##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 Mark One
 [  X  ]
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended June 30, 2009or[     ]
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period from  to .
  AFFILIATED COMPUTER SERVICES, INC.
  Delaware
    
    51-0310342State or other jurisdiction of incorporation or organization
    
    (I.R.S. Employer Identification No.)
 2828 North Haskell, Dallas, Texas 75204
  214-841-6111
  Securities Registered Pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of exchange on which registeredClass A common stock, par value $.01 per share
    
    New York Stock Exchange
 Securities Registered Pursuant to Section 12(g) of the Act: NONE
       Large accelerated filer
    
    [X]
    
    
    
    Accelerated filer
    
    [  ]Non-accelerated filer
    
    [   ]
    
    (Do not check if a smaller reporting company)
    
    Smaller reporting company
    
    [  ]
   DOCUMENTS INCORPORATED BY REFERENCE:




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##### 



AFFILIATED COMPUTER SERVICES, INC.
 FORM 10-K
Fiscal Year Ended June 30, 2009
 Part IItem 1.
    
    Business
    
    1Item 1A.
    
    Risk Factors
    
    11Item 1B.
    
    Unresolved Staff Comments
    
    19Item 2.
    
    Properties
    
    20Item 3.
    
    Legal Proceedings
    
    20Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    20Part IIItem 5.
    
    Market for Our Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
    
    21Item 6.
    
    Selected Financial Data
    
    23Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    24Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    48Item 8.
    
    Financial Statements and Supplementary Data
    
    50Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    98Item 9A.
    
    Controls and Procedures
    
    98Item 9B.
    
    Other Information
    
    98Part IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    99Item 11.
    
    Executive Compensation
    
    103Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    126Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    127Item 14.
    
    Principal Accounting Fees and Services
    
    128Part IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    129EX-21.1EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1EX-32.2




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PART I
 
 ITEM 1. BUSINESS
   Business Strategy
   Focus
on Vertical Markets
 Innovate
 Leverage
our Operational Excellence Model
 Stay
Nimble and Accountable
 Invest in our Sales Force and Processes
 Recruit, Train & Retain
 Complete Strategic and Tactical Acquisitions
 1




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Employees
   Segment Information
  Commercial Reportable Operating Segment
    
    Government Reportable Operating SegmentCommercial Services
    
    Government SolutionsHuman Capital Management Solutions
    
    State & Local SolutionsCommercial Education and Financial Services
    
    Federal SolutionsFinance and Accounting
    
    Government Healthcare SolutionsInformation Technology Outsourcing
    
    Transportation SolutionsElectronic Toll CollectionsBusiness Process Outsourcing
    
    Photo Enforcement and Violations ProcessingCommunications and Consumer Goods
    
    Public TransportHealthcare Payer and Insurance
    
    ParkingHealthcare ProviderTravel, Transportation and LogisticsMortgage and Financial Services
   Fiscal Year Ended June 30,2009
    
    
    2008
    
    
    2007Commercial (a)
    
    $
    3,909,293
    
    
    $
    3,673,981
    
    
    $
    3,404,935Government (b)
    
    
    2,613,871
    
    
    
    2,486,569
    
    
    
    2,367,544Total revenues
    
    $
    6,523,164
    
    
    $
    6,160,550
    
    
    $
    5,772,479
 (a)
    
    Includes $0.1 million, $14.0 million and $18.0 million of revenues for fiscal years 2009,
2008 and 2007, respectively, from operations divested through June 30, 2009.(b)
    
    Includes $0.2 million, $17.9 million and $21.9 million of revenues for fiscal years 2009,
2008 and 2007, respectively, from operations divested through June 30, 2009.
 2




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Commercial Segment
     Human Capital Management Solutions (HCMS)
  Buck Consulting
     3




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Total Benefits Outsourcing
 Human Resources Outsourcing
 Learning Process Outsourcing
 Commercial Education and Financial Services
   Finance and Accounting
   4




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Information Technology Outsourcing (ITO)
  Data Center Outsourcing
 Midrange Server Outsourcing
 Network Outsourcing
 Remote Infrastructure Management (RIM)
 Help Desk/Service Desk Management
 Desktop Outsourcing
 Managed Storage
 Utility Computing
 Disaster Recovery
 Security Services
 IT Commercial Services
 5




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Communications and Consumer Goods
  Healthcare Payer and Insurance
   Healthcare Provider
  Travel, Transportation and Logistics
  Mortgage and Financial Services
  Government Segment
  6




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State & Local Solutions (SLS)
  IT Services
 Child Support Solutions ®
 Electronic Benefits Transfer (EBT)
 Eligibility Solutions
 Government Records Management
 Unclaimed Property
 7




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Federal Solutions
  Student Loan Processing
 Electronic Payment Card
 Administrative Services
 Customer Care
 Government Healthcare Solutions (GHS)
  Health Program Administration
 Healthcare and Quality Management
 Eligibility & Enrollment Solutions
 Pharmacy Benefits Management
 8




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Transportation Solutions (TS)
  Electronic Toll Collection (ETC)
 Commercial Vehicle Operations ®
 Motor Vehicle Services
 Photo Enforcement and Violations Processing
 Public Transport
 On-Street Parking
 Off-Street and Airport Parking
 9




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Revenues by Service Line
  Fiscal Year Ended June 30,2009
    
    
    2008
    
    
    2007Business process outsourcing (a)
    
    $
    5,148,750
    
    
    $
    4,792,403
    
    
    $
    4,322,164Information technology services
    
    
    1,025,469
    
    
    
    1,041,036
    
    
    
    1,013,801Systems integration services
    
    
    348,945
    
    
    
    327,111
    
    
    
    436,514Total revenues
    
    $
    6,523,164
    
    
    $
    6,160,550
    
    
    $
    5,772,479
 (a)
    
    Includes $0.3 million, $31.9 million and $39.9 million of revenues for fiscal years 2009,
2008 and 2007, respectively, from operations divested through June 30, 2009.
 Competition
   Global Production Model
  Client Base
   Geographic Information
  10




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Certifications and Governance
  U.S. Securities and Exchange Commission Reports
  
 ITEM 1A. RISK FACTORS
  We have issued debt and have a substantial uncommitted facility available to us. With respect to
the debt, we have $250 million in Senior Notes due on June 1, 2010 which requires us to have
sufficient funds or credit available to repay or refinance that amount to avoid a default under
those notes and a potential cross default under our other debt and credit facility or other debt
instruments. If interest rates rise or if we draw additional amounts under the facility, our debt
service cost could increase and limit cash flow available to fund our operations, and limit our
ability to obtain further debt or equity financing.
    11




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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 SEC and other regulatory agencies. Investigations by those
agencies could divert managements focus and could have a material adverse impact on our reputation
and financial condition.
  Our credit rating or further reductions of our credit rating may have an adverse impact on our
business.
  12




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A decline in revenues from or a loss or failure 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 and cash flows from operations
may fluctuate from period to period.
  The markets in which we operate are highly competitive and we may not be able to compete
effectively.
  Our business could be adversely affected if our clients are not satisfied with our services.
  13




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We are dependent to a significant extent on third party providers, such as subcontractors, a
relatively small number of primary software vendors, utility providers and network providers, and
could be materially adversely affected if they cannot deliver or perform as expected or if our
relationships with them are terminated or otherwise change.
  We may not be successful at identifying, acquiring or integrating other businesses or technologies.
  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.
  14




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We may incur delays in signing and commencing new business as the result of protests of government
contracts that we are awarded.
  Some of our contracts contain provisions that could adversely affect our business, financial
condition, operating results and cash flows. Additionally, our inability to control costs could
adversely affect our business, financial condition, operating results and cash flows.
    15




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Claims associated with our actuarial consulting and benefit plan management services could
negatively impact 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.
  16




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Budget deficits and/or fluctuations in the number of requests for proposals issued by governments
and their agencies may adversely impact our business.
  Our international and domestic operations are subject to a number of risks.
   Our operating results may be adversely affected by fluctuations in foreign currency exchange rates.
   
    
    Because our consolidated financial statements are presented in U.S. dollars, we
must translate revenues, expenses and income, as well as assets and liabilities, into U.S.
dollars at exchange rates in effect during or at the end of each
 17




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reporting period. Therefore, changes in the value of the U.S. dollar against other
currencies will affect our revenues, operating income and the value
of balance sheet items
originally denominated in other currencies. Declines in the value of other currencies
against the U.S. dollar could cause our consolidated earnings stated in U.S. dollars to be
lower than our consolidated earnings in local currency and could affect our reported results
when compared against other periods. Conversely, increases in the value of other currencies
against the U.S. dollar could cause our consolidated earnings stated in U.S. dollars to be
higher than our consolidated earnings in local currency and could affect our reported
results when compared against other periods. There is no guarantee that our financial
results will not be adversely affected by currency exchange rate fluctuations.
    
    In some countries we could be subject to strict restrictions on the movement of
cash and the exchange of foreign currencies, which could limit our ability to use this
cash across our global operations.
    
    As we continue to leverage our global delivery model, more of our expenses are
incurred in currencies other than those in which we bill for the related services. An
increase in the value of certain currencies against the U.S. dollar could increase costs
for delivery of services at off-shore sites by increasing labor and other costs that are
denominated in local currency, and there can be no assurance that our contractual
provisions or any currency hedging activities would offset this impact. This could result
in a decrease in the profitability of our contracts that are utilizing delivery center
resources.
 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.
  Certain provisions of our certificate of incorporation, bylaws and Delaware law and our stock
ownership could deter takeover attempts.
  
    
    require an 80% vote of the stockholders to amend some provisions of our certificate of
incorporation;
 18




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
    
    require an 80% vote of the stockholders to amend some provisions of our bylaws;
    
    permit only our Chairman, President or a majority of the Board of Directors (calculated
as if there were no vacancies) to call stockholder meetings;
    
    authorize our Board of Directors to issue up to 3.0 million shares of preferred stock in
series with the terms of each series to be fixed by our Board of Directors;
    
    authorize our Board of Directors to issue Class B common stock, which shares are
entitled to ten votes per share;
    
    permit directors to be removed, with or without cause, only by a vote of at least 80% of
the combined voting power; and
    
    specify advance notice requirements for stockholder proposals and director nominations
to be considered at a meeting of stockholders.
   The price of our Class A common stock may fluctuate significantly, which may result in losses for
investors .
   Other Risks
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  19




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ITEM 2. PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  1.
    
    Election of Directors:
 Name
    
    For
    
    
    WithheldDarwin Deason
    
    
    134,490,772
    
    
    
    12,012,590Lynn R. Blodgett
    
    
    133,430,034
    
    
    
    13,073,328Robert Druskin
    
    
    135,130,575
    
    
    
    11,372,727Kurt R. Krauss
    
    
    135,135,983
    
    
    
    11,367,379Ted B. Miller, Jr.
    
    
    129,838,836
    
    
    
    16,664,526Paul E. Sullivan
    
    
    129,836,548
    
    
    
    16,666,814Frank Varasano
    
    
    129,659,941
    
    
    
    16,843,421
 Each of the directors was elected by a plurality of the vote and will serve until their
respective successors are elected and qualified.
 2.
    
    Approval of the Senior Executive Annual Incentive Plan:
 For
    
    Against
    
    Abstain139,402,154
    
    7,016,377
    
    84,830
 3.
    
    Ratification of PricewaterhouseCoopers LLP as our independent registered public accounting
firm for fiscal year 2009:
 For
    
    Against
    
    Abstain144,008,555
    
    2,446,272
    
    48,354
 20




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PART II
 
 ITEM 5. MARKET FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
 Stock Price
 Fiscal Year Ended June 30, 2009
    
    High
    
    
    LowFirst Quarter
    
    $
    54.39
    
    
    $
    45.32Second Quarter
    
    
    51.38
    
    
    
    34.84Third Quarter
    
    
    50.30
    
    
    
    42.10Fourth Quarter
    
    
    50.95
    
    
    
    43.37Fiscal Year Ended June 30, 2008First Quarter
    
    $
    58.70
    
    
    $
    45.52Second Quarter
    
    
    52.61
    
    
    
    39.46Third Quarter
    
    
    53.23
    
    
    
    40.43Fourth Quarter
    
    
    57.40
    
    
    
    49.55
  Dividends
 Stock Option and Employee Stock Purchase Plans
 Number of securitiesNumber of
    
    
    
    
    
    
    remaining available forsecurities to be
    
    
    
    
    
    
    future issuance underissued upon exercise
    
    
    
    
    
    
    equity compensationof outstanding
    
    
    Weighted average
    
    
    plans (excludingoptions, warrants
    
    
    exercise price of
    
    
    securities reflected inand rights
    
    
    outstanding options,
    
    
    initial column)Plan Category
    
    as of June 30, 2009
    
    
    warrants and rights
    
    
    as of June 30, 2009Equity compensation plans
approved by security shareholdersStock options
    
    
    14,415,910
    
    
    $
    48.43
    
    
    
    8,690,200Employee stock purchase plan
    
    
    N/A
    
    
    
    N/A
    
    
    
    534,457Equity compensation plans not
approved by security shareholders
    
    
    -
    
    
    
    -
    
    
    
    -Total
    
    
    14,415,910
    
    
    $
    48.43
    
    
    
    9,224,657
 Stock Option Repricing
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Share Repurchase Programs
 Performance Graph
 
 22




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ITEM 6. SELECTED FINANCIAL DATA
  As of and for the Fiscal Year Ended June 30,2009
    
    
    2008
    
    
    2007(b)
    
    
    2006
    
    
    2005Results of Operations Data:Revenues (a)
    
    $
    6,523,164
    
    
    $
    6,160,550
    
    
    $
    5,772,479
    
    
    $
    5,353,661
    
    
    $
    4,351,159Operating income
    
    $
    685,943
    
    
    $
    645,078
    
    
    $
    536,955
    
    
    $
    617,284
    
    
    $
    647,484Net income
    
    $
    349,943
    
    
    $
    329,010
    
    
    $
    253,090
    
    
    $
    358,806
    
    
    $
    409,569Earnings per share  basic
    
    $
    3.59
    
    
    $
    3.36
    
    
    $
    2.53
    
    
    $
    2.91
    
    
    $
    3.21Earnings per share  diluted
    
    $
    3.57
    
    
    $
    3.32
    
    
    $
    2.49
    
    
    $
    2.87
    
    
    $
    3.14Weighted average shares outstanding 
basic (c)
    
    
    97,510
    
    
    
    98,013
    
    
    
    100,181
    
    
    
    123,197
    
    
    
    127,560Weighted average shares outstanding 
diluted (c)
    
    
    98,006
    
    
    
    98,993
    
    
    
    101,572
    
    
    
    125,027
    
    
    
    130,556Balance Sheet Data:Working capital
    
    $
    929,105
    
    
    $
    1,017,977
    
    
    $
    839,662
    
    
    $
    704,158
    
    
    $
    405,983Total assets
    
    $
    6,900,973
    
    
    $
    6,469,399
    
    
    $
    5,982,429
    
    
    $
    5,502,437
    
    
    $
    4,850,838Total long-term debt (d) (less current
portion)
    
    $
    2,041,529
    
    
    $
    2,357,541
    
    
    $
    2,342,272
    
    
    $
    1,614,032
    
    
    $
    750,355Stockholders equity
    
    $
    2,622,132
    
    
    $
    2,308,374
    
    
    $
    2,066,168
    
    
    $
    2,456,218
    
    
    $
    2,811,712
 (a)
    
    Revenues from operations divested through June 30, 2009 were $0.3 million, $31.9 million,
$39.9 million, $144.7 million and $273.4 million for fiscal years 2009, 2008, 2007, 2006 and
2005, respectively. Please see Significant Developments  Fiscal Year 2009, 2008 and 2007 in
MD&A and Note 20 to our Consolidated Financial Statements for a discussion of divestiture
activity.(b)
    
    During fiscal year 2007 we recorded a non-cash impairment charge of approximately $76.4
million ($48.3 million, net of income tax) related to a change in terms on our contract with
the Department of Education. Please see Significant Developments  Fiscal Year 2007 in MD&A
for further discussion.(c)
    
    Please see Note 14 to our Consolidated Financial Statements for a discussion of our share
repurchase programs.(d)
    
    During fiscal year 2005, we issued $500 million of Senior Notes (defined in Item 1A. Risk
Factors) and during fiscal year 2006 we entered into a new $800 million Term Loan Facility and
$1 billion Revolving Facility (each as defined in Item 1A. Risk Factors). During fiscal year
2009, $250 million of Senior Notes due June 1, 2010 were reclassified to current liabilities.
Please see Liquidity and Capital Resources in MD&A and Note 10 to our Consolidated Financial
Statements for a discussion of our credit arrangements.
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FORWARD-LOOKING AND CAUTIONARY STATEMENTS
 
  
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
   New Business Pipeline
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New Business Signings
  Internal Revenue Growth
 Client Renewal Rates
 Capital Intensity
  25




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Employees
 Other
  Fiscal Year 2010 Outlook
      26




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Significant Developments  Fiscal Year 2009
 Global Production Initiative
 Commercial
    
    
    Government
    
    
    Corporate
    
    
    TotalSeverance costs
    
    $
    6,000
    
    
    $
    1,000
    
    
    $
    -
    
    
    $
    7,000Transition and other expenses
    
    
    12,000 -   13,000
    
    
    
    2,500 -   3,000
    
    
    
    2,500 -   3,000
    
    
    
    17,000 -   19,000Total costs
    
    $
    18,000 - $19,000
    
    
    $
    3,500 - $4,000
    
    
    $
    2,500 - $3,000
    
    
    $
    24,000 - $26,000As of June 30, 2009, we added approximately 3,600 positions outside the United States and Europe
and reduced corresponding positions in the United States and Europe as a result of this initiative.
During fiscal year 2009, we recorded severance costs of $7.3 million, ($4.3 million, net of income
tax) and incurred $14.1 million, ($9.1 million, net of income tax) for transition and other
expenses in cost of revenues in our Consolidated Statements of Income. During fiscal year 2009, we
announced a plan to assist displaced employees who are experiencing financial hardships during
these difficult economic times. We made contributions of approximately $1.4 million, ($0.9
million, net of income tax), related to this plan during fiscal year 2009, which are included in
the transition costs discussed above. The following table reflects charges recorded in each of our
segments (in thousands):Fiscal Year Ended June 30, 2009Commercial
    
    
    Government
    
    
    Corporate
    
    
    TotalAccrued severance costs
    
    $
    5,967
    
    
    $
    1,306
    
    
    $
    -
    
    
    $
    7,273Transition and other expenses
    
    
    10,223
    
    
    
    1,914
    
    
    
    1,942
    
    
    
    14,079Total costs
    
    $
    16,190
    
    
    $
    3,220
    
    
    $
    1,942
    
    
    $
    21,352
 27




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Balance at beginning of period
    
    $
    -Accruals, net of reversals
    
    
    7,273Payments
    
    
    (5,024
    )Balance at end of period
    
    $
    2,249
 New Business
 Acquisitions
 Supplemental Executive Retirement Agreement
 Evaluation of Strategic Alternatives
  Divestitures
 Significant Developments  Fiscal Year 2008
 New Business
 Acquisitions
 28




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Divestitures
  Share Repurchase Programs
 Adoption of FIN 48
 Stock Option Repricing
 Review of Stock Option Grant Practices
 Significant Developments  Fiscal Year 2007
 New Business
 Acquisitions
 Sale of Minority Interests in a Professional Services Business
 Share Repurchase Programs
 29




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##### Table of Contents



Stock Option Repricing
 Contract with the Department of Education
  Government Healthcare Contract
 Restructuring Activities
   30




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Fiscal Year Ended June 30,2008

    
    2007Beginning balance
    
    $
    893
    
    
    $
    899Accruals
    
    
    -
    
    
    
    7,185Reversals
    
    
    (401
    )
    
    
    -Payments
    
    
    (492
    )
    
    
    (7,191
    )Ending balance
    
    $
    -
    
    
    $
    893
  Fiscal Year Ended June 30,2009

    
    2008

    
    2007Beginning balance
    
    $
    82
    
    
    $
    402
    
    
    $
    3,521Excess accrual credited to goodwill
    
    
    -
    
    
    
    (209
    )
    
    
    (1,678
    )Payments
    
    
    (82
    )
    
    
    (111
    )
    
    
    (1,441
    )Ending balance
    
    $
    -
    
    
    $
    82
    
    
    $
    402
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Revenue Growth
   Fiscal Year Ended

    
    
    
    
    
    Fiscal Year EndedJune 30,

    
    Growth

    
    June 30,
    
    Growth2009
    
    2008
    
    %
    
    2008
    
    2007
    
    %ConsolidatedTotal Revenues
    
    $
    6,523
    
    
    $
    6,161
    
    
    
    6
    %
    
    $
    6,161
    
    
    $
    5,772
    
    
    
    7
    %Less: Divestitures
    
    
    -
    
    
    
    (32
    )
    
    
    
    
    
    
    (5
    )
    
    
    (11
    )Adjusted
    
    $
    6,523
    
    
    $
    6,129
    
    
    
    6
    %
    
    $
    6,156
    
    
    $
    5,761
    
    
    
    7
    %Acquired revenues
    
    $
    188
    
    
    $
    11
    
    
    
    3
    %
    
    $
    116
    
    
    $
    4
    
    
    
    2
    %Internal revenues
    
    
    6,335
    
    
    
    6,118
    
    
    
    3
    %
    
    
    6,040
    
    
    
    5,757
    
    
    
    5
    %Total
    
    $
    6,523
    
    
    $
    6,129
    
    
    
    6
    %
    
    $
    6,156
    
    
    $
    5,761
    
    
    
    7
    %CommercialTotal Revenues (a)
    
    $
    3,909
    
    
    $
    3,674
    
    
    
    6
    %
    
    $
    3,674
    
    
    $
    3,405
    
    
    
    8
    %Less: Divestitures
    
    
    -
    
    
    
    (14
    )
    
    
    
    
    
    
    (5
    )
    
    
    (6
    )Adjusted
    
    $
    3,909
    
    
    $
    3,660
    
    
    
    7
    %
    
    $
    3,669
    
    
    $
    3,399
    
    
    
    8
    %Acquired revenues
    
    $
    132
    
    
    $
    6
    
    
    
    4
    %
    
    $
    83
    
    
    $
    -
    
    
    
    2
    %Internal revenues
    
    
    3,777
    
    
    
    3,654
    
    
    
    3
    %
    
    
    3,586
    
    
    
    3,399
    
    
    
    6
    %Total
    
    $
    3,909
    
    
    $
    3,660
    
    
    
    7
    %
    
    $
    3,669
    
    
    $
    3,399
    
    
    
    8
    %GovernmentTotal Revenues (b)
    
    $
    2,614
    
    
    $
    2,487
    
    
    
    5
    %
    
    $
    2,487
    
    
    $
    2,367
    
    
    
    5
    %Less: Divestitures
    
    
    -
    
    
    
    (18
    )
    
    
    
    
    
    
    -
    
    
    
    (5
    )Adjusted
    
    $
    2,614
    
    
    $
    2,469
    
    
    
    6
    %
    
    $
    2,487
    
    
    $
    2,362
    
    
    
    5
    %Acquired revenues
    
    $
    56
    
    
    $
    5
    
    
    
    2
    %
    
    $
    33
    
    
    $
    4
    
    
    
    1
    %Internal revenues
    
    
    2,558
    
    
    
    2,464
    
    
    
    4
    %
    
    
    2,454
    
    
    
    2,358
    
    
    
    4
    %Total
    
    $
    2,614
    
    
    $
    2,469
    
    
    
    6
    %
    
    $
    2,487
    
    
    $
    2,362
    
    
    
    5
    %
 (a)
    
    The Commercial segment includes revenues from operations divested through June 30, 2009 of
$0.1 million, $14.0 million and $18.0 million for fiscal years 2009, 2008 and 2007,
respectively.(b)
    
    The Government segment includes revenues from operations divested through June 30, 2009 of
$0.2 million, $17.9 million and $21.9 million for fiscal years 2009, 2008 and 2007,
respectively.
 32




---



##### Table of Contents



Results of Operations
  Fiscal Year Ended June 30,2009
    
    2008
    
    2007Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Cost of revenues:Wages and benefits
    
    
    45.6
    %
    
    
    47.2
    %
    
    
    47.6
    %Services and supplies
    
    
    24.5
    %
    
    
    22.5
    %
    
    
    21.9
    %Rent, lease and maintenance
    
    
    12.0
    %
    
    
    12.1
    %
    
    
    12.2
    %Depreciation and amortization
    
    
    6.1
    %
    
    
    6.2
    %
    
    
    6.0
    %Software impairment charge
    
    
    -
    
    
    
    -
    
    
    
    1.3
    %Other
    
    
    0.5
    %
    
    
    0.4
    %
    
    
    0.5
    %Cost of revenues
    
    
    88.7
    %
    
    
    88.4
    %
    
    
    89.5
    %Other operating expenses
    
    
    0.8
    %
    
    
    1.1
    %
    
    
    1.2
    %Total operating expenses
    
    
    89.5
    %
    
    
    89.5
    %
    
    
    90.7
    %Operating income
    
    
    10.5
    %
    
    
    10.5
    %
    
    
    9.3
    %Interest expense
    
    
    2.0
    %
    
    
    2.6
    %
    
    
    3.2
    %Other non-operating expense (income), net
    
    
    -
    
    
    
    -0.2
    %
    
    
    -0.5
    %Pretax profit
    
    
    8.5
    %
    
    
    8.1
    %
    
    
    6.6
    %Income tax expense
    
    
    3.1
    %
    
    
    2.8
    %
    
    
    2.2
    %Net income
    
    
    5.4
    %
    
    
    5.3
    %
    
    
    4.4
    %
 Comparison of Fiscal Year 2009 to Fiscal Year 2008
 Revenues
   33




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##### Table of Contents



Operating expenses
    Fiscal Year Ended June 30,2009
    
    2008Commercial segment:Cost related to our global production initiative
    
    $
    1.0
    
    
    $
    -Litigation settlement
    
    
    -
    
    
    
    3.0Gain on sale of UPRR
    
    
    (1.1
    )
    
    
    (1.0
    )Litigation settlement related to
pre-acquisition activities of the Acquired HR
Business and subsequent recovery from seller
    
    
    
    
    
    
    (1.8
    )Government segment:Cost related to our global production initiative
    
    
    0.4
    
    
    
    -Gain on sale of bindery business
    
    
    (0.2
    )Gain on sale of our decision support business
    
    
    
    
    
    
    (2.4
    )Gain on settlement of indemnification and other
claims with Lockheed Martin Corporation
    
    
    
    
    
    
    (2.2
    )Corporate segment:Legal costs associated with the ongoing stock
option investigations and stockholder
derivative lawsuits, net of insurance recovery
    
    
    3.3
    
    
    
    30.1Legal costs associated with the evaluation of
strategic alternatives and stockholder
derivative lawsuits
    
    
    0.5
    
    
    
    6.3Total
    
    $
    3.9
    
    
    $
    32.0As a percentage of revenue
    
    
    0.1
    %
    
    
    0.5
    %Change as a percentage of revenue explained above
    
    
    -0.4
    %Other net change as a percentage of revenue
    
    
    0.1
    %Total change as a percentage of revenue
    
    
    -0.3
    %
 34




---



##### Table of Contents



Operating income
 Fiscal Year Ended June 30,2009
    
    2008Commercial segment:Benefit related to our deferred compensation plans
    
    $
    3.2
    
    
    $
    0.9Costs related to our global production initiative
    
    
    (16.2
    )
    
    
    -Litigation settlement
    
    
    -
    
    
    
    (3.0
    )Impairment charge related to the termination of a Commercial
client that was acquired
    
    
    -
    
    
    
    (1.6
    )Gain on sale of UPRR
    
    
    1.1
    
    
    
    1.0Litigation settlement related to pre-acquisition activities of
the Acquired HR Business and subsequent recovery from seller
    
    
    -
    
    
    
    1.8Government segment:Costs related to our global production initiative
    
    
    (3.2
    )
    
    
    -Gain on sale of bindery business
    
    
    0.2
    
    
    
    -Gain on sale of our decision support business
    
    
    -
    
    
    
    2.4Gain on settlement of indemnification and other claims with
Lockheed Martin Corporation
    
    
    -
    
    
    
    2.2Corporate segment:Benefit related to our deferred compensation plans
    
    
    10.6
    
    
    
    2.2SERP Termination
    
    
    (8.9
    )
    
    
    -Legal and other costs associated with the ongoing stock option
investigations and stockholder derivative lawsuits, net of
insurance recovery
    
    
    (6.7
    )
    
    
    (32.5
    )Legal costs and other costs associated with the evaluation of
strategic alternatives and stockholder derivative lawsuits
    
    
    (0.8
    )
    
    
    (9.9
    )Cost related to amending certain employees stock options
    
    
    -
    
    
    
    (1.2
    )Cost (credits) related to certain former employees stock options
    
    
    0.9
    
    
    
    (1.4
    )Costs related to our global production initiative
    
    
    (1.9
    )
    
    
    -Total
    
    $
    (21.7
    )
    
    $
    (39.1
    )As a percentage of revenue
    
    
    -0.3
    %
    
    
    -0.6
    %Change as a percentage of revenue explained above
    
    
    0.3
    %Other net change as a percentage of revenue
    
    
    -0.3
    %Total change as a percentage of revenue
    
    
    0.0
    %
 Interest expense
 Other non-operating expense (income), net
 Income tax expense
 35




---



##### Table of Contents



Comparison of Fiscal Year 2008 to Fiscal Year 2007
 Revenues
   Operating expenses
   Contract with the Department of Education.
 36




---



##### Table of Contents



Fiscal Year Ended June 30,2008
    
    2007Commercial segment:Litigation settlement
    
    $
    3.0
    
    
    $
    -Gain on sale of UPRR
    
    
    (1.0
    )
    
    
    -Litigation settlement related to pre-acquisition activities
of the Acquired HR Business and subsequent recovery from
seller
    
    
    (1.8
    )
    
    
    4.5Provision for uncollectible accounts receivable related to
the bankruptcy of a sub-prime lending client
    
    
    -
    
    
    
    1.5Government segment:Gain on sale of our decision support business
    
    
    (2.4
    )
    
    
    -Gain on settlement of indemnification and other claims with
Lockheed Martin Corporation
    
    
    (2.2
    )
    
    
    -Corporate segment:Legal costs associated with the ongoing stock option
investigations and stockholder derivative lawsuits, net of
insurance recovery
    
    
    30.1
    
    
    
    30.1Legal costs associated with the evaluation of strategic
alternatives and stockholder derivative lawsuits
    
    
    6.3
    
    
    
    3.1Reversal of penalties related to Section 162(m) disallowances
    
    
    -
    
    
    
    (0.9
    )Total
    
    $
    32.0
    
    
    $
    38.3As a percentage of revenue
    
    
    0.5
    %
    
    
    0.7
    %Change as a percentage of revenue explained above
    
    
    -0.2
    %Other net change as a percentage of revenue
    
    
    0.1
    %Total change as a percentage of revenue
    
    
    -0.1
    %
 37




---



##### Table of Contents



Operating income
 Fiscal Year Ended June 30,2008
    
    2007Commercial segment:Benefit (charge) related to our deferred compensation plans
    
    $
    0.9
    
    
    $
    (3.6
    )Litigation settlement
    
    
    (3.0
    )
    
    
    -Impairment charge related to the termination of a Commercial client that was
acquired
    
    
    (1.6
    )
    
    
    -Gain on sale of UPRR
    
    
    1.0
    
    
    
    -Costs related to our fiscal year 2007 restructuring activities
    
    
    -
    
    
    
    (8.9
    )Litigation settlement related to pre-acquisition activities of the Acquired HR
Business and subsequent recovery from seller
    
    
    1.8
    
    
    
    (4.5
    )Provision for uncollectible accounts receivable and other charges related to the
loss of a sub-prime lending client to bankruptcy
    
    
    -
    
    
    
    (1.7
    )Asset impairments and other charges
    
    
    -
    
    
    
    (1.3
    )Costs related to our efforts to relocate domestic functions to offshore facilities
    
    
    -
    
    
    
    (1.2
    )Government segment:Gain on sale of our decision support business
    
    
    2.4
    
    
    
    -Gain on settlement of indemnification and other claims with Lockheed Martin
Corporation
    
    
    2.2
    
    
    
    -Software impairment charge related to the CSB contract
    
    
    -
    
    
    
    (76.4
    )Revenue related to the settlement of the North Carolina Department of Health and
Human Services contract dispute
    
    
    -
    
    
    
    3.4Cost related to our restructuring activities
    
    
    -
    
    
    
    (1.3
    )Corporate segment:Benefit (charge) related to our deferred compensation plans
    
    
    2.2
    
    
    
    (8.1
    )Legal and other costs associated with the ongoing stock option investigations and
stockholder derivative lawsuits, net of insurance recovery
    
    
    (32.5
    )
    
    
    (32.3
    )Legal costs and other costs associated with the evaluation of strategic
alternatives and stockholder derivative lawsuits
    
    
    (9.9
    )
    
    
    (5.9
    )Cost related to amending certain employees stock options
    
    
    (1.2
    )
    
    
    -Cost related to certain former employees stock options
    
    
    (1.4
    )
    
    
    -Reversal of accrued penalties related to the Section 162(m) disallowances
    
    
    -
    
    
    
    0.9Total
    
    $
    (39.1
    )
    
    $
    (140.9
    )As a percentage of revenue
    
    
    -0.6
    %
    
    
    -2.4
    %Change as a percentage of revenue explained above
    
    
    1.8
    %Other net change as a percentage of revenue
    
    
    -0.6
    %Total change as a percentage of revenue
    
    
    1.2
    %
 Interest expense
 Other non-operating expense (income), net
 38




---



##### Table of Contents



Income tax expense
 Liquidity and Capital Resources
 Cash Flows
     Fiscal Year Ended June 30,2009

    
    2008

    
    2007Net cash provided by operating activities
    
    $
    877,094
    
    
    $
    826,777
    
    
    $
    738,378Purchases of property, equipment and software, net
    
    
    (320,267
    )
    
    
    (267,948
    )
    
    
    (316,843
    )Additions to other intangible assets
    
    
    (42,480
    )
    
    
    (40,358
    )
    
    
    (43,187
    )Free cash flow
    
    $
    514,347
    
    
    $
    518,471
    
    
    $
    378,348
 39




---



##### Table of Contents




    
    During fiscal year 2009, we used $172.5 million for acquisitions, net of cash acquired,
primarily for the acquisitions of Multivoice, e-Services, Anix and contingent consideration
and a working capital settlement related to prior year acquisitions. We used $219.5
million in fiscal year 2008 for acquisitions, including Syan, sds, CompIQ and TMS. We used
$182.7 million in fiscal year 2007 for acquisitions, including Systech, Primax, Albion and
CDR. (Each as defined in Note 3 to our Consolidated Financial Statements).
    
    During fiscal year 2009, we received $10.9 million related to our divestiture
activities, including the sale of our bindery business. During fiscal year 2008, we
received $6.3 million related to the sale of our decision support business.
    
    Cash used for the purchase of property, equipment and software, net and additions to
other intangible assets was $362.7 million, $308.3 million and $360.0 million during fiscal
years 2009, 2008 and 2007, respectively. Historically, the capital intensity of our
business has ranged between 5% and 7% of revenue. During fiscal years 2009, 2008 and 2007,
the overall capital intensity of our business was approximately 6%, 5% and 6% of revenues,
respectively. We expect that as our new business signings ramp, we will incur capital
expenditures associated with the new business but we expect that the capital intensity will
remain within our historical range.
    
    During fiscal years 2009 and 2008, we received $13.3 million and $3.0 million,
respectively, in proceeds primarily for investments which matured during the period.
During fiscal year 2007, we received $20.3 million related to a minority investment which
was sold during the year. During fiscal years 2009, 2008 and 2007, we purchased $15.1
million, $9.8 million and $6.5 million, respectively, of investments primarily to support
our deferred compensation plans.
    
    During fiscal year 2008, we paid Lockheed Martin Corporation $6.5 million to settle all
claims related to the sale of the majority of our federal business and our acquisition of
Lockheed Martin Corporations commercial information technology services business in fiscal
year 2004.
   Credit Arrangements
   Debt Covenants
 40




---



##### Table of Contents



Capital and Credit Market Risk
 Credit ratings
 Derivative Instruments and Hedging Activities
 Share Repurchase Programs
 Stock Option Repricing
 Other
  41




---



##### Table of Contents



Related Party Transactions
  Disclosures about Contractual Obligations and Commercial Commitments as of June 30, 2009 (in
thousands):
 Payments Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsLong-term debt (1)
    
    $
    1,786,863
    
    
    $
    19,209
    
    
    $
    43,553
    
    
    $
    1,724,078
    
    
    $
    23Senior Notes, net of unamortized
discount (1)
    
    
    499,609
    
    
    
    249,984
    
    
    
    -
    
    
    
    -
    
    
    
    249,625Capital lease obligations (1)
    
    
    50,229
    
    
    
    25,979
    
    
    
    22,930
    
    
    
    1,320
    
    
    
    -Operating leases (2)
    
    
    1,012,187
    
    
    
    369,490
    
    
    
    406,447
    
    
    
    144,017
    
    
    
    92,233Purchase obligations (3)
    
    
    24,925
    
    
    
    12,720
    
    
    
    12,205
    
    
    
    -
    
    
    
    -Total Contractual Cash Obligations
    
    $
    3,373,813
    
    
    $
    677,382
    
    
    $
    485,135
    
    
    $
    1,869,415
    
    
    $
    341,881Amount of Commitment Expiration per PeriodTotalAmounts
    
    
    Less than
    
    
    
    
    
    
    
    
    
    
    After 5Other Commercial Commitments
    
    Committed
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    YearsStandby letters of credit
    
    $
    91,001
    
    
    $
    91,001
    
    
    $
    -
    
    
    $
    -
    
    
    $
    -Surety bonds
    
    
    643,456
    
    
    
    579,528
    
    
    
    60,638
    
    
    
    1,993
    
    
    
    1,297Total Commercial Commitments
    
    $
    734,457
    
    
    $
    670,529
    
    
    $
    60,638
    
    
    $
    1,993
    
    
    $
    1,297
 (1)
    
    Excludes accrued interest of $4.8 million at June 30, 2009.(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 2011, and are included in purchase obligations in the
table.
     Income Taxes
 42




---



##### Table of Contents



Critical Accounting Policies
   Use of Estimates
 Revenue Recognition
     43




---



##### Table of Contents



Cost of Revenues
 Contingencies
  44




---



##### Table of Contents



Valuation of Goodwill and Intangibles
      45




---



##### Table of Contents



Valuation of Property, Equipment and Software
 Stock-Based Compensation
 
    
    Expected term of the option based on historical employee stock option exercise behavior
and the vesting and contractual terms of the respective option.
    
    Expected volatility of our stock price based on historical monthly volatility over the
expected term.
    
    Risk-free interest rate for periods within the expected term of the option.
    
    Expected dividend yield.
   Pension and Post-Employment Benefits
 46




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##### Table of Contents



Assumptions for calculating benefit obligations and net periodic benefit cost
 As of June 30,2009

    
    2008Non-U.S. PlansDiscount rate
    
    
    5.75% - 6.74
    %
    
    
    5.20% - 6.00
    %Rate of increase in compensation levels
    
    
    3.00% - 4.05
    %
    
    
    3.00% - 5.45
    %U.S. PlanDiscount rate
    
    
    7.00
    %
    
    
    6.80
    %Rate of increase in compensation levels
    
    
    3.90
    %
    
    
    3.80
    %
  Fiscal Year Ended June 30,2009

    
    2008

    
    2007Non-U.S. PlansDiscount rate
    
    
    5.20% - 5.75
    %
    
    
    5.20% - 6.00
    %
    
    
    5.20% - 5.67
    %Long-term rate of return on assets
    
    
    7.00% - 7.25
    %
    
    
    7.00% - 7.25
    %
    
    
    6.50% - 7.00
    %Rate of increase in compensation levels
    
    
    3.00% - 5.45
    %
    
    
    3.00% - 4.80
    %
    
    
    4.25% - 4.60
    %U.S. PlanDiscount rate
    
    
    6.80
    %
    
    
    6.40
    %
    
    
    6.50
    %Long-term rate of return on assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Rate of increase in compensation levels
    
    
    3.80
    %
    
    
    3.40
    %
    
    
    3.50
    %
  Fiscal Year Ended June 30,2009
    
    2008
    
    2007Plus .25%
    
    Less .25%
    
    Plus .25%
    
    Less .25%
    
    Plus .25%
    
    Less .25%Non-U.S. PlansEffect on pension benefit obligation
    
    $
    (4,115
    )
    
    $
    4,681
    
    
    $
    (7,297
    )
    
    $
    7,827
    
    
    $
    (5,786
    )
    
    $
    5,841Effect on service and interest cost
    
    $
    (479
    )
    
    $
    482
    
    
    $
    (582
    )
    
    $
    569
    
    
    $
    (485
    )
    
    $
    488U.S. PlanEffect on pension benefit obligation
    
    $
    (617
    )
    
    $
    653
    
    
    $
    (441
    )
    
    $
    467
    
    
    $
    (316
    )
    
    $
    336Effect on service and interest cost
    
    $
    (143
    )
    
    $
    151
    
    
    $
    (144
    )
    
    $
    152
    
    
    $
    (145
    )
    
    $
    153
    47




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##### Table of Contents



Allowance for Doubtful Accounts
 Income Taxes
   New Accounting Pronouncements
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rates
 48




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##### Table of Contents



Foreign Currency
  49




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    PAGEReport of Independent Registered Public Accounting Firm
    
    
    51Consolidated Balance Sheets
    
    
    52Consolidated Statements of Income
    
    
    53Consolidated Statements of Changes in Stockholders Equity
    
    
    54Consolidated Statements of Cash Flows
    
    
    55Notes to Consolidated Financial Statements
    
    
    56
 50




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
  Internal Control
- Integrated Framework
      
 51




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share amounts)
 June 30,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    730,911
    
    
    $
    461,883Accounts receivable, net
    
    
    1,415,707
    
    
    
    1,378,285Income taxes receivable
    
    
    19,210
    
    
    
    7,076Prepaid expenses and other current assets
    
    
    249,257
    
    
    
    255,872Total current assets
    
    
    2,415,085
    
    
    
    2,103,116Property, equipment and software, net
    
    
    955,158
    
    
    
    920,637Goodwill
    
    
    2,894,189
    
    
    
    2,785,164Other intangibles, net
    
    
    436,383
    
    
    
    444,479Other assets
    
    
    200,158
    
    
    
    216,003Total assets
    
    $
    6,900,973
    
    
    $
    6,469,399LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    272,889
    
    
    $
    198,191Accrued compensation and benefits
    
    
    251,510
    
    
    
    244,888Other accrued liabilities
    
    
    388,262
    
    
    
    338,861Deferred taxes
    
    
    90,798
    
    
    
    82,017Current portion of Senior Notes, net of unamortized discount
    
    
    249,984
    
    
    
    -Current portion of other long-term debt
    
    
    45,188
    
    
    
    47,373Current portion of unearned revenue
    
    
    187,349
    
    
    
    173,809Total current liabilities
    
    
    1,485,980
    
    
    
    1,085,139Senior Notes, net of unamortized discount
    
    
    249,625
    
    
    
    499,529Other long-term debt
    
    
    1,791,904
    
    
    
    1,858,012Deferred taxes
    
    
    469,606
    
    
    
    411,836Other long-term liabilities
    
    
    281,726
    
    
    
    306,509Total liabilities
    
    
    4,278,841
    
    
    
    4,161,025Commitments and contingencies (See Note 19)Stockholders equity:Class A common stock, $.01 par value, 500,000 shares
authorized, 112,044 and 111,660 shares issued, respectively
    
    
    1,120
    
    
    
    1,116Class B convertible common stock, $.01 par value, 14,000
shares authorized, 6,600 shares issued and outstanding
    
    
    66
    
    
    
    66Additional paid-in capital
    
    
    1,729,995
    
    
    
    1,702,340Accumulated other comprehensive (loss) income, net
    
    
    (45,014
    )
    
    
    18,830Retained earnings
    
    
    1,991,933
    
    
    
    1,641,990Treasury stock at cost, 21,002 shares
    
    
    (1,055,968
    )
    
    
    (1,055,968
    )Total stockholders equity
    
    
    2,622,132
    
    
    
    2,308,374Total liabilities and stockholders equity
    
    $
    6,900,973
    
    
    $
    6,469,399
 The accompanying notes are an integral part of these consolidated financial statements.
 52




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share amounts)
 Fiscal Year Ended June 30,2009
    
    
    2008
    
    
    2007Revenues
    
    $
    6,523,164
    
    
    $
    6,160,550
    
    
    $
    5,772,479Operating expenses:Cost of revenues:Wages and benefits
    
    
    2,977,564
    
    
    
    2,908,290
    
    
    
    2,748,717Services and supplies
    
    
    1,597,713
    
    
    
    1,383,801
    
    
    
    1,262,435Rent, lease and maintenance
    
    
    785,160
    
    
    
    746,077
    
    
    
    701,620Depreciation and amortization
    
    
    395,034
    
    
    
    380,571
    
    
    
    346,199Software impairment charge
    
    
    -
    
    
    
    -
    
    
    
    76,407Other
    
    
    32,967
    
    
    
    27,967
    
    
    
    33,440Cost of revenues
    
    
    5,788,438
    
    
    
    5,446,706
    
    
    
    5,168,818Other operating expenses
    
    
    48,783
    
    
    
    68,766
    
    
    
    66,706Total operating expenses
    
    
    5,837,221
    
    
    
    5,515,472
    
    
    
    5,235,524Operating income
    
    
    685,943
    
    
    
    645,078
    
    
    
    536,955Interest expense
    
    
    130,329
    
    
    
    161,935
    
    
    
    182,665Other non-operating expense (income), net
    
    
    1,379
    
    
    
    (13,076
    )
    
    
    (29,123
    )Pretax profit
    
    
    554,235
    
    
    
    496,219
    
    
    
    383,413Income tax expense
    
    
    204,292
    
    
    
    167,209
    
    
    
    130,323Net income
    
    $
    349,943
    
    
    $
    329,010
    
    
    $
    253,090Earnings per share:Basic
    
    $
    3.59
    
    
    $
    3.36
    
    
    $
    2.53Diluted
    
    $
    3.57
    
    
    $
    3.32
    
    
    $
    2.49Shares used in computing earnings per share:Basic
    
    
    97,510
    
    
    
    98,013
    
    
    
    100,181Diluted
    
    
    98,006
    
    
    
    98,993
    
    
    
    101,572
 The accompanying notes are an integral part of these consolidated financial statements.
 53




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 (In thousands)
 Common Stock

    
    
    
    
    
    
    
    
    
    AccumulatedClass A
    
    Class B
    
    Additional
    
    
    
    
    
    Other
    
    Treasury StockPaid-in
    
    Retained
    
    Comprehensive
    
    SharesShares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Earnings
    
    Income (Loss), Net
    
    Held
    
    Amount
    
    TotalBalance at June 30, 2006
    
    
    129,848
    
    
    
    1,299
    
    
    
    6,600
    
    
    
    66
    
    
    
    1,799,778
    
    
    
    1,836,850
    
    
    
    (10,943
    )
    
    
    (23,289
    )
    
    
    (1,170,832
    )
    
    
    2,456,218Comprehensive income:Foreign currency
translation gains
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    16,955
    
    
    
    -
    
    
    
    -
    
    
    
    16,955Foreign currency hedges(a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    693
    
    
    
    -
    
    
    
    -
    
    
    
    693Interest rate hedges (a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    6,837
    
    
    
    -
    
    
    
    -
    
    
    
    6,837Net income
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    253,090
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    253,090Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    277,575Share repurchases
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (14,429
    )
    
    
    (730,688
    )
    
    
    (730,688
    )Retired shares
    
    
    (16,659
    )
    
    
    (167
    )
    
    
    -
    
    
    
    -
    
    
    
    (214,712
    )
    
    
    (627,825
    )
    
    
    -
    
    
    
    16,659
    
    
    
    842,704
    
    
    
    -Stock-based compensation
expense
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    27,968
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    27,968Tax benefit on stock option
exercises
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    7,203
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    7,203Employee stock transactions
and related tax benefits
    
    
    771
    
    
    
    7
    
    
    
    -
    
    
    
    -
    
    
    
    22,663
    
    
    
    -
    
    
    
    -
    
    
    
    57
    
    
    
    2,848
    
    
    
    25,518Adjustment to initially
apply SFAS 158 (a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    2,374
    
    
    
    -
    
    
    
    -
    
    
    
    2,374Balance at June 30, 2007
    
    
    113,960
    
    
    
    1,139
    
    
    
    6,600
    
    
    
    66
    
    
    
    1,642,900
    
    
    
    1,462,115
    
    
    
    15,916
    
    
    
    (21,002
    )
    
    
    (1,055,968
    )
    
    
    2,066,168Comprehensive income:Foreign currency
translation gains
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    25,473
    
    
    
    -
    
    
    
    -
    
    
    
    25,473Foreign currency hedges(a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    1,278
    
    
    
    -
    
    
    
    -
    
    
    
    1,278Interest rate hedges (a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (12,600
    )
    
    
    -
    
    
    
    -
    
    
    
    (12,600
    )Prior service cost (a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    136
    
    
    
    -
    
    
    
    -
    
    
    
    136Change in funded status
of pension plans (a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (11,490
    )
    
    
    -
    
    
    
    -
    
    
    
    (11,490
    )Net income
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    329,010
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    329,010Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    331,807Share repurchases
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (4,527
    )
    
    
    (200,000
    )
    
    
    (200,000
    )Retired shares
    
    
    (4,527
    )
    
    
    (45
    )
    
    
    -
    
    
    
    -
    
    
    
    (60,764
    )
    
    
    (139,191
    )
    
    
    -
    
    
    
    4,527
    
    
    
    200,000
    
    
    
    -Stock-based compensation
expense
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    25,402
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    25,402Tax benefit on stock option
exercises
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    12,446
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    12,446Employee stock transactions
and related tax benefits
    
    
    2,227
    
    
    
    22
    
    
    
    -
    
    
    
    -
    
    
    
    77,840
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    77,862Adjustment to initially
apply SFAS 158 to pension
acquired(a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    117
    
    
    
    -
    
    
    
    -
    
    
    
    117Settlement of FIN 48 tax
position
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    4,516
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    4,516Adoption of FIN 48
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (9,944
    )
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (9,944
    )Balance at June 30, 2008
    
    
    111,660
    
    
    
    1,116
    
    
    
    6,600
    
    
    
    66
    
    
    
    1,702,340
    
    
    
    1,641,990
    
    
    
    18,830
    
    
    
    (21,002
    )
    
    
    (1,055,968
    )
    
    
    2,308,374Comprehensive income:Foreign currency
translation losses
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (63,489
    )
    
    
    -
    
    
    
    -
    
    
    
    (63,489
    )Foreign currency hedges(a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    777
    
    
    
    -
    
    
    
    -
    
    
    
    777Interest rate hedges (a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (12,322
    )
    
    
    -
    
    
    
    -
    
    
    
    (12,322
    )Prior service cost (a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    140
    
    
    
    -
    
    
    
    -
    
    
    
    140Change in funded status
of pension plans (a)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    11,050
    
    
    
    -
    
    
    
    -
    
    
    
    11,050Net income
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    349,943
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    349,943Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    286,099Stock-based compensation
expense
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    25,143
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    25,143Tax benefit on stock option
exercises
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (7,666
    )
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (7,666
    )Employee stock transactions
and related tax benefits
    
    
    384
    
    
    
    4
    
    
    
    -
    
    
    
    -
    
    
    
    10,178
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    10,182Balance at June 30, 2009
    
    
    112,044
    
    
    $
    1,120
    
    
    
    6,600
    
    
    $
    66
    
    
    $
    1,729,995
    
    
    $
    1,991,933
    
    
    $
    (45,014
    )
    
    
    (21,002
    )
    
    $
    (1,055,968
    )
    
    $
    2,622,132
  The accompanying notes are an integral part of these consolidated financial statements.
 54




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 Fiscal Year Ended June 30,2009
    
    2008
    
    2007Cash flows from operating activities:Net income
    
    $
    349,943
    
    
    $
    329,010
    
    
    $
    253,090Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    395,034
    
    
    
    380,571
    
    
    
    346,199Contract inducement amortization
    
    
    15,650
    
    
    
    14,304
    
    
    
    14,634Deferred financing fee amortization
    
    
    6,274
    
    
    
    6,261
    
    
    
    6,292Deferred contract cost amortization
    
    
    9,887
    
    
    
    7,494
    
    
    
    -Provision (credit) for uncollectible accounts receivable
    
    
    5,132
    
    
    
    3,138
    
    
    
    (290
    )Provision for default loan liability
    
    
    282
    
    
    
    -

    
    
    
    (218
    )Software impairment charge
    
    
    -

    
    
    
    -
    
    
    
    76,407Other asset impairments
    
    
    -
    
    
    
    1,560
    
    
    
    1,351Gain on sale of business units
    
    
    (3,527
    )
    
    
    (3,630
    )
    
    
    (2,459
    )(Gain)/loss on long-term investments
    
    
    15,089
    
    
    
    2,462
    
    
    
    (19,345
    )Deferred income tax expense
    
    
    68,467
    
    
    
    131,248
    
    
    
    19,626Excess tax benefit on stock-based compensation
    
    
    (1,679
    )
    
    
    (3,907
    )
    
    
    (3,763
    )Stock-based compensation expense
    
    
    25,143
    
    
    
    26,737
    
    
    
    28,491Other non-cash activities
    
    
    7,869
    
    
    
    3,767
    
    
    
    3,384Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable
    
    
    (2,533
    )
    
    
    (72,601
    )
    
    
    10,882Prepaid expenses and other current assets
    
    
    (349
    )
    
    
    (17,928
    )
    
    
    (42,023
    )Other assets
    
    
    (4,643
    )
    
    
    (11,642
    )
    
    
    (2,085
    )Accounts payable
    
    
    60,620
    
    
    
    86,787
    
    
    
    (11,349
    )Accrued compensation and benefits
    
    
    350
    
    
    
    (5,903
    )
    
    
    63,233Other accrued liabilities
    
    
    (23,292
    )
    
    
    (55,615
    )
    
    
    12,493Income taxes receivable/payable
    
    
    (23,584
    )
    
    
    1,135
    
    
    
    4,312Other long-term liabilities
    
    
    (14,548
    )
    
    
    (7,036
    )
    
    
    (29,085
    )Unearned revenue
    
    
    (8,491
    )
    
    
    10,565
    
    
    
    8,601Total adjustments
    
    
    527,151
    
    
    
    497,767
    
    
    
    485,288Net cash provided by operating activities
    
    
    877,094
    
    
    
    826,777
    
    
    
    738,378Cash flows from investing activities:Purchases of property, equipment and software, net
    
    
    (320,267
    )
    
    
    (267,948
    )
    
    
    (316,843
    )Additions to other intangible assets
    
    
    (42,480
    )
    
    
    (40,358
    )
    
    
    (43,187
    )Payments for acquisitions, net of cash acquired
    
    
    (172,524
    )
    
    
    (219,480
    )
    
    
    (182,724
    )Proceeds from divestitures, net of transaction costs
    
    
    10,939
    
    
    
    6,345
    
    
    
    -Proceeds from sale of investments
    
    
    13,270
    
    
    
    2,975
    
    
    
    20,283Purchases of investments
    
    
    (15,096
    )
    
    
    (9,820
    )
    
    
    (6,532
    )Other
    
    
    (320
    )
    
    
    (6,500
    )
    
    
    -Net cash used in investing activities
    
    
    (526,478
    )
    
    
    (534,786
    )
    
    
    (529,003
    )Cash flows from financing activities:Proceeds from issuance of long-term debt, net
    
    
    31,880
    
    
    
    218,526
    
    
    
    1,847,719Payments of long-term debt
    
    
    (124,842
    )
    
    
    (240,685
    )
    
    
    (1,150,972
    )Purchase of treasury shares
    
    
    -
    
    
    
    (200,000
    )
    
    
    (730,688
    )Excess tax benefit on stock-based compensation
    
    
    1,679
    
    
    
    3,907
    
    
    
    3,763Proceeds from stock options exercised
    
    
    9,964
    
    
    
    81,184
    
    
    
    24,523Proceeds from issuance of treasury shares
    
    
    -
    
    
    
    -
    
    
    
    2,923Other, net
    
    
    (269
    )
    
    
    (326
    )
    
    
    (194
    )Net cash provided by (used in) financing activities
    
    
    (81,588
    )
    
    
    (137,394
    )
    
    
    (2,926
    )Net increase in cash and cash equivalents
    
    
    269,028
    
    
    
    154,597
    
    
    
    206,449Cash and cash equivalents at beginning of year
    
    
    461,883
    
    
    
    307,286
    
    
    
    100,837Cash and cash equivalents at end of year
    
    $
    730,911
    
    
    $
    461,883
    
    
    $
    307,286
  The accompanying notes are an integral part of these consolidated financial statements.
 55




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1.     BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Description of Business and Basis of Presentation
    Use of Estimates
 Cash and Cash Equivalents
 Allowance for Doubtful Accounts
 Property, Equipment and Software, Net
  56




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     Goodwill and Other Intangible Assets, Net
    57




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Other Assets
 Derivative Instruments
 58




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Revenue Recognition
        59




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Contingencies
  Income
Taxes
   Sales Taxes
 Earnings Per Share
 60




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Stock-based Compensation
 
    
    Expected term of the option based on historical employee stock option exercise behavior
and the vesting and contractual terms of the respective option.
 
    
    Expected volatility of our stock price based on historical monthly volatility over the
expected term.
 
    
    Risk-free interest rate for periods within the expected term of the option.
 
    
    Expected dividend yield.
    Pensions and other post-employment benefits
  61




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2.     STOCK-BASED COMPENSATION PLANS
   Fiscal Year Ended June 30,2009
    

    2008
    

    2007Stock-based compensation expense, net of $9.1,
$9.2 and $10.2 of deferred income tax benefits
    
    $
    16.0
    
    
    $
    16.2
    
    
    $
    17.8Stock-based compensation expense per basic share
    
    $
    0.16
    
    
    $
    0.17
    
    
    $
    0.18Stock-based compensation expense per diluted share
    
    $
    0.16
    
    
    $
    0.16
    
    
    $
    0.18
     Fiscal Year Ended June 30,2009

    
    2008

    
    2007Expected volatility
    
    
    21.71%

    
    
    18.46%

    
    
    21.10%Expected term
    
    4.5 years

    
    4.3 years

    
    4.25 yearsRisk-free interest rate
    
    
    2.75%

    
    
    4.03%

    
    
    4.74%Expected dividend yield
    
    
    0%

    
    
    0%

    
    
    0%
  62




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    Intrinsic ValueOptions

    
    Price

    
    Term
    

    (in thousands)Outstanding as of June 30, 2008
    
    
    13,682,410
    
    
    $
    47.82Granted
    
    
    2,428,700
    
    
    $
    48.76Exercised
    
    
    (384,580
    )
    
    $
    36.26Forfeited
    
    
    (1,310,620
    )
    
    $
    49.63Outstanding as of June 30, 2009
    
    
    14,415,910
    
    
    $
    48.43
    
    
    
    6.64
    
    
    $
    13,401Vested and exercisable at June 30, 2009
    
    
    6,692,395
    
    
    $
    46.48
    
    
    
    4.86
    
    
    $
    12,994
  Employee Stock Purchase Plan
 3.     BUSINESS COMBINATIONS
  Fiscal Year Ended June 30,2009

    
    2008

    
    2007Purchase consideration (in thousands):Net cash paid
    
    $
    154,718
    
    
    $
    209,035
    
    
    $
    164,330Amounts due to seller
    
    
    7,685
    
    
    
    3,303
    
    
    
    5,931Liabilities assumed
    
    
    82,418
    
    
    
    85,268
    
    
    
    40,588Fair value of assets acquired (including intangibles)
    
    $
    244,821
    
    
    $
    297,606
    
    
    $
    210,849
 Fiscal Year 2009 Acquisitions
 63




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      Fiscal Year 2008 Acquisitions
  64




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      Fiscal Year 2007 Acquisitions
  65




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      Contingent Consideration
 66




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 4.     RESTRUCTURING PLANS
 Global Production Initiative
  Commercial

    
    Government
    

    Corporate

    
    TotalSeverance costs
    
    $
    6,000
    
    
    $
    1,000
    
    
    $
    -
    
    
    $
    7,000Transition and other expenses
    
    
    12,000 -   13,000
    
    
    
    2,500 -   3,000
    
    
    
    2,500 -   3,000
    
    
    
    17,000 -   19,000Total costs
    
    $
    18,000 - $19,000
    
    
    $
    3,500 - $4,000
    
    
    $
    2,500 - $3,000
    
    
    $
    24,000 - $26,000
  Fiscal Year Ended June 30, 2009Commercial

    
    Government

    
    Corporate

    
    TotalAccrued severance costs
    
    $
    5,967
    
    
    $
    1,306
    
    
    $
    -
    
    
    $
    7,273Transition and other expenses
    
    
    10,223
    
    
    
    1,914
    
    
    
    1,942
    
    
    
    14,079Total costs
    
    $
    16,190
    
    
    $
    3,220
    
    
    $
    1,942
    
    
    $
    21,352
   Balance at beginning of period
    
    $
    -Accruals, net of reversals
    
    
    7,273Payments
    
    
    (5,024
    )Balance at end of period
    
    $
    2,249
 Other Restructuring Plans
 67




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Fiscal Year Ended June 30,2008

    
    2007Beginning balance
    
    $
    893
    
    
    $
    899Accruals
    
    
    -
    
    
    
    7,185Reversals
    
    
    (401
    )
    
    
    -Payments
    
    
    (492
    )
    
    
    (7,191
    )Ending balance
    
    $
    -
    
    
    $
    893
  Fiscal Year Ended June 30,2009

    
    2008
    
    2007Beginning balance
    
    $
    82
    
    
    $
    402
    
    
    $
    3,521Excess accrual credited to goodwill
    
    
    -
    
    
    
    (209
    )
    
    
    (1,678
    )Payments
    
    
    (82
    )
    
    
    (111
    )
    
    
    (1,441
    )Ending balance
    
    $
    -
    
    
    $
    82
    
    
    $
    402
 68




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 5.    ACCOUNTS RECEIVABLE
  As of June 30,2009

    
    2008Amounts billed or billable:Commercial
    
    $
    550,959
    
    
    $
    526,691Government
    
    
    421,694
    
    
    
    421,951972,653
    
    
    
    948,642Unbilled Amounts
    
    
    449,965
    
    
    
    434,225Total accounts receivable
    
    
    1,422,618
    
    
    
    1,382,867Allowance for doubtful accounts
    
    
    (6,911
    )
    
    
    (4,582
    )$
    1,415,707
    
    
    $
    1,378,285
    Fiscal Year Ended June 30,2009

    
    2008

    
    2007Balance at beginning of period
    
    $
    4,582
    
    
    $
    5,073
    
    
    $
    10,447Provision for uncollectible accounts receivable
    
    
    5,132
    
    
    
    3,138
    
    
    
    (290
    )Losses sustained, net of recoveries and other
    
    
    (2,803
    )
    
    
    (3,629
    )
    
    
    (5,084
    )Balance at end of period
    
    $
    6,911
    
    
    $
    4,582
    
    
    $
    5,073
 6.    PROPERTY, EQUIPMENT AND SOFTWARE
  As of June 30,2009
    
    
    2008Land
    
    $
    23,472
    
    
    $
    25,142Buildings and improvements
    
    
    242,643
    
    
    
    223,411Computer equipment
    
    
    1,093,581
    
    
    
    988,049Computer software
    
    
    973,833
    
    
    
    860,475Furniture and fixtures
    
    
    123,604
    
    
    
    119,5622,457,133
    
    
    
    2,216,639Accumulated depreciation and amortization
    
    
    (1,501,975
    )
    
    
    (1,296,002
    )$
    955,158
    
    
    $
    920,637
  69




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 7.    GOODWILL AND OTHER INTANGIBLE ASSETS
  Commercial
    

    Government
    

    TotalBalance as of June 30, 2007
    
    $
    1,415,315
    
    
    $
    1,197,053
    
    
    $
    2,612,368Acquisition activity during the year
    
    
    129,487
    
    
    
    32,460
    
    
    
    161,947Divestiture activity during the year
    
    
    (2,091
    )
    
    
    (965
    )
    
    
    (3,056
    )Foreign currency translation adjustments
    
    
    4,159
    
    
    
    9,746
    
    
    
    13,905Balance as of June 30, 2008
    
    
    1,546,870
    
    
    
    1,238,294
    
    
    
    2,785,164Acquisition activity during the year
    
    
    137,218
    
    
    
    8,966
    
    
    
    146,184Divestiture activity during the year
    
    
    -
    
    
    
    (2,834
    )
    
    
    (2,834
    )Foreign currency translation adjustments
    
    
    (27,095
    )
    
    
    (7,230
    )
    
    
    (34,325
    )Balance as of June 30, 2009
    
    $
    1,656,993
    
    
    $
    1,237,196
    
    
    $
    2,894,189
   As of June 30,2009

    
    2008Gross Carrying

    
    Accumulated

    
    Gross Carrying

    
    AccumulatedAmount

    
    Amortization

    
    Amount

    
    AmortizationAmortizable intangible assets:Acquired customer-related intangibles
    
    $
    451,954
    
    
    $
    (198,443
    )
    
    $
    445,753
    
    
    $
    (184,400
    )Customer contract costs
    
    
    246,987
    
    
    
    (129,132
    )
    
    
    251,837
    
    
    
    (130,319
    )All other
    
    
    22,527
    
    
    
    (12,398
    )
    
    
    19,121
    
    
    
    (12,401
    )$
    721,468
    
    
    $
    (339,973
    )
    
    $
    716,711
    
    
    $
    (327,120
    )Non-amortizable intangible assets:Title plant
    
    $
    51,045
    
    
    
    
    
    
    $
    51,045Tradename
    
    
    3,843
    
    
    
    
    
    
    
    3,843$
    54,888
    
    
    
    
    
    
    $
    54,888
  Fiscal Year Ended June 30,2009

    
    2008

    
    2007Amortization:Contract inducements
    
    $
    15,650
    
    
    $
    14,304
    
    
    $
    14,634Acquired customer-related intangibles
    
    
    43,277
    
    
    
    45,061
    
    
    
    42,390All other intangibles
    
    
    37,028
    
    
    
    28,078
    
    
    
    22,573Total amortization
    
    $
    95,955
    
    
    $
    87,443
    
    
    $
    79,597
  70




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Fiscal Year Ended June 30,2010
    
    $
    89,1752011
    
    
    75,4872012
    
    
    55,7302013
    
    
    40,3462014
    
    
    28,556
 8.    OTHER ASSETS
  As of June 30,2009

    
    2008Long-term investments related to our deferred compensation plans (see Note 11)
    
    $
    80,145
    
    
    $
    82,840Long-term software license and maintenance agreements
    
    
    40,549
    
    
    
    23,011Long-term portion of deferred contract costs
    
    
    19,750
    
    
    
    28,760Deferred debt issuance costs, net
    
    
    15,756
    
    
    
    21,919Long-term investments
    
    
    13,566
    
    
    
    25,910Other assets
    
    
    30,392
    
    
    
    33,563$
    200,158
    
    
    $
    216,003
 9.     OTHER ACCRUED LIABILITIES
  As of June 30,2009

    
    2008Accrued payments to vendors and contract related accruals
    
    $
    231,026
    
    
    $
    205,676Software and equipment lease and maintenance
    
    
    44,737
    
    
    
    49,944Accruals related to acquisitions and divestitures
    
    
    16,947
    
    
    
    11,518Liabilities related to our derivative instruments
    
    
    25,094
    
    
    
    -Other
    
    
    70,458
    
    
    
    71,723$
    388,262
    
    
    $
    338,861
 10.     LONG- TERM DEBT
  As of June 30,2009

    
    2008Term Loan Facility due in March 2013
    
    $
    1,742,000
    
    
    $
    1,760,000Revolving Facility due in March 2012
    
    
    43,484
    
    
    
    91,2574.70% Senior Notes due in June 2010, net of unamortized discount
    
    
    249,984
    
    
    
    249,9675.20% Senior Notes due in June 2015, net of unamortized discount
    
    
    249,625
    
    
    
    249,562Capitalized lease obligations at various interest rates, payable through 2013
    
    
    50,229
    
    
    
    53,132Other
    
    
    1,379
    
    
    
    9962,336,701
    
    
    
    2,404,914Less current portion
    
    
    (295,172
    )
    
    
    (47,373
    )$
    2,041,529
    
    
    $
    2,357,541
 71




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Fiscal Year Ending June 30,2010
    
    $
    295,1722011
    
    
    14,8722012
    
    
    51,6112013
    
    
    1,725,3402014
    
    
    58Thereafter
    
    
    249,648$
    2,336,701
 Credit Agreement
     72




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Senior Notes
  Debt Covenants
  Other
 Interest
 73




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 11.     PENSION AND OTHER POST-EMPLOYMENT PLANS
      Benefit obligations
 As of and for the Fiscal Year Ended June 30,2009
    
    
    2008Non-U.S.
    
    
    U.S.
    
    
    Non-U.S.
    
    
    U.S.Reconciliation of benefit obligation:Obligation at beginning of period
    
    $
    143,275
    
    
    $
    11,241
    
    
    $
    112,234
    
    
    $
    7,600Acquisition of sds
    
    
    -
    
    
    
    -
    
    
    
    16,509
    
    
    
    -Service cost
    
    
    6,023
    
    
    
    3,450
    
    
    
    6,148
    
    
    
    3,401Interest cost
    
    
    6,872
    
    
    
    788
    
    
    
    6,644
    
    
    
    500Plan amendments
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    34Actuarial (gain) loss
    
    
    (30,306
    )
    
    
    425
    
    
    
    4,030
    
    
    
    (292
    )Employee contribution
    
    
    708
    
    
    
    -
    
    
    
    89
    
    
    
    -Benefit payments
    
    
    (4,028
    )
    
    
    (118
    )
    
    
    (4,102
    )
    
    
    -Settlements
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (2
    )Foreign currency exchange rate changes
    
    
    (21,654
    )
    
    
    -
    
    
    
    1,723
    
    
    
    -Obligation at end of period
    
    $
    100,890
    
    
    $
    15,786
    
    
    $
    143,275
    
    
    $
    11,241
 74




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Costs (income) of plans
 Fiscal Year Ended June 30,2009

    
    2008

    
    2007Non-U.S.

    
    U.S.

    
    Non-U.S.

    
    U.S.

    
    Non-U.S.

    
    U.S.Components of net periodic benefit cost:Defined benefit plans:Service cost
    
    $
    6,023
    
    
    $
    3,450
    
    
    $
    6,148
    
    
    $
    3,401
    
    
    $
    5,841
    
    
    $
    3,395Interest cost
    
    
    6,872
    
    
    
    788
    
    
    
    6,644
    
    
    
    500
    
    
    
    5,662
    
    
    
    251Expected return on assets
    
    
    (6,143
    )
    
    
    (1,015
    )
    
    
    (7,089
    )
    
    
    (686
    )
    
    
    (5,465
    )
    
    
    (111
    )Recognized net actuarial gain
    
    
    -
    
    
    
    (3
    )
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (11
    )Amortization of net gain
    
    
    (6
    )
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
     -Amortization of prior service costs
    
    
    -
    
    
    
    220
    
    
    
    -
    
    
    
    217
    
    
    
    -
    
    
    
    217Net periodic benefit cost for defined
benefit plans
    
    $
    6,746
    
    
    $
    3,440
    
    
    $
    5,703
    
    
    $
    3,432
    
    
    $
    6,038
    
    
    $
    3,741
  Plan assets
 As of and for the Fiscal Year Ended June 30,2009

    
    2008Non-U.S.

    
    U.S.

    
    Non-U.S.

    
    U.S.Reconciliation of fair value of plan assets:Fair value of plan assets at beginning of period
    
    $
    101,295
    
    
    $
    10,156
    
    
    $
    98,009
    
    
    $
    6,802Actual return on plan assets
    
    
    (8,208
    )
    
    
    (1,115
    )
    
    
    (4,548
    )
    
    
    (211
    )Employer contributions
    
    
    9,352
    
    
    
    3,498
    
    
    
    10,510
    
    
    
    3,567Employee contribution
    
    
    390
    
    
    
    -
    
    
    
    89
    
    
    
    -Benefit payments
    
    
    (4,028
    )
    
    
    (118
    )
    
    
    (3,899
    )
    
    
    -Settlement
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (2
    )Foreign currency exchange rate changes
    
    
    (16,159
    )
    
    
    -
    
    
    
    1,134
    
    
    
    -Fair value of plan assets at end of period
    
    $
    82,642
    
    
    $
    12,421
    
    
    $
    101,295
    
    
    $
    10,156
   As of June 30,2009

    
    2008Mutual fund  equity securities
    
    
    48
    %
    
    
    50
    %Mutual fund  debt securities
    
    
    42
    %
    
    
    38
    %Mutual fund  real estate
    
    
    4
    %
    
    
    6
    %Other
    
    
    6
    %
    
    
    6
    %Total
    
    
    100
    %
    
    
    100
    %
  75




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Funded status of defined benefit pension plans
 As of June 30,2009

    
    2008Funded

    
    Unfunded

    
    Funded

    
    UnfundedPlans

    
    Plans

    
    Plans

    
    PlansNon-U.S. PlansAccumulated benefit obligation (ABO)
    
    $
    64,400
    
    
    $
    23,582
    
    
    $
    88,132
    
    
    $
    24,973Projected benefit obligation (PBO)
    
    
    76,286
    
    
    
    24,603
    
    
    
    116,286
    
    
    
    26,989Fair value of assets
    
    
    82,642
    
    
    
    -
    
    
    
    101,295
    
    
    
    -U.S. PlanAccumulated benefit obligation (ABO)
    
    $
    12,498
    
    
    $
    214
    
    
    $
    8,742
    
    
    $
    226Projected benefit obligation (PBO)
    
    
    15,496
    
    
    
    290
    
    
    
    10,922
    
    
    
    319Fair value of assets
    
    
    12,421
    
    
    
    -
    
    
    
    10,156
    
    
    
    -
 As of June 30,2009

    
    2008Non-U.S. PlansFunded status
    
    $
    (18,248
    )
    
    $
    (41,980
    )Unrecognized (gain) loss
    
    
    (6,699
    )
    
    
    11,200Net amount recognized
    
    $
    (24,947
    )
    
    $
    (30,780
    )U.S. PlanFunded status
    
    $
    (3,365
    )
    
    $
    (1,085
    )Unrecognized prior service cost
    
    
    1,275
    
    
    
    1,495Unrecognized (gain) loss
    
    
    2,825
    
    
    
    267Net amount recognized
    
    $
    735
    
    
    $
    677
  As of June 30,2009

    
    2008Non-U.S. PlansAccrued benefit liability  current
    
    $
    (858
    )
    
    $
    (1,416
    )Accrued benefit liability  long term
    
    
    (17,390
    )
    
    
    (40,564
    )Accumulated other comprehensive (income) loss, net
    
    
    (6,699
    )
    
    
    11,200Net amount recognized
    
    $
    (24,947
    )
    
    $
    (30,780
    )U.S. PlanAccrued benefit liability  current
    
    $
    (16
    )
    
    $
    (47
    )Accrued benefit liability  long term
    
    
    (3,349
    )
    
    
    (1,038
    )Accumulated other comprehensive (income) loss, net
    
    
    4,100
    
    
    
    1,762Net amount recognized
    
    $
    735
    
    
    $
    677
 76




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Change inNet periodic

    
    net actuarialJune 30, 2008

    
    benefit cost

    
    (gain)/loss

    
    June 30, 2009Non-U.S. PlansNet actuarial (gain)/loss
    
    $
    10,888
    
    
    $
    6
    
    
    $
    (17,902
    )
    
    $
    (7,008
    )10,888
    
    
    
    6
    
    
    
    (17,902
    )
    
    
    (7,008
    )U.S. PlanNet actuarial (gain)/loss
    
    
    267
    
    
    
    -
    
    
    
    2,558
    
    
    
    2,825Unrecognized prior service cost
    
    
    1,495
    
    
    
    (220
    )
    
    
    -
    
    
    
    1,2751,762
    
    
    
    (220
    )
    
    
    2,558
    
    
    
    4,100Sub-total
    
    
    12,650
    
    
    
    (214
    )
    
    
    (15,344
    )
    
    
    (2,908
    )Tax effect
    
    
    (3,787
    )
    
    
    78
    
    
    
    4,290
    
    
    
    581Total
    
    $
    8,863
    
    
    $
    (136
    )
    
    $
    (11,054
    )
    
    $
    (2,327
    )
  Assumptions for calculating benefit obligations and net periodic benefit cost
 As of June 30,2009

    
    2008Non-U.S. PlansDiscount rate
    
    
    5.75% - 6.74
    %
    
    
    5.20% - 6.00
    %Rate of increase in compensation levels
    
    
    3.00% - 4.05
    %
    
    
    3.00% - 5.45
    %U.S. PlanDiscount rate
    
    
    7.00
    %
    
    
    6.80
    %Rate of increase in compensation levels
    
    
    3.90
    %
    
    
    3.80
    %
  Fiscal Year Ended June 30,2009

    
    2008

    
    2007Non-U.S. PlansDiscount rate
    
    
    5.20% - 5.75
    %
    
    
    5.20% - 6.00
    %
    
    
    5.20% - 5.67
    %Long-term rate of return on assets
    
    
    7.00% - 7.25
    %
    
    
    7.00% - 7.25
    %
    
    
    6.50% - 7.00
    %Rate of increase in compensation levels
    
    
    3.00% - 5.45
    %
    
    
    3.00% - 4.80
    %
    
    
    4.25% - 4.60
    %U.S. PlanDiscount rate
    
    
    6.80
    %
    
    
    6.40
    %
    
    
    6.50
    %Long-term rate of return on assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Rate of increase in compensation levels
    
    
    3.80
    %
    
    
    3.40
    %
    
    
    3.50
    %
  77




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     Expected Cash Flows
  Non-U.S.Fiscal Year Ending June 30,
    
    Plans

    
    U.S. Plan2010
    
    $
    3,712
    
    
    $
    1952011
    
    
    3,743
    
    
    
    3162012
    
    
    3,694
    
    
    
    4852013
    
    
    3,926
    
    
    
    7042014
    
    
    4,327
    
    
    
    8842015-2019
    
    
    28,336
    
    
    
    8,110
 Supplemental Executive Retirement Plan
 Deferred Compensation Plans
 78




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Other Contributory Plans
 12.     INCOME TAXES
  Fiscal Year Ended June 30,2009

    
    2008

    
    2007Current:U.S. federal
    
    $
    103,015
    
    
    $
    5,383
    
    
    $
    79,953State
    
    
    15,840
    
    
    
    6,491
    
    
    
    12,134Foreign
    
    
    16,970
    
    
    
    24,087
    
    
    
    18,610Total current expense
    
    
    135,825
    
    
    
    35,961
    
    
    
    110,697Deferred:U.S. federal
    
    
    62,587
    
    
    
    120,588
    
    
    
    17,588State
    
    
    6,769
    
    
    
    14,544
    
    
    
    5,070Foreign
    
    
    (889
    )
    
    
    (3,884
    )
    
    
    (3,032
    )Total deferred expense
    
    
    68,467
    
    
    
    131,248
    
    
    
    19,626Total income tax expense
    
    $
    204,292
    
    
    $
    167,209
    
    
    $
    130,323
  79




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  As of June 30,2009

    
    2008Deferred tax assets:Accrued expenses not yet deductible for tax purposes
    
    $
    40,726
    
    
    $
    40,661Unearned revenue
    
    
    36,913
    
    
    
    32,015Tax credits and loss carryforwards
    
    
    58,140
    
    
    
    58,585Stock-based compensation
    
    
    35,288
    
    
    
    29,017Divestiture-related accruals
    
    
    421
    
    
    
    430Forward agreements
    
    
    15,614
    
    
    
    8,797Other
    
    
    7,161
    
    
    
    12,424Subtotal
    
    
    194,263
    
    
    
    181,929Deferred tax assets valuation allowance
    
    
    (20,182
    )
    
    
    (20,185
    )Total deferred tax assets
    
    
    174,081
    
    
    
    161,744Deferred tax liabilities:Goodwill amortization
    
    
    (436,584
    )
    
    
    (381,944
    )Depreciation and amortization
    
    
    (156,943
    )
    
    
    (147,118
    )Unbilled revenue
    
    
    (119,660
    )
    
    
    (103,087
    )Prepaid and receivables
    
    
    (21,298
    )
    
    
    (23,448
    )Total deferred tax liabilities
    
    
    (734,485
    )
    
    
    (655,597
    )Net deferred tax liabilities
    
    $
    (560,404
    )
    
    $
    (493,853
    )
    Fiscal Year Ended June 30,2009

    
    2008

    
    2007Statutory U.S. federal income tax
    
    $
    193,982
    
    
    $
    173,677
    
    
    $
    134,194State income taxes, net
    
    
    14,018
    
    
    
    12,471
    
    
    
    12,188Section 162(m) disallowance
    
    
    4,706
    
    
    
    (5,128
    )
    
    
    (4,610
    )Tax reserves, penalties and interest
    
    
    1,782
    
    
    
    (8,513
    )
    
    
    -Foreign benefits
    
    
    (9,132
    )
    
    
    (5,934
    )
    
    
    (6,287
    )Other
    
    
    (1,064
    )
    
    
    636
    
    
    
    (5,162
    )Total income tax expense
    
    $
    204,292
    
    
    $
    167,209
    
    
    $
    130,323
   80




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Fiscal Year Ended June 30,2009

    
    2008Balance at beginning of period
    
    $
    34,324
    
    
    $
    54,531Gross increases on tax positions in prior period
    
    
    4,272
    
    
    
    575Gross decreases on tax positions in prior period
    
    
    (624
    )
    
    
    (6,930
    )Gross increases on tax positions in current period
    
    
    1,621
    
    
    
    1,604Settlements
    
    
    (736
    )
    
    
    (15,456
    )Balance at end of period
    
    $
    38,857
    
    
    $
    34,324
     81




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 13.  OTHER LONG-TERM LIABILITIES
  As of June 30,2009

    
    2008Deferred compensation, pension and other post-retirement obligations
    
    $
    96,035
    
    
    $
    126,151Unearned revenue
    
    
    111,499
    
    
    
    104,732FIN 48 tax reserves (Please see Note 12)
    
    
    47,667
    
    
    
    42,710Other
    
    
    26,525
    
    
    
    32,916Total
    
    $
    281,726
    
    
    $
    306,509
 14.   EQUITY
  Share Repurchase Programs
  Stock Option Repricing
  82




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Voting Rights of Our Chairman
    83




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 15.   EARNINGS PER SHARE
  Fiscal Year Ended June 30,2009

    
    2008

    
    2007Numerator:Numerator for earnings per share -Net Income
    
    $
    349,943
    
    
    $
    329,010
    
    
    $
    253,090Denominator:Weighted average shares outstanding (basic)
    
    
    97,510
    
    
    
    98,013
    
    
    
    100,181Effect of dilutive securities:Stock options
    
    
    496
    
    
    
    980
    
    
    
    1,391Total potential common shares
    
    
    496
    
    
    
    980
    
    
    
    1,391Denominator for earnings per share assuming dilution
    
    
    98,006
    
    
    
    98,993
    
    
    
    101,572Earnings per share (basic)
    
    $
    3.59
    
    
    $
    3.36
    
    
    $
    2.53Earnings per share assuming dilution
    
    $
    3.57
    
    
    $
    3.32
    
    
    $
    2.49
   84




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 16.
    
    COMPREHENSIVE INCOME
   Fiscal Year Ended June 30,2009
    
    2008
    
    2007Net income
    
    $
    349,943
    
    
    $
    329,010
    
    
    $
    253,090Other comprehensive income (loss):Foreign currency gain (loss)
    
    
    (63,489
    )
    
    
    25,473
    
    
    
    16,955Change in net unrealized gain
on foreign exchange forward
agreements (net of income tax
of $489, $727 and $958,
respectively)
    
    
    777
    
    
    
    1,278
    
    
    
    693Amortization of unrealized loss
on forward interest rate
agreements (net of income tax
of $959, $958 and $958,
respectively)
    
    
    1,585
    
    
    
    1,586
    
    
    
    1,586Change in net unrealized
gain (loss) on interest rate
swap agreement (net of income
tax of $(5,335), $(8,997) and
$2,819, respectively)
    
    
    (8,829
    )
    
    
    (15,475
    )
    
    
    5,251Change in net unrealized gain
(loss) on interest rate collar
agreements (net of income tax
of $(3,069) and $779,
respectively)
    
    
    (5,078
    )
    
    
    1,289
    
    
    
    -Amortization of prepaid pension
cost (net of income tax of $80
and $81, respectively)
    
    
    140
    
    
    
    136
    
    
    
    -Change in funded status of
pension and other benefit plans
(net of income tax of $4,288
and $(4,906), respectively)
    
    
    11,050
    
    
    
    (11,490
    )
    
    
    -Comprehensive income
    
    $
    286,099
    
    
    $
    331,807
    
    
    $
    277,575
  As of June 30,2009
    
    2008Foreign currency gain (loss)
    
    $
    (21,487
    )
    
    $
    42,002Unrealized gain on foreign exchange forward
agreements (net of income tax of $1,442 and $953,
respectively)
    
    
    2,432
    
    
    
    1,655Unrealized loss on forward interest rate
agreements (net of income tax of $(3,253) and
$(4,212), respectively)
    
    
    (5,444
    )
    
    
    (7,029
    )Unrealized loss on interest rate swap agreement
(net of income tax of $(11,513) and $(6,178),
respectively)
    
    
    (19,053
    )
    
    
    (10,224
    )Unrealized gain (loss) on interest rate collar
agreements (net of income tax of $(2,290) and
$779, respectively)
    
    
    (3,789
    )
    
    
    1,289Unrecognized prior service costs (net of income
tax of $(469) and $(549), respectively)
    
    
    (806
    )
    
    
    (946
    )Unrecognized gain (loss) on funded status of
pension and other benefit plans (net of income
tax of $1,050 and $(3,238), respectively) (a)
    
    
    3,133
    
    
    
    (7,917
    )Total
    
    $
    (45,014
    )
    
    $
    18,830
 (a)
    
    Balances as of June 30, 2008 include adjustments to initially apply SFAS 158 of $0.1 million
(net of income tax of $59,000), respectively.
  85




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   17.
    
    FINANCIAL INSTRUMENTS
 Long-Term Debt
  Derivatives and Hedging Activities
  Foreign currency forward agreements
 Derivatives not designated as hedging instruments
 86




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Interest rate hedges
    As ofJune 30,Item
    
    Balance Sheet Location
    
    2009Asset derivativesDerivatives designated as hedging instruments under SFAS 133:Foreign exchange forward agreements
    
    Prepaid expenses and other current assets
    
    $
    3,860Derivatives not designated as hedging instruments under SFAS 133:Non-qualified foreign exchange
forward agreements
    
    Prepaid expenses and other current assets
    
    
    345Total asset derivatives
    
    
    
    $
    4,205Liability derivativesDerivatives designated as hedging instruments under SFAS 133:Interest rate swap and collar
    
    Other accrued liabilities
    
    $
    24,704Interest rate swap and collar
    
    Other long-term liabilities
    
    
    11,94136,645Derivatives not designated as hedging instruments under SFAS 133:Foreign exchange forward agreements
    
    Other accrued liabilities
    
    
    390Total liability derivatives
    
    
    
    $
    37,035
 87




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Location of Gain
    
    Gain (Loss)(Loss) Reclassified
    
    Reclassified fromGain (Loss)
    
    from Accumulated
    
    Accumulated OtherRecognized in Other
    
    Other
    
    ComprehensiveComprehensive
    
    Comprehensive
    
    IncomeDerivatives designated under SFAS
133
    
    Income (a)
    
    Income into Income (a)
    
    into Income (a)Cash flow hedges:Foreign currency forward contracts
    
    $
    (66
    )
    
    Revenues
    
    $
    650Foreign currency forward contracts
    
    
    348
    
    
    Cost of revenues
    
    
    (1,634
    )Interest rate swap
    
    
    (33,258
    )
    
    Interest expense
    
    
    (19,094
    )Interest rate collar
    
    
    (13,039
    )
    
    Interest expense
    
    
    (4,892
    )Total designated cash flow hedges
    
    $
    (46,015
    )
    
    
    
    $
    (24,970
    )
 (a)
    
    For fiscal year 2009, we recorded no ineffectiveness from cash flow hedges.
 Derivatives not Designated
    
    Location of Gain (Loss)
    
    Gain (Loss) Recognizedunder SFAS 133
    
    Recognized in Income
    
    in Income on DerivativesForeign currency forward contracts
    
    Other non-operating expense, net
    
    $
    (1,578
    )
   Investments
  88




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  18.
    
    FAIR VALUE MEASUREMENTS
      Level 1:
    
    Observable inputs such as quoted prices in active markets for identical assets or
liabilities.
 Level 2:
    
    Inputs other than quoted prices that are observable for the asset or liability,
either directly or indirectly; these include quoted prices for similar assets or
liabilities in active markets and quoted prices for identical or similar assets or
liabilities in markets that are not active.
 Level 3:
    
    Unobservable inputs reflecting managements own assumptions about the inputs used
in pricing the asset or liability.
 89




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Description
    
    Level 1
    
    Level 2
    
    Level 3
    
    TotalASSETSOther current assetsForeign currency derivatives (a)
    
    $
    -
    
    
    $
    4,205
    
    
    $
    -
    
    
    $
    4,205Other assetsDeferred compensation investments in cash surrender
life insurance (b)
    
    
    -
    
    
    
    57,680
    
    
    
    -
    
    
    
    57,680Deferred compensation investments in mutual funds (c)
    
    
    -
    
    
    
    24,923
    
    
    
    -
    
    
    
    24,923Total assets
    
    $
    -
    
    
    $
    86,808
    
    
    $
    -
    
    
    $
    86,808LIABILITIESOther current liabilitiesForeign currency derivatives (a)
    
    $
    -
    
    
    $
    390
    
    
    $
    -
    
    
    $
    390Interest rate swap and collars (d)
    
    
    -
    
    
    
    24,704
    
    
    
    -
    
    
    
    24,704Other long-term liabilitiesDeferred compensation plan liabilities (e)
    
    
    -
    
    
    
    73,967
    
    
    
    -
    
    
    
    73,967Interest rate swap (d)
    
    
    -
    
    
    
    11,941
    
    
    
    -
    
    
    
    11,941Total liabilities
    
    $
    -
    
    
    $
    111,002
    
    
    $
    -
    
    
    $
    111,002
 (a)
    
    Foreign currency derivatives consist of foreign currency forward agreements. Fair
value is determined using observable market inputs such as the forward pricing curve,
currency volatilities, currency correlations and interest rates, and considers
nonperformance risk of the Company and that of its counterparties.(b)
    
    Fair value is reflected as the cash surrender value of company owned life insurance.(c)
    
    Fair value is based on quoted market prices for actively traded assets similar to those
held by the deferred compensation plan.(d)
    
    The fair values of the interest rate swap and collars are determined using prices
obtained from pricing agencies and financial institutions that develop values based on
inputs observable in active markets, including interest rates, with consideration given to
the nonperformance risk of the Company and that of its counterparties.(e)
    
    Fair value of the deferred compensation liability is based on the fair value of
investments corresponding to employees investment selections, based on quoted prices for
similar assets in actively traded markets.
 19.
    
    COMMITMENTS AND CONTINGENCIES
  Fiscal Year Ending June 30,2010
    
    $
    369,4902011
    
    
    266,8822012
    
    
    139,5652013
    
    
    87,1672014
    
    
    56,850Thereafter
    
    
    92,233$
    1,012,187
 90




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Stock Option Grant Practices
      91




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Investigation Concerning Procurement Process at Hanscom Air Force Base
 Litigation arising from alleged patent infringement
 Other
    92




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 20.
    
    DIVESTITURES
 Sale of bindery business
  Sale of Unclaimed Property Reporting and Recovery Business
  Sale of Government Decision Support Business
   21.
    
    CONTRACT WITH THE DEPARTMENT OF EDUCATION
   93




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##### Table of Contents



AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 22.
    
    RELATED PARTY TRANSACTIONS
   23.
    
    SEGMENT INFORMATION
    94




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Commercial
    
    Government
    
    Corporate
    
    ConsolidatedFiscal Year Ended June 30, 2009Revenues (a)
    
    $
    3,909,293
    
    
    $
    2,613,871
    
    
    $
    -
    
    
    $
    6,523,164Operating expenses (excluding
impairment charge and depreciation
and amortization)
    
    
    3,242,101
    
    
    
    2,086,380
    
    
    
    113,706
    
    
    
    5,442,187Depreciation and amortization expense
    
    
    276,289
    
    
    
    115,248
    
    
    
    3,497
    
    
    
    395,034Operating income (loss)
    
    $
    390,903
    
    
    $
    412,243
    
    
    $
    (117,203
    )
    
    $
    685,943Total assets
    
    $
    3,387,057
    
    
    $
    2,781,002
    
    
    $
    732,914
    
    
    $
    6,900,973Capital expenditures, net
    
    $
    166,143
    
    
    $
    129,180
    
    
    $
    24,944
    
    
    $
    320,267Fiscal Year Ended June 30, 2008Revenues (a)
    
    $
    3,673,981
    
    
    $
    2,486,569
    
    
    $
    -
    
    
    $
    6,160,550Operating expenses (excluding
impairment charge and depreciation
and amortization)
    
    
    3,046,826
    
    
    
    1,935,066
    
    
    
    153,009
    
    
    
    5,134,901Depreciation and amortization expense
    
    
    278,688
    
    
    
    100,283
    
    
    
    1,600
    
    
    
    380,571Operating income (loss)
    
    $
    348,467
    
    
    $
    451,220
    
    
    $
    (154,609
    )
    
    $
    645,078Total assets
    
    $
    3,271,316
    
    
    $
    2,728,796
    
    
    $
    469,287
    
    
    $
    6,469,399Capital expenditures, net
    
    $
    151,689
    
    
    $
    112,243
    
    
    $
    4,016
    
    
    $
    267,948Fiscal Year Ended June 30, 2007Revenues (a)
    
    $
    3,404,935
    
    
    $
    2,367,544
    
    
    $
    -
    
    
    $
    5,772,479Operating expenses (excluding gain
on sale of business and depreciation
and amortization)
    
    
    2,844,545
    
    
    
    1,820,006
    
    
    
    148,367
    
    
    
    4,812,918Software impairment charge
    
    
    -
    
    
    
    76,407
    
    
    
    -
    
    
    
    76,407Depreciation and amortization expense
    
    
    247,363
    
    
    
    97,348
    
    
    
    1,488
    
    
    
    346,199Operating income (loss)
    
    $
    313,027
    
    
    $
    373,783
    
    
    $
    (149,855
    )
    
    $
    536,955Total assets
    
    $
    3,174,031
    
    
    $
    2,601,765
    
    
    $
    206,633
    
    
    $
    5,982,429Capital expenditures, net
    
    $
    202,283
    
    
    $
    112,851
    
    
    $
    1,709
    
    
    $
    316,843
 (a)
    
    Revenues in our Commercial segment for fiscal years 2009, 2008 and 2007 include revenues from
operations divested through June 30, 2009 of $0.1 million, $14.0 million and $18.0 million,
respectively. Revenues in our Government segment for fiscal years 2009, 2008 and 2007 include
revenues from operations divested through June 30, 2009 of $0.2 million, $17.9 million and
$21.9 million, respectively.
 24.
    
    REVENUES BY SERVICE LINE
  Fiscal Year Ended June 30,2009
    
    2008
    
    2007Business process outsourcing (a)
    
    $
    5,148,750
    
    
    $
    4,792,403
    
    
    $
    4,322,164Information technology services
    
    
    1,025,469
    
    
    
    1,041,036
    
    
    
    1,013,801Systems integration services
    
    
    348,945
    
    
    
    327,111
    
    
    
    436,514Total
    
    $
    6,523,164
    
    
    $
    6,160,550
    
    
    $
    5,772,479
 (a)
    
    Includes $0.3 million, $31.9 million and $39.9 million of revenues for fiscal years 2009,
2008 and 2007, respectively, from operations divested through June 30, 2009.
 95




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 25.
    
    QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
  June 30,
    
    March 31,
    
    December 31,
    
    September 30,Fiscal Year Ended June 30, 2009
    
    2009
    
    2009
    
    2008
    
    2008Revenues
    
    $
    1,696,211
    
    
    $
    1,610,429
    
    
    $
    1,612,070
    
    
    $
    1,604,454Operating income
    
    $
    170,335
    
    
    $
    174,321
    
    
    $
    168,539
    
    
    $
    172,748Net income
    
    $
    97,547
    
    
    $
    93,244
    
    
    $
    75,517
    
    
    $
    83,635Earnings per share  basic
    
    $
    1.00
    
    
    $
    0.96
    
    
    $
    0.77
    
    
    $
    0.86Weighted average shares outstanding
    
    
    97,617
    
    
    
    97,572
    
    
    
    97,548
    
    
    
    97,307Earnings per share  diluted
    
    $
    0.99
    
    
    $
    0.95
    
    
    $
    0.77
    
    
    $
    0.85Weighted
average shares outstanding  diluted
    
    
    98,089
    
    
    
    98,042
    
    
    
    97,811
    
    
    
    98,091June 30,
    
    March 31,
    
    December 31,
    
    September 30,Fiscal Year Ended June 30, 2008
    
    2008
    
    2008
    
    2007
    
    2007Revenues
    
    $
    1,613,655
    
    
    $
    1,542,370
    
    
    $
    1,511,442
    
    
    $
    1,493,083Operating income
    
    $
    177,872
    
    
    $
    163,911
    
    
    $
    157,894
    
    
    $
    145,401Net income
    
    $
    98,632
    
    
    $
    82,638
    
    
    $
    81,596
    
    
    $
    66,144Earnings per share  basic
    
    $
    1.02
    
    
    $
    0.86
    
    
    $
    0.82
    
    
    $
    0.66Weighted average shares outstanding
    
    
    96,703
    
    
    
    96,089
    
    
    
    99,505
    
    
    
    99,721Earnings per share  diluted
    
    $
    1.01
    
    
    $
    0.85
    
    
    $
    0.81
    
    
    $
    0.65Weighted
average shares outstanding  diluted
    
    
    97,719
    
    
    
    96,921
    
    
    
    100,310
    
    
    
    100,986
 26.
    
    NEW ACCOUNTING PRONOUNCEMENTS
     96




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AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   FASB Accounting Standard Codification FASB Accounting Standard Codification
   
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Managements Evaluation of Disclosure Controls and Procedures
 Managements Report on Internal Control over Financial Reporting
    Internal Control  Integrated Framework .
 Changes in Internal Control over Financial Reporting
 
 ITEM 9B. OTHER INFORMATION
  98




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PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE REGISTRANT
 Directors
  Served asDirectorName
    
    Principal Occupation
    
    SinceDarwin Deason
    
    Chairman of the Board of Directors
    
    
    1988Lynn R. Blodgett
    
    President and Chief Executive Officer
    
    
    2005Robert Druskin
    
    Investor
    
    
    2008Kurt R. Krauss
    
    Investor/Managing Member of Sachem Investments, LLC
    
    
    2007Ted B. Miller Jr.
    
    Investor
    
    
    2007Paul E. Sullivan
    
    Member, Frost Brown Todd, LLC
    
    
    2008Frank Varasano
    
    Investor
    
    
    2007
 Business Experience of each Director
  Darwin Deason,
 Lynn R. Blodgett,
 Robert Druskin,
 Kurt R. Krauss,
 Ted B. Miller Jr.,
 99




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Paul E. Sullivan,
 Frank Varasano,
  Executive Officers
  Name
    
    Position With The CompanyTom Burlin
    
    Executive Vice President and Chief Operating Officer  Government SolutionsTom Blodgett
    
    Executive Vice President and Chief Operating Officer  Commercial SolutionsKevin Kyser
    
    Executive Vice President and Chief Financial OfficerJohn Rexford
    
    Executive Vice President  Corporate DevelopmentDave Amoriell
    
    Executive Vice President and Group President  Transportation SolutionsJoseph Doherty
    
    Executive Vice President and Group President  Government SolutionsConnie Harvey
    
    Executive Vice President and Group President  Business Process OutsourcingDerrell James
    
    Executive Vice President and Group President  Information Technology OutsourcingAnn Vezina
    
    Executive Vice President and Group President  Commercial SolutionsTas Panos
    
    Executive Vice President, General Counsel and SecretaryLora Villarreal
    
    Executive Vice President and Chief People OfficerLaura Rossi
    
    Senior Vice President and Chief Accounting Officer
 100




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Business Experience of each Executive Officer
 Tom Burlin,
 Tom Blodgett,
 Kevin Kyser,
 John H. Rexford,
 David Amoriell,
 Joseph Doherty,
 Connie Harvey
 Derrell James,
 Ann Vezina,
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Tas Panos,
 Lora J. Villarreal, Ph.D.,
 Laura Rossi,
  Corporate Governance
 Director Independence
  Audit Committee
  Stockholder and Interested Party Communications
  Code of Ethics
  102




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Section 16(a) Beneficial Ownership Reporting Compliance
  
 ITEM 11. EXECUTIVE COMPENSATION
 Compensation Discussion and Analysis
 Overview of Compensation Program and Philosophy
   
    
    to attract and retain qualified, motivated executives;
    
    to closely align the financial interests of our executives with both the short and
long-term interests of our stockholders;
    
    to promote fair treatment of all employees; and
    
    to encourage equity ownership by our executives.
 Comparative Review
   103




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Elements of Compensation
    
    
    Base Salaries
   104




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
    
    Incentive Bonus
 Fiscal Year 2009 Senior Executive Annual Incentive Plan
       
    
    Long Term Incentives  Our Stock Incentive Plans
   105




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
    
    Generally Available Benefit Programs
  Retirement Benefits
  
    
    Executive Perquisites
  
    
    Termination of Employment and Change of Control Benefits
    106




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Stock Ownership Guidelines
   
    
    Our Chief Executive Officer is required to own, within five years after he or she becomes
subject to the guidelines, shares of our Class A common stock having a value equal to a
minimum of five times his or her annual base salary.
    
    Our other executive officers are required to own, within five years after he or she
becomes subject to the guidelines, shares of our Class A common stock having a value equal
to a minimum of three times his or her annual base salary.
    
    Independent directors serving on the Board of Directors are required to own, within three
years after they become subject to the guidelines, shares of our Class A common stock having
a value equal to a minimum of three times their annual retainers.
    
    Vested options to purchase Class A common stock may be counted as shares owned in
determining compliance with the guidelines, but unvested options may not.
  REPORT OF THE COMPENSATION COMMITTEE
   
   107




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SUMMARY COMPENSATION TABLE FOR FISCAL YEARS 2009, 2008, AND 2007
  Change inPensionValue andNon-Non-Equity
    
    QualifiedStock
    
    Option
    
    Incentive Plan
    
    DeferredName And
    
    
    
    
    
    
    
    
    
    Bonus
    
    Awards
    
    Awards
    
    Compensation
    
    Compensation
    
    All OtherPrincipal Position
    
    Year
    
    Salary ($)
    
    ($)
    
    ($) (1)
    
    ($) (2)
    
    ($) (3)
    
    Earnings ($)
    
    Compensation ($)
    
    Total ($)Darwin Deason
    
    
    2009
    
    
    $
    1,013,491
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    1,228,555
    
    
    $
    
    
    
    $
    232,244
    (5)
    
    $
    2,474,290Chairman of theBoard
    
    
    2008
    
    
    
    923,911
    
    
    
    
    
    
    
    
    
    
    
    102,411
    
    
    
    1,772,856
    
    
    
    (122,911
    )
    
    
    312,233
    (5)
    
    
    2,988,5002007
    
    
    
    916,053
    
    
    
    
    
    
    
    
    
    
    
    2,048,835
    
    
    
    1,835,468
    
    
    
    952,710
    (4)
    
    
    219,033
    (5)
    
    
    5,972,099Lynn Blodgett
    
    
    2009
    
    
    
    845,769
    
    
    
    
    
    
    
    
    
    
    
    2,487,793
    
    
    
    821,100
    
    
    
    
    
    
    
    372,313
    (6)
    
    
    4,526,975President &Chief
    
    
    2008
    
    
    
    750,000
    
    
    
    
    
    
    
    
    
    
    
    2,647,985
    
    
    
    1,127,025
    
    
    
    
    
    
    
    209,144
    (6)
    
    
    4,734,154ExecutiveOfficer
    
    
    2007
    
    
    
    695,769
    
    
    
    
    
    
    
    
    
    
    
    1,767,183
    
    
    
    1,200,000
    
    
    
    
    
    
    
    29,985
    (6)
    
    
    3,692,937Kevin Kyser
    
    
    2009
    
    
    
    425,770
    
    
    
    
    
    
    
    
    
    
    
    635,792
    
    
    
    311,535
    
    
    
    
    
    
    
    15,802
    (7)
    
    
    1,388,899Executive VicePresident and
    
    
    2008
    
    
    
    321,922
    
    
    
    
    
    
    
    
    
    
    
    617,339
    
    
    
    292,677
    
    
    
    
    
    
    
    27,714
    (7)
    
    
    1,259,652Chief FinancialOfficer (startingSeptember 18,2007)
    
    
    2007
    
    
    
    253,060
    
    
    
    
    
    
    
    
    
    
    
    140,347
    
    
    
    286,000
    
    
    
    
    
    
    
    6,287
    (7)
    
    
    685,694John Rexford
    
    
    2009
    
    
    
    514,366
    
    
    
    
    
    
    
    
    
    
    
    1,029,083
    
    
    
    373,118
    
    
    
    
    
    
    
    15,090
    (8)
    
    
    1,931,657Executive Vice
    
    
    2008
    
    
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    1,128,992
    
    
    
    459,608
    
    
    
    
    
    
    
    22,579
    (8)
    
    
    2,111,179President,CorporateDevelopment(Executive VicePresident andChief FinancialOfficer untilSeptember 18,2007)
    
    
    2007
    
    
    
    429,108
    
    
    
    
    
    
    
    
    
    
    
    796,062
    
    
    
    600,000
    
    
    
    
    
    
    
    291,419
    (8)
    
    
    2,116,589Tom Burlin
    
    
    2009
    
    
    
    595,769
    
    
    
    
    
    
    
    
    
    
    
    1,029,448
    
    
    
    434,700
    
    
    
    
    
    
    
    501,900
    (9)
    
    
    2,561,817Executive Vice
    
    
    2008
    
    
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    968,079
    
    
    
    464,813
    
    
    
    
    
    
    
    58,307
    (9)
    
    
    1,991,199President andChief OperatingOfficer GovernmentSolutions

    
    
    2007
    
    
    
    420,913
    
    
    
    
    
    
    
    
    
    
    
    542,306
    
    
    
    600,000
    
    
    
    
    
    
    
    25,454
    (9)
    
    
    1,588,673Tom Blodgett
    
    
    2009
    
    
    
    463,308
    
    
    
    
    
    
    
    
    
    
    
    878,181
    
    
    
    345,043
    
    
    
    
    
    
    
    36,003
    (10)
    
    
    1,722,535Executive Vice
    
    
    2008
    
    
    
    425,000
    
    
    
    
    
    
    
    
    
    
    
    895,340
    
    
    
    404,626
    
    
    
    
    
    
    
    26,648
    (10)
    
    
    1,751,614President andChief OperatingOfficer CommercialSolutions
    
    
    2007
    
    
    
    338,066
    
    
    
    
    
    
    
    
    
    
    
    504,294
    
    
    
    277,478
    
    
    
    
    
    
    
    2,447
    (10)
    
    
    1,122,285
 (1)
    
    We did not grant any stock awards to our named executive officers during fiscal years 2009,
2008, or 2007.(2)
    
    The amount shown for each executive officer is the compensation cost recognized in our
financial statements for fiscal years 2009, 2008, or 2007, as applicable, related to
outstanding grants of stock options to each named executive officer to the extent we
recognized compensation expense in such fiscal year for such awards in accordance with the
provisions of SFAS 123(R). All of Mr. Deasons outstanding option grants were related to prior
years. For a discussion of valuation assumptions used in the SFAS 123(R) calculations, see
Note 2 of the Notes to our Consolidated Financial Statements. We did not grant any stock
appreciation rights to our named executive officers during fiscal years 2009, 2008, or 2007.
 108




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##### Table of Contents



(3)
    
    The amounts shown for 2009 were earned under our Senior Executive Annual Incentive Plan. The
amounts shown for 2008 were earned under our FY08 Bonus Plan or were paid to the named
executive officers in connection with the
Companys agreement to pay them the difference between the original option grant price and the
grant price on the revised measurement date, if applicable, when the Company re-priced all or a
portion of their outstanding option grants to avoid adverse tax consequences to individual
option holders, with the named executive officers receiving these cash reimbursements for the
option grant price amendments: Mr. Deason, $655,200; Mr. Lynn Blodgett, $401,398; Mr. Kyser,
$53,220; Mr. Rexford, $96,796; Mr. Burlin, $102,000 and Mr. Tom Blodgett, $82,408. For a
discussion of the option grant price amendments, see Note 14 of the Notes to our Consolidated
Financial Statements. The amounts shown for 2007 were earned under our FY07 Bonus Plan or our
Special Executive FY07 Bonus Plan.(4)
    
    We estimate that our obligation with respect to Mr. Deason under his Supplemental Executive
Retirement Agreement decreased from $9,120,998 on June 30, 2007 to $8,998,087 on June 30,
2008. The Supplemental Executive Retirement Agreement was subsequently terminated. See Note 11
to our Consolidated Financial Statements.(5)
    
    Represents $87,144, $112,921, and $102,110 in non-business use of corporate aircraft
calculated or based on the incremental cost to the Company in fiscal years 2009, 2008, and
2007, respectively; $6,685, $4,604, and $5,228 in auto expense in fiscal years 2009, 2008, and
2007, respectively; $11,310, $8,367, and $9,002 in group life insurance for fiscal years 2009,
2008, and 2007, respectively; $38,878, $52,607, and $4,799 in tax and estate planning services
for fiscal years 2009, 2008, and 2007, respectively; $68,707, $127,346, and $86,219 in
accounting and administrative services for fiscal years 2009, 2008, and 2007, respectively;
and $19,520, $6,388, and $11,675 in medical costs under the Executive Medical Plan for fiscal
years 2009, 2008, and 2007, respectively. We maintain an overall security program for
Mr. Deason due to business-related security concerns. Mr. Deason is provided with security
systems and equipment as well as security advice and personal protection services. The cost of
these systems and services are incurred as a result of business-related concerns and are not
maintained as perquisites or otherwise for the personal benefit of Mr. Deason. As a result, we
have not included such costs in the All Other Compensation column. We expended $498,132 in
fiscal year 2009, $480,698 in fiscal year 2008, and $423,011 in fiscal year 2007 for such
security advice and personal protection services. With regard to the personal protection
services, other executive officers and members of our Board of Directors receive the
incidental benefit of these services when attending a meeting or other function at which
Mr. Deason is also present; such incidental benefit has not been calculated or allocated for
purposes of this table. Excluded from this table is $7,755,660 and $1,697,317 attributable to
the costs of exercising 150,000 stock options issued under the Supplemental Executive
Retirement Agreement and the amount paid for termination of the 300,000 stock options issued
under the Supplemental Executive Retirement Agreement. For purposes of this table, we value
the incremental cost to the Company for non-business use of corporate aircraft using a method
that takes into account the cost of fuel, trip-related maintenance, crew travel expenses,
on-board catering, landing fees, trip-related hangar/parking costs and other variable costs.
This method does not include the fixed costs that do not change based on usage, such as
pilots salaries, the acquisition costs of the Company-owned or leased aircraft, and the cost
of maintenance not related to trips.(6)
    
    Represents $4,259, $9,210, and $1,402 in non-business use of corporate aircraft calculated or
based on the incremental cost to the Company in fiscal years 2009, 2008, and 2007,
respectively; $2,939, $1,932, and $1,555 in group life insurance for fiscal years 2009, 2008,
and 2007, respectively; $6,985, $6,989, and $6,988 in long term disability insurance for
fiscal years 2009, 2008, and 2007, respectively; $5,157, $7,898, and $20,040 in medical costs
under the Executive Medical Plan for fiscal years 2009, 2008, and 2007, respectively; $346,064
and $160,406 in relocation costs for fiscal years 2009 and 2008, respectively; $817, $2,875,
and $0 in matching ACS Savings Plan contributions for fiscal years 2009, 2008, and 2007,
respectively; $5,305, $7,500, and $0 in tax and estate planning services for fiscal years
2009, 2008, and 2007, respectively; and $787, $12,334, and $0 in awards in fiscal years 2009,
2008, and 2007, respectively. For purposes of this table, we value the incremental cost to the
Company for non-business use of corporate aircraft using a method that takes into account the
cost of fuel, trip-related maintenance, crew travel expenses, on-board catering, landing fees,
trip-related hangar/parking costs and other variable costs. This method does not include the
fixed costs that do not change based on usage, such as pilots salaries, the acquisition costs
of the Company-owned or leased aircraft, and the cost of maintenance not related to trips.(7)
    
    Represents $391, $293, and $192 in group life insurance for fiscal years 2009, 2008, and
2007, respectively; $5,200, $5,410, and $0 in long term disability insurance for fiscal years
2009, 2008, and 2007, respectively; $1,924, $4,211, and $3,609 in matching ACS Savings Plan
contributions for fiscal years 2009, 2008, and 2007, respectively; $7,607, $7,061, and $2,486
in medical costs under the Executive Medical Plan for fiscal years 2009, 2008, and 2007,
respectively; and $680, $10,739, and $0 in awards for fiscal years 2009, 2008, and 2007,
respectively.(8)
    
    Represents $1,261, $1,242, and $860 in group life insurance for fiscal years 2009, 2008, and
2007, respectively; $4,577, $7,824, and $8,844 in long term disability insurance for fiscal
years 2009, 2008, and 2007, respectively; $1,203, $4,125, and $6,230 in matching ACS Savings
Plan contributions for 2009, 2008, and 2007, respectively; $7,369, $7,243, and $7,638 in
medical costs under the Executive Medical Plan for fiscal years 2009, 2008, and 2007,
respectively; $0,
 109




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##### Table of Contents



$1,000, and $0 in tax and estate planning services for fiscal years 2009,
2008, and 2007, respectively; $680, $1,145, and $0 in awards for fiscal years 2009, 2008, and
2007, respectively; and $0, $0, and $267,847 in commission payments related to mergers and
acquisitions activity for fiscal years 2009, 2008, and 2007, respectively. A part of
Mr. Rexfords
compensation in fiscal year 2007 was tied to commission payments for closed mergers and
acquisitions based on a target percentage related to revenue acquired by the Company in such
transactions.
 (9)
    
    Represents $1,369, $1,242, and $913 in group life insurance for fiscal years 2009, 2008, and
2007, respectively; $7,770, $5,463, and $24,541 in medical costs under the Executive Medical
Plan for fiscal years 2009, 2008, and 2007, respectively; $577, $1,840, and $0 in matching ACS
Saving Plans contributions for fiscal years 2009, 2008, and 2007, respectively; $680, $1,165,
and $0 in awards for fiscal years 2009, 2008, and 2007, respectively; $5,306, $5,964, and $0
in long term disability insurance for fiscal years 2009, 2008, and 2007, respectively; and
$486,198 and $42,633 of relocation costs for fiscal years 2009 and 2008, respectively.(10)
    
    Represents $2,030, $1,485, and $961 in group life insurance for fiscal years 2009, 2008, and
2007, respectively; $4,701, $3,624 and $0 in medical costs under the Executive Medical Plan
for fiscal years 2009, 2008, and 2007, respectively; $572, $1,765, and $1,486 in matching ACS
Saving Plans contributions for fiscal years 2009, 2008, and 2007, respectively; $6,270,
$9,808, and $0 in awards for fiscal years 2009, 2008, and 2007, respectively; $8,735, $7,466,
and $0 in long term disability insurance for fiscal years 2009, 2008, and 2007, respectively;
and $13,695 and $2,500 in tax planning services for fiscal years 2009 and 2008, respectively.
 Grants of Plan-Based Awards
  GRANTS OF PLAN-BASED AWARDS
FOR FISCAL YEAR 2009
 All OtherOption
    
    
    
    
    
    GrantAwards:
    
    Awards:
    
    Exercise
    
    Date FairEstimated Future Payouts
    
    Estimated Future Payouts
    
    Number
    
    Number of
    
    or Base
    
    Value ofUnder Non-Equity Incentive
    
    Under Equity Incentive Plan
    
    of Shares
    
    Securities
    
    Price of
    
    Stock andPlan Awards(1)
    
    Awards
    
    of Stock
    
    Underlying
    
    Option
    
    OptionGrant
    
    Threshold
    
    Target
    
    Maximum
    
    Threshold
    
    Target
    
    Maximum
    
    or Units
    
    Options
    
    Awards
    
    AwardsName
    
    Date
    
    ($)
    
    ($)
    
    ($)
    
    (#)
    
    (#)
    
    (#)
    
    (#)
    
    (#)
    
    ($/share)
    
    ($)(2)Darwin Deason
    
    
    8/21/08
    
    
    
    
    
    
    
    
    
    
    $
    2,543,593
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    Lynn Blodgett
    
    
    8/21/08
    
    
    
    
    
    
    
    
    
    
    
    1,700,000

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    John Rexford
    
    
    8/21/08
    
    
    
    
    
    
    
    
    
    
    
    772,500

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    Tom Burlin
    
    
    8/21/08
    
    
    
    
    
    
    
    
    
    
    
    900,000

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    Kevin Kyser
    
    
    8/21/08
    
    
    
    
    
    
    
    
    
    
    
    645,000

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    Tom Blodgett
    
    
    5/27/09
    
    
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,200

    
    
    
    
    
    $
    44.77

    
    $
    624,9158/21/08
    
    
    
    
    
    
    
    
    
    
    
    714,375

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    Amounts shown represent the maximum awards that could be earned by our named executive
officers under the Senior Incentive Plan for fiscal year 2009. Actual bonuses paid under this
plan for fiscal year 2009 are shown in the Summary Compensation Table in the Non-Equity
Incentive Plan Compensation column.(2)
    
    The value of an option award is based on the fair value as of the grant date of such award
determined pursuant to SFAS 123(R). The exercise price for each option grant is 100% of the
fair market value of a share of the Companys Class A common stock on the date of grant which
was determined by reference to the closing price for the stock on the grant date on the NYSE.
Regardless of the value placed on a stock option on the grant date, the actual value of the
option will depend on the market value of the Companys common stock at such date in the
future when the option is exercised. These options were granted under our 2007 Equity
Incentive Plan and generally vest and become exercisable 20% on each of the first five
anniversary dates of the grant date.
 110




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##### Table of Contents



Employment Agreements
  Stock Plans
 2007 Equity Incentive Plan
    1997 Stock Incentive Plan
    111




---



##### Table of Contents



Employee Stock Purchase Plan
  The Retirement Benefits
 ACS Savings Plan
  ACS Supplemental Savings Plan
  Perquisites
  
    
    Executive Medical Plan.Under the Executive Medical Plan, which is a fully insured plan
of up to $25,000 per participant, normal and customary medical, dental and vision care costs
for executives and their immediate family members are paid by us. We do not pay
non-medically necessary costs, such as cosmetic surgery. If costs paid by the Company exceed
$25,000 or relate to services or supplies considered experimental, investigational or under
clinical investigation, then the medical expenses that exceed the $25,000, along with any
expenses for experimental, investigational or under clinical investigation services or
supplies, are imputed as income to the executive.
    
    Executive Long-Term Disability Plan.Certain of our executive officers are eligible to
participate in our Executive Long-Term Disability Plan which provides additional long-term
disability coverage through age 65 for certain of our executive officers in addition to the
standard policy provided to each of our employees.
    
    Prescription Benefit.Paid prescription coverage up to 100% for our executive officers
and their immediate family members.
 112




---



##### Table of Contents




    
    Annual Physical Examination.Reimbursement of up to $1,000 annually for any physical
examination for the executive officer and up to $500 annually for any physical examination
for the executive officers spouse, performed by a designated physician or other licensed
physician of their choice.
    
    Estate Planning Services.Our executive officers receive a benefit of up to $25,000 for
initial estate planning services and up to $10,000 per annum for subsequent services.
    
    Income Tax Preparation.Each of our executive officers may be reimbursed, up to $1,500
per annum, for income tax preparation services for preparation of their income tax returns.
  113




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##### Table of Contents



OUTSTANDING EQUITY AWARDS AT 2009 FISCAL YEAR-END
 Option Awards
    
    Stock AwardsEquityIncentiveEquity
    
    PlanIncentive
    
    Awards:Plan
    
    Market orEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Awards:
    
    PayoutIncentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number of
    
    Value ofNumber of
    
    Plan Awards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    Unearned
    
    UnearnedNumber of
    
    Securities
    
    Number of
    
    
    
    
    
    
    
    
    
    Number of
    
    Value of
    
    Shares,
    
    Shares,Securities
    
    Underlying
    
    Securities
    
    
    
    
    
    
    
    
    
    Shares or
    
    Shares or
    
    Units or
    
    Units orUnderlying
    
    Unexercised
    
    Underlying
    
    
    
    
    
    
    
    
    
    Units of
    
    Units of
    
    Other
    
    OtherUnexercised
    
    Options (#)
    
    Unerercised
    
    Option
    
    Option
    
    Stock That
    
    Stock That
    
    Rights That
    
    Rights ThatOptions (#)
    
    Unexercisable
    
    Unearned
    
    Exercise
    
    Expiration
    
    Have Not
    
    Have Not
    
    Have Not
    
    Have NotName
    
    Exercisable
    
    (1)
    
    Options (#)
    
    Price ($)
    
    Date
    
    Vested (#)
    
    Vested ($)
    
    Vested (#)
    
    Vested ($)Darwin Deason
    
    
    600,000
    
    
    
    
    
    
    
    
    
    
    $
    37.57
    
    
    
    7/23/12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lynn Blodgett
    
    
    800
    
    
    
    
    
    
    
    
    
    
    
    44.87
    
    
    
    9/26/11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,000
    
    
    
    
    
    
    
    
    
    
    
    37.57
    
    
    
    7/23/12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    44.10
    
    
    
    8/11/13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,000
    
    
    
    20,000
    (2)
    
    
    
    
    
    
    51.90
    
    
    
    7/30/14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    160,000
    
    
    
    40,000
    (3)
    
    
    
    
    
    
    50.25
    
    
    
    3/18/15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56,000
    
    
    
    84,000
    (4)
    
    
    
    
    
    
    49.55
    
    
    
    12/9/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    48,000
    (5)
    
    
    
    
    
    
    59.13
    
    
    
    7/9/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,000
    
    
    
    320,000
    (6)
    
    
    
    
    
    
    50.29
    
    
    
    8/15/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    John Rexford
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    44.10
    
    
    
    8/11/13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    5,000
    (7)
    
    
    
    
    
    
    51.90
    
    
    
    7/30/14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,000
    
    
    
    20,000
    (8)
    
    
    
    
    
    
    50.25
    
    
    
    3/18/15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    45,000
    (9)
    
    
    
    
    
    
    49.55
    
    
    
    12/9/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    20,000
    (10)
    
    
    
    
    
    
    59.13
    
    
    
    7/9/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    120,000
    (11)
    
    
    
    
    
    
    50.29
    
    
    
    8/15/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tom Burlin
    
    
    80,000
    
    
    
    20,000
    (12)
    
    
    
    
    
    
    51.83
    
    
    
    6/13/15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    60,000
    (13)
    
    
    
    
    
    
    49.55
    
    
    
    12/9/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    160,000
    (14)
    
    
    
    
    
    
    50.29
    
    
    
    8/15/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kevin Kyser
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    35.75
    
    
    
    7/23/12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    37.57
    
    
    
    7/23/12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,500
    
    
    
    
    
    
    
    
    
    
    
    43.00
    
    
    
    7/21/13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    
    44.10
    
    
    
    7/21/13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,000
    
    
    
    1,500
    (15)
    
    
    
    
    
    
    51.90
    
    
    
    7/30/14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    2,000
    (16)
    
    
    
    
    
    
    52.99
    
    
    
    9/13/15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    15,000
    (17)
    
    
    
    
    
    
    49.62
    
    
    
    8/15/16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    30,000
    (18)
    
    
    
    
    
    
    59.13
    
    
    
    6/14/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    120,000
    (19)
    
    
    
    
    
    
    50.29
    
    
    
    8/15/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tom Blodgett
    
    
    8,800
    
    
    
    
    
    
    
    
    
    
    
    44.87
    
    
    
    9/26/11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,000
    
    
    
    
    
    
    
    
    
    
    
    37.57
    
    
    
    7/23/12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    
    
    
    
    
    
    
    
    44.10
    
    
    
    7/21/13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    4,000
    (20)
    
    
    
    
    
    
    51.90
    
    
    
    7/30/14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,000
    
    
    
    20,000
    (21)
    
    
    
    
    
    
    50.25
    
    
    
    3/18/15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    30,000
    (22)
    
    
    
    
    
    
    59.13
    
    
    
    6/14/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    120,000
    (23)
    
    
    
    
    
    
    50.29
    
    
    
    8/15/17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,200
    (24)
    
    
    
    
    
    
    44.77
    
    
    
    5/27/19
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    All of the options listed would, to the extent not otherwise exercisable, be accelerated and
become fully exercisable upon the occurrence of a change of control (as defined in the
applicable plan).(2)
    
    This option was granted on July 30, 2004. 20,000 shares became exercisable on July 30, 2008.
The remaining 20,000 shares became exercisable on July 30, 2009.(3)
    
    This option was granted on March 18, 2005. 40,000 shares became exercisable on March 18,
2009. Assuming continued employment with the Company, the remaining 40,000 shares will become
exercisable on March 18, 2010.(4)
    
    This option was granted on December 9, 2006. 28,000 shares became exercisable on December 9,
2008. Assuming continued employment with the Company, 28,000 shares will become exercisable on
December 9 of each of 2009, 2010 and 2011.
 114




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##### Table of Contents



(5)
    
    This option was granted on July 9, 2007. 12,000 shares became exercisable on July 9, 2008 and
12,000 became exercisable on July 9, 2009. Assuming continued employment with the Company,
12,000 shares will become exercisable on July 9 of each of 2010, 2011 and 2012.(6)
    
    This option was granted on August 15, 2007. 80,000 shares became exercisable on August 15,
2008 and 80,000 shares became exercisable on August 15, 2009. Assuming continued employment
with the Company, 80,000 shares will become exercisable on August 15 of each of 2010, 2011 and
2012.(7)
    
    This option was granted on July 30, 2004. 5,000 shares became exercisable on July 30, 2008.
The remaining 5,000 shares became exercisable on July 30, 2009.(8)
    
    This option was granted on March 18, 2005. 20,000 shares became exercisable on March 18,
2009. Assuming continued employment with the Company, the remaining 20,000 shares will become
exercisable on March 18, 2010.(9)
    
    This option was granted on December 9, 2006. 15,000 shares became exercisable on December 9,
2008. Assuming continued employment with the Company, 15,000 shares will become exercisable on
December 9 of each of 2009, 2010 and 2011.(10)
    
    This option was granted on July 9, 2007. 5,000 shares became exercisable on July 9, 2008 and
5,000 shares became exercisable on July 9, 2009. Assuming continued employment with the
Company, 5,000 shares will become exercisable on July 9 of each of 2010, 2011 and 2012.(11)
    
    This option was granted on August 15, 2007. 30,000 shares became exercisable on August 15,
2008 and 30,000 shares became exercisable on August 15, 2009. Assuming continued employment
with the Company, 30,000 shares will become exercisable on August 15 of each of 2010, 2011 and
2012.(12)
    
    This option was granted on June 13, 2005. 20,000 shares became exercisable on June 13, 2009.
Assuming continued employment with the Company, the remaining 20,000 shares will become
exercisable on June 13, 2010.(13)
    
    This option was granted on December 9, 2006. 20,000 shares became exercisable on December 9,
2008. Assuming continued employment with the Company, 20,000 shares will become exercisable on
December 9 of each of 2009, 2010 and 2011.(14)
    
    This option was granted on August 15, 2007. 40,000 shares became exercisable on August 15,
2008 and 40,000 shares became exercisable on August 15, 2009. Assuming continued employment
with the Company, 40,000 shares will become exercisable on August 15 of each of 2010, 2011 and
2012.(15)
    
    This option was granted on July 30, 2004. 1,500 shares became exercisable on July 30, 2008.
The remaining 1,500 shares became exercisable on July 30, 2009.(16)
    
    This option was granted on September 13, 2005. 1,000 shares became exercisable on
September 13, 2008. Assuming continued employment with the Company, 1,000 shares will become
exercisable on September 13 of each of 2009 and 2010.(17)
    
    This option was granted on August 15, 2006. 5,000 shares became exercisable on August 15,
2008 and 5,000 shares became exercisable on August 15, 2009. Assuming continued employment
with the Company, 5,000 shares will become exercisable on August 15 of each of 2010 and 2011.(18)
    
    This option was granted on June 14, 2007. 10,000 shares became exercisable on June 14, 2009.
Assuming continued employment with the Company, 10,000 shares will become exercisable on
June 14 of each of 2010, 2011 and 2012.(19)
    
    This option was granted on August 15, 2007. 30,000 shares became exercisable on August 15,
2008 and 30,000 shares became exercisable on August 15, 2009. Assuming continued employment
with the Company, 30,000 shares will become exercisable on August 15 of each of 2010, 2011 and
2012.(20)
    
    This option was granted on July 30, 2004. 4,000 shares became exercisable on July 30, 2008.
The remaining 4,000 shares became exercisable on July 30, 2009.(21)
    
    This option was granted on March 18, 2005. 20,000 shares became exercisable on March 18,
2009. Assuming continued employment with the Company, the remaining 20,000 shares will become
exercisable on March 18, 2010.(22)
    
    This option was granted on June 14, 2007. 10,000 shares became exercisable on June 14, 2009.
Assuming continued employment with the Company, 10,000 shares will become exercisable on
June 14 of each of 2010, 2011 and 2012.(23)
    
    This option was granted on August 15, 2007. 30,000 shares became exercisable on August 15,
2008 and 30,000 shares became exercisable on August 15, 2009. Assuming continued employment
with the Company, 30,000 shares will become exercisable on August 15 of each of 2010, 2011 and
2012.
 115




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##### Table of Contents



(24)
    
    This option was granted on May 27, 2009. Assuming continued employment with the Company,
11,040 shares will become exercisable on May 27 of each of 2010, 2011, 2012, 2013 and 2014.
 Option Exercises and Stock Vested in Fiscal Year 2009
  Option Awards
    
    Stock AwardsNumber ofNumber of
    
    Value
    
    Shares
    
    ValueShares
    
    Realized
    
    Acquired
    
    RealizedAcquired
    
    on
    
    on
    
    onon Exercise
    
    Exercise
    
    Vesting
    
    VestingName
    
    (#)
    
    ($)
    
    (#)
    
    ($)Darwin Deason
    
    
    150,000
    
    $
    5,585,813
    
    
    
    Lynn Blodgett
    
    
    30,000
    
    $
    339,387
    
    
    
    John Rexford
    
    
    
    
    
    
    
    
    
    Tom Burlin
    
    
    
    
    
    
    
    
    
    Kevin Kyser
    
    
    
    
    
    
    
    
    
    Tom Blodgett
    
    
    
    
    
    
    
    
    
    
 Pension Benefits
  Non-qualified Deferred Compensation
  116




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##### Table of Contents



NON-QUALIFIED DEFERRED COMPENSATION
FOR FISCAL YEAR 2009
 Executive
    
    
    
    
    
    Aggregate
    
    AggregateContributions
    
    Registrant
    
    Earnings
    
    Withdrawals/
    
    Aggregatein
    
    Contributions
    
    in
    
    Distributions
    
    Balance atFiscal Year
    
    in Fiscal Year
    
    Fiscal Year
    
    in Fiscal Year
    
    June 30,2009
    
    2009
    
    2009
    
    2009
    
    2009Name
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)Darwin Deason
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Lynn Blodgett
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    John Rexford
    
    
    25,718(1)
    
    
    733(2)
    
    
    (22,432)
    
    
    
    
    
    
    97,840Tom Burlin
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kevin Kyser
    
    
    12,688(1)
    
    
    610(2)
    
    
    (45,599)
    
    
    
    
    
    
    343,830Tom Blodgett
    
    
    109,867(1)
    
    
    
    
    
    
    (75,412)
    
    
    
    
    
    
    419,449
 (1)
    
    The amount of Mr. Rexfords, Mr. Kysers and Mr. Tom Blodgetts contribution consists of
deferred salary earned in fiscal year 2009. These amounts are included in the Salary column of
the Summary Compensation Table. In fiscal year 2007, Mr. Rexford contributed $25,002 of
deferred salary and that amount was included in the Salary column of the Summary Compensation
Table for that fiscal year.(2)
    
    Amount of the Companys matching contribution.
 Post Termination Benefits
 Change of Control Agreements
     117




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118




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Change of Control and Termination Payments
 Change of Control Benefits Payable at June 30, 2009
  Vesting ofCash Payment
    
    
    
    
    
    
    Cash
    
    
    Unvested(before Tax
    
    
    Value of Non-
    
    
    Payment
    
    
    StockGross Up)
    
    
    Cash Benefits
    
    
    for Tax
    
    
    OptionsExecutive Officer
    
    ($) (a)
    
    
    ($) (b)
    
    
    Gross Up ($)
    
    
    ($) (c)
    
    
    Total ($)Darwin Deason
    
    $
    13,442,316
    
    
    $
    314,723
    
    
    $
    4,764,111
    
    
    $
    -
    
    
    $
    18,521,150Lynn Blodgett
    
    
    5,583,943
    
    
    
    191,156
    
    
    
    -
    
    
    
    -
    
    
    
    5,775,099Tom Burlin
    
    
    3,372,051
    
    
    
    266,093
    
    
    
    1,755,209
    
    
    
    -
    
    
    
    5,393,353John Rexford
    
    
    3,281,825
    
    
    
    267,122
    
    
    
    -
    
    
    
    -
    
    
    
    3,548,947Kevin Kyser
    
    
    2,806,515
    
    
    
    262,667
    
    
    
    1,255,069
    
    
    
    -
    
    
    
    4,324,251Tom Blodgett
    
    
    3,209,381
    
    
    
    272,018
    
    
    
    -
    
    
    
    -
    
    
    
    3,481,399Total
    
    $
    31,696,031
    
    
    $
    1,573,779
    
    
    $
    7,774,389
    
    
    $
    -
    
    
    $
    41,044,199
 (a)
    
    The cash payment is
principally composed of the base salary and incentive based compensation component, but also
includes the cash payment for accrued but unpaid compensation, 401(k) deferred compensation
and supplemental deferred compensation.(b)
    
    The non-cash benefits include an estimate for directors and officers liability insurance,
continued insurance benefits and outplacement counseling.(c)
    
    The exercise price per share for all unvested options was above the closing price per share
on June 30, 2009.
 Termination Benefits Payable at June 30, 2009 for Involuntary Termination Without Cause,
Termination By the Executive for Good Reason or Termination of Agreement
  Vesting ofUnvestedValue of Non-
    
    
    StockCash
    
    Cash
    
    
    OptionsExecutive Officer
    

Payment ($)

    
    Benefits ($) (e)
    
    
    ($)(f)
    
    
    Total($)Darwin Deason
    
    $
    43,045
    
    
    $
    -
    
    
    $
    -
    
    
    $
    43,045Lynn Blodgett(a)
    
    
    5,583,943
    (b)
    
    
    24,489
    
    
    
    -
    
    
    
    5,608,432Tom Burlin(c)
    
    
    141,220
    (d)
    
    
    -
    
    
    
    -
    
    
    
    141,220John Rexford(c)
    
    
    374,306
    (d)
    
    
    -
    
    
    
    -
    
    
    
    374,306Kevin Kyser(c)
    
    
    569,301
    (d)
    
    
    -
    
    
    
    -
    
    
    
    569,301Tom Blodgett(c)
    
    
    592,107
    (d)
    
    
    -
    
    
    
    -
    
    
    
    592,107Total
    
    $
    7,303,922
    
    
    $
    24,489
    
    
    $
    -
    
    
    $
    7,328,411
 (a)
    
    The cash payment is composed of (i) any accrued but unpaid compensation; (ii) three times the
base salary and incentive based compensation paid for the prior year; (iii) 401(k) deferred compensation and
supplemental deferred compensation.
 119




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##### Table of Contents



(b)
    
    The cash payment would be reduced to $857,062 in the event of termination for cause by the
Company or termination by Mr. Lynn Blodgett without good reason.(c)
    
    The cash payment is composed of (i) amounts which could be received under the Companys
Supplemental Unemployment Pay Plan (the Unemployment Plan) as described in the next
sentence; and (ii) 401(k) deferred compensation (under the ACS Savings Plan) and supplemental
deferred compensation (under the ACS Supplemental Savings Plan). Under the Unemployment Plan,
full time United States-based employees with at least one full year of service who are
terminated because of a qualifying termination (as defined in the Unemployment Plan) and who
otherwise are not eligible for benefits upon the their termination of employment may receive
two weeks of base pay (less any amounts from any state unemployment program for which the
employee would be eligible) for each full year of service, subject to a maximum of ten weeks
of base pay and their compliance with the conditions of the Plan. These figures for the Plan
assume no payments are received from any state unemployment program. In addition to payments
under the Plan, Mr. Burlin, Mr. Rexford, Mr. Kyser and Mr. Tom Blodgett would be entitled to
receive $23,527, $253,480, $468,417 and $483,011, respectively, in 401(k) deferred
compensation under the ACS Savings Plan and supplemental deferred compensation under the ACS
Supplemental Savings Plan upon termination. To the extent these executive officers are or were
one of the named executive officers, their contributions to the ACS Savings Plan and the ACS
Supplemental Savings Plan would be or would have been included in the Salary column of the
Summary Compensation Table.(d)
    
    The cash payment would be reduced to the following amounts in the event the termination was
not a qualifying termination under the Unemployment Plan: Mr. Burlin, $48,912; Mr. Rexford,
$275,268; Mr. Kyser, $486,609; and Mr. Tom Blodgett, $502,684.(e)
    
    The non-cash benefits include an estimate for continued insurance benefits.(f)
    
    The exercise price per share for all unvested options was above the closing price per share
on June 30, 2009.
 Termination Benefits Payable at June 30, 2009 for Involuntary Termination for Cause
  Equity Compensation Plan Information
  Number of
    
    
    
    
    
    
    Number of SecuritiesSecurities to be
    
    
    
    
    
    
    Remaining AvailableIssued Upon
    
    
    Weighted
    
    
    for Future IssuanceExercise of
    
    
    Average
    
    
    Under EquityOutstanding
    
    
    Exercise Price of
    
    
    CompensationOptions,
    
    
    Outstanding
    
    
    Plans (ExcludingWarrants
    
    
    Options,
    
    
    Securities Reflected inand Rights as of
    
    
    Warrants and
    
    
    Initial Column)Plan Category
    
    June 30, 2009
    
    
    Rights
    
    

as of June 30, 2009Equity compensation plans
approved by
security stockholdersStock options
    
    
    14,415,910
    
    
    
    $    48.43
    
    
    
    8,690,200Employee stock purchase plan
    
    
    N/A
    
    
    
    N/A
    
    
    
    534,457Equity compensation plans not
approved by
security stockholders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    14,415,910
    
    
    
    $    48.43
    
    
    
    9,224,657
 120




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Compensation Committee Interlocks and Insider Participation
  DIRECTOR COMPENSATION
For Fiscal Year 2009
 Directors Compensation
  Change inPensionValue andFees
    
    
    
    
    
    
    
    
    Non-Equity
    
    Non-qualifiedPaid in
    
    
    Stock
    
    Option
    
    
    Incentive Plan
    
    Deferred
    
    All OtherCash
    
    
    Awards
    
    Awards
    
    
    Compensation
    
    Compensation
    
    CompensationName
    
    ($)(1)
    
    
    ($)
    
    ($)(2)(3)
    
    
    ($)
    
    Earnings ($)
    
    ($)
    
    Total ($)Robert Druskin
    
    $
    78,000
    
    
    
    
    $
    176,443
    
    
    
    
    
    
    
    
    $
    254,443Kurt R. Krauss
    
    
    250,000
    
    
    
    
    
    184,119
    
    
    
    
    
    
    
    
    
    434,119Ted B. Miller Jr.
    
    
    195,000
    
    
    
    
    
    184,119
    
    
    
    
    
    
    
    
    
    379,119Frank Varasano
    
    
    256,000
    
    
    
    
    
    184,119
    
    
    
    
    
    
    
    
    
    440,119Paul E. Sullivan
    
    
    279,000
    
    
    
    
    
    195,959
    
    
    
    
    
    
    
    
    
    474,959
 (1)
    
    This column reports the amount of cash compensation paid in fiscal year 2009 for Board of
Directors and Committee service. This column includes fees paid to our non-employee directors
for attending Board of Directors and Committee meetings (in person or telephonically), service
as Lead Independent Director, service as chair of one of the Committees of the Board of
Directors, annual retainer, and participation on any special committee.
 (2)
    
    This column represents the dollar amount recognized for financial statement reporting
purposes with respect to the 2009 fiscal year for the fair value of stock options granted to
the directors. The fair value was estimated using the Black-Scholes option-pricing model in
accordance with SFAS 123(R). For a discussion of valuation assumptions used in the SFAS 123(R)
calculations, see Note 2 to our Consolidated Financial Statements included in this Annual
Report on Form 10-K for the year ended June 30, 2009.
 (3)
    
    The following directors had the following outstanding option awards at the end of fiscal year
2009:
 Option
    
    
    Number ofGrant
    
    
    Option Shares
    
    
    Grant DateDirector
    
    Date
    
    
    Granted(a)
    
    
    Fair Value ($)Robert Druskin
    
    
    8/21/08
    
    
    
    7,500
    
    
    
    $   84,2913/19/08
    
    
    
    50,000
    
    
    
    456,871Kurt R. Krauss
    
    
    8/21/08
    
    
    
    7,500
    
    
    
    84,29112/7/07
    
    
    
    50,000
    
    
    
    479,903Ted B. Miller Jr.
    
    
    8/21/08
    
    
    
    7,500
    
    
    
    84,29112/7/07
    
    
    
    50,000
    
    
    
    479,903Frank Varasano
    
    
    8/21/08
    
    
    
    7,500
    
    
    
    84,29112/7/07
    
    
    
    50,000
    
    
    
    479,903Paul E. Sullivan
    
    
    8/21/08
    
    
    
    7,500
    
    
    
    84,2912/23/08
    
    
    
    50,000
    
    
    
    515,419
 (a)
    
    One-third of such options vest and become exercisable on the first, second and third
anniversary date of each grant, unless a change in control (as defined in the applicable
plan) occurs and makes the options fully exercisable.
 121




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##### Table of Contents



Fiscal Year 2009
    
    Compensation    Independent Director Annual Retainer
    
    $
    

    45,000    Lead Independent Director Annual Retainer
    
    $
    

    25,000    Audit Committee Chair Annual Retainer
    
    $
    

    15,000    Nominating and Corporate Governance Committee Chair Annual
Retainer
    
    $
    

    5,000    Compensation Committee Chair Annual Retainer
    
    $
    
    5,000    Board Meeting (in person)
    
    $
    
    2,000    Board Meeting (telephonic)
    
    $
    
    1,000    Audit Committee Meeting (in person)
    
    $
    
    2,000    Audit Committee Meeting (telephonic)
    
    $
    

    1,000    Special Litigation Committee (chair)
    
    $
    

    15,000/month    Special Litigation Committee
    
    $
    

    10,000/month    Strategic Transaction Committee (chair)
    
    $
    

    25,000/month    Strategic Transaction Committee
    

    $
    
    20,000/month    Annual Stock Option Grant
    
    
    

    7,500 shares    Initial Stock Option Grant
        
    

    50,000 shares
  Stock Ownership Guidelines
  Certain Executive Arrangements
 Mr. Lynn Blodgetts Amended and Restated Employment Agreement
    122




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Mr. Deasons Amended Employment Agreement
   123




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Mr. Deasons Voting Agreement
   124




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125




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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  Amount
    
    
    
    
    
    
    Percent ofPercent of
    
    and
    
    
    Percent of

    
    
    TotalAmount and
    
    
    Total
    
    Nature
    
    
    Total
    
    
    Shares ofNature of
    
    
    Shares
    
    of
    
    
    Shares
    
    
    Class ABeneficial
    
    
    of Class A
    
    Beneficial
    
    
    of Class B
    
    
    and Class BOwnership of
    
    
    Common
    
    Ownership
    
    
    Common
    
    
    Common
    

    Percent ofClass A
    
    
    Stock
    
    of Class B
    
    
    Stock
    
    
    Stock
    

    Total VotingCommon
    
    
    Owned
    
    Common
    
    
    Owned
    
    
    Owned

    
    Power OwnedName
    
    Stock
    
    
    Beneficially
    
    Stock
    
    
    Beneficially
    
    
    Beneficially

    
    Beneficially(1)BENEFICIAL OWNERS OF MORE THAN 5% OF OUR COMMON STOCKFMR LLC(2)
    
    
    10,009,412
    
    
    
    10.99
    %
    
    
    *
    
    
    
    *
    
    
    
    10.25
    %
    
    
    6.37%82 Devonshire Street
      Boston, MA 02109Barclays Global Investors
UK Holdings Limited
(Barclays)(3)
    
    
    5,673,113
    
    
    
    6.23
    %
    
    
    *
    
    
    
    *
    
    
    
    5.81
    %
    
    
    3.61%1 Churchill Place,
      Canary Wharf,
      London, England E14 5HPSECURITY OWNERSHIP OF MANAGEMENTDarwin Deason(4)
    
    
    2,740,884
    
    
    
    2.99
    %
    
    
    6,599,372
    
    
    
    100%
    
    
    
    9.51
    %
    
    
    43.60%Lynn Blodgett(5)
    
    
    646,300
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *John Rexford(6)
    
    
    261,047
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Tom Burlin(7)
    
    
    201,100
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Kevin Kyser(8)
    
    
    120,572
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Tom Blodgett(9)
    
    
    206,684
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Robert Druskin(10)
    
    
    25,167
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Kurt R. Krauss(11)
    
    
    24,167
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Ted B. Miller Jr.(12)
    
    
    29,167
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Frank Varasano(13)
    
    
    23,567
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Paul E. Sullivan(14)
    
    
    23,667
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *All Current Executive
Officers    and Directors as a
Group    (18 persons)(15)
    
    
    4,578,926
    
    
    
    4.90
    %
    
    
    6,599,372
    
    
    
    100%
    
    
    
    11.17
    %
    
    
    44.27%
  (1)
    
    In calculating the percent of total voting power, the voting power of shares of Class A
common stock (one vote per share) and Class B common stock (ten votes per share) are
aggregated. As of August 20, 2009, there were 91,042,152 shares of Class A common stock and
6,599,372 shares of Class B common stock issued and outstanding.
 (2)
    
    Based on filing by the stockholder with the Securities and Exchange Commission dated April 9,
2009. Such stockholder has indicated that it has sole voting power with respect to
701,216 shares and no voting power with respect to the remaining shares and sole investment
power with respect to 10,009,412 shares.
 (3)
    
    Based on filing by Barclays
with the Securities and Exchange Commission dated August 12, 2009.
Barclays has indicated that it has sole voting authority with respect to 4,621,195 shares and
no voting authority with respect to the remaining 1,051,918 shares.
 (4)
    
    The shares of our Class A common stock noted in the table include 600,000 shares of Class A
common stock which are not outstanding but are subject to options exercisable within sixty
days of August 20, 2009; and 7,990 shares owned by Mr. Deason through the ACS Employee Stock
Purchase Plan. See discussion of Mr. Deasons voting rights in the section entitled Certain
Executive Arrangements  Mr. Deasons Voting Agreement below. Mr. Deason has also pledged, as
of August 20, 2009, 2,132,894 of his Class A shares to four financial institutions.
 (5)
    
    Includes 645,800 shares of Class A common stock, which are not outstanding, but are subject
to options exercisable within sixty days of August 20, 2009.
 126




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##### Table of Contents



(6)
    
    Includes 255,000 shares of Class A common stock, which are not outstanding, but are subject
to options exercisable within sixty days of August 20, 2009; 2,104 shares of Class A common
stock owned through the ACS 401(k) Plan; 1,443 shares of Class A common stock owned through
the ACS Employee Stock Purchase Plan; and 2,500 shares of Class A common stock owned through
an individual retirement account.
 (7)
    
    Includes 200,000 shares of Class A common stock, which are not outstanding, but are subject
to options exercisable within sixty days of August 20, 2009.(8)
    
    Includes 119,000 shares of Class A common stock, which are not outstanding, but are subject
to options exercisable within sixty days of August 20, 2009; 1,072 shares of Class A common
stock owned through the ACS 401(k) Plan; and 200 shares of Class A common stock owned through
an individual retirement account.(9)
    
    Includes 204,800 shares of Class A common stock, which are not outstanding, but are subject
to options exercisable within sixty days of August 20, 2009; 319 shares of Class A common
stock owned through the ACS 401(k) Plan; and 1,565 shares of Class A common stock owned
through the ACS Employee Stock Purchase Plan.(10)
    
    Includes 19,167 shares of Class A common stock, which are not outstanding, but are subject to
options exercisable within sixty days of August 20, 2009.(11)
    
    Includes 19,167 shares of Class A common stock, which are not outstanding, but are subject to
options exercisable within sixty days of August 20, 2009 and 5,000 shares of Class A common
stock owned through an individual retirement account.(12)
    
    Includes 19,167 shares of Class A common stock, which are not outstanding, but are subject to
options exercisable within sixty days of August 20, 2009.(13)
    
    Includes 19,167 shares of Class A common stock, which are not outstanding, but are subject to
options exercisable within sixty days of August 20, 2009 and 2,200 shares of Class A common
stock owned through an individual retirement account.(14)
    
    Includes 19,167 shares of Class A common stock, which are not outstanding, but are subject to
options exercisable within sixty days of August 20, 2009.(15)
    
    Includes 2,393,035 shares of Class A common stock, which are not outstanding, but are subject
to options exercisable within sixty days of August 20, 2009; 4,125 shares of Class A common
stock owned through the ACS 401(k) plan; 13,372 shares of Class A common stock owned through the
ACS Employee Stock Purchase Plan and 9,900 shares of Class A common stock owned through
individual retirement accounts.
 Equity Compensation Plan Information
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 Certain Relationships and Related Transactions
    127




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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  2009
    
    
    2008Audit fees
    
    $
    3,029
    
    
    $
    4,484Audit-related fees
    
    
    52
    
    
    
    147Tax fees
    
    
    82
    
    
    
    55All other fees
    
    
    76
    
    
    
    52Total Fees
    
    $
    3,239
    
    
    $
    4,738
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##### Table of Contents



PART IV
 
 ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
 (a)
    
    Financial StatementsThe following Consolidated Financial Statements of Affiliated Computer Services, Inc. and
Subsidiaries are included in Part II, Item 8:
 
 (b)
    
    ExhibitsReference is made to the Index to Exhibits beginning on page 131 for a list of all exhibits
filed as part of this report.
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##### Table of Contents



SIGNATURES
  Affiliated Computer Services, Inc.Date: August 27, 2009By:
    

/s/ Kevin KyserKevin KyserExecutive Vice President andChief Financial Officer
  Signature
    
    Title/s/ Darwin Deason
    
    Director, Chairman of the Board(Darwin Deason)/s/ Lynn R. Blodgett
    
    Director, President and Chief Executive Officer(Lynn R. Blodgett)/s/ Kevin Kyser
    
    Executive Vice President and Chief Financial Officer(Kevin Kyser)/s/ Laura Rossi
    
    Senior Vice President and Chief Accounting Officer(Laura Rossi)/s/ Kurt R. Krauss
    
    Director(Kurt R. Krauss)/s/ Ted B. Miller, Jr.
    
    Director(Ted B. Miller, Jr.)/s/ Frank Varasano
    
    Director(Frank Varasano)/s/ Paul E. Sullivan
    
    Director(Paul E. Sullivan)/s/ Robert Druskin
    
    Director(Robert Druskin)
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##### Table of Contents



Index to ExhibitsExhibitNumber
    
    Exhibit Name2.1
    
    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).2.2
    
    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).2.3
    
    Amendment No. 2 to Purchase Agreement, dated as of November 11,
2005, among Mellon Financial Corporation, Mellon Consultants
European Holdings Limited, Affiliated Computer Services, Inc.,
ACS Business Process Solutions Limited and Affiliated Computer
Services of Germany GmbH (filed as Exhibit 2.1 to our Current
Report on Form 8-K, filed November 16, 2005 and incorporated
herein by reference).3.1
    
    Certificate of Incorporation of Affiliated Computer Services,
Inc. (filed as Exhibit 3.1 to our Registration Statement on Form
S-3, filed March 30, 2001, File No. 333-58038 and incorporated
herein by reference).3.2
    
    Certificate of Correction to Certificate of Amendment of
Affiliated Computer Services, Inc., dated August 30, 2001 (filed
as Exhibit 3.2 to our Annual Report on Form 10-K, filed
September 17, 2003 and incorporated herein by reference).3.3
    
    Certificate of Elimination of the Series A Cumulative Redeemable
Preferred Stock of Affiliated Computer Services, Inc. dated
August 20, 2001 (filed as Exhibit 4.3 to our Registration
Statement on Form S-8, File No. 333-42385, filed June 13, 2007
and incorporated herein by reference).3.4
    
    Bylaws of Affiliated Computer Services, Inc., as amended and in
effect on August 21, 2008 (filed as Exhibit 3.2 to our Current
Report on Form 8-K, filed August 27, 2008 and incorporated
herein by reference).4.1
    
    Form of New Class A Common Stock Certificate (filed as Exhibit
4.3 to our Registration Statement on Form S-1, filed May 26,
1994, File No. 33-79394 and incorporated herein by reference).4.2
    
    Indenture, dated as of June 6, 2005, by and between Affiliated
Computer Services, Inc. as Issuer and The Bank of New York Trust
Company, N.A. as Trustee (filed as Exhibit 4.1 to our Current
Report on Form 8-K, filed June 6, 2005 and incorporated herein
by reference).4.3
    
    First Supplemental Indenture, dated as of June 6, 2005, by and
between Affiliated Computer Services, Inc. as Issuer and The
Bank of New York Trust Company, N.A. as Trustee, relating to our
4.70% Senior Notes due 2010 (filed as Exhibit 4.2 to our Current
Report on Form 8-K, filed June 6, 2005 and incorporated herein
by reference).4.4
    
    Second Supplemental Indenture, dated as of June 6, 2005, by and
between Affiliated Computer Services, Inc. as Issuer and The
Bank of New York Trust Company, N.A. as Trustee, relating to our
5.20% Senior Notes due 2015 (filed as Exhibit 4.3 to our Current
Report on Form 8-K, filed June 6, 2005 and incorporated herein
by reference).4.5
    
    Specimen Note for 4.70% Senior Notes due 2010 (filed as Exhibit
4.4 to our Current Report on Form 8-K, filed June 6, 2005 and
incorporated herein by reference).4.6
    
    Specimen Note for 5.20% Senior Notes due 2015 (filed as Exhibit
4.5 to our Current Report on Form 8-K, filed June 6, 2005 and
incorporated herein by reference).9.1
    
    Voting Agreement, as amended December 7, 2007, by and between
Affiliated Computer Services, Inc. and Darwin Deason (filed as
Exhibit 99.1 to our Current Report on Form 8-K filed December
10, 2007 and incorporated herein by reference).10.1
    
    1997 Stock Incentive Plan of the Company (filed as Appendix D to
our Joint Proxy Statement on Schedule 14A, filed November 14,
1997 and incorporated herein by reference).10.2
    
    Amendment No.1 to Affiliated Computer Services, Inc. 1997 Stock
Incentive Plan, dated as of October 28, 2004 (filed as Exhibit
4.6 to our Registration Statement on Form S-8, filed December 6,
2005 and incorporated herein by reference).10.3
    
    Amended and Restated 2007 Equity Incentive Plan of the Company
(filed as Exhibit 10.1 to our Report on Form 8-K, filed August
21, 2009 and incorporated herein by reference).10.4
    
    ACS Senior Executive Annual Incentive Plan (filed as Appendix A
to our Proxy Statement on Schedule 14A, filed April 14, 2009 and
incorporated herein by reference).
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Index to ExhibitsExhibitNumber
    
    Exhibit Name10.5
    
    Form of Directors Indemnification Agreement (filed as Exhibit
10.1 to our Current Report on Form 8-K, filed June 5, 2008 and
incorporated herein by reference).10.6
    
    Form of Change in Control Agreement, dated as of June 9, 2008
(June 6, 2008, in the case of Ann Vezina), by and between
Affiliated Computer Services, Inc. and each of Tom Burlin, Kevin
Kyser and Tom Blodgett (filed as Exhibit 10.1 to our Current
Report on Form 8-K, filed June 11, 2008 and incorporated herein
by reference).10.7
    
    Change in Control Agreement, dated as of June 9, 2008, by and
between Affiliated Computer Services, Inc. and John Rexford
(filed as Exhibit 10.2 to our Current Report on Form 8-K, filed
June 11, 2008 and incorporated herein by reference).10.8
    
    Amendment to Change in Control Agreements with certain executive
officers (filed as Exhibit 10.4 to our Current Report on Form
8-K, filed December 30, 2008 and incorporated herein by
reference).10.9
    
    Supplemental Executive Retirement Agreement, dated as of
December 15, 1998, by and between Affiliated Computer Services,
Inc. and Darwin Deason (filed as Exhibit 10.13 to our Annual
Report on Form 10-K, filed September 29, 1999 and incorporated
herein by reference).10.10
    
    Amendment to Supplemental Executive Retirement Agreement, dated
as of November 13, 2003, by and between Affiliated Computer
Services, Inc. and Darwin Deason (filed as Exhibit 10.1 to our
Quarterly Report on Form 10-Q, filed February 17, 2004 and
incorporated herein by reference).10.11
    
    Amendment No. 2 to Supplemental Executive Retirement Agreement,
dated as of June 30, 2005, by and between Affiliated Computer
Services, Inc. and Darwin Deason (filed as Exhibit 10.1 to our
Current Report on Form 8-K, filed July 1, 2005 and incorporated
herein by reference).10.12
    
    Amendment No. 3 to Supplemental Executive Retirement Agreement
by and between Affiliated Computer Services, Inc. and Darwin
Deason (filed as Exhibit 10.1 to our Current Report on Form 8-K,
filed December 30, 2008 and incorporated herein by reference).10.13
    
    Amended and Restated Executive Employment Agreement, effective
as of May 1, 2008, by and between Affiliated Computer Services,
Inc. and Lynn Blodgett (filed as Exhibit 10.3 to our Current
Report on Form 8-K, filed June 11, 2008 and incorporated herein
by reference).10.14
    
    Amendment to Amended and Restated Executive Employment Agreement
by and between Affiliated Computer Services, Inc. and Lynn
Blodgett (filed as Exhibit 10.3 to our Current Report on Form
8-K, filed December 30, 2008 and incorporated herein by
reference).10.15
    
    Employment Agreement, as amended December 7, 2007, between the
Company and Darwin Deason (filed as Exhibit 99.2 to our Current
Report on Form 8-K, filed December 10, 2007 and incorporated
herein by reference).10.16
    
    Amendment to Employment Agreement between the Company and Darwin
Deason (filed as Exhibit 10.2 to our Current Report on Form 8-K,
filed December 30, 2008 and incorporated herein by reference).10.17
    
    Affiliated Computer Services, Inc. 401(k) Supplemental Plan,
effective as of July 1, 2000, as amended (filed as Exhibit 10.15
to our Annual Report on Form 10-K, filed September 13, 2004 and
incorporated herein by reference).10.18
    
    Affiliated Computer Services, Inc. Executive Benefit Plan,
effective as of January 1, 2002, as amended (filed as Exhibit
10.15 to our Annual Report on Form 10-K, filed September 13,
2005 and incorporated herein by reference).10.19
    
    Form of Stock Option Agreement (filed as Exhibit 10.17 to our
Annual Report on Form 10-K, filed September 13, 2005 and
incorporated herein by reference).10.20
    
    Form of Stock Option Agreement (UK grant) (filed as Exhibit
10.18 to our Annual Report on Form 10-K, filed September 13,
2005 and incorporated herein by reference).10.21
    
    Form of Stock Option Agreement (Switzerland, Canton of Fribourg)
(filed as Exhibit 10.8 to our Quarterly Report on Form 10-Q
filed May 16, 2006 and incorporated herein by reference.10.22
    
    Form of Stock Option Agreement (Switzerland, Cantons of Aargau,
Basel-Landschaft, Bern & Zurich) (filed as Exhibit 10.9 to our
Quarterly Report on Form 10-Q filed May 16, 2006 and
incorporated herein by reference.10.23
    
    1997 Stock Incentive Plan for Employees in France (filed as
Exhibit 10.35 to our Annual Report on Form 10-K filed January
23, 2007 and incorporated herein by reference.)10.24
    
    Form of Stock Option Agreement (France) (filed as Exhibit 10.36
to our Annual Report on Form 10-K filed January 23, 2007 and
incorporated herein by reference.)
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Index to ExhibitsExhibitNumber
    
    Exhibit Name10.25
    
    Form of Stock Option Agreement (Canada, other than Quebec)
(filed as Exhibit 10.20 to our Annual Report on Form 10-K filed
August 28, 2008 and incorporated herein by reference.)10.26
    
    Form of Stock Option Agreement (Quebec) (filed as Exhibit 10.21
to our Annual Report on Form 10-K filed August 28, 2008 and
incorporated herein by reference.)10.27
    
    Form of Stock Option Agreement (Germany) (filed as Exhibit 10.22
to our Annual Report on Form 10-K filed August 28, 2008 and
incorporated herein by reference.)10.28
    
    Agreement, dated as of September 30, 2005, between Affiliated
Computer Services, Inc. and Jeffrey A. Rich (filed as Exhibit
10.1 to our Current Report on Form 8-K, filed October 3, 2005
and incorporated herein by reference).10.29
    
    Credit Agreement, dated March 20, 2006, by and among Affiliated
Computer Services, Inc., and certain subsidiary parties thereto,
as Borrowers, Citicorp USA, Inc., as Administrative Agent,
Citigroup Global Markets Inc., as Sole Lead Arranger and Book
Runner, and various other agents, lenders and issuers (filed as
Exhibit 10.1 to our Current Report on Form 8-K, filed March 21,
2006 and incorporated herein by reference).10.30
    
    Amendment No. 1 to Credit Agreement dated as of March 30, 2006,
by and among Affiliated Computer Services, Inc., and certain
subsidiary parties thereto, as Borrowers, and Citicorp USA,
Inc., as Administrative Agent (filed as Exhibit 10.24 to our
Annual Report on Form 10-K, filed January 23, 2007 and
incorporated herein by reference).10.31
    
    Amendment No. 2 to Credit Agreement dated as of July 6, 2006, by
and among Affiliated Computer Services, Inc., and certain
subsidiary parties thereto, as Borrowers, and Citicorp USA,
Inc., as Administrative Agent (filed as Exhibit 10.1 to our
Current Report on Form 8-K, filed July 7, 2006 and incorporated
herein by reference).10.32
    
    Amendment No. 3, Consent and Waiver to Credit Agreement, by and
among Affiliated Computer Services, Inc., and certain subsidiary
parties thereto and Citicorp USA, Inc., as Administrative Agent
(filed as Exhibit 10.1 to our Current Report on Form 8-K, filed
September 28, 2006 and incorporated herein by reference).10.33
    
    Amendment No. 4, Consent and Waiver to Credit Agreement, by and
among Affiliated Computer Services, Inc., and certain subsidiary
parties thereto and Citicorp USA, Inc., as Administrative Agent
(filed as Exhibit 10.1 to our Current Report on Form 8-K, filed
December 22, 2006 and incorporated herein by reference).10.34
    
    Pledge and Security Agreement, dated March 20, 2006, by and
among Affiliated Computer Services and certain of its
subsidiaries, and Citicorp USA, Inc., as Administrative Agent
(filed as Exhibit 10.2 to our Current Report on Form 8-K, filed
March 21, 2006 and incorporated herein by reference).10.35
    
    Deed of Assignment, dated March 20, 2006, by and among the
companies listed on Schedule thereto, as Assignors, and Citicorp
USA, Inc., as Security Agent (filed as Exhibit 10.3 to our
Current Report on Form 8-K, filed March 21, 2006 and
incorporated herein by reference).10.36
    
    Assignment of Receivables, dated March 20, 2006, by and among
the entities listed in Schedule 1 thereto, as Assignors, and
Citicorp USA, Inc. as Security Agent (filed as Exhibit 10.4 to
our Current Report on Form 8-K, filed March 21, 2006 and
incorporated herein by reference).10.37
    
    Agreement and Deed of the Creation of a First Ranking Right of
Pledge of Shares in Affiliated Computer Services International
B.V., dated March 20, 2006 (filed as Exhibit 10.5 on Form 8-K,
filed March 21, 2006 and incorporated herein by reference).10.38
    
    Agreement and Deed of the Creation of a First Ranking Right of
Pledge of Receivables of Affiliated Computer Services
International B.V., dated March 20, 2006 (filed as Exhibit 10.6
to our Current Report on Form 8-K, filed March 21, 2006 and
incorporated herein by reference).10.39
    
    Affirmation of Liens and Guaranties, dated as of July 6, 2006,
by and among Affiliated Computer Services, Inc. and certain of
its subsidiaries, and Citicorp USA, Inc., as Administrative
Agent (filed as Exhibit 10.2 to our Current Report on Form 8-K,
filed July 7, 2006 and incorporated herein by reference).10.40
    
    Confirmation Deed, dated as of July 6, 2006, by and among the
entities listed on the Schedule thereto and Citicorp USA, Inc.,
as Security Agent (filed as Exhibit 10.3 to our Current Report
on Form 8-K, filed July 7, 2006 and incorporated herein by
reference).10.41
    
    Engagement Letter between Rich Capital, LLC and Affiliated
Computer Services, Inc. dated June 9, 2006 (filed as Exhibit
10.1 on Form 8-K, filed June 12, 2006 and incorporated herein by
reference).
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Index to ExhibitsExhibitNumber
    
    Exhibit Name10.42
    
    Separation Agreement dated as of November 26, 2006 between
Affiliated Computer Services, Inc. and Mark A. King (filed as
Exhibit 10.1 to our Current Report on Form 8-K, filed November
27, 2006 and incorporated herein by reference).10.43
    
    Separation Agreement dated as of November 26, 2006 between
Affiliated Computer Services, Inc. and Warren D. Edwards (filed
as Exhibit 10.2 to our Current Report on Form 8-K, filed
November 27, 2006 and incorporated herein by reference).21.1*
    
    Subsidiaries of the Company23.1*
    
    Consent of PricewaterhouseCoopers LLP23.2*
    
    Consent of Value Incorporated31.1*
    
    Certification of Chief Executive Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(a) promulgated under the
Securities Exchange Act of 1934, as amended.31.2*
    
    Certification of Chief Financial Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(a) promulgated under the
Securities Exchange Act of 1934, as amended.32.1*
    
    Certification of Chief Executive Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(b) promulgated under the
Securities Exchange Act of 1934, as amended and Section 1350 of
Chapter 63 of Title 18 of the United States Code. Pursuant to
Item 601(b)(32)(ii) of Regulation S-K, this Exhibit is furnished
to the SEC and shall not be deemed to be filed.32.2*
    
    Certification of Chief Financial Officer of Affiliated Computer
Services, Inc. pursuant to Rule 13a-14(b) promulgated under the
Securities Exchange Act of 1934, as amended and Section 1350 of
Chapter 63 of Title 18 of the United States Code. Pursuant to
Item 601(b)(32)(ii) of Regulation S-K, this Exhibit is furnished
to the SEC and shall not be deemed to be filed.
 
  134