Affiliated Computer Services (ACS) 8-K ACS Announces Second Quarter Fiscal Year 2006 Results Signs Record New Business During the Quarter

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 Second Quarter Fiscal Year 2006 Results
Signs Record New Business During the Quarter

DALLAS, TEXAS:January 26, 2006 – Affiliated Computer Services, Inc., (NYSE: ACS), a premier provider of business process outsourcing and information technology solutions, announced second quarter fiscal year 2006 revenues of $1.35 billion, an increase of 31% compared to the second quarter of the prior year. The Company’s internal revenue growth rate accelerated to 9% for the quarter. Second quarter fiscal year 2006 reported diluted earnings per share was $0.81 and includes several unusual items.

The Company also set a quarterly record for new business, signing $251 million of annually recurring revenue, an 11% increase over the prior year quarter. Operating and free cash flow were extremely strong at $248 million and $152 million, respectively.

“I am proud of the ACS team and of all we have accomplished this quarter. My confidence in our services and our ability to deliver outstanding value to our clients, our employees and our shareholders has never been greater”, said Mark King, ACS’ President and Chief Executive Officer. “From an operational standpoint, we saw significant momentum on the new business front resulting in a company record for new business signings. Our internal growth accelerated and our Government business has produced positive internal growth and a growing sales pipeline. Our operating and free cash were also company records. Finally, we have been very active in determining the best way to increase shareholder value. As noted in a separate release this afternoon, we announced a tender offer to purchase up to approximately 45% of the Company’s outstanding common stock. Management, along with its advisors and the Board of Directors, believes that this is an appropriate manner for the Company to deliver value to those shareholders who elect to tender their shares.”

Other key highlights from the second quarter of fiscal year 2006 include:

• Commercial segment revenue grew 62% and accounted for 58% of revenues this quarter. Commercial internal revenue growth accelerated to 18%. Government segment revenue increased 4% and accounted for 42% of revenues this quarter. Government internal revenue growth accelerated to 1%.

1

• Diluted earnings per share was $0.81 for the second quarter of fiscal year 2006. Reported results include a net benefit of $0.12 per diluted share for the previously announced divestiture of a substantial portion of our Government welfare to workforce services business and charges related to this business (“WWS Divestiture”), restructuring and related asset impairment charges of $0.05 per diluted share, and a $0.03 per diluted share charge for legal settlements and related legal fees, and for legal fees associated with the previously announced unsolicited offer regarding a potential sale of the Company and the possible recapitalization of the Class B shares.

• Annualized recurring new business was a record at $251 million during the quarter. Trailing twelve month new business increased 15% over the prior trailing twelve month period.

• Cash flow from operations during the second quarter was approximately $248 million, or 18% of revenues. Capital expenditures and additions to intangible assets were approximately $96 million, or 7% of revenues. Free cash flow during the second quarter was $152 million, or 11% of revenue.

• The Company completed the sale of substantially all of its Government welfare to workforce services business for approximately $69 million excluding retained working capital. This business line generated approximately $205 million in revenue during calendar year 2005.

• During the quarter the Company completed the acquisition of the Transport Revenue division of Ascom AG (“ATR”), a Switzerland-based communications company, for approximately $100 million. ATR, with trailing twelve month revenue of approximately $177 million, consists of three business units – fare collection, airport parking solutions and toll collection with office locations across nine countries.

• From September 2003 through December 31, 2005, the Company has repurchased 22 million shares of Class A common stock under its existing authorizations for approximately $1.1 billion, an average purchase price of approximately $50 per share. Approximately 2.2 million shares, or $116 million, were repurchased during the second quarter at an average price of $54 per share.

• The Company announced today that its Board of Directors has approved a “Dutch Auction” tender offer to purchase up to 55.5 million shares of its Class A common stock at a price per share not less than $56 and not greater than $63. The number of shares of Class A common stock proposed to be purchased in the Dutch Auction tender offer represents approximately 45% of the Company’s outstanding common stock. The Company’s directors and executive officers will not tender any shares pursuant to this transaction.

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

• Revenues for the six months ended December 31, 2005 were $2.66 billion, an increase of 28% compared to the first six months of the prior year. Internal revenue growth for the first six months of fiscal year 2006 was 6% and the remaining growth was due to acquisitions.

2

• Diluted earnings per share for the six months ended December 31, 2005 was $1.55 and included a benefit of approximately $0.12 per diluted share for the WWS Divestiture, a restructuring and related asset impairment charge of $0.05 per diluted share, a $0.03 per diluted share charge for legal settlements and related legal fees, and for legal fees associated with the previously announced unsolicited offer regarding a potential sale of the Company and the possible recapitalization of the Class B shares, 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 $0.09 during the first six months of fiscal year 2006.

Fiscal year 2006 financial guidance will be provided upon completion of our tender offer for our shares.

ACS will discuss these results on a conference call and webcast on www.acs-inc.com at 3:30 p.m. CST 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 under the caption “Risks Related to Our Business” in the Company’s prior filings with the Securities and Exchange Commission, including the most recent quarterly report on Form 10-Q filed on November 9, 2005. 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. The information regarding our just announced tender offer in this news release is for informational purposes only and is not an offer to buy, or the solicitation of an offer to sell, any shares. The full details of the tender offer, including complete instructions on how to tender shares, along with the letter of transmittal and related materials, are expected to be mailed to stockholders promptly following commencement of the offer. Stockholders should carefully read the offer to purchase, the letter of transmittal and other related materials when they are available because they will contain important information. Stockholders may obtain free copies, when available, of the tender offer statement and

3

other filed documents relating thereto that will be filed by the Company with the U.S. Securities and Exchange Commission at the Commission’s website at www.sec.gov or from the Company’s information agent to be appointed in connection with the offer. Stockholders are urged to read these materials carefully prior to making any decision with respect to the tender offer.

4

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

	Three months ended						Proforma Three
	December 31,						months ended
	2005			2004			December 31, 2004(4)
Revenues	$	1,347,587		$	1,027,286		$	1,027,286
Expenses:
Wages and benefits		632,889	(2)		435,970			444,967
Services and supplies		305,889			251,006			251,006
Rent, lease and maintenance		163,541			121,124			121,124
Depreciation and amortization		70,444			55,586			55,586
Gain on sale of business (1)		(29,765	)		—			—
Other operating expenses (1)		28,595	(2,3)		8,676			8,676
Total operating expenses		1,171,593			872,362			881,359
Operating income		175,994			154,924			145,927
Interest expense		13,333			2,869			2,869
Other non-operating income, net		(1,994	)		(1,776	)		(1,776	)
Pretax profit		164,655			153,831			144,834
Income tax expense		61,459			57,686			54,438
Net income	$	103,196		$	96,145		$	90,396
Earnings per common share:
Basic	$	0.83		$	0.75		$	0.70
Diluted	$	0.81		$	0.73		$	0.69
Shares used in computing earnings per common share:
Basic		124,849			128,619			128,619
Diluted		126,865			131,933			131,219

5

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

	Six months ended						Proforma
	December 31,						Six months ended
	2005			2004			December 31, 2004 (4)
Revenues	$	2,658,504		$	2,073,468		$	2,073,468
Expenses:
Wages and benefits		1,261,008	(2,5)		867,818			885,049
Services and supplies		596,661			526,068			526,068
Rent, lease and maintenance		318,713			240,117			240,117
Depreciation and amortization		138,524			109,905			109,905
Gain on sale of business (1)		(29,765	)		—			—
Other operating expenses (1)		42,606	(2,3,6)		19,595			19,595
Total operating expenses		2,327,747			1,763,503			1,780,734
Operating income		330,757			309,965			292,734
Interest expense		25,461			6,824			6,824
Other non-operating income, net		(6,375	)		(1,342	)		(1,342	)
Pretax profit		311,671			304,483			287,252
Income tax expense		114,351			114,181			108,265
Net income	$	197,320		$	190,302		$	178,987
Earnings per common share:
Basic	$	1.58		$	1.48		$	1.40
Diluted	$	1.55		$	1.45		$	1.37
Shares used in computing earnings per common share:
Basic		125,139			128,283			128,283
Diluted		127,044			131,501			130,764

6

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

(1) During the second quarter of fiscal year 2006, the Company completed the WWS Divestiture and recorded a net before tax benefit of $26.5 million ($15.8 million after tax), or $0.12 per diluted share for the gain and charges related to this business.

(2) During the second quarter of fiscal year 2006, the Company recorded restructuring charges and related asset impairments totaling $10.4 million ($6.6 million after tax), or $0.05 per diluted share in two components: i.) Wages and benefits — $4.7 million and ii.) Other operating expenses — $5.7 million.

(3) During the second quarter of fiscal year 2006, the Company recorded 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. This expense was primarily recorded in Other operating expense.

(4) 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)

	Three months ended									Six months ended
	December 31, 2004									December 31, 2004
				Pro Forma									Pro Forma
				Stock									Stock
				Compensation									Compensation
	As Reported			Expense			Pro Forma			As Reported			Expense			Pro Forma
Revenues	$	1,027,286		$	—		$	1,027,286		$	2,073,468		$	—		$	2,073,468
Expenses:
Wages and benefits		435,970			8,997			444,967			867,818			17,231			885,049
Services and supplies		251,006			—			251,006			526,068			—			526,068
Rent, lease and maintenance		121,124			—			121,124			240,117			—			240,117
Depreciation and amortization		55,586			—			55,586			109,905			—			109,905
Other operating expenses		8,676			—			8,676			19,595			—			19,595
Total operating expenses		872,362			8,997			881,359			1,763,503			17,231			1,780,734
Operating income		154,924			(8,997	)		145,927			309,965			(17,231	)		292,734
Interest expense		2,869			—			2,869			6,824			—			6,824
Other non-operating (income) expense, net		(1,776	)		—			(1,776	)		(1,342	)		—			(1,342	)
Pretax profit		153,831			(8,997	)		144,834			304,483			(17,231	)		287,252
Income tax expense		57,686			(3,248	)		54,438			114,181			(5,916	)		108,265
Net income	$	96,145		$	(5,749	)	$	90,396		$	190,302		$	(11,315	)	$	178,987

(5)	During the first quarter of fiscal year 2006, the Company recorded 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. This expense was recorded in Wages and benefits.
(6)	During the first quarter of fiscal year 2006, the Company recorded 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. This expense was recorded in Other operating expense.

7

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

	December 31,		June 30,
	2005		2005
	(Unaudited)		(Audited)
ASSETS:
Cash and cash equivalents	$	107,263	$	62,685
Accounts receivable, net		1,232,322		1,061,590
Other current assets		167,831		119,822
Total current assets		1,507,416		1,244,097
Property, equipment and software, net		768,315		677,241
Goodwill, net		2,396,626		2,334,655
Other intangible assets, net		480,423		466,312
Other long-term assets		158,224		128,533
TOTAL ASSETS	$	5,311,004	$	4,850,838
LIABILITIES:
Accounts payable	$	88,106	$	62,788
Accrued compensation		157,328		175,782
Other accrued liabilities		521,395		471,577
Income taxes payable		29,194		2,310
Deferred taxes		28,939		34,996
Current portion of long-term debt		7,489		6,192
Current portion of unearned revenue		98,837		84,469
Total current liabilities		931,288		838,114
Long-term debt		925,603		750,355
Long-term deferred taxes		287,285		240,210
Other long-term liabilities		196,979		183,731
TOTAL LIABILITIES		2,341,155		2,012,410
TOTAL STOCKHOLDERS’ EQUITY		2,969,849		2,838,428
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,311,004	$	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.

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 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

9

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 December 31,
	2005		2004		Growth %(a)
Consolidated
Total Revenues	$	1,348	$	1,027		31	%
Less: Divested		—		—
Adjusted Base	$	1,348	$	1,027		31	%
Acquired Revenues*	$	228	$	—		22	%
Internal Revenues		1,120		1,027		9	%
Total	$	1,348	$	1,027		31	%
Commercial
Total Revenues	$	785	$	485		62	%
Less: Divested		—		—
Adjusted	$	785	$	485		62	%
Acquired Revenues*	$	211	$	—		44	%
Internal Revenues		574		485		18	%
Total	$	785	$	485		62	%
Government
Total Revenues	$	563	$	542		4	%
Less: Divested		—		-
Adjusted	$	563	$	542		4	%
Acquired Revenues*	$	17	$	—		3	%
Internal Revenues		546		542		1	%
Total	$	563	$	542		4	%

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

10

	Six months ended December 31,
	2005			2004		Growth %(a)
Consolidated
Total Revenues	$	2,659		$	2,073		28	%
Less: Divested		(1	)		—
Adjusted Base	$	2,658		$	2,073		28	%
Acquired Revenues*	$	453		$	4		22	%
Internal Revenues		2,205			2,069		6	%
Total	$	2,658		$	2,073		28	%
Commercial
Total Revenues	$	1,551		$	979		58	%
Less: Divested		—			—
Adjusted	$	1,551		$	979		58	%
Acquired Revenues*	$	434		$	4		44	%
Internal Revenues		1,117			975		14	%
Total	$	1,551		$	979		58	%
Government
Total Revenues	$	1,108		$	1,094		1	%
Less: Divested		(1	)		—
Adjusted	$	1,107		$	1,094		1	%
Acquired Revenues*	$	19		$	—		2	%
Internal Revenues		1,088			1,094		(1	%)
Total	$	1,107		$	1,094		1	%

*	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
	December 31,
	2005			2004
Free Cash Flow
Net cash provided by operating activities	$	248		$	180
Less:
Purchases of property, equipment and software, net of sales		(90	)		(45	)
Additions to other intangible assets		(6	)		(15	)
Free Cash Flow	$	152		$	120

—end—

12