##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the period from  to
 Commission file number 001-12665
 AFFILIATED COMPUTER SERVICES, INC.
  Delaware
    
    51-0310342(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)2828 North Haskell, Dallas, Texas
    
    75204(Address of principal executive offices)
    
    (Zip Code)
  Not Applicable
 
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ
  Title of each class
    
    Number of shares outstanding as of
October 29, 2008Class A Common Stock, $.01 par value
    
    90,951,472Class B Common Stock, $.01 par value
    
    6,599,372




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##### 



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
  PAGENUMBERPART I. FINANCIAL INFORMATIONItem 1. Consolidated Financial Statements:Consolidated Balance Sheets (Unaudited) at September 30, 2008 and
June 30, 2008
    
    
    1Consolidated Statements of Income (Unaudited) for the Three
Months Ended September 30, 2008 and 2007
    
    
    2Consolidated Statements of Cash Flows (Unaudited) for the Three
Months Ended September 30, 2008 and 2007
    
    
    3Notes to Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    24Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    38Item 4. Controls and Procedures
    
    
    39PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    39Item 1A. Risk Factors
    
    
    39Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39Item 3. Defaults Upon Senior Securities
    
    
    39Item 4. Submission of Matters to a Vote of Security Holders
    
    
    39Item 5. Other Information
    
    
    39Item 6. Exhibits
    
    
    39EX-31.1EX-31.2EX-32.1EX-32.2




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PART I
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 (in thousands)
 September 30,
    
    
    June 30,2008
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    434,815
    
    
    $
    461,883Accounts receivable, net
    
    
    1,459,272
    
    
    
    1,378,285Income taxes receivable
    
    
    
    
    
    
    7,076Prepaid expenses and other current assets
    
    
    261,953
    
    
    
    255,872Total current assets
    
    
    2,156,040
    
    
    
    2,103,116Property, equipment and software, net
    
    
    897,785
    
    
    
    920,637Goodwill
    
    
    2,764,591
    
    
    
    2,785,164Other intangibles, net
    
    
    428,356
    
    
    
    444,479Other assets
    
    
    199,121
    
    
    
    216,003Total assets
    
    $
    6,445,893
    
    
    $
    6,469,399LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    197,167
    
    
    $
    198,191Accrued compensation and benefits
    
    
    154,443
    
    
    
    244,888Other accrued liabilities
    
    
    354,351
    
    
    
    338,861Income taxes payable
    
    
    21,493
    
    
    
    Deferred taxes
    
    
    83,072
    
    
    
    82,017Current portion of long-term debt
    
    
    46,978
    
    
    
    47,373Current portion of unearned revenue
    
    
    172,921
    
    
    
    173,809Total current liabilities
    
    
    1,030,425
    
    
    
    1,085,139Senior Notes, net of unamortized discount
    
    
    499,549
    
    
    
    499,529Other long-term debt
    
    
    1,824,143
    
    
    
    1,858,012Deferred taxes
    
    
    424,812
    
    
    
    411,836Other long-term liabilities
    
    
    299,719
    
    
    
    306,509Total liabilities
    
    
    4,078,648
    
    
    
    4,161,025Commitments and contingencies (See Note 11)Stockholders equity:Class A common stock, $.01 par value, 500,000 shares
authorized, 111,803 and 111,660 shares issued, respectively
    
    
    1,117
    
    
    
    1,116Class B convertible common stock, $.01 par value, 14,000 shares
authorized, 6,600 shares issued and outstanding
    
    
    66
    
    
    
    66Additional paid-in capital
    
    
    1,714,701
    
    
    
    1,702,340Accumulated other comprehensive income (loss), net
    
    
    (18,296
    )
    
    
    18,830Retained earnings
    
    
    1,725,625
    
    
    
    1,641,990Treasury stock at cost, 21,002 shares
    
    
    (1,055,968
    )
    
    
    (1,055,968
    )Total stockholders equity
    
    
    2,367,245
    
    
    
    2,308,374Total liabilities and stockholders equity
    
    $
    6,445,893
    
    
    $
    6,469,399
  1




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 (UNAUDITED)
 (in thousands, except per share amounts)
 Three months endedSeptember 30,2008
    
    
    2007Revenues
    
    $
    1,604,454
    
    
    $
    1,493,083Operating expenses:Cost of revenues:Wages and benefits
    
    
    734,016
    
    
    
    699,949Services and supplies
    
    
    373,505
    
    
    
    341,766Rent, lease and maintenance
    
    
    202,143
    
    
    
    184,918Depreciation and amortization
    
    
    97,606
    
    
    
    90,824Other
    
    
    10,348
    
    
    
    6,915Cost of revenues
    
    
    1,417,618
    
    
    
    1,324,372Other operating expenses
    
    
    14,088
    
    
    
    23,310Total operating expenses
    
    
    1,431,706
    
    
    
    1,347,682Operating income
    
    
    172,748
    
    
    
    145,401Interest expense
    
    
    35,208
    
    
    
    43,970Other non-operating expense (income), net
    
    
    3,700
    
    
    
    (680
    )Pretax profit
    
    
    133,840
    
    
    
    102,111Income tax expense
    
    
    50,205
    
    
    
    35,967Net income
    
    $
    83,635
    
    
    $
    66,144Earnings per share:Basic
    
    $
    0.86
    
    
    $
    0.66Diluted
    
    $
    0.85
    
    
    $
    0.65Shares used in computing earnings per share:Basic
    
    
    97,307
    
    
    
    99,721Diluted
    
    
    98,091
    
    
    
    100,986
  2




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 (in thousands)
 Three months endedSeptember 30,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    83,635
    
    
    $
    66,144Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    97,606
    
    
    
    90,824Stock-based compensation expense
    
    
    5,695
    
    
    
    7,601Excess tax benefit on stock-based compensation
    
    
    (80
    )
    
    
    (1,955
    )Deferred income tax expense
    
    
    14,319
    
    
    
    3,791Loss on long-term investments
    
    
    5,987
    
    
    
    1,853Gain on sale of business units
    
    
    (441
    )
    
    
    Other non-cash activities
    
    
    12,054
    
    
    
    6,846Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable
    
    
    (84,192
    )
    
    
    (130,635
    )Prepaid expenses and other current assets
    
    
    (13,257
    )
    
    
    (4,222
    )Other assets
    
    
    1,840
    
    
    
    (3,598
    )Accounts payable
    
    
    (1,202
    )
    
    
    51,547Accrued compensation and benefits
    
    
    (90,483
    )
    
    
    (106,925
    )Other accrued liabilities
    
    
    9,564
    
    
    
    (2,796
    )Income taxes receivable/payable
    
    
    29,301
    
    
    
    36,322Other long-term liabilities
    
    
    (8,988
    )
    
    
    5,058Unearned revenue
    
    
    1,244
    
    
    
    (11,832
    )Total adjustments
    
    
    (21,033
    )
    
    
    (58,121
    )Net cash provided by operating activities
    
    
    62,602
    
    
    
    8,023Cash flows from investing activities:Purchases of property, equipment and software, net
    
    
    (64,550
    )
    
    
    (65,841
    )Additions to other intangible assets
    
    
    (9,541
    )
    
    
    (9,481
    )Payments for acquisitions, net of cash acquired
    
    
    (4,751
    )
    
    
    (23,697
    )Proceeds from divestitures, net of transaction costs
    
    
    9,307
    
    
    
    Purchases of investments
    
    
    (2,596
    )
    
    
    Proceeds from sale of investments
    
    
    10,551
    
    
    
    Net cash used in investing activities
    
    
    (61,580
    )
    
    
    (99,019
    )Cash flows from financing activities:Proceeds from issuance of long-term debt, net
    
    
    
    
    
    
    22,961Payments of long-term debt
    
    
    (33,688
    )
    
    
    (22,365
    )Excess tax benefit on stock-based compensation
    
    
    80
    
    
    
    1,955Proceeds from stock options exercised
    
    
    5,599
    
    
    
    27,276Other, net
    
    
    (81
    )
    
    
    (102
    )Net cash provided by (used in) financing activities
    
    
    (28,090
    )
    
    
    29,725Net decrease in cash and cash equivalents
    
    
    (27,068
    )
    
    
    (61,271
    )Cash and cash equivalents at beginning of period
    
    
    461,883
    
    
    
    307,286Cash and cash equivalents at end of period
    
    $
    434,815
    
    
    $
    246,015
  3




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1. BASIS OF PRESENTATION
     2. GOODWILL AND OTHER INTANGIBLE ASSETS, NET
  Commercial
    
    
    Government
    
    
    TotalBalance as of June 30, 2008
    
    $
    1,546,870
    
    
    $
    1,238,294
    
    
    $
    2,785,164Acquisition activity during the period
    
    
    (3
    )
    
    
    2,843
    
    
    
    2,840Divestiture activity during the period
    
    
    
    
    
    
    (2,834
    )
    
    
    (2,834
    )Foreign currency translation adjustments
    
    
    (15,229
    )
    
    
    (5,350
    )
    
    
    (20,579
    )Balance as of September 30, 2008
    
    $
    1,531,638
    
    
    $
    1,232,953
    
    
    $
    2,764,591
  4




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  As of September 30, 2008
    
    
    As of June 30, 2008Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationAmortizable intangible assets:Acquired customer-related
intangibles
    
    $
    424,489
    
    
    $
    (177,969
    )
    
    $
    445,753
    
    
    $
    (184,400
    )Customer contract costs
    
    
    251,423
    
    
    
    (130,388
    )
    
    
    251,837
    
    
    
    (130,319
    )All other
    
    
    19,038
    
    
    
    (13,125
    )
    
    
    19,121
    
    
    
    (12,401
    )$
    694,950
    
    
    $
    (321,482
    )
    
    $
    716,711
    
    
    $
    (327,120
    )Non-amortizable intangible assets:Title plant
    
    $
    51,045
    
    
    
    
    
    
    $
    51,045Tradename
    
    
    3,843
    
    
    
    
    
    
    
    3,843$
    54,888
    
    
    
    
    
    
    $
    54,888
 Three months endedSeptember 30,2008
    
    
    2007Amortization:Contract inducements
    
    $
    3,872
    
    
    $
    3,727Acquired customer-related intangibles
    
    
    11,205
    
    
    
    11,034All other intangibles
    
    
    8,213
    
    
    
    6,364Total amortization
    
    $
    23,290
    
    
    $
    21,125
   2009
    
    $
    87,8642010
    
    
    73,5552011
    
    
    62,2122012
    
    
    43,2502013
    
    
    29,784
 5




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 3. PENSION AND OTHER POST-EMPLOYMENT PLANS
 Net periodic benefit cost
  Three months ended September 30,2008
    
    
    2007Non-U.S.
    
    
    U.S.
    
    
    Non-U.S.
    
    
    U.S.Components of net periodic benefit costDefined benefit plans:Service cost
    
    $
    1,732
    
    
    $
    894
    
    
    $
    1,528
    
    
    $
    926Interest cost
    
    
    1,994
    
    
    
    191
    
    
    
    1,632
    
    
    
    123Expected return on assets
    
    
    (1,786
    )
    
    
    (240
    )
    
    
    (1,800
    )
    
    
    (173
    )Recognized net actuarial gain
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service costs
    
    
    
    
    
    
    55
    
    
    
    
    
    
    
    54Net periodic benefit cost for defined benefit plans
    
    $
    1,941
    
    
    $
    900
    
    
    $
    1,360
    
    
    $
    930
 Contributions
  4. EQUITY
 Share repurchase programs
  6




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 5. EARNINGS PER SHARE
  Three months ended September 30,2008
    
    
    2007Numerator:Net Income
    
    $
    83,635
    
    
    $
    66,144Denominator:Basic weighted average shares
    
    
    97,307
    
    
    
    99,721Effect of dilutive securities:Stock options
    
    
    784
    
    
    
    1,265Total potential common shares
    
    
    784
    
    
    
    1,265Diluted weighted average shares
    
    
    98,091
    
    
    
    100,986Earnings per shareBasic
    
    $
    0.86
    
    
    $
    0.66Diluted
    
    $
    0.85
    
    
    $
    0.65
   6. COMPREHENSIVE INCOME
  7




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  Three months endedSeptember 30,2008
    
    
    2007Net income
    
    $
    83,635
    
    
    $
    66,144Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    (36,334
    )
    
    
    11,743Unrealized losses on foreign exchange forward agreements
(net of income tax of $(694) and $(114), respectively)
    
    
    (1,145
    )
    
    
    (201
    )Amortization of unrealized loss on forward interest rate
agreements
(net of income tax of $240 and $240, respectively)
    
    
    396
    
    
    
    396Unrealized gains (losses) on interest rate swap agreement
(net of income tax of $159 and $(4,489), respectively)
    
    
    264
    
    
    
    (8,014
    )Unrealized losses on interest rate collar agreements
(net of income tax of $(207) and $0, respectively)
    
    
    (342
    )
    
    
    Amortization of prior service costs
(net of income tax of $20 and $20, respectively)
    
    
    35
    
    
    
    34Comprehensive income
    
    $
    46,509
    
    
    $
    70,102
  As of
    
    
    As ofSeptember 30, 2008
    
    
    June 30, 2008Foreign currency gains
    
    $
    5,668
    
    
    $
    42,002Unrealized gains on foreign exchange forward agreements
(net of income tax of $259 and $953, respectively)
    
    
    510
    
    
    
    1,655Unrealized loss on forward interest rate agreements
(net of income tax of $(3,972) and $(4,212), respectively)
    
    
    (6,633
    )
    
    
    (7,029
    )Unrealized losses on interest rate swap agreement
(net of income tax of $(6,018) and $(6,177), respectively)
    
    
    (9,960
    )
    
    
    (10,224
    )Unrealized gains on interest rate collar agreements
(net of income tax of $572 and $779, respectively)
    
    
    947
    
    
    
    1,289Unrecognized prior service costs
(net of income tax of $(508) and $(528), respectively)
    
    
    (898
    )
    
    
    (933
    )Unrealized losses on funded status of pension and other benefit plans
(net of income tax of $(3,259) and $(3,259), respectively)
    
    
    (7,930
    )
    
    
    (7,930
    )Total
    
    $
    (18,296
    )
    
    $
    18,830
 8




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 7. DERIVATIVES AND HEDGING INSTRUMENTS
 Interest rate hedges
   Foreign currency forward agreements
   9




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  NotionalAmount in$US
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted(Functional
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    Cumulativecurrency in
    
    
    Functional
    
    
    Counter
    
    
    Contract
    
    
    UnrealizedHedged Transaction
    
    $US)
    
    
    Currency
    
    
    Currency
    
    
    Rate
    
    
    Gain in $USReceipt of revenue
    
    $
    1,145
    
    
        EUR
    
    
    793
    
    
        CAD
    
    
    1,091
    
    
    
    0.727
    
    
    $
    90Payment of
operating expenses
    
    
    17,215
    
    
        USD
    
    
    17,215
    
    
        MXN
    
    
    193,000
    
    
    
    11.198
    
    
    
    260Receipt of revenue
    
    
    3,683
    
    
        CHF
    
    
    4,038
    
    
        NOK
    
    
    20,284
    
    
    
    0.199
    
    
    
    254Receipt of revenue
    
    
    396
    
    
        CHF
    
    
    434
    
    
        EUR
    
    
    269
    
    
    
    1.623
    
    
    
    10Payment for
merchandise
    
    
    3,032
    
    
        USD
    
    
    3,032
    
    
        CHF
    
    
    3,549
    
    
    
    1.171
    
    
    
    155Total
    
    $
    25,471
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    769
  8. FAIR VALUE MEASUREMENTS
   10




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  Level 1:
    
    Observable inputs such as quoted prices in active markets for identical assets or
liabilities.Level 2:
    
    Inputs other than quoted prices that are observable for the asset or liability,
either directly or indirectly; these include quoted prices for similar assets or
liabilities in active markets and quoted prices for identical or similar assets or
liabilities in markets that are not active.Level 3:
    
    Unobservable inputs reflecting managements own assumptions about the inputs used
in pricing the asset or liability.
  Balance SheetDescription
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total
    
    
    ClassificationASSETSForeign currency derivatives (a)
    
    $
    
    
    
    $
    769
    
    
    $
    
    
    
    $
    769
    
    
    Other current assetsDeferred compensation investments
in cash surrender value life insurance (b)
    
    
    
    
    
    
    55,482
    
    
    
    
    
    
    
    55,482
    
    
    Other long-term assetsDeferred compensation investments
in mutual funds (c)
    
    
    
    
    
    
    26,388
    
    
    
    
    
    
    
    26,388
    
    
    Other long-term assetsTotal assets
    
    $
    
    
    
    $
    82,639
    
    
    $
    
    
    
    $
    82,639LIABILITIESForeign currency derivatives (a)
    
    $
    
    
    
    $
    1,272
    
    
    $
    
    
    
    $
    1,272
    
    
    Other current liabilitiesDeferred Compensation investment
liabilities (d)
    
    
    
    
    
    
    80,005
    
    
    
    
    
    
    
    80,005
    
    
    Other long-term liabilitiesInterest rate swap and collar (e)
    
    
    
    
    
    
    14,460
    
    
    
    
    
    
    
    14,460
    
    
    Other long-term liabilitiesTotal liabilities
    
    $
    
    
    
    $
    95,737
    
    
    $
    
    
    
    $
    95,737
 
 (a)
    
    Foreign currency derivatives consist of foreign currency forward agreements. Fair
value is determined using observable market inputs such as the forward pricing curve,
currency volatilities, currency correlations and interest rates, and considers
nonperformance risk of the Company and that of its counterparties.(b)
    
    Fair value is reflected as the cash surrender value of company owned life insurance.(c)
    
    Fair value is based on quoted market prices for actively traded assets similar to those
held by the deferred compensation plan.(d)
    
    Fair value of the deferred compensation liability is based on the fair value of
investments corresponding to employees investment selections, based on quoted prices for
similar assets in actively traded markets.(e)
    
    The fair values of the interest rate swap and collar are determined using prices
obtained from pricing agencies and financial institutions who develop values based on
inputs observable in active markets, including interest rates with consideration given to
the nonperformance risk of the Company and that of its counterparties. 11




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 9. SEGMENT INFORMATION
  Commercial
    
    
    Government
    
    
    Corporate
    
    
    ConsolidatedThree months ended September 30, 2008Revenues (a)
    
    $
    959,417
    
    
    $
    645,037
    
    
    $
    
    
    
    $
    1,604,454Operating expenses (excluding depreciation and
amortization)
    
    
    798,225
    
    
    
    511,195
    
    
    
    24,680
    
    
    
    1,334,100Depreciation and amortization expense
    
    
    70,619
    
    
    
    26,352
    
    
    
    635
    
    
    
    97,606Operating income (loss)
    
    $
    90,573
    
    
    $
    107,490
    
    
    $
    (25,315
    )
    
    $
    172,748Three months ended September 30, 2007Revenues (a)
    
    $
    878,879
    
    
    $
    614,204
    
    
    $
    
    
    
    $
    1,493,083Operating expenses (excluding depreciation and
amortization)
    
    
    730,254
    
    
    
    480,710
    
    
    
    45,894
    
    
    
    1,256,858Depreciation and amortization expense
    
    
    65,896
    
    
    
    24,514
    
    
    
    414
    
    
    
    90,824Operating income (loss)
    
    $
    82,729
    
    
    $
    108,980
    
    
    $
    (46,308
    )
    
    $
    145,401
 
 (a)
    
    Revenues in our Commercial segment include revenues from operations divested through
the September 30, 2008 of $2.9 million for the three months ended September 30, 2007.
Revenues in our Government segment include revenues from operations divested through
September 30, 2008 of $0.3 million and $5.2 million for the three months ended September
30, 2008 and 2007, respectively. 10. DIVESTITURES
 Sale of bindery business
   Sale of Unclaimed Property Reporting and Recovery Business
   Sale of our decision support business
   12




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 11. COMMITMENTS AND CONTINGENCIES
 Regulatory Agency Investigations Relating to Stock Option Grant Practices
       13




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
     Lawsuits Related to Stock Option Grant Practices
  14




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 Dallas County Texas State District Court
 
    
    Merl Huntsinger, Derivatively on Behalf of Nominal Defendant
Affiliated Computer Services, Inc., Plaintiff, v. Darwin Deason, Mark
A. King, J. Livingston Kosberg, Dennis McCuistion, Joseph P. ONeill,
Jeffrey A. Rich and Frank A. Rossi, Defendants, and Affiliated
Computer Services, Inc., Nominal Defendant, Cause No. 06-03403 in the
District Court of Dallas County, Texas, 193rd Judicial
District filed on April 7, 2006.
    
    Robert P. Oury, Derivatively on Behalf of Nominal Defendant Affiliated
Computer Services, Inc., Plaintiff, v. Darwin Deason, Mark A. King, J.
Livingston Kosberg, Dennis McCuistion, Joseph P. ONeill, Jeffrey A.
Rich and Frank A. Rossi, Defendants, and Affiliated Computer Services,
Inc., Nominal Defendant, Cause No. 06-03872 in the District Court of
Dallas County, Texas, 193rd Judicial District filed on
April 21, 2006.
    
    Anchorage Police & Fire Retirement System, derivatively on behalf of
nominal defendant Affiliated Computer Services Inc., Plaintiff v.
Jeffrey Rich; Darwin Deason; Mark King; Joseph ONeill; Frank Rossi;
Dennis McCuistion; J. Livingston Kosberg; Gerald Ford; Clifford
Kendall; David Black; Henry Hortenstine; Peter Bracken; William
Deckelman; and Affiliated Computer Services Inc. Cause No. 06-5265-A
in the District Court of Dallas County, Texas, 14th
Judicial District filed on June 2, 2006.
 Huntsinger Oury Anchorage In Re Affiliated Computer Services, Inc. Derivative
Litigation rd
 Court of Chancery for the State of Delaware
 
    
    Jan Brandin, in the Right of and for the Benefit of Affiliated Computer Services, Inc.,
Plaintiff, v. Darwin Deason, Jeffrey A. Rich, Mark A. King, Joseph ONeill and Frank Rossi,
Defendants, and Affiliated Computer Services, Inc., Nominal Defendant, Civil Action No.
2123-VCL, pending before the Court of Chancery of the State of Delaware in and for New Castle
County, filed on May 2, 2006.
  United States District Court for the Northern District of Texas
 
    
    Alaska Electrical Fund, derivatively on behalf of Affiliated Computer Services Inc. v.
Jeffrey Rich; Joseph ONeill; Frank A. Rossi; Darwin Deason; Mark King; Lynn Blodgett; J.
Livingston Kosberg; Dennis McCuistion; Warren Edwards; John Rexford and John M. Brophy,
Defendants, and Affiliated Computer Services, Inc., Nominal Defendant, Cause No.
3-06CV1110-M, in the United States District Court for the Northern District of Texas, Dallas
Division, filed on June 22, 2006.
 15




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 
    
    Bennett Ray Lunceford and Ann M. Lunceford, derivatively on behalf of Affiliated Computer
Services Inc. v. Jeffrey Rich; Joseph ONeill; Frank A. Rossi; Darwin Deason; Mark King; Lynn
Blodgett; J. Livingston Kosberg; Dennis McCuistion; Warren Edwards; John Rexford and John M.
Brophy, Defendants, and Affiliated Computer Services, Inc., Nominal Defendant, Cause No.
3-06CV1212-M, filed on July 7, 2006, in the United States District Court for the Northern
District of Texas, Dallas Division.
 Alaska Electrical Lunceford In Re Affiliated Computer Services Federal Derivative
Litigation
     Regarding the Texas State Derivative Action and the Delaware Chancery Case
     16




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 United States District Court of Texas for the Northern District of Texas
  
    
    Terri Simeon, on behalf of Herself and All Others Similarly Situated, Plaintiff, vs.
Affiliated Computer Services, Inc., Darwin Deason, Mark A. King, Lynn R. Blodgett, Jeffrey A.
Rich, Joseph ONeill, Frank Rossi, J. Livingston Kosberg, Dennis McCuistion, The Retirement
Committee of the ACS Savings Plan, and John Does 1-30, Civil Action No. 306-CV-1592P, in
the United States District Court for the Northern District of Texas, Dallas Division, filed
August 31, 2006.
    
    Kyle Burke, Individually and on behalf of All Others Similarly Situated, Plaintiff, vs.
Affiliated Computer Services, Inc., the ACS Administrative Committee, Lora Villarreal, Kellar
Nevill, Gladys Mitchell, Meg Cino, Mike Miller, John Crysler, Van Johnson, Scott Bell, Anne
Meli, David Lotocki, Randall Booth, Pam Trutna, Brett Jakovac, Jeffrey A. Rich, Mark A. King,
Darwin Deason, Joseph P. ONeill and J. Livingston Kosberg, Case No. 306-CV-02379-M,
United States District Court for the Northern District of Texas, Dallas Division, filed on
September 15, 2006.
 Simeon Burke In re Affiliated
Computer Systems [sic] ERISA Litigation In re Affiliated Computer Systems [sic] ERISA
Litigation
 Litigation Arising from Buy-Out Offer
   
    
    Momentum Partners v. Darwin Deason, Lynn R. Blodgett, Joseph P. ONeill, Frank A.
Rossi, J. Livingston Kosberg, Robert B. Holland, Dennis McCuistion, Affiliated Computer
Services, Inc., and Cerberus Capital Management, L.P., Civil Action No. 2814-VCL, in the
Court of Chancery of the State of Delaware in and for New Castle County, filed on March 20,
2007.
 
    
    Mark Levy v. Darwin Deason, Lynn Blodgett, John Rexford, Joseph P. ONeill, Frank A.
Rossi, J. Livingston Kosberg, Dennis McCuistion, Affiliated Computer Services, Inc., and
Cerberus Capital Management, L.P., Civil Action No. 2816-VCL, in the Court of
Chancery of the State of Delaware in and for New Castle County, filed on March 21, 2007.
 
    
    St. Clair Shores Police and Fire Retirement System v. Darwin Deason, Lynn Blodgett,
Joseph P. ONeill, Frank A. Rossi, J. Livingston Kosberg, Dennis McCuistion, Robert B.
Holland, Cerberus Capital Management, L.P., Citigroup Global Markets Inc., and Affiliated
Computer Services, Inc., Civil Action No. 2821-VCL, in the Court of Chancery of the State
of Delaware in and for New Castle County, filed on March 22, 2007.
 
    
    Louisiana Municipal Police Employees Retirement System v. Darwin Deason, Joseph P.
ONeill, Frank A. Rossi, J. Livingston Kosberg, Dennis McCuistion, Robert B. Holland,
Affiliated Computer Services, Inc., and Cerberus Capital Management, L.P., Civil Action
No. 2839-VCL, in the Court of Chancery of the State of Delaware in and for New Castle County,
filed on March 26, 2007.
 
    
    Edward R. Koller v. Darwin Deason, Frank A. Rossi, J. Livingston Kosberg, Robert B.
Holland, Affiliated Computer Services, Inc., and Cerberus Capital Management, L.P., Civil
Action No. 2908-VCL, in the Court of Chancery of the State of Delaware in and for New Castle
County, filed on April 20, 2007.
 
    
    Suzanne Sweeney Living Trust v. Darwin Deason, Lynn R. Blodgett, John H. Rexford,
Joseph P. ONeill, Frank A. Rossi, J. Livingston Kosberg, Dennis McCuistion, Robert B.
Holland, Affiliated Computer Services, Inc., and Cerberus Capital Management, L.P., Civil
Action No. 2915-VCL, in the Court of Chancery of the State of Delaware in and for New Castle
County, filed on April 24, 2007.
 17




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 In Re Affiliated Computer Services, Inc. Shareholder
Litigation
  
    
    Steamship Trade Association/International Longshoremans Association Pension Fund v
Affiliated Computer Services, Inc., Darwin Deason, Lynn Blodgett, John Rexford, Joseph P.
ONeill, Gerardo I. Lopez, Frank A. Rossi, J. Livingston Kosberg, Dennis McCuistion, Robert B.
Holland, and Cereberus [sic] Capital Management, L.P., Cause No. 07-02691 in the District
Court of Dallas County, Texas, 44th Judicial District, filed on March 22, 2007.
 
    
    The City of Birmingham, Alabama Retirement and Relief System v. Darwin Deason, Robert
B. Holland, III, J. Livingston Kosberg, Frank A. Rossi, Joseph P. ONeill, Lynn R. Blodgett,
John H. Rexford, Dennis McCuistion, Affiliated Computer Services, Inc., and Cerberus Capital
Management, L.P., Cause No. 07-02768 in the District Court of Dallas, Texas,
160th Judicial District, filed on March 28, 2007.
 Texas State Court Consolidated stock option derivative case
 Texas State Court Consolidated stock option derivative
case
 Texas Federal Court Consolidated stock option derivative case
  18




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   Declaratory Action with Respect to Alleged Default and Purported Acceleration of our Senior Notes
and Amendment, Consent and Waiver for our Credit Facility
       19




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 Investigation Concerning Procurement Process at Hanscom Air Force Base
  Investigations Regarding Florida Workforce Contracts
    20




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   Litigation arising from alleged patent infringement
  Other
   21




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   12. NEW ACCOUNTING PRONOUNCEMENTS
       22




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   13. SUBSEQUENT EVENTS
  23




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##### Table of Contents



FORWARD-LOOKING AND CAUTIONARY STATEMENTS
   
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
   24




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##### Table of Contents



New Business Pipeline
   New Business Signings
   Internal Revenue Growth
  Client Renewal Rates
  25




---



##### Table of Contents



Capital Intensity
   Employees
  Other
   Significant Developments
 Deason/Cerberus Proposal
   26




---



##### Table of Contents



Subsequent Events
  27




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##### Table of Contents



Revenue Growth
  Three Months Ended September 30,2008
    
    
    2007
    
    
    $ Growth
    
    
    Growth %ConsolidatedTotal Revenues
    
    $
    1,604,454
    
    
    $
    1,493,083
    
    
    $
    111,371
    
    
    
    7
    %Less: Divestitures
    
    
    (316
    )
    
    
    (8,116
    )
    
    
    7,800Adjusted
    
    $
    1,604,138
    
    
    $
    1,484,967
    
    
    $
    119,171
    
    
    
    8
    %Acquired revenues
    
    $
    48,511
    
    
    $
    
    
    
    $
    48,511
    
    
    
    3
    %Internal revenues
    
    
    1,555,627
    
    
    
    1,484,967
    
    
    
    70,660
    
    
    
    5
    %Total
    
    $
    1,604,138
    
    
    $
    1,484,967
    
    
    $
    119,171
    
    
    
    8
    %CommercialTotal Revenues (a)
    
    $
    959,417
    
    
    $
    878,879
    
    
    $
    80,538
    
    
    
    9
    %Less: Divestitures
    
    
    (24
    )
    
    
    (2,902
    )
    
    
    2,878Adjusted
    
    $
    959,393
    
    
    $
    875,977
    
    
    $
    83,416
    
    
    
    10
    %Acquired revenues
    
    $
    34,244
    
    
    $
    
    
    
    $
    34,244
    
    
    
    4
    %Internal revenues
    
    
    925,149
    
    
    
    875,977
    
    
    
    49,172
    
    
    
    6
    %Total
    
    $
    959,393
    
    
    $
    875,977
    
    
    $
    83,416
    
    
    
    10
    %GovernmentTotal Revenues (b)
    
    $
    645,037
    
    
    $
    614,204
    
    
    $
    30,833
    
    
    
    5
    %Less: Divestitures
    
    
    (292
    )
    
    
    (5,214
    )
    
    
    4,922Adjusted
    
    $
    644,745
    
    
    $
    608,990
    
    
    $
    35,755
    
    
    
    6
    %Acquired revenues
    
    $
    14,267
    
    
    $
    
    
    
    $
    14,267
    
    
    
    2
    %Internal revenues
    
    
    630,478
    
    
    
    608,990
    
    
    
    21,488
    
    
    
    4
    %Total
    
    $
    644,745
    
    
    $
    608,990
    
    
    $
    35,755
    
    
    
    6
    %
 
 (a)
    
    The Commercial segment includes revenues from operations divested through September 30,
2008 of $2.9 million for the three months ended September 30, 2007.(b)
    
    The Government segment includes revenues from operations divested through September 30,
2008 of $0.3 million and $5.2 million for the three months ended September 30, 2008 and
2007, respectively. 28




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##### Table of Contents



Results of Operations
  Three months endedSeptember 30,2008
    
    2007Revenues
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Cost of revenues:Wages and benefits
    
    
    45.7
    %
    
    
    46.9
    %Services and supplies
    
    
    23.3
    %
    
    
    22.9
    %Rent, lease and maintenance
    
    
    12.6
    %
    
    
    12.4
    %Depreciation and amortization
    
    
    6.1
    %
    
    
    6.1
    %Other
    
    
    0.7
    %
    
    
    0.4
    %Cost of revenues
    
    
    88.4
    %
    
    
    88.7
    %Other operating expenses
    
    
    0.8
    %
    
    
    1.6
    %Total operating expenses
    
    
    89.2
    %
    
    
    90.3
    %Operating income
    
    
    10.8
    %
    
    
    9.7
    %Interest expense
    
    
    2.2
    %
    
    
    2.9
    %Other non-operating expense (income), net
    
    
    0.3
    %
    
    
    0.0
    %Pretax profit
    
    
    8.3
    %
    
    
    6.8
    %Income tax expense
    
    
    3.1
    %
    
    
    2.4
    %Net income
    
    
    5.2
    %
    
    
    4.4
    %
 Comparison of the three months ended September 30, 2008 to the three months ended September 30,
2007
 Revenues
    29




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##### Table of Contents



Operating expenses
     30




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##### Table of Contents



Operating income
  Three months endedSeptember 30,2008
    
    
    2007Government segment:Gain on sale of bindery business
    
    $
    0.2
    
    
    $
    Corporate segment:Legal costs associated with the ongoing stock option investigations and
stockholder derivative lawsuits
    
    
    (4.4
    )
    
    
    (11.1
    )Legal costs associated with the potential sale of the Company and stockholder
derivative lawsuits
    
    
    (0.8
    )
    
    
    (4.9
    )Cost related to amending certain employee stock options
    
    
    
    
    
    
    (1.2
    )Cost related to certain former employees stock options
    
    
    0.3
    
    
    
    (0.8
    )Total
    
    $
    (4.7
    )
    
    $
    (18.0
    )As a percentage of revenue
    
    
    -0.3
    %
    
    
    -1.2
    %Change as a percentage of revenue explained above
    
    
    0.9
    %Other net change as a percentage of revenue
    
    
    0.2
    %Total change as a percentage of revenue
    
    
    1.1
    %
 Interest expense
  Other
non-operating expense (income), net
  Income tax expense
  Liquidity and Capital Resources
 Cash flow
   31




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##### Table of Contents



Three months endedSeptember 30,2008
    
    
    2007Net cash provided by operating activities
    
    $
    62,602
    
    
    $
    8,023Purchases of property, equipment and software, net
    
    
    (64,550
    )
    
    
    (65,841
    )Additions to other intangible assets
    
    
    (9,541
    )
    
    
    (9,481
    )Free cash flow
    
    $
    (11,489
    )
    
    $
    (67,299
    )
   Credit arrangements
    32




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##### Table of Contents



Capital and Credit Market Risk
  Credit ratings
  Derivative instruments and hedging activities
  Share Repurchase Program
  Stock Option Repricing
  Other
   33




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##### Table of Contents



Disclosures about Contractual Obligations and Commercial Commitments as of September 30, 2008 (in
thousands):
 Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    Year
    
    1-3 Years
    
    4-5 Years
    
    5 YearsLong-term debt (1)
    
    $
    1,818,251
    
    
    $
    18,278
    
    
    $
    36,076
    
    
    $
    1,763,840
    
    
    $
    57Senior Notes, net of unamortized discount (1)
    
    
    499,549
    
    
    
    
    
    
    
    249,971
    
    
    
    
    
    
    
    249,578Capital lease obligations (1)
    
    
    52,870
    
    
    
    28,700
    
    
    
    22,854
    
    
    
    1,316
    
    
    
    Operating leases (2)
    
    
    925,262
    
    
    
    320,813
    
    
    
    442,331
    
    
    
    108,993
    
    
    
    53,125Purchase obligations (3) (4)
    
    
    42,181
    
    
    
    13,647
    
    
    
    28,534
    
    
    
    
    
    
    
    Total Contractual Cash Obligations
    
    $
    3,338,113
    
    
    $
    381,438
    
    
    $
    779,766
    
    
    $
    1,874,149
    
    
    $
    302,760Amount of Commitment Expiration per PeriodTotalAmounts
    
    Less than 1
    
    
    
    
    
    
    
    
    
    After 5Other Commercial Commitments
    
    Committed
    
    Year
    
    1-3 Years
    
    4-5 Years
    
    YearsStandby letters of credit
    
    $
    73,677
    
    
    $
    65,677
    
    
    $
    8,000
    

    
    $
    
    
    
    $
    Surety bonds
    
    
    642,527
    
    
    
    549,673
    
    
    
    92,854
    
    
    
    
    
    
    
    Total Commercial Commitments
    
    $
    716,204
    
    
    $
    615,350
    
    
    $
    100,854
    
    
    $
    
    
    
    $
    
 
 (1)
    
    Excludes accrued interest of $11 million at September 30, 2008.(2)
    
    We have various contractual commitments to lease hardware and software and for the
purchase of maintenance on such leased assets with varying terms through fiscal year 2013,
which are included in operating leases in the table.(3)
    
    We have entered into various contractual agreements to purchase telecommunications
services. These agreements provide for minimum annual spending commitments, and have
varying terms through fiscal year 2011, and are included in purchase obligations in the
table.(4)
    
    In June 2006, we entered into a two year agreement with Rich Capital, LLC, an M&A
advisory firm owned by Jeffery A. Rich, a former Chief Executive Officer, to provide us
with advisory services in connection with potential acquisition candidates. This
contractual obligation is included in purchase obligations in the table above. However, we
have currently suspended payment under this agreement pending determination whether Rich
Capital, LLC is capable of performing its obligations under the contract in view of the
internal investigations conclusions regarding stock options awarded to Mr. Rich.  Income Taxes
    34




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##### Table of Contents



Critical Accounting Policies
   Revenue Recognition
        35




---



##### Table of Contents



Cost of Revenues
  Contingencies
   Valuation of Goodwill and Intangibles
  36




---



##### Table of Contents



Valuation of Property, Equipment and Software
  Stock-Based Compensation
  
    
    Expected volatility of our stock price based on historical monthly volatility over the
expected term.
    
    Expected term of the option based on historical employee stock option exercise behavior
and the vesting and contractual terms of the respective option.
    
    Risk-free interest rate for periods within the expected term of the option.
    
    Expected dividend yield.
   Pension and Post-Employment Benefits
   Allowance for Doubtful Accounts
  Income Taxes
  37




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##### Table of Contents



Fair Value Measurements
    New Accounting Pronouncements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     38




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
  
 PART II
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
  39




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##### Table of Contents



SIGNATURES
  AFFILIATED COMPUTER SERVICES, INC.By:
    /s/ Kevin KyserKevin KyserExecutive Vice President and
Chief Financial Officer 40




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##### Table of Contents



Index to Exhibits
 ExhibitNumber
    
    Exhibit Name2.1
    
    Stock Purchase Agreement, dated as of July 31, 2003 between
Lockheed Martin Corporation and Affiliated Computer Services,
Inc. (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q,
filed November 14, 2003 and incorporated herein by reference).2.2
    
    Asset Purchase Agreement, dated as of July 31, 2003 between
Lockheed Martin Service, Inc. and Affiliated Computer Services,
Inc. (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q,
filed November 14, 2003 and incorporated herein by reference).2.3
    
    Purchase Agreement, dated as of March 15, 2005, among Mellon
Financial Corporation, Mellon Consultants European Holdings
Limited, Affiliated Computer Services, Inc., ACS Business Process
Solutions Limited and Affiliated Computer Services of Germany
GmbH (filed as Exhibit 2.1 to our Current Report on Form 8-K,
filed March 17, 2005 and incorporated herein by reference).2.4
    
    Amendment No. 1 to Purchase Agreement, dated as of May 25, 2005,
among Mellon Financial Corporation, Mellon Consultants European
Holdings Limited, Affiliated Computer Services, Inc., ACS
Business Process Solutions Limited and Affiliated Computer
Services of Germany GmbH (filed as Exhibit 2.1 to our Current
Report on Form 8-K, filed June 1, 2005 and incorporated herein by
reference).2.5
    
    Amendment No. 2 to Purchase Agreement, dated as of November 11,
2005, among Mellon Financial Corporation, Mellon Consultants
European Holdings Limited, Affiliated Computer Services, Inc.,
ACS Business Process Solutions Limited and Affiliated Computer
Services of Germany GmbH (filed as Exhibit 2.1 to our Current
Report on Form 8-K, filed November 16, 2005 and incorporated
herein by reference).3.1
    
    Certificate of Incorporation of Affiliated Computer Services,
Inc. (filed as Exhibit 3.1 to our Registration Statement on Form
S-3, filed March 30, 2001, File No. 333-58038 and incorporated
herein by reference).3.2
    
    Certificate of Correction to Certificate of Amendment of
Affiliated Computer Services, Inc., dated August 30, 2001 (filed
as Exhibit 3.2 to our Annual Report on Form 10-K, filed September
17, 2003 and incorporated herein by reference).3.3
    
    Certificate of Elimination of the Series A Cumulative Redeemable
Preferred Stock of Affiliated Computer Services, Inc. dated
August 20, 2001 (filed as Exhibit 4.3 to our Registration
Statement on Form S-8, File No. 333-42385, filed June 13, 2007
and incorporated herein by reference).3.4
    
    Bylaws of Affiliated Computer Services, Inc., as amended and in
effect on August 21, 2008 (filed as Exhibit 3.2 to our Current
Report on Form 8-K, filed August 27, 2008 and incorporated herein
by reference).4.1
    
    Form of New Class A Common Stock Certificate (filed as Exhibit
4.3 to our Registration Statement on Form S-1, filed May 26,
1994, File No. 33-79394 and incorporated herein by reference).4.2
    
    Indenture, dated as of June 6, 2005, by and between Affiliated
Computer Services, Inc. as Issuer and The Bank of New York Trust
Company, N.A. as Trustee (filed as Exhibit 4.1 to our Current
Report on Form 8-K, filed June 6, 2005 and incorporated herein by
reference).4.3
    
    First Supplemental Indenture, dated as of June 6, 2005, by and
between Affiliated Computer Services, Inc. as Issuer and The Bank
of New York Trust Company, N.A. as Trustee, relating to our 4.70%
Senior Notes due 2010 (filed as Exhibit 4.2 to our Current Report
on Form 8-K, filed June 6, 2005 and incorporated herein by
reference).4.4
    
    Second Supplemental Indenture, dated as of June 6, 2005, by and
between Affiliated Computer Services, Inc. as Issuer and The Bank
of New York Trust Company, N.A. as Trustee, relating to our 5.20%
Senior Notes due 2015 (filed as Exhibit 4.3 to our Current Report
on Form 8-K, filed June 6, 2005 and incorporated herein by
reference).4.5
    
    Specimen Note for 4.70% Senior Notes due 2010 (filed as Exhibit
4.4 to our Current Report on Form 8-K, filed June 6, 2005 and
incorporated herein by reference).4.6
    
    Specimen Note for 5.20% Senior Notes due 2015 (filed as Exhibit
4.5 to our Current Report on Form 8-K, filed June 6, 2005 and
incorporated herein by reference).9.1
    
    Voting Agreement, as amended December 7, 2007, by and between
Affiliated Computer Services, Inc. and Darwin Deason (filed as
Exhibit 99.1 to our Current Report on Form 8-K filed December 10,
2007 and incorporated herein by reference).10.1
    
    1997 Stock Incentive Plan of the Company (filed as Appendix D to
our Joint Proxy Statement on Schedule 14A, filed November 14,
1997 and incorporated herein by reference).10.2
    
    Amendment No.1 to Affiliated Computer Services, Inc. 1997 Stock
Incentive Plan, dated as of October 28, 2004 (filed as Exhibit
4.6 to our Registration Statement on Form S-8, filed December 6,
2005 and incorporated herein by reference).
 41




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##### Table of Contents



Index to Exhibits
 ExhibitNumber
    
    Exhibit Name10.3
    
    2007 Equity Incentive Plan of the Company (filed as Appendix C to
our Proxy Statement on Schedule 14A, filed April 30, 2007 and
incorporated herein by reference).10.4
    
    Form of Directors Indemnification Agreement (filed as Exhibit
10.1 to our Current Report on Form 8-K, filed June 5, 2008 and
incorporated herein by reference).10.5
    
    Form of Change in Control Agreement, dated as of June 9, 2008
(June 6, 2008, in the case of Ann Vezina), by and between
Affiliated Computer Services, Inc. and each of Tom Burlin, Kevin
Kyser and Tom Blodgett (filed as Exhibit 10.1 to our Current
Report on Form 8-K, filed June 11, 2008 and incorporated herein
by reference).10.6
    
    Change in Control Agreement, dated as of June 9, 2008, by and
between Affiliated Computer Services, Inc. and John Rexford
(filed as Exhibit 10.2 to our Current Report on Form 8-K, filed
June 11, 2008 and incorporated herein by reference).10.7
    
    Supplemental Executive Retirement Agreement, dated as of December
15, 1998, by and between Affiliated Computer Services, Inc. and
Darwin Deason (filed as Exhibit 10.13 to our Annual Report on
Form 10-K, filed September 29, 1999 and incorporated herein by
reference).10.8
    
    Amendment to Supplemental Executive Retirement Agreement, dated
as of November 13, 2003, by and between Affiliated Computer
Services, Inc. and Darwin Deason (filed as Exhibit 10.1 to our
Quarterly Report on Form 10-Q, filed February 17, 2004 and
incorporated herein by reference).10.9
    
    Amendment No. 2 to Supplemental Executive Retirement Agreement,
dated as of June 30, 2005, by and between Affiliated Computer
Services, Inc. and Darwin Deason (filed as Exhibit 10.1 to our
Current Report on Form 8-K, filed July 1, 2005 and incorporated
herein by reference).10.10
    
    Amended and Restated Executive Employment Agreement, effective as
of May 1, 2008, by and between Affiliated Computer Services, Inc.
and Lynn Blodgett (filed as Exhibit 10.3 to our Current Report on
Form 8-K, filed June 11, 2008 and incorporated herein by
reference).10.11
    
    Employment Agreement, as amended December 7, 2007, between the
Company and Darwin Deason (filed as Exhibit 99.2 to our Current
Report on Form 8-K, filed December 10, 2007 and incorporated
herein by reference).10.12
    
    Affiliated Computer Services, Inc. 401(k) Supplemental Plan,
effective as of July 1, 2000, as amended (filed as Exhibit 10.15
to our Annual Report on Form 10-K, filed September 13, 2004 and
incorporated herein by reference).10.13
    
    Affiliated Computer Services, Inc. Executive Benefit Plan,
effective as of January 1, 2002, as amended (filed as Exhibit
10.15 to our Annual Report on Form 10-K, filed September 13, 2005
and incorporated herein by reference).10.14
    
    Form of Stock Option Agreement (filed as Exhibit 10.17 to our
Annual Report on Form 10-K, filed September 13, 2005 and
incorporated herein by reference).10.15
    
    Form of Stock Option Agreement (UK grant) (filed as Exhibit 10.18
to our Annual Report on Form 10-K, filed September 13, 2005 and
incorporated herein by reference).10.16
    
    Form of Stock Option Agreement (Switzerland, Canton of Fribourg)
(filed as Exhibit 10.8 to our Quarterly Report on Form 10-Q filed
May 16, 2006 and incorporated herein by reference.10.17
    
    Form of Stock Option Agreement (Switzerland, Cantons of Aargau,
Basel-Landschaft, Bern & Zurich) (filed as Exhibit 10.9 to our
Quarterly Report on Form 10-Q filed May 16, 2006 and incorporated
herein by reference.10.18
    
    1997 Stock Incentive Plan for Employees in France (filed as
Exhibit 10.35 to our Annual Report on Form 10-K filed January 23,
2007 and incorporated herein by reference.)10.19
    
    Form of Stock Option Agreement (France) (filed as Exhibit 10.36
to our Annual Report on Form 10-K filed January 23, 2007 and
incorporated herein by reference.)10.20
    
    Form of Stock Option Agreement (Canada, other than Quebec) (filed
as Exhibit 10.20 to our Annual Report on Form 10-K filed August
28, 2008 and incorporated herein by reference.)10.21
    
    Form of Stock Option Agreement (Quebec) (filed as Exhibit 10.21
to our Annual Report on Form 10-K filed August 28, 2008 and
incorporated herein by reference.)10.22
    
    Form of Stock Option Agreement (Germany) (filed as Exhibit 10.22
to our Annual Report on Form 10-K filed August 28, 2008 and
incorporated herein by reference.)10.23
    
    Agreement, dated as of September 30, 2005, between Affiliated
Computer Services, Inc. and Jeffrey A. Rich (filed as Exhibit
10.1 to our Current Report on Form 8-K, filed October 3, 2005 and
incorporated herein by reference).
 42




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##### Table of Contents



Index to Exhibits
 ExhibitNumber
    
    Exhibit Name10.24
    
    Credit Agreement, dated March 20, 2006, by and among Affiliated
Computer Services, Inc., and certain subsidiary parties thereto,
as Borrowers, Citicorp USA, Inc., as Administrative Agent,
Citigroup Global Markets Inc., as Sole Lead Arranger and Book
Runner, and various other agents, lenders and issuers (filed as
Exhibit 10.1 to our Current Report on Form 8-K, filed March 21,
2006 and incorporated herein by reference).10.25
    
    Amendment No. 1 to Credit Agreement dated as of March 30, 2006,
by and among Affiliated Computer Services, Inc., and certain
subsidiary parties thereto, as Borrowers, and Citicorp USA, Inc.,
as Administrative Agent (filed as Exhibit 10.24 to our Annual
Report on Form 10-K, filed January 23, 2007 and incorporated
herein by reference).10.26
    
    Amendment No. 2 to Credit Agreement dated as of July 6, 2006, by
and among Affiliated Computer Services, Inc., and certain
subsidiary parties thereto, as Borrowers, and Citicorp USA, Inc.,
as Administrative Agent (filed as Exhibit 10.1 to our Current
Report on Form 8-K, filed July 7, 2006 and incorporated herein by
reference).10.27
    
    Amendment No. 3, Consent and Waiver to Credit Agreement, by and
among Affiliated Computer Services, Inc., and certain subsidiary
parties thereto and Citicorp USA, Inc., as Administrative Agent
(filed as Exhibit 10.1 to our Current Report on Form 8-K, filed
September 28, 2006 and incorporated herein by reference).10.28
    
    Amendment No. 4, Consent and Waiver to Credit Agreement, by and
among Affiliated Computer Services, Inc., and certain subsidiary
parties thereto and Citicorp USA, Inc., as Administrative Agent
(filed as Exhibit 10.1 to our Current Report on Form 8-K, filed
December 22, 2006 and incorporated herein by reference).10.29
    
    Pledge and Security Agreement, dated March 20, 2006, by and among
Affiliated Computer Services and certain of its subsidiaries, and
Citicorp USA, Inc., as Administrative Agent (filed as Exhibit
10.2 to our Current Report on Form 8-K, filed March 21, 2006 and
incorporated herein by reference).10.30
    
    Deed of Assignment, dated March 20, 2006, by and among the
companies listed on Schedule thereto, as Assignors, and Citicorp
USA, Inc., as Security Agent (filed as Exhibit 10.3 to our
Current Report on Form 8-K, filed March 21, 2006 and incorporated
herein by reference).10.31
    
    Assignment of Receivables, dated March 20, 2006, by and among the
entities listed in Schedule 1 thereto, as Assignors, and Citicorp
USA, Inc. as Security Agent (filed as Exhibit 10.4 to our Current
Report on Form 8-K, filed March 21, 2006 and incorporated herein
by reference).10.32
    
    Agreement and Deed of the Creation of a First Ranking Right of
Pledge of Shares in Affiliated Computer Services International
B.V., dated March 20, 2006 (filed as Exhibit 10.5 on Form 8-K,
filed March 21, 2006 and incorporated herein by reference).10.33
    
    Agreement and Deed of the Creation of a First Ranking Right of
Pledge of Receivables of Affiliated Computer Services
International B.V., dated March 20, 2006 (filed as Exhibit 10.6
to our Current Report on Form 8-K, filed March 21, 2006 and
incorporated herein by reference).10.34
    
    Affirmation of Liens and Guaranties, dated as of July 6, 2006, by
and among Affiliated Computer Services, Inc. and certain of its
subsidiaries, and Citicorp USA, Inc., as Administrative Agent
(filed as Exhibit 10.2 to our Current Report on Form 8-K, filed
July 7, 2006 and incorporated herein by reference).10.35
    
    Confirmation Deed, dated as of July 6, 2006, by and among the
entities listed on the Schedule thereto and Citicorp USA, Inc.,
as Security Agent (filed as Exhibit 10.3 to our Current Report on
Form 8-K, filed July 7, 2006 and incorporated herein by
reference).10.36
    
    Engagement Letter between Rich Capital, LLC and Affiliated
Computer Services, Inc. dated June 9, 2006 (filed as Exhibit 10.1
on Form 8-K, filed June 12, 2006 and incorporated herein by
reference).10.37
    
    Separation Agreement dated as of November 26, 2006 between
Affiliated Computer Services, Inc. and Mark A. King (filed as
Exhibit 10.1 to our Current Report on Form 8-K, filed November
27, 2006 and incorporated herein by reference).10.38
    
    Separation Agreement dated as of November 26, 2006 between
Affiliated Computer Services, Inc. and Warren D. Edwards (filed
as Exhibit 10.2 to our Current Report on Form 8-K, filed November
27, 2006 and incorporated herein by reference).31.1*
    
    Certification of Chief Executive Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(a) promulgated under the
Securities Exchange Act of 1934, as amended.31.2*
    
    Certification of Chief Financial Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(a) promulgated under the
Securities Exchange Act of 1934, as amended.
 43




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##### Table of Contents



Index to Exhibits
 ExhibitNumber
    
    Exhibit Name32.1*
    
    Certification of Chief Executive Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(b) promulgated under the
Securities Exchange Act of 1934, as amended and Section 1350 of
Chapter 63 of Title 18 of the United States Code. Pursuant to
Item 601(b)(32)(ii) of Regulation S-K, this Exhibit is furnished
to the SEC and shall not be deemed to be filed.32.2*
    
    Certification of Chief Financial Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(b) promulgated under the
Securities Exchange Act of 1934, as amended and Section 1350 of
Chapter 63 of Title 18 of the United States Code. Pursuant to
Item 601(b)(32)(ii) of Regulation S-K, this Exhibit is furnished
to the SEC and shall not be deemed to be filed.
 
 *
    
    Filed herewith.
    
    Management contract or compensatory plan or arrangement. 44