<PAGE>
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended       December 31, 2001
                                     -----------------

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the period from __________ to __________

                         Commission file number 0-24787
                                                -------
                       AFFILIATED COMPUTER SERVICES, INC.
                       ----------------------------------
             (Exact name of registrant as specified in its charter)

              Delaware                                        51-0310342
   -------------------------------                       ------------------
   (State or other jurisdiction of                       (I.R.S. Employer
    incorporation or organization)                       Identification No.)

   2828 North Haskell, Dallas, Texas                             75204
----------------------------------------                      ----------
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code    (214) 841-6111

                                 NOT APPLICABLE
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X  No
                                       ---   ---

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

                                            NUMBER OF SHARES OUTSTANDING AS OF
        TITLE OF EACH CLASS                         FEBRUARY 8, 2002
------------------------------------        ----------------------------------
Class A Common Stock, $.01 par value                   56,939,056
Class B Common Stock, $.01 par value                    3,299,686
                                                       ----------
                                                       60,238,742



<PAGE>



               AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES

                                      INDEX



<Table>
<Caption>
                                                                                                      PAGE
 PART I.               FINANCIAL INFORMATION                                                         NUMBER
<S>        <C>                                                                                    <C>
 Item 1.   Consolidated Financial Statements:

                    Consolidated Balance Sheets at December 31, 2001 and
                             June 30, 2001                                                           1

                    Consolidated Statements of Income for the Three and Six Months
                             Ended December 31, 2001 and 2000                                        2

                    Consolidated Statements of Cash Flows for the Six Months Ended
                             December 31, 2001 and 2000                                              3

                    Notes to Consolidated Financial Statements                                     4 - 10

 Item 2.   Management's Discussion and Analysis of Financial Condition and
                    Results of Operations                                                         11 - 15

 PART II.             OTHER INFORMATION

 Item 1.   Legal Proceedings                                                                        16

 Item 2.   Changes in Securities and Use of Proceeds                                                16

 Item 6.   Exhibits and Reports on Form 8-K                                                         17
</Table>




<PAGE>





               AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                               DECEMBER 31,      JUNE 30,
                                                                  2001            2001
                                                               (UNAUDITED)      (AUDITED)
                                                               ------------   -----------
<S>                                                            <C>            <C>
                               ASSETS
Current assets:
     Cash and cash equivalents                                 $    44,174    $   242,458
     Accounts receivable, net                                      623,121        472,042
     Inventory                                                      12,576          8,591
     Prepaid expenses and other current assets                      89,993         77,572
     Deferred taxes                                                  6,707          8,952
                                                               -----------    -----------
         Total current assets                                      776,571        809,615

Property, equipment and software, net                              343,506        237,563
Intangibles, net                                                   163,763         97,160
Goodwill, net                                                    1,422,008        697,760
Long-term investments and other assets                              53,402         49,589
                                                               -----------    -----------

         Total assets                                          $ 2,759,250    $ 1,891,687
                                                               ===========    ===========

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                          $    48,176    $    40,265
     Accrued compensation and benefits                              82,839         82,043
     Other accrued liabilities                                     209,591        126,875
     Income taxes payable                                           15,922          7,742
     Short-term debt                                                 9,550          3,362
     Current portion of unearned revenue                            36,398         20,765
                                                               -----------    -----------
         Total current liabilities                                 402,476        281,052

Convertible notes                                                  546,927        546,927
Long-term debt                                                         308        102,386
Deferred taxes                                                      74,241         55,601
Other long-term liabilities                                         17,689         20,206
                                                               -----------    -----------
         Total liabilities                                       1,041,641      1,006,172
                                                               -----------    -----------

Stockholders' equity:
     Class A common stock                                              569            473
     Class B common stock                                               33             33
     Additional paid-in capital                                  1,083,585        350,767
     Retained earnings                                             633,390        534,374
     Accumulated other comprehensive income (net of tax)                32           (132)
                                                               -----------    -----------
         Total stockholders' equity                              1,717,609        885,515
                                                               -----------    -----------

         Total liabilities and stockholders' equity            $ 2,759,250    $ 1,891,687
                                                               ===========    ===========
</Table>



                 See notes to consolidated financial statements.




                                       1
<PAGE>


               AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)



<Table>
<Caption>
                                                         Three Months Ended             Six Months Ended
                                                             December 31,                  December 31,
                                                     --------------------------    --------------------------
                                                        2001           2000           2001           2000
                                                     -----------    -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>            <C>
Revenues                                             $   750,427    $   500,882    $ 1,405,446    $   979,508
Expenses:
     Wages and benefits                                  327,417        212,442        624,290        428,631
     Services and supplies                               224,707        151,477        397,578        280,982
     Rent, lease and maintenance                          65,980         52,683        138,860        115,389
     Depreciation and amortization                        27,499         22,576         51,914         43,668
     Other operating expenses                              7,403          4,977         13,841         11,938
                                                     -----------    -----------    -----------    -----------
         Total operating expenses                        653,006        444,155      1,226,483        880,608
                                                     -----------    -----------    -----------    -----------

     Operating income                                     97,421         56,727        178,963         98,900

Interest expense                                           7,583          4,839         20,182          9,875
Other non-operating (income) expense, net                    942           (991)          (374)       (14,358)
                                                     -----------    -----------    -----------    -----------

         Pretax profit                                    88,896         52,879        159,155        103,383

Income tax expense                                        33,336         20,887         59,682         40,836
                                                     -----------    -----------    -----------    -----------

     Net income                                      $    55,560    $    31,992    $    99,473    $    62,547
                                                     ===========    ===========    ===========    ===========
Earnings per common share:

   Basic                                             $       .94    $       .64    $      1.81    $      1.26
                                                     ===========    ===========    ===========    ===========
   Diluted                                           $       .84    $       .59    $      1.62    $      1.16
                                                     ===========    ===========    ===========    ===========

Shares used in computing earnings per common share:

   Basic                                                  59,286         49,811         55,038         49,625

   Diluted                                                70,346         56,881         66,009         56,545
</Table>


                 See notes to consolidated financial statements.


                                       2
<PAGE>




               AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<Table>
<Caption>
                                                                                      SIX MONTHS ENDED
                                                                                         DECEMBER 31,
                                                                                   ----------------------
                                                                                     2001         2000
                                                                                   ---------    ---------
<S>                                                                                <C>          <C>
Cash flows from operating activities:
    Net income                                                                     $  99,473    $  62,547
                                                                                   ---------    ---------
    Adjustments to reconcile net income to net cash provided by operating
     activities:
        Depreciation and amortization                                                 51,914       43,668
        Gain on sale of investment                                                        --      (12,785)
        Other                                                                            836       (1,327)
        Changes in assets and liabilities, net of effects from acquisitions:
           Increase in accounts receivable                                           (42,443)     (13,687)
           Increase in inventory                                                      (3,606)      (1,549)
           Increase in prepaid expenses and other current assets                        (660)      (6,503)
           Change in deferred taxes                                                   20,745       16,098
           Increase in other long-term assets                                         (1,069)        (585)
           Increase (decrease) in accounts payable                                     6,952      (22,826)
           Decrease in accrued compensation and benefits                             (23,858)     (11,215)
           Increase in other accrued liabilities                                      25,065        4,215
           Change in income taxes payable                                             17,869      (43,564)
           Decrease in unearned revenue                                               (2,393)      (5,163)
           Increase (decrease) in other long-term liabilities                           (615)          98
                                                                                   ---------    ---------
        Total adjustments                                                             48,737      (55,125)
                                                                                   ---------    ---------
        Net cash provided by operating activities                                    148,210        7,422
                                                                                   ---------    ---------

Cash flows from investing activities:
    Purchases of property, equipment and software, net of sales                      (78,550)     (51,679)
    Payments for acquisitions, net of cash acquired                                 (878,809)     (86,264)
    Proceeds from divestitures, net of transaction costs                              (3,401)     208,428
    Purchase of investments                                                               --       (2,138)
    Proceeds from sale of investment                                                      --       17,100
    Additions to other intangible assets                                              (8,523)     (13,794)
    Additions to notes receivable                                                     (2,823)        (819)
    Proceeds received on notes receivable                                              2,395        7,898
                                                                                   ---------    ---------
        Net cash provided (used) by investing activities                            (969,711)      78,732
                                                                                   ---------    ---------

Cash flows from financing activities:
    Proceeds from issuance of debt, net of issuance costs                            810,360      229,422
    Repayments of debt                                                              (911,468)    (352,324)
    Proceeds from equity offering                                                    715,392           --
    Proceeds from stock options exercised                                              9,733        6,756
    Other                                                                               (800)        (295)
                                                                                   ---------    ---------
        Net cash provided (used) by financing activities                             623,217     (116,441)
                                                                                   ---------    ---------

Net decrease in cash and cash equivalents                                           (198,284)     (30,287)
Cash and cash equivalents at beginning of period                                     242,458       44,521
                                                                                   ---------    ---------
Cash and cash equivalents at end of period                                         $  44,174    $  14,234
                                                                                   =========    =========
</Table>

                 See notes to consolidated financial statements.




                                       3
<PAGE>



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

1.  BASIS OF PRESENTATION

    The consolidated financial statements include the accounts of Affiliated
    Computer Services, Inc. and its majority-owned subsidiaries. All material
    intercompany profits, transactions and balances have been eliminated. We are
    a Fortune 1000 company comprised of approximately 30,000 full-time
    equivalent employees in 29 countries providing business process and
    technology outsourcing solutions to world-class commercial and government
    clients.

    The financial information presented should be read in conjunction with our
    consolidated financial statements for the year ended June 30, 2001. The
    foregoing unaudited consolidated financial statements reflect all
    adjustments (all of which are of a normal recurring nature) which are, in
    the opinion of management, necessary for a fair presentation of the results
    of the interim periods. The results for the interim periods are not
    necessarily indicative of results to be expected for the year.

    All share and per share information is presented without giving effect to
    the two-for-one stock split of our Class A and Class B common shares
    declared on January 22, 2002, payable on February 22, 2002 to shareholders
    of record as of February 15, 2002 (see Note 13 for further discussion).

2.  EQUITY OFFERING

    On October 10, 2001, we completed our offering of 9.2 million shares of our
    Class A common stock. The shares were issued at $81.00 per share. Net
    proceeds of $714.5 million (net of underwriters' fees and other costs) were
    used to repay the $550 million 18-month interim credit facility incurred to
    fund the Lockheed Martin IMS Corporation ("IMS") acquisition and a portion
    of the amount outstanding under our revolving credit facility.

3.  ACQUISITIONS

    In August 2001, we acquired 100% of the stock of IMS, a wholly owned
    subsidiary of Lockheed Martin Corporation for approximately $825 million.
    The acquisition was funded from a $550 million 18-month interim credit
    facility, borrowings from our existing revolving credit facility, and
    existing cash on hand. IMS' results have been included in our consolidated
    financial statements from the effective date of the acquisition, August 1,
    2001. IMS provides business process outsourcing services to more than 230
    state and local government agencies in 45 U.S. states, the District of
    Columbia, Canada, Australia, and Europe. IMS specializes in child support
    enforcement, welfare and workforce services, child care management,
    electronic toll collection, and other intelligent transportation services
    involving the trucking industry, photo enforcement of red-light and speeding
    violations, parking management, and information technology outsourcing. We
    believe the acquisition of IMS solidifies ACS as a leader in technology
    based outsourcing solutions to state and local government agencies.

    The acquisition was accounted for under the purchase method of accounting
    with assets acquired of $935.2 million and liabilities assumed of $110.2
    million. The purchase price was allocated to assets acquired and liabilities
    assumed based on the estimated fair value at July 31, 2001, subject to
    finalization of third party valuation, as follows (in thousands):


        <Table>
        <S>                                     <C>
        Current Assets                          $120,604
        Property, equipment and software          58,804
        Other long-term assets                     2,826
        Intangible assets                         64,501
        Goodwill                                 688,512
                                                --------
          Total assets acquired                  935,247
        Current liabilities                      110,247
                                                --------
          Total liabilities assumed              110,247
                                                --------
          Net assets acquired                   $825,000
                                                ========
        </Table>


     The total amount of goodwill is expected to be fully deductible for tax
     purposes. Software of $41.5 million is included in property, equipment and
     software and has an anticipated useful life ranging from 2 to 10 years. The
     $64.5 million acquired intangible assets is attributable to customer
     contracts with an aggregate anticipated useful life of approximately 11
     years.



                                       4
<PAGE>


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

3.   ACQUISITIONS (CONTINUED)

     Pro forma Financial Information

     The following unaudited pro forma information presents a summary of our
     consolidated results of operations as if the IMS acquisition had occurred
     at the beginning of the periods presented and are not necessarily
     indicative of future results or actual results that would have been
     achieved had the acquisition occurred at the beginning of the periods
     presented (in thousands, except per share amounts).

<Table>
<Caption>
                                 For the three months ended           For the six months ended
                                         December 31,                       December 31,
                               -------------------------------     -------------------------------
                                   2001              2000              2001              2000
                               -------------     -------------     -------------     -------------
<S>                            <C>               <C>               <C>               <C>
Revenue                        $     750,427     $     659,292     $   1,457,099     $   1,296,459
Net income                            55,560            41,346           101,467            75,449

Earnings per common share:
Basic                          $         .94     $         .83     $        1.84     $        1.52
Diluted                        $         .84     $         .75     $        1.65     $        1.39
</Table>


4.  NEW ACCOUNTING STANDARDS

    In July 2001, the Financial Accounting Standards Board issued Statements of
    Financial Accounting Standards No. 141, ("SFAS 141") "Business Combinations"
    and No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets." SFAS 141
    requires that all business combinations be accounted for under the purchase
    method only and that certain acquired intangible assets in a business
    combination be recognized as assets apart from goodwill. SFAS 142 requires
    that ratable amortization of goodwill be replaced with periodic tests of the
    goodwill's impairment and that intangible assets other than goodwill be
    amortized over their useful lives. SFAS 141 is effective for all business
    combinations initiated after June 30, 2001 and for all business combinations
    accounted for by the purchase method for which the date of acquisition is
    after June 30, 2001. We adopted the provisions of SFAS 141 and SFAS 142
    effective July 1, 2001.

    In August 2001, the Financial Accounting Standards Board issued Statement of
    Financial Standards No. 144, ("SFAS 144") "Accounting for the Impairment or
    Disposal of Long-Lived Assets." SFAS 144 retains the fundamental provisions
    of existing generally accepted accounting principles with respect to the
    recognition and measurement of long-lived asset impairment contained in
    Statement of Financial Accounting Standards No. 121 ("SFAS 121") "Accounting
    for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
    Disposed Of." However, SFAS No. 144 provides new guidance intended to
    address certain significant implementation issues associated with SFAS 121,
    including expanded guidance with respect to appropriate cash flows to be
    used to determine whether recognition of any long-lived asset impairment is
    required, and if required, how to measure the amount of the impairment. SFAS
    144 also requires that any net assets to be disposed of by sale be reported
    at the lower of carrying value or fair market value less cost to sell, and
    expands the reporting of discontinued operations to include any component of
    an entity with operations and cash flows that can be clearly distinguished
    from the rest of the entity. SFAS 144 is effective for financial statements
    issued for fiscal years beginning after December 15, 2001, and interim
    periods within those fiscal years. We do not believe SFAS 144 will have a
    material impact on our future earnings and financial position.



                                       5
<PAGE>



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

5.  GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF SFAS 142

    The following table reflects the effect of SFAS 142 on net income and
    earnings per share as if SFAS 142 had been in effect for all periods
    presented:




<Table>
<Caption>
                                                    FOR THE THREE MONTHS ENDED           FOR THE SIX MONTHS ENDED
                                                           DECEMBER 31,                         DECEMBER 31,
                                                  -------------------------------     -------------------------------
                                                       2001              2000              2001              2000
                                                  -------------     -------------     -------------     -------------
                                                  (in thousands except per share      (in thousands except per share
                                                             amounts)                             amounts)
<S>                                               <C>               <C>               <C>               <C>
Net income                                        $      55,560     $      31,992     $      99,473     $      62,547
  Add back goodwill amortization, net of
  related tax benefit ($809 and $1,760
  respectively)                                              --             5,297                --            10,055
                                                  -------------     -------------     -------------     -------------
Adjusted net income                               $      55,560     $      37,289     $      99,473     $      72,602
                                                  =============     =============     =============     =============

Basic earnings per share:
  Reported net income                             $         .94     $         .64     $        1.81     $        1.26
  Add back goodwill amortization (net of
  tax benefit)                                               --               .11                --               .20
                                                  -------------     -------------     -------------     -------------
Adjusted net income                               $         .94     $         .75     $        1.81     $        1.46
                                                  =============     =============     =============     =============

Diluted earnings per share:
  Reported net income                             $         .84     $         .59     $        1.62     $        1.16
  Add back goodwill amortization (net of
  tax benefit)                                               --               .09                --               .18
                                                  -------------     -------------     -------------     -------------
  Adjusted net income                             $         .84     $         .68     $        1.62     $        1.34
                                                  =============     =============     =============     =============
</Table>

6.  DERIVATIVES AND HEDGING ACTIVITIES

    In order to manage interest costs and exposure to changing interest rates,
    we held two interest rate hedges, designated as cash flow hedges, which were
    initiated in December 1998. Both interest rate hedges expired in December
    2001. Each hedge was structured such that we paid a fixed rate of interest
    of 4.54%, and received a floating rate of interest based on one month LIBOR.
    The notional amount of the two hedges totaled $100 million and the fair
    market value of the two hedges at December 31, 2001 and June 30, 2001 was $0
    and ($355,000), respectively. The fair value of each interest rate hedge
    reflected termination cash value. The fair value of the interest rate
    hedges, net of $0 and $139,000 tax benefit, respectively, was reflected in
    "Accumulated other comprehensive income (net of tax)."

    In order to manage the volatility of the value of our marketable security
    investment of $1.1 million, we entered into a no-cost collar agreement in
    June 2001 which matures in March 2002. The collar, a fair value hedge, is
    structured so that all fluctuations in the price of the marketable security
    above or below 100% or 102.5% of its value on the date the collar was
    entered into are hedged. As of December 31, 2001 and June 30, 2001, the
    collar had fair market values of $11,000 and $27,000, respectively.



                                       6
<PAGE>


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

7.  COMPREHENSIVE INCOME

    We have adopted Statement of Financial Accounting Standards No. 130 ("SFAS
    130"), "Reporting Comprehensive Income." The objective of SFAS 130 is to
    report a measure of all changes in equity of an enterprise that result from
    transactions and other economic events of the period other than transactions
    with owners. Comprehensive income is the total of net income and other
    non-owner charges in equity.

    The components of comprehensive income are as follow (in the thousands):

<Table>
<Caption>
                                                     THREE MONTHS ENDED              SIX MONTHS ENDED
                                                         DECEMBER 31,                   DECEMBER 31,
                                                  -------------------------      -------------------------
                                                     2001           2000            2001           2000
                                                  ----------     ----------      ----------     ----------
<S>                                               <C>            <C>             <C>                     <C>
Net income                                        $   55,560     $   31,992      $   99,473     $   62,547

Change in fair value of derivatives (net
of tax effect of $159, ($460), $158 and
$507 respectively)                                       249           (703)            164            776
                                                  ----------     ----------      ----------     ----------

Comprehensive income                              $   55,809     $   31,289      $   99,637     $   63,323
                                                  ==========     ==========      ==========     ==========
</Table>

8.  GOODWILL

    The changes in the carrying amount of goodwill for the quarter ended
    December 31, 2001 are as follow (in thousands):

<Table>
<Caption>
                                                            FEDERAL
                                          COMMERCIAL      GOVERNMENT         TOTAL
                                          -----------     -----------     -----------
<S>                                       <C>             <C>             <C>
Balance as of September 30, 2001          $ 1,265,696     $   122,873     $ 1,388,569
Goodwill activity
    During the quarter                         33,439              --          33,439
                                          -----------     -----------     -----------
Balance as of December 31, 2001           $ 1,299,135     $   122,873     $ 1,422,008
                                          ===========     ===========     ===========
</Table>


    The goodwill activity in the commercial segment is primarily the result of
    the refinement of the third-party valuation of the assets acquired in the
    IMS acquisition during the current quarter.

9.  INTANGIBLE ASSETS


<Table>
<Caption>
                                                  AS OF DECEMBER 31, 2001 (IN THOUSANDS)
                                                  --------------------------------------
                                                  GROSS CARRYING         ACCUMULATED
                                                      AMOUNT             AMORTIZATION
                                                  ---------------     ------------------
<S>                                               <C>                 <C>
Amortized intangible assets:
  Customer contract related intangibles           $       151,914     $          (43,190)
  All other                                                 6,865                 (2,626)
                                                  ---------------     ------------------
    Total                                         $       158,779     $          (45,816)
                                                  ===============     ==================
Unamortized intangible asset:
  Title plant                                     $        50,800
                                                  ---------------
    Total                                         $        50,800
                                                  ===============
</Table>




                                       7
<PAGE>


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

8.  INTANGIBLE ASSETS (CONTINUED)

<Table>
<S>                                                            <C>
     Aggregate amortization expense:
       For the quarter ended December 31, 2001                 $   5,643

     Estimated amortization expense:
       For the year ended June 30, 2002                        $  21,503
       For the year ended June 30, 2003                        $  18,913
       For the year ended June 30, 2004                        $  15,497
       For the year ended June 30, 2005                        $  12,591
       For the year ended June 30, 2006                        $  11,348
</Table>

    Customer contract related intangibles are amortized over a weighted average
    of approximately 8 years. All other intangibles are amortized over a
    weighted average of 14 years.

10. EARNINGS PER SHARE

    In accordance with Statement of Financial Accounting Standard No. 128,
    "Earnings per Share," the following table (in thousands except per share
    amounts) sets forth the computation of basic and diluted earnings per share
    before giving effect to the two-for-one stock split payable on February 22,
    2002 (see Note 13):

<Table>
<Caption>
                                                                    THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                        DECEMBER 31,                 DECEMBER 31,
                                                                 -------------------------     -------------------------
                                                                    2001           2000           2001           2000
                                                                 ----------     ----------     ----------     ----------
<S>                                                              <C>            <C>            <C>            <C>
Numerator:
  Numerator for earnings per share (basic)
    Income available to common stockholders                      $   55,560     $   31,992     $   99,473     $   62,547

  Effect of dilutive securities:
    Interest on 4% convertible debt, net of tax                       1,548          1,540          3,085          3,080
    Interest on 3.5% convertible debt, net of tax                     2,066             --          4,118             --
                                                                 ----------     ----------     ----------     ----------
  Numerator for earnings per share assuming
   Dilution - income available to common  stockholders           $   59,174     $   33,532     $  106,676     $   65,627
                                                                 ==========     ==========     ==========     ==========
Denominator:
  Weighted average shares outstanding (basic)                        59,286         49,811         55,038         49,625
  Effect of dilutive securities:
    4% convertible debt                                               5,390          5,392          5,390          5,392
    3.5% convertible debt                                             3,650             --          3,650             --
    Stock options                                                     2,020          1,678          1,931          1,528
                                                                 ----------     ----------     ----------     ----------
    Total potential common shares                                    11,060          7,070         10,971          6,920
                                                                 ----------     ----------     ----------     ----------
Denominator for earnings per share assuming dilution                 70,346         56,881         66,009         56,545
                                                                 ==========     ==========     ==========     ==========
Earnings per common share (basic)                                $      .94     $      .64     $     1.81     $     1.26
                                                                 ==========     ==========     ==========     ==========
Earnings per common share assuming dilution                      $      .84     $      .59     $     1.62     $     1.16
                                                                 ==========     ==========     ==========     ==========
</Table>

11. NON-RECURRING ITEMS

    In the first quarter of fiscal 2001, we recorded a $12.8 million gain in
    "Other non-operating (income) expense, net" related to the sale of a
    non-strategic minority investment in ACS Merchant Services, Inc.

    In the first quarter of fiscal 2001, we recorded a $10.4 million charge in
    connection with the termination of certain hardware leases and disaster
    recovery contracts, which is included in "Rent, lease and maintenance"
    expense. In addition, we recorded a $2.1 million charge for non-recurring
    litigation costs and the writedown of property held-for-sale to market value
    to "Other operating expenses."



                                       8
<PAGE>



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

12. SEGMENT INFORMATION

    Based on the criteria set forth in Statement of Financial Accounting
    Standard No. 131, "Disclosure about Segments of an Enterprise and Related
    Information," we have two reportable segments: commercial and federal
    government. Certain reclassifications have been made to the segment
    disclosure as the result of changes to our reporting structure. The
    following is a summary of certain financial information by reportable
    segment (in thousands):

<Table>
<Caption>
Quarter Ended December 31, 2001
-------------------------------                              Federal
                                             Commercial     Government     Corporate       Consolidated
                                             ----------     ----------     ----------      ------------
<S>                                          <C>            <C>            <C>             <C>
Revenue                                      $  559,286     $  191,141     $       --      $    750,427
Operating expense                               446,820        170,671          8,016           625,507
                                             ----------     ----------     ----------      ------------
EBITDA(a)                                       112,466         20,470         (8,016)          124,920
Depreciation & amortization expense              22,308          4,662            529            27,499
Goodwill amortization                                --             --             --                --
                                             ----------     ----------     ----------      ------------
Operating income                             $   90,158     $   15,808     $   (8,545)     $     97,421
                                             ==========     ==========     ==========      ============
</Table>



<Table>
<Caption>

Quarter Ended December 31, 2000
-------------------------------                                 Federal
                                             Commercial        Government     Corporate       Consolidated
                                             ----------        ----------     ----------      -------------
<S>                                          <C>               <C>            <C>             <C>
Revenue                                      $  314,728(b)     $  186,154     $       --      $     500,882(b)
Operating expense                               249,426           168,000          4,153            421,579
                                             ----------        ----------     ----------      -------------
EBITDA(a)                                        65,302            18,154         (4,153)            79,303
Depreciation & amortization expense              13,419             2,660            391             16,470
Goodwill amortization                             4,858             1,248             --              6,106
                                             ----------        ----------     ----------      -------------
Operating income                             $   47,025        $   14,246     $   (4,544)     $      56,727
                                             ==========        ==========     ==========      =============
</Table>


<Table>
<Caption>
Six Months Ended December 31, 2001
-----------------------------------                          Federal
                                             Commercial     Government     Corporate       Consolidated
                                             ----------     ----------     ----------      -------------
<S>                                          <C>            <C>            <C>             <C>
Revenue                                      $1,024,129     $  381,317     $       --      $   1,405,446
Operating expense                               819,695        342,197         12,677          1,174,569
                                             ----------     ----------     ----------      -------------
EBITDA(a)                                       204,434         39,120        (12,677)           230,877
Depreciation & amortization expense              42,442          8,459          1,013             51,914
Goodwill amortization                                --             --             --                 --
                                             ----------     ----------     ----------      -------------
Operating income                             $  161,992     $   30,661     $  (13,690)     $     178,963
                                             ==========     ==========     ==========      =============

</Table>


<Table>

<Caption>
Six Months Ended December 31, 2000
----------------------------------                              Federal
                                             Commercial        Government     Corporate       Consolidated
                                             ----------        ----------     ----------      -------------
<S>                                          <C>               <C>            <C>             <C>
Revenue                                      $  615,743(b)     $  363,765     $       --      $     979,508(b)
Operating expense                               500,869(c)        328,417          7,654            836,940(c)
                                             ----------        ----------     ----------      -------------
EBITDA(a)                                       114,874            35,348         (7,654)           142,568
Depreciation & amortization expense              25,672             5,469            712             31,853
Goodwill amortization                             9,486             2,329             --             11,815
                                             ----------        ----------     ----------      -------------
Operating income                             $   79,716        $   27,550     $   (8,366)     $      98,900
                                             ==========        ==========     ==========      =============
</Table>

----------

(a)      EBITDA consist of earnings before interest income, interest expense,
         other non-operating income and expense, income taxes, depreciation and
         amortization. EBITDA is not a measure of financial performance under
         generally accepted accounting principles and should not be considered
         in isolation or as an alternative to net income as an indicator of a
         company's performance or to cash flows from operating activities as a
         measure of liquidity.

(b)      Includes revenue of $4.3 million for the quarter ended December 31,
         2000 and $16.2 million for the six months ended December 31, 2000
         related to the divestitures announced in June 2000.

(c)      Operating expense includes $12.5 million of non-recurring charges
         related to hardware lease buyouts and disaster recovery contracts,
         legal fees and a writedown of property held-for sale to market value
         (see Note 11).



                                       9
<PAGE>



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

13. SUBSEQUENT EVENTS

    On January 22, 2002, we announced that our Board of Directors approved a
    two-for-one stock split of our outstanding Class A Common Stock and Class B
    Common Stock to be implemented in the form of a 100% stock dividend ("Stock
    Split"). Each holder of record of our Class A Common Stock and Class B
    Common Stock as of the close of business on February 15, 2002 will receive
    one additional share of such stock held by them at that time. We will issue
    the additional shares resulting from the Stock Split on February 22, 2002.
    In connection with the Stock Split, the number of shares of Class A Common
    Stock reserved for issuance or subject to outstanding options granted under
    our employee stock option or other benefit plans, as well as the number of
    shares reserved for issuance under our 4% Convertible Subordinated Notes due
    March 15, 2005 and 3.5% Convertible Subordinated Notes due February 15,
    2006, will be proportionately increased in accordance with the terms of such
    options, plans and other instruments.

    The following table (in thousands except per share amounts) sets forth the
    pro forma computation of basic and diluted earnings per share as if the
    two-for-one stock split payable on February 22, 2002 had been effective for
    all periods presented:

<Table>
<Caption>
                                                          THREE MONTHS ENDED              SIX MONTHS ENDED
                                                              DECEMBER 31,                  DECEMBER 31,
                                                        ------------------------     -------------------------
                                                          2001           2000           2001           2000
                                                       ----------     ----------     ----------     ----------
<S>                                                    <C>            <C>            <C>            <C>
Net Income                                             $   55,560     $   31,992     $   99,473     $   62,547
                                                       ==========     ==========     ==========     ==========

Weighted average shares outstanding (basic)               118,572         99,622        110,076         99,250
Weighted average shares outstanding (diluted)             140,692        113,762        132,018        113,090

Earnings per common share (basic)                      $      .47     $      .32     $      .90     $      .63
                                                       ==========     ==========     ==========     ==========
Earnings per common share assuming dilution            $      .42     $      .29     $      .81     $      .58
                                                       ==========     ==========     ==========     ==========
</Table>


    On February 12, 2002, we announced that our Board of Directors had approved
    the redemption of our 4% Convertible Subordinated Notes due March 15, 2005
    (the "Notes"). As of February 12, 2002, the outstanding principal amount of
    the Notes was $229.9 million. The redemption will occur on March 15, 2002,
    for holders of record on that date at a redemption price equal to 101.71% of
    the principal amount of Notes held. Holders of the Notes may elect to
    convert the Notes to our Class A Common Stock on or before the day prior to
    redemption. The conversion rate is 23.4432 shares of Class A Common Stock
    for each $1,000 principal amount of the Notes (equivalent to a conversion
    price of $42.66 per share of Class A Common Stock before giving effect to
    our previously announced two-for-one stock split, to be implemented in the
    form of a stock dividend payable on February 22, 2002 to stockholders of
    record as of the close of business on February 15, 2002). In accordance with
    the terms of the Notes, we will be required to make payment for fractional
    shares in cash, based on the closing price of our stock on the date of
    conversion, and all accrued interest due through the date of conversion.
    The notice is irrevocable.



                                       10
<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of
Operations includes "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. All statements, other than statements of historical facts, included in
this MD&A regarding our financial position, business strategy and plans and
objectives of our management for future operations are forward-looking
statements. While management has based any forward looking statements contained
herein on its current expectations, the information on which such expectations
were based may change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of risks,
uncertainties and other factors, many of which are outside of our control, that
could cause actual results to materially differ from such statements. Such
events include, but are not necessarily limited to: (i) uncertainties caused by
terrorist attacks on September 11, 2001 and the threat of other attacks, acts of
war or other related events that may disrupt the markets in which we operate,
our customers, our operations and our profitability; (ii) the loss of business
from significant customers; (iii) the impairment of our capital investments as
the result of the deterioration of the financial condition of our customers in
whom we have made a significant capital investment; (iv) the competition in the
information technology industry and the impact of such competition on pricing,
revenues and margins; (v) difficulty or inability to execute our acquisition
strategy; (vi) timing and magnitude of technological advances; (vii) loss of
significant vendor(s) resulting in increased expense or inability to serve our
customers; (viii) provisions in our contracts permitting termination for
convenience, permitting termination of or subjecting us to penalties under
certain contracts, if specified service levels are not maintained, and/or
permitting audits of our pricing and compliance; (ix) changes in federal, state
or local government requirements imposing additional burdens and subjecting us
to additional expenditures and increased compliance risk; and (x) the cost of
attracting and retaining highly skilled personnel. These risks and uncertainties
and other risks and uncertainties are discussed in more detail in the "Risk
Factors" section of our Prospectus Supplement dated October 3, 2001, which has
been filed with the Securities and Exchange Commission. In addition, we operate
in a highly and rapidly changing environment and new risks may arise.
Accordingly, investors should not place any reliance on forward looking
statements as a prediction of actual results. We undertake no obligation to
update any forward looking statements.

SIGNIFICANT DEVELOPMENTS

SIX MONTHS ENDED DECEMBER 31, 2001

On October 10, 2001, we completed our offering of 9.2 million shares of our
Class A common stock. The shares were issued at $81.00 per share. Net proceeds
of $714.5 million (net of underwriters' fees and other costs) were used to repay
the $550 million 18-month interim credit facility incurred to fund the IMS
acquisition and a portion of the amount outstanding under our revolving credit
facility.

In August 2001, we acquired IMS, a wholly-owned subsidiary of Lockheed Martin
Corporation. IMS, with its principal offices located in Washington D.C. and
approximately 4,800 employees primarily throughout the United States, provides
services to state and local government agencies in health and human services,
transportation, public safety and child support. The transaction, valued at $825
million plus related transaction costs, was funded initially through a
combination of a $550 million, 18-month interim credit facility, borrowings on
our existing credit facility and existing cash on hand. IMS' operating results
are included in our financial statements from the effective date of the
acquisition, August 1, 2001.

Also in August 2001, we acquired the business process outsourcing services unit
of National Processing Company ("NPC"). NPC provides healthcare claims
processing, credit card application processing and airline lift ticket
processing. As part of the transaction, we acquired all of NPC's offshore
operations in Jamaica, the Dominican Republic, Barbados and a majority of NPC's
Mexican operations. The transaction value was $43 million plus related
transaction costs. NPC's operating results are included in our financial
statements from the effective date of the acquisition, August 1, 2001.

On January 22, 2002, we announced that our Board of Directors approved a
two-for-one stock split of our outstanding Class A Common Stock and Class B
Common Stock to be implemented in the form of a 100% stock dividend ("Stock
Split"). Each holder of record of our Class A Common Stock and Class B Common
Stock as of the close of business on February 15, 2002 will receive one
additional share of such stock held by them at that time. We will issue the
additional shares resulting from the Stock Split on February 22, 2002. In
connection with the Stock Split, the number of shares of Class A Common Stock
reserved for issuance or subject to outstanding options granted under our
employee stock option or other benefit plans, as well as the number of shares
reserved for issuance under our 4% Convertible Subordinated Notes due March 15,
2005 and 3.5% Convertible Subordinated Notes due February 15, 2006, will be
proportionately increased in accordance with the terms of such options, plans
and other instruments.



                                       11
<PAGE>



On February 12, 2002, we announced that our Board of Directors had approved the
redemption of our 4% Convertible Subordinated Notes due March 15, 2005 (the
"Notes"). As of February 12, 2002, the outstanding principal amount of the Notes
was $229.9 million. The redemption will occur on March 15, 2002, for holders of
record on that date at a redemption price equal to 101.71% of the principal
amount of Notes held. Holders of the Notes may elect to convert the Notes to our
Class A Common Stock on or before the day prior to redemption. The conversion
rate is 23.4432 shares of Class A Common Stock for each $1,000 principal amount
of the Notes (equivalent to a conversion price of $42.66 per share of Class A
Common Stock before giving effect to our previously announced two-for-one stock
split, to be implemented in the form of a stock dividend payable on February
22, 2002 to stockholders of record as of the close of business on February 15,
2002). In accordance with the terms of the Notes, we will be required to make
payment for fractional shares in cash, based on the closing price of our stock
on the date of conversion, and all accrued interest due through the date of
conversion. The notice is irrevocable.

SIX MONTHS ENDED DECEMBER 31, 2000

During the first quarter of fiscal 2001, we recorded a $12.8 million gain in
"Other non-operating (income) expense, net" associated with the sale of a
certain non-strategic minority investment in ACS Merchant Services, Inc. In
addition, we recorded non-recurring charges totaling $12.5 million related to
the termination of certain computer equipment leases and consolidation of
disaster recovery contracts ($10.4 million recorded in "Rent, lease and
maintenance") and litigation expense and the writedown of a facility
held-for-sale to market value ($2.1 million recorded in "Other operating
expenses").

RESULTS OF OPERATIONS

The following table sets forth certain items from our consolidated statements of
income as a percentage of revenues:

<Table>
<Caption>
                                                THREE MONTHS ENDED              SIX MONTHS ENDED
                                                   DECEMBER 31,                   DECEMBER 31,
                                             ------------------------       -------------------------
                                               2001           2000            2001            2000
                                             ---------      ---------       ---------       ---------
<S>                                          <C>            <C>             <C>             <C>
Revenues                                           100%           100%            100%            100%

Expenses:
     Wages and benefits                           43.6           42.4            44.4            43.8
     Services and supplies                        29.9           30.3            28.3            28.7
     Rent, lease and maintenance                   8.8           10.5             9.9            11.8
     Depreciation and amortization                 3.7            4.5             3.7             4.5
     Other operating expenses                      1.0            1.0             1.0             1.1
                                             ---------      ---------       ---------       ---------
         Total operating expenses                 87.0           88.7            87.3            89.9
                                             ---------      ---------       ---------       ---------

     Operating income                             13.0           11.3            12.7            10.1

Interest expense                                   1.0            1.0             1.4             1.0
Other non-operating income, net                    0.1           (0.2)           (0.0)           (1.5)
                                             ---------      ---------       ---------       ---------
     Pretax profit                                11.9           10.5            11.3            10.6
     Income tax expense                            4.5            4.1             4.2             4.2
                                             ---------      ---------       ---------       ---------
     Net income                                    7.4%           6.4%            7.1%            6.4%
                                             =========      =========       =========       =========
</Table>

COMPARISON OF THE QUARTER ENDED DECEMBER 31, 2001 TO THE QUARTER ENDED DECEMBER
31, 2000

Revenues increased to $750.4 million, or 50%, in the second quarter of fiscal
year 2002 from $500.9 million in the second quarter of fiscal year 2001.
Included in the revenues for the second quarter fiscal 2001 was $4.3 million
related to business units which were divested in fiscal 2001. Internal revenue
growth was 12% and revenue growth from acquisitions was 38%, primarily due to
the IMS and NPC acquisitions in the first quarter of fiscal year 2002. Excluding
revenues from the divested units, our commercial revenues increased $248.9
million, or 80%, to $559.3 million in the second quarter of fiscal 2002, of
which 63% related to acquisitions completed in the last twelve months and 17%
due primarily to strong revenue increases in our business process outsourcing
and state healthcare businesses. Our federal government revenues increased 3%,
or $5.0 million, to $191.1 million.

After adjusting for the application of SFAS 142 (see Note 5), our operating
income increased to $97.4 million, or 55%, in the second quarter of fiscal year
2002 as compared to $62.8 million for the second quarter of fiscal year 2001,
primarily due to the full quarter impact of the IMS and NPC acquisitions in the
first quarter of fiscal year 2002, as well as the internal growth discussed
above.




                                       12
<PAGE>


After adjusting for the application of SFAS 142 (see Note 5), our operating
margins increased slightly to 13.0% from 12.5% in the second quarter of fiscal
2001. Wages and benefits increased 1.2%, rent, lease and maintenance decreased
1.7%, and services and supplies decreased 0.4% as a percentage of revenue due to
our increased focus in business process outsourcing, which has a larger
component of salaries and wages and a lower component of rent, lease and
maintenance than traditional technology outsourcing. When adjusting for SFAS
142, depreciation and amortization increased 0.4% as a percentage of revenue
primarily due to capital expenditures and additions to intangible assets from
acquisition related activity.

Interest expense increased $2.7 million from $4.8 million in the second quarter
of fiscal year 2001 to $7.6 million in the second quarter of fiscal year 2002.
The increase was primarily due to interest expense incurred on the 3.5%
Convertible Subordinated Notes which were issued in February 2001 and the
interim credit facility which funded the IMS acquisition.

Other non-operating expense in fiscal year 2002 consisted primarily of a loss of
$1.0 million on a long-term investment, which we received in the December 1998
acquisition of BRC Holdings, Inc., recorded in the second quarter of fiscal year
2002. The other non-operating income in fiscal year 2001 primarily consisted of
a gain on a note receivable recorded in the second quarter of fiscal 2001.

Our effective tax rate of approximately 37.5% in the second quarter of fiscal
2002 exceeded the federal statutory rate of 35% due primarily to the net effect
of state income taxes. Our effective tax rate decreased 2.0% from 39.5% for the
second quarter of fiscal year 2001 due to the application of SFAS 142 (see Note
5).

COMPARISON OF THE SIX MONTHS ENDED DECEMBER 31, 2001 TO THE SIX MONTHS ENDED
DECEMBER 31, 2000

Revenues increased to $1.4 billion, or 46%, for the six months ended December
31, 2001 as compared to the same period last year when excluding the fiscal year
2001 revenues from divested units of $16.2 million. Internal growth was 11% and
growth through acquisitions was 35%. Our commercial revenues increased $424.5
million, or 72%, to $1.0 billion when excluding revenues from our divested
units, with 15% internal growth and 57% from acquisitions. Internal growth was
due to growth in our state healthcare, state and local governments and business
process outsourcing businesses. Our federal government revenues increased 5% to
$381.3 million for the six months ended December 31, 2001 as a result of
continued growth in our defense and education contracts.

After adjusting for the application of SFAS 142 (see Note 5), our operating
income increased to $179.0 million, or 62%, for the six months ended December
31, 2002 as compared to $110.7 million for the same period last year, primarily
due to the impact of the first quarter fiscal year 2002 acquisitions of IMS and
NPC, as well as the internal growth discussed above.

Operating margins increased 0.1% to 12.7% for the six months ended December 31,
2001 after adjusting for the application of SFAS 142 (see Note 5) and the
non-recurring items recorded in the first quarter of fiscal year 2001 (see Note
11). Excluding these items, wages and benefits increased 0.6%, rent, lease and
maintenance decreased 0.8%, and services and supplies decreased 0.4% as a
percentage of revenue due to our increased focus in business process outsourcing
which has a larger component of salaries and wages and a lower component of
rent, lease and maintenance than traditional technology outsourcing.
Depreciation and amortization increased 0.4% as a percentage of revenue when
adjusting for SFAS 142 due to capital expenditures and additions to intangible
assets during the last year.

Interest expense increased $10.3 million from $9.9 million to $20.2 million for
the six months ended December 31, 2001 compared to the six months ended December
31, 2000. The increase was due to interest expense on the 3.5% Convertible
Subordinated Notes which were issued in February 2001 and the interim credit
facility which funded the IMS acquisition.

Other non-operating expense in fiscal year 2002 consisted primarily of a loss of
$1.0 million on a long-term investment, which we received in the December 1998
acquisition of BRC Holdings, Inc. recorded in the second quarter of fiscal year
2002. Other non-operating income in fiscal year 2001 consisted of a
non-recurring gain on sale of an investment (see Note 11) and a gain on a note
receivable.

Our effective tax rate of approximately 37.5% in the first six months of fiscal
2002 exceeded the federal statutory rate of 35% due primarily to the net effect
of state income taxes. Our effective tax rate decreased 2.0% from 39.5% for the
six months ended December 31, 2001 due to the application of SFAS 142 (see Note
5).



                                       13
<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2001, we had cash and cash equivalents of $44.2 million compared
to $242.5 million at June 30, 2001. Included in these cash balances was $5.0
million and $4.9 million, respectively as of December 31, 2001 and June 30,
2001, of restricted cash held on behalf of our governmental customers. Working
capital decreased to $374.1 million at December 31, 2001 from $528.6 million at
June 30, 2001 due to cash paid for the IMS and NPC acquisitions during the first
quarter of $225 million and $43 million, respectively, offset by proceeds from
the second quarter fiscal 2002 equity offering, net of repayments of outstanding
balances on our revolving credit facility and interim credit facility.

Excluding the $50.0 million in taxes related to our divestiture activity and
$10.4 million of non-recurring items in fiscal year 2001, cash provided by
operating activities increased to $148.2 million for the six months ended
December 31, 2001, as compared to $67.8 million in the same period last year.
The increase in operating cash flow is primarily due to increased net income and
our continued focus on our working capital requirements, including improvement
in our days sales outstanding on our accounts receivable. Cash used in investing
activities was $969.7 million, primarily due to the IMS and NPC acquisitions
during the first quarter of fiscal year 2002. Cash provided by financing
activities was $623.2 million due to proceeds received from the equity offering
(see Note 2) offset by net repayments of our credit facilities.

On October 10, 2001, we completed our offering of 9.2 million shares of our
Class A common stock. The shares were issued at $81.00 per share. Net proceeds
of $714.5 million (net of underwriters' fees and other costs) were used to repay
the $550 million 18-month interim credit facility incurred to fund the IMS
acquisition and a portion of the amount outstanding under our revolving credit
facility.

At December 31, 2001, we had $434.4 million available on our $450 million
revolving credit facility and outstanding letters of credit of $15.6 million. In
January 2002, we issued an additional $89 million of letters of credit to secure
our performance on our Georgia Healthcare Partnership contract. These letters of
credit reduce the availability of our revolving credit facility.

Due to the terrorist attacks on September 11, 2001 and the Enron Corporation
bankruptcy, the surety bond market has substantially changed, resulting in
reduced availability of bonds and increased premiums. Some of our state and
local government contracts require either a bond or a letter of credit and
future requests for proposal may require a surety bond or letter of credit.
Notwithstanding the existing condition of the surety bond market, management
believes that it has sufficient liquidity from its cash flow and under its
revolving credit facility to meet ongoing business needs and to respond to
future requests for proposals from state and local governments.

On January 22, 2002, we announced that our Board of Directors approved a
two-for-one stock split of our outstanding Class A Common Stock and Class B
Common Stock to be implemented in the form of a 100% stock dividend ("Stock
Split"). Each holder of record of our Class A Common Stock and Class B Common
Stock as of the close of business on February 15, 2002 will receive one
additional share of such stock held by them at that time. We will issue the
additional shares resulting from the Stock Split on February 22, 2002. In
connection with the Stock Split, the number of shares of Class A Common Stock
reserved for issuance or subject to outstanding options granted under our
employee stock option or other benefit plans, as well as the number of shares
reserved for issuance under our 4% Convertible Subordinated Notes due March 15,
2005 and 3.5% Convertible Subordinated Notes due February 15, 2006, will be
proportionately increased in accordance with the terms of such options, plans
and other instruments.

On February 12, 2002, we announced that our Board of Directors had approved the
redemption of our 4% Convertible Subordinated Notes due March 15, 2005 (the
"Notes"). As of February 12, 2002, the outstanding principal amount of the Notes
was $229.9 million. The redemption will occur on March 15, 2002, for holders of
record on that date at a redemption price equal to 101.71% of the principal
amount of Notes held. Holders of the Notes may elect to convert the Notes to our
Class A Common Stock on or before the day prior to redemption. The conversion
rate is 23.4432 shares of Class A Common Stock for each $1,000 principal amount
of the Notes (equivalent to a conversion price of $42.66 per share of Class A
Common Stock before giving effect to our previously announced two-for-one stock
split, to be implemented in the form of a stock dividend payable on February
22, 2002 to stockholders of record as of the close of business on February 15,
2002). In accordance with the terms of the Notes, we will be required to make
payment for fractional shares in cash, based on the closing price of our stock
on the date of conversion, and all accrued interest due through the date of
conversion. The notice is irrevocable.

Management believes that available cash and cash equivalents, together with cash
generated from operations and available borrowings under our credit facility,
will provide adequate funds for our anticipated internal growth needs, including
capital expenditures. Our management also believes that cash provided by
operations will be sufficient to satisfy all existing debt obligations as they
become due. However, we intend to continue our growth through acquisitions and
from time to time to engage in discussions with potential acquisition
candidates, which could require significant commitments of capital. In order to
pursue such opportunities we may be required to incur debt or to issue
additional potentially dilutive securities in the future. No assurance can be
given as to our future acquisitions and expansion opportunities and how such
opportunities will be financed.



                                       14
<PAGE>


NEW ACCOUNTING STANDARDS

On July 1, 2001, we adopted Statements Financial Accounting Standards No. 141,
"Business Combinations," and No. 142 "Goodwill and Other Intangible Assets."
SFAS 141 requires that all business combinations be accounted for under the
purchase method only and that certain acquired intangible assets in a business
combination be recognized as assets apart from goodwill. SFAS 142 requires that
ratable amortization of goodwill be replaced with periodic tests of the
goodwill's impairment and that intangible assets other than goodwill be
amortized over their useful lives. SFAS 141 is effective for all business
combinations initiated after June 30, 2001 and for all business combinations
accounted for by the purchase method for which the date of acquisition is after
June 30, 2001.

In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Standards No. 144, ("SFAS 144") "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 retains the fundamental provisions of
existing generally accepted accounting principles with respect to the
recognition and measurement of long-lived asset impairment contained in
Statement of Financial Accounting Standards No. 121 ("SFAS 121") "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." However, SFAS No. 144 provides new guidance intended to address certain
significant implementation issues associated with SFAS 121, including expanded
guidance with respect to appropriate cash flows to be used to determine whether
recognition of any long-lived asset impairment is required, and if required, how
to measure the amount of the impairment. SFAS 144 also requires that any net
assets to be disposed of by sale be reported at the lower of carrying value or
fair market value less cost to sell, and expands the reporting of discontinued
operations to include any component of an entity with operations and cash flows
that can be clearly distinguished from the rest of the entity. SFAS 144 is
effective for financial statements issued for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal years. We do not
believe SFAS 144 will have a material impact on our future earnings and
financial position.




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<PAGE>



                                     PART II
ITEM 1. LEGAL PROCEEDINGS

On December 16, 1998, a state district court in Houston, Texas entered final
judgment against us in a lawsuit brought by twenty-one former employees of
Gibraltar Savings Association and/or First Texas Savings Association
(collectively, "GSA/FTSA"). The GSA/FTSA employees alleged that they were
entitled to the value of 401,541 shares of our stock pursuant to options issued
to the GSA/FTSA employees in 1988 in connection with a former technology
outsourcing services agreement between GSA/FTSA and us. The judgment against us
was for approximately $17 million, which includes attorneys' fees and
pre-judgment interest, but excludes additional attorneys' fees of approximately
$850,000 and post-judgement interest at the statutorily mandated rate, which
could be awarded in the event the plaintiffs are successful upon appeal and
final judgment. We continue to believe that we have a meritorious defense to all
or a substantial portion of the plaintiffs' claims, and accordingly, have not
accrued any amount on our balance sheet related to the lawsuit. We filed our
appeal of the judgment on March 15, 1999 and a brief in support of such appeal
has been filed. We plan to vigorously pursue the appeal. The plaintiffs also
have filed a notice of appeal. A hearing for oral arguments on the parties'
appeals occurred on September 20, 2001. Should the proceedings not be favorably
resolved on appeal, we would be subject to a material charge. The court of
appeals has given no indication of when it will issue its decision.

In addition to the foregoing, we are subject to certain other legal proceedings,
claims and disputes which arise in the ordinary course of our business. Although
we cannot predict the outcomes of these legal proceedings, we do not believe
these actions, in the aggregate, will have a material adverse effect on our
financial position, results of operations or liquidity.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

On October 10, 2001, we completed our offering of 9.2 million shares of our
Class A common stock. The shares were issued at $81.00 per share. Net proceeds
of $714.5 million (net of underwriters' fees and other costs) were used to repay
the $550 million 18-month interim credit facility we obtained in connection with
the IMS acquisition and a portion of the amount outstanding under our revolving
credit facility.

On January 22, 2002, we announced that our Board of Directors approved a
two-for-one stock split of our outstanding Class A Common Stock and Class B
Common Stock to be implemented in the form of a 100% stock dividend ("Stock
Split"). Each holder of record of our Class A Common Stock and Class B Common
Stock as of the close of business on February 15, 2002 will receive one
additional share of such stock held by them at that time. We will issue the
additional shares resulting from the Stock Split on February 22, 2002. In
connection with the Stock Split, the number of shares of Class A Common Stock
reserved for issuance or subject to outstanding options granted under our
employee stock option or other benefit plans, as well as the number of shares
reserved for issuance under our 4% Convertible Subordinated Notes due March 15,
2005 and 3.5% Convertible Subordinated Notes due February 15, 2006, will be
proportionately increased in accordance with the terms of such options, plans
and other instruments.

On February 12, 2002, we announced that our Board of Directors had approved the
redemption of our 4% Convertible Subordinated Notes due March 15, 2005 (the
"Notes"). As of February 12, 2002, the outstanding principal amount of the Notes
was $229.9 million. The redemption will occur on March 15, 2002, for holders of
record on that date at a redemption price equal to 101.71% of the principal
amount of Notes held. Holders of the Notes may elect to convert the Notes to our
Class A Common Stock on or before the day prior to redemption. The conversion
rate is 23.4432 shares of Class A Common Stock for each $1,000 principal amount
of the Notes (equivalent to a conversion price of $42.66 per share of Class A
Common Stock before giving effect to our previously announced two-for-one stock
split, to be implemented in the form of a stock dividend payable on February
22, 2002 to stockholders of record as of the close of business on February 15,
2002). In accordance with the terms of the Notes, we will be required to make
payment for fractional shares in cash, based on the closing price of our stock
on the date of conversion, and all accrued interest due through the date of
conversion. The notice is irrevocable.



                                       16
<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a.)      Exhibits
                  None.

b.)      Reports on Form 8-K
                  None.


                                       17
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the 14th day of February, 2002.

                                          AFFILIATED COMPUTER SERVICES, INC.

                                          By:  /s/ Warren D. Edwards
                                             ----------------------------------
                                               Warren D. Edwards
                                               Executive Vice President and
                                               Chief Financial Officer



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