AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
17. Segment Information
We are organized into commercial, state and local government, and the federal government segments due to the different
operating environments of each segment, caused by different types of customers, differing economic characteristics, and the
nature of regulatory environments. Within the commercial segment, we provide technology outsourcing, business process
outsourcing, and systems integration services to clients in such industries as insurance, utilities, manufacturing, financial
institutions, telecommunications, healthcare, retail, and transportation. In the state and local government segment, we are a
business process outsourcing provider to state and local governments. In the federal government segment, we provide systems
integration services, business process outsourcing, and technology outsourcing to federal agencies.
In fiscal year 2001, we reported our results of operations in two segments: commercial and federal government. The
commercial segment included our state and local government customers. In fiscal year 2002, as a result of the acquisition of
IMS and the growth in our state and local government business, we determined that our state and local government operations
met the definition of a segment. Prior period reporting has been restated to conform to the new segment reporting.
Over 99% of our consolidated revenues are derived from domestic clients. In fiscal years ended 2003, 2002, and 2001, no
single customer exceeded 10% of our revenues.
The accounting policies of each segment are the same as those described in the summary of significant accounting policies (see
Note 1). Intersegment sales and transfers are priced as if the sales or transfers were to third parties. However, these amounts
during the three years presented were immaterial to the individual segments.
We use earnings before interest, taxes and other non operating expense (income), or Adjusted EBITDA, to measure segment
profit. Segment operating income includes selling, general and administrative expenses directly attributable to that segment.
Corporate includes general and administrative services shared by all of our segments such as treasury, legal, corporate
accounting, human resources, and facilities. Where practical, shared expenses are allocated based on measurable drivers of
expense (e.g., human resource costs are allocated based on headcount).
Certain reclassifications have been made to the segment disclosures as the result of changes to our operating structure. In fiscal
year 2003, we reclassed a certain operation previously held in our commercial segment to our state and local government
segment, due to a change in the management of that operation. Prior years' results have been restated for comparison purposes.