AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands) 

Year ended June 30, 

2003 2002 2001 

Cash flows from operating activities: 

     Net income 

$   306,842 

$  229,596 

$ 134,292 

     Adjustments to reconcile net income to net cash provided by operating  activities: 

             Depreciation and amortization 

152,128 

110,486 

93,617 

             Contract inducement amortization 

7,346 

887 

             Provision for uncollectible accounts receivable 

4,838 

3,283 

2,062 

             Impairment of long term investments 

3,375 

8,449 

             Gain on collection of note receivable 

(1,713)

             Gain on sale of investment 

(12,785)

             (Gain) loss on sale of business units 

(1,585) 

1,841 

             Other non cash activities 

5,575 

1,012 

526 

             Deferred income tax expense 

100,851 

55,821 

37,359 

             Tax benefit of stock options 

16,124 

21,951 

20,649 

             Changes in assets and liabilities, net of effects from acquisitions: 

                Increase in accounts receivable 

(100,643) 

(115,806)

(47,807)

                (Increase) decrease in inventory 

2,616 

(744)

(1,160)

                (Increase) decrease in prepaid expenses and other current assets 

3,773 

2,762 

(2,965)

                (Increase) decrease in other assets 

(15,585) 

(6,570)

3,449 

                Increase (decrease) in accounts payable 

(15,867) 

26,252 

(11,273)

                Increase in accrued compensation and benefits 

787 

7,209 

13,190 

                Increase (decrease) in other accrued liabilities 

64,502 

12,975 

(23,357)

                Increase (decrease) in income taxes payable 

 (3,350) 

13,118 

(52,907)

                Increase (decrease) in other long term liabilities 

1,468 

(638)

(1,069)

                Increase (decrease) in unearned revenue 

12,110 

130 

(8,194)

                      Total adjustments 

238,463 

142,418 

7,622 

                      Net cash provided by operating activities 

545,305 

372,014 

141,914 

Cash flows from investing activities: 

     Purchases of property, equipment and software, net 

(205,673) 

(144,406)

(99,070)

     Payments for acquisitions, net of cash acquired 

(76,838) 

(1,425,529)

(173,402)

     Additions to other intangible assets 

(47,967) 

(19,317)

(21,695)

     Proceeds from (payments on) divestitures, net of transaction costs 

4,093 

(5,887)

202,718 

     Purchases of investments 

(4,129)

(500)

     Proceeds from sale of investments 

466 

700 

17,100 

     Additions to notes receivable 

(3,478) 

(3,577)

(3,781)

     Proceeds from notes receivable 

9,314 

3,981 

9,492 

                       Net cash used in investing activities 

(320,083) 

(1,598,164)

(69,138)

Cash flows from financing activities: 

     Proceeds from issuance of long term debt, net 

927,762 

1,279,210 

674,893 

     Payments of long term debt 

(1,146,561) 

(992,510)

(566,912)

     Proceeds from equity offering, net of transaction costs 

714,292 

     Employee stock transactions 

14,243 

17,901 

17,829 

     Other, net 

(3,310) (1,387)

(649)

                       Net cash provided (used) by financing activities 

(207,866) 

1,017,506 

125,161 

     Net increase (decrease) in cash and cash equivalents 

17,356 

(208,644)

197,937 

     Cash and cash equivalents at beginning of year 

33,814 

242,458 

44,521 

     Cash and cash equivalents at end of year 

$     51,170 

$    33,814 

$ 242,458 

See supplemental cash flow information in Notes 2, 5, 6, 7, and 8. 

The accompanying notes are an integral part of these consolidated financial statements. 

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