8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
April 27, 2006

Affiliated Computer Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-12665
(Commission File Number) 51-0310342
(IRS Employer
Identification No.)

2828 North Haskell Avenue
Dallas, Texas 75204
(Address of principal executive offices, including zip code)

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

Not Applicable
(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-14(c))

TABLE OF CONTENTS

Press Release

Slide Presentation

Item 2.02 Results of Operations and Financial Condition.

     On April 27, 2006, Affiliated Computer Services, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of fiscal year 2006 ended March 31, 2006. A copy of such press release is attached as Exhibit 99.1 and will be published on the Company’s web site at http://www.acs-inc.com. The press release includes certain non-generally accepted accounting principles (“GAAP”) financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in the press release.

     On April 27, 2006, the Company will hold a telephone conference and webcast to disclose the Company’s financial results for the third quarter of fiscal year 2006 ended March 31, 2006. During this conference, the Company will present certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures and supplementary information related to these reconciliations are included in the slides to be presented during the conference. These slides are attached as Exhibit 99.2 and will also be available on the Company’s web site.

     Pursuant to the rules and regulations of the Securities and Exchange Commission, the press release attached as Exhibit 99.1 and the slides attached as Exhibit 99.2 are deemed to be furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

     Pursuant to the rules and regulations of the Securities and Exchange Commission, exhibits 99.1 and 99.2 referenced below and the information set forth therein are deemed to be furnished pursuant to Item 2.02 hereof and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.

(c) Exhibits.

EXHIBIT
NUMBER	DESCRIPTION
99.1	Affiliated Computer Services, Inc. Press Release dated April 27, 2006-ACS Announces Third Quarter Fiscal Year 2006 Results.
99.2	Slide presentation appearing on Company’s website in connection with Fiscal Year 2006 Third Quarter Earnings Conference Call on April 27, 2006.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	AFFILIATED COMPUTER SERVICES, INC.
Date: April 27, 2006
	By:		/s/ WARREN D. EDWARDS
		Name:	Warren D. Edwards
		Title:	Executive Vice President and
			Chief Financial Officer

3

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Affiliated Computer Services, Inc. Press Release dated April 27, 2006-ACS Announces Third Quarter Fiscal Year 2006 Results.
99.2	Slide presentation appearing on Company’s website in connection with Fiscal Year 2006 Second Quarter Earnings Conference Call on April 27, 2006.

4

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

Analyst Contact	Media Contact
Warren Edwards	Lesley Pool
Executive Vice President/	Senior Vice President/
Chief Financial Officer	Chief Marketing Officer
Affiliated Computer Services, Inc.	Affiliated Computer Services, Inc.
214-841-8082	214-841-8028
warren.edwards@acs-inc.com	lesley.pool@acs-inc.com

ACS Announces Third Quarter Fiscal Year 2006 Results

DALLAS, TEXAS: April 27, 2006 — Affiliated Computer Services, Inc., (NYSE: ACS), a premier provider of business process outsourcing and information technology solutions, announced third quarter fiscal year 2006 revenues of $1.31 billion, an increase of 24% compared to the third quarter of the prior year. The Company’s internal revenue growth rate was 6% for the quarter. Third quarter fiscal year 2006 reported diluted earnings per share was $0.62, and included certain restructuring charges and other items.

The Company signed $190 million of annual recurring revenue during the quarter. This represents an increase of 52% when compared to the adjusted prior year quarter. Despite continued strong new business signings, the pipeline increased over 10% sequentially and represents a company record.

“We continue to make excellent progress on the initiatives we have set for the company,” said Mark King, ACS’ President and Chief Executive Officer. “Business momentum remains very strong as evidenced by another healthy quarter of new business signings. I am also pleased to report that, even though our year-to-date new business signings have increased 32% over the prior year period, our pipelines have expanded to over $1.5 billion, the highest in our history. Our initiatives to improve overall client satisfaction are paying off as well, with year-to-date renewal rates of approximately 95%. As a result, I am very confident that internal growth will accelerate given the tremendous increase in new business awards over the last several quarters, coupled with our outstanding renewal rate and increasing sales opportunities. The ACS management team will continue to focus on delivering outstanding service to our clients and providing great opportunities for our employees. And, with this focus we expect to deliver long-term value to our shareholders.”

Key highlights from the third quarter of fiscal year 2006 include:

• Commercial segment revenue grew 47% and accounted for 60% of revenues this quarter. Commercial internal revenue growth was 11%. Government segment revenue accounted for 40% of revenues this quarter. Excluding prior year revenue from the Government Welfare to Workforce Services business (“WWS”), substantially all of which was sold in the second quarter of 2006 (“WWS Divestiture”), Government total revenue increased 10% over the prior year, all of which was acquisition related.

1

• Diluted earnings per share was $0.62 for the third quarter of fiscal year 2006. Reported results include $0.11 per diluted share related to results of operations from two underperforming multi-scope HR contracts, $0.03 per diluted share related to restructuring activities and incremental transaction expenses related to the Mellon HR business, $0.03 per diluted share related to debt issue costs from our previous credit facility and legal expenses associated with the activities of our Special Committee of the Board of Directors, a $0.01 per diluted share write-down of accounts receivable retained from the fiscal year 2004 divestiture of a majority of our Federal government business, and a $0.01 residual gain associated with the WWS Divestiture.

• Annualized recurring new business sold was $190 million during the quarter. Trailing twelve month annual recurring new business increased 28% over the prior trailing twelve month period, excluding new business signings from the WWS Divestiture.

• Cash flow from operations during the third quarter was approximately $113 million, or 8.6% of revenues, and free cash flow was negative $8 million. Cash flow from operations and free cash flow were both adversely impacted by final settlement payments of $86 million related to the Mellon transition services agreement and Mellon pre-acquisition bonus payments of $26 million. Capital expenditures and additions to intangible assets were approximately $120 million, or 9.2% of revenues.

Key year-to-date highlights for fiscal year 2006 include:

• Revenues for the nine months ended March 31, 2006 were $3.97 billion, an increase of 30% compared to the first nine months of the prior year, adjusted for the WWS Divestiture. Internal revenue growth for the first nine months of fiscal year 2006 was 7% and the remaining growth was due to acquisitions.

• Cash flow from operations for the first nine months was $468 million, or 11.8% of revenue, and free cash flow was $150 million, or 3.8% of revenue. Cash flow from operations and free cash flow were adversely impacted by final settlement payments of $86 million related to the Mellon transition services agreement, of which $76 million benefited our fourth quarter fiscal year 2005 results, and Mellon pre-acquisition bonus payments of $26 million. Capital expenditures and additions to intangibles were $318 million, or 8.0% of revenues.

• Diluted earnings per share related to nine months ended March 31, 2006 was $2.17. Reported results included $0.11 per diluted share results from two underperforming multi-scope HR contracts, $0.09 per diluted share related to restructuring activities and incremental transaction expenses related to the Mellon HR business, $0.05 per diluted share related to debt issue costs of our previous credit facility and legal expenses associated with the activities of our Special Committee of the Board of Directors and other legal expenses, a $0.01 per diluted share write-down of accounts receivable retained from the fiscal year 2004 divestiture of the majority of our Federal government business, a benefit of approximately $0.14 per diluted share for the WWS Divestiture, a $0.03 per diluted share charge for compensation expense related to the departure of the former Chief Executive Officer and a $0.02 per diluted share charge for an assessment of risk related to the bankruptcies of certain airline clients. The adoption of SFAS No. 123(R) impacted diluted earnings per share by $0.13 during the first nine months of fiscal year 2006.

2

ACS initial guidance for fiscal year 2007, is as follows:

• Revenue growth — Total revenue growth is expected to be at least 10%, after taking into consideration the WWS Divestiture which occurred in the second quarter of fiscal year 2006.

• Diluted earnings per share growth is expected to be at least 10%, assuming no further share repurchases.

ACS will discuss these results on a conference call and webcast on www.acs-inc.com at 3:30 p.m. CDT today. During the conference call, management will refer to a presentation provided on the Investor Relations page of ACS’ website which will contain certain non-generally accepted accounting principles (“GAAP”) financial measures, some of which are included herein as well as reconciliations to the most directly comparable GAAP financial measures.

ACS, a FORTUNE 500 company with more than 55,000 people supporting client operations in nearly 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.” ACS makes technology work. Visit ACS on the Internet at 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 the caption “Risks Related to Our Business” in the most recent quarterly report on Form 10-Q filed on February 9, 2006. 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.

3

AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Dollars in thousands, except per share amounts
(Unaudited)

	Three months ended						Proforma three
	March 31,						months ended
	2006 (1)			2005 (4)			March 31, 2005(4,5)
Revenues	$	1,314,455		$	1,063,299		$	1,063,299
Cost of revenues:
Wages and benefits		643,651			452,794			461,794
Services and supplies		272,990			251,825			251,825
Rent, lease and maintenance		156,489			124,047			124,047
Depreciation and amortization		72,891			57,801			57,801
Other expenses		20,303			4,893			4,893
Total cost of revenues		1,166,324			891,360			900,360
Gain on sale of business		(2,717	)		—			—
Other operating expenses		12,430			6,127			6,127
Total operating expenses		1,176,037			897,487			906,487
Operating income		138,418			165,812			156,812
Interest expense		14,967			3,688			3,688
Other non-operating (income) expense, net		589			(466	)		(466	)
Pretax profit		122,862			162,590			153,590
Income tax expense		44,986			47,924			44,683
Net income	$	77,876		$	114,666		$	108,907
Earnings per common share:
Basic	$	0.63		$	0.90		$	0.85
Diluted	$	0.62		$	0.88		$	0.84
Shares used in computing earnings per common share:
Basic		124,347			127,568			127,568
Diluted		126,319			130,229			129,479

4

AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Dollars in thousands, except per share amounts
(Unaudited)

	Nine months ended						Proforma
	March 31,						Nine months ended
	2006 (1.2.3)			2005 (4)			March 31, 2005(4,5)
Revenues	$	3,972,959		$	3,136,767		$	3,136,767
Cost of revenues:
Wages and benefits		1,904,659			1,320,612			1,347,263
Services and supplies		869,651			777,893			777,893
Rent, lease and maintenance		475,202			364,164			364,164
Depreciation and amortization		211,415			167,706			167,706
Other expenses		32,061			13,038			13,038
Total cost of revenues		3,492,988			2,643,413			2,670,064
Gain on sale of business		(32,482	)		—			—
Other operating expenses		43,278			17,577			17,577
Total operating expenses		3,503,784			2,660,990			2,687,641
Operating income		469,175			475,777			449,126
Interest expense		40,428			10,512			10,512
Other non-operating (income) expense, net		(5,786	)		(1,808	)		(1,808	)
Pretax profit		434,533			467,073			440,422
Income tax expense		159,337			162,105			152,528
Net income	$	275,196		$	304,968		$	287,894
Earnings per common share:
Basic	$	2.20		$	2.38		$	2.25
Diluted	$	2.17		$	2.33		$	2.21
Shares used in computing earnings per common share:
Basic		124,879			128,048			128,048
Diluted		126,806			131,081			130,403

5

AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)

(1) During the third quarter of fiscal year 2006, the Company recorded the following:

• Total activity during the quarter related to two underperforming multi-scope HR contracts included revenue of $11.9 million and a net pretax loss of $22.1 million ($14.0 million after tax), or $0.11 per diluted share.

• Restructuring charges and related asset impairments of $4.3 million ($2.7 million after tax), or $0.02 per diluted share.

• Incremental transaction expenses related to the Mellon HR business of $2.9 million ($1.8 million after tax), or $0.01 per diluted share.

• Charges for debt issue costs related to our previous credit facility of $4.1 million ($2.6 million after tax), or $0.02 per diluted share.

• Legal fees of $1.3 million ($0.8 million after tax), or $0.01 per diluted share, related to activities of the Special Committee of the Board of Directors.

• A retained Federal accounts receivable write-down of $2.4 million ($1.5 million after tax), or $0.01 per diluted share.

• A residual WWS Divestiture gain of $2.8 million ($1.7 million after tax), or $0.01 per diluted share.

(2) During the second quarter of fiscal year 2006, the Company recorded the following:

• A net benefit before tax of $26.5 million ($15.8 million after tax), or $0.12 per diluted share, for the gain and charges related to the WWS Divestiture.

• Restructuring charges and related asset impairments totaling $10.4 million ($6.6 million after tax), or $0.05 per diluted share.

• Charges for legal settlements and related legal fees, and for legal fees associated with the unsolicited offer regarding a potential sale of the Company and the possible recapitalization of the Class B shares totaling $5.9 million ($3.7 million after tax), $0.03 per diluted share.

(3) During the first quarter of fiscal year 2006, the Company recorded the following:

• A $5.4 million charge ($3.4 million after tax), or $0.03 per diluted share, for the departure of the former Chief Executive Officer.

• A $3.0 million charge ($1.9 million after tax), or $0.02 per diluted share, for the assessment of risk related to the bankruptcies of certain airline clients.

(4) During the third quarter of fiscal year 2005, the Company recognized an income tax benefit related to the 2004 divestiture of the majority of our federal business, resulting in a benefit to net income of approximately $9.4 million, or $0.07 per diluted share.

6

AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)

(5) The prior year proforma results reflect the impact of Statement of Financial Accounting Standards No. 123(R), which requires companies to measure all employee stock-based compensation awards using a fair value method and recognize compensation costs in its financial statements. The Company adopted SFAS 123(R) on a prospective basis on July 1, 2005 and, as a result, we have presented proforma results of operations for the prior year periods for comparative purposes. ($ in thousands)

				Pro Forma									Pro Forma
				Stock									Stock
				Compensation									Compensation
	As Reported			Expense			Pro Forma			As Reported			Expense			Pro Forma
Revenues	$	1,063,299		$	—		$	1,063,299		$	3,136,767		$	—		$	3,136,767
Cost of revenues:
Wages and benefits		452,794			9,000			461,794			1,320,612			26,651			1,347,263
Services and supplies		251,825			—			251,825			777,893			—			777,893
Rent, lease and maintenance		124,047			—			124,047			364,164			—			364,164
Depreciation and amortization		57,801			—			57,801			167,706			—			167,706
Other expenses		4,893			—			4,893			13,038			—			13,038
Total costs of revenues		891,360			9,000			900,360			2,643,413			26,651			2,670,064
Other operating expenses		6,127			—			6,127			17,577			—			17,577
Total operating expenses		897,487			9,000			906,487			2,660,990			26,651			2,687,641
Operating income		165,812			(9,000	)		156,812			475,777			(26,651	)		449,126
Interest expense		3,688			—			3,688			10,512			—			10,512
Other non-operating (income) expense, net		(466	)		—			(466	)		(1,808	)		—			(1,808	)
Pretax profit		162,590			(9,000	)		153,590			467,073			(26,651	)		440,422
Income tax expense		47,924			(3,241	)		44,683			162,105			(9,577	)		152,528
Net income	$	114,666		$	(5,759	)	$	108,907		$	304,968		$	(17,074	)	$	287,894

7

AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
Dollars in Thousands

	March 31,		June 30,
	2006		2005
	(Unaudited)		(Audited)
ASSETS:
Cash and cash equivalents	$	174,877	$	62,685
Accounts receivable, net		1,167,374		1,061,590
Other current assets		180,914		119,822
Total current assets		1,523,165		1,244,097
Property, equipment and software, net		818,247		677,241
Goodwill, net		2,395,320		2,334,655
Other intangible assets, net		465,757		466,312
Other long-term assets		185,254		128,533
TOTAL ASSETS	$	5,387,743	$	4,850,838
LIABILITIES:
Accounts payable	$	102,969	$	62,788
Accrued compensation		158,390		175,782
Other accrued liabilities		445,449		471,577
Income taxes payable		5,267		2,310
Deferred taxes		25,552		34,996
Current portion of long-term debt		22,285		6,192
Current portion of unearned revenue		106,697		84,469
Total current liabilities		866,609		838,114
Long-term debt		1,365,308		750,355
Long-term deferred taxes		299,800		240,210
Other long-term liabilities		203,700		183,731
TOTAL LIABILITIES		2,735,417		2,012,410
TOTAL STOCKHOLDERS’ EQUITY		2,652,326		2,838,428
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,387,743	$	4,850,838

8

Frequently Used Terms

New business signings — While there are no third party standards or requirements governing the calculation of new business signings, new business signings are defined as recurring revenue from new contracts, including the incremental portion of renewals, signed during the period and represent the estimated first twelve months of revenue to be recorded under that contract 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.

Supplemental Information

We have provided the impact on pre-tax profit, net income and diluted earnings per share of certain transactions and events included in our reported results of operations, which management believes enhances the understanding of our financial results and the impact of those events and transactions on our results. Management believes this information provides additional information related to factors impacting our reported financial performance which may be useful to investors. The amount of the transaction or event is presented on a basis determined in accordance with generally accepted accounting principles as reflected in our reported consolidated results of operations. All per share measures are calculated on the same diluted per share basis as our reported diluted earnings per share. The per share impacts are not intended to reflect a per share amount that accrues directly to an investor’s benefit as a result of the particular transaction or event.

Use of Non-GAAP Financial Information

The Company reports its financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP financial measures and ratios, used in managing the Company’s business, may provide users of this financial information with additional meaningful comparisons between current results and prior reported results. Certain of the information set forth herein and certain of the information presented by the Company from time to time including free cash flow and internal revenue growth may constitute non-GAAP financial measures within the meaning of Regulation G adopted by the Securities and Exchange Commission. We have presented herein and we will present in other information we publish that contains any of these non-GAAP financial measures a reconciliation of these measures to the most directly comparable GAAP financial measure. The presentation of this additional information is not meant to be considered in isolation or as a substitute for comparable amounts determined in accordance with GAAP in the United States.

Internal Revenue Growth

Internal revenue growth is measured as total revenue growth less acquired revenue from acquisitions and revenues from divested operations. At the date of acquisition, we identify the trailing twelve months of revenue of the acquired company as the “pre-acquisition revenue of acquired companies.” Pre-acquisition revenue of the acquired companies is considered “acquired

9

revenues” in our calculation, and revenues from the acquired company, either above or below that amount are components of “internal growth” in our calculation. 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. Revenues from divested operations are excluded from the internal revenue growth calculation in the periods following the effective date of the divestiture. Our measure of internal revenue growth may not be comparable to similarly titled measures of other companies. (unaudited, $ in millions)

	Three months ended March 31,(a)
	2006			2005			Growth %
Consolidated
Total Revenues	$	1,314		$	1,063			24	%
Less: Divested		(3	)		(51	)
Adjusted	$	1,312		$	1,012			30	%
Acquired Revenues*	$	257		$	17			24	%
Internal Revenues		1,055			995			6	%
Total	$	1,312		$	1,012			30	%
Commercial
Total Revenues	$	790		$	538			47	%
Less: Divested		—			—
Adjusted	$	790		$	538			47	%
Acquired Revenues*	$	211		$	17			36	%
Internal Revenues		579			521			11	%
Total	$	790		$	538			47	%
Government
Total Revenues	$	524		$	525			0	%
Less: Divested		(3	)		(51	)
Adjusted	$	521		$	474			10	%
Acquired Revenues*	$	46		$	—			10	%
Internal Revenues		475			474			0	%
Total	$	521		$	474			10	%

*	Acquired revenues are based on pre-acquisition normalized revenues of acquired companies.
(a)	Based on actual amounts, not rounded.

10

	Nine months ended March 31,(a)
	2006			2005			Growth %
Consolidated
Total Revenues	$	3,973		$	3,137			27	%
Less: Divested		(104	)		(165	)
Adjusted	$	3,869		$	2,972			30	%
Acquired Revenues*	$	711		$	22			23	%
Internal Revenues		3,158			2,950			7	%
Total	$	3,869		$	2,972			30	%
Commercial
Total Revenues	$	2,341		$	1,518			54	%
Less: Divested		—			—
Adjusted	$	2,341		$	1,518			54	%
Acquired Revenues*	$	645		$	22			41	%
Internal Revenues		1,696			1,496			13	%
Total	$	2,341		$	1,518			54	%
Government
Total Revenues	$	1,632		$	1,619			1	%
Less: Divested		(104	)		(165	)
Adjusted	$	1,528		$	1,454			5	%
Acquired Revenues*	$	66		$	—			4	%
Internal Revenues		1,462			1,454			1	%
Total	$	1,528		$	1,454			5	%

*	Acquired revenues are based on pre-acquisition normalized revenues of acquired companies.
(a)	Based on actual amounts, not rounded.

11

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 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,
	2006			2005			2006			2005
Free Cash Flow
Net cash provided by operating activities	$	113		$	173		$	468		$	472
Less:
Purchases of property, equipment and software, net of sales		(105	)		(64	)		(290	)		(170	)
Additions to other intangible assets		(15	)		(5	)		(28	)		(29	)
Free Cash Flow	$	(8	)	$	105		$	150		$	272

* Based on actual amounts, not rounded.

—end—

12

EX-99.2

EXHIBIT 99.2

Third Quarter Fiscal Year 2006 April 27, 2006 This presentation may contain "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). These statements are based on a number of assumptions concerning future events and are subject to numerous risks, uncertainties and other factors, many of which are outside the Company's control. The anticipated results described in the forward-looking statements could be materially different from the actual events and results. For a description of these risks, uncertainties and other factors, see the Company's prior filings with the Securities and Exchange Commission, including the most recent quarterly report on Form 10-Q filed February 9, 2006 under the caption "Risks Related to our Business". ACS disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future event, or otherwise.

Mark King Chief Executive Officer

Quarterly Highlights Strong new business signings Healthy and expanding pipeline High client renewal rates Solid cash flow metrics Executing cost initiatives Slide #1

Q3 FY05 Q3 FY06 East 525.1 524.2 Revenue Summary ($ in millions) Q3 FY05 Q3 FY06 East 1063.3 1314.5 $1,063 $1,314 24% Total Q3 FY05 Q3 FY06 East 538.2 790.3 $538 $790 47% Commercial $525 Flat $524 Government Internal Revenue Growth = 6% Internal Revenue Growth = Flat Internal Revenue Growth = 11% Slide #2 Differences in schedule due to rounding Excluding the WWS divestiture, total growth was 10% Excluding the WWS divestiture, total growth was 30%

Earnings Per Share Slide #3 (1) - The impact of stock option expense for Q3 FY06 was $0.04 per diluted share and is included in the reported GAAP EPS results.

Strong New Business Signings BPO IT Outsourcing 91 99 Annualized Recurring Revenue $190 Million Commercial Government 153 37 Comments: 52% growth versus prior year quarter, 28% on a TTM basis Fifth highest in history; highest March quarter Segment mix: 81% Commercial, 19% Government Service line mix: 52% ITO, 48% BPO Total contract value - $0.9 billion (average life 4.5 years) $91M $99M $153M $37M Slide #4

New Business Profile Top 20 new business signings represent about 80% of annual recurring revenue signings in the quarter Margins are not decreasing Capital intensity is not increasing Capital intensity represents capital expenditures and customer contract related intangibles as a percentage of total contract revenue. Average capital intensity of ITO and BPO contracts is approximately 7% and 3%, respectively. Slide #5 Comments:

Quarterly Signings ($ in millions) Slide #6 Note: The above amounts have been adjusted to exclude signings from the Federal and WWS divestitures.

Areas of Focus - Progress Report Areas of Focus Cost structure review Heightened focus on client "Best practices" in government business Slide #7 Status Expect to be two-thirds complete by June 2006 Renewal rates back to mid-90% level Incentive based compensation being expanded / improved sales status reporting Key positions filled in both segments Ongoing Increase management depth Increasing shareholder value

Lynn Blodgett Chief Operating Officer

Commercial Highlights Strong overall signings ITO new business acceleration Record new business generating significant start-up costs Two underperforming multi-scope HR contracts Slide #8

Commercial Segment Results ($ in millions) Comments: Internal revenue growth:11%; third consecutive double-digit quarter. Startup losses to recent new business increased approximately $7 million from Q2 FY06. Slide #9 Impacted by delayed new business ramp and known Mellon client losses Includes net losses for two underperforming multi- scope HR contracts ($22M), restructuring charge ($3M) and Mellon transaction costs ($3M) Includes restructuring charge of $5M

IT Outsourcing Differentiators Slide #10 Selective in deal pursuits Healthy financial metrics Commitment to quality and innovation BS 15000 certification ISO 20000 certification Advisory firms' perception of ACS Approach is flexible and accommodating Deal teams connect with client staff

Human Capital Management Services (HCMS) Outsourcing Consulting East 0.53 0.47 Consulting: Outsourcing: Multi-scope HR Services and benefits 11 Multi-scope clients 115 Benefit-only clients Cost reduction plans in place 75% U.S. / 25% International Concentration in Retirement and H&W Consulting 2,400 clients Industry average operating margins Highlights: Revenue: $800 million (1) Full range of integrated, end-to- end HRO services 5,000+ employees Slide #11 (1) HCMS revenues are included in the Commercial segment revenues.

Government Highlights Pipeline is expanding, up over 40% sequentially Signed $37 million of annual new business - $70 million of awards pending contract finalization Excellent client satisfaction Integration of ASCOM acquisition proceeding on plan Slide #12

Government Segment Results ($ in millions) Comments: Internal revenue growth: Flat Internal growth impacted by lower non-recurring revenue Slide #13 Includes $48M of WWS revenue Includes $31M related to WWS Includes Federal A/R writedown ($2M), restructuring charges ($1M) offset by residual WWS gain ($3M) Excluding WWS, operating margin was 17.4%

Pipeline Overview Sales pipeline in excess of $1.5 billion Qualified pipeline - deals within 180 days and smaller than $100 million of annual revenue Overall pipeline greater than $1.5 billion Highest ever Commercial strength despite continued healthy signings Government pipeline accelerating Areas of Strength Transactional BPO Commercial ITO Healthcare HR outsourcing Slide #14

Warren Edwards Chief Financial Officer

Selected Income Statement Components ($ in million, except EPS amounts) Slide #15

Selected Balance Sheet Categories ($ in millions) Slide #16

Condensed Cash Flow ($ in millions) Slide #17 Note: See the non-GAAP supplemental schedules at the end of this presentation for a reconciliation and a discussion of the adjustments made to GAAP results. Differences in schedule due to rounding Excludes $86M of Mellon transition services and $26M in Mellon pre-acquisition bonus payments.

FY07 Initial Guidance Slide #18 Revenue growth expected to be at least 10% Considers impact of WWS Divestiture Diluted earnings per share growth expected to be at least 10% Assumes no further share repurchases

Supplemental Schedules Third Quarter Fiscal Year 2006 April 27, 2006

Supplemental Information We have provided the impact on pre-tax profit, net income and diluted earnings per share of certain transactions and events included in our reported results of operations, which management believes enhances the understanding of our financial results and the impact of those events and transactions on our results. Management believes this information provides additional information related to factors impacting our reported financial performance which may be useful to investors. The amount of the transaction or event is presented on a basis determined in accordance with generally accepted accounting principles as reflected in our reported consolidated results of operations. All per share measures are calculated on the same diluted per share basis as our reported diluted earnings per share. The per share impacts are not intended to reflect a per share amount that accrues directly to an investor's benefit as a result of the particular transaction or event. Slide #S1

Non-GAAP Measures Use of Non-GAAP Financial Information The Company reports its financial results in accordance with generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP financial measures and ratios, used in managing the Company's business, may provide users of this financial information with additional meaningful comparisons between current results and prior reported results. Certain of the information set forth herein and certain of the information presented by the Company from time to time including Free Cash Flow and internal revenue growth may constitute non-GAAP financial measures within the meaning of Regulation G adopted by the Securities and Exchange Commission. We have presented herein and we will present in other information we publish that contains any of these non-GAAP financial measures a reconciliation of these measures to the most directly comparable GAAP financial measure. The presentation of this additional information is not meant to be considered in isolation or as a substitute for comparable amounts determined in accordance with GAAP in the United States. Slide #S2

Non-GAAP Measures (cont.) Internal revenue growth- is measured as total revenue growth less acquired revenue from acquisitions and revenues from divested operations. At the date of acquisition, we identify the trailing twelve months of revenue of the acquired company as the "pre-acquisition revenue of acquired companies." Pre-acquisition revenue of the acquired companies is considered "acquired revenues" in our calculation, and revenues from the acquired company, either above or below that amount are components of "internal growth" in our calculation. 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. Revenues from divested operations are excluded from the internal revenue growth calculation in the periods following the effective date of the divestiture. Our measure of internal revenue growth may not be comparable to similarly titled measures of other companies. 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 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. Slide #S3

Non-GAAP Measures (cont.) Adjusted Net Cash provided by Operating Activities and Adjusted Free Cash Flow - In the first quarter of fiscal year 2006, we adopted Statement of Financial Accounting Standards No. 123(R) ("SFAS 123(R)"), which requires companies to measure all employee stock-based compensation awards using a fair value method and recognize compensation costs in its financial statements. In periods ending prior to July 1, 2005, the excess tax benefits from the exercise of stock-based compensation awards was classified as net cash provided by operating activities pursuant to Emerging Issues Task Force Issue No. 00-15 "Classification in the Statement of Cash Flows of the Income Tax Benefit Received by a Company upon Exercise of a Nonqualified Employee Stock Option." However, for periods ending after July 1, 2005, pursuant to SFAS 123(R), the excess tax benefits from exercises are required to be reported in net cash provided by financing activities. We have calculated the excess tax benefits that would have been attributable to exercises in these prior periods as if the provisions of SFAS 123(R) were effective for those periods, and have presented a reconciliation of our previously reported cash flows from operating activities and free cash flow to the adjusted amounts, giving effect of the excess tax benefits attributable to those periods. This presentation is provided to enable investors to analyze our cash flows on a comparable basis. The third quarter of fiscal year 2006 was negatively impacted by the final settlement payments of $86 million related to the Mellon transition services agreement and Mellon pre-acquisition bonus payments of $26 million. Adjusted cash flow from operating activities and adjusted free cash flow are provided in order to present the impact of certain transactions or events on cash flow from operating activities and free cash flow that management expects to be infrequently occurring, so that investors can evaluate, and separate, the impact of these events on the Company's reported cash flows. We believe these adjusted measures are more indicative of the Company's cash flows and allow investors to analyze the performance of the Company in the same manner as management. Slide #S4

Revenue Growth - Second Quarter ($ in millions) Slide #S5

Revenue Growth - Third Quarter ($ in millions) Slide #S6

Slide #S7 Revenue Growth - YTD ($ in millions)

Slide #S8 Segment Results ($ in millions)

Slide #S9 Cash Flow Statement ($ in millions)

Third Quarter Fiscal Year 2006 April 27, 2006