollar of $21 that were credited to "interest
    income and other, net" and adjustments of $105 due to changes in previous
    estimates. These adjustments resulted in a decrease of restructuring
    liabilities related to facilities of $148 and an increase of restructuring
    liabilities related to employee separation costs of $43. The net amount was
    credited to "cost of service" and "selling, general and administrative"
    expenses in the year ended September 30, 2003.

(2) Reflects differences in foreign exchange rates from balances paid in
    currencies other than the U.S. dollar of $71 that were charged to "interest
    income and other, net" and adjustments of $448 due to changes in previous
    estimates. These adjustments resulted in an increase of restructuring
    liabilities related to facilities of $513 and a decrease of restructuring
    liabilities related to employee separation costs of $65. The net amount was
    credited to "cost of service" and "selling, general and administrative"
    expenses in the year ended September 30, 2004.

     The financial savings of these actions of approximately $30,000 quarterly
commencing in the first quarter of fiscal 2003 is reflected as a reduction in
operating expense. These cost savings may not be permanent as increased activity
levels resulting from, among other factors, acquisitions, Managed Services
agreements and increased revenue, may require an increase in headcount and other
increased spending.

     In the first quarter of fiscal 2002, as part of a plan to achieve increased
operational efficiency and to more closely monitor and reduce costs, the Company
consolidated its Stamford, Connecticut data center into its Champaign, Illinois
facility and closed the Stamford facility.

     The restructuring charge associated with this action and recorded in the
first quarter of fiscal 2002 was $13,311. Approximately $7,108 of the total
charge was paid in cash as of September 30, 2004. The remainder of the charge,
comprised of facility related costs, is expected to be paid out through August
2008.

                                       F-42
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

     Details of $13,311 Restructuring Charge:

     Approximately $6,255 of the total restructuring charge related to
facilities and represented rent obligations outstanding for the Stamford site.
Approximately $4,126 of the total restructuring charge related to the write-off
of leasehold improvements at the Stamford site that were abandoned. The Company
also recorded a provision of $2,530 related to employee separation costs in
connection with the termination of employment of 166 employees.

     The restructuring charge related to the consolidation of the Stamford and
Champaign facilities is comprised of the following as of September 30, 2004:

<Table>
<Caption>
                                          EMPLOYEE
                                         SEPARATION                  ASSET
                                           COSTS      FACILITIES   WRITE-OFFS   OTHER    TOTAL
                                         ----------   ----------   ----------   -----   -------
<S>                                      <C>          <C>          <C>          <C>     <C>
Balance as of October 1, 2001..........   $    --      $    --      $    --     $  --   $    --
Charges................................     2,530        6,255        4,126       400    13,311
Cash payments..........................    (2,473)      (2,592)          --        (5)   (5,070)
Non cash...............................        --           --       (4,126)       --    (4,126)
                                          -------      -------      -------     -----   -------
Balance as of September 30, 2002.......        57        3,663           --       395     4,115
Cash payments..........................        --         (785)          --      (141)     (926)
Adjustments(1).........................       (57)        (168)          --      (254)     (479)
                                          -------      -------      -------     -----   -------
Balance as of September 30, 2003.......        --        2,710           --        --     2,710
Cash payments..........................        --       (1,112)          --        --    (1,112)
Adjustments(2).........................        --        4,220           --        --     4,220
                                          -------      -------      -------     -----   -------
Balance as of September 30, 2004.......   $    --      $ 5,818      $    --     $  --   $ 5,818
                                          =======      =======      =======     =====   =======
</Table>

---------------
(1) Reflects adjustments of $479 due to changes in previous estimates. These
    adjustments resulted in a decrease of restructuring liabilities related to
    facilities of $168, a decrease of restructuring liabilities related to
    employee separation costs of $57 and a decrease in other related costs of
    $254. The net amount was credited to "cost of service" and "selling, general
    and administrative" expenses in the year ended September 30, 2003.

(2) Reflects adjustments of $4,220 due to changes in previous estimates. These
    adjustments resulted in an increase of restructuring liabilities related to
    facilities of $4,220, which was charged to "cost of service" and "selling,
    general and administrative" expenses in the year ended September 30, 2004.

     The operating costs related to the Stamford site that were eliminated were
approximately $8,500 in its last quarter of activity.

     Actual future cash requirements may differ materially from the accrual as
of September 30, 2004, particularly if actual sublease income differs
significantly from current estimates.

     These charges are included in "restructuring charges, in-process research
and development and other" for the years ended September 30, 2003 and 2002.

NOTE 22 -- FINANCIAL INSTRUMENTS

     The Company enters into forward contracts to purchase and sell foreign
currencies to reduce the exposure associated with revenue denominated in a
foreign currency and exposure associated with anticipated expenses (primarily
personnel costs), in non-U.S. dollar-based currencies and designates these as
cash flow hedges. The Company also may enter into forward contracts to sell
foreign currency in order to hedge its exposure associated with some firm
commitments from customers in non-U.S. dollar-based

                                       F-43
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

currencies and designates these for accounting purposes as fair value hedges. As
of September 30, 2004 and 2003, the Company had no outstanding fair value
hedges. The derivative financial instruments are afforded hedge accounting
because they are effective in managing foreign exchange risks and are
appropriately assigned to the underlying exposures. The Company does not engage
in currency speculation. The Company currently enters into forward exchange
contracts exclusively with major financial institutions. Forward contracts,
which are not designated as hedging instruments under SFAS No. 133, are used to
offset the effect of exchange rates on certain assets and liabilities. The
Company currently hedges its exposure to the variability in future cash flows
for a maximum period of three years.

     The hedges are evaluated for effectiveness at least quarterly. As the
critical terms of the forward contract and the hedged transaction are matched at
inception, the hedge effectiveness is assessed generally based on changes in
forward rates for cash flow hedges as compared to the changes in the fair value
of the cash flows associated with the underlying hedged transactions. The
effective portion of the change in the fair value of forward exchange contracts,
which are classified as cash flow hedges, is recorded as comprehensive income
until the underlying transaction is recognized in earnings. For fair value
hedges, changes in the fair value of forward exchange contracts offset the
change in the fair value of the hedged item to the extent of the arrangement's
effectiveness. Any residual change in fair value of the forward contracts, such
as time value, excluded from effectiveness testing for hedges of estimated
receipts from customers, is recognized immediately in "interest income and
other, net". Hedge ineffectiveness, if any, is also included in current period
in earnings in "interest income and other, net".

     The Company discontinues hedge accounting for a forward contract when (1)
it is determined that the derivative is no longer effective in offsetting
changes in the fair value of cash flows of hedged item; (2) the derivative
matures or is terminated; (3) it is determined that the forecasted hedged
transaction will no longer occur; (4) a hedged firm commitment no longer meets
the definition of a firm commitment; or (5) management decides to remove the
designation of the derivative as a hedging instrument.

     When hedge accounting is discontinued, and if the derivative remains
outstanding, the Company will record the derivative at its fair value on the
consolidated balance sheet, recognizing changes in the fair value in current
period earnings in "interest income and other, net". When the Company
discontinues hedge accounting because it is no longer probable that the
forecasted transaction will occur, the gains and losses that were accumulated in
other comprehensive income will be recognized immediately in earnings in
"interest income and other, net".

     The fair value of the open contracts recorded by the Company in its
consolidated balance sheets as an asset or a liability is as follows:

<Table>
<Caption>
                                                              AS OF SEPTEMBER 30,
                                                              -------------------
                                                                2004       2003
                                                              --------   --------
<S>                                                           <C>        <C>
Prepaid expenses and other current assets...................  $ 2,529    $ 7,447
Accrued expenses and other current liabilities..............   (2,465)    (2,138)
Noncurrent liabilities and other............................   (2,200)        --
                                                              -------    -------
Net fair value..............................................  $(2,136)   $ 5,309
                                                              =======    =======
</Table>

     All forward contracts outstanding as of September 30, 2004 are expected to
mature within the next two years.

     During fiscal years 2004, 2003 and 2002, the gains or losses recognized in
earnings for hedge ineffectiveness, excluding the time value portion excluded
from effectiveness testing, were not material. During fiscal years 2004, 2003
and 2002, the Company recognized losses of $0, $143 and $0, respectively,

                                       F-44
<PAGE>
                                 AMDOCS LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
         (DOLLAR AND SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

for a hedged firm commitment that no longer qualified as a fair value hedge.
During fiscal years 2004, 2003 and 2002, the Company recognized losses of
$1,189, $16 and $25, respectively, resulting from hedged forecasted cash flows
that no longer qualified as cash flow hedges. All of the above gains or losses
are included in "interest income and other, net".

     Derivatives gains and losses, that are included in other comprehensive
income (loss), are reclassified into earnings at the time the forecasted revenue
or expenses are recognized. The Company estimates that a $213 net gain related
to forward contracts that is included in other comprehensive income as of
September 30, 2004 will be reclassified into earnings within the next twelve
months. The amount ultimately realized in earnings will likely differ due to
future changes in foreign exchange rates.

NOTE 23 -- SELECTED QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

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

<Table>
<Caption>
                                                  SEPTEMBER 30,   JUNE 30,   MARCH 31,   DECEMBER 31,
                                                  -------------   --------   ---------   ------------
<S>                                               <C>             <C>        <C>         <C>
2004
  Revenue.......................................    $452,455      $450,224   $442,758      $428,295
  Operating income..............................      76,948        76,699     75,584        66,969
  Net income....................................      61,582        59,920     60,290        53,068
  Basic earnings per share......................        0.30          0.29       0.29          0.25
  Diluted earnings per share....................        0.30          0.28       0.28          0.24
2003(1)
  Revenue.......................................    $411,759      $377,168   $355,014      $339,386
  Operating income..............................      56,167        59,982     56,314        37,955
  Net income....................................      43,871        47,438     45,375        32,199
  Basic earnings per share......................        0.20          0.22       0.21          0.15
  Diluted earnings per share....................        0.20          0.21       0.21          0.15
</Table>

---------------
(1) In fiscal 2003, the fiscal quarter ended December 31, 2002 included a
    restructuring charge of $9,956, and the fiscal quarter ended September 30,
    2003 included a charge related to the Company's 10% share in Certen's
    pre-acquisition results of $4,133.

                                       F-45
<PAGE>

                                 AMDOCS LIMITED

                          FINANCIAL STATEMENT SCHEDULE
                       VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                             ACCOUNTS         VALUATION
                                                            RECEIVABLE    ALLOWANCES ON NET
                                                            ALLOWANCES   DEFERRED TAX ASSETS
                                                            ----------   -------------------
<S>                                                         <C>          <C>
Balance as of October 1, 2001.............................   $  4,118         $ 27,907
Additions:
  Charged to costs and expenses...........................         --               --
  Charged to revenue......................................      9,082               --
  Charged to other accounts...............................     13,777(1)            --
Deductions................................................       (737)         (17,203)
                                                             --------         --------
Balance as of September 30, 2002..........................     26,240           10,704
Additions:
  Charged to costs and expenses...........................         --               --
  Charged to revenue......................................     17,585               --
  Charged to other accounts...............................         --            2,578(2)
Deductions................................................    (25,807)(3)       (13,282)(4)
                                                             --------         --------
Balance as of September 30, 2003..........................     18,018               --
Additions:
  Charged to costs and expenses...........................         --            8,076(5)
  Charged to revenue......................................      2,881               --
  Charged to other accounts...............................      4,176            3,348
Deductions................................................    (12,905)              --
                                                             --------         --------
Balance as of September 30, 2004..........................   $ 12,171         $ 11,424
                                                             ========         ========
</Table>

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

(1) Includes accounts receivable allowance of $13,777 acquired as part of the
    acquisition of Clarify.

(2) Includes valuation allowances on net deferred tax assets incurred during
    fiscal 2003.

(3) Includes accounts receivable allowance eliminated as a result of the
    acquisition of Certen and write-off of accounts receivable previously
    reserved.

(4) Release of valuation allowance.

(5) Valuation allowances on deferred tax assets incurred during fiscal 2004.

                                       F-46