Company Delivers Strong Signings, Earnings and Cash Flow
DALLAS, May 1 /PRNewswire-FirstCall/ -- Affiliated Computer Services,
Inc. (NYSE: ACS) today announced third quarter fiscal year 2008 revenues of
$1.54 billion, an increase of 7% compared to the third quarter of the prior
year. Adjusted non-GAAP diluted earnings per share for the third quarter of
fiscal years 2008 and 2007 were $0.91 and $0.78, respectively, representing
a 17% increase. See "Reconciliation of Reported GAAP Results to Adjusted
Non-GAAP Results" below. Third quarter new business signings were the
second highest in Company history at $245 million of annual recurring
revenue. Third quarter fiscal year 2008 free cash flow was $161 million, or
10% of revenues.
Fiscal year-to-date revenues were $4.55 billion, an increase of 7% over
the prior year period. Adjusted non-GAAP earnings per share for the nine
months ended March 31, 2008 and 2007 were $2.58 and $2.24, respectively,
representing a 15% increase. Fiscal year-to-date new business signings were
$591 million of annual recurring revenue, a 30% increase over the prior
year-to-date period. Fiscal year-to-date free cash flow was $342 million,
or 8% of revenues.
"Our outstanding signings, free cash flow, and strong earnings growth
underscore that our strategy is working," said Lynn Blodgett, ACS president
and chief executive officer. "We are focused on providing specific vertical
business process outsourcing solutions that we can leverage across many
customers. In support of this strategy, this quarter we expanded our
service offerings and geographic footprint with four new acquisitions and
key new logos wins. These new capabilities, along with our ability to
execute our sales strategy and operational excellence, delivered strong
results this quarter and positions us well for the future."
Key highlights from ACS' fiscal year 2008 third quarter:
-- During the quarter, the Company generated new business signings of
$245 million in annual recurring revenue with an estimated total
contract value of $1.1 billion. Government signings represented 63% of
new business signings and Commercial contributed 37%. From a service
line perspective, business process outsourcing contributed 84% of new
business signings and 16% were information technology solutions.
-- Total revenues were $1.54 billion and represented 7% growth, of which
5% was internal. The Commercial segment contributed 60% of revenues
and grew 8% with 5% internal revenue growth. The Government segment
contributed 40% of revenues and grew 6%, excluding divestitures, with
5% internal growth.
-- Adjusted non-GAAP diluted earnings per share for the third quarter of
fiscal years 2008 and 2007 were $0.91 and $0.78, respectively,
representing a 17% increase. Third quarter fiscal year 2008 reported
GAAP diluted earnings per share was $0.85 as compared to $0.82 in the
prior year third quarter. Third quarter fiscal year 2007 included a
$0.06 per diluted share gain related to the sale of a minority
interest. See "Reconciliation of Reported GAAP Results to Adjusted
Non-GAAP Results" below.
-- Cash flow from operations during the third quarter was $229 million, or
15% of revenues. Free cash flow during the quarter was $161 million,
or 10% of revenues. This quarter's cash flow results benefited from
improved collections on accounts receivable, lower capital expenditures
and additions to intangible assets.
-- The Company expanded its service offerings and global capabilities by
closing the following acquisitions this quarter:
o In January 2008, to support its expansion, the Company acquired Syan
Holdings Limited, a U.K.-based provider of information technology
outsourcing services, for a purchase price of $69 million. Syan
generated trailing twelve month revenue of approximately
$75 million.
o In February 2008, to deepen its healthcare vertical, the Company
acquired Bowers & Associates, Inc., a Wisconsin-based provider of
quality care and productivity management services and healthcare
data analytics, for a purchase price of $8 million. Bowers had
trailing twelve month revenue of approximately $5 million.
o In March 2008, to further support its global expansion, the Company
acquired sds business services GmbH, a Germany-based provider of
data center, infrastructure services, and application related
solutions, for a purchase price of $63 million. sds generated
trailing twelve month revenue of approximately $40 million.
o In March 2008, to broaden its transportation vertical, the Company
acquired Communications Development, Inc., an Arkansas-based
provider of outsourced marketing, consulting, and advertising
services to the commercial transportation industry.
Key year-to-date highlights for fiscal 2008:
-- Year-to-date fiscal 2008 new business signings were $591 million of
annual recurring revenue, with an estimated total contract value of
$2.5 billion. Commercial signings contributed 55% of year-to-date
fiscal 2008 new business signings and Government contributed 45%. From
a service line perspective, business process outsourcing generated 80%
of new business signings and 20% were information technology solutions.
Trailing twelve month new business signings were $744 million in annual
recurring revenue and increased 24% over the prior period.
-- Year-to-date fiscal 2008 revenues were $4.55 billion. Total revenue
growth was 7% with internal growth of 5%. The Commercial segment
accounted for 59% of revenues in the year-to-date period and grew
7% with 5% internal revenue growth. The Government segment accounted
for 41% of revenues in the year-to-date period and grew 7% with
6% internal revenue growth.
-- Adjusted non-GAAP diluted earnings per share for the nine months ended
March 31, 2008 and 2007 were $2.58 and $2.24, respectively,
representing a 15% increase. Year-to-date fiscal 2008 reported GAAP
diluted earnings per share was $2.32 compared to $2.12 in the prior
year. See "Reconciliation of Reported GAAP Results to Adjusted
Non-GAAP Results" below.
-- Fiscal year-to-date cash flow from operations was $560 million, or
12% of revenues, and free cash flow was $342 million, or 8% of
revenues. Capital expenditures and additions to intangibles were
$218 million, or 5% of revenues.
-- During the second quarter of fiscal year 2008, the Company completed a
$200 million share repurchase program, purchasing 4.5 million shares at
an average price of $44 per share.
Events subsequent to ACS' fiscal year 2008 third quarter:
-- In April 2008, to deepen its transportation vertical, the Company
announced its intent to acquire Orbital Sciences Corporation's
Transportation Management Systems (TMS) business for a purchase price
of $43 million. TMS had trailing twelve month revenue of approximately
$50 million.
-- In April 2008, to broaden its healthcare vertical, the Company acquired
CompIQ Corporation (CompIQ) for a purchase price of $22 million.
CompIQ generated approximately $17 million of trailing twelve month
revenue.
ACS will discuss its financial results on a conference call and web
cast on http://www.acs-inc.com at 3:30 p.m. central time today. During the
conference call, management will refer to a presentation provided on the
Investor Relations page of ACS' website and will use certain non-generally
accepted accounting principles ("GAAP") financial measures for which
reconciliations to the most directly comparable GAAP financial measures
will also be provided.
ACS, a FORTUNE 500 company with in excess of 63,000 people supporting
client operations in more than 100 countries, provides business process
outsourcing and information technology solutions to world-class commercial
and government clients. The Company's Class A common stock trades on the
New York Stock Exchange under the symbol "ACS." Visit ACS on the Internet
at http://www.acs-inc.com.
All statements in this news release that are not based on historical
fact are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and the provisions of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (which Sections were adopted as
part of the Private Securities Litigation Reform Act of 1995). While
management has based any forward-looking statements contained herein on its
current expectations, the information on which such expectations were based
may change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of risks,
uncertainties, and other factors, many of which are outside of our control,
that could cause actual results to materially differ from such statements.
Such risks, uncertainties, and other factors include, but are not
necessarily limited to, those set forth in the Company's prior filings with
the Securities and Exchange Commission, including those set forth under
Item 1A "Risk Factors" in the most recent Annual Report on Form 10-K filed
on August 29, 2007. In addition, we operate in a highly competitive and
rapidly changing environment, and new risks may arise. Accordingly,
investors should not place any reliance on forward-looking statements as a
prediction of actual results. We disclaim any intention to, and undertake
no obligation to, update or revise any forward-looking statement.
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Dollars in thousands, except per share amounts
(Unaudited)
Three months ended
March 31,
2008 2007
Revenues $1,542,370 $1,440,546
Operating expenses:
Cost of revenues:
Wages and benefits 736,646 689,298
Services and supplies 338,320 304,734
Rent, lease and maintenance 184,622 174,052
Depreciation and amortization 96,413 87,995
Other 7,274 8,406
Total cost of revenues 1,363,275 1,264,485
Other operating expenses 15,184 13,470
Total operating expenses 1,378,459 1,277,955
Operating income 163,911 162,591
Interest expense 39,325 46,391
Other non-operating income, net (4,514) (12,325)
Pretax profit 129,100 128,525
Income tax expense 46,462 46,466
Net income $82,638 $82,059
Earnings per share:
Basic $0.86 $0.83
Diluted $0.85 $0.82
Shares used in computing earnings per share:
Basic 96,089 98,945
Diluted 96,921 100,300
Note: See "Summary Reconciliation of Reported GAAP Results to Adjusted
Non-GAAP Results" for certain items impacting the reported numbers above.
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Dollars in thousands, except per share amounts
(Unaudited)
Nine months ended
March 31,
2008 2007
Revenues $4,546,895 $4,252,745
Operating expenses:
Cost of revenues:
Wages and benefits 2,153,642 2,023,766
Services and supplies 1,006,543 913,714
Rent, lease and maintenance 554,743 530,207
Depreciation and amortization 281,595 254,861
Other 21,171 28,161
Total cost of revenues 4,017,694 3,750,709
Other operating expenses 61,995 48,259
Total operating expenses 4,079,689 3,798,968
Operating income 467,206 453,777
Interest expense 126,344 140,489
Other non-operating income, net (10,703) (24,629)
Pretax profit 351,565 337,917
Income tax expense 121,187 122,401
Net income $230,378 $215,516
Earnings per share:
Basic $2.34 $2.15
Diluted $2.32 $2.12
Shares used in computing earnings per share:
Basic 98,447 100,448
Diluted 99,414 101,749
Note: See "Summary Reconciliation of Reported GAAP Results to Adjusted
Non-GAAP Results" for certain items impacting the reported numbers above.
AFFILIATED COMPUTER SERVICES, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Dollars in thousands
(Unaudited)
March 31, June 30,
2008 2007
Assets
Cash and cash equivalents $328,907 $307,286
Accounts receivable, net 1,362,320 1,257,108
Income taxes receivable 10,871 13,268
Other current assets 250,328 232,872
Total current assets 1,952,426 1,810,534
Property, equipment, and software, net 899,280 897,319
Goodwill 2,750,337 2,612,368
Other intangible assets, net 446,637 481,378
Other assets 205,147 180,830
Total Assets $6,253,827 $5,982,429
Liabilities:
Accounts payable $200,969 $97,951
Accrued compensation and benefits 177,737 246,742
Other accrued liabilities 359,244 400,238
Deferred taxes 84,457 14,418
Current portion of long-term debt 47,056 47,039
Current portion of unearned revenue 168,179 164,484
Total current liabilities 1,037,642 970,872
Long-term debt 2,370,894 2,342,272
Deferred taxes 376,175 367,565
Other long-term liabilities 318,710 235,552
Total Liabilities 4,103,421 3,916,261
Total Stockholders' Equity 2,150,406 2,066,168
Total Liabilities and Stockholders'
Equity $6,253,827 $5,982,429
Frequently Used Terms
New business signings -- while there are no third party standards or
requirements governing the calculation of new business signings, we define
new business signings as annual recurring revenue from new contracts and
the incremental portion of renewals that are signed during the period,
which represents the estimated first twelve months of revenue to be
recorded under the contracts after full implementation. We use new business
signings as a measure of estimated recurring revenues represented by
contractual commitments, both to forecast prospective revenues and to
estimate capital commitments. Revenues are measured under GAAP.
Trailing twelve month new business -- is the preceding twelve months of
new business signings at a point in time expressed in annual revenue, not
total contract value.
Total contract value -- represents estimated total revenue over the
term of the contract.
Restatement of Operating Segment Results
During the first quarter of fiscal year 2008, the Company reorganized
the internal operating and reporting structures in its Commercial and
Government segments to more formally align its sales, service delivery and
financial organizations under their appropriate leadership. As a result,
the Company has restated its Commercial and Government segment results for
the three and nine months ended March 31, 2007 to reflect its current
operating and reporting structure. The restatement has no impact on the
Company's consolidated results for the period of restatement.
Use of Non-GAAP Financial Information
The Company reports its financial results in accordance with GAAP.
However, the Company uses certain non-GAAP performance measures, including
adjusted non-GAAP earnings per share, free cash flow and internal revenue
growth to provide both management and investors a more complete
understanding of the Company's underlying operational trends and results.
Management uses these non-GAAP measures to provide additional
meaningful comparisons between current results and prior results, and as a
basis for planning and forecasting for future periods.
Reconciliation of Reported GAAP Results to Adjusted Non-GAAP Results --
In addition to reporting operating income, pretax income, net income and
earnings per share on a GAAP basis, the Company has also made certain
non-GAAP adjustments which are described in "Description of Non-GAAP
Adjustments," and are reconciled to the corresponding GAAP measures in the
attached financial schedules titled, "Reconciliation of Reported Results to
Income Adjusted for Certain Non-GAAP Items" included in this earnings
release. In making these non-GAAP adjustments, the Company takes into
account the impact of items that are infrequently occurring or that are
non-operational in nature. Management believes that the exclusion of these
items provides a useful basis for evaluating underlying business
performance, but should not be considered in isolation and is not in
accordance with, or a substitute for, evaluating business unit performance
utilizing GAAP financial information. Management uses non-GAAP measures in
its budgeting and forecasting processes and to further analyze its
financial trends, as well as making financial comparisons to prior periods
presented on a similar basis. The Company's management uses each of these
non-GAAP financial measures in its own evaluation of the Company's
performance, particularly when comparing performance to prior periods, and
the Company believes that providing such adjusted results allows investors
and other users of the Company's financial statements to better understand
the Company's comparative operating performance for the periods presented.
The Company's management uses each of these non-GAAP financial measures
in its own evaluation of the Company's performance, particularly when
comparing performance to past periods. The Company's non-GAAP measures may
differ from similar measures by other companies, even if similar terms are
used to identify such measures. Although the Company's management believes
non-GAAP measures are useful in evaluating the performance of its business,
the Company acknowledges that items excluded from such measures may have a
material impact on the Company's income from operations, pretax income, net
income and earnings per share calculated in accordance with GAAP.
Therefore, management uses non-GAAP measures in conjunction with GAAP
results. Investors and users of our financial information should also
consider the above factors when evaluating our results.
Description of Non-GAAP Adjustments:
The following items are included in our presentation of Non-GAAP
adjustments:
1. Costs related to our internal investigation of our stock option grant
practices, investigations begun by the Securities and Exchange
Commission and Department of Justice, and shareholder derivative suits:
The Company has incurred costs related to our internal investigation,
as well as those of the SEC and DOJ. In addition, several derivative
lawsuits have been filed in connection with our stock option grant
practices, generally alleging claims related to breach of fiduciary
duty and unjust enrichment by certain of our directors and senior
executives and the Company has incurred costs related to these
lawsuits. Management expects that the Company will continue to incur
costs related to the ongoing investigations and derivative lawsuits
(collectively, "Option Investigation Related Costs"). Management
believes that these costs, although material and recurring, are not
related to the Company's ongoing operations and that excluding them
helps to provide a more meaningful representation of the Company's
operating performance.
2. Costs related to buyout offers and related shareholder derivative
suits: The Company has incurred costs in fiscal years 2008 and 2007 to
evaluate our strategic alternatives, including the proposal from Darwin
Deason, Chairman of the Board of Directors, and Cerberus. In addition,
several lawsuits have been filed in connection with the announced
buyout transaction, generally alleging claims related to breach of
fiduciary duty, and seeking class action status ("Buyout Related
Cost"). Management expects that the Company may continue to incur costs
related to our evaluation of strategic alternatives and these lawsuits.
Management believes that these costs, although material and possibly
recurring, are not related to the Company's ongoing operations and that
excluding them helps to provide a more meaningful representation of the
Company's operating performance.
3. Cost related to amending certain employee stock options: During fiscal
year 2007 and the first quarter of fiscal year 2008, the Company
amended the exercise price of certain outstanding stock options in
order to reprice all, or a portion, of the respective stock option
grants to the correct accounting measurement date to avoid adverse tax
consequences to individual holders under Section 409A of the Internal
Revenue Code ("Section 409A"). During the first quarter of fiscal
year 2008, the Company expensed approximately $1.2 million related to
these amended stock options ("Amended Options"). During the third
quarter of fiscal year 2008, the Company paid approximately
$6.7 million to the individual holders in accordance with the terms of
the amended stock options. Management believes that these costs and
cash payments are not related to the Company's ongoing operations and
that excluding them helps to provide a more meaningful representation
of our operating performance.
4. Cost related to certain former employees' stock options: The exercise
price of certain former employees' vested, unexercised and outstanding
stock options were less than the fair market value per share of ACS
stock on the revised measurement dates for such stock options. During
the first quarter of fiscal year 2008, the Company notified certain
former employees that the Company will pay them the additional
20% income tax imposed by Section 409A if a triggering event occurs and
if the employee is required to recognize and report W-2 income under
Section 409A, subject to certain limitations. During the three and
nine months ended March 31, 2008, the Company accrued approximately
$0.5 million and $1.0 million, respectively, based on the market price
of ACS common stock at March 31, 2008 and will adjust this accrual to
the fair market value of ACS stock each quarter until the options are
exercised ("Income Tax Reimbursements"). Management believes that
these costs are not related to the Company's ongoing operations and
that excluding them helps to provide a more meaningful representation
of our operating performance.
5. Gain related to sale of our decision support business: In the second
quarter of fiscal year 2008, the Company divested its decision support
business and recognized a pre-tax gain of $2.4 million. Management
believes that the decision support business is not strategic to our
ongoing operations and its sale is an isolated event. Management
believes excluding the gain on its sale better reflects the performance
of our continuing operations.
6. Waiver fee on our Credit Facility: In the first quarter of fiscal
year 2007, the Company received an amendment, consent and waiver from
the lenders under our Credit Facility with respect to, among other
provisions, waiver of any default or event of default arising under the
Credit Facility as a result of our failure to comply with certain
reporting covenants ("Waiver Fee"). Management believes that our
delayed filings of our Annual Report on Form 10-K for the year ended
June 30, 2006 and Quarterly Report on Form 10-Q for the period ended
September 30, 2006, which necessitated the waiver, are infrequently
occurring events and excluding the Waiver Fee provides a more
meaningful representation of our results of operations for the first
quarter of fiscal year 2007.
7. Gain related to sale of minority interests: In the third quarter of
fiscal year 2007, the Company divested its minority interest in a
professional service business and recognized a pre-tax gain of
$9.1 million. Management believes that this sale is an isolated event
related to non-core operations and not representative of our ongoing
operations. This business was not considered strategic to our ongoing
operations and excluding the gains on the sale helps to isolate the
performance of our continuing operations.
8. North Carolina contract settlement ("NC Settlement"): In the third
quarter of fiscal year 2007, we mutually agreed to terminate the North
Carolina MMIS contract, settled all issues related to the contract, and
recognized $3.4 million in revenue related to this settlement. The
Company believes that the contract termination and settlement was an
infrequent occurrence and that excluding this settlement helps to
provide a more meaningful representation of the performance of our
continuing operations.
9. Litigation settlement: In the third and fourth quarters of fiscal
year 2007, we recorded charges of approximately $2.2 million and
$2.3 million, respectively, related to the settlement of a
pre-acquisition claim related to our fiscal year 2005 acquisition of
the human resources consulting business of Mellon Financial
Corporation. In the third quarter of fiscal year 2008, we recovered
approximately $1.8 million of this settlement. We believe that the
settlement and subsequent recovery of this pre-acquisition claim is not
related to our ongoing operations and that excluding them helps to
provide a more meaningful representation of the performance from our
continuing operations.
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (GAAP)
TO ADJUSTED OPERATING INCOME (Non-GAAP)
(UNAUDITED)
(In millions)
Three Months Ended Nine Months Ended
March 31, March 31,
2008 2007 2008 2007
Operating Income (GAAP) $163.9 $162.6 $467.2 $453.8
Adjusting items, pre-tax:
Option investigation related costs 9.8 4.3 34.0 26.0
Buyout related costs 0.2 0.6 8.9 0.6
Amended options (409(a)) - - 1.2 -
Income tax reimbursement 0.5 - 1.0 -
Sale of decision support business - - (2.4) -
NC settlement - (3.4) - (3.4)
Legal settlement (1.8) 2.2 (1.8) 2.2
Adjusted Operating Income (Non-GAAP)* $172.7 $166.3 $508.2 $479.2
RECONCILIATION OF NET INCOME (GAAP)
TO ADJUSTED NET INCOME (Non-GAAP)
(UNAUDITED)
(In millions)
Three Months Ended Nine Months Ended
March 31, March 31,
2008 2007 2008 2007
Net Income (GAAP) $82.6 $82.1 $230.4 $215.5
Adjusting items, net of tax:
Option investigation related costs 6.3 2.7 21.9 16.6
Buyout related costs 0.1 0.4 5.8 0.4
Amended options (409(a)) - - 0.8 -
Income tax reimbursement 0.3 - 0.7 -
Sale of decision support business - - (1.6) -
Waiver fee - - - 1.6
Sale of minority interests - (5.9) - (5.9)
NC settlement - (2.1) - (2.1)
Legal settlement (1.1) 1.4 (1.1) 1.4
Adjusted Net Income (Non-GAAP)* $88.3 $78.5 $256.8 $227.5
RECONCILIATION OF DILUTED EARNINGS PER SHARE (GAAP)
TO ADJUSTED DILUTED EARNINGS PER SHARE (Non-GAAP)
(UNAUDITED)
Three Months Ended Nine Months Ended
March 31, March 31,
2008 2007 2008 2007
Diluted Earnings Per Share (GAAP) $0.85 $0.82 $2.32 $2.12
Adjusting items, net of tax:
Option investigation related costs 0.06 0.03 0.22 0.17
Buyout related costs - - 0.06 -
Amended options (409(a)) - - 0.01 -
Income tax reimbursement - - 0.01 -
Sale of decision support business - - (0.02) -
Waiver fee - - - 0.01
Sale of minority interests - (0.06) - (0.06)
NC settlement - (0.02) - (0.02)
Legal settlement (0.01) 0.01 (0.01) 0.01
Adjusted Diluted Earnings Per Share
(Non-GAAP)* $0.91 $0.78 $2.58 $2.24
*Differences in schedule due to rounding.
Internal revenue growth -- is measured as total revenue growth less
acquired revenue from acquisitions and revenues from divested operations.
Acquired revenue from acquisitions is based on pre-acquisition normalized
revenue of acquired companies. We use the calculation of internal revenue
growth to measure revenue growth excluding the impact of acquired revenues
and the revenue associated with divested operations and we believe these
adjustments to historical reported results are necessary to accurately
reflect our internal revenue growth.
For the three months ended March 31, 2008, the Company generated internal
revenue growth of 5%. Internal revenue growth is measured as follows
(unaudited, $ in millions):
Three months ended March 31,
2008 2007 Growth %(a)
Consolidated
Total Revenues $1,542 $1,440 7%
Less: Divested - (2)
Adjusted Base $1,542 $1,438 7%
Acquired Revenues* $33 $- 2%
Internal Revenues 1,509 1,438 5%
Total $1,542 $1,438 7%
Commercial
Total Revenues $922 $851 8%
Less: Divested - -
Adjusted Base $922 $851 8%
Acquired Revenues* $26 $- 3%
Internal Revenues 896 851 5%
Total $922 $851 8%
Government
Total Revenues $620 $589 5%
Less: Divested - (2)
Adjusted Base $620 $587 6%
Acquired Revenues* $7 $- 1%
Internal Revenues 613 587 5%
Total $620 $587 6%
* Acquired revenues are based on pre-acquisition normalized revenues of
acquired companies.
(a) Differences in schedule due to rounding.
For the nine months ended March 31, 2008, the Company generated internal
revenue growth of 5%. Internal revenue growth is measured as follows
(unaudited, $ in millions):
Nine months ended March 31,
2008 2007 Growth %(a)
Consolidated
Total Revenues $4,547 $4,253 7%
Less: Divested - (3)
Adjusted Base $4,547 $4,250 7%
Acquired Revenues* $71 $- 2%
Internal Revenues 4,476 4,250 5%
Total $4,547 $4,250 7%
Commercial
Total Revenues $2,704 $2,533 7%
Less: Divested - -
Adjusted Base $2,704 $2,533 7%
Acquired Revenues* $50 $- 2%
Internal Revenues 2,654 2,533 5%
Total $2,704 $2,533 7%
Government
Total Revenues $1,843 $1,720 7%
Less: Divested - (3)
Adjusted Base $1,843 $1,717 7%
Acquired Revenues* $21 $- 1%
Internal Revenues 1,822 1,717 6%
Total $1,843 $1,717 7%
* Acquired revenues are based on pre-acquisition normalized revenues of
acquired companies.
(a) Differences in schedule due to rounding.
Free Cash Flow
Free cash flow -- is measured as operating cash flow (net cash provided
by operating activities, as reported in our consolidated statements of cash
flows) less capital expenditures (purchases of property, equipment and
software, net of sales, as reported in our consolidated statements of cash
flows) less additions to other intangible assets (as reported in our
consolidated statements of cash flows). We believe that this free cash flow
metric provides an additional measure of available cash flow after we have
satisfied the capital expenditure requirements of our operations, and
should not be taken in isolation to be a measure of cash flow available for
us to satisfy all our obligations and execute our business strategies. We
also rely on cash flows from investing and financing activities which,
together with free cash flow, are expected to be sufficient for us to
execute our business strategies. Our measure of free cash flow may not be
comparable to similarly titled measures of other companies. (unaudited, $
in millions):
Three months ended Nine months ended
March 31, March 31,
2008 2007 2008 2007
Free Cash Flow
Net cash provided by operating
activities $229 $90 $560 $395
Less:
Purchase of property, equipment and
software, net of sales (60) (69) (193) (239)
Additions to other intangible assets (8) (15) (26) (30)
Free Cash Flow* $161 $6 $342 $126
Certain cash flow items (included above):
Cash interest paid on debt $32 $39 $118 $121
Cash paid on stock option investigations,
potential buyout and derivative lawsuits 6 6 35 25
Tax, interest and penalties paid on stock
option restatement - 35 - 35
Payments related to amended options 7 - 7 -
Cash interest received (1) (2) (7) (7)
Total* $43 $78 $153 $174
*Differences in schedule due to rounding.
SOURCE Affiliated Computer Services, Inc.
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Related links:
http://www.acs-inc.com
CONTACT:
Investors, Jon Puckett, Vice President,
Investor Relations, +1-214-841-8281, jon.puckett@acs-inc.com, or
media, Kevin Lightfoot, Vice President, Corporate Communications,
+1-214-841-8191, kevin.lightfoot@acs-inc.com, both of Affiliated
Computer Services, Inc.
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