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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934
For the Fiscal Year Ended December 31, 1999
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 No.: 0-9233
AMERICAN MANAGEMENT SYSTEMS, INCORPORATED
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware I.R.S. Employer
Identification No.: 54-0856778
4050 Legato Road
Fairfax, Virginia 22033
(Address of principal executive office)
Registrant's Telephone No., Including Area Code: (703) 267-8000
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock
Par Value $0.01
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ____
The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 24, 2000 was $1,734,198,977.
As of March 24, 2000, 41,533,071 shares of common stock were outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
1. Pursuant to Form 10-K General Instruction G(2), registrant hereby
incorporates by reference those portions of the American Management Systems,
Incorporated 1999 Financial Report necessary to respond to items 5, 6, 7, 7A and
8 of this Form 10-K.
2. Pursuant to Form 10-K General Instruction G(3), registrant hereby
incorporates by reference those portions of the American Management Systems,
Incorporated definitive Proxy Statement for the Annual Meeting of Shareholders
to be held May 12, 2000 necessary to respond to items 10, 11, 12, and 13 of this
Form 10-K.
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CONTENTS
Page
----
Part I Item 1. Business..................................................................... 1
Item 2. Properties................................................................... 4
Item 3. Legal Proceedings............................................................ 5
Item 4. Submission of Matters to a Vote of Security Holders.......................... 5
Part II Item 5. Market for the Registrant's Common Stock
and Related Stockholder Matters.............................................. 6
Item 6. Selected Financial Data...................................................... 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................................... 6
Item 7A. Quantitative and Qualitative Disclosures About Market Risk................... 6
Item 8. Financial Statements and Supplementary Data.................................. 6
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure....................................... 6
Part III Item 10. Directors and Executive Officers of the Registrant........................... 8
Item 11. Executive Compensation....................................................... 8
Item 12. Security Ownership of Certain Beneficial Owners
and Management............................................................... 8
Item 13. Certain Relationships and Related Transactions............................... 8
Part IV Item 14. Exhibits, Financial Statements and Schedules,
and Reports on Form 8-K...................................................... 9
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PART I
ITEM 1. BUSINESS
OVERVIEW
The business of American Management Systems, Incorporated and its
wholly-owned subsidiaries ("AMS" or the "Company") is to partner with clients to
achieve breakthrough performance through the intelligent use of information
technology. AMS is the premier provider of Next Generation Enterprise business
and technology solutions that dramatically improve business performance and
create value for our clients. AMS provides a full range of consulting services
from strategic business analysis to the full implementation of solutions that
produce genuine results, on time and within budget. AMS's suite of eBusiness
strategy, management and technology services makes business reinvention possible
in Internet time for large organizations. AMS measures success based on the
results and business benefits achieved by its clients.
AMS is a trusted business partner for many of the largest and most
respected organizations in the markets in which it specializes. AMS is a company
that transforms organizations into Next Generation Enterprises. A key element of
this is establishing an extensive network of strategic alliances, partnerships
and joint ventures to provide "best of breed" solutions and to extend AMS's
market reach in all of the Company's target markets. Further, the Company is
establishing organizations with different business models to leverage the
Company's assets in new ways and create additional market value. Each year,
approximately 85-90% of the Company's business comes from clients it worked with
in previous years.
The Company, which operates as one segment, focuses on clients in
specific sectors which are referred to as target markets. The Company is
targeting high value sectors within these target markets and striving to be the
market leader in providing Next Generation Enterprise solutions. Organizations
in AMS's target markets -- telecommunications firms; financial services
institutions; state and local governments and education organizations; federal
government agencies; and other corporate clients -- have a crucial need to
exploit the potential benefits of information and systems integration
technology. The Company helps clients fulfill this need by continuing to build a
professional staff which is composed of experts in the necessary technical and
functional disciplines; managers who can lead large, complex systems integration
projects; and business and computer analysts who can devise creative solutions
to complex problems. The Company is focused on accelerating international
growth, and the Company is investing in establishing a strong AMS brand and
identity to support the growth.
Another significant component of AMS's business is the development of
proprietary software products, either with its own funds or on a jointly funded
basis with other organizations. These products are principally licensed as
elements of custom tailored systems, and, to a lesser extent, as stand-alone
applications. The Company expended $102.3 million in 1999, $77.4 million in
1998, and $50.6 million in 1997 for development associated with proprietary
software. The Company expensed in the accompanying consolidated financial
statements $47.1 million in 1999, $35.4 million in 1998, and $30.7 million in
1997 for research and development associated with proprietary software,
including amortization. In 1999, the Company reduced the unamortized costs by
$21.8 million representing collections from funding partners, compared to $14.8
million in 1998. As a percentage of revenues, license and maintenance fee
revenues were less than 10% during each of the last three years.
As part of its growth strategy the Company has formed a cross-target
market practice that will focus on delivering high-value, customer-facing Web
solutions - including eBill, eCare and eMarketing - tailored to clients in the
financial services, telecommunications, government and utilities sectors. These
solutions will help firms achieve greater cost savings, deliver improved
customer service
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and leverage cross-sell and up-sell opportunities in their markets. The new
"eCustomer" practice builds upon the Company's existing, significant eCommerce
client base. In 1999, the Company expanded its direct eBusiness revenue to
approximately $117 million and its eBusiness related revenue to more than $500
million, both increases of more than 150%. Given the rapidly evolving digital
economy and the critical role of eBusiness, AMS has begun to implement a
strategy that clearly positions the Company for success in this fast changing
environment. The vision driving the strategy is to be the premier provider of
Next Generation Enterprise business and technology solutions that dramatically
improve business performance. AMS will provide leading edge eBusiness services
and solutions to transform both private and public organizations into Next
Generation Enterprises - organizations fully utilizing emerging technologies to
succeed in the digital economy.
In order to serve clients outside of the United States, AMS has
expanded internationally by establishing subsidiaries or foreign branches.
Exhibit 21 of this Form 10-K provides a complete listing of all twenty-one
active AMS subsidiaries (and branches), showing name, year organized or
acquired, and place of incorporation. Revenues attributable to AMS's non-US
clients were approximately $226.7 million in 1999, $208.4 million in 1998, and
$248.6 million in 1997. Additional information on revenues and assets
attributable to AMS's geographic areas of operation is provided in Note 12 of
the consolidated financial statements appearing in Exhibit 13 of this Form 10-K.
Founded in 1970, AMS services clients worldwide. AMS's approximately
9,000 employees serve clients from corporate headquarters in Fairfax, Virginia
and from 59 offices worldwide.
TELECOMMUNICATIONS FIRMS
AMS markets systems consulting and integration services for order
processing, customer care, billing, accounts receivable, and collections, both
for local exchange and interexchange carriers and for cellular/wireless
telephone companies. Much of the Company's work involves developing and
implementing customized capabilities using AMS's application software products
as a foundation.
FINANCIAL SERVICES INSTITUTIONS
AMS provides information technology consulting and systems integration
services to money center banks, major regional banks, insurance companies, and
other large financial services firms. The Company specializes in corporate and
international banking, consumer credit management, customer value and global
risk management, bank management information systems, and retirement plan
systems.
STATE AND LOCAL GOVERNMENTS AND EDUCATION
AMS markets systems consulting and integration services, and
application software products, to state, county, and municipal governments for
financial management, tax and revenue management, human resources, social
services, public safety and transportation functions, and environmental systems.
The Company also markets services and application software products to
universities and colleges.
FEDERAL GOVERNMENT AGENCIES
The Company's clients include civilian and defense agencies and
aerospace companies. Assignments require knowledge of agency programs and
management practices as well as expertise in computer systems integration.
Services provided by AMS include information technology, consulting, operations
and maintenance support, large scale systems integration and certain Year 2000
remediation. AMS's work for defense agencies often involves specialized
expertise in engineering and logistics.
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OTHER CORPORATE CLIENTS
The Company also solves information systems problems for the largest
firms in other industries, including health care organizations and firms in the
gas and electric utilities industry. AMS has systems integration and operations
projects with several large organizations and intends to pursue more. AMS
provides technical training and technical consulting services in software
technology for large-scale business systems.
PEOPLE
People are AMS's most important asset and its success depends on its
ability to attract, retain and motivate well-qualified people. The Company's
largest investment in recent years has been in recruiting, assimilating, and
developing its people.
AMS recruited and successfully assimilated approximately 2,300 new
staff members in 1999, including 475 in Europe. About 35% of the new staff
members came from the Company's college and university recruiting program.
AMS recruits individuals for a career and hires a balanced mix of
recent university graduates and experienced professionals who have demonstrated
extraordinary technical, analytical, and/or management skills. A large number
have advanced degrees in management, computer science, public policy, or
engineering.
Individuals are assigned to one of the Company's market-oriented groups
to develop expertise in the areas needed for solving its clients' problems.
Transfers between these groups occur regularly to meet the shifting needs of
clients. Performance, in terms of productivity, quality of work, and creativity
in solving problems, determines an individual's advancement. This motivates
staff members to increase their knowledge of AMS's clients' businesses and
industries, to stay current with the technology most suited to AMS's clients,
and to develop the consulting and managerial skills needed to produce results.
The Company launched a strategic initiative in 1998 to implement a more
integrated, structured career and leadership development program. To drive this
program the Company established "AMS University" as the focal point for expanded
training and development activities. By linking learning resources directly to
the skills required to perform key roles that drive the business, and by
structuring a development program that includes required as well as elective
courses, the Company believes it can accelerate the development of individual
capabilities and the overall capacity of the Company to take full advantage of
market opportunities.
COMPETITIVE FACTORS
AMS's competition comes primarily from the management services units of
large public accounting firms and consulting and systems integration firms. In
addition, prospective clients may decide to perform projects with their in-house
staff.
AMS seeks to meet this competition by exploiting its industry-specific
knowledge, its expertise with important business functions and with new
technologies, its proprietary computer application products, and its experience
in managing very large design and implementation projects. Although price is
always a factor in clients' decisions, it is typically not the major factor.
Other important factors are proven experience, the capabilities of the proposed
computer application products, the quality of the proposed staff, and the
proposed completion time for the project.
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AMS is significantly expanding its systems integration capabilities by
augmenting its delivery expertise and establishing key alliances and
partnerships with "best-of-breed" software providers. Combining this expanded
delivery capability with AMS's thought leadership consulting provides major
market growth opportunities.
MARKETING, CONTRACTS, AND SIGNIFICANT CUSTOMERS
Marketing is performed principally by the senior staff (executive
officers, vice presidents, senior principals, and principals) and by a
relatively small number of full-time salespersons for each large market. In the
U.S. Government markets, AMS replies selectively to requests for proposals,
concentrating on those closely related to previous work done for the same or
similar customers. Certain of the Company's software products and computer
services are sold by a small group of full-time salespersons and, for those
products and services, AMS advertises in trade publications and exhibits at
industry conventions.
For large systems integration projects, AMS typically contracts for one
phase (design, development, or implementation) at a time. Many contracts may be
canceled by the customer on short notice with appropriate compensation to the
Company for actual work performed. Most contracts with federal government
agencies allow for termination for the convenience of the government and for an
annual audit. No contracts are subject to renegotiation at the client's option.
AMS generally contracts either on the basis of reimbursement of costs plus a
fixed fee, a fixed or ceiling price for each phase, unit rates for time and
materials used, or services sold at unit prices. In most cases, AMS receives
monthly or milestone progress payments.
In 1999, the Company worked on projects directly for 112 U.S.
Government clients, representing a total of $288.2 million, or 23% of revenues.
No other customer accounted for 10% or more of revenues in 1999.
ITEM 2. PROPERTIES
Headquartered in Fairfax, Virginia, the Company's principal operations
occupy approximately 1,208,000 square feet of office space under leases expiring
through 2011. The Company also has other long-term lease commitments totaling
approximately 606,000 square feet with varying expirations through 2011 at other
locations throughout the United States.
Additionally, the Company's international staff occupies approximately
255,000 square feet of office space outside of the U.S. at locations under
leases expiring through 2006.
With regard to its operating environment, the Company maintains and
operates a large- and mid-range computing environment at the AMS Data Center in
Fairfax, Virginia. In addition to physical and data security, the AMS Data
Center facilities include conditioned power, A/C, UPS, and fire suppression. The
Company leases its computing equipment including mainframe processors, small and
mid-size servers, and communications equipment.
The Company believes its facilities and equipment continue to be
adequate for its business as currently conducted.
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ITEM 3. LEGAL PROCEEDINGS
As previously described in the Company's Forms 10-Q filed May 17, 1999,
August 13, 1999 and November 15, 1999, the State of Mississippi sued AMS in
April 1999, alleging claims for breach of contract, bad faith breach of
contract, and unjust enrichment, and seeks various forms of injunctive relief as
well as compensatory damages. On May 24, 1999, AMS filed an answer and
counterclaim for payment for certain deliverables accepted by the State,
including work in progress. Discovery continues and is expected to be completed
by the second quarter of 2000. AMS expects to continue to contest the lawsuit
vigorously.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
the fourth quarter of 1999.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Market information for the Company's common stock contained in the
Company's 1999 Financial Report is incorporated herein by reference in
accordance with General Instruction G(2) of Form 10-K.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data contained in the Company's 1999 Financial
Report is incorporated herein by reference in accordance with General
Instruction G(2) of Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and results
of operations contained in the Company's 1999 Financial Report are incorporated
herein by reference in accordance with General Instruction G(2) of Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The information set forth on pages 12-14 of the Company's 1999
Financial Report, under the captions "Foreign Currency Hedging" and "Notes
Payable and Capitalized Lease Obligations," is incorporated herein by reference
in accordance with General Instruction G(2) of form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company, together with the
reports thereon of Deloitte & Touche LLP and PricewaterhouseCoopers LLP, and the
supplementary financial information, contained in the Company's 1999 Financial
Report, are incorporated herein by reference in accordance with General
Instruction G(2) of Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On July 31, 1998, at the Company's regularly scheduled meetings of its
Board of Directors and the Audit Committee of the Board of Directors, the
Company accepted the resignation of PricewaterhouseCoopers LLP because of
conflicts of interest resulting from the July 1, 1998 merger of Price Waterhouse
LLP and Coopers & Lybrand LLP. The Company and Coopers & Lybrand LLP have
long-standing business relationships which both parties wish to continue. In
view of the independence requirements of the Securities and Exchange Commission
regarding the independence of certifying public accountants, the Company and
PricewaterhouseCoopers LLP mutually determined that it would be inappropriate
for PricewaterhouseCoopers LLP to continue as the Company's accountants. Price
Waterhouse LLP was the Company's independent certifying accountants for 28
years. As a result of the
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above circumstances, the Audit Committee and Board of Directors thereupon
appointed Deloitte & Touche LLP as the Company's independent certifying
accountants for fiscal year 1998.
During the fiscal year ended December 31, 1997, the reports of
PricewaterhouseCoopers LLP on the annual financial statements have neither
contained any adverse opinions or disclaimers of opinions, nor have they been
qualified or modified. During such two year period, and through July 31, 1998
there were no disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
PricewaterhouseCoopers LLP, would have caused PricewaterhouseCoopers LLP to make
reference to the subject matter of the disagreement in connection with its
reports on the financial statements for such years.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors and executive officers of the
Company contained in the Company's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held May 12, 2000, is incorporated herein by
reference. The Company's definitive Proxy Statement will be filed within 120
days after the close of the Company's fiscal year in accordance with General
Instruction G(3) of Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation contained in the
Company's definitive Proxy Statement for the Annual Meeting of Shareholders to
be held May 12, 2000, is incorporated herein by reference. The Company's
definitive Proxy Statement will be filed within 120 days after the close of the
Company's fiscal year in accordance with General Instruction G(3) of Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to the security ownership of certain beneficial
owners and management contained in the Company's definitive Proxy Statement for
the Annual Meeting of Shareholders to be held May 12, 2000, is incorporated
herein by reference. The Company's definitive Proxy Statement will be filed
within 120 days after the close of the Company's fiscal year in accordance with
General Instruction G(3) of Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to certain relationships and related transactions
contained under the headings "Principal Stockholders" and "Compensation
Committee Interlocks and Insider Participation" in the Company's definitive
Proxy Statement for the Annual Meeting of Shareholders to be held May 12, 2000,
is incorporated herein by reference. The Company's definitive Proxy Statement
will be filed within 120 days after the close of the Company's fiscal year in
accordance with General Instruction G(3) of Form 10-K.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The consolidated financial statements of American Management
Systems, Incorporated and subsidiaries filed are as follows:
Consolidated Statements of Operations for 1999 - 1997
Consolidated Balance Sheets as of December 31, 1999
and 1998
Consolidated Statements of Cash Flows for 1999-1997
Consolidated Statements of Changes in Stockholders'
Equity for 1999-1997
Consolidated Statements of Comprehensive Income 1999
- 1997
Notes to Consolidated Financial Statements
Reports of Independent Accountants
2. FINANCIAL STATEMENT SCHEDULE
The financial statement schedule of American Management
Systems, Incorporated and subsidiaries filed is as follows:
Reports of Independent Accountants on financial
statement schedules
Schedule II - Valuation and Qualifying Accounts for
1999-1997
All other schedules are omitted because they are not
applicable, or the required information is shown in the financial statements or
the notes thereto.
Individual financial statements of the Company and each of its
subsidiaries are omitted because the Company is primarily an operating company,
and all subsidiaries included in the consolidated financial statements being
filed, in the aggregate, do not have a minority equity interest in and/or
indebtedness to any person other than the Company or its consolidated
subsidiaries in amounts which together exceed five percent of the total assets
as shown by the most recent year-end consolidated balance sheet.
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3. EXHIBITS
The exhibits to the Annual Report on Form 10-K of American
Management Systems, Incorporated filed are as follows:
3. Articles of Incorporation and By-laws
3.1 Second Restated Certificate of Incorporation of
the Company (incorporated herein by reference to the Company's 1995 Annual
Report on Form 10-K, filed on April 1, 1996).
3.2 Certificate of Designation of Series A Junior
Participating Preferred Stock (incorporated herein by reference to Exhibit 2 to
the Company's Registration Statement on Form 8-A filed on August 4, 1998).
3.3 By-Laws of the Company, as amended and restated
February 27, 1998 (incorporated herein by reference to Exhibit 3.2 of the
Company's 1997 Annual Report on Form 10-K).
3.4 Certificate of Amendment of Second Restated
Certificate of Incorporation of the Company (incorporated herein by reference to
Exhibit 3.4 of the Company's quarterly report on Form 10-Q for the quarter ended
June 30, 1999).
4. Instruments Defining the Rights of Security Holders
4.1 Specimen Common Stock Certificate (incorporated
herein by reference to Exhibit 4.1 of the Company's quarterly report on Form
10-Q for the quarter ended March 31, 1997).
4.2 Rights Agreement dated as of July 31, 1998,
between the Company and ChaseMellon Shareholder Services L.L.C. as Rights Agent
(incorporated herein by reference to the Company's Form 8-A filed on August 4,
1998, including form of Rights Certificate).
10. Material Contracts
10.1 1996 Amended Stock Option Plan F as amended
(incorporated herein by reference to Exhibit A to the Company's definitive Proxy
Statement filed on April 15, 1999).
10.2 Outside Directors Stock-for-Fees Plan
(incorporated herein by reference to Exhibit C to the Company's definitive Proxy
Statement filed on April 10, 1996).
10.3 1992 Amended and Restated Stock Option Plan E,
as amended (incorporated herein by reference to Exhibit B to the Company's
definitive Proxy Statement filed on April 17, 1995).
10.4 Executive Deferred Compensation Plan, as amended
September 1, 1997 (incorporated herein by reference to Exhibit 10.4 of the
Company's 1997 Annual Report on Form 10-K).
10.5 Outside Director Deferred Compensation Plan,
effective January 1, 1997 (incorporated herein by reference to Exhibit 10.5 of
the Company's 1997 Annual Report on Form 10-K).
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10.6 Multi-Currency Revolving Credit Agreement dated
as of January 9, 1998 among the Company, certain of the Company's subsidiaries,
the Lenders named therein, and NationsBank N.A. as administrative agent and
Wachovia Bank N.A., as Documentation agent (incorporated herein by reference to
Exhibit 10.6 of the Company's 1997 Annual Report on Form 10-K).
10.7 Agreement of Lease between Joshua Realty
Corporation and the Company, dated August 10, 1992, as amended (incorporated
herein by reference to Exhibit 10.7 of the Company's 1997 Annual Report on Form
10-K).
10.8 Office Lease Agreement between Hyatt Plaza
Limited Partnership and the Company, dated August 12, 1993, as amended
(incorporated herein by reference to Exhibit 10.8 of the Company's 1997 Annual
Report on Form 10-K).
10.9 Lease Agreement between Fairfax Gilbane, L.P.
and the Company, dated February 15, 1994, as amended (incorporated herein by
reference to Exhibit 10.9 of the Company's 1997 Annual Report on Form 10-K).
10.10 Deed of Lease between Principal Mutual Life
Insurance Company and the Company, dated December 1996 (incorporated herein by
reference to Exhibit 10.10 of the Company's 1997 Annual Report on Form 10-K).
10.11 1996 Incentive Compensation Plan for Executive
Officers (incorporated herein by reference to Exhibit 10.11 of the Company's
1998 Annual Report on Form 10-K).
10.12 1999 Contractor Stock Option Plan (filed
herewith)
13. 1999 Financial Report
21. Subsidiaries of the Company
23. Consents of Independent Accountants
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of PricewaterhouseCoopers LLP
27. Financial Data Schedules
27.1 Financial Data Schedule for the twelve
months ended December 31, 1999.
27.2 Restated Financial Data Schedule for the
twelve months ended December 31, 1998.
27.3 Restated Financial Data Schedule for the
twelve months ended December 1997
27.4 Restated Financial Data Schedule for the
twelve months ended December 1996
27.5 Restated Financial Data Schedule for the
nine months ended September 30, 1998.
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27.6 Restated Financial Data Schedule for the six
months ended June 30, 1998.
27.7 Restated Financial Data Schedule for the
three months ended March 31, 1998.
27.8 Restated Financial Data Schedule for the
nine months ended September 30, 1997
27.9 Restated Financial Data Schedule for the six
months ended June 30, 1997
27.10 Restated Financial Data Schedule for the
three months ended March 31, 1997.
(b) REPORTS ON FORM 8-K
None.
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REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders of
American Management Systems, Incorporated
Fairfax, Virginia
We have audited the consolidated financial statements of American
Management Systems, Incorporated and subsidiaries (the "Company") as of December
31, 1999 and 1998, and for the years then ended, and have issued our report
thereon dated February 16, 2000 (incorporated by reference in this Annual Report
on Form 10-K). Our audit also included the financial statement schedule for the
year ended December 31, 1999 listed in Item 14(a) of this Form 10-K. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audit. In our opinion,
such 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.
DELOITTE & TOUCHE LLP
McLean, Virginia
February 16, 2000
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REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of
American Management Systems, Incorporated
Our audits of the consolidated financial statements referred to in our
report dated February 18, 1998 appearing on page 26 of the 1999 Financial Report
of American Management Systems, Incorporated (which report and consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the Financial Statement Schedule for the year
ended December 31, 1997 listed in Item 14(a) of this Form 10-K. In our opinion,
this Financial Statement Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.
PricewaterhouseCoopers LLP
Washington, D.C.
February 18, 1998
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Schedule II
American Management Systems, Incorporated
VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31 (In millions) 1999 1998 1997
- ---------------------------------------------------------------------------------------------
Allowance for Doubtful Accounts
Balance at Beginning of Period $ 9.8 $ 5.0 $ 18.9
Allowance Accruals 6.2 10.9 10.6
Charges Against Allowance (5.2) (6.1) (24.5)
------- ------- -------
Balance at End of Period $ 10.8 $ 9.8 $ 5.0
======= ======= =======
Deferred Tax Asset Valuation Allowance
Balance at Beginning of Period $ 1.1 $ 0.5 $ 0.4
Allowance Accruals -- 0.6 0.1
Charges Against Allowance (0.2) -- --
------- ------- -------
Balance at End of Period $ 0.9 $ 1.1 $ 0.5
======= ======= =======
Provision for Contract Losses
Balance at Beginning of Period $ 7.3 $ -- $ 18.5
Allowance Accruals 20.0 7.3 --
Charges Against Provision (0.3) -- (18.5)
------- ------- -------
Balance at End of Period $ 27.0 $ 7.3 $ --
======= ======= =======
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 29th of March,
2000.
American Management Systems, Incorporated
by s/ Paul A. Brands
-----------------------------------------
Paul A. Brands
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following officers and directors of the
Registrant in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
(i) Principal Executive Officer:
s/Paul A. Brands Chairman and March 29, 2000
--------------------------------- Chief Executive
Paul A. Brands Officer
(ii) Principal Financial Officer:
s/Ronald L. Schillereff Treasurer and March 29, 2000
--------------------------------- Chief Financial
Ronald L. Schillereff Officer
(iii) Principal Accounting Officer:
s/Nancy Yurek Controller March 29, 2000
---------------------------------
Nancy Yurek
16
20
Signature Title Date
--------- ----- ----
(iv) Directors:
s/Daniel J. Altobello Director March 29, 2000
---------------------------------
Daniel J. Altobello
s/Paul A. Brands Director March 29, 2000
--------------------------------
Paul A. Brands
s/James J. Forese Director March 29, 2000
--------------------------------
James J. Forese
s/Patrick W. Gross Director March 29, 2000
---------------------------------
Patrick W. Gross
s/Dorothy Leonard Director March 29, 2000
---------------------------------
Dorothy Leonard
s/W. Walker Lewis Director March 29, 2000
---------------------------------
W. Walker Lewis
s/Frederic V. Malek Director March 29, 2000
---------------------------------
Frederic V. Malek
s/Frank A. Nicolai Director March 29, 2000
---------------------------------
Frank A. Nicolai
s/Alan G. Spoon Director March 29, 2000
---------------------------------
Alan G. Spoon
17
21
Signature Title Date
--------- ----- ----
(iv) Directors:
_________________________ Director March 29, 2000
Daniel J. Altobello
_________________________ Director March 29, 2000
Paul A. Brands
_________________________ Director March 29, 2000
James J. Forese
_________________________ Director March 29, 2000
Patrick W. Gross
_________________________ Director March 29, 2000
Dorothy Leonard
_________________________ Director March 29, 2000
W. Walker Lewis
_________________________ Director March 29, 2000
Frederic V. Malek
_________________________ Director March 29, 2000
Frank A. Nicolai
_________________________ Director March 29, 2000
Alan G. Spoon
19
22
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
3.1 Second Restated Certificate of Incorporation of the Company *
(incorporated herein by reference to the Company's 1995 Annual
Report on Form 10-K, filed on April 1, 1996).
3.2 Certificate of Designation of Series A Junior Participating
Preferred Stock (incorporated herein by reference to Exhibit 2 *
to the Company's Registration Statement on Form 8-A filed on
August 4, 1998).
3.3 By-Laws of the Company, as amended and restated February 27, *
1998 (incorporated herein by reference to Exhibit 3.2 of the
Company's 1997 Annual Report on Form 10-K).
3.4 Certificate of Amendment of Second Restated Certificate of *
Incorporation of the Company (incorporated herein by reference
to Exhibit 3.4 of the Company's quarterly report on Form 10-Q
for the quarter ended June 30, 1999).
4.1 Specimen Common Stock Certificate (incorporated herein by *
reference to Exhibit 4.1 of the Company's quarterly report on
Form 10-Q for the Quarter ended March 31, 1997).
4.2 Rights Agreement dated as of July 31, 1998, between the Company *
and ChaseMellon Shareholder Services L.L.C. as Rights Agent
(incorporated herein by reference to the Company's Form 8-A filed
on August 4, 1998, including form of Rights Certificate).
10.1 1996 Amended Stock Option Plan F as amended (incorporated *
herein by reference to Exhibit A to the Company's definitive Proxy
Statement filed on April 15, 1999).
10.2 Outside Directors Stock-for-Fees Plan (incorporated herein by *
reference to Exhibit C to the Company's definitive Proxy
Statement filed on April 10, 1996).
10.3 1992 Amended and Restated Stock Option Plan E, as amended *
(incorporated herein by reference to Exhibit B to the Company's
definitive Proxy Statement filed on April 17, 1995).
10.4 Executive Deferred Compensation Plan, as amended *
September 1, 1997 (incorporated herein by reference to Exhibit
10.4 of the Company's 1997 Annual Report on Form 10-K).
10.5 Outside Director Deferred Compensation Plan, effective *
January 1, 1997 (incorporated herein by reference to Exhibit
10.5 of the Company's 1997 Annual Report on Form 10-K).
18
23
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
10.6 Multi-Currency Revolving Credit Agreement dated as of *
January 9, 1998 among the Company, certain of the Company's
subsidiaries, the Lenders named therein, and NationsBank N.A.
as administrative agent and Wachovia Bank N.A., as
Documentation agent. (incorporated herein by reference to Exhibit
10.6 of the Company's 1997 Annual Report on Form 10-K).
10.7 Agreement of Lease between Joshua Realty Corporation and the *
Company, dated August 10, 1992, as amended (incorporated herein
by reference to Exhibit 10.7 of the Company's 1997 Annual Report
on Form 10-K).
10.8 Office Lease Agreement between Hyatt Plaza Limited Partnership *
and the Company, dated August 12, 1993, as amended (incorporated
herein by reference to Exhibit 10.8 of the Company's 1997 Annual
Report on Form 10-K).
10.9 Lease Agreement between Fairfax Gilbane, L.P. and the Company, *
dated February 15, 1994, as amended (incorporated herein by
reference to Exhibit 10.9 of the Company's 1997 Annual Report on
Form 10-K).
10.10 Deed of Lease between Principal Mutual Life Insurance Company *
and the Company, dated December 1996 (incorporated herein by
reference to Exhibit 10.10 of the Company's 1997 Annual Report
on Form 10-K).
10.11 1996 Incentive Compensation Plan for Executive Officers *
(incorporated herein by reference to Exhibit 10.11 of the Company's
1998 Annual Report on Form 10-K).
10.12 1999 Contractor Stock Option Plan (filed herewith)
13. 1999 Financial Report
21. Subsidiaries of the Company
23. Consents of Independent Accountants
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of PricewaterhouseCoopers LLP
27. Financial Data Schedules
27.1 Financial Data Schedule for the twelve months ended December 31, 1999
19
24
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
27.2 Restated Financial Data Schedule for the twelve months ended December 31, 1998
27.3 Restated Financial Data Schedule for the twelve months ended December 31, 1997
27.4 Restated Financial Data Schedule for the twelve months ended December 31, 1996
27.5 Restated Financial Data Schedule for the nine months ended September 30, 1998
27.6 Restated Financial Data Schedule for the six months ended June 30, 1998
27.7 Restated Financial Data Schedule for the three months ended March 31, 1998
27.8 Restated Financial Data Schedule for the nine months ended September 30, 1997
27.9 Restated Financial Data Schedule for the six months ended June 30, 1997
27.10 Restated Financial Data Schedule for the three months ended March 31, 1997
- ------------
*Previously filed.
20