e11vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
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Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2007
Or
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Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
Commission File Number: 001-12665
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
ACS SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
AFFILIATED COMPUTER SERVICES, INC.
2828 North Haskell Avenue
Dallas, Texas 75204
Notices and communications from the Securities and Exchange Commission relative to
this report should be forwarded to:
Tas Panos, Esq.
Executive Vice President, Secretary And General Counsel
Affiliated Computer Services, Inc.
2828 North Haskell Avenue
Dallas, Texas 75204
(214) 841-6147
REQUIRED INFORMATION
The ACS Savings Plan is subject to the requirements of the Employee
Retirement Income Security Act of 1974 (ERISA). Included herein is a copy of
the most recent financial statements and schedules of the ACS Savings Plan
prepared in accordance with the financial reporting requirements of ERISA.
ACS Savings Plan
Financial statements and report of
Independent registered public accountants
As of December 31, 2007 and 2006,
And for the Year Ended December 31, 2007
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Plan Committee of
ACS Savings Plan
We have audited the accompanying statements of net assets available for benefits of the ACS Savings
Plan (the Plan) as of December 31, 2007 and 2006, and the related statement of changes in net
assets available for benefits for the year ended December 31, 2007. These financial statements are
the responsibility of the Plans management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). 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 consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plans internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As further discussed in Note B, the Plan adopted Financial Accounting Standards Board Staff
Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts
Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and
Defined-Contribution Health and Welfare and Pension Plans as of and for the year ended December 31,
2007.
In our opinion, 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, 2007 and 2006, and
the changes in net assets available for benefits for the year ended December 31, 2007 in conformity
with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental schedule on pages 18 and 19, together referred to as
supplemental information, 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 Labors Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental information is the responsibility of the
Plans management. The supplemental information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are fairly stated in
all material respects in relation to the basic financial statements taken as a whole.
/s/ Chapman,
Hext & Co., P.C.
Richardson, Texas
June 17, 2008
-1-
ACS SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 2007 and 2006
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2007 |
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2006 |
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ASSETS
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Investments |
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Non-interest bearing cash |
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$ |
717 |
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$ |
7,782 |
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Participant directed investments (at fair value) |
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636,746,270 |
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588,367,850 |
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636,746,987 |
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588,375,632 |
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Contributions receivable |
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Employer |
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364,950 |
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219,763 |
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Participants |
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2,514,134 |
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1,570,550 |
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Total contributions receivable |
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2,879,084 |
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1,790,313 |
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Total assets |
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639,626,071 |
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590,165,945 |
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LIABILITIES
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Operating payables |
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40,500 |
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118,697 |
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Net assets available for plan benefits |
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$ |
639,585,571 |
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$ |
590,047,248 |
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See independent auditors report and accompanying notes to financial statements.
-2-
ACS SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 2007
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ADDITIONS TO NET ASSETS ATTRIBUTED TO: |
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Earnings on investments |
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Net appreciation in fair value of assets |
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$ |
35,297,323 |
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Interest |
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6,401,155 |
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Total earnings on investments |
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41,698,478 |
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Contributions |
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Employer |
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9,597,288 |
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Participants |
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62,263,127 |
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Participant rollovers |
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7,527,936 |
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Total contributions |
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79,388,351 |
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Total additions |
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121,086,829 |
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: |
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Benefits paid to participants |
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81,897,886 |
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Plan expenses |
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320,505 |
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Total deductions |
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82,218,391 |
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Increase in net plan assets before net transfers to the plan |
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38,868,438 |
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NET TRANSFERS IN DUE TO MERGERS (NOTE J) |
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10,669,885 |
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Increase in net assets |
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49,538,323 |
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NET ASSETS AVAILABLE FOR PLAN BENEFITS: |
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Beginning of the year |
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590,047,248 |
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End of the year |
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$ |
639,585,571 |
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See independent auditors report and accompanying notes to financial statements.
-3-
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE A PLAN DESCRIPTION
The following description of the ACS Savings Plan (the Plan) provides only general information.
Affiliated Computer Services, Inc. (the Company) is the sponsor and administrator of the Plan.
Mellon Bank N.A. is the Plan Trustee. Participants should refer to the Plan agreement for a more
complete description of the Plans provisions.
General
The Plan as amended and restated was established January 1, 1989, upon conversion of an existing
employee contribution savings plan.
401(k) Provisions
Contributions are by salary reduction and are at the employees discretion within limits imposed by
the 401(k) provisions of the Plan and the applicable Internal Revenue Code sections. The
participant accounts are participant directed accounts.
Plan Amendments
The Plan was amended during the years ended December 31, 2007 and 2006.
A summary of the 2007 plan amendments are as follows.
On
March 1, 2007, the Systech Inc. 401(k) Plan merged into the ACS Savings Plan. A transfer of
all assets and liabilities of the Systech Inc. 401(k) Plan to the ACS Plan was authorized.
Eligible employees of Systech Inc. shall participate in the Plan.
On March 19, 2007, the ACS Plan was amended to provide specific discretionary employer
profit-sharing contributions for certain employees of ACS Human Services, LLC who were
previously employees of the State of Indiana.
On April 1, 2007, the LiveBridge, Inc. 401(k) Plan merged into the ACS Savings Plan. A
transfer of all assets and liabilities of the LiveBridge, Inc. 401(k) Plan to the ACS Plan was
authorized. Eligible employees of LiveBridge, Inc. shall participate in the Plan.
On June 1, 2007, the Primax Recoveries Incorporated Employees 401(k) Plan merged into the ACS
Savings Plan. A transfer of all assets and liabilities of the Primax Recoveries Incorporated
Employees 401(k) Plan to the ACS Plan was authorized. Eligible employees of Primax
Recoveries Incorporated shall participate in the Plan.
-4-
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE A PLAN DESCRIPTION
During 2007, the Company entered into outsourcing arrangements, and as a result of those
arrangements, certain affected employees became ACS employees. The Plan was amended to allow
former employees of Exigent Computer Group, Inc., Albion, Inc., and Walt Disney Company to
begin participating in the Plan. Employees would receive the ACS corporate benefit structure
effective on and after the date they are eligible to participate in the Plan as follows:
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Prior Employer |
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ACS Participation Eligibility Date |
Exigent Computer Group, Inc.
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January 1, 2007 |
Albion, Inc.
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April 17, 2007 |
Walt Disney Company
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May 5, 2007 |
A summary of the 2006 plan amendments are as follows.
On January 1, 2006, the ACS Consultant Holdings Plan (formerly known as Superior Consultant
Holdings Corp. 401(k) Profit Sharing Plan) merged into the ACS Savings Plan. A transfer of
all assets and liabilities of the ACS Consultant Holdings Plan to the ACS Plan was authorized.
Former participants in the ACS Consultant Holdings Plan shall participate in the Plan.
On January 1, 2006, the ACS Plan was amended to accept the transfer of the assets attributable
to the benefits of HR Solutions employees from the Mellon Human Resources & Investor
Solutions, Inc. 401(k) Savings Plan into the ACS Plan.
On April 1, 2006, the ASCOM Transport Systems, Inc. 401(k) Plan merged into the ACS Savings
Plan. A transfer of all assets and liabilities of the ASCOM Transport Systems, Inc. 401(k)
Plan to the ACS Plan was authorized. Eligible employees of ASCOM Transport Systems, Inc.
shall participate in the Plan.
On June 1, 2006, ACS acquired the assets of Healthcare Consulting Benefits Review LLC. As a
result of the acquisition, affected employees became ACS employees. The plan was amended so
all eligible employees would begin participation in the Plan and receive the ACS corporate
benefit structure.
On November 30, 2006 ACS acquired the assets of Exigent Computer Group, Inc. As a result of
that acquisition, certain employees of Exigent became ACS employees on January 1, 2007, and
were eligible to participate in the ACS Plan on January 1, 2007.
-5-
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE A PLAN DESCRIPTION
During 2006, the Company entered into outsourcing arrangements, and as a result of those
arrangements, certain affected employees became ACS employees. The Plan was amended to allow
former employees of GlaxoSmithKline, Inc., MeadWestvaco, Walt Disney Company, and United
Technologies Corporation to begin participating in the Plan. Employees would receive the ACS
corporate benefit structure effective on and after the date they are eligible to participate
in the Plan as follows:
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Prior Employer |
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ACS Participation Eligibility Date |
GlaxoSmithKline, Inc.
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February 2, 2006 |
MeadWestvaco
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April 1, 2006 |
Walt Disney Company
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February 5, 2006 |
United Technologies Corporation
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March 16, 2006 |
Salary Deferral
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. Generally, the Plan covers all
eligible employees of the Company who elect to participate except those who are leased or are
nonresident aliens not receiving United States source income. The Plan also allows for rollovers
from other plans.
Employees are eligible to contribute on their date of hire or as soon thereafter as
administratively feasible. Participating employees are eligible for matching contributions
immediately following completion of a one-year period of service.
Employees can elect to contribute to the Plan for not less than 1% nor more than 18% of
compensation. The term compensation for calculation of deferral shall be base pay, overtime and
commissions. The maximum of contributions allowed by the Internal Revenue Service was $15,500 and
$15,000 for 2007 and 2006, respectively. The Company matches the deferral contributions of 25% of
pre-tax deferral up to 6% of compensation. No after-tax contributions may be made to the Plan.
Participating employees are eligible to make catch-up contributions under the Plan provided the
participating employees have attained or will attain the age of 50 before the close of the year.
The amount of catch-up contributions allowed by the Internal Revenue Services was $5,000 and $5,000
for 2007 and 2006, respectively. The catch-up contributions are excluded in calculating the
matching compensation.
-6-
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE A PLAN DESCRIPTION
For 2006, Company matching contributions were made to the ACS Employer Stock Fund. However,
beginning on September 29, 2006, the ACS employer Stock Fund was frozen due to the invalid
registration statement of ACS stock. All contributions made after the suspension of trading have
been allocated to the Fidelity Retirement Money Market Portfolio.
For 2007, all matching contributions have been allocated to the Fidelity Retirement Money Market
Portfolio.
Allocation
Each participants account is credited with the participants salary deferral and the Companys
matching contributions are allocated bi-weekly to each participants account. Investment income or
loss is allocated daily based on the ratio of each participants account balance at the end of each
day.
Vesting
Vesting of all employer contributions occurs at the following rates for employees of all employers
enrolled in the Plan. Employee contributions and rollover contributions are 100% vested. The
vesting schedule applicable to matching contributions in 2007 and 2006 is:
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Years in Vesting Service |
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Vested Interest |
Less than two years |
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0 |
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Two to three years |
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50 |
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Three or more years |
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100 |
% |
Participant Loans
Participants may borrow from their fund accounts, through a loan transaction, a minimum of $1,000
or up to a maximum of $50,000 not to exceed 50% of their vested account balance.
The balance in the participants account is used to secure the loans. These loan transactions are
treated as a transfer between the investment fund and the participant notes fund. The loan terms
range from one to five years or within a reasonable time if the purpose of the loan is to acquire a
primary residence. The interest rate on loan transactions is commensurate with current rates. As
of December 31, 2007 and 2006, interest rates on outstanding loan balances ranged from 3.49% to
11.0%. Total loans outstanding as of December 31, 2007 and 2006 were $17,623,056 and $16,201,814
respectively.
-7-
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE A PLAN DESCRIPTION
Principal and interest are paid ratably through payroll deductions. Participant notes receivable
are valued at cost, which approximates fair values. A participant may not have more than two loans
outstanding at the same time.
Termination
Although it has not expressed any intent to do so, the Companys 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 Plans 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, the participants vested interest in employer contributions
shall be 100%.
Upon termination of service, a participant may elect to receive a lump-sum amount equal to the
value of his or her account.
Forfeitures
Forfeitures are used to reduce employer matching or profit sharing contributions or plan
administrative expenses. At December 31, 2007 and 2006, the Plan maintained a balance of $126,356
and $306,325, respectively, in forfeited non-vested accounts and utilized $522,547 and $656,022,
respectively, in forfeitures to offset employer contributions and plan expenses.
Plan Administrative Costs
The Plan sponsor absorbs the portion of administrative costs of the Plan not paid by forfeitures.
Funding Policy
It is the policy of the Plan sponsor to remit the employee and employer contribution three business
days after the date of payroll.
NOTE B 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 Plans
administrator, who is responsible for their integrity and objectivity. The accounting policies
conform to accounting principles generally accepted in the United States of America and have been
consistently applied in the preparation of the financial statements.
-8-
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires the plan administrator to make estimates and assumptions
that affect certain reported amounts and disclosures, such as fair value. Actual results may
differ from those estimates.
Guaranteed Investment Contracts
As described in Financial Accounting Standards Board Staff position, FSP AAG INV-1 and SOP 94-4-1,
Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies
Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and
Pension Plans (the FSP), investment contracts held by a defined-contribution plan are required to
be reported at fair value. However, contract value is the relevant measurement attribute for that
portion of the net assets available for benefits of a defined-contribution plan attributable to
fully benefit-responsive investment contracts because contract value is the amount participants
would receive if they were to initiate permitted transactions under the terms of the Plan. As
required by the FSP, the statements of net assets available for benefits should present the fair
value of the investment contracts as well as the adjustment of the fully benefit-responsive
investment contracts from fair value to contract value. The statement of changes in net assets
available for benefits is prepared on a contract value basis. As of December 31, 2007, the Great
West Guaranteed fund held approximately $210,672 of assets and is closed to new contributions. The
Custodian estimates that contract value approximates fair market value and deems no adjustment
necessary.
Investment Valuation and Income Recognition
Mellon Bank N.A. holds the Plan investments. The fair value per unit/share is stated at quoted
market prices as determined by Mellon Bank N.A. Purchases and sales of securities are recorded on
a trade-date basis. Dividends are recorded on the ex-dividend date. 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 (losses) and the unrealized appreciation (depreciation) on those investments.
Payment of Benefits
Benefit payments are recorded when paid.
-9-
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE C DEPARTMENT OF LABOR REVIEW
In May 2006, the Plan sponsor was advised by the U.S. Department of Labor (DOL) of their
intention to review the Plan under Section 504 of the Employee Retirement Income Security Act of
1974. The DOL began the review in August 2006. The Plan sponsor was notified that the review will
remain open until the ACS stock option backdating investigation is complete.
NOTE D PLAN LEGAL MATTERS
The plan is subject to various outstanding legal proceedings. In 2006, the plan was named as a
defendant in the derivative lawsuit investigation. Two lawsuits were filed under the Employee
Retirement Income Security Act (ERISA) alleging breach of ERISA fiduciary duties by the directors
and officers as well as the ACS Benefits Administrative Committee, in connection with the retention
of ACS Class A common stock as an investment option in light of the alleged stock option issues,
as follows:
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Terri Simeon, on behalf of Herself and All Others Similarly Situated, Plaintiff, vs.
Affiliated Computer Services, Inc., Darwin Deason, Mark A. King, Lynn R. Blodgett, Jeffrey
A. Rich, Joseph ONeill, Frank Rossi, J. Livingston Kosberg, Dennis McCuistion, The
Retirement Committee of the ACS Savings Plan, and John Does 1-30, Civil Action No.
306-CV-1592P, in the United States District Court for the Northern District of Texas,
Dallas Division, filed August 31, 2006. |
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Kyle Burke, Individually and on behalf of All Others Similarly Situated, Plaintiff,
vs. Affiliated Computer Services, Inc., the ACS Administrative Committee, Lora Villarreal,
Kellar Nevill, Gladys Mitchell, Meg Cino, Mike Miller, John Crysler, Van Johnson, Scott
Bell, Anne Meli, David Lotocki, Randall Booth, Pam Trutna, Brett Jakovac, Jeffrey A. Rich,
Mark A. King, Darwin Deason, Joseph P. ONeill, and J. Livingston Kosberg, Case No.
306-CV-02379-M, in the United States District Court for the Northern District of Texas,
Dallas Division, filed September 15, 2006. |
On February 12, 2007, the Simeon Case and the Burke case were consolidated into one
case, under the caption, In re Affiliated Computer Systems [sic] ERISA Litigation, Master
File No. 3:06-CV-1592-M. On December 20, 2007, an Order Preliminarily Approving Settlement was
entered in the In re Affiliated Computer Systems [sic] ERISA Litigation consolidated case.
Principally, the settlement provides for a payment to the plaintiffs and the ACS Savings Plan of a
total of $1.5 million, which includes attorney fees, and is subject to final approval of the court.
- 10 -
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE E INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter dated June 13,
2006, that the Plan and related trust are designed in accordance with applicable sections of the
Internal Revenue Code (IRC). Although the Plan has been amended since receiving the determination
letter, the Plan administrator and the Plans tax counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable requirements of the IRC. The Plan filed
an application for a determination letter on February 1, 2008.
NOTE F INVESTMENTS
The Plan maintains the following investments representing 5% or more of net assets available for
benefits at December 31, 2007 and 2006:
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2007 |
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2006 |
Fidelity Growth Company Fund |
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$ |
83,460,183 |
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$ |
70,012,031 |
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Fidelity Low Priced Stock Fund |
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43,398,405 |
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48,464,078 |
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Fidelity Money Market Trust Retirement |
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107,893,249 |
|
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|
96,394,284 |
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Fidelity Spartan US Equity Index Fund |
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41,139,636 |
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41,259,428 |
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Fidelity Diversified Intl Fund |
|
|
56,978,638 |
|
|
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45,371,525 |
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Vanguard Global Equity Fund |
|
|
37,557,466 |
|
|
|
35,902,256 |
|
The Plan invests in various investment securities which, in general, are exposed to various risks,
such as interest rate, credit and overall market volatility risks. Further, due to the level of
risk associated with certain investment securities it is at least reasonably possible that changes
in values of investment securities will occur in the near term and that such changes could
materially affect participants account balances and the amounts reported in the Statements of Net
Assets Available for Benefits.
The Plan invests in a Master Trust arrangement consisting of common stock. Investment information
related to the Master Trust arrangement is as follows:
- 11 -
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE F INVESTMENTS
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2007 |
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2006 |
Net assets |
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Common stock |
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$ |
34,022,286 |
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$ |
41,643,712 |
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Year Ended |
|
|
December 31, 2007 |
Change in net assets: |
|
|
|
|
Contributions |
|
$ |
4,152,763 |
|
Interest/Dividends |
|
|
134,394 |
|
Net appreciation of investments |
|
|
(525,688 |
) |
Benefits paid to participants |
|
|
(266,103 |
) |
Net transfer to/from the Fund |
|
|
(11,116,792 |
) |
|
|
|
|
|
|
|
|
|
Net change |
|
$ |
(7,621,426 |
) |
|
|
|
|
The Net Assets of the Master Trust Investment at year end shall equal the aggregate value of the
assets of the Master Trust Investment less the value of the accrued liabilities of the Master Trust
Investment. The assets of the Master Trust Investment shall be determined in accordance with
generally recognized valuation procedures based upon prices and quotes from independent pricing
services.
During the
year ended December 31, 2007, the Plans investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in value by $35,297,323
as follows:
|
|
|
|
|
|
|
2007 |
Mutual funds |
|
$ |
35,688,661 |
|
Nonemployee corporate stock |
|
|
850,841 |
|
ACS Stock Fund |
|
|
(1,242,179 |
) |
|
|
|
|
|
|
$ |
35,297,323 |
|
|
|
|
|
- 12 -
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE G INVESTMENT CONTRACTS WITH INSURANCE COMPANY
The Plan has a fully benefit-responsive investment contract with Great West Retirement Services
(Great West). Great West maintains the contributions in a general account. The account is
credited with earnings on the investments and is charged for Plan withdrawals and administrative
expenses charged by Great West. Discontinuance of the contract would result in certain surrender
charges and market value adjustments as defined by the contract. The contract is included in the
financial statements at fair value as reported to the Plan by Great West. Contract value
represents deposits made under the contract, plus earnings at guaranteed crediting rates, less
withdrawals and administrative expenses. Principal and interest at crediting rates, which are
announced in advance on an annual basis, are guaranteed; however, there is no stated maturity date.
The average yield for the year ended December 31, 2007 was 3.16%.
NOTE H RELATED PARTY TRANSACTIONS
The Plan invested in investments managed by Mellon Bank N.A. the custodian of the Plans assets, as
defined by the Plan. These transactions qualify as party-in-interest transactions. However, these
transactions are exempt from the prohibited transaction rules.
The Plan allows for participant loans. These loans qualify as party-in-interest transactions.
However, these transactions are exempt from the prohibited transaction rules.
The Company provides certain accounting, administrative, and investment management services to the
Plan for which no fees are charged. These transactions are exempt party-in-interest transactions.
NOTE I DERIVATIVES
The Plan has no instruments that, in whole or part, are accounted for as a derivative instrument
under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, during
the current plan year.
NOTE J PLAN MERGERS
A summary of Plan mergers for 2007 are as follows:
Assets of Systech, Inc. 401(k) Savings Plan were transferred into the ACS Savings Plan in
March 2007. The funds transferred totaled approximately $1,244,041 and were reinvested with
Mellon in similar investments.
- 13 -
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE J PLAN MERGERS
Assets of LiveBridge, Inc. 401(k) Profit Sharing Plan were transferred into the ACS Savings
Plan on April 3, 2007. The funds transferred totaled approximately $2,756,303 and were
reinvested with Mellon in similar investments.
Assets of Primax Recoveries Incorporated Employees 401(k) Plan were transferred into the ACS
Savings Plan in June 2007. The funds transferred totaled approximately $6,354,812 and were
reinvested with Mellon in similar investments.
Participant loans of $314,729 were also transferred into the Plan through various mergers.
The Statement of Changes in Net Assets Available for Benefits includes the activity from the
employees of these companies from the date the assets were merged into the ACS Savings Plan
to December 31, 2007.
A summary of Plan mergers for 2006 are as follows:
Assets of Superior Consultant Holdings, Inc. 401(k) Profit Sharing Plan were transferred into
the ACS Savings Plan and the Superior Consultant Holdings, Inc. 401(k) Profit Sharing Plan,
as it previously existed, was merged in January 2006. The funds transferred totaled
approximately $26,293,807 and were reinvested with Mellon in similar investments.
Assets of ASCOM Transport Systems, Inc. 401(k) Retirement Plan were transferred into the ACS
Savings Plan and the ASCOM Transport Systems, Inc. 401(k) Retirement Plan, as it previously
existed, was merged in April 2006. The funds transferred totaled approximately $6,417,175
and were reinvested with Mellon in similar investments.
Assets of Mellon Human Resources & Investor Solutions, Inc. 401(k) Savings Plan were
transferred into the ACS Savings Plan in June 2006. The funds transferred totaled
approximately $20,952,895 and were reinvested with Mellon in similar investments.
Participant loans of $2,275,480 were also transferred into the Plan through the various
mergers.
The Statement of Changes in Net Assets Available for Benefits includes the activity from the
employees of these companies from the date the assets were merged into the ACS Savings Plan to
December 31, 2006.
- 14 -
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE K RISKS AND UNCERTAINTIES
The Plan invests in a variety of investment funds. Investments in general are exposed to various
risks, such as interest rate, credit, and overall volatility risk. Due to the level of risk
associated with certain investments, it is reasonably possible that changes in the values of
investments will occur in the near term and that such changes could materially affect the amounts
reported in the statement of Net Assets Available for Benefits.
NOTE L SUBSEQUENT EVENTS
In the normal course of business, the Company may consolidate additional subsidiaries into or
eliminate current subsidiaries from the ACS Savings Plan.
On April 4, 2007, ACS acquired substantially all of the outstanding equity interests of CDR
Associates, LLC. Effective on March 1, 2008, the CDR Plan merged into and was succeeded by the ACS
Plan. As a result of this transaction, eligible employees of CDR Associates, LLC who were
participants in the CDR Plan on December 31, 2007, and who were ACS controlled group employees on
January 1, 2008 were authorized to participate in the ACS Plan as of January 1, 2008. Prior
service with CDR on and after January 1, 2002 shall be credited for all Eligible Employees of CDR
for purposes of vesting under the ACS Plan as if such service had been rendered to an ACS
controlled group member.
On June 1, 2006, ACS acquired substantially all of the outstanding equity interests of Intellinex,
LLC. Effective on March 1, 2008, the Intellinex Plan merged into and was succeeded by the ACS
Plan. As a result of this transaction, eligible employees of Intellinex, LLC who were participants
in the Intellinex Plan on December 31, 2007, and who were ACS controlled group employees on January
1, 2008 were authorized to participate in the ACS Plan as of January 1, 2008. Prior service with
Intellinex shall be credited for all Eligible Employees of Intellinex for purposes of vesting under
the ACS Plan as if such service had been rendered to an ACS controlled group member.
On February 19, 2008, ACS acquired substantially all of the outstanding equity interests of Bowers
and Associates, Inc. Effective on May 1, 2008, the Bowers and Associates, Inc. Plan merged into
and was succeeded by the ACS Plan. As a result of this transaction, eligible employees of Bowers
and Associates, Inc. who were participants in the Bowers and Associates, Inc. Plan on April 30,
2008, and who were ACS controlled group employees on May 1, 2008 were authorized to participate in
the ACS Plan as of May 1, 2008. Prior service with Bowers and Associates, Inc. shall be credited
for all Eligible Employees of Bowers and Associates, Inc. for purposes of vesting under the ACS
Plan as if such service had been rendered to an ACS controlled group member.
- 15 -
ACS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
NOTE L SUBSEQUENT EVENTS
On March 25, 2008, ACS acquired substantially all of the outstanding equity interests of
Communications Development, Inc. (CDI) Effective on May 1, 2008, the CDI Plan merged into and was
succeeded by the ACS Plan. As a result of this transaction, eligible employees of CDI who were
participants in the CDI Plan on May 1, 2008, and who were ACS controlled group employees on May 1,
2008 were authorized to participate in the ACS Plan as of May 1, 2008. Prior service with CDI
shall be credited for all Eligible Employees of CDI for purposes of vesting under the ACS Plan as
if such service had been rendered to an ACS controlled group member.
On May 20, 2008, ACS entered into the Voluntary Correction Program to amend the Plan to be in full
compliance with Internal Revenue Code section 401(k) and (m) plans.
As of December 31, 2007, the Plan sponsor was in the process of amending the plan documents. Some
of the amendments will include change in investment line up, employer matching formula and
participant fee arrangements.
As of December 31, 2007, the Plan was in the process of obtaining an updated plan determination
letter from the Internal Revenue Service.
NOTE M SEPARATED PARTICIPANTS WITH VESTED BENEFITS
There were 5,999 and 7,428 terminated participants with vested benefits of $180,357,393 and
$169,690,024 as of December 31, 2007 and 2006, respectively.
NOTE N FORM 5500
The Form 5500 was not available for review at the time of filing the audited financial statements
on Form 11-K with the Securities and Exchange Commission. However, in order to comply with ERISA,
a comparison and reconciliation of the audited financial statements with the Form 5500 will occur
before the Form 5500 is finalized and filed (with the accompanying audited financial statements).
The plan administrator does not anticipate any changes to these financial statements as a result of
this reconciliation.
16
ACS SAVINGS PLAN
SCHEDULE H, LINE 4i SCHEDULE OF ASSETS (HELD AT END OF YEAR)
FOR THE YEAR ENDED DECEMBER 31, 2007
EIN #51-0310342 PLAN NUMBER 333
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
(b) Identity of Issue, |
|
(c) Description of investment, including |
|
(d) Cost |
|
(e) Current Value |
|
|
|
Borrower, Lessor or |
|
maturity date, rate of interest, collateral, |
|
|
|
|
|
|
|
|
Similar Party |
|
par, or maturity value |
|
|
|
|
|
|
* |
|
Mellon |
|
AIM Dynamics Inv (Investor Class) |
|
|
|
$ |
12,978,935 |
|
* |
|
Mellon |
|
American Beacon FDS Small Cap Value Fund |
|
|
|
|
7,812,773 |
|
* |
|
Mellon |
|
Blair William Small Cap Growth Fund |
|
|
|
|
3,494,224 |
|
* |
|
Mellon |
|
Bridgeway Small Cap Growth Fund |
|
|
|
|
2,417 |
|
* |
|
Mellon |
|
Brokerage Account Self Directed |
|
|
|
|
420,584 |
|
* |
|
Mellon |
|
BSDT Late Money Deposit Account |
|
|
|
|
9,944 |
|
* |
|
Mellon |
|
Commonwealth International Australia/New
Zealand Fund |
|
|
|
|
2,605 |
|
* |
|
Mellon |
|
Direxion Latin American Bull 2x Fund |
|
|
|
|
3,589 |
|
* |
|
Mellon |
|
Dreyfus 100% US Treasury Money Market
Fund |
|
|
|
|
77,732 |
|
* |
|
Mellon |
|
Dreyfus Premier International Greater
China Fund |
|
|
|
|
11,028 |
|
* |
|
Mellon |
|
EB Temporary Investment Fund II |
|
|
|
|
1,042,618 |
|
* |
|
Mellon |
|
Fidelity Aberdeen Trust Freedom 2040 Fund |
|
|
|
|
7,900,251 |
|
* |
|
Mellon |
|
Fidelity Diversified International Fund |
|
|
|
|
56,978,638 |
|
* |
|
Mellon |
|
Fidelity Equity-Income Fund |
|
|
|
|
26,866,115 |
|
* |
|
Mellon |
|
Fidelity Freedom 2000 Fund |
|
|
|
|
3,054,575 |
|
* |
|
Mellon |
|
Fidelity Freedom 2010 Fund |
|
|
|
|
11,093,854 |
|
* |
|
Mellon |
|
Fidelity Freedom 2020 Fund |
|
|
|
|
17,122,621 |
|
* |
|
Mellon |
|
Fidelity Freedom 2030 Fund |
|
|
|
|
12,954,727 |
|
* |
|
Mellon |
|
Fidelity Freedom Income Fund |
|
|
|
|
3,084,553 |
|
* |
|
Mellon |
|
Fidelity Mount Vernon Growth Company Fund |
|
|
|
|
83,460,183 |
|
* |
|
Mellon |
|
Fidelity Investment Japan Small Cos Fund |
|
|
|
|
782 |
|
* |
|
Mellon |
|
Fidelity Low-Priced Stock Fund |
|
|
|
|
43,398,405 |
|
* |
|
Mellon |
|
Fidelity Money Market Trust Retirement |
|
|
|
|
107,893,249 |
|
* |
|
Mellon |
|
Fidelity Spartan US Equity Index Fund |
|
|
|
|
41,139,636 |
|
* |
|
Mellon |
|
Franklin Small Cap Growth Fund I Class A |
|
|
|
|
19,361,735 |
|
* |
|
Mellon |
|
Great West Guaranteed Fund |
|
|
|
|
210,672 |
|
* |
|
Mellon |
|
Harris Assoc Investment Oakmark Global Select Fund |
|
|
|
|
3,496 |
|
18
\
|
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|
|
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|
|
|
|
|
|
(a) |
|
(b) Identity of Issue, |
|
(c) Description of investment, including |
|
(d) Cost |
|
(e) Current Value |
|
|
|
Borrower, Lessor or |
|
maturity date, rate of interest, collateral, |
|
|
|
|
|
|
|
|
Similar Party |
|
par, or maturity value |
|
|
|
|
|
|
* |
|
Mellon |
|
Harris Assoc Investment Oakmark
International Small Cap Fund |
|
|
|
$ |
20,189 |
|
* |
|
Mellon |
|
Ishares Silver Fund |
|
|
|
|
147 |
|
* |
|
Mellon |
|
Janus Investment Global Technology Fund |
|
|
|
|
1,147 |
|
* |
|
Mellon |
|
John Hancock Income Fund III |
|
|
|
|
17,751 |
|
* |
|
Mellon |
|
Oneok Partners LP Unit Ltd Partnership |
|
|
|
|
3,063 |
|
* |
|
Mellon |
|
Old Mut Advisor Funds II Select Growth
(Class Z) |
|
|
|
|
2,048 |
|
* |
|
Mellon |
|
Perritt Cap Growth Fund |
|
|
|
|
2,360 |
|
* |
|
Mellon |
|
Phoenix Multi-Portfolio Fund Real Estate |
|
|
|
|
12,562,933 |
|
* |
|
Mellon |
|
PIMCO High Yield Fund (Admin Class) |
|
|
|
|
8,337,073 |
|
* |
|
Mellon |
|
PIMCO Total Return Fund-Admin Class |
|
|
|
|
21,562,795 |
|
* |
|
Mellon |
|
Profunds Ultra Emerging Markets |
|
|
|
|
5,647 |
|
* |
|
Mellon |
|
Royce Opportunity Fund |
|
|
|
|
16,397 |
|
* |
|
Mellon |
|
United States Oil Fund LP units |
|
|
|
|
1,439 |
|
* |
|
Mellon |
|
U.S. Global Investors Global Resources Fund |
|
|
|
|
4,694 |
|
* |
|
Mellon |
|
Wasatch Advisors Global Technology Fund |
|
|
|
|
6,828 |
|
* |
|
Mellon |
|
Wisdomtree Trust International Fund |
|
|
|
|
19,275 |
|
* |
|
Mellon |
|
Davis NY Venture Fund |
|
|
|
|
26,677,027 |
|
* |
|
Mellon |
|
Vanguard Global Equity Fund |
|
|
|
|
37,557,466 |
|
* |
|
Mellon |
|
Vanguard Balanced Fund |
|
|
|
|
17,922,708 |
|
* |
|
Mellon |
|
ACS Stock Fund |
|
|
|
|
28,230,585 |
|
* |
|
Mellon |
|
Lockheed Martin Stock Fund |
|
|
|
|
5,791,701 |
|
* |
|
Participant loans at 3.5% to 11.0% |
|
$0 |
|
|
17,623,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
636,746,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Denotes a party-in-interest |
19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
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|
|
ACS SAVINGS PLAN |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
Affiliated Computer Services, Inc.
Plan Administrator
|
|
|
|
|
|
By:
|
|
/s/ Lora Villarreal |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Lora Villarreal |
|
|
|
|
Title:
|
|
Executive Vice President and Chief People Officer |
|
|
Date: June 20, 2008 |
|
|
|
|
|
|
20
INDEX TO EXHIBITS
|
|
|
Exhibit |
|
|
Number |
|
Exhibit Name |
23*
|
|
Consent of Chapman, Hext & Co., P.C. |
21