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FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED DECEMBER 31, 1999
COMMISSION FILE NUMBER _________
ACS DEFENSE, INC. PROFIT SHARING AND 401(k) PLAN
(FULL TITLE OF THE PLAN)
--------------
AFFILIATED COMPUTER SERVICES, INC.
(NAME OF ISSUER)
2828 NORTH HASKELL AVENUE
DALLAS, TEXAS 75201
(PRINCIPAL EXECUTIVE OFFICE)
Notices and communications from the Securities and Exchange Commission relative
to this report should be forwarded to:
William L. Deckelman, Jr., Esq.
Executive Vice President, Secretary And General Counsel
Affiliated Computer Services, Inc.
2828 North Haskell Avenue
Dallas, Texas 75201
(214) 841-6144
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REQUIRED INFORMATION
The ACS Defense Inc. Profit Sharing and 401(k) Plan is subject to the
requirements of the Employee Retirement Income Security Act of 1974. Attached
hereto is a copy of the most recent financial statements and schedules of the
Plan prepared in accordance with the financial reporting requirements of ERISA.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrative Committee (or other persons who administer the employee
benefit plan) has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
ACS DEFENSE, INC. PROFIT SHARING AND 401(k) PLAN
By: /s/ Lora Villarreal
--------------------------------------------------------------
Name: Lora Villarreal
Title: Administrative Committee Member
Date: May 31, 2001
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ACS DEFENSE, INC.
PROFIT SHARING AND 401(K) PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
ANSTISS & CO., P.C.
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ACS DEFENSE, INC.
PROFIT SHARING AND 401(K) PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
INDEX
PAGE #
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Independent Auditors' Report 1
Statements of Net Assets Available For Benefits 2
Statements of Changes in Net Assets Available For Benefits 3
Notes to Financial Statements 4-9
Supplementary Schedules: *
-----------------------
Schedule I - Assets Held for Investment Purposes at End of Year 10
*Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
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INDEPENDENT AUDITOR'S REPORT
To the Board of Trustees of
ACS Defense, Inc.
Profit Sharing and 401(K) Plan
5 Burlington Woods Drive
Burlington, MA 01803
We were engaged to audit the financial statements of ACS Defense, Inc. Profit
Sharing and 401(K) Plan as of December 31, 1999 and 1998, and for the years then
ended, and the supplemental schedules as of and for the year ended December 31,
1999 as listed in the accompanying index. These financial statements and
schedules are the responsibility of the Plan's management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note 3, which was certified by CG Trust Company, the trustee of
the Plan, except for comparing the information with the related information
included in the financial statements and supplemental schedules. We have been
informed by the plan administrator that the trustee holds the Plan's investment
assets and executes investment transactions. The plan administrator has obtained
a certification from the trustee as of and for the years ended December 31, 1999
and 1998, that the information provided to the plan administrator by the trustee
is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedules taken as a whole. The form and content of the
information included in the financial statements and schedules, other than that
derived from the information certified by the trustee, have been audited by us
in accordance with generally accepted auditing standards and, in our opinion,
are presented in compliance with the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974.
ANSTISS & CO., P.C.
Lowell, MA
January 19, 2001
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ACS Defense, Inc., Profit Sharing and 401(k) Plan
Statements of Net Assets Available for Benefits
----------------------------------------------------------------------------------------------------------------------------------
As of December 31,
1999 1998
-------------------------- -------------------------
INVESTMENTS, AT FAIR VALUE
Investments $ 65,279,429 $ 26,426,064
ACS Stock 80,352 32,971
Participant loans 904,456 489,614
-------------------------- -------------------------
TOTAL INVESTMENTS 66,264,237 26,948,649
-------------------------- -------------------------
Receivables
Cash Transaction Fund - 267
Employer's contributions 1,416,458 879,049
Participants' contributions 316,329 182,355
-------------------------- -------------------------
TOTAL RECEIVABLES 1,732,787 1,061,671
-------------------------- -------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 67,997,024 $ 28,010,320
========================== =========================
The accompanying notes are in integral part of the financial statements.
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ACS Defense, Inc., Profit Sharing and 401(k) Plan
Statements of Changes in Net Assets Available for Benefits
------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
1999 1998
----------------- ------------------
ADDITIONS
Investment income:
Interest and dividend income, investments $ 346,668 $ 376,709
Interest income, participant loans 46,010 39,181
Other Income 372 -
Net appreciation in fair value of investments 6,050,795 3,744,259
----------------- ------------------
6,443,845 4,160,150
----------------- ------------------
Contributions:
Employer 1,721,096 1,064,670
Participant 2,831,318 2,327,275
----------------- ------------------
4,552,414 3,391,945
----------------- ------------------
Other additions:
Transferred Assets 31,694,734 -
Rollover Contributions 215,101 41,859
----------------- ------------------
31,909,835 41,859
----------------- ------------------
TOTAL ADDITIONS 42,906,095 7,593,953
----------------- ------------------
DEDUCTIONS
Payment of benefits 2,907,547 4,693,612
Fees & Commissions 11,576 2,944
Other Adjustments 268 -
----------------- ------------------
TOTAL DEDUCTIONS 2,919,391 4,696,556
----------------- ------------------
NET INCREASE 39,986,704 2,897,397
Net assets available for plan benefits:
Beginning of period 28,010,320 25,112,923
----------------- ------------------
End of period $ 67,997,024 $ 28,010,320
================= ==================
The accompanying notes are in integral part of the financial statements.
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ACS DEFENSE, INC.
PROFIT SHARING AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - DESCRIPTION OF THE PLAN
The following description of the ACS Defense, Inc. Profit Sharing and
401(K) Plan provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's
provisions. Effective April 1, 1998 the Analytical Systems Engineering
Corporation Profit Sharing and Analytical Systems Engineering
Corporation 401(K) Plan were merged and became the ACS Defense, Inc.
Profit Sharing and 401(K) Plan.
As of April 1, 1998 the trustee of the Plan was changed from Vanguard
Fiduciary Company Trust to CG Trust Company.
GENERAL - The Plan is a 401(K) and a profit sharing plan. The Plan is
designed to allow full-time employees to contribute a portion of their
salary and allows the employer to "match" a percentage of their
contribution. It also allows the employer to make an additional "profit
sharing" contribution to the plan. It is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS - The Plan is funded with voluntary employee deferrals and
employer contributions.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's profit
sharing and matching contribution and, (b) plan earnings and, (c)
forfeitures of terminated participants' nonvested accounts, and charged
with an allocation of administrative expenses. Allocations are based on
participant earnings or account balances, as defined. The benefit to
which a participant is entitled is the benefit that can be provided from
the participant's vested account.
VESTING - Participants are immediately vested in their contributions
plus actual earnings thereon. Vesting in the company's contribution
portion of their accounts plus actual earnings thereon is based on years
of continuous service. A participant is 100% vested after seven years of
credited service.
PAYMENT OF BENEFITS - On termination of service due to death, disability
or retirement, a participant may elect to receive either a lump-sum
amount equal to the value of the participant's vested interest in his or
her account, or annual installments over a ten-year period. For
termination of service due to other reasons, a participant may receive
the value of the vested interest in his or her account as a lump-sum
distribution.
PARTICIPANT LOANS - Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum of $50,000 or 50% of their account
balance, whichever is less. The loans are secured by the balance in the
participant's account and bear interest at rates ranging from 6% to 10%,
which are commensurate with local prevailing rates as determined
quarterly by the Plan administrator. Principal and interest is paid
ratably through monthly payroll deductions.
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ACS DEFENSE, INC.
PROFIT SHARING AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
FORFEITED ACCOUNTS - Forfeitures, in the amount of $17,870 and $96,876
for the years ended December 31, 1999 and 1998, respectively, were
allocated to remaining active participants.
INVESTMENT OPTIONS - During the plan year ending December 31, 1999
participants were able to allocate their contributions among the
following investment options:
GUARANTEED INCOME FUND - This fixed income fund seeks to provide
competitive yields relative to comparable guaranteed fixed
income investment funds.
BALANCED FUND - This CIGNA Separate Account seeks to achieve a
high total return on investment through capital appreciation and
current income by investing in a combination of equity and fixed
income securities.
CIGNA LIFETIME FUNDS - CIGNA Lifetime Funds is a family of funds
comprised of five distinct, multi-asset class, multi-manager
investment portfolios, which investment objectives for each of
the five Funds varies, in keeping with the investment time
horizon (using the participant's age as the indicator of time
remaining to retirement) and associated asset allocation of the
underlying portfolios. The performance goal for each is to
consistently out-perform its custom benchmark over full market
cycles.
AMERICAN CENTURY ULTRA ACCOUNT - This CIGNA Separate Account
invests wholly in the American Century Ultra Fund, a mutual fund
which seeks to provide long-term growth of capital.
LARGE COMPANY STOCK - GROWTH FUND - This fund seeks to provide
investors with consistent, competitive investment results
through the superior selection of large capitalization growth
stocks and by managing risk in all market conditions.
LARGE COMPANY STOCK - INDEX FUND - This fund is constructed to
reflect the composition of the S&P 500 Index and seeks to
provide long-term growth of capital and income.
FIDELITY ADVISOR GROWTH OPPORTUNITIES ACCOUNT - This CIGNA
Separate Account invests wholly in the Fidelity Advisor Growth
Opportunities fund, a mutual fund that seeks long-term capital
growth.
INVESCO DYNAMICS ACCOUNT - This CIGNA Separate Account invests
wholly in the INVESCO Dynamics fund, a mutual fund that seeks to
provide capital appreciation.
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ACS DEFENSE, INC.
PROFIT SHARING AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
SMALL COMPANY STOCK - GROWTH FUND - This CIGNA Separate Account
is managed by Fiduciary Trust Company International following
their small capitalization growth strategy and seeks to achieve
long-term capital appreciation.
FOREIGN STOCK II FUND - This CIGNA Separate Account is managed
by the Bank of Ireland Asset Management (BIAM) team, pursuant to
an agreement with the registered investment adviser, BBOI
Worldwide LLC, which is a joint venture between Bank of Ireland
Asset Management (U.S.) Ltd. And Berger Associates, Inc. This
fund seeks to provide long-term capital appreciation by
investing primarily in the common stock of well-established
companies located outside the U.S.
JANUS WORLDWIDE ACCOUNT - This CIGNA Separate Account invest
wholly in the Janus Worldwide Fund, a mutual fund that seeks to
provide long-term growth of capital in a manner consistent with
the preservation of capital.
AFFILIATED COMPUTER SERVICES, INC. (ACS), STOCK - Employees have
the ability to purchase stock of the parent company, ACS, Inc.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly actual results may differ from those estimates.
TRUSTEE
The trustee of the plan is CG Trust Company. CG Trust Company serves as
the Plans' trustee and manages the plan assets.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices, which represent
the net asset value of shares held by the Plan at year-end. Units of the
Retirement Savings Trust are valued at net asset value at year-end.
Participant loans are valued at cost, which approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis.
Interest income is accrued when earned. Dividend income is recorded on
the ex-dividend date. Capital gain distributions are included in
dividend income.
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ACS DEFENSE, INC.
PROFIT SHARING AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
ADMINISTRATIVE EXPENSES
Investment advisory fees for portfolio management are paid directly from
fund earnings and are included in the fund expense ratio and do not
reduce assets of the plan. Purchase fees, if applicable, are paid by the
plan participants investing in those funds, which are subject to such
fees.
NOTE 3 - NON-AUDITED INFORMATION
The following items were not audited by us as they were certified by CG
Trust Company for 1999 and 1998. See Independent Auditors' Report.
1999 1998
---- ----
Investments $65,279,429 $26,426,064
ACS Stock 80,352 32,971
Participants' Loans Receivable 904,456 489,614
Rollovers & Other Transfers In 31,909,835 41,859
Investment Income 6,443,845 4,160,150
Administrative Expenses 11,576 2,944
NOTE 4 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
NOTE 5 - TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated September 15, 1994, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). The Plan has been amended since receiving the determination
letter. However, the Plan administrator and the Plan's tax counsel
believe that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC.
The plan is exempt from Federal and state income taxes, therefore, no
provision for income taxes is required in the financial statements.
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ACS DEFENSE, INC.
PROFIT SHARING AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 6 - RELATED PARTY TRANSACTIONS
The Plan invests in units of pooled separate accounts, along with units
of a deposit administration accounts, managed by a subsidiary of the
Custodian (CIGNA). Transactions in such investments qualify as
party-in-interest transactions, which are exempt from, prohibited
transactions rules.
The plan invested in shares of Affiliated Computer Services, Inc. "ACS,
Inc.", the parent company of ACS Defense, Inc.
NOTE 7 - INVESTMENTS
The following presents investments at December 31, 1999 and 1998 that
represent 5% or more of the Plan's net assets.
1999 1998
---- ----
Guaranteed Income Fund $22,593,375 $5,590,003
Cigna Lifetime 40 4,786,971 4,896,818
Stock Index 11,716,787 8,195,537
Large Growth Putnam 13,399,390 6,783,341
Templeton Foreign 0 543,208
Fidelity Advanced Growth Opp 4,066,628 0
Janus Worldwide 3,205,496 0
NOTE 8 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 SCHEDULE H
RECONCILIATION OF TOTAL NET ASSETS
----------------------------------
Net Assets per F/S (Accrual Basis) $67,997,024
Less: Receivables on Accrual Basis Financial Statements
not on Schedule H (1,732,787)
Less: Certain "deemed" Distributions Relating to
Participant Loans on Schedule H not on the Financial
Statements (14,799)
-------------
Net Assets per Schedule H (Modified Cash) $66,249,438
=============
RECONCILIATION OF PART I NET ASSETS BY LINE ITEM
------------------------------------------------
Schedule H Line C(10) $41,713,708
Schedule H Line C(13) 972,346
Schedule H Line C(14) 22,593,375
-------------
Investments per Financial Statements $65,279,429
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ACS DEFENSE, INC.
PROFIT SHARING AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 8 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 SCHEDULE H
(Continued)
RECONCILIATION OF NET INCOME
----------------------------
Net Increase per Financial Statements $39,986,704
Less: Transfers Into the Plan (31,694,734)
-------------
Net Income per Financial Statements 8,291,970
Accrual Basis Contribution Receivable Included in Net
Assets at Beginning of the Year 857,222
Accrual Basis Contribution Receivable Included in Net
Assets at End of the Year (1,732,787)
Deemed Distribution from Participant Loans (14,799)
-------------
Net Income per Schedule H $7,401,606
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NOTE 9 - PLAN MERGERS
On October 1, 1999, the Betac International Corporation Employee Stock
Ownership Plan was merged into the ACS Defense, Inc. Profit Sharing and
401(k) Plan. Prior to the merger, the plans covered eligible employees
at the ACS Defense, Inc. The transferred net assets have been recognized
in the accounts of the ACS Defense, Inc. Profit Sharing and 401(k) Plan
as of October 1, 1999, at their balances as previously carried in the
accounts of the Betac International Corporation Employee Stock Ownership
Plan. The changes in net assets of the combined plans are included in
the accompanying statement of changes in net assets available for
benefits from October 1, 1999. A summary of the transferred net assets
follows:
Investments at fair value $31,269,786
Participant Loans 424,948
-----------------
31,694,734
=================
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INDEX TO EXHIBITS
Exhibit No. Description
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23 Consent of Antiss & Co., P.C.