2135--8/29/2007--AFFILIATED_COMPUTER_SERVICES

related topics

{cost, contract, operation}

{regulation, government, change}

{financial, litigation, operation}

{customer, product, revenue}

{acquisition, growth, future}

{system, service, information}

{operation, natural, condition}

{loss, insurance, financial}

{competitive, industry, competition}

{personnel, key, retain}

{capital, credit, financial}

{property, intellectual, protect}

{operation, international, foreign}

{stock, price, operating}

Alleged defaults and purported acceleration of our Senior Notes, if upheld in litigation, could have a negative impact on our cash flow and divert resources that could otherwise be utilized in our business operations. The complexity of regulatory environments in which we operate has increased and may continue to increase our costs. We are subject to the oversight of the SEC and other regulatory agencies and investigations by those agencies could divert management s focus and could have a material adverse impact on our reputation and financial condition. Reductions of our credit rating may have an adverse impact on our business. A decline in revenues from or a loss of significant clients could reduce our profitability and cash flow. Our ability to recover capital investments in connection with our contracts is subject to risk. We have non-recurring revenue, which subjects us to a risk that our revenues from year to year may fluctuate. The markets in which we operate are highly competitive and we may not be able to compete effectively. We may not be able to make acquisitions that will complement our growth. A failure to properly manage our operations and our growth could have a material adverse effect on our business. Our Government contracts are subject to termination rights, audits and investigations, which, if exercised, could negatively impact our reputation and reduce our ability to compete for new contracts. We may incur delays in signing and commencing new business as the result of protests of government contracts that we are awarded. The exercise of contract termination provisions and service level penalties may have an adverse impact on our business. Some of our contracts contain pricing provisions that could adversely affect our operating results and cash flow. Claims associated with our actuarial consulting and benefit plan management services could negatively impact our business. The loss of or change in our significant software vendor relationships could have a material adverse effect on our business. We may be subject to claims of infringement of third-party intellectual property rights which could adversely affect our business. We are subject to United States and foreign jurisdiction laws relating to individually identifiable information, and failure to comply with those laws, whether or not inadvertent, could subject us to legal actions and negatively impact our operations. We are subject to breaches of our security system. Budget deficits and/or fluctuations in the number of requests for proposals issued by state and local governments and their agencies may adversely impact our business. Our international operations are subject to a number of risks. Armed hostilities and terrorist attacks may negatively impact the countries in which we operate. A failure to attract and retain necessary technical personnel, skilled management and qualified subcontractors may have an adverse impact on our business.

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2135--8/29/2007--AFFILIATED_COMPUTER_SERVICES_INC