Acxiom : Form 11-K FY2004
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2003.
OR
[ ] Transition Report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the transition period from _____________ to ______________
Commission File Number 0-16163
A. Full title of the plan and the address of the plan, if different from that of the issuer named
below:
Acxiom Corporation
Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office:
Acxiom Corporation
1 Information Way
Little Rock, AR 72202
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Financial Statements and Supplemental Schedule
December 31, 2003 and 2002
(With Report of Independent Registered Public Accounting Firm Thereon)
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Table of Contents
Page
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002 2
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2003 3
Notes to Financial Statements 4
Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003 10
All other schedules required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 are omitted as they are inapplicable or not required.
Report of Independent Registered Public Accounting Firm
The Plan Administrator
Acxiom Corporation Retirement Savings Plan:
We have audited the accompanying statements of net assets available for benefits of the Acxiom Corporation Retirement
Savings Plan (the Plan) as of December 31, 2003 and 2002, and the related statement of changes in net assets available
for benefits for the year ended December 31, 2003. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets
available for benefits of the Acxiom Corporation Retirement Savings Plan as of December 31, 2003 and 2002, and the
changes in net assets available for benefits for the year ended December 31, 2003, in conformity with U.S. generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The
supplemental schedule of assets (held at end of year) is presented for purposes of additional analysis and is not a
required part of the basic financial statements, but is supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a whole.
KPMG LLP
Dallas, Texas
May 28, 2004
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
2003 2002
------------------- -------------------
Assets:
Investments, at fair value (note 3):
Acxiom Corporation common stock $ 67,060,591 58,768,334
Other common stock 191,080 94,518
Mutual funds 115,638,864 82,029,999
Common collective trust fund 15,186,509 15,185,250
Participant notes receivable 4,134,215 4,098,114
Cash 84,208 39,002
------------------- -------------------
Total investments 202,295,467 160,215,217
------------------- -------------------
Net assets available for benefits (note 10) $ 202,295,467 160,215,217
=================== ===================
See accompanying notes to financial statements.
2
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2003
Additions to net assets attributed to:
Investment income:
Dividends $ 2,297,618
Interest 305,794
Net appreciation in fair value of investments (note 3) 35,992,205
------------------
38,595,617
------------------
Contributions:
Participants 14,041,584
Employer, net of $1,263,230 of forfeitures 2,177,399
------------------
16,218,983
------------------
Total additions 54,814,600
------------------
Deductions from net assets attributed to:
Plan expenses 19,519
Distribution of benefits 12,714,831
------------------
Total deductions 12,734,350
------------------
Net increase in net assets available for benefits 42,080,250
Net assets available for benefits, beginning of year 160,215,217
------------------
Net assets available for benefits, end of year $ 202,295,467
==================
See accompanying notes to financial statements.
3
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(1) Plan Description
The following description of the Acxiom Corporation Retirement Savings Plan (the Plan) provides only general
information. Participants should refer to the Plan agreement (the Agreement) for a more complete description of
the Plan's provisions.
(a) General
The Plan is a defined contribution Plan covering substantially all employees of Acxiom Corporation and its
domestic subsidiaries (Acxiom, the Company or the Employer). The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA), as amended.
(b) Contributions
The Plan includes a 401(k) provision whereby each non-highly compensated participant may defer up to 30% of
annual compensation not to exceed limits determined under Section 415(c) of the Internal Revenue Code
(IRC). Deferrals for highly compensated participants are limited to meet nondiscrimination requirements of
the IRC and are currently limited to 6% of annual compensation.
The Plan has historically provided a matching contribution of 50% of deferrals for deferrals up to 6%
(maximum matching contribution of 3%). During 2003 the Plan was amended to allow the Company to provide
discretionary instead of mandatory matching contributions (see note 9). From August 1, 2003 until October
31, 2003, the discretionary matching contribution was suspended. On November 1, 2003, the discretionary
matching contribution was reinstated at the level of 25% for deferrals up to 6% (maximum matching
contribution of 1.5%). During the 2004 plan year, March 1, 2004, the discretionary match was increased back
to its prior level of 50% of 6%, for a maximum 3.0%.
Participant contributions to the Plan are invested as directed by participants into various investment
options. The Company's matching contributions are made with Acxiom common stock and are recorded based on
the fair value of the common stock at the date contributed. During the years ended December 31, 2003 and
2002 the Company contributed 142,481 and 285,097 shares, respectively, of Acxiom common stock. Immediately
upon deposit into the Plan, the match shares are 100% diversifiable, at the election of the Participant,
among the other investment options with the Plan.
Certain fees for attorneys, accountants, and Plan administration have been paid by the Company during the
year ended December 31, 2003. The Company may continue to pay these fees in the future, if it so chooses;
otherwise, fees will be paid out of the trust of the Plan.
(c) Participant Accounts
Each participant's account is credited with the participant's contribution, the Company's matching
contribution, and discretionary contributions, if any, and is adjusted for investment income/losses.
Allocations of income/losses are made according to formulas specified in the Agreement based on participant
compensation or account balances. The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
4 (Continued
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(d) Participant Notes Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of
$50,000 or 50% of their vested account balance. Loans are repayable through payroll deductions ranging up
to five years unless the loan is for the purchase of a primary residence, in which case the loan can be
repaid over ten years. The loans are secured by the balance in the participant's account and bear interest
at the prime rate in effect at the date of the loan plus 2%. The interest rates on outstanding participant
loans at December 31, 2003 range from 6.0% to 11.5%.
(e) Vesting
Participants are immediately vested in their voluntary contributions and the earnings thereon. Participants
are vested in the remainder of their accounts based on years of service, whereby partial vesting occurs in
20% increments beginning after two years of service until participants become fully vested after six years
of service. If applicable, nonvested portions of Company contributions are forfeited as of an employee's
termination date and are used to reduce future Company matching contributions or to pay Plan expenses.
At December 31, 2003 and 2002, forfeited nonvested accounts totaled $431,925 and $27,464, respectively.
These accounts will be used to reduce future Employer contributions. During 2003 $1,572,067 of
participants' accounts were forfeited and Employer contributions were reduced by $1,263,230 from forfeited
nonvested accounts. During 2003 the forfeiture account balance was also increased by $95,624 on the fair
market value of the investments held in the account.
(f) Investment Options
Upon enrollment in the Plan, a participant may direct employee contributions in any of 18 mutual funds and
one common collective trust fund currently offered by T. Rowe Price Investment Services, Inc.
(T. Rowe Price) (see note 4). In addition, participants have the option to open a self-directed brokerage
account with T. Rowe Price in order to invest in numerous other stocks, bonds, and mutual funds. Acxiom
common stock is also an investment option for employee contributions. For the years ended December 31, 2003
and 2002, employee contributions to the Acxiom common stock fund were $158,601 and $131,606, respectively.
The Plan's investment in the T. Rowe Price Stable Value Fund (the Fund), a common trust fund, holds
substantial investments in guaranteed investment contracts, bank investment contracts, and synthetic
investment contracts. The value of the Fund reflects the value of the underlying contracts, which consist
of changes in principal value, reinvested dividends and capital gains distributions, and approximate fair
market value. The stated interest rates of the contracts vary and the average yield for the year ended
December 31, 2003 was 4.74% after expenses.
5 (Continued)
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(g) Withdrawals and Payment of Benefits
Benefits paid upon retirement, death, or disability are made in the form of a lump-sum payment of cash or
common stock of the Company. If a participant receives benefits prior to retirement, death, or disability,
the benefits paid from the participant's Employer contribution account shall not exceed the participant's
vested balance therein.
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of accounting.
(b) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America 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 date of the
financial statements and the reported amounts of additions to and deductions from net assets during the
reporting period. Actual results could differ from those estimates.
(c) Investment Valuation and Income Recognition
The Plan's investments are stated at fair value, based upon quoted market prices, except for participant
notes receivable, which are stated at unpaid principal balance, which approximates fair value. Purchases
and sales of securities and related income are recorded on a trade date basis.
The Plan provides for investment in investment securities that, in general, are exposed to various risks,
such as interest rate, credit, and overall market volatility. Due to the level of risk associated with
certain investment securities, changes can materially affect the amounts reported in the statements of net
assets available for benefits.
(d) Payment of Benefits
Benefits are recorded when paid.
6 (Continued)
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(3) Investments
The fair value of the individual investments held by the Plan is as follows (investments that represent 5% or more
of the Plan's net assets are separately identified):
2003 2002
-------------------------------- ------------------------------
Number of Number of
shares or shares or
units Fair Value units Fair Value
-------------- -------------- -------------- --------------
Acxiom common stock 3,599,602 $ 67,060,591 3,821,088 $ 58,768,334*
Other common stock 191,080 94,518
Mutual funds:
**T. Rowe Price Equity Income Fund 803,035 19,401,323 744,019 14,724,145
**T. Rowe Price Balanced Fund 932,819 17,173,203 898,489 13,935,565
**T. Rowe Price Growth Stock Fund 733,103 18,809,597 717,317 13,327,753
**T. Rowe Price Small-Cap Value Fund 388,226 11,409,965 -
**T. Rowe Price Mid-Cap Growth Fund 359,851 15,437,602 315,679 9,798,677
**Other funds 33,407,174 30,243,859
-------------- --------------
115,638,864 82,029,999
Total mutual funds -------------- --------------
Common collective trust fund:
**T. Rowe Price Stable Value Fund 15,186,509 15,186,509 15,185,250 15,185,250
Participant notes receivable (6.0%-11.5%) 4,134,215 4,098,114
Cash 84,208 39,002
-------------- --------------
Total investments $ 202,295,467 $ 160,215,217
============== ==============
* The Employer matching portion of this investment is nonparticipant directed for the first half of 2002.
**All T. Rowe Price Funds are a part in interest. Other Funds consist of various investments including T. Rowe Price Funds
in the amount of $32,962,682 for 2003 and $30,104,221 for 2002.
7 (Continued)
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
During 2003, the Plan's investments (including investments bought, sold, and held during the year) appreciated in
value as follows:
Acxiom common stock $ 12,038,535
Other common stock 144,776
Mutual funds 23,808,894
------------
$ 35,992,205
============
(4) Plan Administration
The Plan is administered by the Company. During 2003 and 2002 participant records and assets have been maintained
by T. Rowe Price Trust Company as recordkeeper and trustee (see note 6).
(5) Tax Status
The Internal Revenue Service has determined and informed the Company by a letter dated July 21, 2003 that the Plan
is designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving the
determination letter. The plan administrator and the Plan's tax counsel believe that the Plan is currently
designed and being operated in compliance with the applicable requirements of the IRC.
(6) Parties in Interest
All investment transactions were executed with T. Rowe Price Trust Company, the Plan's trustee and recordkeeper.
Accordingly, all investment transactions during the respective years were with a party in interest.
(7) Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the provisions of ERISA. Upon complete
discontinuance of contributions, termination, or partial termination of the Plan, participants will become 100%
vested in their accounts, in which event the value of such accounts shall be distributed as provided in the Plan.
(8) Reconciliation to Form 5500
Participant directed brokerage accounts are reported in the aggregate on Form 5500 but are classified according to
investment type in the statements of net assets available for benefits. As of December 31, 2003 and 2002
participant-directed brokerage accounts included $444,492 and $255,163 of mutual fund investments and $191,080 and
$94,518 of common stock investments, respectively.
8 (Continued)
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(9) Plan Amendments
Effective June 30, 2003 the Plan was amended to provide for immediate vesting of the accounts of participants who
cease to be employed by the Company due to a divestiture.
The Plan was amended on July 30, 2003 to permit amendments to be adopted by either the Board of Directors or a
committee designated by the Board of Directors.
Effective August 1, 2003 the Plan was amended to provide for a discretionary Company matching contribution instead
of a mandatory company matching contribution.
(10) Subsequent Events
The Company entered into an agreement to acquire Computer Graphics of Arizona and several other companies on
December 31, 1998. Computer Graphics had a 401(k) plan which Acxiom froze after the acquisition. The participants
became immediately eligible to participate in the plan.
On March 31, 2004 the account balances of all current participants in the Computer Graphics of Arizona Retirement
Plan and Trust (CG 401(k) Plan) were transferred to the Plan. The sum of the participant account balances in each
Plan equaled the fair market value of the Plan (determined as of the date of the merger). Immediately after the
merger, each participant in the merged Plan had an account balance equal to the sum of the account balances he or
she had in the Plans immediately prior to the merger. Separate accounts for the affected participants shall be
established under the Plan to receive and account for the merged CG 401(k) account. There were no reductions of
accrued benefits to participants as a result of the merger.
9
ACXIOM CORPORATION
RETIREMENT SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
Identity of issuer, borrower, Current
lessor, or similar party Description Shares Cost value
-------------------------------------------------------------------------------------------------------------------------------
* Acxiom Corporation Common stock 3,599,602 $ 65,912,120 67,060,591
Participant Directed Investments Tradelink Investments ** 635,572
* T. Rowe Price Mutual funds:
PIMCO Total Return Admin. 9,190 $ ** 98,422
American Growth Fund of America 59,508 ** 1,460,336
Strong Common Stock Fund 40,988 ** 907,892
BGI Lifepath Income 6,648 ** 73,322
BGI Lifepath 2010 12,406 ** 152,600
BGI Lifepath 2020 18,182 ** 256,911
BGI Lifepath 2030 25,988 ** 367,207
BGI Lifepath 2040 8,587 ** 132,835
International Stock Fund 411,887 ** 4,732,581
Growth Stock Fund 773,103 ** 18,809,597
New Horizons Fund 311,886 ** 7,734,780
Small-Cap Value Fund 388,226 ** 11,409,965
Equity Index 500 Fund 131,200 ** 3,929,435
Mid-Cap Growth Fund 359,851 ** 15,437,602
Balanced Fund 932,819 ** 17,173,203
Equity Income Fund 803,035 ** 19,401,323
Spectrum Income Fund 615,526 ** 7,244,736
Spectrum Growth Fund 396,731 ** 5,871,625
--------------
Total mutual funds 115,194,372
* T. Rowe Price Common collective trust fund 15,186,509 ** 15,186,509
* Participant notes receivable, loans to participants, interest rates range from 6.0% - 11.5% ** 4,134,215
* T. Rowe Price Cash ** 84,208
--------------
Total investments $ 202,295,467
==============
* Indicates a party in interest.
** Not applicable - cost is excluded as investments are participant directed.
See accompanying report of independent registered public accounting firm.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Acxiom Corporation has duly caused this annual
report to be signed on its behalf by the undersigned thereunto duly authorized.
Acxiom Corporation
As Sponsor and Administrator of the
Acxiom Corporation Retirement Savings Plan
Date: June 24, 2004 By: /s/ Jefferson D. Stalnaker
-----------------------------------------------
Jefferson D. Stalnaker
Company Financial Operations Leader
11
EXHIBIT INDEX
Exhibit 23.1 Consent of KPMG LLP