AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 

The fair value of each option grant was estimated at the date of grant using a separate Black Scholes option pricing calculation 

for each grant.  The following weighted average assumptions were used for grants in fiscal 2003, 2002 and 2001: dividend 

yield of 0% in all years for all plans; volatility of 34.65%, 34.94% and 35.84%, for fiscal 2003, 2002, and 2001, respectively, 

for all plans; risk free interest rates of 3.74%, 4.36% and 4.76% for fiscal 2003, 2002, and 2001, respectively, for all plans; 

and weighted average expected option life of 5.5 years for the 1997 and 1988 Plans and 3 years for the 1991 Plan for all years 

presented. The average fair values of the options granted during fiscal 2003, 2002, and 2001 are estimated at $14.49, $16.01 

and $9.93 respectively, for the combined plans.  The fair values have been adjusted to reflect the February 2002 two for one 

stock split. 

Reclassifications 

Certain reclassifications have been made to prior period financial statements to conform to current presentation. 

2. Business 

Combinations 

From our inception through June 30, 2003, we have acquired several businesses in the information technology services and 

business process outsourcing industries. Our recent acquisition activity is summarized as follows (excluding transaction costs): 

Year ended June 30, 

2003 

2002 

2001 

Purchase consideration (in thousands): 

    Net cash paid 

$           65,395 

  $      1,405,009 

$       166,108 

    Amounts due to seller 

325 

14,740 

1,536 

    Liabilities assumed 

17,089  

188,699  

19,220 

         Fair value of assets acquired 

             (including intangibles) 

$           82,809 

  $      1,608,448 

$       186,864 

During fiscal 2003, we acquired five companies, the most significant of which was the acquisition of CyberRep, Inc. 

( CyberRep ) in January 2003.  CyberRep, which is included in our commercial segment, provides customer care and 

customer relationship management services for the telecommunications, wireless communications, technology, and consumer 

products industries. The transaction was valued at approximately $42 million plus transaction costs, with assets acquired of 

$56.6 million and liabilities assumed of $14.9 million.  We recorded goodwill of $33.6 million, which is expected to be fully 

deductible for tax purposes, and $5.5 million in customer related intangible assets, which are attributable to customer 

relationships with an aggregate anticipated useful life of approximately 7 years. CyberRep's operating results are included in 

our consolidated financial statements from the effective date of the acquisition, January 1, 2003. We believe this transaction 

expands our suite of business process outsourcing solutions for commercial clients worldwide by enhancing high volume, 

customer care center capability and CRM business process outsourcing solutions for Fortune 500 companies. We also 

completed four other acquisitions during fiscal 2003, all of which were included in our state and local government segment.  

These acquisitions are not considered material to our results of operations, either individually or in the aggregate; therefore, no 

pro forma information is presented.  

During fiscal year 2002, we acquired eight companies, the most significant of which were the acquisitions of Lockheed Martin 

IMS Corporation ( IMS ) in August 2001 and AFSA Data Corporation ( AFSA ) in June 2002. 

We acquired 100% of the stock of IMS, a wholly owned subsidiary of Lockheed Martin Corporation, (now known as ACS 

State and Local Solutions), for approximately $825 million plus related transaction costs.  The acquisition was funded from a 

$550 million 18 month interim credit facility, borrowings from our then existing revolving credit facility, and existing cash on 

hand.  This interim credit facility was repaid in October 2001 with the proceeds from the equity offering of 18.4 million shares 

of our Class A common stock at $40.50 per share (see Note 9).  IMS' results have been included in our consolidated financial 

statements from the effective date of the acquisition, August 1, 2001.  IMS provides business process outsourcing services to 

more than 230 state and local government agencies in 45 U.S. states, the District of Columbia, Canada, Australia, and Europe.  

IMS specializes in child support enforcement, welfare and community services, electronic toll collection, and other intelligent 

transportation services involving the trucking industry, photo enforcement of red light and speeding violations, parking 

management, and information technology outsourcing.  We believe the acquisition of IMS solidifies ACS as a leader in 

technology based outsourcing solutions to state and local government agencies. 

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