<PAGE>   1

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

                                  FORM 20-F/A

[ ]  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, 2000

                                       OR

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

                         COMMISSION FILE NUMBER 1-14840

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

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

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

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

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

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

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

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

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

<TABLE>
<S>                                                           <C>
Voting Ordinary Shares, par value L0.01                       198,029,595(1)
Non-Voting Ordinary Shares, par value L0.01                   23,136,273
(Title of class)                                              (Number of shares)
</TABLE>

---------------
(1) Includes 9,037,774 shares held by shareholders of a company we acquired,
    which can be exchanged for our voting ordinary shares. Does not include (a)
    12,159,578 ordinary shares remaining under our stock option plan, and (b)
    1,703,672 ordinary shares reserved for issuance upon exercise of vested
    options granted by companies we have acquired. As of September 30, 2000,
    options to purchase an aggregate of 9,524,406 ordinary shares were
    outstanding and 2,635,172 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>   2

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

                                   FORM 20-F
           ANNUAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000
                            ------------------------

                                     INDEX

<TABLE>
<S>       <C>                                                           <C>
                                     PART I
Item 1.   Identity of Directors, Senior Management and Advisors -- Not
          applicable..................................................      2
Item 2.   Offer Statistics and Expected Timetable -- Not applicable...      2
Item 3.   Key Information.............................................      2
Item 4.   Information on the Company..................................      9
Item 5.   Operating and Financial Review and Prospects................     21
Item 6.   Directors, Senior Management and Employees..................     29
Item 7.   Major Shareholders and Related Party Transactions...........     35
Item 8.   Financial Information.......................................     37
Item 9.   The Offer and Listing.......................................     38
Item 10.  Additional Information......................................     38
Item 11.  Quantitative and Qualitative Disclosure about Market Risk...     45
Item 12.  Description of Securities Other than Equity
          Securities -- Not applicable................................     46

                                    PART II
Item 13.  Defaults, Dividend Arrearages and Delinquencies -- Not
          applicable..................................................     47
Item 14.  Material Modifications to the Rights of Security Holders and
          Use of Proceeds -- Not applicable...........................     47

                                    PART III
Item 17.  Financial Statements -- Not applicable......................     47
Item 18.  Financial Statements........................................     47
Item 19.  Exhibits....................................................     47
SIGNATURES
EXHIBIT INDEX
</TABLE>

                                        1
<PAGE>   3

                                     PART I

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

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

     Not applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

     Not applicable.

ITEM 3.  KEY INFORMATION

SELECTED FINANCIAL DATA

     Our historical Consolidated Financial Statements are prepared in accordance
with accounting principals generally accepted in the United States ("GAAP") and
presented in dollars. The selected historical consolidated financial information
set forth below has been derived from the historical Consolidated Financial
Statements of Amdocs for the years presented. Historical information as of and
for the five years ended September 30, 2000 is derived from our Consolidated
Financial Statements, which have been audited by Ernst & Young LLP, our
independent auditors.

     The information presented below is qualified by the more detailed
historical Consolidated Financial Statements included elsewhere in this report
and should be read in conjunction with those Consolidated Financial Statements
and the discussion under "Operating and Financial Review and Prospects" included
elsewhere in this report.

<TABLE>
<CAPTION>
                                                      YEAR ENDED SEPTEMBER 30,
                                     ----------------------------------------------------------
                                        2000         1999        1998        1997        1996
                                     ----------    --------    --------    --------    --------
                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                  <C>           <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
Revenue............................  $1,118,320    $626,855    $403,767    $290,102    $211,720
Operating income...................      74,124     146,998      84,895      26,969      35,490
Net income(1)......................       5,978      98,543      30,107       5,876      24,508
Basic earnings per share...........        0.03        0.50        0.19        0.05        0.23
Diluted earnings per share.........        0.03        0.49        0.19        0.05        0.22
Dividends declared per share.......          --          --        3.76        0.18        0.35
</TABLE>

<TABLE>
<CAPTION>
                                                        AS OF SEPTEMBER 30,
                                     ----------------------------------------------------------
                                        2000         1999        1998        1997        1996
                                     ----------    --------    --------    --------    --------
                                                           (IN THOUSANDS)
<S>                                  <C>           <C>         <C>         <C>         <C>
BALANCE SHEET DATA:
Total assets.......................  $1,935,085    $430,011    $239,966    $220,582    $104,531
Long-term obligations (net of
  current portion).................      23,417      17,148       9,215       7,370       1,663
Shareholders' equity
  (deficit)(2)(3)..................   1,430,772     123,737     (21,889)     94,253      15,988
</TABLE>

                                        2
<PAGE>   4

<TABLE>
<CAPTION>
                                                               ORDINARY SHARES          ADDITIONAL
                                                         ---------------------------     PAID-IN
                                                          SHARES          AMOUNT         CAPITAL
                                                         ---------    --------------    ----------
                                                                      (IN THOUSANDS)
<S>                                                      <C>          <C>               <C>
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY DATA:
Balance as of October 1, 1996..........................    107,916        $1,727        $   14,348
  Issuance of ordinary shares..........................     16,792           269            91,431
                                                         ---------        ------        ----------
Balance as of September 30, 1997.......................    124,708         1,996           105,779
  Issuance of ordinary shares(2).......................     72,092         1,153           331,485
  Stock options granted, net of forfeitures............         --            --            10,239
                                                         ---------        ------        ----------
Balance as of September 30, 1998.......................    196,800         3,149           447,503
  Issuance of ordinary shares(2).......................      2,000            32            41,352
  Stock options granted, net of forfeitures............         --            --               244
                                                         ---------        ------        ----------
Balance as of September 30, 1999.......................    198,800         3,181           489,099
  Issuance of ordinary shares related to acquisitions,
     net(3)............................................     20,307           325         1,263,330
  Employee stock options exercised.....................      2,058            33            21,327
  Tax benefit of stock options exercised...............         --            --            10,825
  Stock options granted................................         --            --               235
                                                         ---------        ------        ----------
Balance as of September 30, 2000.......................    221,165        $3,539        $1,784,816
                                                         =========        ======        ==========
</TABLE>

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

(1) In fiscal 2000, we recorded nonrecurring acquisition-related charges
    aggregating to $75,617, relating to our acquisitions of International
    Telecommunication Data Systems, Inc. ("ITDS") in November 1999 and Solect
    Technology Group Inc. ("Solect") in April 2000, in stock-for-stock
    transactions. The charges related to the ITDS transaction aggregated to
    $19,876 and were incurred by us in the first quarter of fiscal 2000. The
    charges related to the Solect transaction aggregated to $55,741 and were
    incurred by us in the third quarter of fiscal 2000. Each of these charges
    included write-offs of purchased in-process research and development and
    other indirect acquisition-related costs. In the fourth quarter of fiscal
    1997, we recorded nonrecurring charges of $27,563. Of such amount, $25,763
    was attributable to the funding of a contribution to a trust and the
    balance, $1,800, was due to the write-off of in-process technology related
    to certain software rights acquired from several operating subsidiaries of
    SBC Communications Inc. ("SBC").

(2) We completed our initial public offering of 18,000 ordinary shares in June
    1998 and a public offering of an additional 2,000 ordinary shares in June
    1999. The net proceeds to us from the offerings were $234,190 and $41,384,
    respectively.

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

RISK FACTORS

  FUNDAMENTAL CHANGES IN THE COMMUNICATIONS MARKET COULD REDUCE DEMAND FOR OUR
SYSTEMS

     Future developments in the communications industry, such as continued
industry consolidation, the formation of alliances among network operators and
service providers, and changes in the regulatory environment, could materially
affect our existing or potential customers. This could reduce the demand for our
products and services. As a result, we may be unable to effectively market and
sell our information systems to potential customers in the communications
industry.

     A portion of our revenue is derived from products and services provided to
directory publishers. We believe that the demand for those products and services
will be reduced as a result of the increased competition between directory
publishers and other media channels, as well as a broader introduction of
electronic directories. Our new products for these markets may not be successful
and we believe our current

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<PAGE>   5

levels of revenue from the sales of products and services to directory
publishers are not likely to grow but will remain relatively stable.

  IF WE CANNOT COMPETE SUCCESSFULLY WITH EXISTING OR NEW COMPETITORS OUR
  BUSINESS COULD BE MATERIALLY ADVERSELY AFFECTED

     We may be unable to compete successfully with existing or new competitors
and our failure to adapt to changing market conditions and to compete
successfully with established or new competitors could have a material adverse
effect on our results of operations and financial condition.

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

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

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

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

     -  the responsiveness of our competitors to customer needs, and

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

     We compete with a number of companies that have longer operating histories,
larger customer bases, substantially greater financial, technical, sales,
marketing and other resources, and greater name recognition than us. 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 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. 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.

  WE MUST CONTINUALLY ENHANCE OUR PRODUCTS TO REMAIN COMPETITIVE

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

     On November 30, 1999, in a stock-for-stock transaction, we completed our
acquisition of International Telecommunication Data Systems, Inc. ("ITDS"), a
leading provider of billing and customer care service bureau solutions to
wireless communications service providers. On April 5, 2000, in a
stock-for-stock transaction, we completed our acquisition of Solect Technology
Group Inc. ("Solect"), a leading provider of Internet Protocol ("IP") billing
and customer care software to Internet service providers, including wireless
                                        4
<PAGE>   6

companies and Application Service Providers ("ASPs"). We also may acquire other
companies where we believe we can acquire new products or services or otherwise
enhance our market position or strategic strengths. There can be no assurance
that suitable acquisition candidates can be found, that acquisitions can be
consummated on favorable terms, that the ITDS or Solect acquisitions will
enhance our products or strengthen our competitive position or that we will be
able to successfully and efficiently integrate these businesses into our own.

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

     Our business is highly dependent on a limited number of significant
customers. The loss of any significant customer or a significant decrease in
business from any of those customers could have a material adverse effect on our
results of operations and financial condition. Aggregate revenue derived from
the multiple business arrangements we have with each of our five largest
customer groups and their affiliates, excluding SBC (see below), accounted for
approximately 39.7%, 33.4% and 39.0% of revenue in fiscal 2000, 1999 and 1998,
respectively. After giving effect to the acquisition of Mannesmann Mobilfunk by
Vodafone Group in 2000, the combined company would have been one of our largest
customers and would have accounted for more than 10% of our revenue in each of
fiscal 2000 and 1999.

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

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

     One of our largest groups of customers is SBC Communications Inc. ("SBC")
and its operating subsidiaries. SBC International Inc. ("SBCI"), a wholly-owned
subsidiary of SBC, is also one of our largest shareholders. As of December 1,
2000, it held approximately 10.4% of our outstanding voting ordinary shares and
all of our outstanding non-voting ordinary shares. A significant decrease in the
sale of products and services to SBC or its subsidiaries may materially
adversely affect our results of operations and financial condition.

     Substantially all of our work for SBC is conducted directly with SBC's
operating subsidiaries, such as Southwestern Bell Mobile Systems, Southwestern
Bell Yellow Pages, Southwestern Bell Communications Services (SBC's long
distance provider) and Southwestern Bell Telephone Company. These SBC
relationships accounted for in the aggregate 12.6%, 15.9% and 20.8% of our total
revenue in fiscal 2000, 1999 and 1998, respectively. The amount of revenue
attributable to SBC and such subsidiaries amounted to $141.0 million, $99.5
million and $84.4 million in fiscal 2000, 1999 and 1998, respectively.

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

     We believe that our future success depends to a significant extent on our
ability to develop long-term relationships with successful network operators and
service providers. Many new entrants into the communications market lack
significant financial and other resources. We may be unable to develop new
customer relationships and our new customers may be unsuccessful. Our failure to
maintain customer relationships or the failure of new customers to be successful
could have a material adverse effect on our business, results of operations and
financial condition.

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

     Our success depends in large part on our ability to attract, train,
motivate and retain highly skilled information technology professionals,
software programmers and communications engineers. These types of qualified
personnel are in great demand and are likely to remain a limited resource for
the foreseeable future. We currently employ approximately 7,900 software and
information technology specialists, of which over 4,200 are located in Israel
and 1,900 are located in North America. We intensively recruit technical
personnel for our principal development centers in Israel, the United States,
Cyprus, Ireland and Canada. Our ability to

                                        5
<PAGE>   7

expand our business is highly dependent upon our success in recruiting such
personnel and our ability to manage and coordinate our worldwide development
efforts. We may be unable to continue to attract and retain the skilled
employees we require and any inability to do so could adversely impact our
ability to manage and complete our existing projects and to compete for new
customer contracts. In addition, the resources required to attract and retain
such personnel may adversely affect our operating margins. The failure to
attract and retain qualified personnel may have a material adverse effect on our
business, results of operations and financial condition. Our success also
depends, to a certain extent, upon the continued active participation of a
relatively small group of senior management personnel who have been with us for
many years. The loss of the services of all or some of these employees could
have a material adverse effect on our business.

  OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE

     We have experienced fluctuations in our quarterly operating results and
anticipate that such fluctuations may continue and could intensify. Our
quarterly operating results may fluctuate as a result of many factors,
including:

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

     -  increased competition,

     -  cancellations of significant projects by customers,

     -  changes in operating expenses,

     -  changes in our strategy,

     -  personnel changes,

     -  foreign currency exchange rates, and

     -  general economic and political factors.

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

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

  OUR LENGTHY SALES CYCLE MAKES IT DIFFICULT TO ANTICIPATE THE TIMING OF SALES

     The sales cycle associated with the purchase of our information systems is
lengthy, with the time between the making of an initial proposal to a
prospective customer and the signing of a sales contract typically being between
three and twelve months. 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 implementation procedures within an organization.
Moreover, the purchase of such products typically requires coordination and
agreement across a potential customer's entire organization. Delays associated
with such timing factors may reduce our revenue in a particular period without a
corresponding reduction in our costs, which could have a material adverse effect
on our results of operations and financial condition.

                                        6
<PAGE>   8

  OUR INTERNATIONAL PRESENCE CREATES SPECIAL RISKS

     We are subject 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.

     We maintain development facilities in Israel, the United States, Cyprus,
Ireland and Canada, operate a support center in Brazil and have operations in
North America, Europe, Latin America and the Asia-Pacific region. Although a
majority of our revenue in fiscal 2000 was 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 European and North American customer base and to expand into new
international markets.

  FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES COULD ADVERSELY AFFECT OUR
BUSINESS

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

     Generally, the effects of fluctuations in foreign currency exchange rates
are mitigated by the fact that a significant portion of our revenue is in
dollars and we generally hedge our currency exposure on both a short-term and
long-term basis with respect to the balance of our revenue.

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

  WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY

     Any misappropriation of our technology or the development of competitive
technology could seriously harm our business. We regard a substantial portion of
our software products and systems as proprietary and rely on a combination of
statutory and common law copyright, trademark and 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, customers
and potential customers and limit access to and distribution of 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

                                        7
<PAGE>   9

not protect our proprietary technology to the same extent as the laws of the
United States. 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 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 notices 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 increase and overlaps occur. Any claim of infringement
by a third party could cause us to incur substantial costs defending against the
claim, even if the claim is invalid, and could distract our management from our
business. Furthermore, a party making such a claim 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.
Any of these events could seriously harm our business.

     If anyone asserts a claim against us relating to proprietary technology or
information, we might seek to license their intellectual property or to develop
non-infringing technology. We might not be able to obtain a license on
commercially reasonable terms or on any terms. Alternatively, our 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.

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

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

     Any of the following could have a material affect 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, or

     - 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 accredited tax benefits if we are found to be in
       violation of the stipulated conditions.

  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.

     Since 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. Completion of the development and
implementation phases of a project requires between six and twelve months of
work. During this period, a customer's budgeting constraints and

                                        8
<PAGE>   10

internal reviews, over which we have little or no control, can impact operating
results. Our failure or inability to meet a customer's expectations in providing
products or performing services may result in the termination of our
relationship with that customer or could give rise to claims against us.
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. Claims and liabilities arising from customer problems could
damage our reputation, adversely affecting our business, results of operations
and financial condition.

  OUR DEVELOPMENT FACILITIES IN ISRAEL AND CYPRUS MAY BE ADVERSELY AFFECTED BY
  POLITICAL AND ECONOMIC CONDITIONS IN THOSE COUNTRIES

     Out of the five development centers we maintain worldwide, our largest
development center is located in Israel, which is also where we employ over half
of our employees. As a result, we are directly influenced by the political,
economic and military conditions affecting Israel and any major hostilities
involving Israel could have a material adverse effect on our business. We have
developed contingency plans to move some development operations within Israel to
various sites both within and outside of Israel in the event political or
military conditions disrupt our normal operations.

     While Israel has entered into peace agreements with both Egypt and Jordan
and several other countries have announced their intentions to establish trade
and other relations with Israel, Israel has not entered into any peace
arrangement with Syria or Lebanon. Moreover, while Israel is in the process of
conducting peace negotiations with the Palestinian community, recently there has
been a significant deterioration in Israel's relationship with the Palestinian
community. Efforts to resolve the problem have failed to result in an agreeable
solution. Continued hostilities between the Palestinian community and Israel and
any failure to settle the conflict may have a material adverse effect on us and
our business. Further deterioration of hostilities into a full scale conflict
might require more widespread military reserve service by some of our employees
which may have a material adverse effect on our business.

     Our development facility in Cyprus may be adversely affected by political
conditions in that country. As a result of intercommunal strife between the
Greek and Turkish communities, Turkish troops invaded Cyprus in 1974 and
continue to occupy approximately 40% of the island. Efforts to finally resolve
the problem have not yet resulted in an agreeable solution, although the parties
did recently agree to enter into negotiations to be facilitated by the United
Nations and the United States. Any major hostilities between Cyprus and Turkey
or any failure of the parties to reach a peaceful resolution may have a material
adverse effect on our development facility in Cyprus.

ITEM 4.  INFORMATION ON THE COMPANY

HISTORY AND DEVELOPMENT OF AMDOCS

     Both our legal and commercial name is Amdocs Limited. We are a holding
company, originally incorporated under the laws of the Island of Guernsey in
1988. From the inception of our business in 1982 until 1995, our business
operated through a group of companies owned by common shareholders. Amdocs
Limited became the holding company for all these affiliated companies in 1995.
Our global business, conducted through subsidiaries, is to provide information
system solutions to major communications companies in North America, Europe and
the rest of the world. Our registered office is located in Suite 5, Tower Hill
House Le Bordage, St. Peter Port, Island of Guernsey, GY1 3QT Channel Islands,
and the telephone number at that location is 011-44-1481-728444.

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

     On November 30, 1999, in a stock-for-stock transaction, we completed the
acquisition of ITDS, a leading provider of customer care and billing service
bureau solutions to wireless communications providers. Our

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acquisition of ITDS enabled us to expand our service offering, enhancing our
ability to provide outsourcing solutions for customers using our systems.

     On April 5, 2000, in a stock-for-stock transaction, we completed our
acquisition of Solect, a leading provider of customer care and billing software
to IP service providers. The Solect acquisition is part of our strategy to
expand our commitment to the IP services market. With our acquisition of Solect,
together with expanded internal development efforts in the IP area, we believe
we are enhancing our ability to serve the growing IP needs of our existing
wireless and wireline customers, while also expanding our target market to cover
IP operators, such as Internet Service Providers ("ISPs"), ASPs and broadband
providers.

     In the future, we may consider additional acquisitions in order to acquire
new products or services or otherwise enhance our market position or strategic
strengths.

     Our principal capital expenditures for each of fiscal 2000, 1999 and 1998
have been for computer equipment, for which we spent approximately $35.7
million, $30.2 million and $13.0 million in each respective year. We also lease
vehicles for use by our employees, incurring lease obligations of $15.7 million,
$14.9 million and $5.2 million, respectively, in each of the last three fiscal
years.

     Principal capital expenditures currently in progress consist of
approximately $80.0 million to be used in fiscal 2001 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

     We are a leading provider of software products and services to major
communications companies in North America, Europe and the rest of the world.

     Our BSS products consist of families of customized software products and
services designed to meet the critical business needs of specific communications
market sectors. We provide primarily Customer Care, Billing and Order Management
Systems ("CC&B Systems") for communications and IP service providers. Our
systems support a wide range of communications services including wireline,
wireless, broadband, electronic and mobile commerce and Internet services. We
also support companies that offer multiple service packages, commonly referred
to as convergent services. In addition, we provide a full range of Directory
Sales and Publishing Systems ("Directory Systems") to publishers of both
traditional printed yellow page and white page directories and electronic
Internet directories. Due to the complexity of the process and the expertise
required for system support, we also provide extensive customization,
implementation, system integration, ongoing support, system enhancement,
maintenance and outsourcing services.

     Since the inception of our business in 1982, we have concentrated on
providing software products and services to major communications companies. By
focusing on this market, we believe that we have been able to develop the
innovative products and the industry expertise, project management skills and
technological competencies required for the advanced, large-scale,
specifications-intensive system projects typical of leading communications
providers. Our customer base includes major North American and foreign
communications companies, including major wireline companies (such as all the
regional Bell operating companies in the United States, BT, Tele Danmark and
Deutsche Telekom), wireless companies (such as Sprint PCS, Pacific Wireless,
Vodafone Group, Mannesmann Mobilfunk and Telstra) and Internet companies (such
as BT, E-Plus and PointOne).

     Our BSS products and related services are designed to manage and improve
key aspects of the business operations of communications companies, such as
customer care, order management, call rating, invoice calculation and
preparation, bill formatting, collections, fraud management and directory
publishing services. We tailor our BSS products to address the unique needs of
each communications provider.

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  INDUSTRY BACKGROUND

  Communications Industry

     The global communications industry is becoming increasingly more
competitive due to 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 increased
competition in the United States even further by allowing new and existing
local, long distance and cable companies to offer competing services. Many
companies now compete by providing multiple or convergent services, offering
combinations of local exchange, long distance, wireless, Internet data and
electronic and mobile commerce services. Deregulation is also creating
opportunities for new ways of doing business, such as wholesaling and reselling
communications services. Internationally, privatization and deregulation
continue to encourage increased international competition and the emergence of
newly authorized communications network operators and service providers,
especially in Europe, Latin America and the Asia-Pacific region. As markets are
opened to competition, new competitors within these markets typically compete
for market share with more established carriers, initially by providing access
to service and then by providing competitive prices, by introducing new features
and services and by being more responsive to customer needs. In parallel, the
communications industry is undergoing 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 an explosion of new communications
technologies, including ATM, IP, xDSL, utilization of cable television
infrastructure to provide Internet services, PCS, GPRS (General Packet Radio
Services), UMTS (Universal Mobile Telecommunications System), WAP (Wireless
Application Protocol) for wireless Internet, and intelligent networks.
Additionally, the directory publishing industry, which is currently dominated by
communications companies that are owned by or affiliated with the public
telecommunications carriers, is also experiencing significant changes due to the
introduction of new technologies and distribution platforms, especially Internet
directories.

  Information Systems

     As a result of these developments, many communications companies are
seeking a new generation of information systems to support their operations and
to be more competitive. Such communications companies are looking for systems
that provide enhanced customer management, flexible rating capabilities to
support rapid rollout of new price plans and advanced IP services, and the
ability to provide customers with single-contact, single-invoice solutions with
integrated pricing plans for a wide range of services (convergence or "one-stop
shopping"). The legacy information systems used by communications companies
generally do not provide the level of integration, flexibility and scalability
needed by communications companies as they seek to differentiate themselves from
their competitors in an increasingly competitive market place.

     Many new and existing communications companies do not have the financial or
human resources or technological capability to internally develop efficient,
flexible, cost-effective information systems on a timely basis. Moreover, as
many communications companies strive to become more consumer-oriented, they are
concentrating their efforts and internal resources on marketing to consumers and
expanding their service offerings, and many are turning to third-party vendors
for their information systems which creates significant opportunities for
vendors of CC&B Systems, such as Amdocs.

  THE AMDOCS SOLUTION

     We believe that our total solutions orientation, product-driven approach
and commitment to and support of quality personnel permit us to offer our
customers effective 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.

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     Total Solutions Orientation.  We offer our customers total solutions that
include BSS product-driven software tailored to the customer's specific
requirements, implementation services, systems integration, maintenance, ongoing
support and outsourcing. By providing services directly to the customer, we are
able to utilize effectively our intensive technical knowledge of our BSS
products in the overall execution of a project, significantly reducing project
risk. Our product-driven software solutions approach is distinctly different
from the project-based strategy that has traditionally characterized many of the
communications information systems and service providers over the past twenty
years. Our product-driven software solutions use our BSS products as the
starting point for each project. This approach enhances our ability to provide
our customers with timely, cost-effective, low-risk solutions at a consistent
level of quality.

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

     Highly Skilled Personnel.  We are able to offer our customers superior
products and services on a worldwide basis in large part due to 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 the reliable delivery of quality solutions
within agreed time frames and budgets. We have global recruitment capabilities
and have development centers in Israel, the United States, Cyprus, Ireland and
Canada.

  BUSINESS STRATEGY

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

     - Continued Focus on the Communications Industry.  We intend to continue to
       concentrate our resources and efforts on providing strategic information
       systems to the growing number of communications industry participants.
       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, IP and convergent service sectors.

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

     - Deliver and Support Total Solutions.  Our strategy is to use our BSS
       products as the basis for providing customers with total systems
       solutions. Using this product-driven solutions strategy, we strive to
       tailor our core software modules to the specific, individualized
       requirements of our customers. Working directly with the customer, our
       development personnel prepare the detailed functional specifications of
       the system required by the customer. In accordance with such
       specifications, system modules are then adapted or customized to meet the
       customer's specific business requirements. We believe that this approach
       minimizes risks and increases efficiencies by drawing on field-proven BSS
       products and techniques, and also helps to create significant
       time-to-market and other competitive
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       advantages for our customers. By leveraging our specialized product
       knowledge, we believe that we can provide more effective system
       integration and implementation support services to our customers.

     - 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 customer's reliance on 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.

     - Further Enhance Global Capabilities.  We intend to continue to develop
       and enhance our global business strategy by targeting advanced
       communications markets around the world. The worldwide demand for
       communications services is increasing rapidly, due, in part, to the rapid
       development of new communications technologies, the needs of many
       underserved national markets and, in part, to increased competition among
       established and new network operators and service providers in more
       mature markets. We believe we have developed the human and other
       resources required to conduct business on a global basis and we are well
       positioned to respond to the demands of a worldwide industry, including
       the increasing trend for major communications companies to invest in new
       national markets, often in partnership with local companies. We have also
       developed the capability for the rapid global deployment of appropriately
       skilled personnel, when and where required, to support customer projects.

  TECHNOLOGY

     We have developed core competencies in various advanced technologies that
are used in our BSS products. By utilizing technologies such as rule and
table-based design, multi-tier architecture, object-oriented techniques, data
mining, web-enabling and open application program interfaces ("APIs"), 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 for 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, client-server,
service-oriented architecture. In order to support the ability of our customers
to operate all of their distributed and mainframe applications, our BSS products
are designed to work in a number of network and operating system environments,
including UNIX, VMS and Windows NT.

     The architecture of our BSS products includes the following key
characteristics:

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

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

     - Portability.  Utilization of the UNIX platform ensures that our BSS
       customers are able to choose from a variety of hardware vendors,
       including Compaq, Hewlett Packard, IBM and Sun Microsystems. In
       implementing solutions for wireline companies, we are also able to employ
       VMS and hybrid
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       UNIX/VMS platforms. Certain applications can also be deployed on the
       Windows NT platform. The BSS products utilize, where applicable,
       Java-based design and programming to augment cross-platform portability.

     - Open Systems.  Our BSS products accommodate well-defined APIs with legacy
       systems and with other third-party software modules or packages. The
       systems are not dependent on any single hardware vendor, enabling our
       customers to select among multiple hardware platforms and a variety of
       network and operating system environments. Similarly, BSS products
       utilize standard programming languages, such as C++, to ensure
       compatibility with the operating environments employed in most
       communications companies. It is also our general policy to deliver to our
       customers complete copies of all source code, system documentation and
       other product information, thereby permitting the customer to maintain
       and further customize our BSS products.

  PRODUCTS

     Our product offerings include an extensive library of BSS software products
that we have developed to provide comprehensive information systems
functionality for wireline, wireless, broadband, electronic and mobile commerce
and IP service providers. Core elements include customer relationship
management, order management, call rating, invoice calculation, bill formatting,
collections, fraud management and directory publishing services.

     Specialized modules are provided to support specific functionalities
required in different network environments (e.g., roaming functionality for
wireless carriers, SIM card functionality for GSM networks, value added services
introduced by Advanced Intelligent Networks ("AIN") and preferred interexchange
carrier functionality for long distance carriers). In addition, we have
developed systems to support resellers and wholesalers of communication
services. Our systems also support communications providers that offer multiple
service packages, commonly referred to as convergent services (combinations of
wireline, wireless, cable television, broadband, electronic and mobile commerce
and IP services).

     We configure individual BSS modules into families of products, which serve
as marketing packages oriented to the needs of specific customer segments. We
provide Ensemble(TM) software, 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 television,
broadband and electronic and mobile commerce. As a result of our acquisition of
Solect, our CC&B Systems offering also includes the IAF Horizon(TM) product for
Internet and electronic and mobile commerce, encompassing functionalities such
as Internet-based bill viewing, IP service management, IP provisioning, IP event
collection and partner management. We also offer our new generation, or NG, line
of ADS (NG)/Family of Products which provides comprehensive support for
directory publishing operations. Each individual module from the product
families can be installed as an independent stand-alone application, interfacing
with the customer's legacy and third-party systems, or as part of an integrated
Amdocs solution.

  Customer Care, Billing and Order Management

     The Ensemble(TM) suite of products offered by Amdocs encompasses the
following key CC&B Systems application areas:

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

     - Order Management -- supports the ordering of products and services for
       all lines of business. This module assists customer service
       representatives in capturing the customer's order, negotiating with the
       customer and monitoring service delivery.

     - Event Processing -- calculates charges for usage (i.e., event rating) of
       communications services, such as telephone calls, Internet access and
       data transfer. Usage of the communications network creates event records,
       which contain information such as the origin and destination of a
       telephone call and its
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       duration. This module provides for acquisition and formatting of the raw
       event data received from a communications switch, and calculates the
       charges for each event based on the service packages and price plans
       applicable to each individual user.

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

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

     - Revenue Management -- 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.

     - Network Resource Mediation -- manages the carrier's inventory of
       telephone numbers and SIM cards. This module also manages the interface
       between a wireless carrier's customer care and billing system and the
       network, transferring instructions regarding the provision or
       discontinuation of network services to specified users.

     - Commission Management -- calculates and manages commissions to be paid by
       the wireless carrier to its authorized dealers and sales representatives.

     - Fraud Management -- employs sophisticated data analysis tools and makes
       use of the integrated user database to detect the fraudulent use of
       phones and phone numbers.

     - Electronic bill presentment and payment -- enables bill view and payment
       capabilities over the Internet.

     - Churn Management -- uses data mining techniques to identify customers
       with a high probability of switching to another carrier or of
       disconnecting service.

     - Intercarrier Settlement -- calculates, manages and reconciles payments
       for intercarrier network access, including settlement of roaming charges
       between cellular carriers.

     The IAF Horizon(TM) suite of CC&B Systems products acquired from Solect has
helped us to focus on the IP service provider market. By allowing service
providers to offer, collect and bill for IP services over packet-switched
networks, IAF Horizon(TM) supports innovative new business models, such as
virtual Service Providers ("vSPs"), mobile commerce, content aggregation,
revenue sharing, sponsorship and hosting packaged applications.

     IAF Horizon(TM) is comprised of the following functional modules:

     - Service Management -- provides the functionality for flexibly defining
       service offerings, real-time provisioning of these services in the
       network, and collecting usage data for the services so that the service
       provider can bill for them.

     - PDC Service Plug-ins -- Provisioning Data Collectors ("PDCs") operate as
       a service plug-in, allowing service providers the opportunity to rapidly
       add new services without costly coding delays or system downtime.

     - Product Console -- allows the service provider's marketing managers to
       create product offerings, pricing and bundles quickly and easily through
       a web-based graphical user interface ("GUI").

     - Rater -- advanced rule and table-based rating engine, which allows
       service providers to develop complex rating rules in a simple logical
       manner via an intuitive HTML-based GUI.

     - Billing -- provides comprehensive billing capabilities, generates
       invoices in multiple formats (electronic and hard-copy), and offers
       optional credit card billing as well as interfaces to existing billing
       and invoicing systems.

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     - Customer Care -- includes a highly configurable HTML template-driven
       interface for customer service representatives, corporate
       self-administration and self-care. This module allows IP service
       providers to create price plans. The templates are fully WAP enabled.

  Directory Publishing

     The ADS(NG)/Family of Products, our main offering in the Directory Systems
area, provides 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 a directory. These modules encompass contract processing, service
       order processing, listing information management and directory extract in
       preparation for the actual production of the directory.

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

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

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

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

  SERVICES

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

     This process of customizing a system involves creating a tailored BSS
product to address a customer's specific technical and business requirements.
Following detailed functional design sessions with the customer, we modify our
BSS software modules to provide the complete functionality needed by the
customer. The process permits both Amdocs and the customer to identify and
jointly plan for ongoing resource requirements, as well as jointly to create
specific guidelines for the types of organizational and other changes that may
be required for implementation and integration.

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     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, for example, project
management, development of training, methods and procedures, design of work
flows, hardware planning and installation, network and system design and
installation, system conversion and documentation. In most cases, the role of
Amdocs personnel is to provide support services to the customer's own
implementation and integration team which has primary responsibility for the
task. Customers sometimes require turn-key solutions, in which case we are able
to provide full system implementation and integration services.

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

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

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

  SALES AND MARKETING

     Our sales and marketing activities are primarily directed at major
communications companies and at emerging network operators or services providers
that are potential market leaders. 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. Due to the
comprehensiveness and large scale of our systems, the time between the making of
an initial proposal to a prospective customer and the signing of a sales
contract is typically between six and twelve months.

     We employ a relatively small and dedicated sales force and 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. Our
sales efforts are dependent upon close cooperation between our sales
representatives and development personnel. Development personnel are intensively
involved from the early stages of the sales cycle. This approach enables us to
demonstrate our technical and professional skills to potential customers, while
creating the opportunity to discuss with the customer its system needs. To
ensure that we have a clear understanding of customer needs and expectations, it
is our policy to have development personnel involved in a particular sales
proposal continue to work with the customer. This approach creates continuity
from the initial sales proposal through project development and beyond, into the
ongoing production phase.

     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.

                                        17
<PAGE>   19

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

  CUSTOMERS

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

     Our customers include global communications leaders, as well as other
leading network operators and service providers and directory publishers in the
United States and around the world. Our customers include SBC and a number of
its operating subsidiaries, such as Southwestern Bell Mobile Systems,
Southwestern Bell Yellow Pages, Southwestern Bell Communications Services (SBC's
long distance provider) and Southwestern Bell Telephone Company. Additional
customers include:

BCP
Belgacom
BellSouth
BT
Deutsche Telekom
Eircom PLC
GTE International
Japan Telecom
Korean Telecom
Mannesmann Mobilfunk
Netcom
Nextel
PointOne
Qwest
Rogers AT&T
SEAT
Sprint
Tele Danmark
Telecom New Zealand
Telstra
Telus
Verizon
Vodafone Group
VoiceStream
Western Wireless

     Our single largest customer group is Vodafone Group, which accounted for
14.4%, 8.0% and 5.4% of our revenue in fiscal 2000, 1999 and 1998, respectively.
Our next largest group of customers is SBC and its operating subsidiaries, which
accounted for, in the aggregate, 12.6%, 15.9% and 20.8% of our revenue in fiscal
2000, 1999 and 1998, respectively.

     Aggregate revenue derived from the multiple business arrangements we have
with each of our five largest customers and their affiliates, excluding SBC and
its operating subsidiaries, accounted for approximately 39.7%, 33.4% and 39.0%
of our revenue in fiscal 2000, 1999 and 1998, respectively.

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

<TABLE>
<CAPTION>
                                                             2000     1999     1998
                                                             -----    -----    -----
<S>                                                          <C>      <C>      <C>
North America..............................................  45.6%    36.1%    52.2%
Europe.....................................................  42.4%    41.8%    27.2%
Rest of the World..........................................  12.0%    22.1%    20.6%
</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

                                        18
<PAGE>   20

services, including American Management Systems, Convergys, IBM, Kenan Systems
(a subsidiary of Lucent Technologies), Geneva Technology, Portal Software Inc.,
Saville Systems (a subsidiary of ADC Telecommunications, Inc.) and Sema Group,
with system integrators, such as EDS, and with internal information systems
departments of large communication companies. We expect continued growth and
competition in the communications industry and the entrance of new competitors
into the software information systems market in the future.

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

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

     - providing high quality reliable, scalable products,

     - managing effectively the timely implementation of products,

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

     - providing BSS solutions independent of any specific vendor of network
       equipment, hardware or software.

     We compete with a number of companies that have longer operating histories,
larger customer bases, substantially greater financial, technical, sales,
marketing and other resources, and greater name recognition than us. 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 recruitment, training and retention of
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 senior 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.

ORGANIZATIONAL STRUCTURE

     We are organized under the laws of Guernsey and, as set forth in our
Articles of Association, we are a holding company for the various subsidiaries
that conduct our business on a worldwide basis. Our principal operating
wholly-owned subsidiaries are Amdocs, Inc. (the United States), Amdocs (UK)
Limited (the United Kingdom), Amdocs Development Limited (Republic of Cyprus),
Amdocs Management Limited (the United Kingdom), Amdocs (Israel) Limited
(Israel), Amdocs Software Systems Ltd (Ireland), International Telecommunication
Data Systems, Inc. (the United States) and Solect Technology Group Inc.
(Canada).

                                        19
<PAGE>   21

PROPERTY, PLANTS AND EQUIPMENT

     We lease space in various facilities in Israel, aggregating approximately
890,000 square feet, pursuant to leases expiring on various dates between 2001
and 2016, and we have various options to extend the terms of such leases. In
Israel, we currently pay total yearly rental fees of approximately $17.7
million, which are linked, in most cases, to the dollar. Included in these
facilities are an aggregate 364,000 square feet in Ra'anana, with the remainder
in Ramat-Gan, Hod-Hasharon, Jerusalem and Haifa. Approximately 73,000 square
feet of the facilities in Ramat-Gan are owned by related companies that lease
these facilities to us. See "Major Shareholders and Related Party Transactions
-- Related Party Transactions".

     Our Israeli subsidiary has committed to rent an additional 215,000 square
feet under a seven-year lease (commencing, in stages, in January 2001). The
annual rent for the entire space will be approximately $4.1 million.

     Our Amdocs, Inc. subsidiary in the United States rents approximately
170,000 square feet in Chesterfield, Missouri under various leases expiring
between 2005 and 2008. The aggregate annual rent for these facilities is
approximately $4.2 million.

     Our ITDS subsidiary rents approximately 81,000 square feet in Stamford,
Connecticut under a lease expiring in 2008 and 85,000 square feet in Champaign,
Illinois under a lease expiring in 2006. The annual rent for these facilities is
approximately $2.2 million and $1.1 million, respectively.

     We also hold a number of other leases in the United States, with an
aggregate annual rent of approximately $1.4 million.

     Our Solect subsidiary rents two facilities in Toronto, Canada, aggregating
approximately 85,000 square feet, pursuant to leases expiring between 2002 and
2007. The total annual rent for these facilities is approximately $2.2 million.

     Our subsidiary in the United Kingdom leases approximately 43,000 square
feet in London under a lease expiring in 2007. The annual rent for the facility
is approximately $2.2 million.

     Our subsidiary in Cyprus leases approximately 72,000 square feet in various
facilities in Limassol at an annual rent of approximately $0.7 million. In
addition we entered into a three-year lease for an additional 91,000 square feet
that will commence in April 2001. The annual rent will be approximately $1.3
million.

     We lease additional office space in Australia, Brazil, France, Germany,
Hong Kong, Ireland, Italy, Japan and Spain.

     Our BSS products are developed and, in many cases, operated over a system
of UNIX, VMS and Windows NT servers owned by us and manufactured by, among
others, Compaq, Hewlett Packard, IBM and Sun Microsystems, which are connected
to approximately 8,000 personal computers owned by us.

     Automatic tape libraries provide full and incremental backups of the data
used in and generated by our business. These tapes are kept on-site and
off-site, as appropriate, to ensure security and integrity, and are connected
with a high speed redundant wide area network ("WAN").

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

                                        20
<PAGE>   22

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

FORWARD LOOKING STATEMENTS

     Some of the information in this section contains forward looking statements
that involve substantial risks and uncertainties. You can identify these
statements by forward looking words such as "expect", "anticipate", "believe",
"seek", "estimate" and similar words. Statements that we make in this section
that are not statements of historical fact also may be forward looking
statements. Forward looking statements are not guarantees of our future
performance, and involve risks, uncertainties and assumptions that may cause our
actual results to differ materially from the expectations 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. See "Risk
Factors" for more information.

INTRODUCTION

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

     - what factors affect our business,

     - what our revenue and costs were in the fiscal years ended September 30,
       2000, 1999 and 1998,

     - why those revenue and costs were different from year to year,

     - the sources of our revenue,

     - how all of this affects our overall financial condition,

     - what our expenditures were in the fiscal years ended September 30, 2000,
       1999 and 1998, and

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

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

OVERVIEW OF BUSINESS AND TREND INFORMATION

     We are a leading provider of software products and services to the
communications industry. Our Business Support Systems ("BSS") consist of
families of customized software products and services designed to meet the
mission-critical needs of specific communications market sectors. We provide
primarily Customer Care, Billing and Order Management Systems ("CC&B Systems")
for communications and Internet Protocol ("IP") service providers. Our systems
support a wide range of communications services, including wireline, wireless,
broadband, electronic and mobile commerce and IP services. We also support
companies that offer multiple service packages, commonly referred to as
convergent services. In addition, we provide a full range of Directory Sales and
Publishing Systems ("Directory Systems") to publishers of both traditional
printed yellow page and white page directories and electronic Internet
directories. Due to the complexity of BSS projects and the expertise required
for system support, we also provide extensive customization, implementation,
system integration, ongoing support, system enhancement, maintenance and
outsourcing services.

     We derive our revenue principally from:

     - the initial sale of our products and related services, including license
       fees and customization, implementation and integration services, and

     - recurring revenue from ongoing maintenance, support, outsourcing and
       other related services provided to our customers and, to a lesser degree,
       from incremental license fees resulting from increases in a customer's
       subscribers.

                                        21
<PAGE>   23

     License revenue is primarily recognized as work is performed, using the
percentage of completion method of accounting. Service revenue that involves
significant ongoing obligations, including fees for customization,
implementation and initial support services, is also recognized as work is
performed, under the percentage of completion method of accounting. In
outsourcing contracts, revenue from operation and maintenance of customers'
billing systems is recognized in the period in which the bills are produced.
Revenue from ongoing support services is recognized as work is performed.
Revenue from third-party hardware and software sales is recognized upon
delivery. Maintenance revenue is recognized ratably over the term of the
maintenance agreement. As a result of our 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.

     License and service fee revenue from the sale of CC&B Systems amounted to
$986.6 million in the year ended September 30, 2000, representing 88.2% of our
revenue for such period, as compared to $468.2 million in fiscal 1999 and $251.8
million in fiscal 1998, where license and service fee revenue from the sale of
CC&B Systems represented 74.7% and 62.4%, respectively, of our revenue for such
periods.

     We believe that the demand for CC&B Systems will continue to increase due
to, among other key factors:

     - the growth and globalization of the communications market,

     - intensifying competition among communications carriers,

     - rapid technological changes, such as the introduction of wireless
       Internet services via WAP (Wireless Application Protocol), GPRS (General
       Packet Radio Services) and UMTS (Universal Mobile Telecommunications
       System) technology,

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

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

     We also believe that a key driver of demand is the continuing trend for
communications and IP service providers to offer to their subscribers multiple
service packages, commonly referred to as convergent services (combinations of
voice, broadband, electronic and mobile commerce and IP services).

     Another significant current market trend impacting our business is the
growth of the IP services industry and market. The emergence and expansion of IP
services creates significant opportunities for companies like us that offer CC&B
Systems. Specifically, the development of this market permits us to offer our
CC&B Systems to a growing group of new market entrants and to enhance our
offerings to existing customers to facilitate their entry into the IP services
market.

     Although we believe that we are a leading provider of Directory Systems in
most of the markets that we serve, revenue from this business is not expected to
grow significantly.

     License and service fee revenue from the sale of Directory Systems totaled
$131.8 million in the year ended September 30, 2000, accounting for 11.8% of our
revenue for such period, as compared to $158.6 million in fiscal 1999 and $151.9
million in fiscal 1998, where license and service fee revenue from the sale of
Directory Systems represented 25.3% and 37.6%, respectively, of our revenue for
such periods.

     The decrease in revenue from Directory Systems primarily reflects a
reduction in the volume of Directory Systems services required by our existing
customers. We expect that the demand for our Directory Systems will remain
relatively stable in future periods and that the contribution to total revenue,
as a percentage of revenue, of license and service fees from Directory Systems
services will continue to decrease over time.

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

     Our research and development activities involve the development of new
software modules and product offerings in response to an identified market
demand, either in conjunction with a customer project or as part of our product
development program. We also expend additional amounts on applied research and
software

                                        22
<PAGE>   24

development activities to keep abreast of new technologies in the communications
and IP market. Research and development expenditures amounted to $74.9 million,
$40.9 million and $25.6 million in fiscal 2000, 1999 and 1998, respectively,
representing 6.7%, 6.5% and 6.3%, respectively, of our revenue in these fiscal
years. In the next several years, we intend to continue to make substantial
investments in our research and development activities and anticipate a
significant increase in absolute dollar terms in research and development
expenditures.

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

  ACQUISITIONS

     On November 30, 1999, we completed the purchase of International
Telecommunication Data Systems, Inc. ("ITDS") in a stock-for-stock transaction.
The acquisition of ITDS, a leading provider of solutions to communications
companies for outsourcing of billing operations, has expanded the scope of our
CC&B Systems offering and, we believe, has further established our leadership in
providing total solutions to the communications industry. In connection with the
consummation of this transaction, we issued 6,461,376 ordinary shares and
granted 1,102,955 options to purchase ordinary shares. The total purchase price
of $189.0 million included issuance of ordinary shares, the grant of options and
transaction costs. The acquisition was accounted for using the purchase method
of accounting. The fair market value of ITDS' assets and liabilities has been
included in our balance sheet as of the acquisition date. An acquired technology
valuation, which was determined by an independent specialist, 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. The fair value of existing
technology products was valued at $12.3 million and is being amortized over five
years. In-process research and development, valued at $19.9 million, was charged
as an expense immediately following the completion of the acquisition since this
technology had not reached technological feasibility and has no alternative use.
Additional development, coding and testing efforts were required before
technological feasibility could be determined. The fair value of customer base
was valued at $0.6 million and the fair value of workforce-in-place was valued
at $5.4 million, both of which are being amortized over five years. The excess
of the purchase price over the net assets acquired, or goodwill, of $71.2
million is being amortized over 15 years.

     On April 5, 2000, we completed the purchase of Solect Technology Group Inc.
("Solect"), in a stock-for-stock transaction. The acquisition of Solect, a
leading provider of billing and customer care software to IP service providers,
including wireless and application service providers ("ASPs"), has expanded our
IP service provider customer base for CC&B Systems. Under the terms of our
combination agreement with Solect, all then outstanding Solect common shares
were exchanged for shares of a newly issued class of exchangeable shares of
Solect. The Solect exchangeable shares entitle holders to dividends and other
rights economically equivalent to our ordinary shares, including the right,
through a voting trust, to vote at our shareholder meetings, and are
exchangeable at the option of the holders into our ordinary shares on a
one-for-one basis. The total purchase price of $1,087.7 million included the
issuance of 13,846,302 exchangeable shares, the grant of options to purchase
1,653,662 ordinary shares and transaction costs. An aggregate 1,170,000 of the
exchangeable shares issued in the transaction have been placed in escrow until
April 2001 to indemnify us against any breaches of representations or warranties
under the combination agreement. The acquisition was accounted for using the
purchase method of accounting. The fair market value of Solect's assets and
liabilities has been included in our balance sheet as of the acquisition date.
An acquired technology valuation, which was determined by an independent
specialist, 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. The fair value of existing technology products was

                                        23
<PAGE>   25

valued at $18.3 million and is being amortized over two years. In-process
research and development, valued at $50.4 million, was charged as an expense
immediately following the completion of the acquisition since this technology
had not reached technological feasibility and has no alternative use. Additional
development, coding and testing efforts were required before technological
feasibility could be determined. The fair value of customer base was valued at
$1.2 million and the fair value of workforce-in-place was valued at $3.3
million, both of which are being amortized over three years. The excess of the
purchase price over the net assets acquired, or goodwill, of $986.3 million is
being amortized over five years.

     In the future, we may consider additional acquisitions in order to acquire
new products or services or otherwise enhance our market position or strategic
strength.

OPERATING RESULTS

     The following table sets forth for the fiscal years ended September 30,
2000, 1999 and 1998, certain items in our consolidated statements of operations
reflected as a percentage of total revenue:

<TABLE>
<CAPTION>
                                                          YEAR ENDED SEPTEMBER 30,
                                                   --------------------------------------
                                                           2000            1999     1998
                                                   --------------------    -----    -----
                                                     PRO
                                                   FORMA(*)       AS
                                                   --------    REPORTED
<S>                                                <C>         <C>         <C>      <C>
Revenue:
  License........................................    11.2%       11.2%      11.9%    10.6%
  Service........................................    88.8        88.8       88.1     89.4
                                                    -----       -----      -----    -----
                                                    100.0       100.0      100.0    100.0
                                                    -----       -----      -----    -----
Operating expenses:
  Cost of license................................     0.5         0.5        0.9      2.7
  Cost of service................................    57.2        57.2       57.1     57.3
  Research and development.......................     6.7         6.7        6.5      6.3
  Selling, general and administrative............    12.3        12.3       12.1     12.7
  Amortization of goodwill and purchased
     intangible assets...........................      --         9.9         --       --
  In-process research and development and other
     indirect acquisition-related costs..........      --         6.8         --       --
                                                    -----       -----      -----    -----
                                                     76.7        93.4       76.6     79.0
                                                    -----       -----      -----    -----
Operating income.................................    23.3         6.6       23.4     21.0
Other income (expense), net......................     1.0         1.0      (1.0)    (6.0)
                                                    -----       -----      -----    -----
Income before income taxes.......................    24.3         7.6       22.4     15.0
Income taxes.....................................     7.3         7.1        6.7      7.5
  Cumulative effect of change in accounting
     principles, net.............................      --          --         --     (**)
                                                    -----       -----      -----    -----
Net income.......................................    17.0%        0.5%      15.7%     7.5%
                                                    =====       =====      =====    =====
</TABLE>

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

(*)  The pro forma financial information excludes purchased in-process research
     and development charges and other indirect acquisition-related costs,
     amortization of goodwill and purchased intangible assets (collectively, the
     "ITDS and Solect acquisition-related charges") and related tax effects
     attributable to the ITDS and Solect transactions.

(**) Less than 0.1%.

  YEARS ENDED SEPTEMBER 30, 2000 AND 1999

     Revenue.  Revenue for the year ended September 30, 2000 was $1,118.3
million, an increase of $491.5 million, or 78.4%, compared to fiscal 1999. Over
70% of the increase in revenue was due to the

                                        24
<PAGE>   26

continued growth in the demand for our CC&B Systems in our traditional target
markets of high-end and mid-tier communications companies and less than 30% was
attributable to our acquisitions of ITDS and Solect. Demand for customer care,
billing and order management systems is diverse, as reflected by the broad cross
section of new projects we were awarded in fiscal 2000. These projects covered
customers in, among other locations, North America, Europe and Latin America,
working within a wide range of operating environments, including wireline,
wireless and IP. In many cases, we expanded our ongoing relationships with
existing customers. In fiscal 2000, the demand for our CC&B Systems was
primarily driven by the need for communications companies to upgrade their
customer care, billing and order management systems in response to growth in
their subscriber base, increased competition in the subscriber markets, and the
need to offer convergent and IP services.

     License revenue increased from $74.4 million in fiscal 1999 to $124.8
million in the year ended September 30, 2000, an increase of 67.8%. Service
revenue increased from $552.5 million in fiscal 1999 to $993.5 million in fiscal
2000, an increase of $441.0 million, or 79.8%.

     Total CC&B Systems revenue for the year ended September 30, 2000 was $986.6
million, an increase of $518.3 million, or 110.7%, compared to fiscal 1999.

     Revenue from Directory Systems decreased to $131.8 million for the year
ended September 30, 2000, from $158.6 million for the prior fiscal year. The
decrease in revenue from Directory Systems reflects a reduction in the volume of
Directory Systems services required by our existing customers.

     In the year ended September 30, 2000, revenue from customers in North
America, Europe and the rest of the world accounted for 45.6%, 42.4% and 12.0%,
respectively, compared to 36.1%, 41.8% and 22.1%, respectively, in the year
ended September 30, 1999. The growth in North America was primarily attributable
to revenue we gained from existing ITDS customers and to our forming or
expanding relationships with new or existing customers in North America in
fiscal 2000.

     Cost of License.  Cost of license for fiscal 2000 was $5.6 million, an
increase of $0.1 million from cost of license for the prior fiscal year. Cost of
license includes amortization of purchased computer software and intellectual
property rights. The increase in cost of license for fiscal 2000 was primarily
attributable to new purchases of computer software in fiscal 2000 and the
related amortization.

     Cost of Service.  Cost of service for fiscal 2000 was $639.9 million, an
increase of $282.1 million, or 78.8%, compared to cost of service of $357.8
million for the year ended September 30, 1999. Cost of service is predominantly
related to salary and employee related expenses. The absolute increase in cost
of service is consistent with the increase in revenue for fiscal 2000, and
reflects increased employment levels required to support our continued growth.

     Research and Development.  Research and development expense is primarily
comprised of compensation expense attributed to research and development
activities, either in conjunction with customer projects or as part of our
product development programs. In fiscal 2000, research and development expense
was $74.9 million, or 6.7% of revenue, compared with $40.9 million, or 6.5% of
revenue, in the previous fiscal year. The bulk of the increase in research and
development expense represents ongoing expenditures primarily for CC&B Systems,
with the balance attributable to Directory Systems.

     Selling, General and Administrative.  Selling, general and administrative
expense is primarily comprised of compensation expense and increased by 81.1% to
$137.0 million, or 12.3% of revenue, in fiscal 2000, from $75.7 million, or
12.1% of revenue, in the year ended September 30, 1999. The increase in selling,
general and administrative expense is consistent with the increase in our
revenue for fiscal 2000 and with our acquisitions of ITDS and Solect.

     Amortization of Goodwill and Purchased Intangible Assets.  Amortization of
goodwill and purchased intangible assets in the year ended September 30, 2000
relates to the ITDS and Solect transactions.

     In-process Research and Development and Other Indirect Acquisition-Related
Costs.  In-process research and development and other indirect
acquisition-related costs in the year ended September 30, 2000

                                        25
<PAGE>   27

consisted primarily of one-time charges related to the ITDS and Solect
transactions of $19.9 million and $50.4 million, respectively, for write-offs of
purchased in-process research and development.

     Operating Income.  Operating income for the year ended September 30, 2000
was $74.1 million, as compared with $147.0 million for the previous fiscal year,
a decrease of 49.6%, primarily due to the ITDS and Solect acquisition-related
charges. Pro forma operating income for the year ended September 30, 2000,
excluding the ITDS and Solect acquisition-related charges, was $260.9 million,
or 23.3% of revenue, as compared with $147.0 million, or 23.4% of revenue, in
the year ended September 30, 1999, an increase of 77.5%.

     Other Income (Expense), Net.  Other income (expense), net consists
primarily of interest income. In the year ended September 30, 2000, other
income, net was $10.7 million, an increase of $16.9 million from other expense,
net of $6.2 million in the prior fiscal year. The increase in other income
(expense), net is primarily attributed to increases in interest earned on cash
equivalents and short-term interest-bearing investments.

     Income Taxes.  Income taxes in fiscal 2000 were $78.9 million on income
before income taxes of $84.9 million. Our effective tax rate in fiscal 2000
(calculated based on the income taxes out of the income before income taxes,
excluding non recurring charges for write-offs of purchased in-process research
and development and other indirect acquisition-related costs) was 49%, resulting
from the non-cash amortization of goodwill related to the acquisitions of ITDS
and Solect, much of which is not tax deductible. The pro forma effective tax
rate for the year ended September 30, 2000, excluding the ITDS and Solect
acquisition-related charges, was 30%. Income taxes were $42.2 million on income
before income taxes of $140.8 million in fiscal 1999. Our effective tax rate in
fiscal 1999 was 30%. See discussion below -- "Effective Tax Rate".

     Net Income.  Net income was $6.0 million in the year ended September 30,
2000, as compared to $98.5 million for the previous fiscal year. Net income was
0.5% of revenue for fiscal 2000, as compared to 15.7% for fiscal 1999. Pro forma
net income in fiscal 2000, excluding the ITDS and Solect acquisition-related
charges, increased by 93.0% from fiscal 1999, reaching $190.1 million,
representing 17.0% of revenue.

     Diluted Earnings per Share.  Diluted earnings per share was $0.03 for the
year ended September 30, 2000, as compared with $0.49 in fiscal 1999. Pro forma
diluted earnings per share in the year ended September 30, 2000, excluding the
ITDS and Solect acquisition-related charges, increased by 79.6% from the year
ended September 30, 1999, reaching $0.88 per diluted share.

  YEARS ENDED SEPTEMBER 30, 1999 AND 1998

     Revenue.  Revenue for the year ended September 30, 1999 was $626.9 million,
an increase of $223.1 million, or 55.3%, compared to fiscal 1998. The increase
in revenue was primarily due to the growth in the demand for our CC&B Systems
solutions in our traditional target markets of high-end and mid-tier
communications companies. In fiscal 1999, the demand for our CC&B Systems was
primarily driven by the need for communications companies to upgrade their
customer care, billing and order management systems in response to growth in
their subscriber base, increased competition in the subscriber markets, and the
need to offer convergent services.

     License revenue increased from $42.9 million in fiscal 1998 to $74.4
million in the year ended September 30, 1999, an increase of 73.4%. Service
revenue increased by $191.6 million, or 53.1%, in fiscal 1999, from $360.9
million in fiscal 1998 to $552.5 million.

     Total CC&B Systems revenue for the year ended September 30, 1999 was $468.2
million, an increase of $216.4 million, or 85.9%, compared to fiscal 1998.

     Revenue from Directory Systems grew to $158.6 million for the year ended
September 30, 1999, from $151.9 million for the prior fiscal year.

     In the year ended September 30, 1999, revenue from customers in Europe,
North America and the rest of the world accounted for 41.8%, 36.1% and 22.1%,
respectively, compared to 27.2%, 52.2% and 20.6%, respectively, in the year
ended September 30, 1998. The growth in revenue from customers in Europe was
                                        26
<PAGE>   28

primarily attributable to increased competition among communications companies
within Europe and deregulation of the European market.

     Cost of License.  Cost of license for fiscal 1999 was $5.5 million, a
decrease of $5.2 million, from cost of license for the prior fiscal year. Cost
of license included amortization of purchased computer software and intellectual
property rights. The decrease in cost of license for fiscal 1999 was
attributable primarily to reductions in the required amortization of certain
purchased computer software.

     Cost of Service.  Cost of service for fiscal 1999 was $357.8 million, an
increase of $126.4 million, or 54.7%, compared to cost of service of $231.4
million for the year ended September 30, 1998. Cost of service was predominantly
related to salary and employee related expenses. The absolute increase in cost
of service was consistent with the increase in revenue for the year ended
September 30, 1999.

     Research and Development.  Research and development expense was primarily
comprised of compensation expense attributed to research and development
activities, either in conjunction with customer projects or as part of our
product development programs. In fiscal 1999, research and development expense
was $40.9 million, or 6.5% of revenue, compared with $25.6 million, or 6.3% of
revenue, in the previous fiscal year. The increase in research and development
expense represented ongoing expenditures primarily for CC&B Systems and also for
Directory Systems.

     Selling, General and Administrative.  Selling, general and administrative
expense was primarily comprised of compensation expense and increased by 47.9%
to $75.7 million, or 12.1% of revenue, in fiscal 1999, from $51.2 million, or
12.7% of revenue, in the year ended September 30, 1998. The absolute increase in
selling, general and administrative expense was consistent with the increase in
our revenue for fiscal 1999.

     Operating Income.  Operating income in the year ended September 30, 1999
was $147.0 million, as compared with $84.9 million in the previous fiscal year,
an increase of 73.1%. Operating income was 23.4% of revenue for fiscal 1999, as
compared to 21.0% for fiscal 1998.

     Other Income (Expense), Net.  Other income (expense), net consisted
primarily of interest expense. In the year ended September 30, 1999, other
expense, net was $6.2 million, a decrease of $17.9 million from the prior fiscal
year. The decrease was primarily attributed to reductions in our bank debt
through the use of cash from operations and the proceeds from our initial public
offering in June 1998. Interest expense in fiscal 1998 related primarily to
senior bank debt and subordinated debt.

     Income Taxes.  Income taxes in fiscal 1999 were $42.2 million on income
before income taxes of $140.8 million, representing an overall effective tax
rate of 30%. In fiscal 1998, income taxes were $30.4 million on income before
income taxes of $60.8 million, representing an overall effective tax rate of
50%. This higher tax rate resulted from significant interest expense in a tax
jurisdiction where we were tax exempt, giving us no tax benefit to offset the
tax incurred by us in other jurisdictions.

     Net Income.  Net income was $98.5 million in the year ended September 30,
1999 compared to $30.1 million for the previous fiscal year. Net income was
15.7% of revenue for fiscal 1999, as compared to 7.5% for fiscal 1998.

     Diluted Earnings per Share.  Diluted earnings per share increased from
$0.19 in the year ended September 30, 1998 to $0.49 in fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents totaled $402.3 million as of September 30, 2000,
compared to $85.2 million as of September 30, 1999. The increase in cash and
cash equivalents is primarily attributable to cash flows from operations and, to
a lesser degree, to cash balances of $31.9 million and $35.9 million we acquired
as part of our acquisitions of ITDS and Solect, respectively, and to the
exercise of employee stock options. Net cash provided by operating activities
amounted to $287.6 million and $152.3 million for the years ended September 30,
2000 and 1999, respectively. A significant portion of our cash flow from
operations during the year ended September 30, 2000 was used to invest in cash
equivalents. We currently intend to retain our future earnings to support the
further expansion of our business.
                                        27
<PAGE>   29

     As of September 30, 2000, we had short-term revolving lines of credit
totaling $140.0 million from various banks or bank groups, of which $20.0
million was outstanding.

     As of September 30, 2000, we also had utilized approximately $19.3 million
of revolving credit facilities to support outstanding letters of credit or bank
guarantees.

     As of September 30, 2000, we had positive working capital of $319.0
million, as compared to positive working capital of $35.9 million as of
September 30, 1999. The increase in working capital is primarily attributable to
cash generated from operating activities and to the cash obtained from our
acquisitions of ITDS and Solect. In our opinion, current cash balances, cash
generated from operations and our current lines of credit will provide
sufficient resources to meet our near-term requirements.

     As of September 30, 2000, we had long-term obligations outstanding of $32.1
million in connection with leasing arrangements. Currently, our capital
expenditures consist primarily of computer equipment and vehicles and are funded
principally by operating cash flows and capital leasing arrangements. We do not
anticipate any change to this policy in the foreseeable future.

  NET DEFERRED TAX ASSETS

     As of September 30, 2000, deferred tax assets of $16.7 million, derived
primarily from carry-forward net operating losses relating to Solect
pre-acquisition losses, were offset by valuation allowances due to the
uncertainty of realizing any tax benefit for such losses. Upon the subsequent
realization of any such net operating losses, the valuation allowance will be
released, resulting in an offsetting reduction of the goodwill recorded in the
Solect acquisition.

EFFECTIVE TAX RATE

     Our overall effective tax rate has historically been approximately 30% due
to the various corporate income tax rates in the countries in which we operate
and the relative magnitude of our business in those countries. Our consolidated
effective tax rate (calculated based on the income taxes out of the income
before income taxes, excluding non recurring charges for write-offs of purchased
in-process research and development and other indirect acquisition-related
costs) for the year ended September 30, 2000 was 49%, compared to 30% in the
year ended September 30, 1999. This higher effective tax rate was attributable
to amortization of goodwill related to our acquisitions of ITDS and Solect, much
of which is not tax deductible. Excluding the impact of the ITDS and Solect
acquisition-related charges, the effective tax rate for the year ended September
30, 2000 was 30%.

                                        28
<PAGE>   30

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

     We rely on the executive officers of our principal operating subsidiaries,
including Amdocs, Inc. (the United States), Amdocs (UK) Limited (the United
Kingdom), Amdocs Development Limited (Republic of Cyprus), Amdocs Management
Limited (the United Kingdom), Amdocs (Israel) Limited (Israel), Amdocs Software
Systems Ltd. (Ireland), International Telecommunication Data Systems, Inc. (the
United States) and Solect Technology Group Inc. (Canada), 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 December 22, 2000, our directors, senior managers and key employees
upon whose work we are dependent are as follows:

<TABLE>
<CAPTION>
                    NAME                       AGE    POSITION
                    ----                       ----   --------
<S>                                            <C>    <C>
Bruce K. Anderson(1)(2)......................    60   Chairman of the Board and Chief
                                                      Executive Officer
Robert A. Minicucci(1)(2)....................    48   Director and Chief Financial Officer
Avinoam Naor(2)..............................    52   Director; Chief Executive Officer of
                                                      Amdocs Management Limited
Dov Baharav..................................    50   Senior Vice President and Chief
                                                      Financial Officer, Amdocs Management
                                                        Limited
Nehemia Lemelbaum............................    57   Senior Vice President, Amdocs
                                                      Management Limited
Mario Segal..................................    53   Senior Vice President and Chief
                                                      Operating Officer, Amdocs Management
                                                        Limited
Eli Gelman...................................    42   Senior Vice President, Amdocs
                                                      Management Limited
Paul Atkinson................................    36   Senior Vice President, Amdocs
                                                      Management Limited
Shlomo Baleli................................    44   Senior Vice President, Amdocs
                                                      Management Limited
Thomas G. O'Brien............................    40   Treasurer and Secretary
Simon Cassif.................................    58   Senior Vice President, Amdocs (UK)
                                                        Limited
Melinos Pissourios...........................    32   General Manager, Amdocs Development
                                                        Limited
Kevin Picker.................................    43   Director and General Manager, Amdocs
                                                        (UK) Limited
Adrian Gardner(1)(2)(3)......................    38   Director
James S. Kahan(1)(2).........................    53   Director
John T. McLennan(3)..........................    55   Director
Lawrence Perlman(3)..........................    62   Director
Michael J. Price.............................    43   Director
Modi Rosen...................................    40   Director
Ron Zuckerman................................    43   Director
</TABLE>

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

     (1)  Member of the Compensation Committee

     (2)  Member of Executive Committee

     (3)  Member of the Audit Committee

     Bruce K. Anderson has been Chief Executive Officer and Chairman of the
Board of Amdocs since September 1997. Since August 1978, he has been a general
partner of WCAS, an investment firm that

                                        29
<PAGE>   31

specializes in the acquisition of companies in the information services,
communications and health care industries. Investment partnerships affiliated
with WCAS are collectively one of our largest shareholders. Mr. Anderson served
for nine years with Automated Data Processing, Inc. ("ADP") until his
resignation as Executive Vice President and a director of ADP, and President of
ADP International, effective August 1978. Mr. Anderson serves on the board of
Bridge Information Systems, Inc.

     Robert A. Minicucci has been Chief Financial Officer and 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. Mr. Minicucci served for twelve years with Lehman
Brothers (and its predecessors) until his resignation as a Managing Director in
1991. He is also a director of several private companies including Global
Knowledge Networks, Inc., Alliance Data Systems, Inc., Headstrong, Inc. and
Attachmate, Inc.

     Avinoam Naor has been a director of Amdocs Limited since January 1999 and
is Chief Executive Officer of Amdocs Management Limited, having overall
coordination responsibility for the operations and activities of our operating
subsidiaries. Mr. Naor was a member of the team that founded Amdocs in 1982 and
initially served as a Senior Vice President. He has been involved with software
development for 28 years, working on projects for the development of application
and infrastructure software for communications systems and developing and
marketing directory assistance systems. Mr. Naor was also a member of the team
that established the computerized system for Golden Pages, the Israeli yellow
pages company.

     Dov Baharav is a Senior Vice President and the Chief Financial Officer of
Amdocs Management Limited, and has overall coordination responsibility for the
financial reporting of our operating subsidiaries. Mr. Baharav joined Amdocs in
1991 in St. Louis, Missouri and until 1995 served first as Vice President and
then as President of Amdocs, Inc., our principal U.S. subsidiary. 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.

     Nehemia Lemelbaum is Senior Vice President, Strategy and Corporate
Development, of Amdocs Management Limited. He joined Amdocs in 1985, with
initial responsibility for our U.S. operations. Mr. Lemelbaum led our
development of graphic products for the yellow pages industry and directed our
development of CC&B Systems. He served for nine years with Contahal Ltd., a
leading Israeli software company, first as a senior consultant, and later as
Managing Director. From 1967 to 1976, Mr. Lemelbaum was employed by the Ministry
of Communications of Israel (in effect the organization that eventually became
Bezeq, the Israel Telecommunication Corp. Ltd.), with responsibility for
computer technology in the area of business data processing.

     Mario Segal is a Senior Vice President and the Chief Operating Officer of
Amdocs Management Limited. He joined Amdocs in 1984 as Senior Vice President and
was a leading member of the team that developed the ADS(NG)/Family of Products
directory automation systems and the Ensemble(TM) platform. Mr. Segal was also
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.

     Eli Gelman is a Senior Vice President of Amdocs Management Limited, with
responsibility for sales and strategic alliances. He has over 20 years of
experience in the software industry, including over 10 years with Amdocs. Prior
to his current position, he was a division president. He headed Amdocs' United
States sales and marketing operations and helped spearhead our entry into the
CC&B Systems market. Mr. Gelman was an account manager for our major European
and North American installations, and has also led several major software
development projects. Before joining Amdocs, Mr. Gelman was involved in the
development of real-time software systems for communications networks.

     Paul Atkinson has been a Senior Vice President of Amdocs Management Limited
since October 2000, having overall responsibility for the Product Marketing and
Marketing Communications departments.

                                        30
<PAGE>   32

Mr. Atkinson served as Chief Executive Officer of Solect from 1994 until the
acquisition of Solect by Amdocs in April 2000. Prior to joining Solect, Mr.
Atkinson was the President and co-founder of Southwest Sun, the independent
representative of Sun Microsystems in central Canada.

     Shlomo Baleli joined Amdocs in 1982 and has been a Senior Vice President of
Amdocs Management Limited since October 2000. He has over 20 years experience in
software engineering and in the development of software applications and
infrastructure for communications systems and directory systems. Prior to
joining Amdocs, he was a member of the team that established the computerized
system for Golden Pages, the Israeli yellow pages company.

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

     Simon Cassif is a Senior Vice President of Amdocs (UK) Limited. He has
principal responsibility for developing our relationships with strategic
customers in Europe. Mr. Cassif joined Amdocs in January 1994 and has since been
devoting most of his efforts to business development in the area of customer
care, billing and order management systems. Prior to joining Amdocs, Mr. Cassif
was Chief Information Officer and Vice President, Systems and Computers at
Bezeq, the Israel Telecommunication Corp. Ltd. Mr. Cassif held this position for
twelve years, with full responsibility for Bezeq's information technology
strategy, systems development, maintenance and operations.

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

     Kevin Picker has been a director and the General Manager of Amdocs (UK)
Limited since October 1999. He joined the Amdocs group in 1997 as the financial
director of Directory Technology (PTY) Ltd. From May 1992 Mr. Picker was the
general manager of Myers Tyres in Australia and prior to that financial director
of KM Printing and Publishing. Mr. Picker is a member of the Institute of
Chartered Accountants in Australia (1994), the Israeli Institute of Certified
Public Accountants (1995) and the South African Institute of Chartered
Accountants (1980).

     Adrian Gardner has been a director of Amdocs since April 1998. Mr. Gardner
is a Managing Director of Lazard LLC, based in London, and works 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 and a member of The Securities Institute in the
United Kingdom.

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

     John T. McLennan has been a director of Amdocs since November 1999. Since
May 1999, he has served as Vice-Chair and Chief Executive Officer of AT&T
Canada. Mr. McLennan founded and was the President of Jenmark Consulting Inc.
from 1997 until May 1999. From 1994 to 1997, Mr. McLennan served as the
President and Chief Executive Officer of Bell Canada. Prior to that, he held
various positions at several telecommunications companies, including BCE Mobile
Communications and Cantel Inc. Mr. McLennan

                                        31
<PAGE>   33

currently serves on the board of directors of Hummingbird Corporation and
several other private software and communication companies.

     Lawrence Perlman has been a director of Amdocs since April 1998. He was
Chairman of Ceridian Corporation from 1992 through 1999, and its Chief Executive
Officer from 1990 through 1999. Ceridian Corporation is a provider of
information services to employers to administer various human resource
functions, as well as information services for the transportation and electronic
media markets. Mr. Perlman is a director and Chairman of Seagate Technology,
Inc., and a director of The Valspar Corporation and Computer Network Technology
Corporation. Mr. Perlman has been a director of Ceridian since 1985.

     Michael J. Price has been a director of Amdocs since January 1998. He is
co-Chairman of FirstMark Communications International LLC, a broadband
communications company in Europe. Prior to that, he worked at Lazard Freres &
Co. L.L.C., starting in 1987, serving first as a Vice President and then as a
Managing Director, where he led its technology and telecommunications group. He
is also a director of SpectraSite, a leading tower management company, and
PeoplePC.

     Modi Rosen has been a director of Amdocs since December 2000. He founded
and has been a co-manager of Magnum Communications Fund, a venture capital fund
specializing in the Israeli telecommunications industry, since 1999. From 1997
to 1999, he was a Vice-President of Monitor Company, an international consulting
group, where he advised European wireless and wireline companies, including
Siemens. From 1991 to 1997, Mr. Rosen was a managing partner at Shaldor, an
Israeli consultancy firm.

     Ron Zuckerman has been a director of Amdocs since December 2000. He founded
and has been Chairman of the Board of Precise Software Solutions, a
Nasdaq-listed company and a provider of information technology infrastructure
performance management software, since 1991. He also founded Sapiens
International, a Nasdaq-listed company and global e-business solutions provider,
where he has served as Chairman since 1998, and EC-Gate, a solutions provider
for e-marketplaces, where he has served as Chairman since 1996.

COMPENSATION

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

     A total of 20 persons who served either as directors of Amdocs or members
of its administrative, supervisory or management bodies during fiscal 2000
received remuneration from Amdocs. The aggregate remuneration paid by us to such
persons was approximately $7.1 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 a former executive
officer and to three former members of our board of directors.

     During fiscal 2000, directors or members of our administrative, supervisory
or management bodies were granted options to purchase a total of 21,112 ordinary
shares at an average price of $43.45 per share, with vesting over three to four
year terms. All options were issued pursuant to our 1998 Stock Option and
Incentive Plan, as amended (the "Option Plan"). See "Employee Stock Option and
Incentive Plan".

BOARD PRACTICES

     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.

                                        32
<PAGE>   34

     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 an employment agreement between us and Mr. Naor, which provides
that Mr. Naor shall be paid a cash severance upon termination of his employment,
there are no service contracts between us and any of our directors providing for
benefits upon termination of their employment.

  BOARD COMMITTEES

     The Audit Committee of the board of directors reviews, acts on and reports
to the board of directors with respect to various auditing and accounting
matters, including the selection of our auditors, the scope of the annual
audits, fees to be paid to the auditors, the performance of our independent
auditors and our accounting practices. Our Audit Committee consists of Messrs.
Gardner, McLennan and Perlman, all of whom are independent directors, as
required by the rules of the New York Stock Exchange, Inc. ("NYSE").

     The Compensation Committee of the board of directors determines the
salaries and incentive compensation of the officers of Amdocs and our
subsidiaries and provides recommendations for the salaries and incentive
compensation of other employees and the consultants. The Compensation Committee
also administers various compensation, stock and benefit plans of Amdocs. Our
Compensation Committee consists of Messrs. Anderson, Gardner, Kahan and
Minicucci. None of the members of the Committee was an employee of ours at any
time during fiscal 2000.

     We have also established an Executive Committee that may act from time to
time instead of the full board of directors and has such responsibilities as may
be delegated to it by the board from time to time. Our Executive Committee
consists of Messrs. Anderson, Gardner, Kahan, Miniccuci and Naor.

EMPLOYEES

     As of September 30, 2000, we employed on a full-time basis approximately
7,400 software and information technology specialists, engaged in research,
development, maintenance and support activities, and approximately 1,000
managers and administrative professionals. We employ approximately 4,000 and
2,200 software and information technology specialists in Israel and North
America, respectively, with the remaining principally located in Europe and the
Asia-Pacific region. We often maintain teams of employees at a customer's
premises to work on specific projects.

     As of September 30, 1999, we employed on a full-time basis approximately
4,400 software and information technology specialists, engaged in research,
development, maintenance and support activities, and approximately 600 managers
and administrative professionals. We employed over 3,000 and 780 software and
information technology specialists in Israel and North America, respectively,
with the remaining located in Europe and the Asia-Pacific region.

     As of September 30, 1998, we employed on a full-time basis approximately
2,900 software and information technology specialists, engaged in research,
development, maintenance and support activities, and approximately 375 managers
and administrative professionals. We employed over 2,100 and 500 software and
information technology specialists in Israel and North America, respectively,
with the remaining located in Europe and the Asia-Pacific region.

     We have 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. To date, compliance with such laws has not
been a material burden for us. As the number of our employees increases over
time, our compliance with such regulations could become more burdensome.

     Our principal operating subsidiaries are not party to any collective
bargaining agreements. However, our Israeli subsidiary is subject to certain
labor-related statutes and to certain provisions of collective bargaining
agreements between the Histadrut (General Federation of Labor in Israel) and the
Coordinating Bureau of Economic Organizations (including the Industrialists'
Association), which are applicable to our Israeli

                                        33
<PAGE>   35

employees by virtue of expansion orders of the Israeli Ministry of Labor and
Welfare. A significant provision applicable to all employees in Israel under
collective bargaining agreements and expansion orders is the automatic
adjustment of wages in relation to increases in the consumer price index, or
CPI. The amount and frequency of these adjustments are modified from time to
time. We consider our relationship with our employees to be good and have never
experienced a labor dispute, strike or work stoppage.

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

SHARE OWNERSHIP

  SECURITY OWNERSHIP OF DIRECTORS AND SENIOR MANAGEMENT AND CERTAIN KEY
EMPLOYEES

     As of December 1, 2000, the aggregate number of our voting ordinary shares
beneficially owned by our directors, senior managers and certain key employees
was 68,369,254 shares. This number includes voting ordinary shares held by SBCI
and WCAS since affiliates of SBCI and WCAS serve on our board of directors and,
accordingly, such designees may be deemed to be the beneficial owners of the
voting ordinary shares held by such entities. Each such designee disclaims
beneficial ownership of such shares. The number also includes voting ordinary
shares held by Amdocs International Limited ("AIL"), affiliates of which were on
our board of directors at December 1, 2000 but have since resigned. See "Major
Shareholders and Related Party Transactions -- Major Shareholders".

     Beneficial ownership by a person 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

     The Option Plan provides for the grant by Amdocs of restricted shares or
stock options to our directors, employees (including officers) and consultants.
Of the 13,300,000 ordinary shares originally available for issuance under the
Option Plan, options to purchase 10,427,565 ordinary shares have been granted as
of December 1, 2000, and 2,872,435 ordinary shares remain available for future
grants. The board of directors has authorized an increase of 19,000,000 ordinary
shares to the Option Plan, subject to shareholder approval at our next general
meeting of shareholders. The purpose of the Option Plan is to enable us to
attract and retain qualified personnel and to motivate such persons by providing
them with an equity participation in the Company.

     The Option Plan provides for the granting of "incentive stock options" and
"non-qualified stock options" to purchase ordinary shares and/or the granting of
rights to purchase ordinary shares on a "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 are granted awards. The board of directors may amend or terminate the
Option Plan, provided that stockholder approval is required to increase the
number of ordinary shares available under the Option Plan, to decrease the basis
upon which the minimum exercise price of options is determined or to extend the
term of an individual option or the period in which awards may be granted.
Ordinary shares acquired upon exercise of an award are subject to certain
restrictions on sale, transfer or hypothecation.

     As of December 1, 2000, there were outstanding options to purchase an
aggregate 9,261,093 ordinary shares at exercise prices ranging from $1.92 to
$77.25 per share and no restricted shares had been awarded.

     As a result of the ITDS and Solect transactions, as of December 1, 2000, we
are obligated to issue (and have reserved for issuance) an additional 566,592
and 1,087,337 ordinary shares, respectively, upon exercise of options that had
previously been granted under the ITDS and Solect option plans. These options
vest over a period of 3.5 years and have exercise prices ranging from $0.001 to
$74.79 per share. No additional options have been or will be granted under these
plans.

                                        34
<PAGE>   36

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

     Our voting ordinary shares are owned 13.8% by AXA Financial, Inc. and its
affiliates, 10.4% by SBCI, 9.4% by Amdocs International Limited ("AIL"), a
private company beneficially owned by Morris S. Kahn and 8.4% by Welsh, Carson,
Anderson & Stowe ("WCAS"), a private investment firm, and its affiliates.

     As a result of the concentration of ownership of our voting ordinary
shares, some shareholders may be able to exercise control over matters requiring
shareholder approval, including the election of directors and approval of
significant corporate transactions. This control may have the effect of delaying
or preventing a change in control of Amdocs.

     The following table sets forth specified information with respect to the
beneficial ownership as of December 1, 2000 of any person known by us to be the
beneficial owner of more than 5% of our outstanding voting ordinary shares.

<TABLE>
<CAPTION>
                                                                 SHARES
                                                              BENEFICIALLY    PERCENTAGE
                      NAME AND ADDRESS                          OWNED(1)     OWNERSHIP(2)
                      ----------------                        ------------   ------------
<S>                                                           <C>            <C>
AXA Financial, Inc.(3)......................................   27,453,122        13.8%
  1290 Avenue of the Americas
  New York, New York 10104
SBC International Inc.(4)...................................   20,654,138        10.4%
  175 E. Houston Street
  San Antonio, Texas 78205-2233
Amdocs International Limited(5).............................   18,744,442         9.4%
  Suite 5, Tower Hill House
  Le Bordage, St. Peter Port
  Guernsey GY1 3QT
  The Channel Islands
Welsh, Carson, Anderson & Stowe(6)..........................   16,752,911         8.4%
  320 Park Avenue, Suite 2500
  New York, New York 10022
</TABLE>

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

(2) The percentages shown are based on 198,370,603 voting ordinary shares
    outstanding on December 1, 2000.

(3) Includes 26,911,722 shares held indirectly through AXA Financial's
    majority-owned subsidiary Alliance Capital Management L.P. and 541,400
    shares held indirectly through AXA Financial's wholly-owned subsidiary the
    Equitable Life Assurance Society of the United States.

(4) SBCI is a wholly-owned subsidiary of SBC, a company whose shares are
    publicly traded on the NYSE. SBCI also owns 22,864,373 non-voting ordinary
    shares, which, together with its voting ordinary shares, represent 19.7% of
    our aggregate outstanding shares as of December 1, 2000. SBCI is the only
    shareholder that holds our non-voting ordinary shares. James S. Kahan,
    Senior Executive Vice President-Corporate Development of SBC, serves on our
    board of directors.

(5) The number of shares shown as beneficially owned by AIL includes 10,000,000
    voting ordinary shares that AIL may be required to deliver to the Amdocs
    Automatic Common Exchange Security Trust (the "TRACES Trust") upon the
    exchange of Automatic Common Exchange Securities that were issued and sold
    by the TRACES Trust in June 1999. The exchange date for the Automatic Common
    Exchange Securities will occur no earlier than June 11, 2002.

                                        35
<PAGE>   37

(6) Includes 10,857,994 voting ordinary shares held by Welsh, Carson, Anderson &
    Stowe VII, L.P., 3,107,681 voting ordinary shares held by Welsh, Carson,
    Anderson & Stowe VI, L.P. and 2,787,236 voting ordinary shares held by WCAS
    Capital Partners III, L.P. Bruce K. Anderson and Robert A. Minicucci,
    principals of the various WCAS entities, serve on our board of directors and
    as Chairman of the Board and Chief Executive Officer of Amdocs, and Chief
    Financial Officer of Amdocs, respectively.

     Pursuant to a call option agreement entered into in September 1997 among
various of our shareholders as of that date, a call option was exercised in
November 1999, without the payment of any consideration, as a result of certain
revenue and cash flow targets having been met by us, which resulted in the
relative ownership of certain of our shareholders increasing or decreasing with
no change in the aggregate number of our outstanding ordinary shares.

     As of December 1, 2000, our ordinary shares were held by approximately 274
recordholders. Based on a review of the information provided to us by our
transfer agent, 180 recordholders, holding approximately 83.0% of our
outstanding ordinary shares, were residents of the United States.

RELATED PARTY TRANSACTIONS

  INVESTMENT AGREEMENTS

     In September 1997, Amdocs and affiliates of WCAS and certain other
investors (the "WCAS Investors") entered into a Share Subscription Agreement
under which the WCAS Investors acquired from us on September 22, 1997, $3.27
million principal amount of junior promissory notes and ordinary shares issued
by us representing 8.7% of our then outstanding equity for $61.2 million. On
that date, Amdocs and the WCAS Investors also entered into a Conditional
Investment Agreement, under which the WCAS Investors agreed, subject to the
satisfaction of specific revenue and cash flow targets through November 30,
1997, to acquire additional shares of Amdocs which, when added to the shares
acquired under the Share Subscription Agreement, would constitute 35.0% of our
outstanding equity as of September 22, 1997. Concurrently with the signing of
the Conditional Investment Agreement, a subsidiary of Amdocs, European Software
Marketing Ltd. ("ESM"), entered into a Note Purchase Agreement with WCAS Capital
Partners III, L.P., an investment partnership affiliated with WCAS, and several
other investors, providing for the issuance of up to $125.0 million principal
amount of 10% subordinated notes of ESM, subject to the satisfaction of the same
financial targets set forth in the Conditional Investment Agreement. In January
1998, with the financial targets having been met, ESM sold $123.5 million
principal amount of subordinated notes under the Note Purchase Agreement for a
purchase price equal to their principal amount. On March 30, 1998, we completed
the transactions contemplated by the Conditional Investment Agreement by issuing
and selling to the WCAS Investors 51,507,716 ordinary shares for $95.83 million
in cash and the surrender of the $3.27 million principal amount of junior
promissory notes issued by us in September 1997.

     Some entities in which several of our directors and executive officers and
our subsidiaries have a beneficial interest participated in the investments made
pursuant to the Share Subscription Agreement and the Conditional Investment
Agreement and acquired beneficial ownership of 2,078,336 ordinary shares for a
total investment of $4.0 million.

     The proceeds of the equity and subordinated debt investments made under the
Share Subscription Agreement, the Conditional Investment Agreement and the Note
Purchase Agreement were used, together with the proceeds of a senior bank debt
financing and internally generated funds, to acquire for $40.0 million certain
intellectual property rights from operating subsidiaries of SBC and to fund an
internal corporate reorganization. Following the reorganization, $478.7 million
in dividends were paid to our shareholders, including a total of $39.9 million
to the WCAS Investors.

  SHAREHOLDERS AGREEMENTS

     In connection with the Share Subscription Agreement and Conditional
Investment Agreement, SBCI, WCAS (on behalf of the WCAS Investors), AIL and
Amdocs, entered into a Shareholders Agreement, under

                                        36
<PAGE>   38

which these shareholders have certain rights to have their shares registered for
sale to the public under the Securities Act of 1933, as amended.

     Pursuant to separate Shareholders Agreements entered into in 1995 among
various of our shareholders as of that date, the parties thereto have, subject
to the occurrence of specified events, call and put rights with respect to
certain shares held by the parties. These rights expire ratably over time and
fully expire in 2002. The exercise of such rights will not affect the number of
our outstanding ordinary shares.

  RELATIONSHIP WITH SBC

     SBC and some of its operating subsidiaries are also significant customers
of ours. During fiscal 2000, 1999 and 1998, SBC and those subsidiaries accounted
for approximately 12.6%, 15.9% and 20.8%, respectively, of our revenue.

     In March 1999, we entered into an agreement with a subsidiary of SBC, under
which SBC has agreed that the level of support and development services that we
provide to SBC and its subsidiaries over the subsequent three years will be at
least equal to a substantial portion of the services we provided to SBC as of
such date.

  OTHER RELATIONSHIPS

     Since fiscal 1997, we have provided a CC&B Systems and related
customization and implementation services to GoldenLines Limited, a provider of
international telephone service for calls to and from Israel. SBC and Morris S.
Kahn have a significant beneficial interest in GoldenLines.

     SBC and Mr. Kahn also are the beneficial owners of a company that leases
certain office facilities and provides certain miscellaneous support services to
us in Israel.

ITEM 8.  FINANCIAL INFORMATION

FINANCIAL STATEMENTS

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

LEGAL PROCEEDINGS

     We are not involved in any material legal proceedings.

DIVIDEND POLICY

     We did not pay any cash dividends on our ordinary shares in fiscal 2000 or
1999. We paid cash dividends totaling $478.7 million, $19.3 million and $37.9
million on our ordinary shares in each of fiscal 1998, 1997 and 1996,
respectively. After the payment of the 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 our existing debt and any additional debt that may be incurred by
us may effectively limit our ability to pay dividends.

                                        37
<PAGE>   39

ITEM 9.  THE OFFER AND LISTING

     Our ordinary shares have been quoted on the NYSE since June 19, 1998, under
the symbol "DOX". The annual high and low reported sale prices for the ordinary
shares were $96.00 and $19.81, respectively, for fiscal 2000 and were $30.25 and
$8.75, respectively, for fiscal 1999. Through November 30, 2000, the high and
low reported sale prices for the ordinary shares were as follows:

<TABLE>
<CAPTION>
                                                               HIGH     LOW
                                                              ------   ------
<S>                                                           <C>      <C>
Fiscal Year ending September 30, 1998:
  Third Quarter (since June 19, 1998).......................  $16.50   $14.00
  Fourth Quarter............................................  $16.38   $ 8.19
Fiscal Year ending September 30, 1999:
  First Quarter.............................................  $17.50   $ 8.75
  Second Quarter............................................  $26.38   $13.50
  Third Quarter.............................................  $29.69   $18.38
  Fourth Quarter............................................  $30.25   $20.00
Fiscal Year ending September 30, 2000:
  First Quarter.............................................  $37.94   $19.81
  Second Quarter............................................  $96.00   $32.44
  Third Quarter.............................................  $88.75   $49.00
  Fourth Quarter............................................  $88.75   $59.38
Most recent six months:
  June, 2000................................................  $81.50   $62.50
  July, 2000................................................  $88.75   $66.13
  August, 2000..............................................  $73.38   $59.38
  September, 2000...........................................  $72.75   $60.00
  October, 2000.............................................  $67.38   $53.88
  November, 2000............................................  $73.50   $51.63
</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 and are set 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.

                                        38
<PAGE>   40

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

  PREFERRED SHARES

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

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

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

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

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

  ORDINARY SHARES AND NON-VOTING ORDINARY SHARES

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

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

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

                                        39
<PAGE>   41

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

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

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

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

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

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

     Provisions in respect of the holding of general meetings and extraordinary
general meetings are set out at Articles 14, 15 and 16 of the Articles of
Association. The Articles 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, disclose such ownership. In addition, holders of more than
5% of a registered equity security 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, and the
                                        40
<PAGE>   42

Company may by special resolution reduce its share capital, any capital
redemption reserve fund or any share premium account in accordance with Guernsey
law. These provisions in relation to the alteration of the Company's capital are
in accordance with but no more onerous than the Companies Law.

MATERIAL CONTRACTS

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

EXCHANGE CONTROLS

     Not applicable.

TAXATION

  TAXATION OF THE COMPANY

     The following is a summary of certain material tax considerations relating
to us 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 overall effective tax rate has historically been approximately 30% due
to the various corporate income tax rates in the countries in which we operate
and the relative magnitude of our activities in those countries. Our
consolidated effective tax rate (calculated based on the income taxes out of the
income before income taxes, excluding nonrecurring charges for write-offs of
purchased in-process research and development and other indirect
acquisition-related costs) for fiscal 2000 was 49%. This higher effective tax
rate was attributable to amortization of goodwill related to our acquisitions of
ITDS and Solect, much of which is not tax deductible. Excluding the impact of
the ITDS and Solect acquisition-related charges, the effective tax rate for
fiscal 2000 was 30%. 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, we 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 Cyprus Tax Considerations

     Our Cyprus subsidiary, Amdocs Development Ltd., operates a development
center. Corporations resident in Cyprus currently are subject to a maximum 25%
income tax rate. The Government of Cyprus has issued a permit to our Cyprus
subsidiary pursuant to which the activities conducted by it are deemed to be
offshore activities for the purpose of Cyprus taxation. As a result, our Cyprus
subsidiary is subject to an effective tax rate in Cyprus of 4.25%. In order for
our subsidiary to remain entitled to this reduced rate of taxation pursuant to
the permit, it must continue to satisfy certain requirements concerning its
operations in Cyprus and it must undertake certain information reporting
obligations to the Government of Cyprus.

                                        41
<PAGE>   43

  Certain Irish Tax Considerations

     Our Irish subsidiary, Amdocs Software Systems Ltd., operates a development
center. The corporation tax rate on its trading activities is 24% for 2000 and
will decline to 20% in 2001 and to 16% in 2002, and finally 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 is subject to a corporation tax rate in Ireland of 10% with respect
to its manufacturing activities. This tax rate on manufacturing activities will
be available to our Irish subsidiary until December 31, 2002. As of January 1,
2003, our Irish subsidiary will be subject to a single corporation tax rate of
12.5% on all of its trading and manufacturing activities.

  Certain Israeli Tax Considerations

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

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

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

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

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

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

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

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

     Such income is eligible for further reductions in tax rates if we qualify
as a Foreign Investors' Company ("FIC") depending on the percentage of the
foreign ownership. Subject to certain conditions, an FIC is a company more than
25% of whose share capital (in terms of shares, rights of profits, voting and
appointment of directors) and more than 25% of whose combined share and loan
capital is 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
                                        42
<PAGE>   44

upon the geographic location within Israel. On expiration of the tax holiday,
the Approved Enterprise is eligible for a beneficial tax rate (25% or lower in
the case of an FIC, as described above) for the remainder of the otherwise
applicable period of benefits.

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

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

  Dividends

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

  TAXATION OF HOLDERS OF ORDINARY SHARES

  Certain United States Federal Income Tax Considerations

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

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

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

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

                                        43
<PAGE>   45

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

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

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

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

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

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

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

                                        44
<PAGE>   46

  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.

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

CURRENCY FLUCTUATIONS

     Approximately 89% of our revenue is in dollars or linked to the dollar and
therefore the dollar is our functional currency. Approximately 58% of our
operating expenses are paid in dollars or are linked to dollars. Other
significant currencies in which we receive revenue or pay expenses are
Australian dollars, British pounds, Canadian dollars, the European Monetary
Union currency ("euro") and Israeli shekels. Historically, the effect of
fluctuations in currency exchange rates has had a minimal impact on our
operations. As we expand our operations outside of the United States, our
exposure to fluctuations in currency exchange rates could increase. In managing
our foreign exchange risk, we enter from time to time into various foreign
exchange contracts. As of September 30, 2000, we had hedged most of our
significant exposures in currencies other than the dollar.

                                        45
<PAGE>   47

FOREIGN CURRENCY RISK

     We enter into foreign exchange forward contracts to hedge some 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 and anticipated costs to be incurred in a foreign currency. We seek to
minimize the risk that the fair value of sales of our products and services and
cash flow required for our expenses denominated in a currency other than our
functional currency, the dollar, will be affected by changes in exchange rates.
See Note 20 to our Consolidated Financial Statements included elsewhere in this
report. The following table summarizes our foreign currency forward exchange
agreements as of September 30, 2000. The table (all dollar amounts in millions)
presents the notional amounts, weighted average exchange rates by expected
(contractual) maturity dates, and fair value of the total derivative instruments
as of September 30, 2000. Notional values and average contract rates are
calculated based on forward rates as of September 30, 2000, dollar translated.

<TABLE>
<CAPTION>
                                                                                       AS OF
                                             FOR THE YEAR ENDED SEPTEMBER 30,    SEPTEMBER 30, 2000
                                             ---------------------------------     FAIR VALUE OF
                                               2001        2002        2003          DERIVATIVE
                                             ---------   ---------   ---------   ------------------
<S>                                          <C>         <C>         <C>         <C>
Forward contracts to sell foreign currency in dollars:
British Pounds
  Notional value...........................   $ 19.35          --          --         $ (1.10)
  Average contract rate....................      1.57          --          --              --
Canadian Dollars
  Notional value...........................   $  1.96     $  6.37          --         $ (0.17)
  Average contract rate....................      1.46        1.46          --              --
Euro (Deutsche Marks)
  Notional value...........................   $  0.18          --          --              (*)
  Average contract rate....................      2.19          --          --              --
Forward contracts to buy foreign currency for dollars:
Australian Dollars
  Notional value...........................   $ 11.54     $  6.00     $  4.70         $  3.05
  Average contract rate....................      0.61        0.65        0.65              --
Israeli Shekels
  Notional value...........................   $196.70          --          --         $ (4.79)
  Average contract rate....................      4.15          --          --              --
</TABLE>

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

     (*)  Less than $100,000

INTEREST RATE RISK

     Our interest expenses and income are sensitive to changes in interest
rates, as all of our cash reserves and borrowings 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
United States governmental securities and commercial paper and currently bear
minimal interest rate risk. As of September 30, 2000, we had approximately $20.0
million outstanding on our revolving line of credit and short-term credit
agreements and $32.1 million recorded as long-term lease obligations, which in
the aggregate bear minimal interest rate risk.

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.

                                        46
<PAGE>   48

                                    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

                                    PART III

ITEM 17.  FINANCIAL STATEMENTS

     Not applicable.

ITEM 18.  FINANCIAL STATEMENTS

FINANCIAL STATEMENTS AND SCHEDULE

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

     FINANCIAL STATEMENTS

        Report of Independent Auditors

        Consolidated Balance Sheets as of September 30, 2000 and 1999

        Consolidated Statements of Operations for the years ended September 30,
        2000, 1999 and 1998

        Consolidated Statements of Changes in Shareholders' Equity (Deficit) for
        the years ended September 30, 2000, 1999 and 1998

        Consolidated Statements of Cash Flows for the years ended September 30,
        2000, 1999 and 1998

        Notes to Consolidated Financial Statements

     FINANCIAL STATEMENT SCHEDULE

        Valuation and Qualifying Accounts

ITEM 19.  EXHIBITS

<TABLE>
<S>        <C>
*1.        Memorandum and Articles of Association of Amdocs Limited
           (Exhibits 3.1 and 3.2 to Amdocs' Registration Statement on
           Form F-1 dated June 19, 1998; Registration No. 333-8826)
*3.        Voting and Exchange Trust Agreement dated as of April 5,
           2000 among Amdocs Limited, Amdocs (Denmark) ApS., Amdocs
           Holdings ULC, Solect Technology Group Inc. and The Trust
           Company of Bank of Montreal
*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. (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 (Exhibit 2.1 to
           Amdocs' Current Report on Form 6-K dated March 3, 2000)
*8.        Subsidiaries of Amdocs Limited
 10.a.1    Consent of Ernst & Young LLP
</TABLE>

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

* Previously filed.

                                        47
<PAGE>   49

                                   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: April 3, 2001
<PAGE>   50
               INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULE

<TABLE>
<CAPTION>
<S>                                                                          <C>
Financial Statements

     Report of Independent Auditors......................................... F-2

     Consolidated Balance Sheets as of September 30, 2000 and 1999.......... F-3

     Consolidated Statements of Operations for the years ended
     September 30, 2000, 1999 and 1998...................................... F-4

     Consolidated Statements of Changes in Shareholders' Equity (Deficit)
     for the years ended September 30, 2000, 1999 and 1998.................. F-5

     Consolidated Statements of Cash Flows for the years ended
     September 30, 2000, 1999 and 1998...................................... F-6

     Notes to Consolidated Financial Statements............................. F-8

Financial Statement Schedule

     Valuation and Qualifying Accounts...................................... S-1
</TABLE>



                                      F-1
<PAGE>   51

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders
Amdocs Limited

     We have audited the accompanying consolidated balance sheets of Amdocs
Limited as of September 30, 2000 and 1999, and the related statements of
operations, changes in stockholders' equity (deficit) and cash flows for each of
the three years in the period ended September 30, 2000. Our audits also included
the financial statement schedule listed in the index at Item 18. These financial
statements and the financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and the financial statement schedule based on our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Amdocs Limited
at September 30, 2000 and 1999, and the consolidated results of its operations
and its cash flows for each of the three years in the period ended September 30,
2000, in conformity with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.

Ernst & Young LLP

St. Louis, Missouri
November 2, 2000

                                      F-2
<PAGE>   52

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

<TABLE>
<CAPTION>
                                                                   AS OF SEPTEMBER 30,
                                                              -----------------------------
                                                                 2000               1999
                                                              ----------         ----------
<S>                                                           <C>                <C>
                                          ASSETS
Current assets:
  Cash and cash equivalents.................................  $  402,300         $   85,174
  Accounts receivable, including unbilled of $4,203 and
     $4,243, less allowances of $6,868 and $0, in 2000 and
     1999, respectively(*)..................................     263,100            159,312
  Deferred income taxes and taxes receivable................      35,179             29,899
  Prepaid expenses and other current assets.................      34,327             16,390
                                                              ----------         ----------
          Total current assets..............................     734,906            290,775
Equipment, vehicles and leasehold improvements, net.........     128,081             83,997
Deferred income taxes.......................................      13,900              5,605
Goodwill and other intangible assets, net...................   1,011,053             22,798
Other noncurrent assets.....................................      47,145             26,836
                                                              ----------         ----------
          Total assets......................................  $1,935,085         $  430,011
                                                              ==========         ==========
                           LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued expenses.....................  $  128,249         $   68,594
  Accrued personnel costs...................................      70,196             40,092
  Short-term financing arrangements.........................      20,000              2,381
  Deferred revenue..........................................     133,546            104,688
  Short-term portion of capital lease obligations...........       8,713              5,722
  Deferred income taxes and taxes payable...................      55,197             33,412
                                                              ----------         ----------
          Total current liabilities.........................     415,901            254,889
Long-term portion of capital lease obligations..............      23,417             17,148
Deferred income taxes.......................................      11,191                 --
Other noncurrent liabilities................................      53,804             34,237
                                                              ----------         ----------
          Total liabilities.................................     504,313            306,274
                                                              ----------         ----------
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; 221,165 and 198,800 outstanding in 2000 and
     1999, respectively.....................................       3,539              3,181
  Additional paid-in capital................................   1,784,816            489,099
  Accumulated other comprehensive income (loss).............       1,159             (1,157)
  Unearned compensation.....................................      (1,164)            (3,830)
  Accumulated deficit.......................................    (357,578)          (363,556)
                                                              ----------         ----------
          Total shareholders' equity........................   1,430,772            123,737
                                                              ----------         ----------
          Total liabilities and shareholders' equity........  $1,935,085         $  430,011
                                                              ==========         ==========
</TABLE>

---------------
(*) See Note 4.

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

                                      F-3
<PAGE>   53

                                 AMDOCS LIMITED

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

<TABLE>
<CAPTION>
                                                                  YEAR ENDED SEPTEMBER 30,
                                                              --------------------------------
                                                                 2000        1999       1998
                                                              ----------   --------   --------
<S>                                                           <C>          <C>        <C>
Revenue:
     License(*).............................................  $  124,822   $ 74,387   $ 42,891
     Service(*).............................................     993,498    552,468    360,876
                                                              ----------   --------   --------
                                                               1,118,320    626,855    403,767
                                                              ----------   --------   --------
Operating expenses:
     Cost of license........................................       5,624      5,515     10,732
     Cost of service(*).....................................     639,900    357,809    231,360
     Research and development...............................      74,852     40,874     25,612
     Selling, general and administrative(*).................     137,004     75,659     51,168
     Amortization of goodwill and purchased intangible
       assets...............................................     111,199         --         --
     In-process research and development and other indirect
       acquisition-related costs............................      75,617         --         --
                                                              ----------   --------   --------
                                                               1,044,196    479,857    318,872
                                                              ----------   --------   --------
Operating income............................................      74,124    146,998     84,895
Other income (expense), net(*)..............................      10,734     (6,223)   (24,126)
                                                              ----------   --------   --------
Income before income taxes and cumulative effect............      84,858    140,775     60,769
Income taxes................................................      78,880     42,232     30,385
                                                              ----------   --------   --------
Income before cumulative effect.............................       5,978     98,543     30,384
Cumulative effect of change in accounting principle, net of
  $0, $0 and $277 tax, respectively.........................          --         --        277
                                                              ----------   --------   --------
          Net income........................................  $    5,978   $ 98,543   $ 30,107
                                                              ==========   ========   ========
Basic earnings per share:
  Income before cumulative effect...........................  $     0.03   $   0.50   $   0.19
  Cumulative effect of change in accounting principle ($0,
     $0 and less than $0.01, respectively)..................          --         --         --
                                                              ----------   --------   --------
          Net earnings per share............................  $     0.03   $   0.50   $   0.19
                                                              ==========   ========   ========
Diluted earnings per share:
  Income before cumulative effect...........................  $     0.03   $   0.49   $   0.19
  Cumulative effect of change in accounting principle ($0,
     $0 and less than $0.01, respectively)..................          --         --         --
                                                              ----------   --------   --------
          Net earnings per share............................  $     0.03   $   0.49   $   0.19
                                                              ==========   ========   ========
Basic weighted average number of shares outstanding.........     212,005    197,436    158,528
                                                              ==========   ========   ========
Diluted weighted average number of shares outstanding.......     216,935    200,262    159,442
                                                              ==========   ========   ========
</TABLE>

---------------
(*) See Note 4.

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

                                      F-4
<PAGE>   54

                                 AMDOCS LIMITED

      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                 ACCUMULATED
                                                                    OTHER                                        TOTAL
                                ORDINARY SHARES    ADDITIONAL   COMPREHENSIVE                                SHAREHOLDERS'
                                ----------------    PAID-IN        INCOME         UNEARNED     ACCUMULATED      EQUITY
                                SHARES    AMOUNT    CAPITAL        (LOSS)       COMPENSATION     DEFICIT       (DEFICIT)
                                -------   ------   ----------   -------------   ------------   -----------   -------------
<S>                             <C>       <C>      <C>          <C>             <C>            <C>           <C>
BALANCE AS OF OCTOBER 1,
  1997........................  124,708   $1,996   $  105,779      $    --        $     --      $ (13,522)    $   94,253
Net income....................       --      --            --           --              --         30,107         30,107
Unrealized loss on derivative
  instruments, net of $640
  tax.........................       --      --            --       (1,495)             --             --         (1,495)
Dividends declared, $3.76 per
  share.......................       --      --            --           --              --       (478,684)      (478,684)
Issuance of Ordinary Shares,
  net.........................   54,092     865        97,583           --              --             --         98,448
Initial public offering of
  Ordinary Shares, net........   18,000     288       233,902           --              --             --        234,190
Stock options granted, net of
  forfeitures.................       --      --        10,239           --         (10,239)            --             --
Amortization of unearned
  compensation................       --      --            --           --           1,292             --          1,292
                                -------   ------   ----------      -------        --------      ---------     ----------
BALANCE AS OF SEPTEMBER 30,
  1998........................  196,800   3,149       447,503       (1,495)         (8,947)      (462,099)       (21,889)
Net income....................       --      --            --           --              --         98,543         98,543
Unrealized income on
  derivative instruments, net
  of $145 tax.................       --      --            --          338              --             --            338
Issuance of Ordinary Shares,
  net.........................    2,000      32        41,352           --              --             --         41,384
Stock options granted, net of
  forfeitures.................       --      --           244           --            (163)            --             81
Amortization of unearned
  compensation................       --      --            --           --           5,280             --          5,280
                                -------   ------   ----------      -------        --------      ---------     ----------
BALANCE AS OF SEPTEMBER 30,
  1999........................  198,800   3,181       489,099       (1,157)         (3,830)      (363,556)       123,737
Net income....................       --      --            --           --              --          5,978          5,978
Employee stock options
  exercised...................    2,058      33        21,327           --              --             --         21,360
Tax benefit of stock options
  exercised...................       --      --        10,825           --              --             --         10,825
Unrealized other comprehensive
  income, net of $993 tax.....       --      --            --        2,316              --             --          2,316
Issuance of Ordinary Shares
  related to acquisitions,
  net.........................   20,307     325     1,263,330           --              --             --      1,263,655
Stock options granted.........       --      --           235           --              --             --            235
Amortization of unearned
  compensation................       --      --            --           --           2,666             --          2,666
                                -------   ------   ----------      -------        --------      ---------     ----------
BALANCE AS OF SEPTEMBER 30,
  2000........................  221,165   $3,539   $1,784,816      $ 1,159        $ (1,164)     $(357,578)    $1,430,772
                                =======   ======   ==========      =======        ========      =========     ==========
</TABLE>

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

                                      F-5
<PAGE>   55

                                 AMDOCS LIMITED

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED SEPTEMBER 30,
                                                             ---------------------------------
                                                               2000        1999        1998
                                                             ---------   ---------   ---------
<S>                                                          <C>         <C>         <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income.................................................  $   5,978   $  98,543   $  30,107
Reconciliation of net income to net cash provided by
  operating activities:
  Depreciation and amortization............................    155,359      30,601      29,096
  In-process research and development expenses.............     70,319          --          --
  Loss on sale of equipment................................        148         549         149
  Deferred income taxes....................................     (1,196)     (4,026)     (1,351)
  Tax benefit of stock options exercised...................     10,825          --          --
  Unrealized income (loss) on other comprehensive income...      3,309         483      (2,135)
Net changes in operating assets and liabilities:
  Accounts receivable......................................    (29,763)    (69,354)    (26,000)
  Prepaid expenses and other current assets................    (12,408)     (4,400)     (5,244)
  Other noncurrent assets..................................    (10,861)    (10,350)     (3,324)
  Accounts payable and accrued expenses....................     38,852      22,893      29,054
  Deferred revenue.........................................     24,313      75,448      11,800
  Income taxes payable.....................................     16,071       2,177      (1,429)
  Other noncurrent liabilities.............................     16,642       9,739       5,760
                                                             ---------   ---------   ---------
Net cash provided by operating activities..................    287,588     152,303      66,483
                                                             ---------   ---------   ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment, vehicles and leasehold
  improvements.............................................      1,280       1,461         889
Payments for purchase of equipment, vehicles and leasehold
  improvements.............................................    (56,571)    (42,180)    (26,566)
Investment in noncurrent assets............................     (9,000)         --          --
Net cash acquired in acquisitions..........................     67,791          --          --
Purchase of computer software and intellectual property....     (6,169)     (1,000)         --
                                                             ---------   ---------   ---------
Net cash used in investing activities......................     (2,669)    (41,719)    (25,677)
                                                             ---------   ---------   ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Dividends paid.............................................         --          --    (478,684)
Net proceeds from issuance of Ordinary Shares..............         --      42,535     330,638
Proceeds from employee stock options exercised.............     21,360          --          --
Payments under short-term finance arrangements.............   (284,464)   (395,345)   (269,946)
Borrowings under short-term finance arrangements...........    301,933     306,161     358,862
Net proceeds from issuance of long-term debt...............         --          --     364,127
Principal payments on long-term debt.......................         --          --    (368,521)
Principal payments on capital lease obligations............     (6,622)     (4,150)     (2,357)
Payments on issuance of notes payable......................         --          --      (3,268)
                                                             ---------   ---------   ---------
Net cash provided by (used in) financing activities........     32,207     (50,799)    (69,149)
                                                             ---------   ---------   ---------
Net increase (decrease) in cash and cash equivalents.......    317,126      59,785     (28,343)
Cash and cash equivalents at beginning of year.............     85,174      25,389      53,732
                                                             ---------   ---------   ---------
Cash and cash equivalents at end of year...................  $ 402,300   $  85,174   $  25,389
                                                             =========   =========   =========
</TABLE>

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

                                      F-6
<PAGE>   56
                                 AMDOCS LIMITED

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               YEAR ENDED SEPTEMBER 30,
                                                              ---------------------------
                                                               2000      1999      1998
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
SUPPLEMENTARY CASH FLOW INFORMATION
Interest and Income Taxes Paid
  Cash paid for:
     Income taxes, net of refunds...........................  $49,262   $38,369   $32,472
     Interest...............................................    2,614     6,393    25,150
</TABLE>

NON CASH INVESTING AND FINANCING ACTIVITIES

     Capital lease obligations of $15,732, $14,853 and $5,200 were incurred
during the years ended September 30, 2000, 1999 and 1998, respectively, when the
Company (as hereinafter defined) entered into lease agreements for vehicles.

     As of September 30, 1999, the Company incurred stock issuance costs of
$1,153, which had not been paid as of that date. Such costs were paid during
fiscal year 2000.

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

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

                                      F-7
<PAGE>   57

                                 AMDOCS LIMITED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1 -- NATURE OF ENTITY

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

     The Company is a Guernsey corporation, which holds directly or indirectly
several wholly-owned subsidiaries in the Asia-Pacific region, Australia, Europe,
Israel, Latin America and North America. The Company's customers are mainly in
North America, Europe, Latin America and the Asia-Pacific region. During fiscal
2000, the Company derived approximately 46 percent of its revenue from North
America. The Company's main production and operating facilities are located in
Israel, the United States, Cyprus, Ireland and Canada.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  BASIS OF PRESENTATION

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

  CONSOLIDATION

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

  FUNCTIONAL CURRENCY

     The U.S. dollar is the functional currency for the Company and its
subsidiaries, as the U.S. dollar is the predominant currency of the Company's
revenue and expenses.

  CASH AND CASH EQUIVALENTS

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

  INVESTMENTS

     From time to time the Company invests in short-term interest-bearing
investments. The Company classifies all of its short-term interest-bearing
investments as available-for-sale securities. Such short-term interest-bearing
investments consist primarily of United States governmental securities and
commercial paper, 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 other comprehensive income in
shareholders' equity. Realized gains and losses on short-term interest-bearing
investments are included in earnings and are derived using the specific
identification method for determining the cost of securities. Except for its
cash and cash equivalents, the Company has no short-term interest-bearing
investments as of September 30, 2000.

     The Company also has certain investments in non-publicly traded companies.
These investments are included in other noncurrent assets in the Company's
balance sheet and are generally carried at cost. The Company monitors these
investments for impairment and will make appropriate reductions in carrying
values if necessary. There were no impairment charges in fiscal 2000.

                                      F-8

<PAGE>   58
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

  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 12 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 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.

     The Company accounts for certain costs incurred in connection with
developing or obtaining software for internal use in accordance with Statement
of Position (SOP) 98-1, "Accounting for the Costs of Computer Software Developed
for or Obtained for Internal-Use". SOP 98-1 requires the capitalization of
certain costs incurred in connection with developing or obtaining software for
internal use.

  GOODWILL AND OTHER INTANGIBLE ASSETS

     The total purchase price of product line or business acquisitions accounted
for using the purchase method is allocated first to identifiable assets and
liabilities based on estimated fair values. The excess of the purchase price
over the fair value of net assets of purchased businesses is recorded as
goodwill. Goodwill is amortized on a straight-line basis over its estimated
useful life.

     Other intangible assets consist of purchased computer software,
intellectual property rights, core technology, workforce-in-place and customer
base.

     Purchased computer software is reported at the lower of amortized cost or
net realizable value, and is amortized over its estimated useful life based on
the ratio of the current gross revenue for each product to the total current and
anticipated future gross revenue for each product. This accounting policy
results in amortization of purchased computer software on a basis faster than
the straight-line method.

     Intellectual property rights, core technology, workforce-in-place and
customer base acquired by the Company are amortized over their estimated useful
lives on a straight-line basis.

     Periodically, the Company considers whether there are indicators of
impairment that would require the evaluation of the net realizable value of
goodwill and other intangible assets in comparison to their carrying value. Any
impairment would be recognized when the expected future operating cash flows
derived from such intangible assets is less than their carrying value.

  STOCK SPLIT

     In May 1998, the Board of Directors of the Company authorized a stock split
that was effected as a dividend of Ordinary Shares. All references in the
consolidated financial statements referring to shares, per share amounts and
contingently issuable shares have been adjusted retroactively for the stock
split.

  COMPREHENSIVE INCOME

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

                                      F-9
<PAGE>   59
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (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 purposes and for 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 business
acquisitions is subsequently reduced, the adjustment may 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

     The Company's software products require significant customization and
therefore the development projects are recognized as long term contracts in
conformity with Accounting Research Bulletin (ARB) No. 45 "Long Term
Construction Type Contracts", SOP 81-1 "Accounting for Performance of
Construction Type and Certain Production Type Contracts" and SOP 97-2 "Software
Revenue Recognition". Initial license fee revenue is recognized as work is
performed, under the percentage of completion method of accounting. Subsequent
license fee revenue is recognized upon completion of the specified conditions in
each contract. Service revenue that involves significant ongoing obligations,
including fees for customization, implementation and initial support services,
is recognized as work is performed, under the percentage of completion method of
accounting. In outsourcing contracts, revenue from operation and maintenance of
customers' billing systems is recognized in the period in which the bills are
produced. Revenue from ongoing support is recognized as work is performed.
Revenue from third-party hardware and software sales is recognized upon
delivery, and recorded at gross or net amount according to the criterions
established in Emerging Issues Task Force (EITF) 99-19 "Recording Revenue Gross
as a Principal versus Net as an Agent" and Staff Accounting Bulletins (SAB) 101
"Revenue Recognition in Financial Statements". Maintenance revenue is recognized
ratably over the term of the maintenance agreement, which in most cases is one
year or less. Losses are recognized on contracts in the period in which the
liability is identified. As a result of its percentage of completion accounting
policies, 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.

     Deferred revenue represents billings to customers for licenses, services
and third-party products for which revenue has not been recognized.

     Included in service revenue are sales of third-party products. Revenue from
sales of such products includes third-party computer hardware and computer
software products and was less than 10 percent of total revenue in fiscal 2000,
1999 and 1998.

  COST OF LICENSE AND COST OF SERVICE

     Cost of license and service consists of all costs associated with providing
services to customers, including warranty expense. 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-10
<PAGE>   60
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

     Included in cost of service are costs of third-party products associated
with reselling third-party computer hardware and computer software products to
customers, when revenue from third-party products is recognized at 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 product development program.
Research and development costs, which are in conjunction with a customer
project, are expensed as incurred. Certain computer software costs are
capitalized in accordance with SFAS No. 86, "Accounting for the Costs of
Computer Software to be Sold, Leased or Otherwise Marketed", which requires
capitalization of software development costs subsequent to the establishment of
technological feasibility.

     Based on the Company's product development process, technological
feasibility is established upon completion of a detailed program design or, in
the absence thereof, completion of a working model. Costs incurred by the
Company after achieving technological feasibility and before the product is
ready for customer release have been insignificant.

  STOCK-BASED COMPENSATION

     The Company accounts for stock-based compensation in accordance with
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees". Pursuant to this accounting standard, the Company records
deferred compensation for share options granted to employees at the date of
grant based on the difference between the exercise price of the options and the
market value of the underlying shares at that date. Deferred compensation is
amortized to compensation expense over the vesting period of the underlying
options. No compensation expense is recorded for stock options that are granted
to employees and directors at an exercise price equal to the fair market value
of the Ordinary Shares at the time of the grant. See Note 17 for pro forma
disclosures required in accordance with SFAS No. 123, "Accounting for
Stock-Based Compensation".

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

  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The financial instruments of the Company consist mainly of cash and cash
equivalents, short-term interest-bearing investments, accounts receivable,
short-term financing arrangements, forward exchange contracts and lease
obligations. In view of their nature, the fair value of the financial
instruments included in the accounts of the Company does not significantly vary
from their carrying amount. The fair values of the Company's foreign currency
exchange contracts are estimated based on quoted market prices of comparable
contracts.

  CONCENTRATION OF CREDIT RISK

     Financial instruments that potentially subject the Company to concentration
of credit risk consist principally of trade receivables. The Company invests its
excess cash primarily in highly liquid U.S. dollar-denominated securities with
major U.S. and U.K. institutions. The Company does not expect any credit losses

                                      F-11
<PAGE>   61
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

in respect of these items. The Company's revenue is generated primarily in North
America and Europe and to a lesser extent 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 performs
ongoing credit analyses of its customer base and generally does not require
collateral.

  EARNINGS PER SHARE

     The Company accounts for earnings per share based on SFAS No. 128 "Earnings
per Share". SFAS No. 128 requires companies to compute earnings per share under
two different methods, basic and diluted earnings per share, and to disclose the
methodology used for the calculations. Basic earnings per share is 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 the dilutive outstanding stock
options using the treasury stock method.

  DERIVATIVES AND HEDGING

     Effective July 1, 1998, the Company adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133 requires the
Company to recognize all derivatives on the balance sheet at fair value. If the
derivative meets the definition of a hedge and is so designated, depending on
the nature of the hedge, changes in the fair value of derivatives 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. The adoption of
SFAS No. 133 on July 1, 1998 did not have a material impact on results of
operations but resulted in the cumulative effect of change in accounting
principle of $277, net of tax in 1998.

  RECLASSIFICATIONS

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

  USE OF ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. The Company's most significant estimates are related to contract
accounting estimates used to recognize revenue under the percentage of
completion method of accounting. Actual results could differ from those
estimates.

NOTE 3 -- ACQUISITIONS

  ITDS

     On November 30, 1999, the Company completed a stock-for-stock acquisition
transaction of International Telecommunication Data Systems, Inc. ("ITDS"), a
leading provider of solutions to communications companies for outsourcing of
billing operations. The total purchase price of $189,034, based on a per share
price of $28.25 for the Company's Ordinary Shares, included issuance of 6,461
Ordinary Shares, the grant of 1,103 options and transaction costs. The
acquisition was accounted for using the purchase method of accounting. The fair
market value of ITDS' assets and liabilities has been included in the Company's
balance sheet as of the acquisition date. The results of ITDS' operations are
included in the Company's consolidated

                                      F-12
<PAGE>   62
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

statement of operations, commencing December 1, 1999. An acquired technology
valuation, which was independently determined, included both existing technology
and in-process research and development. The valuation of these technologies was
made by applying the income forecast method, which considered the present value
of cash flows by product lines. The fair value of core technology was valued at
$12,342 and is being amortized over five years. Purchased in-process research
and development, valued at $19,876, was charged as an expense immediately
following the completion of the acquisition since this technology had not
reached technological feasibility and had no alternative use. This technology
required additional development, coding and testing efforts before technological
feasibility could be determined. The fair value of customer base was valued at
$647 and the fair value of workforce-in-place was valued at $5,407, each of
which is being amortized over five years. The excess of the purchase price over
the fair value of the net assets acquired, or goodwill, of $71,154 is being
amortized over 15 years.

  SOLECT

     On April 5, 2000, the Company completed a stock-for-stock acquisition
transaction of Solect Technology Group Inc. ("Solect"), a leading provider of
customer care and billing software to IP service providers. Under the terms of
the combination agreement, all then outstanding Solect common shares were
exchanged for shares of a newly issued class of exchangeable shares of Solect.
The Solect exchangeable shares entitle holders to dividends and other rights
economically equivalent to the Company's Ordinary Shares, including the right,
through a voting trust, to vote at the Company's shareholder meetings, and are
exchangeable at the option of holders into the Company's Ordinary Shares on a
one-for-one basis. The total purchase price of $1,087,711, based on a per share
price of $69.875 for the Company's Ordinary Shares, included both the issuance
of 13,846 exchangeable shares, the grant of options to purchase 1,654 Ordinary
Shares, as well as transaction costs. An aggregate 1,170 of the exchangeable
shares issued in the transaction have been placed in escrow until April 2001 to
indemnify the Company against any breaches of representations or warranties
under the combination agreement. The acquisition was accounted for using the
purchase method of accounting. The fair market value of Solect's assets and
liabilities has been included in the Company's balance sheet as of the
acquisition date. The results of Solect's operations are included in the
Company's consolidated statement of operations, commencing April 6, 2000. An
acquired technology valuation, which was independently determined, included both
existing technology and in-process research and development. The valuation of
these technologies was made by applying the income forecast method, which
considered the present value of cash flows by product lines. The fair value of
core technology was valued at $18,259 and is being amortized over two years.
Purchased in-process research and development, valued at $50,443, was charged as
an expense immediately following the completion of the acquisition since this
technology had not reached technological feasibility and had no alternative use.
This technology required varying additional development, coding and testing
efforts before technological feasibility could be determined. The fair value of
customer base was valued at $1,211 and the fair value of workforce-in-place was
valued at $3,259, each of which is being amortized over three years. The excess
of the purchase price over the fair value of net assets acquired, or goodwill,
of $986,312 is being amortized over five years.

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

                                      F-13
<PAGE>   63
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                        YEAR ENDED SEPTEMBER 30,
                                                   -----------------------------------
                                                      2000         1999        1998
                                                   ----------    --------    ---------
<S>                                                <C>           <C>         <C>
Revenue..........................................  $1,152,783    $775,653    $ 500,554
Operating income (loss)..........................      41,516     (43,744)    (134,543)
Net loss.........................................     (25,516)    (97,933)    (161,239)
Basic loss per share.............................       (0.12)      (0.45)       (1.03)
Diluted loss per share...........................       (0.12)      (0.45)       (1.03)
</TABLE>

NOTE 4 -- RELATED PARTY TRANSACTIONS

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

<TABLE>
<CAPTION>
                                                           AS OF SEPTEMBER 30,
                                                           --------------------
                                                             2000        1999
                                                           --------    --------
<S>                                                        <C>         <C>
Accounts receivable, including unbilled of $0 and $828 in
  2000 and 1999, respectively............................  $27,116     $14,128
</TABLE>

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

<TABLE>
<CAPTION>
                                                                 YEAR ENDED SEPTEMBER 30,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------    -------    -------
<S>                                                           <C>         <C>        <C>
Revenue(1):
  License...................................................  $ 15,888    $   743    $ 2,300
  Service...................................................   144,859     98,761     82,100
Operating expenses(2):
  Cost of service...........................................     2,814      2,656      2,325
  Selling, general and administrative.......................       700        570        510
Other income (expense), net(3)..............................        --         --     (6,268)
</TABLE>

---------------
(1) The Company licenses software and provides computer systems integration and
    related services to several affiliates of a significant shareholder of the
    Company (the "Affiliates").

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

(3) On September 22, 1997, the Company issued junior subordinated notes payable
    in the aggregate amount of $3,268 to certain persons affiliated with the
    investors party to the Share Subscription Agreement referred to in Note 16.
    The notes bore an interest rate of 5.75 percent per annum and were
    originally due September 22, 1998. The notes were paid in March 1998. In
    January 1998, the Company issued $123,500 in principal amount of 10 percent
    subordinated notes to affiliates of certain shareholders, which were party
    to the Conditional Investment Agreement referred to in Note 16. The
    subordinated notes were repaid in 1998.

NOTE 5 -- COMPENSATING BALANCES

     The Company was required to maintain compensating cash balances of $4,777
and $2,791 as of September 30, 2000 and 1999, respectively, primarily relating
to foreign currency contracts, letters of credit and bank guarantees.

                                      F-14
<PAGE>   64
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 6 -- EQUIPMENT, VEHICLES AND LEASEHOLD IMPROVEMENTS, NET

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

<TABLE>
<CAPTION>
                                                          AS OF SEPTEMBER 30,
                                                          -------------------
                                                            2000       1999
                                                          --------    -------
<S>                                                       <C>         <C>
Furniture and fixtures..................................  $ 24,297    $14,009
Computer equipment......................................   110,583     67,416
Vehicles furnished to employees.........................    44,766     31,541
Leasehold improvements..................................    30,593     19,315
                                                          --------    -------
                                                           210,239    132,281
Less accumulated depreciation...........................    82,158     48,284
                                                          --------    -------
                                                          $128,081    $83,997
                                                          ========    =======
</TABLE>

     The Company has entered into various arrangements for the leasing of
vehicles for periods of five years, carrying interest rates of LIBOR plus an
interest rate of 0.5 percent (7.3 percent as of September 30, 2000). The Company
has accounted for these as capital leases and amortization costs have been
included in depreciation expense. Capital lease payments, excluding interest,
due over the next five years are as follows:

<TABLE>
<S>                                           <C>
2001........................................  $8,713
2002........................................   8,068
2003........................................   7,368
2004........................................   5,234
2005........................................   2,747
</TABLE>

NOTE 7 -- GOODWILL AND OTHER INTANGIBLE ASSETS, NET

     Goodwill and other intangible assets, net are:

<TABLE>
<CAPTION>
                                              ESTIMATED      AS OF SEPTEMBER 30,
                                             USEFUL LIFE    ---------------------
                                             (IN YEARS)        2000        1999
                                             -----------    ----------    -------
<S>                                          <C>            <C>           <C>
Goodwill...................................      5 - 15     $1,057,466    $    --
Intellectual property rights and purchased
  computer software........................      2 - 10         74,107     39,200
Other intangible assets....................      3 -  5         12,403         --
                                                            ----------    -------
                                                             1,143,976     39,200
Less accumulated amortization..............                    132,923     16,402
                                                            ----------    -------
                                                            $1,011,053    $22,798
                                                            ==========    =======
</TABLE>

                                      F-15
<PAGE>   65
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 8 -- OTHER NONCURRENT ASSETS

     Other noncurrent assets consist of the following:

<TABLE>
<CAPTION>
                                                           AS OF SEPTEMBER 30,
                                                           --------------------
                                                             2000        1999
                                                           --------    --------
<S>                                                        <C>         <C>
Funded personnel benefit costs.........................    $25,913     $18,264
Noncurrent investments, at cost........................      9,250          --
Other..................................................     11,982       8,572
                                                           -------     -------
                                                           $47,145     $26,836
                                                           =======     =======
</TABLE>

NOTE 9 -- INCOME TAXES

     The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                  YEAR ENDED SEPTEMBER 30,
                                                -----------------------------
                                                 2000       1999       1998
                                                -------    -------    -------
<S>                                             <C>        <C>        <C>
Current.....................................    $80,076    $46,258    $31,736
Deferred....................................     (1,196)    (4,026)    (1,351)
                                                -------    -------    -------
                                                $78,880    $42,232    $30,385
                                                =======    =======    =======
</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,
                                                           --------------------
                                                             2000        1999
                                                           --------    --------
<S>                                                        <C>         <C>
Deferred tax assets:
  Deferred revenue.......................................  $19,560     $21,021
  Accrued personnel costs................................   15,733       8,184
  Computer software and intellectual property............    3,496          --
  Warranty and maintenance accruals......................       --         195
  Net operating loss carry forwards......................   18,713          --
  Other..................................................    5,685       4,947
  Valuation allowances...................................  (16,743)         --
                                                           -------     -------
  Total deferred tax assets..............................   46,444      34,347
                                                           -------     -------
Deferred tax liabilities:
  Anticipated withholdings on subsidiaries' earnings.....  (17,391)    (14,033)
  Intangible assets, computer software and intellectual
     property............................................  (11,191)     (2,071)
  Other..................................................     (500)         --
                                                           -------     -------
  Total deferred tax liabilities.........................  (29,082)    (16,104)
                                                           -------     -------
Net deferred tax assets..................................  $17,362     $18,243
                                                           =======     =======
</TABLE>

                                      F-16
<PAGE>   66
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

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

<TABLE>
<CAPTION>
                                                               YEAR ENDED
                                                             SEPTEMBER 30,
                                                          --------------------
                                                          2000    1999    1998
                                                          ----    ----    ----
<S>                                                       <C>     <C>     <C>
Statutory Guernsey tax rate.............................   20%     20%     20%
Guernsey tax-exempt status..............................  (20)    (20)    (20)
Foreign taxes...........................................   30      30      50
Effect of acquisition-related costs.....................   19      --      --
                                                          ---     ---     ---
Effective income tax rate...............................   49%     30%     50%
                                                          ===     ===     ===
</TABLE>

     In fiscal 2000, the Company incurred certain non-tax deductible indirect
acquisition- related costs and non deductible goodwill amortization related to
the acquisitions of ITDS and Solect. As a result, the Company's effective income
tax rate in 2000 (calculated based on the income taxes out of the income before
income taxes, excluding non recurring charges for write-offs of purchased
in-process research and development and other indirect acquisition-related
costs) is significantly higher than the 1999 effective income tax rate.

     In fiscal 1998, the Company incurred tax expense on the income of its
operations in various countries and sustained a loss in a tax jurisdiction in
which the Company is tax-exempt. This resulted in no tax benefit to offset the
expense incurred. No such loss occurred in 1999 or 2000 and, as a result, the
Company's effective income tax rate in 1998 was significantly higher than the
1999 effective income tax rate.

     The Company's Israeli subsidiary, which accounted for approximately 34%,
36% and 34% for 2000, 1999 and 1998, respectively, of the Company's income
before income taxes, enjoys tax benefits from Approved Enterprise status, as
established under Israeli law. The benefits from this status began phasing out
in 1999. However, the effect on the 1999 and 2000 effective income tax rate on
the Company is not significant.

     As of September 30, 2000, the Company had $41,900 of Canadian net operating
loss carry-forwards, most of which were acquired in the Solect transaction. The
net operating loss carry-forwards will expire within 5-10 years. Given the
uncertainty of the realization of these assets through future taxable earnings,
a valuation allowance of $16,743 has been recorded.

NOTE 10 -- SHORT-TERM FINANCING ARRANGEMENTS

     The Company's financing transactions are described below:

     In December 1997, the Company entered into various credit agreements (the
"Credit Agreements") with several commercial banks. According to an amendment to
the Credit Agreements (the "Revolving Credit Agreement") entered into in July
1998, the Company may borrow up to $100,000 under a revolving line of credit.
This agreement expires in June 2001. The revolving line of credit bears a
variable interest rate (7.3 percent as of September 30, 2000). The Revolving
Credit Agreement has various covenants, that limit the Company's ability to make
investments, incur debt, pay dividends and dispose of property. The Company is
also required to maintain certain financial ratios as defined in the Revolving
Credit Agreement. Except for vehicles, substantially all of the Company's assets
have been pledged as security under the terms of the Revolving Credit Agreement.
As of September 30, 2000, the outstanding balance under this arrangement was
$20,000.

     According to an agreement with several commercial banks the Company may
borrow up to $40,000 under a short-term credit line. The short-term credit line
bears a variable interest rate. As of September 30, 2000, there was no
outstanding balance.

                                      F-17
<PAGE>   67
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

     As of September 30, 2000, the Company had utilized approximately $19,295 of
revolving credit facilities to support letters of credit or bank guarantees.

     The maximum amount of short-term borrowings under the revolving bank credit
arrangements at the end of any month was approximately $31,700 in 2000 and
$97,300 in 1999. The average short-term borrowings during the year were
approximately $13,300 in 2000 and $63,500 in 1999. The weighted average interest
rates approximated 7.0 percent in 2000, 6.0 percent in 1999 and 6.4 percent in
1998.

NOTE 11 -- OTHER NONCURRENT LIABILITIES

     Other noncurrent liabilities consist of the following:

<TABLE>
<CAPTION>
                                                           AS OF SEPTEMBER 30,
                                                           --------------------
                                                             2000        1999
                                                           --------    --------
<S>                                                        <C>         <C>
Accrued personnel costs..................................  $49,313     $32,441
Long term forward exchange obligations...................    2,987         231
Other....................................................    1,504       1,565
                                                           -------     -------
                                                           $53,804     $34,237
                                                           =======     =======
</TABLE>

NOTE 12 -- COMPREHENSIVE INCOME

     The following table sets forth the reconciliation from net income to
comprehensive income:

<TABLE>
<CAPTION>
                                                   YEAR ENDED SEPTEMBER 30,
                                                 ----------------------------
                                                  2000      1999       1998
                                                 ------    -------    -------
<S>                                              <C>       <C>        <C>
Net income.....................................  $5,978    $98,543    $30,107
Other comprehensive income:
  Unrealized income (loss) on derivative
     instruments, net of tax...................   2,333        338     (1,495)
  Unrealized income on cash equivalents, net of
     tax.......................................     (17)        --         --
                                                 ------    -------    -------
Comprehensive income...........................  $8,294    $98,881    $28,612
                                                 ======    =======    =======
</TABLE>

NOTE 13 -- OTHER INCOME (EXPENSE), NET

     Other income (expense), net consists of the following:

<TABLE>
<CAPTION>
                                                  YEAR ENDED SEPTEMBER 30,
                                               ------------------------------
                                                2000       1999        1998
                                               -------    -------    --------
<S>                                            <C>        <C>        <C>
Interest income..............................  $14,274    $ 1,680    $  3,445
Interest expense.............................   (2,528)    (5,654)    (24,267)
Interest expense relating to settlement of
  tax claims.................................       --         --        (680)
Other, net...................................   (1,012)    (2,249)     (2,624)
                                               -------    -------    --------
                                               $10,734    $(6,223)   $(24,126)
                                               =======    =======    ========
</TABLE>

                                      F-18
<PAGE>   68
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 14 -- COMMITMENTS

     The Company leases office space under non-cancelable operating leases in
various countries in which it does business. Future minimum lease payments
required for the five-year period beginning October 1, 2000 are as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED SEPTEMBER 30,
---------------------------------
<S>                                         <C>
2001......................................  $ 27,100
2002......................................    27,000
2003......................................    22,800
2004......................................    19,100
2005......................................    17,300
                                            --------
                                            $113,300
                                            ========
</TABLE>

     Rent expense was approximately $20,400, $12,600 and $8,000 for 2000, 1999
and 1998, respectively.

NOTE 15 -- 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 other noncurrent liabilities, is partially
funded by amounts on deposit with insurance companies, which are included in
other noncurrent assets. Severance pay expenses were approximately $17,614,
$9,200 and $7,100 for 2000, 1999 and 1998, respectively.

     The Company sponsors defined contribution plans covering substantially all
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 2000, 1999 and 1998 plan contributions were not significant.

NOTE 16 -- CAPITAL TRANSACTIONS

     The following are details of the Ordinary Shares outstanding:

<TABLE>
<CAPTION>
                                                           AS OF SEPTEMBER 30,
                                                           --------------------
                                                             2000        1999
                                                           --------    --------
<S>                                                        <C>         <C>
Voting Ordinary Shares...................................  198,029     174,590
Non-Voting Ordinary Shares...............................   23,136      24,210
                                                           -------     -------
                                                           221,165     198,800
                                                           =======     =======
</TABLE>

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

     The Company's capital transactions are described below:

     On September 22, 1997, the Company entered into a Share Subscription
Agreement, under which 11,072 Ordinary Shares and 990 voting shares (Voting
Shares) and $3,268 principal amount of junior promissory notes were issued to
certain investors. These notes were repaid in March 1998. Also, on September 22,
1997, the Company entered into a Conditional Investment Agreement whereby such
investors were to be obligated to purchase 51,508 Ordinary Shares of the Company
in second quarter 1998 for approximately $99,000, if the

                                      F-19
<PAGE>   69
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

Company achieved certain financial performance targets. In addition, the Company
entered into a note purchase agreement with certain affiliates of the investors
to issue, at its election, up to $125,000 of subordinated notes.

     In January 1998, the Company issued 36 additional Voting Shares at par
value, which were redeemed in May 1998, as discussed below, and issued 2,584
contingently issuable Ordinary Shares, which were paid in advance in the amount
of $2,000 pursuant to a 1995 Stock Subscription Agreements with certain
shareholders.

     In January 1998, the Company's Board of Directors declared dividends of
$478,684, which were paid at that time. The dividends were financed by the
proceeds of the Credit Agreements and subordinated notes from affiliates of
certain shareholders, and surplus working capital.

     In March 1998, the Company issued 51,508 Ordinary Shares according to the
Conditional Investment Agreement discussed above. The net proceeds to the
Company after the deduction of transaction costs amounted to $96,448.

     In May 1998, in contemplation of the Company's initial public offering, the
Board of Directors took the following actions: (i) redeemed the outstanding
Voting Shares at the par value thereof; (ii) amended the terms of the Ordinary
Shares to create two classes: voting and non-voting; (iii) authorized 25,000
Preferred Shares, 500,000 Ordinary Shares and 50,000 Non-Voting Ordinary Shares;
and (iv) declared a stock split of 52-for-1 for each Ordinary Share outstanding.
The rights of the two classes of Ordinary Shares are identical except as to
voting rights. After the initial public offering, all of the outstanding
Non-Voting Ordinary Shares have been held by one existing shareholder of the
Company. All references to the number of shares and earnings per share have been
restated to reflect the stock split and the redemption of Voting Ordinary Shares
has been given retroactive effect.

     On June 19, 1998, the Company conducted an initial public offering on the
New York Stock Exchange of 18,000 Ordinary Shares. Total net proceeds to the
Company, after deduction of offering expenses and underwriting commissions,
amounted to $234,190.

     On June 7, 1999, the Company and certain shareholders of the Company
completed a public offering pursuant to which the Company sold 2,000 Ordinary
Shares. The net proceeds to the Company, after deduction of underwriting
discounts and offering expenses, amounted to $41,384.

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

     Total proceeds from the exercise of employee stock options amounted to
$21,360 in fiscal 2000.

NOTE 17 -- STOCK OPTION AND INCENTIVE PLAN

     In January 1998, the Company adopted, and in January 1999 and January 2000
the Company amended, the Amdocs Limited 1998 Stock Option and Incentive Plan, as
amended ("the Plan"). Under the provisions of the Plan, 13,300 Ordinary Shares
are available to be granted to officers, directors, employees and consultants.
Such options fully vest over two to nine years and have a term of ten years.

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

                                      F-20
<PAGE>   70
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

     The following table summarizes information about share options, as well as
changes during the years ended September 30, 2000, 1999 and 1998:

<TABLE>
<CAPTION>
                                                      NUMBER OF       WEIGHTED
                                                        SHARE         AVERAGE
                                                       OPTIONS     EXERCISE PRICE
                                                      ---------    --------------
<S>                                                   <C>          <C>
Outstanding as of October 1, 1997...................        --         $   --
Granted.............................................   3,527.4           3.93
Exercised...........................................        --             --
Forfeited...........................................      (7.8)          1.92
                                                      --------         ------
Outstanding as of September 30, 1998................   3,519.6           3.93
Granted.............................................   2,752.6          21.67
Exercised...........................................        --             --
Forfeited...........................................     (35.3)          6.23
                                                      --------         ------
Outstanding as of September 30, 1999................   6,236.9          11.75
Granted.............................................   4,948.7          52.82
Options exchanged in acquisitions...................   2,756.7          18.24
Exercised...........................................  (2,057.5)         10.38
Forfeited...........................................    (656.7)         30.11
                                                      --------         ------
Outstanding as of September 30, 2000................  11,228.1         $30.62
                                                      ========         ======
</TABLE>

     The following table summarizes information about share options outstanding
as of September 30, 2000:

<TABLE>
<CAPTION>
                                                                            EXERCISABLE AS OF
               OUTSTANDING AS OF SEPTEMBER 30, 2000                         SEPTEMBER 30, 2000
-------------------------------------------------------------------   ------------------------------
                                   WEIGHTED
                                    AVERAGE
                                   REMAINING
                   NUMBER      CONTRACTUAL LIFE    WEIGHTED AVERAGE     NUMBER      WEIGHTED AVERAGE
EXERCISE PRICE   OUTSTANDING      (IN YEARS)        EXERCISE PRICE    EXERCISABLE    EXERCISE PRICE
--------------   -----------   -----------------   ----------------   -----------   ----------------
<S>              <C>           <C>                 <C>                <C>           <C>
$    0 -  3.01     2,384.4            7.68              $ 1.92           640.7           $ 1.85
  8.75 - 16.75     1,659.3            8.22               11.39           261.5             9.27
 18.70 - 28.05     1,990.5            8.72               23.56            88.3            24.37
 28.06 - 37.40     1,452.3            9.15               33.63            20.1            31.63
 37.41 - 46.74       205.9            7.10               41.39           125.9            41.74
 53.19 - 65.44     2,678.5            9.74               59.09            44.8            64.32
 65.45 - 77.25       857.2            9.51               70.82           100.3            71.96
</TABLE>

     The following table summarizes information about share options outstanding
as of September 30, 1999:

<TABLE>
<CAPTION>
                                                                            EXERCISABLE AS OF
               OUTSTANDING AS OF SEPTEMBER 30, 1999                         SEPTEMBER 30, 1999
-------------------------------------------------------------------   ------------------------------
                                   WEIGHTED
                                    AVERAGE
                                   REMAINING
                   NUMBER      CONTRACTUAL LIFE    WEIGHTED AVERAGE     NUMBER      WEIGHTED AVERAGE
EXERCISE PRICE   OUTSTANDING      (IN YEARS)        EXERCISE PRICE    EXERCISABLE    EXERCISE PRICE
--------------   -----------   -----------------   ----------------   -----------   ----------------
<S>              <C>           <C>                 <C>                <C>           <C>
    $1.92         2,492.6             8.27              $ 1.92              --           $  --
  8.75 - 16.75    1,613.4             9.08               11.62          166.75            9.08
 21.90 - 23.63    2,130.9             9.82               23.34              --              --
</TABLE>


                                      F-21
<PAGE>   71
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

     The weighted average grant-date fair value of the 4,948.7 and 2,752.6
options granted amounted to $35.71 and $13.92 for 2000 and 1999, respectively,
per option. The Company utilized the Black-Scholes option-pricing model to
estimate fair value, utilizing the following assumptions for the year (all in
weighted averages):

<TABLE>
<CAPTION>
                                                       YEAR ENDED SEPTEMBER 30,
                                                      --------------------------
                                                       2000      1999      1998
                                                      ------    ------    ------
<S>                                                   <C>       <C>       <C>
Risk-free interest rate.............................   5.75%     5.31%     5.24%
Expected life of options............................   9.51       7.3       7.1
Expected annual volatility..........................  1.086     0.550     0.945
Expected dividend yield.............................   None      None      None
</TABLE>

     Had compensation cost for the Company's options been determined based on
fair value at the grant dates for awards made in 2000, 1999 and 1998 in
accordance with SFAS 123, the Company's pro forma net income (loss) and earnings
(loss) per share would have been as follows:

<TABLE>
<CAPTION>
                                                  YEAR ENDED SEPTEMBER 30,
                                               ------------------------------
                                                 2000       1999       1998
                                               --------    -------    -------
<S>                                            <C>         <C>        <C>
Pro forma net income (loss)..................  $(23,022)   $92,624    $29,463
Pro forma diluted earnings (loss) per
  share......................................     (0.11)      0.46       0.18
</TABLE>

NOTE 18 -- EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                                         YEAR ENDED SEPTEMBER 30,
                                                     --------------------------------
                                                       2000        1999        1998
                                                     --------    --------    --------
<S>                                                  <C>         <C>         <C>
Numerator:
  Income before cumulative effect..................  $  5,978    $ 98,543    $ 30,384
                                                     ========    ========    ========
Denominator:
  Denominator for basic earnings per
     share -- weighted average number of shares
     outstanding(*)................................   212,005     197,436     158,528
  Effect of dilutive stock options granted.........     4,930       2,826         914
                                                     --------    --------    --------
  Denominator for dilutive earnings per
     share -- adjusted weighted average shares and
     assumed conversions(*)........................   216,935     200,262     159,442
                                                     ========    ========    ========
Basic earnings per share...........................  $   0.03    $   0.50    $   0.19
                                                     ========    ========    ========
Diluted earnings per share.........................  $   0.03    $   0.49    $   0.19
                                                     ========    ========    ========
</TABLE>

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

     (*)  The weighted average number of shares outstanding includes the Solect
          exchangeable shares.

NOTE 19 -- SEGMENT INFORMATION AND SALES TO SIGNIFICANT CUSTOMERS

  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.

                                      F-22
<PAGE>   72
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                 YEAR ENDED SEPTEMBER 30,
                                            ----------------------------------
                                               2000         1999        1998
                                            ----------    --------    --------
<S>                                         <C>           <C>         <C>
REVENUE
North America.............................  $  510,129    $226,387    $210,867
Europe....................................     474,300     261,726     109,752
Australia.................................      51,093      61,237      33,215
Other.....................................      82,798      77,505      49,933
                                            ----------    --------    --------
  Total...................................  $1,118,320    $626,855    $403,767
                                            ==========    ========    ========
LONG-LIVED ASSETS
North America(*)..........................  $1,041,383    $ 35,228    $ 30,441
Israel(**)................................      85,518      61,472      38,917
Other.....................................      33,466      18,772       7,378
                                            ----------    --------    --------
                                            $1,160,367    $115,472    $ 76,736
                                            ==========    ========    ========
</TABLE>

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

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

        (**) Primarily computers and vehicles.

  REVENUE AND CUSTOMER INFORMATION

     Customer Care, Billing and Order Management systems ("CC&B Systems")
include systems for wireline, wireless, broadband, 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,
                                            ----------------------------------
                                               2000         1999        1998
                                            ----------    --------    --------
<S>                                         <C>           <C>         <C>
CC&B Systems..............................  $  986,553    $468,216    $251,829
Directory.................................     131,767     158,639     151,938
                                            ----------    --------    --------
  Total...................................  $1,118,320    $626,855    $403,767
                                            ==========    ========    ========
</TABLE>

  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,
                                                          --------------------
                                                          2000    1999    1998
                                                          ----    ----    ----
<S>                                                       <C>     <C>     <C>
Customer 1..............................................   14%     (*)%    (*)%
Customer 2..............................................   13      16      21
Customer 3..............................................   (*)     (*)     16
</TABLE>

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

(*) less than 10 percent of total revenue

NOTE 20 -- FINANCIAL INSTRUMENTS

     The Company enters into forward contracts to sell foreign currency in order
to hedge its exposure associated with most firm commitments from customers in
non-U.S. dollar-based currencies and treats these

                                      F-23
<PAGE>   73
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

for accounting purposes as fair value hedges. The Company also enters into
forward contracts in foreign currency to reduce the exposure associated with
estimated receipts from customers and with liabilities (primarily personnel
costs), in non-U.S. dollar-based currencies and treats these as cash flow
hedges. The derivative financial instruments are afforded hedge accounting
because they are effective in managing foreign exchange risks and are
appropriately assigned to the underlying exposures. The Company does not engage
in currency speculation. Generally, the Company measures the differential
between forward rates and spot rates on forward exchange contracts as the
inherent ineffectiveness of a hedging arrangement. Accordingly, changes in the
fair value of forward exchange contracts, which are classified as fair value
hedges, offset the change in the fair value of the hedged item to the extent of
the arrangement's effectiveness. The effective portion of the change in the fair
value of forward exchange contracts, which are classified as cash flow hedges,
is recorded as comprehensive income until the underlying transaction is
recognized in earnings.

     The following table describes forward contracts outstanding:

<TABLE>
<CAPTION>
                                                         AS OF SEPTEMBER 30,
                                                         --------------------
                                                           2000        1999
                                                         --------    --------
<S>                                                      <C>         <C>
Contracts treated as fair value hedges for the sale of:
  British pounds.......................................  $ 19,346    $ 24,567
  Canadian dollars.....................................     8,332      11,394
  Austrian schillings..................................        --      10,779
  Japanese yen.........................................        --         770
  Other currencies.....................................       178       4,658
                                                         --------    --------
                                                         $ 27,856    $ 52,168
                                                         ========    ========
Contracts treated as cash flow hedges for the purchase
  of:
  Israeli shekels......................................  $196,700    $145,000
  Australian dollars...................................    22,240      31,655
                                                         --------    --------
                                                         $218,940    $176,655
                                                         ========    ========
</TABLE>

     The fair values of the forward derivatives were $3,016 and $(3,412) on
September 30, 2000 and 1999, respectively. The Company currently enters into
forward exchange contracts exclusively with major financial institutions.

                                      F-24
<PAGE>   74
                                 AMDOCS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 21 -- 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>
2000
Revenue........................................    $315,067      $297,002   $270,745      $235,506
Operating income (loss)........................      20,955       (39,806)    60,115        32,860
Net income (loss)..............................      12,993       (67,159)    42,863        17,281
Basic earnings (loss) per share................        0.06         (0.31)      0.21          0.09
Diluted earnings (loss) per share..............        0.06         (0.31)      0.20          0.08
1999
Revenue........................................    $182,716      $164,884   $147,830      $131,425
Operating income...............................      43,430        37,782     35,625        30,161
Net income.....................................      29,839        25,421     23,141        20,142
Basic and diluted earnings per share...........        0.15          0.13       0.12          0.10
1998
Revenue........................................    $116,704      $106,497   $ 94,008      $ 86,558
Operating income...............................      26,104        22,821     19,125        16,845
Net income.....................................      11,598         6,443      4,105         7,961
Basic and diluted earnings per share...........        0.06          0.04       0.03          0.06
</TABLE>

     The fiscal quarters ended December 31, 1999 and June 30, 2000 include
purchased in-process research and development and other indirect
acquisition-related costs of $19,876 and $55,741, respectively.

                                      F-25
<PAGE>   75
                                 AMDOCS LIMITED

                          FINANCIAL STATEMENT SCHEDULE

                       VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>

                                                                         ADDITIONS
                                                                --------------------------
                                             BALANCE AT         CHARGED TO      CHARGED TO                      BALANCE
                                            BEGINNING OF        COSTS AND         OTHER                          AT END
DESCRIPTION                                    PERIOD            EXPENSES        ACCOUNTS        DEDUCTIONS     OF PERIOD
-----------                                 ------------        ----------      -----------      ----------     ---------
<S>                                         <C>                 <C>             <C>               <C>            <C>
Allowances for doubtful debts ...........            --            1,844              5,024(*)           --        6,868
Valuation allowances ....................            --            2,411             14,332(**)          --       16,743

--------------
(*)  Allowances for doubtful debts that we acquired as part of our acquisition of ITDS.

(**) Valuation allowance related to accumulated tax benefit from losses we acquired as part of
     our acquisition of Solect.

</TABLE>

                                      S-1
<PAGE>   76

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<C>       <S>
*1.       Memorandum and Articles of Association of Amdocs Limited
          (Exhibits 3.1 and 3.2 to Amdocs' Registration Statement on
          Form F-1 dated June 19, 1998; Registration No. 333-8826)
*3.       Voting and Exchange Trust Agreement dated as of April 5,
          2000 among Amdocs Limited, Amdocs (Denmark) ApS., Amdocs
          Holdings ULC, Solect Technology Group Inc. and The Trust
          Company of Bank of Montreal
*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. (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 (Exhibit 2.1 to
          Amdocs' Current Report on Form 6-K dated March 3, 2000)
*8.       Subsidiaries of Amdocs Limited
10.a.1    Consent of Ernst & Young LLP
</TABLE>

---------------
* Previously filed.