##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period endedSeptember 30, 2007
 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  (Former name, former address and former fiscal year, if changed since last report.)
 þ o
  þ o o
 o þ
  Number of shares outstanding as ofTitle of each class
    
    October 29, 2007Class A Common Stock, $.01 par value
    
    93,890,441Class 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, 2007 and
June 30, 2007
    
    
    1Consolidated Statements of Income (Unaudited) for the Three
Months Ended September 30, 2007 and 2006
    
    
    2Consolidated Statements of Cash Flows (Unaudited) for the Three
Months Ended September 30, 2007 and 2006
    
    
    3Notes to Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    36Item 4. Controls and Procedures
    
    
    37PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    37Item 1A. Risk Factors
    
    
    37Item 3. Defaults Upon Senior Securities
    
    
    37Item 6. Exhibits
    
    
    37Certification of CEO Pursuant to Rule 13a-14(a) or 15d-14(a)Certification of CFO Pursuant to Rule 13a-14(a) or 15d-14(a)Certification of CEO Pursuant to Rule 13a-14(b) or 15d-14(b)Certification of CFO Pursuant to Rule 13a-14(b) or 15d-14(b)




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##### Table of Contents



PART I
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 (in thousands)
 September 30,
    
    
    June 30,2007
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    246,015
    
    
    $
    307,286Accounts receivable, net
    
    
    1,387,656
    
    
    
    1,257,108Income taxes receivable
    
    
    34,610
    
    
    
    13,268Prepaid expenses and other current assets
    
    
    241,957
    
    
    
    232,872Total current assets
    
    
    1,910,238
    
    
    
    1,810,534Property, equipment and software, net
    
    
    899,694
    
    
    
    897,319Goodwill
    
    
    2,621,120
    
    
    
    2,612,368Other intangibles, net
    
    
    448,450
    
    
    
    481,378Other assets
    
    
    199,504
    
    
    
    180,830Total assets
    
    $
    6,079,006
    
    
    $
    5,982,429LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    149,489
    
    
    $
    97,951Accrued compensation and benefits
    
    
    139,817
    
    
    
    246,742Other accrued liabilities
    
    
    375,893
    
    
    
    400,238Deferred taxes
    
    
    61,432
    
    
    
    14,418Current portion of long-term debt
    
    
    48,814
    
    
    
    47,039Current portion of unearned revenue
    
    
    146,577
    
    
    
    164,484Total current liabilities
    
    
    922,022
    
    
    
    970,872Senior Notes, net of unamortized discount
    
    
    499,469
    
    
    
    499,449Other long-term debt
    
    
    1,853,628
    
    
    
    1,842,823Deferred taxes
    
    
    347,340
    
    
    
    367,565Other long-term liabilities
    
    
    293,746
    
    
    
    235,552Total liabilities
    
    
    3,916,205
    
    
    
    3,916,261Commitments and contingencies (See Notes 2, 4 and 13)Stockholders equity:Class A common stock, $.01 par value, 500,000 shares
authorized, 114,843 and 113,960 shares issued, respectively
    
    
    1,148
    
    
    
    1,139Class B convertible common stock, $.01 par value, 14,000
shares authorized, 6,600 shares issued and outstanding
    
    
    66
    
    
    
    66Additional paid-in capital
    
    
    1,679,366
    
    
    
    1,642,900Accumulated other comprehensive income, net
    
    
    19,874
    
    
    
    15,916Retained earnings
    
    
    1,518,315
    
    
    
    1,462,115Treasury stock at cost, 21,002 shares
    
    
    (1,055,968
    )
    
    
    (1,055,968
    )Total stockholders equity
    
    
    2,162,801
    
    
    
    2,066,168Total liabilities and stockholders equity
    
    $
    6,079,006
    
    
    $
    5,982,429
  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 30,2007
    
    
    2006Revenues
    
    $
    1,493,083
    
    
    $
    1,385,438Operating expenses:Cost of revenues:Wages and benefits
    
    
    699,949
    
    
    
    666,616Services and supplies
    
    
    341,766
    
    
    
    291,362Rent, lease and maintenance
    
    
    184,918
    
    
    
    179,056Depreciation and amortization
    
    
    90,824
    
    
    
    81,638Other
    
    
    6,915
    
    
    
    10,614Total cost of revenues
    
    
    1,324,372
    
    
    
    1,229,286Other operating expenses
    
    
    23,310
    
    
    
    15,294Total operating expenses
    
    
    1,347,682
    
    
    
    1,244,580Operating income
    
    
    145,401
    
    
    
    140,858Interest expense
    
    
    43,970
    
    
    
    46,013Other non-operating income, net
    
    
    (680
    )
    
    
    (2,618
    )Pretax profit
    
    
    102,111
    
    
    
    97,463Income tax expense
    
    
    35,967
    
    
    
    36,080Net income
    
    $
    66,144
    
    
    $
    61,383Earnings per share:Basic
    
    $
    0.66
    
    
    $
    0.59Diluted
    
    $
    0.65
    
    
    $
    0.59Shares used in computing earnings per share:Basic
    
    
    99,721
    
    
    
    103,452Diluted
    
    
    100,986
    
    
    
    104,761
  2




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 (in thousands)
 Three Months EndedSeptember 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    66,144
    
    
    $
    61,383Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    90,824
    
    
    
    81,638Stock-based compensation expense
    
    
    7,601
    
    
    
    7,744Excess tax benefit on stock-based compensation
    
    
    (1,955
    )
    
    
    (31
    )Deferred income tax expense
    
    
    3,791
    
    
    
    5,838Impairment charges
    
    
    
    
    
    
    1,231(Gain) loss on investments
    
    
    1,853
    
    
    
    (1,300
    )Gain on sale of business
    
    
    
    
    
    
    (726
    )Other non-cash activities
    
    
    6,325
    
    
    
    5,781Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable
    
    
    (130,635
    )
    
    
    (7,202
    )Prepaid expenses and other current assets
    
    
    (3,701
    )
    
    
    (9,442
    )Other assets
    
    
    (3,598
    )
    
    
    (2,324
    )Accounts payable
    
    
    51,547
    
    
    
    (13,762
    )Accrued compensation and benefits
    
    
    (106,925
    )
    
    
    (33,288
    )Other accrued liabilities
    
    
    (2,796
    )
    
    
    35,607Income taxes payable/receivable
    
    
    36,322
    
    
    
    26,142Other long-term liabilities
    
    
    5,058
    
    
    
    (438
    )Unearned revenue
    
    
    (11,832
    )
    
    
    16,331Total adjustments
    
    
    (58,121
    )
    
    
    111,799Net cash provided by operating activities
    
    
    8,023
    
    
    
    173,182Cash flows from investing activities:Purchases of property, equipment and software, net
    
    
    (65,841
    )
    
    
    (101,498
    )Additions to other intangible assets
    
    
    (9,481
    )
    
    
    (9,089
    )Payments for acquisitions, net of cash acquired
    
    
    (23,697
    )
    
    
    (33,988
    )Purchases of investments
    
    
    
    
    
    
    (6,360
    )Net cash used in investing activities
    
    
    (99,019
    )
    
    
    (150,935
    )Cash flows from financing activities:Proceeds from issuance of long-term debt, net
    
    
    22,961
    
    
    
    1,356,956Payments of long-term debt
    
    
    (22,365
    )
    
    
    (615,088
    )Purchase of treasury shares
    
    
    
    
    
    
    (730,689
    )Excess tax benefit on stock-based compensation
    
    
    1,955
    
    
    
    31Proceeds from stock options exercised
    
    
    27,276
    
    
    
    5,023Proceeds from issuance of treasury shares
    
    
    
    
    
    
    2,923Other
    
    
    (102
    )
    
    
    Net cash provided by financing activities
    
    
    29,725
    
    
    
    19,156Net change in cash and cash equivalents
    
    
    (61,271
    )
    
    
    41,403Cash and cash equivalents at beginning of period
    
    
    307,286
    
    
    
    100,837Cash and cash equivalents at end of period
    
    $
    246,015
    
    
    $
    142,240
  3




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1. BASIS OF PRESENTATION
     2. DEASON/CERBERUS PROPOSAL
   4




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 3. GOODWILL AND OTHER INTANGIBLE ASSETS
  Commercial
    
    
    Government
    
    
    TotalBalance as of June 30, 2007
    
    $
    1,415,315
    
    
    $
    1,197,053
    
    
    $
    2,612,368Acquisition activity
    
    
    
    
    
    
    2,709
    
    
    
    2,709Foreign currency translation
    
    
    2,458
    
    
    
    3,585
    
    
    
    6,043Balance as of September 30, 2007
    
    $
    1,417,773
    
    
    $
    1,203,347
    
    
    $
    2,621,120
   September 30, 2007
    
    
    June 30, 2007Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationAmortizable intangible assets:Acquired customer-related
intangibles
    
    $
    420,320
    
    
    $
    (158,551
    )
    
    $
    419,853
    
    
    $
    (147,872
    )Customer-related intangibles
    
    
    234,291
    
    
    
    (109,460
    )
    
    
    247,840
    
    
    
    (101,217
    )All other
    
    
    17,166
    
    
    
    (10,204
    )
    
    
    17,248
    
    
    
    (9,362
    )Total
    
    $
    671,777
    
    
    $
    (278,215
    )
    
    $
    684,941
    
    
    $
    (258,451
    )Non-amortizable intangible assets:Title plant
    
    $
    51,045
    
    
    
    
    
    
    $
    51,045Trade name
    
    
    3,843
    
    
    
    
    
    
    
    3,843Total
    
    $
    54,888
    
    
    
    
    
    
    $
    54,888Aggregate Amortization:For the quarter ended September 30, 2007
    
    
    
    
    
    
    
    
    
    $
    21,125For the quarter ended September 30, 2006
    
    
    
    
    
    
    
    
    
    
    18,765Estimated amortization for the years ended June 30,2008
    
    
    
    
    
    
    
    
    
    
    81,3242009
    
    
    
    
    
    
    
    
    
    
    67,8872010
    
    
    
    
    
    
    
    
    
    
    56,3212011
    
    
    
    
    
    
    
    
    
    
    47,0252012
    
    
    
    
    
    
    
    
    
    
    31,937
  5




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 4. DEBT
 Senior
Notes
      Credit
Facility
 6




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  5. PENSION AND OTHER POST-EMPLOYMENT PLANS
 Net periodic benefit cost
  Three Months endedSeptember 30,2007
    
    
    2006Non-U.S.
    
    
    U.S.
    
    
    Non-U.S.
    
    
    U.S.Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansComponents of
net periodic benefit cost:Defined benefit plans:Service cost
    
    $
    1,528
    
    
    $
    926
    
    
    $
    1,384
    
    
    $
    924Interest cost
    
    
    1,632
    
    
    
    123
    
    
    
    1,366
    
    
    
    63Expected return on assets
    
    
    (1,800
    )
    
    
    (173
    )
    
    
    (1,342
    )
    
    
    (54
    )Amortization of gains/losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )Amortization of prior service costs
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    63Net periodic benefit cost for defined benefit plans
    
    $
    1,360
    
    
    $
    930
    
    
    $
    1,408
    
    
    $
    990
 Contributions
  6. INCOME TAXES
     7




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 7. EQUITY
 Share repurchase program
  Stock option grants
  Stock option repricing
  8. EARNINGS PER SHARE
  Three Months EndedSeptember 30,2007
    
    
    2006Numerator:Net income
    
    $
    66,144
    
    
    $
    61,383Denominator:Basic weighted average shares outstanding
    
    
    99,721
    
    
    
    103,452Dilutive effect of stock options
    
    
    1,265
    
    
    
    1,309Denominator for earnings per share assuming dilution
    
    
    100,986
    
    
    
    104,761Basic earnings per share
    
    $
    0.66
    
    
    $
    0.59Diluted earnings per share
    
    $
    0.65
    
    
    $
    0.59
   8




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  9. COMPREHENSIVE INCOME
   Three Months EndedSeptember 30,2007
    
    
    2006Net income
    
    $
    66,144
    
    
    $
    61,383Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    11,743
    
    
    
    2,715Unrealized loss on interest rate swap agreement (net of
income tax of $(4,489))
    
    
    (8,014
    )
    
    
    Amortization of unrealized loss on forward interest rate
agreements (net of income tax of $240 and $240,
respectively)
    
    
    396
    
    
    
    396Unrealized gain (loss) on foreign exchange forward
agreements (net of income tax of $(114), and $217,
respectively)
    
    
    (201
    )
    
    
    359Prepaid pension cost amortization (net of income tax of $20)
    
    
    34
    
    
    
    Comprehensive income
    
    $
    70,102
    
    
    $
    64,853
  As of
    
    
    As ofSeptember 30, 2007
    
    
    June 30, 2007Foreign currency gains
    
    $
    28,272
    
    
    $
    16,529Unrealized (loss) gain on
interest rate swap agreement
(net of income tax of
$(1,670) and $2,819,
respectively)
    
    
    (2,763
    )
    
    
    5,251Unrealized loss on forward
interest rate agreements (net
of income tax of $(4,930) and
$(5,170), respectively)
    
    
    (8,219
    )
    
    
    (8,615
    )Unrealized gains on foreign
exchange forward agreements
(net of income tax of $114
and $226, respectively)
    
    
    176
    
    
    
    377Unrecognized prior service
costs (net of income tax of
$(589) and $(609),
respectively)
    
    
    (1,035
    )
    
    
    (1,069
    )Unrealized actuarial gains on
pension plans (net of income
tax of $1,588 and $1,588,
respectively)
    
    
    3,443
    
    
    
    3,443Total
    
    $
    19,874
    
    
    $
    15,916
 10. DERIVATIVES AND HEDGING INSTRUMENTS
 Interest rate hedges
  9




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   Foreign currency forward agreements
   10




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 11. SEGMENT INFORMATION
   Commercial
    
    
    Government
    
    
    Corporate
    
    
    ConsolidatedThree
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
    
    
    65,896
    
    
    
    24,514
    
    
    
    414
    
    
    
    90,824Operating income
    
    $
    82,729
    
    
    $
    108,980
    
    
    $
    (46,308
    )
    
    $
    145,401Three
months ended September 30, 2006Revenues (a)
    
    $
    832,139
    
    
    $
    553,299
    
    
    $
    
    
    
    $
    1,385,438Operating expenses (excluding
depreciation and amortization)
    
    
    711,661
    
    
    
    423,810
    
    
    
    27,471
    
    
    
    1,162,942Depreciation and amortization
    
    
    56,394
    
    
    
    24,889
    
    
    
    355
    
    
    
    81,638Operating income
    
    $
    64,084
    
    
    $
    104,600
    
    
    $
    (27,826
    )
    
    $
    140,858
 
 (a)
    
    Revenues in our Government segment include revenues from operations divested during
fiscal year 2006 of $0.6 million for the three months ended September 30, 2006. 12. RESTRUCTURING ACTIVITIES
  Beginning balance as of June 30, 2007
    
    $
    893Accrual reversals
    
    
    (300
    )Payments
    
    
    (387
    )Ending balance as of September 30, 2007
    
    $
    206
  11




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  Beginning balance as of June 30, 2007
    
    $
    402Payments
    
    
    (4
    )Ending balance as of September 30, 2007
    
    $
    398
  13. COMMITMENTS AND CONTINGENCIES
 Regulatory Agency Investigations Relating to Stock Option Grant Practices
      12




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
       Lawsuits Related to Stock Option Grant Practices
  13




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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.
    
    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
 14




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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
  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, 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
 15




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 Inc.,
and Affiliated Computer Services, Inc.
 
    
    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.
 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.
 TX State Court Consolidated stock option derivative case
 TX State Court Consolidated stock option derivative case
 Texas Federal Court Consolidated stock option derivative case
 16




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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
  Investigation Regarding Photo Enforcement Contract in Edmonton, Alberta, Canada
   Investigation Concerning Procurement Process at Hanscom Air Force Base
  Investigation Regarding Certain Child Support Payment Processing Contracts
  17




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  Investigation regarding Florida Workforce Contracts
   18




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  Other
        14. NEW ACCOUNTING PRONOUNCEMENTS
  19




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   15. SUBSEQUENT EVENTS
   20




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
    
    We have issued debt and have a substantial uncommitted facility available to us. Our
debt service cost could limit cash flow available to fund our operations, and may limit our
ability to obtain further debt or equity financing;
    
    Alleged defaults and purported acceleration of our Senior Notes, if upheld in
litigation, could have a negative impact on our cash flow and divert resources that could
otherwise be utilized in our business operations;
    
    The complexity of regulatory environments in which we operate has increased and may
continue to increase our costs;
    
    We are subject to the oversight of the Securities and Exchange Commission (SEC) and
other regulatory agencies and investigations by those agencies could divert managements
focus and could have a material adverse impact on our reputation and financial condition;
    
    Reductions of our credit rating may have an adverse impact on our business;
    
    A decline in revenues from or a loss of significant clients could reduce our
profitability and cash flow;
    
    Our ability to recover capital investments in connection with our contracts is subject
to risk;
    
    We have non-recurring revenue, which subjects us to a risk that our revenues from year
to year may fluctuate;
    
    The markets in which we operate are highly competitive and we may not be able to compete
effectively;
    
    We may not be able to make acquisitions that will complement our growth;
    
    A failure to properly manage our operations and our growth could have a material adverse
effect on our business;
    
    Our Government contracts are subject to termination rights, audits and investigations,
which, if exercised, could negatively impact our reputation and reduce our ability to
compete for new contracts;
    
    We may incur delays in signing and commencing new business as the result of protests of
government contracts that we are awarded;
    
    The exercise of contract termination provisions and service level penalties may have an
adverse impact on our business;
    
    Some of our contracts contain pricing provisions that could adversely affect our
operating results and cash flow;
    
    Claims associated with our actuarial consulting and benefit plan management services
could negatively impact our business;
    
    The loss of or change in our significant software vendor relationships could have a
material adverse effect on our business;
    
    We may be subject to claims of infringement of third-party intellectual property rights
which could adversely affect our business;
    
    We are subject to United States and foreign jurisdiction laws relating to individually
identifiable information, and failure to comply with those laws, whether or not
inadvertent, could subject us to legal actions and negatively impact our operations;
    
    We are subject to breaches of our security systems;
    
    Budget deficits and/or fluctuations in the number of requests for proposals issued by
state and local governments and their agencies may adversely impact our business;
    
    Our international operations are subject to a number of risks;
    
    Armed hostilities and terrorist attacks may negatively impact the countries in which we
operate;
    
    A failure to attract and retain necessary technical personnel, skilled management and
qualified subcontractors may have an adverse impact on our business;
    
    Risks associated with loans that we service may reduce our profitability and cash flow;
    
    A disruption in utility or network services may have a negative impact on our business;
    
    Our indemnification obligations may have a material adverse effect on our business.
   21




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OVERVIEW
      22




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##### Table of Contents



SIGNIFICANT DEVELOPMENTS
 Deason/Cerberus Proposal
  New Business
  Adoption of FIN 48
   23




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##### Table of Contents



Stock option repricing
 Stock
Option Repricing
 Subsequent
events
   24




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##### Table of Contents



REVENUE GROWTH
   Three months ended September 30,2007
    
    2006
    
    $ Growth
    
    Growth %Consolidated:Total revenues
    
    $
    1,493,083
    
    
    $
    1,385,438
    
    
    $
    107,645
    
    
    
    8
    %Less: divestitures
    
    
    
    
    
    
    (585
    )
    
    
    585Adjusted
    
    $
    1,493,083
    
    
    $
    1,384,853
    
    
    $
    108,230
    
    
    
    8
    %Acquired revenues
    
    $
    26,536
    
    
    $
    
    
    
    $
    26,536
    
    
    
    2
    %Internal revenues
    
    
    1,466,547
    
    
    
    1,384,853
    
    
    
    81,694
    
    
    
    6
    %Total
    
    $
    1,493,083
    
    
    $
    1,384,853
    
    
    $
    108,230
    
    
    
    8
    %Commercial:Acquired revenues
    
    $
    19,484
    
    
    $
    
    
    
    $
    19,484
    
    
    
    3
    %Internal revenues
    
    
    859,395
    
    
    
    832,139
    
    
    
    27,256
    
    
    
    3
    %Total
    
    $
    878,879
    
    
    $
    832,139
    
    
    $
    46,740
    
    
    
    6
    %Government:Total revenues
    
    $
    614,204
    
    
    $
    553,299
    
    
    $
    60,905
    
    
    
    11
    %Less: divestitures
    
    
    
    
    
    
    (585
    )
    
    
    585Adjusted
    
    $
    614,204
    
    
    $
    552,714
    
    
    $
    61,490
    
    
    
    11
    %Acquired revenues
    
    $
    7,052
    
    
    $
    
    
    
    $
    7,052
    
    
    
    1
    %Internal revenues
    
    
    607,152
    
    
    
    552,714
    
    
    
    54,438
    
    
    
    10
    %Total
    
    $
    614,204
    
    
    $
    552,714
    
    
    $
    61,490
    
    
    
    11
    %
 25




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##### Table of Contents



RESULTS OF OPERATIONS
  Three months endedSeptember 30,2007
    
    2006Revenues
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Cost of revenues:Wages and benefits
    
    
    46.9
    
    
    
    48.1Services and supplies
    
    
    22.9
    
    
    
    21.0Rent, lease and maintenance
    
    
    12.4
    
    
    
    12.9Depreciation and amortization
    
    
    6.1
    
    
    
    5.9Other
    
    
    0.4
    
    
    
    0.8Total cost of revenues
    
    
    88.7
    
    
    
    88.7Other operating expenses
    
    
    1.6
    
    
    
    1.1Total operating expenses
    
    
    90.3
    
    
    
    89.8Operating income
    
    
    9.7
    
    
    
    10.2Interest expense
    
    
    2.9
    
    
    
    3.4Other non-operating income, net
    
    
    (0.0
    )
    
    
    (0.2
    )Pretax profit
    
    
    6.8
    
    
    
    7.0Income tax expense
    
    
    2.4
    
    
    
    2.6Net income
    
    
    4.4
    %
    
    
    4.4
    %
 COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2007 TO THE THREE MONTHS ENDED SEPTEMBER 30,
2006
 Revenues
   26




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Operating
Expenses
     27




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##### Table of Contents



Operating
Income
 Three months endedSeptember 30,2007
    
    
    2006Commercial segment:Restructuring charges
    
    $
    
    
    
    $
    (5.6
    )Impairments and other charges
    
    
    
    
    
    
    (2.1
    )Government segment:Restructuring charges
    
    
    
    
    
    
    (0.4
    )Corporate segment:Legal costs associated with the ongoing stock option
investigations and shareholder derivative lawsuits
    
    
    (11.1
    )
    
    
    (7.9
    )Legal cost and other costs associated with the
potential sale of the Company and shareholder
derivative lawsuits
    
    
    (4.9
    )
    
    
    Cost related to amending certain employee stock options
    
    
    (1.2
    )
    
    
    Cost related to certain former employees stock options
    
    
    (0.8
    )
    
    
    Total
    
    $
    (18.0
    )
    
    $
    (16.0
    )As a percentage of revenue
    
    
    1.2
    %
    
    
    1.2
    %
 Interest
Expense
 Other
income, net
 Income
tax expense
 LIQUIDITY AND CAPITAL RESOURCES
 Cash
Flow
 Three months endedSeptember 30,2007
    
    
    2006Cash paid for interest
    
    $
    34,984
    
    
    $
    31,301Cash paid for legal fees and
other costs related to the
investigations into our stock
option grant practices,
derivative lawsuits related to
our stock option grant practices
and the potential sale
of the Company
    
    
    9,306
    
    
    
    1,527Cash received for interest income
    
    
    (2,816
    )
    
    
    (1,681
    )$
    41,474
    
    
    $
    31,147
 28




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##### Table of Contents



Three months endedSeptember 30,2007
    
    
    2006Net cash provided by operating activities
    
    $
    8,023
    
    
    $
    173,182Purchases of property, equipment and software, net
    
    
    (65,841
    )
    
    
    (101,498
    )Additions to other intangible assets
    
    
    (9,481
    )
    
    
    (9,089
    )Free cash flow
    
    $
    (67,299
    )
    
    $
    62,595
   Credit arrangements
    29




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##### Table of Contents



Credit Ratings
  Derivative instruments and hedging activities
  Share Repurchase Programs
  Stock Option Repricing
     30




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##### Table of Contents



Other
   31




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##### Table of Contents



DISCLOSURES ABOUT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
AS OF SEPTEMBER 30, 2007 (IN THOUSANDS):
 Payments Due by PeriodLess thanContractual Obligations
    
    Total
    
    1 Year
    
    1-3 Years
    
    4-5 Years
    
    After 5 YearsSenior Notes, net of unamortized
discount (1)
    
    $
    499,469
    
    
    $
    
    
    
    $
    249,955
    
    
    $
    
    
    
    $
    249,514Long-term debt (1)
    
    
    1,842,724
    
    
    
    18,957
    
    
    
    36,076
    
    
    
    104,087
    
    
    
    1,683,604Capital lease obligations (1)
    
    
    59,718
    
    
    
    29,857
    
    
    
    28,685
    
    
    
    1,176
    
    
    
    Operating leases (2)
    
    
    1,074,478
    
    
    
    327,903
    
    
    
    514,342
    
    
    
    170,042
    
    
    
    62,191Purchase obligations (3) (4)
    
    
    21,234
    
    
    
    11,158
    
    
    
    10,076
    
    
    
    
    
    
    
    Total Contractual Cash Obligations
    
    $
    3,497,623
    
    
    $
    387,875
    
    
    $
    839,134
    
    
    $
    275,305
    
    
    $
    1,995,309
 Total
    
    Amount of Commitment Expiration per PeriodAmounts
    
    Less thanOther Commercial Commitments
    
    Committed
    
    1 Year
    
    1-3 Years
    
    4-5 Years
    
    After 5 YearsStandby letters of credit
    
    $
    113,582
    
    
    $
    113,582
    
    
    $
    
    
    
    $
    
    
    
    $
    Surety bonds
    
    
    453,248
    
    
    
    408,095
    
    
    
    42,923
    
    
    
    2,230
    
    
    
    Total Commercial Commitments
    
    $
    566,830
    
    
    $
    521,677
    
    
    $
    42,923
    
    
    $
    2,230
    
    
    $
    
 
 (1)
    
    Excludes accrued interest of $15.9 million at September 30, 2007.(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 2015,
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 2010, 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.     32




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CRITICAL ACCOUNTING POLICIES
   Revenue Recognition
    33




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##### Table of Contents



Cost of revenues
  Contingencies
  34




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##### Table of Contents



Valuation of goodwill and intangibles
  Valuation of property, equipment and software
  Stock-Based Compensation
  
    
    Expected volatility of our stock price based on historical monthly volatility over the
expected term based on daily closing stock prices.
    
    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.
   35




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##### Table of Contents



Pension and post-employment benefits
   Allowance for doubtful accounts
  Income taxes
   Adoption of FIN 48
 NEW ACCOUNTING PRONOUNCEMENTS
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    36




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
  
 PART II
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 6. EXHIBITS
  37




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##### Table of Contents



SIGNATURES
  AFFILIATED COMPUTER SERVICES, INC.By:
    
    /s/ Kevin KyserKevin KyserExecutive Vice President andChief Financial Officer
 38




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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
    
    Bylaws of Affiliated Computer Services, Inc., as amended and in
effect on September 11, 2003 (filed as Exhibit 3.3 to our
Quarterly Report on Form 10-Q, filed February 17, 2004 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
    
    Amended and Restated Rights Agreement, dated April 2, 1999,
between Affiliated Computer Services, Inc. and First City
Transfer Company, as Rights Agent (filed as Exhibit 4.1 to our
Current Report on Form 8-K, filed May 19, 1999 and incorporated
herein by reference).4.3
    
    Amendment No. 1 to Amended and Restated Rights Agreement, dated
as of February 5, 2002, by and between Affiliated Computer
Services, Inc. and First City Transfer Company (filed as Exhibit
4.1 to our Current Report on Form 8-K, filed February 6, 2002
and incorporated herein by reference).4.4
    
    Form of Rights Certificate (included as Exhibit A to the Amended
and Restated Rights Agreement (Exhibit 4.3)).4.5
    
    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).4.6
    
    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).4.7
    
    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).
 39




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##### Table of Contents



ExhibitNumber
    
    Exhibit Name4.8
    
    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).4.9
    
    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 dated February 9, 2006 by and between
Affiliated Computer Services, Inc. and Darwin Deason (filed as
Exhibit 9.1 to our Quarterly Report on Form 10-Q filed February
9, 2006 and incorporated herein by reference).31.1*
    
    Certification of Chief Executive Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(a) or 15d-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) or 15d-14(a) promulgated under the
Securities Exchange Act of 1934, as amended.32.1*
    
    Certification of Chief Executive Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(b) or 15d-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) or 15d-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. 40