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FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED DECEMBER 31, 1999
COMMISSION FILE NUMBER ________
AFFILIATED COMPUTER SERVICES, INC. SAVINGS PLAN
(FULL TITLE OF THE PLAN)
--------------
AFFILIATED COMPUTER SERVICES, INC.
(NAME OF ISSUER)
2828 NORTH HASKELL AVENUE
DALLAS, TEXAS 75201
(PRINCIPAL EXECUTIVE OFFICE)
Notices and communications from the Securities and Exchange Commission relative
to this report should be forwarded to:
William L. Deckelman, Jr., Esq.
Executive Vice President, Secretary And General Counsel
Affiliated Computer Services, Inc.
2828 North Haskell Avenue
Dallas, Texas 75201
(214) 841-6144
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REQUIRED INFORMATION
The Affiliated Computer Services, Inc. Savings Plan is subject to the
requirements of the Employee Retirement Income Security Act of 1974. Attached
hereto is a copy of the most recent financial statements and schedules of the
Plan prepared in accordance with the financial reporting requirements of ERISA.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrative Committee (or other persons who administer the employee
benefit plan) has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
AFFILIATED COMPUTER SERVICES, INC. SAVINGS PLAN
By: /s/ Lora Villarreal
--------------------------------------------------------------
Name: Lora Villarreal
Title: Administrative Committee Member
Date: May 31, 2001
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
FOR THE YEAR ENDED DECEMBER 31, 1999
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
TABLE OF CONTENTS
DECEMBER 31, 1999
Independent Auditors' Report................................................. 1
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998.................................................3
Statement of Changes in Net Assets Available for
Benefits-Year Ended December 31, 1999......................................4
Notes to Financial Statements................................................ 5
Supplemental Schedules.......................................................11
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INDEPENDENT AUDITORS' REPORT
To the Participants and Plan Committee of
Affiliated Computer Services, Inc. Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Affiliated Computer Services, Inc. Savings Plan ("Plan") as of December 31,
1999 and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on the financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in
accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note 6, which was certified by Connecticut General Life Insurance
Company, the trustee of the Plan, except for comparing the information with the
related information included in the financial statements and supplemental
schedules. We have been informed by the plan administrator that the trustee
holds the plan's investment assets and executes investment transactions. The
plan administrator has obtained a certification from the trustee as of and for
the year ended December 31, 1999 that the information provided to the plan
administrator by the trustee is complete and accurate.
In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had we performed procedures with respect to
the information summarized in Note 3, the financial statements referred to above
present fairly, in all material respects, the net assets available for benefits
of the plan as of December 31, 1999 and the changes in net assets available for
benefits for the year then ended in conformity with generally accepted
accounting principles.
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INDEPENDENT AUDITORS' REPORT (CONTINUED)
Our audit of the Plan's financial statements were conducted for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
supplemental schedules on pages 10 to 12 are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
The supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
except for the effects on the Schedules of Assets Held For Investment Purposes
and the Schedules of Reportable Transactions of such adjustments, if any, as
might have been determined to be necessary had we performed procedures with
respect to the information summarized in Note 6 as described in the second
preceding paragraph, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
Salmon, Beach & Company,
A Professional Corporation
Certified Public Accountants & Consultants
July 26, 2000
Dallas, Texas
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
1999 1998
---- ----
Funds held in Uninvested Cash Accounts $ 97,207 $ 12,974
Funds held in Connecticut General Life Insurance
Guaranteed Income Fund 10,418,021 8,337,895
Participant Directed Investments:
At fair value:
Pooled separate accounts held by Connecticut
General Life Insurance
Corporate Bond Fund 1,554,506 1,494,203
High Yield Bond Fund - 1,558,968
CIGNA Lifetime60, 50, 40, 30 & 20 1,130,734 466,158
INVESCO Total Return - 48,471
Stock Index 1,306,969 524,779
Fidelity Advisor Equity Income - 2,228,405
Putnam Large Growth 4,066,607 2,689,497
Neuberger & Berman Partners - 1,411,696
Fidelity Advisor Equity Growth 8,766,282 5,281,100
Fidelity Advisor Growth Opportunities 13,142,253 12,829,281
Twentieth Century Ultra 3,325,652 1,018,733
Small Growth Fund 998,790 379,906
Small Company Stock Fund 5,436,774 5,493,081
Janus Worldwide 7,220,178 3,165,156
Fidelity Puritan 251,267 -
--------------- ----------------
47,200,012 38,589,434
--------------- ----------------
ACS Stock 5,905,093 4,032,024
Participant Loans 2,018,780 1,970,199
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NET ASSETS AVAILABLE FOR BENEFITS $ 65,639,113 $ 52,942,526
=============== ================
The accompanying notes are an integral part of these financial statements.
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
PARTICIPANT NON-PARTICIPANT
DIRECTED DIRECTED TOTAL
-------- -------- -----
ADDITIONS:
Contributions:
Participants $ 5,670,283 $ 592,359 $ 6,262,642
Employer (353,530) 1,218,068 864,538
Rollover from other plans 1,841,203 156,731 1,997,934
--------------- ------------- ---------------
Total contributions 7,157,956 1,967,158 9,125,114
--------------- ------------- ---------------
Earnings on investments:
Net realized/unrealized appreciation on investments 8,504,098 213,652 8,717,750
Other income 26,259 13,954 40,213
Interest/Dividends 598,116 14,205 612,321
--------------- ------------- ---------------
Total earnings on investments 9,128,473 241,811 9,370,284
--------------- ------------- ---------------
Total additions 16,286,429 2,208,969 18,495,398
--------------- ------------- ---------------
DEDUCTIONS:
Benefits paid to participants 6,844,771 549,071 7,393,842
Defaulted loan 3,025 - 3,025
Plan expenses 22,394 6,702 29,096
--------------- ------------- ---------------
Total deductions 6,870,190 555,773 7,425,963
--------------- ------------- ---------------
Net transfers from other plans 1,434,421 192,731 1,627,152
--------------- ------------- ---------------
Increase in net assets 10,850,660 1,845,927 12,696,587
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period 48,883,360 4,059,166 52,942,526
--------------- ------------- ---------------
End of period $ 59,734,020 $ 5,905,093 $ 65,639,113
=============== ============= ===============
The accompanying notes are an integral part of this financial statement.
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1. PLAN DESCRIPTION
The following description of the Affiliated Computer Services, Inc. (Company)
Savings Plan (Plan) provides only general information. Affiliated Computer
Services, Inc. is the sponsor of the Plan. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
GENERAL.
The Plan was established January 1, 1989, upon conversion of an existing
employee contribution savings plan. The Plan was amended and restated as of
January 1, 1999. The amended Plan merged the assets of the Affiliated Computer
Services, Inc. Savings Plan with the Roadway Savings Plan and the Micah Plan as
of January 1, 1999. Roadway and Micah are separate divisions owned by the
Company. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA) and Section 401(a) of the Internal Revenue Code of
1986.
Participants in the Plan have the option of investing their contributions to the
Plan in the following funds at December 31, 1999:
GENERAL ACCOUNT
CIGNA Charter Guaranteed Income Fund which is a fixed income fund that
invests in a diversified portfolio of high quality, fixed income
instruments (primarily intermediate-term bonds and commercial mortgages)
within Connecticut General Life Insurance Company's General Account. The
principal and interest earnings are guaranteed by CIGNA.
SEPARATE ACCOUNTS
CIGNA Charter Corporate Bond Fund primarily invests in investment-grade,
publicly traded U.S. dollar-denominated corporate bonds.
CIGNA Lifetime Funds are comprised of five distinct funds offering a
range of risk/return characteristics for 20, 30, 40, 50 and 60 year olds.
These funds include different bond/stock mixes that are appropriate for
individuals at different stages of their lives.
CIGNA Stock Market Index Account invests primarily in Standards and
Poor's 500 index companies.
Fidelity Advisor Growth Opportunities Fund invests in common stocks and
securities which are convertible into the common stock of companies
believed to have long-term growth potential.
Fidelity Advisor Equity Growth Account invests primarily in common and
preferred stock and securities convertible into common stock.
American Century - Twentieth Century Ultra Account invests in equity
securities of large and medium-sized companies that offer the potential
for better-than-average prospects for capital appreciation.
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 1. PLAN DESCRIPTION (CONTINUED)
SEPARATE ACCOUNTS (CONTINUED)
Large Company Stock - Growth Fund, managed by Putnam, invests primarily
in the equity securities selected from 600 to 1,000 companies that have
market capitalization of at least $2 billion, a minimum of 10% earnings
per share growth on a five year basis and evidence of ample liquidity.
Small Company Stock - Value I Fund (Berger Associates, Inc.) invests
primarily in common stocks of small companies.
Small Company Stock - Growth Fund, managed by Fiduciary Trust Company
International, invests primarily in the common and preferred stocks of
U.S. companies with market capitalization between $30 million and $3
billion with a focus on growing companies involved in new product
development and technological breakthroughs.
Janus Worldwide Account invests primarily in common stocks of foreign and
domestic companies to provide long-term growth of capital and
preservation of capital.
Affiliated Computer Services (ACS) stock is an investment in the
Company's stock.
Fidelity Puritan Fund invests approximately 60% of its assets in stocks
and other equity securities and the remainder in bonds and other debt
securities that may include a lower quality debt. At least 25% of the
total assets are invested in fixed income senior securities.
The following funds were available for contributions only through November 1,
1999. CIGNA discontinued the funds and gave participants until December 1, 1999
to transfer their money to other funds. Any remaining money in the funds were
moved to the Charter Guaranteed Income Fund, the Fidelity Advisor Growth
Opportunities Fund, and the Fidelity Puritan.
CIGNA Charter High Yield Bond Account includes investments in publicly
traded U.S. corporate debt obligations.
Neuberger & Berman Partners Account invests in common stocks of
established medium-to large-capitalization companies.
Fidelity Advisor Equity Income Account invests in income-producing equity
securities (common and preferred stock) and debt securities.
INVESCO Total Return Account which invests in equities, fixed- and
variable-income securities, common stocks, investment-grade corporate
debt obligations, obligations of the US government and its Agencies,
foreign equity and debt securities to achieve capital appreciation.
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 1. PLAN DESCRIPTION (CONTINUED)
FUNDING
The Plan is a defined contribution plan wherein participants elect to reduce
their compensation and have such reductions contributed to the Plan on their
behalf. The Plan covers employees of the Company who have at least six months of
service, attained the age of 18 and elect to participate.
Participating employees may contribute up to the lesser of fifteen percent of
covered compensation through payroll deductions or the maximum amount permitted
under applicable Internal Revenue Service provisions. The Company may make a
discretionary matching contribution to the plan based on a percentage of the
participant's compensation and company profitability as decided by the company's
Board of Directors. In 1999, the Company made matching contributions of 25% up
to 6% of compensation for Affiliated Computer Service, Inc. employees. The
Company made matching contributions of 50% up to 7% of compensation for
employees of the Roadway division. A discretionary match of $20,684 was made for
Micah division employees. Company matches are made in Affiliated Computer
Service, Inc. stock. Participants must maintain their matching contribution of
Company stock for at least two years. The Company may make a profit sharing
contribution, however no contribution was made for 1999.
ALLOCATION
Each participant's account is credited with the participants' and the Companies'
matching contributions and allocated monthly to each participant's account.
Investment income or loss is allocated daily based on the ratio of each
participant's account balance at the end of each day.
Company profit sharing contributions are allocated among participants on the
last day of the Plan year in the same proportion of the entitled participant's
compensation for such Plan year bears to the total compensation of all entitled
participants.
VESTING
Employee contributions are 100% vested. Vesting of employer contributions occurs
at the following rates:
Years of Vesting Service Vested Interest
------------------------ ---------------
Less than two years 0%
Two to three years 50%
Three to four years 100%
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 or up to a
maximum equal to the lesser of $50,000 or 50 percent of their account balance.
Loan transactions are treated as a transfer to (from) the investment fund and
from (to) the Participant Notes fund. Loan terms range from 1-5 years or within
a reasonable time if the purpose of the loan is to acquire a primary residence.
The balance in the participant's account secures the loans. The interest rate is
a reasonable rate commensurate with current rates. Interest rates range from 5
percent to 15 percent. Principal and interest is paid ratably through weekly
payroll deductions. Participant notes receivable are valued at cost which
approximates fair values.
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 1. PLAN DESCRIPTION (CONTINUED)
TERMINATION
The Company's Board of Directors may terminate the Plan at any time. Upon
termination, the Board of Directors may elect to distribute to each participant,
or his or her beneficiary, the proportionate share of the Plan's assets as
determined by the individual account balances on the date of termination, or
continue the existence of the trust for the purpose of paying benefits as they
become due under the terms of the Plan. In addition, upon termination of the
Plan, participants' vested interest in employer contributions shall be 100%.
Upon termination of service, a participant may elect to receive either a
lump-sum amount equal to the value of his or her account, or one of various
installment payments available under the Plan.
FORFEITURES
Forfeitures are first used to reinstate previously forfeited account balances of
rehired former participants and any remaining forfeitures serve to reduce the
employer contributions. At December 31, 1999, the Plan maintained a balance of
$3,083 in forfeited non-vested accounts.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of the Plan is presented to
assist in understanding the financial statements. The financial statements and
notes are representations of the Plan's administrator, who is responsible for
their integrity and objectivity. The accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions that affect certain reported amounts and disclosures, such as fair
value. Accordingly, actual results may differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
CIGNA Retirement & Investment Services holds the Plan's investments. The fair
value per unit/share is stated at quoted market prices. Purchases and sales of
securities are recorded on a trade-date basis. Interest income is recorded on
the accrual basis.
The Plan presents, in the statement of changes in net assets available for
benefits, the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
PAYMENT OF BENEFITS
Benefit payments are recorded when paid.
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 3. INCOME TAX STATUS
The Internal Revenue Service has determined by letter dated November 3, 1989,
that the Plan, as then designed, was in compliance with the applicable sections
of the IRC. The Plan has since been amended, however, the Plan administrator and
the Plan's tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC. Therefore,
no provision for income taxes has been included in the Plan's financial
statements.
NOTE 4. TERMINATED EMPLOYEE INFORMATION
The Plan holds funds for 550 terminated employees with account balances totaling
$7,842,971 at December 31, 1999.
NOTE 5. INVESTMENTS
The Plan maintains the following investments which represent 5% or more of net
assets available for benefits at December 31, 1999:
Participant Directed:
Guaranteed Income Fund $ 10,418,021
Putnam-Large Growth 4,066,607
Fidelity Advisor Equity Growth Fund 8,766,282
Fidelity Advisor Growth Opportunities 13,142,253
Twentieth Century Ultra 3,325,652
Small Company Stock Fund 5,436,774
Janus Worldwide 7,220,178
Non-participant directed:
ACS Stock 5,905,093
NOTE 6. INFORMATION CERTIFIED BY TRUST COMPANY
Under the Department of Labor's ("DOL") regulations, certain assets and related
information held by a bank, trust company, or similar institution or an
insurance company that is regulated and subject to periodic examination by a
state or federal agency does not have to be audited, provided the plan
administrator exercises this option and the institution holding the assets
certifies the required information. CIGNA has provided certification as to the
completeness and accuracy of all information presented in the accompanying
statement of net assets available for plan benefits as of December 31, 1999 and
for the year then ended, except for information related to participant loan
information. The accompanying supplemental schedules also include information
certified by CIGNA as being complete and accurate except for information related
to participant loans and investment costs.
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 7. RELATED PARTY TRANSACTIONS
The Plan invests in units of pooled separate accounts managed by a subsidiary of
CIGNA, who acts as custodian of the Plan's assets as defined, by the Plan. These
transactions qualify as party-in-interest transactions. However, they are exempt
from the prohibited transaction rules.
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AFFILIATED COMPUTER SERVICES, INC.
SAVINGS PLAN
DECEMBER 31, 1999
SUPPLEMENTAL SCHEDULES
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AFFILIATED COMPUTER SERVICES, INC. SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
EIN# 51-0310342
PLAN NUMBER: 001
(c) DESCRIPTION OF INVESTMENT,
(b) IDENTITY OF ISSUE, INCLUDING MATURITY DATE, RATE OF
BORROWER, LESSOR, OR INTEREST, COLLATERAL, PAR, OR MATURITY (e) CURRENT
(a) SIMILAR PARTY VALUE (d) COST VALUE
----- --------------------------- -------------------------------------------------- ----------------------- ---------------
* CIGNA CHTR. Guaranteed Income Fund $10,418,021 $ 10,418,021
* CIGNA CHTR. Corporate Bond-CIGNA 1,512,100 1,554,506
* CIGNA CIGNA Lifetime 60 126,262 134,713
* CIGNA CIGNA Lifetime 50 249,764 294,545
* CIGNA CIGNA Lifetime 40 389,319 459,894
* CIGNA CIGNA Lifetime 30 129,851 150,948
* CIGNA CIGNA Lifetime 20 69,859 90,634
* CIGNA Chtr Large Co Stk Index-CIGNA 1,102,436 1,306,969
* CIGNA Chtr Lg Co Stock Growth-Putnam 2,870,850 4,066,607
* CIGNA Fidelity Advisor Equity Growth 6,009,389 8,766,282
* CIGNA Fidelity Adv Growth Opportunites 11,443,457 13,142,253
* CIGNA American Century Ultra Account 2,472,556 3,325,652
* CIGNA Chtr Sm Co Stk Growth-Fiduciary 719,109 998,790
* CIGNA CHTR. Sm Co Stock Value I - Berger 4,872,536 5,436,774
* CIGNA Janus Worldwide Account 4,543,052 7,220,178
* NATL FIN SER CORP Affiliated Computer Services Stock 4,865,140 5,905,093
* CIGNA Fidelity Puritan Account 241,565 251,267
* CIGNA Cash Transaction Account (GST) 97,207 97,207
Participant Loans (5 to 15% interest rate) - 2,018,780
------------------- -------------------
$52,132,473 $ 65,639,113
=================== ===================
* Denotes a party-in-interest.
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INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
23 Consent of Salmon, Beach & Company, P.C.